Wednesday, October 20, 2010

Honors World History II: 21 October 2010

Current Events:
"Everything is OK"


Waiter-Developer Answers Funding Questions about Ground Zero Mosque

Artist's rendition of the Ground Zero mosque

An audio recording of the Ground Zero Imam claiming credit for Obama's Cairo speech:

Obama's Cairo Speech written by Mosque Imam

Quotations from Obama's Cairo speech:

"I consider it part of my responsibility as president of the United States to fight against negative stereotypes of Islam wherever they appear."

"That's why the United States government has gone to court to protect the right of women and girls to wear the hijab, and to punish those who would deny it."

"we must address together . . . religious freedom. Islam has a proud tradition of tolerance. We see it in the history of Andalusia and Cordoba [Islamist names for Spain] during the Inquisition" (i.e., against the Catholics).

The Ground Zero imam stated: "The U.S. has more Muslim blood on its hands than Al Queda."

American Taxpayers Fund Mosque Imam on Trip:

As a point of historical reference, so as not to offend Jewish groups who objected to a Catholic convent at the site of Auschwitz from the Holocaust the Pope ordered Carmelite nuns not to build there. Jewish people were encouraged by the respect that was shown by the Catholics towards Jewish sensibilities at Auschwitz.

Ch. 11 Sec. 1 Quiz is on Tuesday.

The Chapter 10 Test Make-Up is today.


Be sure your name is on both the Scantron and the Test.

HW Avatar is available below (per our usual procedure HW is also posted at the bottom of the daily blog post as well as being posted on GradeConnect):

Chapter 11 The French Revolution and Napoleon, 1789–1815

Chapter Overviews

Section 1 The French Revolution Begins

Poverty and deep social divisions were the backdrop of the French Revolution. On the eve of the revolution, financial crisis gripped the government of Louis XVI. Rather than accept higher taxes, the commoners in France's legislative body, the Estates-General, broke off to form a National Assembly. Anticipating an attack by the king's forces, commoners then stormed the Bastille prison, marking the start of the Revolution. The new Assembly took control of the Catholic Church and adopted the Declaration of the Rights of Man and the Citizen. The document was inspired in part by the American Declaration of Independence and Constitution. The Assembly then wrote a constitution establishing a limited monarchy and a Legislative Assembly. France was soon at war with Austria, where some feared the revolution might spread. Louis XVI was taken captive by the Paris Commune. The Commune called for a National Convention and forced the revolution into a more violent phase.

Chapter Overviews

After surveying the Chapter, we begin in Section 1 The French Revolution Begins

Chapter 11 Section 1 The French Revolution Begins


The Conquerors of the Bastille before the Hotel de Ville, painted by Paul Delaroche

Fall of the Bastille

Background to the Revolution

The Three Estates

In 1789, France, like the rest of Europe, still clung to an outdated social system that had emerged in the Middle Ages. Under this ancien régime, or old order, everyone in France was divided into one of three social classes, or estates. The First Estate was made up of the clergy; the Second Estate was made up of the nobility; and the Third Estate comprised the vast majority of the population.

During the Middle Ages, the Church had exerted great influence throughout Christian Europe. In 1789, the French clergy still enjoyed enormous wealth and privilege. The Church owned about 10 percent of the land, collected tithes, and paid no direct taxes to the state. High Church leaders such as bishops and abbots were usually nobles who lived very well. Parish priests, however, often came from humble origins and might be as poor as their peasant congregations.

The First Estate did provide some social services. Nuns, monks, and priests ran schools, hospitals, and orphanages. But during the Enlightenment, philosophes targeted the Church for reform. They criticized the idleness of some clergy, the Church’s interference in politics, and its intolerance of dissent. In response, many clergy condemned the Enlightenment for undermining religion and moral order.

The Second Estate was the titled nobility of French society. In the Middle Ages, noble knights had defended the land. In the 1600s, Richelieu and Louis XIV had crushed the nobles’ military power but had given them other rights—under strict royal control. Those rights included top jobs in government, the army, the courts, and the Church.

At Versailles, ambitious nobles competed for royal appointments while idle courtiers enjoyed endless entertainments. Many nobles, however, lived far from the center of power. Though they owned land, they received little financial income. As a result, they felt the pinch of trying to maintain their status in a period of rising prices.

Many nobles hated absolutism and resented the royal bureaucracy that employed middle-class men in positions that once had been reserved for them. They feared losing their traditional privileges, especially their freedom from paying taxes.

Analyzing Political Cartoons

The Old Regime

This cartoon represents the social order in France before the French Revolution. While a member of the Third Estate is beginning to express anger and rise up, a nobleman representing the Second Estate and a priest, representing the First Estate, recoil in surprise and fear.

