Chapter Focus
Section 1 Capitalist and
Mixed Systems
Section 2 Emerging Economies
Section 3 Major Economies in
Transition
Section 4 The Global Economy
Chapter Assessment
Chapter Objectives
•
Capitalist and Mixed Systems Identify the
factors of production in economic systems and
the chief characteristics of capitalism.
•
Emerging Economies Discuss economic
problems that have challenged developing
nations and attempts to solve those problems.
•
Major Economies in Transition Describe the
major obstacles to change in the Russian and
Chinese economies.
•
The Global Economy Analyze the factors that
dominate global economic concerns today.
Capitalist and Mixed Systems
Key Terms
scarcity, traditional economy, command economy,
market economy, factors of production,
entrepreneur, monopoly, profit, mixed economy
Find Out
• What are the characteristics of capitalism that
differentiate it from socialism and communism?
• Why can the economy of the United States be
called a mixed economy?
Capitalist and Mixed Systems
Understanding Concepts
Free Enterprise What kinds of economic choices
do individuals make in a free enterprise system?
Section Objective
Identify the factors of production in economic
systems and the chief characteristics of capitalism.
In 1776 Adam Smith described capitalism
as an economic system controlled by an
“invisible hand.” According to Smith,
through self interest this invisible hand
moves people to decide what goods and
services to produce, how to produce them,
and to whom to distribute them. Adam
Smith’s ideas were popularized in his book
The Wealth of Nations, which was
published in the same year the United
States declared its independence.
I. Factors of Production (pages 717–718)
A. The resources of an economic system are
called factors of production.
B. Factors of production fall into four
categories:
1) land,
2) labor,
3) capital,
4) entrepreneurs.
I. Factors of Production (pages 717–718)
Are all of the factors of production equally
important in the economy? Explain.
If any factor is less important, it is still
essential to production.
II. Forms of Economic Organization (page 718)
A. Three major forms of economic organization
represent the range of economic systems
that determine how the factors of production
are allocated.
B. Communism is a command economic system.
C. Socialism is a partial command
economic system.
D. Capitalism is an economic system in which
individual producers and consumers make
the economic decisions in free markets.
II. Forms of Economic Organization (page 718)
II. Forms of Economic Organization (page 718)
What do you think are the advantages and
disadvantages of a communist system?
Explain.
Answers will vary. Lack of incentives, central
planning, little individual freedom.
III. Characteristics of Capitalism (pages 718–721)
A. In the United States and several industrial
countries, capitalism is the basic
economic system.
B. Capitalism, also called a free enterprise
system, is based on private ownership and
on individual economic freedom.
C. Capitalists range from small store owners,
persons who own a few shares of stock in a
corporation, to industrialists who own large
factories, mines, and financial institutions.
D. Capitalism encourages people to become
entrepreneurs.
III. Characteristics of Capitalism (pages 718–721)
E. Competition among sellers of products
and services is another characteristic
of capitalism.
F. Buyers, sellers, and workers have freedom
of choice in a capitalist system.
G. The capitalist system is based on the
profit motive.
III. Characteristics of Capitalism (pages 718–721)
What do you think are the advantages and
disadvantages of a capitalist system?
Answers will vary. Free enterprise, private
ownership, individual initiative, competition.
IV. Changing Face of Capitalism (page 721)
A. Capitalism in the United States contains
some elements of a command economy.
B. Since the late 1800s, the federal
government has increased its role in
the economy.
C. The federal government has adopted
regulatory laws to ensure competition
and safety.
IV. Changing Face of Capitalism (page 721)
D. In Japanese capitalism, the government
works closely with business to limit foreign
competition. In South Korea, Singapore, and
Taiwan the government has a similar close
relationship with business.
E. Generally, the capitalist economies of
Western European nations are more
controlled and regulated than that of the
United States.
IV. Changing Face of Capitalism (page 721)
How might the relationship between
government and business change in
capitalist nations during the twentyfirst century?
Answers will vary. Discuss the increasing or
decreasing role of government in economies.
Checking for Understanding
1. Main Idea Use a graphic organizer like the one
below to identify five characteristics of capitalist
economies.
private ownership, individual initiative,
competition, freedom of choice, profit and loss
Checking for Understanding
Match the term with the correct definition.
