Is Capitalism Good for the Poor?

The lesson plans and student activities in Is Capitalism Good for the Poor? (CAP) have been carefully designed and written by distinguished economists, including a Nobel Laureate, award winning curriculum writers, and classroom teachers to engage students in discussions and study of some of the most important economic issues of our time. The title question is intentionally provocative to stir interest and thought, and the answer—yes or no—depends on the particular features of a nation’s institutions and how we measure and perceive poverty. Poverty, capitalism, economic growth, income distribution, markets, property rights, rule of law, and moral values are among the many topics addressed. CAP Lessons Lessons may be viewed and printed as web pages or downloaded from the links below. Lessons are designed to stand alone, or to be used together as the framework for a unit on capitalism and poverty in the developing world. Applicable economics content standards are identified. All FTE materials may be freely copied and edited for classroom use.

Lesson Outline

Historical Overview

Lesson 1 Part 1:  What is Poverty and Who Are the Poor?

• Key Terms and Concepts:  Absolute Poverty; Income; Relative Poverty; Wealth
• Activities: What is Poverty? A KWL Exercise; Web Quest — What is Poverty and Who are the Poor?
• Appendices: Relative Poverty and Distribution of Income; Social Indicators of Poverty (.doc files)

Lesson 1 Part 2:  Capitalism – Institutional Building Blocks

• Key Terms and Concepts: Market; Entrepreneurship; Rule of Law; Incentives; Property Rights; Limited Government
• Activity: Will the Real Capitalism Please Stand Up?

Lesson 2:  Property Rights and the Rule of Law

• Key Terms and Concepts: Institutions; Property Rights; Rule of Law; Incentives; Capital; Asset; Collateral
• Activity: You’re the Economist
• Exercises: The Rule of Law; Australia and Argentina – A Study in Contrast (.doc files)

Lesson 3:  Beneficiaries of Competition

• Key Terms and Concepts: Market; Entrepreneurship; Competition; Incentives; Property Rights; Human Capital
• Activity: The More, the Merrier

Lesson 4:  How Incentives Affect Innovation

• Key Terms and Concepts: Incentives; Profit; Competition; Entrepreneurship; Economic Growth; Innovation
• Activity: It’s Not Rocket Science
  • Includes 3 exercises:
    • “Distinguishing Between Invention and Innovation”
    • “If the Soviets Were So Smart, Why Weren’t They Rich?”
    • “No More Slide Rules – The Costs and Benefits of Innovation”

Lesson 5:  Character Values and Capitalism

• Key Terms and Concepts: Incentives; Rule of Law; Standard of Living; Property Rights; Economic Growth
• Activity: The Ultimatum Game

Lesson 6: Capitalism and Economic Freedom

• Key Terms and Concepts: Economic Systems; Incentives; Institutions
• Activity: How Free is That Country?

Lesson 7: How Do Institutions Affect Productivity and Standard of living?

• Key Terms and Concepts:  Absolute Poverty; Economic Freedom; Economic Institutions; GDP; Incentives; Relative Poverty 
• Activity: Who Wins and Loses with Competition?