Current Events:
Today's lesson plan and HW is available on the blog: http://gmicksmithsocialstudies.blogspot.com/
Email: gmsmith@shanahan.org
The Shanawiki page (http://shanawiki.wikispaces.com/) has updated class information.
LibraryThing has bibliographic resources.
I moved the "Blog Archive" to the top right on the blog page so it should be easier to find the daily lesson, HW, and other class material.
We are addressing Chapter 2 in particular for the parts not covered in the Quiz. We will cover the non-Quiz material in Chapter 2 for a Test on Chapter 2.
We will finish "NAFTA: Are Jobs Being Sucked Out of the United States?"
Conclusion:
The debate on NAFTA, and United States foreign trade in general, usually centers on the potential negative effects of imports on the economy. It is relatively easy to identify who is harmed, because imports displace workers in industries where the comparative advantage lies elsewhere. At the same time, others benefit. Firms whose exports increase clearly benefit. Consumers get the same or higher quality products at lower costs. Are these gains costless? No; some firms lose sales and some individuals lose their jobs. Is protecting firms or industries that are likely to lose costless? No; we lose the gains from trade, and those who would have benefited because they could have increased exports never get the chance to do so.
The purpose of this lesson is to acquaint students with the concept of comparative advantage (relative efficiency) and the arguments for and against foreign trade. Understanding the theory, the debates surrounding the theory, and the relevant data will help students to think clearly about optimum public policy concerning free trade.
References and a part of the Basic Concepts Graphs that we did not cover as of yet.
Then, we can cover a brief exercise on
comparative advantage (http://gmicksmithsocialstudies.blogspot.com/2009/08/ap-economics-comparative-advantage.html). Once you access the comparative advantage, blog post, click on "When Disaster Strikes, What Can We Do?"
Answer the following questions: what non-government institutions traditionally succeeded "in transforming the desire to do good into real world benefits?" What did Americans form as opposed to the Europeans?
Key phrases:
decentralized nature
non-profit
Private
(There are of course also profit-motivated firms)
What non-government institutions can be inferred from your reading of the article?
Hint: Consider the following quote from Tocqueville:
“Americans of all ages, all conditions, and all dispositions constantly form associations. They have not only commercial and manufacturing companies . . . but associations of a thousand other kinds, religious, moral, serious, futile, general or restricted, enormous or diminutive. The Americans make associations to give entertainments, to found seminaries, to build inns, to construct churches, to diffuse books, to send missionaries to the antipodes; in this manner, they found hospitals, prisons, and schools . . . .” (de Tocqueville).
Lesson Overview
Understanding what governments and markets can do well in disasters is useful knowledge for citizens and policymakers, but it does not answer the question of what those same citizens can do as compassionate individuals. Allocating tasks among political and economic institutions appears to leave ordinary people without a role – but this is misleading. Institutions are human creations, the processes and procedures through which we interact with one another. The lesson of institutional analysis of disasters is that people who want to help can be most effective when they work through the institutions that form the framework of society. This lesson looks at the record of non-profit charitable organizations in explaining why they so often succeed in transforming the desire to do good into real world benefits.
Key Points
1. People’s desire to help in times of disaster is most effective when channeled through the community of non-profit, charitable organizations. These organizations have a comparative advantage in providing relief services that untrained, unorganized individuals and groups (and government agencies) do not.
* The decentralized nature of the non-profit community makes it an effective transmitter of signals between interested third parties who want to help and individuals and small groups in need of assistance. (Chamlee-Wright & Rothschild, 5-7)
* The common practice by for-profit companies of channeling their charitable contributions through established relief organizations is evidence that the market recognizes the comparative advantage of non-profits in this arena.
* Private, profit-motivated firms want their donations to be used in the most valuable ways, not just for compassionate reasons, but also because they are attentive to reputation and future profits. The route of corporate donations in recent disasters offers corroborating evidence:
2. Charitable organizations operate in a “market-like” atmosphere in which incentives similar to those in markets shape the behavior of both the charities and their donors. When charities do a good job of using donors’ money to assist victims, their budgets get bigger because donations increase. When charities perform poorly – whether because of incompetence, fraud, or mismanagement – they suffer budget cuts in the form of reduced donations.
3. The comparative advantage of non-profits has been strengthened by centuries of experience. In the United States, for example, disaster assistance has traditionally been provided by voluntary action within communities. Our history of private, community responsibility for aiding disaster victims is a reflection of the concept of limited government upon which the U.S. was established.
4. Given the competitive nature of charitable organizations and their background of experience in disaster relief, the best way for individuals to help disaster victims is by finding a reputable relief organizations and responding to their calls for resources.
5. Donating money is the most useful way to express compassion.
6. Although donating cash may seem less satisfying because it is impersonal, it is important to recognize that the impersonal nature of money is what makes it particularly powerful and effective in disaster situations.
Conclusion
As we have looked at the dynamics of how sympathetic onlookers can best aid victims of disasters, we have also implicitly raised the question of whether charitable giving is preferable to leaving victim assistance in the hands of government. We may not think of charitable organizations as “economic” institutions, but economic analysis reveals the underlying reasons for their effectiveness in natural disasters and provides a compelling rationale for funneling our compassionate impulses through them:
First, the decentralized network of organizations competes for our donations – of time, effort, and especially money – and we can hold them accountable by our choices of whether or not to donate.
Second, because charities are accountable to their donors, they are careful to target assistance and to weigh the value of continuing assistance in one area against reserving resources for use in another. The limited nature of private assistance significantly reduces the potential for moral hazard.
And finally, because of their extensive experience and their ongoing day-to-day operation, non-profit charitable organizations have developed a comparative advantage in getting goods and services from those who can provide them to the individuals and groups in distress.
You can also start checking Shanawiki (http://shanawiki.wikispaces.com/) for Test #1 multiple choice preview questions.
Before the Test, you should have 75 potential multiple-choice questions that may appear on the Test posted on Shanawiki. At this point, you will answer 20, in later Tests there may be more questions on a Test.
In any event, after the Tests are graded and handed back, I will provide an answer key to all 75 multiple-choice questions that you can use as a Study Guide for the actual AP Test.
You do not need to send HW in email to gmsmith@shanahan.org for this exercise.
1. However, what you should do is to collaborate with at least one other study partner in the class and answer at least the first 10 (10) possible questions on the Shanawiki (http://shanawiki.wikispaces.com/) site for Test #1 multiple choice preview questions. Feel free to discuss and disagree on Shanawiki as to the possible answers.
After the Test is graded and handed back for credit I will supply an Answer Key for all 75 Chapter Questions; this is your Chapter 2 Study Guide for the actual AP Test.