___
B scarcity
___
C entrepreneur
___
D monopoly
___
A profit
A. the difference between the
amount of money used to
operate a business and the
amount of money a business
takes in
B. a condition that exists because
society does not have all the
resources to produce all the
goods and services that
everyone wants
C. a person who takes a risk to
produce goods and services in
search of profit
D. a business that controls so
much of an industry that little or
no competition exists
Checking for Understanding
3. Identify communism, socialism, capitalism,
free enterprise system.
Communism is an economic system in which the central
government directs all major economic decisions.
Socialism is an economic system in which the
government owns the basic means of production,
distributes the products and wages, and provides social
services such as health care and welfare.
Capitalism is an economic system providing free choice
and individual incentive for workers, investors,
consumers, and business enterprises.
A free enterprise system is an economic system based
on private ownership of the means of production and on
individual economic freedom.
Checking for Understanding
4. What are the three forms of economic
organization that have emerged in the world?
Communism, socialism, and capitalism are the
three forms of economic organization that have
emerged in the world.
Checking for Understanding
5. How has the U.S. government played a
growing role in the nation’s economy since
the late 1800s?
It has taken responsibility for the well-being of
individuals and for the financial condition of the
nation. It has assumed increasing responsibility
for social policies.
Critical Thinking
6. Making Inferences How does the free market
system promote freedom of choice for
consumers in the United States?
Consumers are free to choose what products
they buy. Consumers may choose from a variety
of sellers and products.
Free Enterprise One of the issues
debated by advocates of a planned
economy and those who support a free
market economy is whether there can be
democratic freedoms such as freedom
of speech without having economic
freedom. Write an essay explaining the
connection between economic freedom
and civil liberties.
Emerging Economies
Key Terms
developing nations, newly developed nations,
welfare state, nationalization
Find Out
• What are the important economic choices that
developing and newly developed nations
must make?
• How have economic choices affected the
development of nations in Latin America
and Africa?
Emerging Economies
Understanding Concepts
Comparative Government What are the
differences and similarities of socialist governments
and communist governments?
Section Objective
Discuss economic problems that have challenged
developing nations and attempts to solve
those problems.
As many Latin American nations
developed their economies, land reform
turned some toward socialism. In Chile, a
socialist government led by Salvador
Allende began an ambitious program to
break up large land holdings and
redistribute land to the people. In 1973 the
army overthrew Allende, established a
military government, and ended land
reform and socialism in Chile.
I. Developing and Newly Developed
Nations (page 772)
A. Developing nations are states with little or
no industry.
B. Newly developed nations are states that
have had significant or rapid industrial
growth in recent years.
I. Developing and Newly Developed
Nations (page 772)
I. Developing and Newly Developed
Nations (page 772)
If you were the leader of a newly
developing nation, what economic model
would you want to follow? Explain.
Answers will vary. Discuss capitalism,
socialism, or a mixed system.
II. The Economic Choices (pages 722–724)
A. Some developing and newly developed
nations rely on the free market, trade and
contacts with the West to develop their
economies; others rely on socialist
economic models.
B. Under socialism the government only owns
and controls some factors of production.
C. Socialists believe that wealth should be
distributed as equally as possible. They try
to achieve this goal by making basic goods
and social services available to everyone.
D. Critics of socialism claim socialist policies
create a welfare state.
II. The Economic Choices (pages 722–724)
Do you think government should have a
major role in the economy? Why or why not?
Answers will vary. Discuss advantages of
specific services and regulations of government.
III. Searching for Economic Answers
(pages 724–726)
A. Socialist governments in developing and
newly developed countries use more
central planning than developed socialist
countries do.
B. Socialist governments often take control of
industries by nationalization.
C. Many developing nations, especially in
Latin America, have a history of foreignowned industries.
D. Nationalization in Latin America has been
both an economic policy and a symbol of
anti-colonialism.
III. Searching for Economic Answers
(pages 724–726)
E. Until recent moves toward free enterprise,
Israel had a moderate socialist economy.
F. After independence, many African nations
tried to develop economies based on one
cash crop or one resource for trade.
G. Economic difficulties forced African countries
south of the Sahara to take on $130 billion
worth of debt by the 1980s.
