1. What can I speak about? Your delegate’s position on the specific topic You can explain a positive of a position that you agree with. You can explain a negative of a position that you don’t agree with. Explain how a decision will improve or not improve a current situation under the articles You can relate the topic to the principles of the constitution You can relate the topic to economic concepts You can relate the topic to game theory

2. Popular Sovereignty- People are the ultimate source of power, we self-govern. We always retain our rights (republic) Limited Government- The people will provide the Government with specific powers that are outlined in the Constitution. Rule of Law- Nobody is above the law and laws cannot be arbitrary applied. Federalism- The will be a division of power between the national government and the states. The balance is imperative to ensure that neither the states nor the national government abuse their power. A separation of powers and checks and balances- The ensure in mutual volunteerism and that no branch becomes too powerful there must be system in place that prevents abuse from happening. An Independent Judicial Branch- Those interpreting the Constitution must be able to resist the pressures of others and their own self-interest. PrinciplesEconomic Concepts Mutual Voluntariness, self interest, law of supply, price markets, allocation of votes to their must useful place, knowledge, information, trade-offs, incentive, competition Mutual Voluntariness, self interest, competition, equilibrium, efficiency, trade-offs, cost/benefits, marginal analysis, risk reduction, speculation, Mutual Voluntariness, Equilibrium, division of labor, specialization, economies of scale. Prevent Government Monopolies of power Mutual Voluntariness, Equilibrium, division of labor, specialization, competition, efficiency, trade-offs, cost/benefits, incentives. Prevent Government Monopolies of power eliminating Incentive, self-interest, competition, risk Creating equilibrium, stability Ending the Prisoner’s Dilemma?

3. Articles of Confederation and Perpetual Union between the States (1781-1787) League of Friendship between states. One house Congress (unicameral) States had sovereignty and could establish own laws, currency, and tariffs States had all domestic power, central government had little or no power. Congress dealt with foreign issues and debt. Congress had no power to tax and could only ask for donations. 1 state = 1 vote regardless of size or population. 2/3 of states needed to agree to pass legislation 13 out of 13 states had to approve amendments to the Articles. No judicial branch to judge and no executive branch to enforce congressional laws The states under this arrangement could act only on their self interest

4. Articles of Confederation ProblemsCausesPossible Solution States did not follow Central Government’s laws That Central Government had no enforcement power Increase Central Power The Central Government had no money. It couldn’t pay debts. The Central Government had no power to tax Give the Central Government power to tax Inflation Over printing by both the Central Government and state governments National Currency Disputes and division among states States created inter-state tariffs, taxes and navigational rights disputes National court system, central control of inter-state trade No trade or treaties with foreign nations and no reprisals against nations that hurt trade The Central Government had no power to enforce Make it easier for the Central Government to act Instability both economically and politically No Central PowerIncrease Central Power Resources were not allocated to their most useful purpose. The number one dagger in the heart of a free market society is instability.

5. Essential Ingredients for free markets to work 1.Impartial Spectator 2.Own interest- desire to maximize utility combined with the desire to be loved and lovely. (Impartial Spectator) 3.Division of labor and specialization (synergy) 4.Voluntary exchanges with the mutual benefits that increase production of goods and services that we value. 5.Empathy (understanding and sharing the feelings of others) coordination of own interest and the interest of others 6.Choices (leads to competition) 7.Feedback loops – reputation and information 8.Repeating games All leads to the invisible hand and spontaneous order

6. Human nature appears to be simultaneously self regarding and other regarding.

7. Inputs Process Self advancement Controller mechanism Outputs Feedback Adjustment Intra Personal Goal of System: Create a balance between response and circumstances Own Regarding Others Regarding New Experiences Thoughts Ideas Conversations Interactions Passions/Instincts Self- Preservation Defector Own interest and perspective Temptation Values Memories Imaginary 3 rd party Impartial Spectator is developed to judge our responses as either proper or improper, based on established norms and empathy Proper and Prudent Pride/gratitude Merit Proper reaction to circumstances- Loved and lovely Improper and not Prudent Guilt/Shame/resentment demerit Improper reaction- over or under reactions Must self-correct Self correct in order to satisfy our need to be loved and lovely and not hated and hateful Our new adjustments become new inputs

8. "one behavioral axiom, 'the propensity to truck, barter, and exchange one thing for another,' where the objects of trade I will interpret to include not only goods, but also gifts, assistance, and favors out of sympathy... whether it is goods or favors that are exchanged, they bestow gains from trade that humans seek relentlessly in all social transactions. Thus, Adam Smith's single axiom, broadly interpreted... is sufficient to characterize a major portion of the human social and cultural enterprise. It explains why human nature appears to be simultaneously self-regarding and other- regarding."[4]

