What Choices Do I Have?

Keystone Principle #4 – Economic Systems Influence Choices

Voluntary National Content Standard

Connection:

For convenience, we categorize economic systems as traditional, command, or market.  These systems form a continuum, with all societies embracing some elements of each.  It is therefore no surprise that students of all ages experience some facet of each type of system in their daily lives.  While it is very helpful to identify cultures of other eras or other regions that may be closely identified with a particular system (Native American tribes were predominantly traditional; history is laden with examples of strong kings or dictators exemplifying a command economy), it is even more helpful to look for the intersection of this Keystone Economic Principleand an ordinary day in the life of each student.  Such insights will enable them to make that personal connection with the rather abstract idea of economic systems.

  • Traditional. Young children typically look to adults with whom they have frequent interaction to be their role models – parents or other family members, child care providers, teachers, doctors, clergy.  The role modeling holds across a wide spectrum, from manners to interpersonal relationships to hobbies to career aspirations.  Children imitate the world they experience as they look for their place in it.  Put in this context, they have a strong emotional connection to life in a traditional economy.
  • Command. During a child’s early school years they experience structural elements of a command system in their schools and families.  Just as command economies are directed from the top down, so also a child’s individual choices are limited by the parents’ and teachers’ role of guiding and training.  Even when given choices, the range of choice is usually limited by the authority figure.  While the idea of a strong authority can be problematic, it is necessary and beneficial to provide a safe haven for a child not ready to make his or her own choices.  While parents and teachers work hard to enable their children or students to grow into emancipated and responsible individuals, students are quite capable of understanding the push/pull nature of command economies: an undesirable limiting of individual freedom of choice, coupled with the allure of believing someone or something is in place to take care of you and relieve you of responsibility.
  • Market. In the United States, examples of a market economy are abundant – a wide variety of choices in jobs, friends, food, religion, ways to spend your time, ideas, reading materials…the list is long.  In a market economy, almost everyone is both a producer and a consumer.  While students can easily think of ways in which they are consumers, be open to the ways in which they are producers.  By doing chores at home, they are supplying their labor in exchange for some family benefit which accrues to them as well.  If you see your classroom as a community, identify the productive output of each student in it.  If you encourage community service by your students, help them to understand the valuable product of their labor and the psychic benefit they receive for doing so.

Objectives

I. Understanding

  • Traditional economies are structured to follow what has been done in the past.
  • Traditional economies offer a very limited range of choices.
  • Command economies are dominated by an individual or relatively small group of people.
  • Command economies offer a limited range of choices.
  • Market economies offer a wide range of choices to both consumers and producers.
  • Market economies are characterized by the decentralization of decision-making.

II. Skills

Students will be able to:

  • Define vocabulary.
  • Identify the 3 primary types of economic systems.
  • Identify the differences between economic systems.
  • Identify the directional flow of money in the circular flow.
  • Identify the four productive resources.

Activities

I. Concept Vocabulary

  • Consumers – A person who uses goods and services to satisfy personal needs and not for resale or in the production of other goods and services
  • Command Economy – An economic system characterized by the public ownership of productive resources and centralized economic planning
  • Market Economy – An economy that allocates resources through the decentralized decisions of many businesses and households as they interact in markets for goods and services
  • Producer – An individual or business engaged in the process of creating goods and/or services to be offered for sale to consumers
  • Productive Resources – That set of resources utilized in the process of production: land, labor, capital, technology and entrepreneurial abilities
  • Traditional Economy – An economic system characterized by decisions made by previous generations being used as the guiding force in the organization of current economic activities

II. Journals

Initial Prompt (to be done during the introduction of this monthly theme/principle):

  • What things do you do in your life because you want to be like somebody else?
  • What things do you do in your life because you are ordered to do them?
  • What things do you do in your life that you yourself are able to choose?

General assignment:

Choose one or two of the quotations and write a journal entry of at least half a page. For K-2nd grades, you may do this exercise as part of a discussion. Or, ask the students to draw an illustration of a quotation or the monthly theme/principle.

  1. Restate the idea in your own words.
  2. Say whether or not you agree with the statement.
  3. Explain why you agree or disagree.
  4. Discuss how you have seen it expressed in your own life

III. Quotations:

  1. “Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own. So if you want efficiency and effectiveness, if you want knowledge to be properly utilized, you have to do it through the means of private property.”   Milton Friedman
  2. “Economies are supposed to serve human ends, not the other way round. We forget at our peril that markets make a good servant, a bad master and a worse religion.”  Amory Lovins
  3. “It has been true in Western societies and it seems to be true elsewhere that you do not find democratic systems apart from capitalism, or apart from a market economy, if you prefer that term.”Peter L. Berger

Lessons

Beatrice’s Goat (from the Powell Center Lessons)

The Economics of Freedom (from the Powell Center Lessons)

Who Gets More than Their Fair Share? (an EconEdLink online lesson)

Car Shopping (an EconEdLink online lesson)

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