Terry College of Business

Department of Finance

FINA 4050 – Capitalism

Spring 2019
MWF 8:00: 8:50 (50783) and 9:05-9:55 (20683)
Amos B012

Dr. Jeffry M. Netter

Josiah Meigs Professor
Georgia Bankers’ Association Chair
Chair Department of Finance
http://www.terry.uga.edu/directory/profile/jnetter/

Office: B359A Amos Hall

Email: [email protected]
Phone: 706 2073056 (cell for emergencies and text questions in class)

TA: Bryan Oh: [email protected]

There are two sections of the same class. You must attend the section you are registered for. It
will be monitored. The 9:05 class is full, every seat.

Office Hours WF 10:30- 11:30 W 2:30-3:30 and Tuesday 10:30 – 12:00 in my office and by appt.
However, I am the Department Head and issues come up unexpectedly, affecting my time in
the office. Office hours are for explicit questions on a topic or a personal class situation not for
a repeat of a missed class. There are over students in this class so consider the impact on my
ability for student contact. Students may text me questions during class so we maintain student
ability to directly interact with the presentation. If you have a question others have the same
question.

"I will be academically honest in all of my academic work

and will not tolerate academic dishonesty of others."

— UGA Student Honor Code

http://www.uga.edu/honesty/

The UGA Honesty Code matters especially in this large class.

a) FINA 4050 – Capitalism

b) Course description – This class studies the history of mainly European Intellectual views of
Capitalism and Finance and its predecessors. We apply these thoughts to modern day issues
and thoughts. While we consider the effects of capitalism on different sexes and ethnic and
racial groups we mainly consider big picture issues. Those issues are important we just do not
have time for detailed analysis.

c) Prerequisites, co-requisites, and cross-listings for the course – none

d) Course objectives or expected learning outcomes – This is taken from the back of the class
book: The Mind and the Market: “Capitalism has never been a subject for economists alone.
Philosophers, politicians, poets and social scientists have debated the cultural, moral and
political effects of capitalism for centuries, and their claims have been many and diverse. The
Mind and the Market is a remarkable history of how the idea of capitalism has developed in
Western thought. “

Outline: The class will provide an introduction to the benefits and cost of capitalism and finance
and collectivism by considering a wide spectrum of thought including the arguments of, among
others, Aristotle, Hobbes, Smith, Burke, Hegel, Marx, Keynes, Rand, Hayek, M. Friedman, T.
Friedman, Pope Francis, President Trump, other economists, thinkers, and politicians including
progressives and conservatives. While some analysis will consider the development of the neo-
classical economic model begun by Adam Smith the student will be exposed to various
viewpoints. Further, there will be a significant amount of material from what is happening
today, thus postings will be ongoing.

The basic question is the benefits and costs of economic and social systems to individuals and
society. Specifically, thinking about the costs and benefits of alternative institutional
arrangements. The goal is working on the ability to weigh different approaches and apply them
to an analysis of real-world issues. Note any discussion of capitalism requires a significant
analysis of government and its interaction with markets as well as history. It is not but its very
nature a organized subject. Also the ideas maybe very different. In his essay “The Crack-Up,” F.
Scott Fitzgerald wrote, “The test of a first-rate intelligence is the ability to hold two opposed
ideas in the mind at the same time, and still retain the ability to function.”

This quote taken from a similar MIT class on capitalism is relevant; “Students will be
encouraged to ground their views in concrete textual and empirical material and to consider
the implications of different arguments for the understanding of personal, political, and
economic events today.” Some students will not like this class because it requires critical
thinking at times, not just the ability to work with or memorize models (which is also valuable
but not in this class).

