Professor Rae uses the case of Polaroid cameras to highlight key features of the capitalist system. Polaroid's business model, corporate culture, and firm trajectory are discussed. Important firm decisions are analyzed, including product offerings and mergers. Professor Rae explores factors that led to Polaroid's demise, including the company's relentless focus on scientific innovation at the expense of market research and product development.

Dean of the Yale School of Management, Sharon Oster, explains the CardioThoracic business case. Barriers to CardioThoracic's success are discussed, including competition from other medical firms, "gatekeeper problems," other medical procedures, and difficulties understanding needs of the firm's customers. Various players in the case are identified, as well as their specific interests and potential strategies for articulating these interests. Dean Oster analyzes interest misalignments, information asymmetries, and discrepancies in values among the various players in the case.

Professor Rae explains how the growing scale and complexity of railroads in the US were foundational to the development of modern capitalism. Operating the railroad system required professional managers and new management techniques, and the scale of railroad financing gave rise to the formation of the joint stock corporation. Professor Rae then discusses how different forms of company ownership differ along liability, liquidity, financial scalability, accountability, and role of ownership dimensions.

A practical theory of freedom is discussed, based on Hayek's Constitution of Liberty. Free societies can be thought of as great learning machines capable of aggregating individuals' knowledge and accomplishments. Professor Rae uses examples from automotives and university administration to illustrate how freedom allows everybody to profit from others' knowledge. Professor Rae also highlights Hayek's story of the rock climber who is stuck at the bottom of the crevasse, and discusses whether refusing to assist another is an implicit act of coercion.

Professor Rae relates Marxist theories of monopoly capitalism to Schumpeter's theory of creative destruction. Both Marx and Schumpeter agree that capitalism is a system that is "incapable of standing still," and is always revising (or revolutionizing) itself. Professor Rae critiques Marxist determinism and other features of Marx's theories. To highlight Schumpeterian creative destruction, Professor Rae uses examples from technological revolutions in energy production since water-powered mills. Marx's labor theory of value is discussed.

Professor Rae introduces Adam Smith's notion of the "invisible hand" of the market. Several preconditions must be met for the invisible hand to work. Markets must be open, and there cannot be just one buyer or one seller who can control product prices. No producer can hold a pivotal private technology, and there must be more or less truthful information across the whole market. Governments must enforce property and contracts.

Professor Rae shows how countries over the last two centuries have experienced improved life expectancies and increased incomes per capita. Dynamic graphical representation of this trend reveals how improved life expectancies tend to predate increases in wealth. Malthus' "iron law of wages" and diminishing returns are explained. Questions about why the industrial revolution occurred in England at the time that it did are then posed. Professor Rae then shows the importance of the "world demographic transition" to economic history and contemporary economics.

Professor Rae introduces the concept of capital as accumulated wealth used to produce more wealth. Questions about what constitutes capital are posed and discussed. The biggest story in recent economic history is the substitution of labor intensive production to capital intensive production. This transition, and the various speeds and scales with which it has occurred in different places at different times, has generated large income disparities around the world. Characteristics of capitalism are presented and discussed.

The lecture begins by examining the consequences a suicide has on both the person committing it and those around this person. The question is raised, however, whether this factor is the only that counts morally, as utilitarians claim, or whether other factors matter morally as well, as deontologists claim. The moral relevance of a deontological prohibition against harming the innocent is considered. A concluding summary of the course is offered.

The discussion of suicide continues. A few more cases are introduced to consider circumstances under which it might be rational to end one's life, and more graphs are drawn that show relevant variations in the quality of one's life. A question is then posed about how one should make a decision about continuing or ending life, given that one cannot know the future with certainty. Finally, two quick moral arguments concerning suicide which rest on theological premises are presented.