III. Searching for Economic Answers
(pages 724–726)
How do you think central planning by the
government can be helpful in a
developing nation?
Answers will vary. See Searching for Economic
Answers on text page 724.
IV. Socialism’s Practical Problems (page 726)
A. Socialist ideology remains a popular and
widely held belief in the developing world.
B. Socialism often fails to live up to its promises
because capital investment is a primary
need for developing economies. Failure of
large-scale economic planning in Eastern
Europe has raised doubts that it can work.
C. Western governments have exercised
influence and pressure in favor of a
combination of free markets and democracy
in developing nations.
IV. Socialism’s Practical Problems (page 726)
How do you think the socialist model can
be improved?
Answers will vary. See Socialism’s Practical
Problems on text page 726.
Checking for Understanding
1. Main Idea Create a graphic organizer like the
one below. In the left box, identify the economic
issues facing developing countries. In the right
box, list policies some have adopted to promote
economic progress.
Answers might include: Issues—foreign
ownership of industry, how to achieve rapid
industrial growth, development of cash crops for
export; Policies—nationalization of industry,
centralized planning, agricultural communes,
acceptance of foreign aid and loans
Checking for Understanding
Match the term with the correct definition.
___
C developing nations
___
A newly developed
nations
___
D welfare state
___
B nationalization
A. nations that have had
significant or rapid
industrial growth in recent
years
B. the process by which a
government takes control
of industry
C. nations only beginning to
develop industrially
D. a nation that has an
economic system that
provides many welfare
programs
Checking for Understanding
3. Identify centralized planning, kibbutzim.
Centralized planning is government control of
the economy.
Kibbutzim are collective agricultural
communes.
Checking for Understanding
4. Why have many Latin American industries been
foreign-owned?
Many Latin American industries have been
foreign-owned because of their colonial history
or their reliance upon foreign investment.
Checking for Understanding
5. What factor contributes to socialism in Africa?
Some African leaders adopted socialism
because they viewed Western capitalism as
another form of colonialism.
Critical Thinking
6. Making Comparisons Analyze the economic
choices that developing and newly developed
nations must make in an increasingly
interdependent global economy.
Developing nations may seek to industrialize as
rapidly as possible, whereas newly developed
nations may seek to sustain their rate of growth
and influence the world economy.
Comparative Government Review the
characteristics of economies under
socialist governments and under
communist governments. Create an
organizational chart that illustrates
decision making under each of these
types of government.
Major Economies in Transition
Key Terms
state farm, collective farm, gross national product
Find Out
• How did economic problems lead to the collapse
of the Soviet Union?
• What are some of the obstacles to change faced
by Russia?
Major Economies in Transition
Understanding Concepts
Comparative Government How did the
Communist Party control the government and
economy of the Soviet Union?
Section Objective
Describe the major obstacles to change in the
Russian and Chinese economies.
After decades in power, the Communist
Party was unable to prevent the breakdown
of the authoritarian economic and political
system of the Soviet Union. Mikhail
Gorbachev’s efforts to reform the communist
system failed. As a leading adviser of
Gorbachev had predicted, “Gorbachev took
on this country like my wife takes on
cabbage. He thought that to get rid of the
dirt, he could just peel off the top layers of
the leaves. But he had to keep going until
there was nothing.”
I. Transforming the Russian Economy
(pages 728–729)
A. Beginning in 1917, the Soviet Union built the
world’s leading communist economic
system; economic decisions were made by
the government. Almost all Soviet
enterprises and farms were state-owned and
state-operated.
B. Mikhail Gorbachev, the last Communist
leader of the Soviet Union, tried to change
many policies to stimulate the stagnating
economy, but the economy continued
to decline.
C. Gorbachev resigned in 1991; several Soviet
republics then declared their independence,
effectively ending the Soviet Union.
I. Transforming the Russian Economy
(pages 728–729)
D. Since the collapse of communism, Russian
leaders have made attempts to move toward
capitalism and democracy.
E. Even with some reform, Russia is being run
much as it was under communism—and by
many of the same leaders.
F. The slow pace of change in Russia has
several causes. For one, former Communist
bureaucrats are unwilling to give up power.