To do well (whatever that means to you)

1) Come to almost every class and take notes.
2) Read the book and other assignments. This is critical.
3) Develop an outline that integrates the various materials
4) Study that outline.
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5) Remember the material is not straightforward; it is complex with many subtleties and is not
like Introduction to Finance or Organic chemistry where there is a direct pattern from one
topic to another. Some students thrive on this; others want a cookie cutter approach “What
do I need to know and I will know it. This class isn’t really like that at least in what you
should take away, although as always that is relevant for tests.
6) In general, I am not going to provide PowerPoints or notes to be downloaded. I will post a
limited document with some comments and some links. This is different than the past. I will
type notes in class and show some videos. It will be important to take notes because I will
not post what I write in class.
7) There is a significant amount of reading in the class. There is the text book and I will post
articles mainly from the press to read. There will be material on a test we did not cover in
class directly, coming from the reading. It is not the sort of thing you can do two days
before the test.

You may email me or text a question in class or other times. I do not always see those
questions. You may help others with your question. Never ask something like “What do I need
to know for the test?” The more you know the better. And my view is that we are here to learn
(me too) not just for grades. Thus, the questions should be on something you do not
understand or for clarification. But you need to try and figure things out too,

Capitalism and finance must first be defined and put in a historical context. First we will set out
the approach for analysis in the class. The approach is to first set out a paradigm for the factors
that define a society at some point. We then analyze each of the thinkers in the Muller book
(and other discussed in class, and other sources) in the context of our paradigm. We will also
discuss modern examples. Note this is a different sort of course than a typical business or
finance class. Some students find it unpleasant and disorganized because it requires considering
different, conflicting viewpoints where there is no right answer (although there are right
answers on multiple choice test, not necessarily on the essay final). This is very unlike a class
like FINA 3000 which is straightforward (although often hard) development and application of a
model, with problems similar to what you have seen. It is a Finance class for both institutional
are content reasons

In addition, while tests are needed for motivation to study, learning from, and ranking students
to me the most important part of this class is learning from some of the greatest and most
important minds in history, and being able to use that going forward.

e) Detailed Topical outline – I will post assignments on ELC in Schedule. We will follow the
book so a major part of the assignment is straightforward, read in the Muller book. But I will
supplement the book with a related webpage or an article. This is because material needs to be
filled in our study not covered in the Muller book.

f) University Honor Code and Academic Honesty Policy

As a University of Georgia student, you have agreed to abide by the University’s academic
honesty policy, “A Culture of Honesty,” and the Student Honor Code. All academic work must
meet the standards described in “A Culture of Honesty” found at http://www.uga.edu/honesty.
Lack of knowledge of the academic honesty policy is not a reasonable explanation for a
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violation. Questions related to course assignments and the academic honesty policy should be
directed to the instructor.

g) The course policy is a general plan for the course; deviations announced to the class by the
instructor may be necessary.

h) Principal course assignments and course requirements – There will be readings from one
primary text, and online sources, and articles. Everything is held together by the lectures where
new non-text material is introduced.

Any test may contain short answer or essay questions.

Test 1: Monday Feb. 11, 2019

Test 2: Monday March 4, 2019
March 21, WD deadline
Test 3: Monday April 8, 2019
Test 4: Wed. April 24, 2018
Final Exam: 8:00 Class Mon. May 6 8:00-11:00, 9:05 Class Wed. May 8 8:00-11:00

All tests are comprehensive.

i) General approach

We will read most chapters in the Muller book. This is important. We will have assigned
readings in other articles and some pages in Atlas Shrugged. I will lecture (important to take
notes unless you remember everything because while the lectures are related to the book I will
definitely not just repeat the book). I write some of the material I discuss on a Word file
projected in class, but this is not saved for students. While the lectures and readings are
organized by the thoughts of individuals, there is an overwhelming amount of material on the
topics covered in this class. We can only overview them. The course deals with the role of the
individual, the role of society, efficiency and equity effects of capitalism, the concepts of free
choice, and moral factors.

Students may use computers or tablets or phones in class. It is inappropriate and

counterproductive to spend significant time on these devices in ways unrelated to the class.
Further, anything that bothers another student is totally inappropriate.

