Economic Systems through Cows (and candy )

What is an Economic System? An economic system is how goods and services are produced and distributed in an economy.

Exploring Economic Systems I am going to give everyone some candy, and we are going to use this candy to explore “economic systems”—or, different ways to get what you want/need – Rules: 1.You CANNOT eat the candy until I tell you to (you’ll get a chance later) 2.Your goal is to get as much of the candy that you want. 3.We will run through this simulation 3 times, each with slightly different rules. Pay close attention so that you don’t miss new instructions!

SCENARIO 1 I will pass out candy Once everyone has candy, go around the room and play Rock, Paper, Scissors: – Play each person best out of 3 – loser has to give up a piece of candy – Once you run out of candy, you must sit down. – You may rotate to different people until the timer stops

Capitalism Questions: How much candy did people get to start with? How did that make you feel? What did you try to do? How did you try to get more candy – what tactics could you have used to get back in the game? What did I do? What was my role? Was the game fair? Where do you see this economic system today?

Capitalism

Definition: Economic system in which money is invested in business ventures with the goal of making money Role of the Government: Laissez-faire – The government shouldn’t step in for any reason, including laws for better wages or working conditions Private Ownership Freedom of Competition Unequal economic classes

Capitalism Positives – Private ownership Entrepreneurial opportunities – Freedom of competition Better goods at better prices – Helped middle class grow – Fueled the industrial revolution – Increased standards of living (for some) Negatives – Only a few grew rich – unequal economic classes – No labor laws – People grew upset with working conditions and unequal distribution of wealth, so they searched for other solutions

SCENARIO 2 Rules: – You STILL cannot eat the candy – Place your candy on the table in front of you: I have to do some redistributing. Listen while I do so.

Questions – How much candy did people get to start with? – How did you try to get more candy? – What did I do? What was my role? – Was the system fair? – How many are willing to risk the candy received to play Rock, Paper, Scissors now? – Where do you see this economic system today? How would this idea be a solution to Capitalism?

Socialism

Definition: an economic system in which the government controls things and gives them out as needed.

SCENARIO 3 Rules: – You still CANNOT eat the candy – Place all the candy at the center of your table – As a class, you all must decide how to distribute the candy equally to create a classless society – You only have 2 minutes! Go!

Questions What did I do with the candy? How was the candy distributed? Was it equal? Who did I represent? Do you think this system would work in our country today?

Communism

An economic system in which the people own all aspects of business and share all goods and services Socialism and Communism were created in response to the injustices of capitalism Positives – People work for the good of all – Attempt to redistribute wealth Negatives: – Inefficient businesses – No price competition

Important Economic Thinkers Adam Smith – Wrote The Wealth of Nations about the theory of capitalism – Believed in laissez-faire (hands off) economics. (The government shouldn’t interfere.) Karl Marx (and Friederich Engles) – Wrote Communist Manifesto and Das Kapital in 1848 – Believed the world has always been divided into the “haves” and the “have nots” Rich were growing richer and the poor poorer—this was BAD – Communism was their solution to Capitalism

Factories drive out business Small # of manufacturers hold wealth Proletariat revolt Proletariat produces what is needed Workers share profits Economic equality created No need for government Classless society achieved Complete form of socialism COMMUNISM TRANSITION OF SOCIALISM TO ITS FINAL PHASE OF COMMUNISM

QUICK WRITE To wrap up our discussion of the Industrial Revolution, you will write a letter to a friend explaining to them your experiences of the Industrial Revolution and the economic systems. – Step 1: I will assign your identity: a factory worker, a leader in the government, or a businessman – Paragraph A: How did the Industrial Revolution change the way the economy worked in England? Things to consider – How were goods made before and after? – Who had the money before and after? – Paragraph B: What economic system do you see developing around you, and how does it affect you? – Paragraph C: Which economic system (capitalism, communism, and socialism) do you feel would be the most beneficial to you and why?