Also, Russians are familiar with living in a
society in which rules have traditionally been
imposed from above.
I. Transforming the Russian Economy
(pages 728–729)
Do you think that Russia can overcome
the problems it faces today? Explain
your answer.
Answers will vary. Have students assess
the current Russian economic and
political situation.
II. Changing the Chinese Economy
(pages 729–731)
A. The Chinese Communist government
followed the model of the Soviet planned
economy until China found itself unable to
compete with the market-based economies
of its neighbors.
B. In the late 1970s, China’s Communist
leaders began to encourage private
enterprise; since then, the Chinese economy
has grown rapidly.
II. Changing the Chinese Economy
(pages 729–731)
C. More recent rapid development in China has
several causes:
i. China’s population provides a large
labor pool.
ii. The Chinese government promotes
manufacturing by giving foreign
companies tax incentives and cheap land.
iii. The Chinese government spends billions
of dollars on communications
technologies to assist manufacturers.
II. Changing the Chinese Economy
(pages 729–731)
D. China is attempting to move to a market
economy while maintaining an authoritarian
political system controlled by the
Communist Party.
E. Several factors threaten the Communist
Party in China:
i. China’s growing middle class will want
more of a say in its government.
ii. Poverty and unemployment creates a
class of urban poor who are angry with
the government.
iii. Transition to a market economy has led
to even greater political corruption.
II. Changing the Chinese Economy
(pages 729–731)
F. Trade with China has opened new markets
for American goods, though Chinese labor
costs have driven many American
manufacturers out of business. American
experts worry that an economically strong
China could become a dangerous political
and military rival.
II. Changing the Chinese Economy
(pages 729–731)
Do you think that rapid economic growth
in China will have a positive or negative
impact on the United States? Explain
your answer.
Answers will vary. Students should illustrate
an understanding of the impact of an
economically strong China on American
business and industry.
Checking for Understanding
1. Main Idea Use a graphic organizer like the one
here to identify four reasons for China’s rapid
economic growth.
large labor pool, low production costs, tax breaks
and cheap land given to foreign companies,
billions spent by Chinese government on
highways, ports, and communications
Checking for Understanding
2. Define state farm, collective farm, gross
national product.
A state farm is a farm owned by the
government and run like a factory, with
farmworkers being paid wages.
A collective farm is a farm in which the land is
owned by the government but rented to a family.
Gross national product, or GNP, is the sum of
all goods and services produced in a nation in a
year.
Checking for Understanding
3. Identify Mikhail Gorbachev, Vladimir Putin.
Mikhail Gorbachev was the last Communist
leader of the Soviet Union; he tried to
implement economic reforms while keeping the
Communist form of authoritarian government.
Vladimir Putin is the current Russian president;
he was elected to office in 2000 and is a former
lieutenant colonel of the KGB, the Soviet secret
police.
Checking for Understanding
4. What was the main source of agricultural
problems in the Soviet Union?
The main source of agricultural problems in the
Soviet Union was government mismanagement
of production.
Checking for Understanding
5. What events in 1991 led to the collapse of the
Soviet Union?
Six years of reform did not cure the Soviet
economy. Citizens revolted and several Soviet
republics declared their independence.
Critical Thinking
6. Analyzing Information How does the growing
Chinese middle class threaten the current
government in China?
As the middle class grows, its members will
want more say in how China is governed.
Comparative Government Before the
1980s, the Soviet economy was under
the control of government planners from
the Communist Party. Create a political
cartoon that illustrates one of the
problems that centralized planning
created for the Soviet economy. Share
your cartoon with your classmates.
The Global Economy
Key Terms
comparative advantage, tariffs, quotas, trading blocs
Find Out
• Why do nations develop trading blocs and
regional trade agreements?
• What are the four types of trade policy?
The Global Economy
Understanding Concepts
Global Perspectives How is the global economy
making nations interdependent?
Section Objective
Analyze the factors that dominate global economic
concerns today.
In the late 1990s, South Korea experienced
a sharp economic downturn. The
International Monetary Fund loaned South
Korea $57 billion to help strengthen its
financial institutions and industrial
corporations. South Korea’s problems
threatened to spread to Japan and other
nations with major trade with and
investments in South Korea. The
international effects of South Korea’s
economic downturn demonstrated how
interdependent nations have become in
today’s global economy.