Note I am changing this class significantly from the way it was taught in the past so old lecture
notes and outlines may not be as useful. It will be new to me too. Also, I make up new tests
every time so old tests are ok to check your knowledge but don’t count on repeated questions.

j) Specific course assignments

The elc website provides the official schedule of readings. If possible all assigned material should
be read before class.

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k) Grading policies

There will be four tests and an optional final. The tests each count 24%, and there is 4%
professor discretion (used mainly if a student changes significantly their performance on tests).
All scores count, there are no dropped test scores. If a student takes a final, the final counts
20%, each individual test 19% and again 4% professor discretion. The point of the optional final
is that you may improve (or go down). I will tell your grade before the final but if you come to
take the final you must take it.

There is an Honors option. That will be discussed separately.

We will see how the class goes for a distribution. Note this quote from Andrew Perrin, a
sociologist at the University of North Carolina, Chapel Hill. “An A should mean outstanding
work; it should not be the default grade,” Mr. Perrin said. “If everyone gets an A for adequate
completion of tasks, it cripples our ability to recognize exemplary scholarship.”

The final grade will be based on the total points earned, weighted as indicated. All students will
be ranked by points earned and the final grade will be based on that ranking. Thus, there is only
limited information on a point scale (ie an 85 is not necessarily a B it could be higher or lower).
However, there is not a fixed scale of ranking, that is I do not say in advance what percentage of
students will receive what grades. That will be based on how the class as a whole does. It is
impossible for me to predict in advance the midterm or final exam score that one student will
need to earn a certain letter grade as it depends on the performance of all other students in the
class and the performance of the class as a whole. Thus, you are graded on the performance of
the class and your position in the class. If everyone earned a high grade that could happen, but
that is unlikely.
Thus, to me, the idea of 90 80 70 only matters because students can think it matters. What
matters is the distribution that exists. In the past in this class, the median grade, about an 80
has been a B+/B, and Cs have gone down to even 50s but that is the past. Medians on test in
the past tend to be the high 70s but many people do very well in terms of scores (this class is
hard meaning it takes work and understanding).

Read the posting on grading for an understanding of grading.

l) Attendance policy
Attendance is expected and may be monitored at any time. However, most important,
attendance matters for all sorts of reasons including learning in the class. There are formally
excused absences where the excuse is a career-related interview that can’t be rescheduled, a
sickness with a note from the health service, or a death. Of course, many people skip class. But
for any class missed whether an excused absence or just a missed class, it is not my
responsibility to make the student whole. I am somewhat lenient on documentation but can
require the formal documentation in the event of a missed test (see below for makeup policy).
In the past, as the student network may indicate I have been lenient, that is not my policy going
forward.

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m) Required course material

The assignments will be posted in ELC modified as we go along. However, basically keep reading
in the Muller book as we go along.

1. The Mind and the Market: Capitalism in Western Thought, by Jerry Muller.

2. Online posting: Sometimes web pages, articles, occasionally even PowerPoints will be posted.

3. Atlas Shrugged, by Ayn Rand. It will be distributed at my office if you want it. It is a
somewhat tedious long book. There will be a few assigned pages that are posted. It is not a
text.

n) Policy for make-up of examinations

A makeup by its very nature cannot be the same as taking a test. Thus, there are no makeups.
In some circumstances, I will allow a test taken early. In general, the weight will be shifted to
the final and in exceptional circumstances to the next test.

o) Contact information:
Professor Jeffry Netter
456 Brooks Hall
[email protected]
cell for major issues or texting me during class: 706 207 3056

Office hours – M 10:30-2:00 and Tuesday 9:00- 10:30 B359A Amos Hall and by appointment.
See above. Check beforehand if possible. I often have unexpected campus meetings and other
responsibilities as Department Head. It is always best to email first to check availability.
Emailing directly from an email account works much better than emailing from within elc (these
cannot be replied to directly).

Communication and Website. There is an elc website for the course. The website contains
important notices, answers to problems discussed in class, readings, and identification of
materials of interest to the class. You are responsible for all information announced in class or
posted on the website, including changes to the course syllabus and assignments.