ACTIVITY 6 – Will the Real Socialism Please Step Forward?

Introduction

In this activity student will use their knowledge of socialism to examine country profiles in the CIA World Factbook for evidence of socialism.  After their examination they will decide how many steps forward to take for each country in answer to the question “will the real socialism please step forward?”

Key Terms

Socialism
A society in which the state controls resources and makes decisions about production and equitable distribution.

Control Problem
The difficulty central planners have in controlling human wants and desires.

Incentive Problem
The problem that occurs with central planning when individuals and central planners are not incentivized to serve the general interest.

Knowledge Problem
The idea that the information for economic planning is distributed across individual members of society and cannot be known by central planners.

Pathologies of Privilege
The problem that occurs in central planning when bureaucrats gain power, and some are privileged over others.

Objectives

Students will be able to:

• Identify examples of the control problem in country profiles.
• Identify examples of the knowledge problem in country profiles.
• Identify examples of the incentive problem in country profiles.
• Identify examples of the pathologies of privilege in country profiles.
• Analyze country profiles to determine to what degree a country is socialist.

Voluntary National Content Standards

CONTENT STANDARD 8: Role of Price

Students will understand that prices send signals and provide incentives to buyers and sellers. When supply or demand changes, market prices adjust, affecting incentives.

• Benchmark 4: Scarce goods and services are allocated in a market economy through the influence of prices on production and consumption decisions.

CONTENT STANDARD 9: Competition and Market Structure

Competition among sellers usually lowers costs and prices, and encourages producers to produce what consumers are willing and able to buy. Competition among buyers increases prices and allocates goods and services to those people who are willing and able to pay the most for them. 

• Benchmark 1: The pursuit of self-interest in competitive markets usually leads to choices and behavior that also promote the national level of well-being.
• Benchmark 5: The introduction of new products and production methods is an important form of competition and is a source of technological progress and economic growth.

CONTENT STANDARD 14: Entrepreneurship

Entrepreneurs take on the calculated risk of starting new businesses, either by embarking on new ventures similar to existing ones or by introducing new innovations. Entrepreneurial innovation is an important source of economic growth.

• Benchmark 3:  Productivity and efficiency gains that result from innovative practices of entrepreneurs foster long term economic growth.

Time Required

50 minutes