I. International Trade (pages 732–734)
A. The economic principle of comparative
advantage says that each country should
produce those goods it can make more
efficiently and purchase those goods that
other nations produce more efficiently;
nations also trade to obtain goods and
services that they cannot produce, and to
create jobs.
B. Governments limit or control international
trade using barriers such as tariffs, quotas,
non-tariff barriers, and embargoes; countries
may also engage in unfair trade practices
such as dumping.
I. International Trade (pages 732–734)
C. Economists look at a nation’s balance of
trade—the measure of the entire flow of
money in and out of a country—to
measure a nation’s overall performance in
the global economy.
I. International Trade (pages 732–734)
Explain your position on unrestricted
international trade.
Answers will vary. See International Trade on
text pages 732–734 for a discussion of pros
and cons.
II. Trade Agreements (pages 734–735)
A. Over 100 nations have signed the General
Agreement on Tariffs and Trade (GATT)
since it was first enacted in 1947 in an effort
to reduce trade barriers.
B. In 1994 GATT was replaced by a regulatory
body known as the World Trade
Organization (WTO), which hears complaints
brought to it by member countries and has
the authority to penalize nations that violate
the GATT treaty.
II. Trade Agreements (pages 734–735)
C. The European Union (EU), currently made
up of 15 European nations, is the world’s
most important economic group; the EU
achieved monetary integration with the
adoption of the euro in 2002.
D. In signing the North American Free Trade
Agreement (NAFTA), the United States,
Canada, and Mexico agreed to reduce and
eventually end most trade restrictions
among their nations.
II. Trade Agreements (pages 734–735)
How do you think European political and
economic unification will affect the
United States?
Answers will vary. Some believe European
unification will threaten U.S. world
economic leadership.
III. Trade Alternatives for the United States
(pages 735–736)
A. A pure free-trade policy would mean that
businesses in different nations could buy
and sell goods with no tariffs or other
limitations of any kind.
B. The goal of a fair trade policy is to create an
orderly world market that does not give an
unfair advantage to countries that use unfair
business practices.
C. With managed trade, government intervenes
in trade arrangements in order to achieve
specific results.
D. Protectionism is the policy of using trade
barriers to protect domestic industries from
foreign competition and to prevent
unrestricted trade.
III. Trade Alternatives for the United States
(pages 735–736)
What challenges does globalization
present to the American economy?
Answers may vary but should include: the
American worker must now compete with a
much larger labor pool; economic and political
decisions are now more complicated.
Checking for Understanding
1. Main Idea Using a graphic organizer like the
one below, identify factors that affect the
stability of the global economy.
Answers might include: free trade—quotas,
tariffs, trading blocs; economic development—
investment capital, stable markets, economic
freedom, lack of national unity, military rule of
government, rapid population growth
Checking for Understanding
Match the term with the correct definition.
___
C comparative
advantage
___
D tariff
___
B quota
___
A trade bloc
A. a group of nations that
trade without barriers
such as tariffs
B. limit on the quantity of a
product that may be
imported
C. economic principle that
each country should
produce those goods it
can make more
efficiently and trade for
other goods
D. a tax placed on imports
to increase their price in
the domestic market
Checking for Understanding
3. Identify embargo, General Agreement on
Tariffs and Trade (GATT), World Trade
Organization (WTO).
An embargo is an agreement prohibiting trade.
The General Agreement on Tariffs and Trade
(GATT) is a treaty that made an effort to reduce
trade barriers.
The World Trade Organization (WTO) is a
regulatory body that replaced the GATT and
enforces the provisions of the treaty.
Checking for Understanding
4. Why do nations trade with one another?
Nations trade with one another to exercise and
benefit from comparative advantage.
Critical Thinking
5. Drawing Conclusions Which type of trade
policy do you believe is the most appropriate for
the United States to follow? Why?
Answers should be supported.
Global Perspectives Trade is
becoming more and more international,
and countries are linking their economic
fortunes with trade agreements.
However, there are barriers to
international trade. Review these
barriers, and then prepare a plan for
helping nations to overcome these
barriers and build their international
trade opportunities.
Reviewing Key Terms
Match the following terms with the descriptions below.