9. Person A Person B Inter-Personal Goal of System: Create a balance between response and circumstances Incentive Compatibility Interpersonal A’s Output B’s Input A’s input B’s Output Interpersonal exchange can be voluntary or forced For voluntary exchanges to occur there must be empathy, persuasion, and mutual benefits. Both parties must be self and others regarding. This will result in propriety, gratitude and continued exchanges. In the absences of empathy, persuasion, and mutual benefits impropriety and resentment will result. In situations where there is free exchange, exchanges will end. The only way to continue the exchange is to adjust or to use force to continue the exchange. Other parties will adapt to avoid force Inputs Process Self advancement Controller mechanism Outputs Feedback Adjustment Intra Personal Goal of System: Create a balance between response and circumstances Own Regarding Others Regarding New Experiences Thoughts Ideas Conversations Interactions Passions/Instincts Self- Preservation Defector Own interest and perspective Temptation Values Memories Imaginary 3 rd party Impartial Spectator is developed to judge our responses as either proper or improper, based on established norms and empathy Proper and Prudent Pride/gratitude Merit Proper reaction to circumstances- Loved and lovely Improper and not Prudent Guilt/Shame/resentment demerit Improper reaction- over or under reactions Must self-correct Self correct in order to satisfy our need to be loved and lovely and not hated and hateful Our new adjustments become new inputs Inputs Process Self advancement Controller mechanism Outputs Feedback Adjustment Intra Personal Goal of System: Create a balance between response and circumstances Own Regarding Others Regarding New Experiences Thoughts Ideas Conversations Interactions Passions/Instincts Self- Preservation Defector Own interest and perspective Temptation Values Memories Imaginary 3 rd party Impartial Spectator is developed to judge our responses as either proper or improper, based on established norms and empathy Proper and Prudent Pride/gratitude Merit Proper reaction to circumstances- Loved and lovely Improper and not Prudent Guilt/Shame/resentment demerit Improper reaction- over or under reactions Must self-correct Self correct in order to satisfy our need to be loved and lovely and not hated and hateful Our new adjustments become new inputs

10. Inputs Process Self advancement ControllerOutputs Feedback Adjustment Non-personal interaction (The Market) (The Invisible Hand) Goal of System: Create a balance supply and demand resulting in Incentive Compatibility Wants Ideas Circumstances Resources Realities Marginal Costs and Benefits Values Desire for profit and fear of loss Utility maximization Person greed or gain Market power Self Regarding Others Regarding Marginal Costs and Benefits of others Empathy Other’s desire for profit and fear of loss Other’s Utility maximization Other’s values and wants Valued production and acceptable terms of exchange (price) Mutual benefits and profits Increased wealth and standards of living Proper balance between supply and demand and costs and benefits Thank you-thank you Improper balance between supply and demand and costs and benefits Re-allocation of scarce resources that reduced valued production and acceptable terms of exchange (price) One sided benefits (if exchange took place in first place) Decreased wealth and reduced standards of living Resentment Adjustments must be made. Those unwilling or unable to adapt will fail- freeing up resources for other Free market Lower prices, improve quality, and cut cost to make exchange more lovely Rearrange scarce resources to once again create value Forced Influence government to make laws that forces people to exchange Others will adjust to avoid force Logic: system is designed so that the potentially dangerous motives of personal greed and quest for power which cannot be eliminated, are instead made to control themselves and redirected to contribute to (or not impede) socially desirable outcomes.

11. Inputs Process Self advancement Controller Outputs Feedback Adjustment Constitution: General Goal of Founding Fathers: To produce a balanced state (equilibrium) between Authority and Liberty Incentive Compatibility Wants Ideas circumstances Balance Self Regarding Others Regarding Improper or not prudent Resentment- demerit No adjustment will result in lost power Proper and Prudent -Gratitude and merit -Socially desirable outcome -Improved standard of living Ambition for power Advancement Greed Personal motive- self centered Personally desired outcomes Others’ Ambition for power Popular Sovereignty Republicanism Limited Government Federalism Separation of Powers and checks and balances Re-election Who elects who Courts Politicians self correct in order to satisfy their need to be loved and lovely and not hated and hateful And to maintain or gain power Their new adjustments become new inputs Or Work within system to create forced exchanges Logic: system is designed so that the potentially dangerous motives of personal greed and quest for power which cannot be eliminated, are instead made to control themselves and redirected to contribute to (or not impede) socially desirable outcomes.