Free Enterprise and Prosperity75 min
- Why are some countries rich and others not?
- Students will identify the claims of economists and political scientists that there is a clear connection between economic and political freedoms and national affluence.
- Students will defend or refute their argument, using evidence from the exercise.
- rule of law
- limited government
Pose the following question: “Why are some countries rich and others not?”
Tell students that this has been one of the central questions plaguing economic thought for centuries. Note that the first work of modern economics was Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations. This was also Smith’s greatest question.
Tell students that they will examine economic conditions in ten countries around the world in order to discover some possible causes of prosperity. To the extent possible, divide the class evenly into ten groups.
Assign each group one of the following countries:
- Korea, North
- Korea, South
Each group is to do research on several aspects of the economic and political characteristics of their assigned country. Ideally, teachers should have students do research on each of the sites listed below for their respective countries. If there are time limitations, teachers may pass out Handout A: Comparative Data, which contains the relevant data.
Explain to students that many of these measures are attempts by economists, political scientists, statisticians, and others to try to capture complex economic and political phenomena. Each has its strengths and weaknesses, but all have a high degree of empirical validity.
Topics and sources include:
Topic: Real per capita Gross Domestic Product (in $) Source: https://www.cia.gov/the-world-factbook/field/real-gdp-per-capita/country-comparison
Topic: Economic Freedom Ranking Source: http://www.heritage.org/index/ranking
Topic: Human Development Index Source: http://hdr.undp.org/en/data
Topic: Global Competitiveness Index Source: https://www.weforum.org/reports/the-global-competitiveness-report-2020
Topic: Freedom in the World Index Source: https://freedomhouse.org/report/freedom-world
Topic: Worldwide Governance Indicators – Rule of Law Source: https://info.worldbank.org/governance/wgi/Home/Reports
Topic: Total natural resources rents (% of GDP) Source: https://data.worldbank.org/indicator/NY.GDP.TOTL.RT.ZS
After conducting its research, each group should make a poster of their respective country’s economic and political characteristics. Teachers may have students add additional elements to their posters, but at a minimum, the posters should clearly present the data listed above.
When complete, each student group should present its respective poster to the class. Students should discuss each of the major topics. Ideally, students will tape or pin their posters side-by-side with the other posters.
Pass out Handout B: Summative Questions. The class as a whole should now compare all of the posters and answer the questions on Handout B. (If teachers prefer, students may simply answer the questions orally.) When the students have completed their answers, discuss as a class. Point specifically to the Founding principles as reasons for why the United States is at the top in the answers to many of these questions.
Have students write an essay on the following prompt:
Many economists and political scientists claim that there is a clear connection between economic and political freedoms and national affluence. Defend or refute this argument, using evidence from the exercise we just completed.
Free Enterprise and Prosperity
The overall wealth of the United States has been achieved because of the free enterprise system. The U.S. hasa limited government, and that feature extends to economic choices; most decisions about what, how, and for whom to produce are left to market forces rather than government dictates.