A.
B.
C.
D.
E.
factors of production
newly developed nations
command economy
gross national product
comparative advantage
F.
G.
H.
I.
J.
developing nations
trading bloc
tariffs
market economy
quotas
___
C 1.
an economy in which the government
makes most of the economic decisions
___
I 2.
an economy in which consumers make
most of the economic decisions
___
A 3.
the resources that an economic system
needs to produce goods and services
___
F 4.
nations with little or no industry
___
B 5.
nations recently having significant or rapid
industrial growth
Reviewing Key Terms
Match the following terms with the descriptions below.
A.
B.
C.
D.
E.
factors of production
newly developed nations
command economy
gross national product
comparative advantage
F.
G.
H.
I.
J.
developing nations
trading bloc
tariffs
market economy
quotas
the sum of a nation’s goods and services
principle that each country should produce
the goods it can make efficiently and trade
for other goods
___
H 8. taxes placed on imports to increase their
price in the domestic market
___
J 9. limits on the quantities of a product that
may be imported
___
G 10. a group of nations that trade without
economic barriers
___
D 6.
___
E 7.
Recalling Facts
1. What are the four factors of production?
The four factors of production are land, labor,
capital, and entrepreneurs.
2. What is the role of competition in the free
enterprise system?
Competition is an essential ingredient for a free
enterprise system. It helps ensure that the
consumer will get products of good quality at
low prices.
Recalling Facts
3. Where are most newly developed
nations located?
Most newly developed nations are located in
Eastern Europe, the Middle East, Asia, and
South America.
4. How has China’s growing economy impacted
the United States?
Trade with China is opening new American
markets; U.S. investment in China is increasing;
changes provide new sources of income for
some American workers and professionals;
some American industries are harmed because
they cannot compete with low Chinese labor
costs; China’s future relationship with the U.S. is
uncertain.
Recalling Facts
5. What are the causes of a lack of national unity
in some developing nations?
When colonial rulers left, fears and hatreds
based on ethnic, regional, religious, racial, and
language ties surfaced.
Understanding Concepts
1. Free Enterprise How did Soviet agricultural
policy differ from the policy practiced in the
United States?
Crops were sold at uncontrolled prices; team
workers’ pay was based on how hard the
workers worked and how much they produced.
Understanding Concepts
2. Global Perspectives What are the
differences between the traditional and the
new economic goals to promote development
in developing nations?
Goals have shifted from increasing the GNP to
improving people’s lives.
Critical Thinking
1. Making Comparisons Use a graphic
organizer like the one below to compare land
ownership in a capitalist system with that in a
planned economy.
Capitalist system—land is privately owned
with some government ownership to provide
public services; Planned economy—all land is
owned by the government
Critical Thinking
2. Drawing Conclusions Why might industrialized
nations such as the United States exercise
influence on developing nations to develop free
market economies and democracy?
Answers will vary but may include that new
free market, democratic nations might
become good trading partners and provide
markets for products.
Interpreting Political Cartoons Activity
1. What comparison is the cartoonist making?
Tensions between legislative and executive
branches of government are apparent in both
Russia and the United States.
Interpreting Political Cartoons Activity
2. Do you think the comparison is a valid one?
Why or why not?
Answers will vary. However, the United States
has balanced these powers during a long period
of stable government.
Interpreting Political Cartoons Activity
3. This cartoon was published in 1993. Are the
issues it raises still applicable today? Explain.
The issues it raises may always be applicable because as
long as different branches of government exist, there will
always be a struggle for power between them, especially
if different groups control the two institutions.
Interpreting Political Cartoons Activity
4. How do you think the economic situation in a
country affects its political climate?
The economic situation in a country may affect
how citizens perceive the effectiveness of their
government.
What is the formal name of the World
Bank, and under whose authority does
it operate?
A United Nations agency, it is known
formally as the International Bank for
Reconstruction and Development.
2) Nigeria
1) Russia
3) Pakistan
1) about 8 years longer
2) Answers will vary.
3) Yes; the greater per
capita GDP, the
longer the life
1) Turkmenistan
2) Kyrgyzstan
3) Answers will vary.
