This for That School House Rock

Transcription

1 When we lived in caves There were no shopping malls And people's manners were Neanderthal No bodegas, no delis, no corner stores Shopping trips turned into tugs of war When not having pull got this man mangled He thought he'd try an easier angle I'll give you this for that We'll make a trade called "barter" I'll give you this for that We'll have it made with barter Now, barter worked well At least in theory But a wallet full of yaks Could make you weary Making change for a cow Wasn't easy to master Unless you were ready For an "udder" disaster Shiny shells were far more portable Why not use them for what's affordable? I'll give you this for that With shiny shells, why barter? I'll give you this for that Shelling out shells is smarter For farmers in ancient Mesopotamia The barley they grew was the money mania When hauling big sacks put their backs in traction They invented coins to lighten transactions Now, when a man had a debt to settle He'd dig out some coins made of precious metal This for That School House Rock I'll give you this for that Silver or gold or copper I'll give you this for that With coins you're a smarter shopper Then China made money even more desirous Printing it on paper made of crushed papyrus Take one from Column A and one from Column B The Chinese paid their checks in paper currency When Columbus set out on that famous charter He had no paper money, so he had to barter He took along some beads for currency So barter played a part in our discovery Balboa and Pisarro and Sebastian Cabot Even Coronado had the trading habit I'll give you this for that They loaded up with gold, then parted I'll give you this for that And soon the whole world was charted Today we use cash and spend with ardor But that doesn't mean we don't still barter When a football team needs a pulling guard Or a kid like you is into trading cards Take this for that Bills and coins are smarter But when you pay for that Remember this It all started out with barter

2 Monday, January 30 th Essay #1 due at the START of labs on February 2 nd or 3 rd Remember to submit paper via blackboards Turn-It-In function before labs and hard copy at the start of labs. Failure to do both will result in a late penalty. Don t forget to come into the American Heritage Review Room (173 A SWKT) for help on papers and concepts

3 Economics and the Founding Day 1

4 Two competing systems Command System Example: Mercantilism Free Market System Example: Capitalism

5 Mercantilism English system, Theory: government should regulate the economy for the benefit of the crown Method: Navigation Acts Definition of wealth: the amount of gold or silver in the country s treasury

6 Navigation Acts Trade must be carried in English ships Direct strike against Dutch carrying trade Enumerated goods had to be shipped to England and pay duties before going to another port. Included: Tobacco Sugar Dye stuffs (ie, indigo)

7 Capitalism vs Mercantilism Adam Smith George III

8 The Market System: Adam Smith, The Wealth of Nations, 1776 Theory: government should keep hands off (laissez-faire) Method: Self-interest and the efficient action of prices and profits regulate the market (the invisible hand ) Definition of wealth: The yearly amount of production and consumption in a country (per capita income)

9 Consumer sovereignty Adam Smith put economic sovereignty in the hands of consumers, just as John Locke put political sovereignty in the hands of the people.

10 Capitalism in Crisis

11 Occupy Wall Street: Salt Lake City, 2011

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13 How a free market economy operates The most basic economic fact is scarcity, which dictates that choices must be made.

14 How a free market economy operates Exchange Simple exchange (barter) Money Specialization Comparative Advantage Competition Competition curbs interest: Interests of buyer and seller conflict > seller must appeal to buyer Supply and Demand

15 Exchange Simple exchange (barter) Both buyer and seller believe they benefit When we lived in caves There were no shopping malls And people's manners were Neanderthal No bodegas, no delis, no corner stores Shopping trips turned into tugs of war When not having pull got this man mangled He thought he'd try an easier angle I'll give you this for that We'll make a trade called "barter" I'll give you this for that We'll have it made with barter

16 Exchange Money Negates need for coincidence of wants

17 One aspect of exchange Opportunity cost: The opportunity cost of a choice is the most valuable option you did NOT take.

18 Exchange Specialization: the division of labor Manufacturing assembly line in China

19 Another aspect of exchange The Law of Comparative Advantage: Every individual, nation, and group will tend to produce the goods and services for which they are the low-cost producer. City on a Hill, 2 nd ed.

20 Competition Interests of buyers and sellers conflict Competition curbs self-interest Supply and demand Scarcity and surplus

21 Supply and Demand The Law of Supply: As the price of a particular good or service rises, suppliers will produce more of that good or service. The Law of Demand: As the price of a particular good or service rises, individuals will buy less of that good or service.