3) The overall value of trade has increased and a
greater increase of imports from Mexico has
resulted in a negative U.S. balance of trade
1) increase until 2000, then a slight decrease
2) 1994
Creating a Time Capsule Make a time capsule that
will tell future generations about economic issues at
the end of the twentieth century. Search for
photographs or other forms of illustrations; published
materials such as books, pamphlets, or slogans;
original written or drawn materials such as a glossary
of economic terms, a case study of a developing
country, or a chart of the characteristics of major
economic systems; or artifacts that illustrate some
economic concept (such as free enterprise) or issue
(such as free trade zones). Display and explain the
contents of your time capsule.
Collective Ownership The idea of collective
ownership of property goes back at least to the
ancient Greeks. Modern socialist theory—and the term
socialism—first was advanced by several French
utopian philosophers in the early 1800s. The most
influential of these was the Comte de Saint-Simon.
People from diverse fields and political persuasions—
utopian socialist Robert Owen, anarchist PierreJoseph Proudhon, Italian nationalist Giuseppe
Garibaldi, economist John Stuart Mill, and sociologist
Auguste Comte, for example—acknowledged a debt
to him. Karl Marx, too, was influenced initially by SaintSimon’s writings.
Changes in Eastern Europe and the collapse of the
Soviet Union have tainted the words socialist and
communist. Some political parties with these words
in their names have made changes—to Social
Democrats or Democratic Left, for example—to
avoid the negative connotations.
More About Intercultural Exchange Programs A
leading administrator of student and work exchange
programs is the Council on International Educational
Exchange. Interested students can learn about its
programs on the Internet (http://www.ciee.org/ ) or by
writing to its headquarters at 205 East 42nd Street,
New York, NY 10017.
Entrepreneur comes from the French word
entreprendre, which means “to undertake,” “to
attempt,” “to try.”
. . . All Others Pay Cash
The motto “In God We Trust” did not always appear
on U.S. bills and coins. During the Civil War, many
citizens asked the Secretary of the Treasury to
place some mention of a deity on U.S. coins. One
letter writer said that a mention of God “would place
us openly under . . . divine protection.” Their
pleadings were heard, and in 1864, “In God We
Trust” was used for the first time, on a two-cent
coin. In 1956, Congress declared “In God We Trust”
the national motto of the United States, and by the
next year, it made its debut on paper money.
Should the United State Increase Foreign Aid? What
responsibilities does the United States have to other nations?
How can foreign aid help achieve those goals? Research the
nations that receive aid, including each country’s history and
present-day challenges. Discuss the general principles upon
which the United States would determine the allocation of aid.
Consider the historic “pro” and “con” arguments about foreign
aid as well as arguments that relate to the immediate cases.
Concluding the Debate What standards did you set for
yourselves in asking for aid for your nation or in determining a
nation’s need? What arguments would you have used in
response to criticism of a nation’s need for aid? What do you
hope to see happen in each nation because of the decision
made about aid?
Conflict of Interest Consider the Soviet economy
and debate the following question: What economic
decisions might have kept the Soviet Union
from political collapse?
NAFTA Criticizing a North American free trade
zone, California representative Maxine Waters
asserted, “for every industry that goes [to Mexico]
and opens a plant, there’s a loss of jobs in our
community.” John Robinson of the National Minority
Business Council countered that free trade would
create more jobs in the minority community.
Research and debate these positions.
Consumer Advocacy The quality of goods
produced in the United States is closely monitored
by several organizations. Find out how the quality of
one product you use frequently has been assessed.
Economics Even under capitalism, private property
rights are not absolute but are subject to matters of
public welfare. In the United States, for example,
taxes, zoning restrictions, health and building codes,
and environmental regulations limit the use of private
property. Furthermore, federal laws prevent people
from using their property to make certain products,
such as illegal drugs or alcohol.
Food From the ‘Hood
The slogan of Food From the ’Hood is “Great things
are growing in South Central L.A.” In its first four
years, Food From the ’Hood put some $42,000—
half of its net profits from the sale of its creamy
Italian dressing—into scholarships. Food From the
’Hood received the 1996 Small Business
Entrepreneurs Award, given by Black Enterprise
magazine, in recognition of the students’
achievement.
Activity: Discuss how you might set up a business
whose profits could help college-bound students
and the community.
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