1. How does the cartoonist portray the Third Estate? Explain why.

2. What were the differences among the social classes in pre-revolutionary France?

The Third Estate was the most diverse social class. At the top sat the bourgeoisie (boor zhwah zee), or middle class. The bourgeoisie included prosperous bankers, merchants, and manufacturers, as well as lawyers, doctors, journalists, and professors. The bulk of the Third Estate, however, consisted of rural peasants. Some were prosperous landowners who hired laborers to work for them. Others were tenant farmers or day laborers.

The poorest members of the Third Estate were urban workers. They included apprentices, journeymen, and others who worked in industries such as printing or cloth making. Many women and men earned a meager living as servants, stable hands, construction workers, or street sellers of everything from food to pots and pans. A large number of the urban poor were unemployed. To survive, some turned to begging or crime.

Vocabulary Builder

urban—(ur bun) adj. of, relating to, or characteristic of a city

From rich to poor, members of the Third Estate resented the privileges enjoyed by their social “betters.” Wealthy bourgeois families in the Third Estate could buy political office and even titles, but the best jobs were still reserved for nobles. Urban workers earned miserable wages. Even the smallest rise in the price of bread, their main food, brought the threat of greater hunger or even starvation.

Because of traditional privileges, the First and Second Estates paid almost no taxes. Peasants were burdened by taxes on everything from land to soap to salt. Though they were technically free, many owed fees and services that dated back to medieval times, such as the corvée (kawr vay), which was unpaid labor to repair roads and bridges. Peasants were also incensed when nobles, hurt by rising prices, tried to reimpose old manor dues.


What Is the Third Estate?

In towns and cities, Enlightenment ideas led people to question the inequalities of the old regime. Why, people demanded, should the first two estates have such great privileges at the expense of the majority? Throughout France, the Third Estate called for the privileged classes to pay their share.

Financial Crisis

Economic woes in France added to the social unrest and heightened tensions. One of the causes of the economic troubles was a mushrooming financial crisis that was due in part to years of deficit spending. This occurs when a government spends more money than it takes in.

Louis XIV had left France deeply in debt. The Seven Years’ War and the American Revolution strained the treasury even further. Costs generally had risen in the 1700s, and the lavish court soaked up millions. To bridge the gap between income and expenses, the government borrowed more and more money. By 1789, half of the government’s income from taxes went to paying the interest on this enormous debt. Also, in the late 1780s, bad harvests sent food prices soaring and brought hunger to poorer peasants and city dwellers.

To solve the financial crisis, the government would have to increase taxes, reduce expenses, or both. However, the nobles and clergy fiercely resisted any attempt to end their exemption from taxes.

The heirs of Louis XIV were not the right men to solve the economic crisis that afflicted France. Louis XV, who ruled from 1715 to 1774, pursued pleasure before serious business and ran up more debts. Louis XVI was well-meaning but weak and indecisive. He did, however, wisely choose Jacques Necker, a financial expert, as an advisor. Necker urged the king to reduce extravagant court spending, reform government, and abolish burdensome tariffs on internal trade. When Necker proposed taxing the First and Second Estates, however, the nobles and high clergy forced the king to dismiss him.

As the crisis deepened, the pressure for reform mounted. The wealthy and powerful classes demanded, however, that the king summon the Estates-General, the legislative body consisting of representatives of the three estates, before making any changes. A French king had not called the Estates-General for 175 years, fearing that nobles would use it to recover the feudal powers they had lost under absolute rule. To reform-minded nobles, the Estates-General seemed to offer a chance of carrying out changes like those that had come with the Glorious Revolution in England. They hoped that they could bring the absolute monarch under the control of the nobles and guarantee their own privileges.

Poorer peasants and city dwellers in France were faced with great hunger as bad harvests sent food prices soaring. People began to riot to demand bread. In the countryside, peasants began to attack the manor houses of the nobles. Arthur Young, an English visitor to France, witnessed these riots and disturbances. Why did the poor attack the nobles’ homes?

Primary Source

“Everything conspires to render the present period in France critical: the [lack] of bread is terrible: accounts arrive every moment from the provinces of riots and disturbances, and calling in the military, to preserve the peace of the markets.”

—Arthur Young, Travels in France During the Years 1787, 1788, 1789
Reading Check


What groups were part of the Third Estate?

From Estates-General to National Assembly

As 1788 came to a close, France tottered on the verge of bankruptcy. Bread riots were spreading, and nobles, fearful of taxes, were denouncing royal tyranny. A baffled Louis XVI finally summoned the Estates-General to meet at Versailles the following year.

In preparation, Louis had all three estates prepare cahiers (kah yayz), or notebooks, listing their grievances. Many cahiers called for reforms such as fairer taxes, freedom of the press, or regular meetings of the Estates-General. In one town, shoemakers denounced regulations that made leather so expensive they could not afford to make shoes. Servant girls in the city of Toulouse demanded the right to leave service when they wanted and that “after a girl has served her master for many years, she receive some reward for her service.”

The cahiers testified to boiling class resentments. One called tax collectors “bloodsuckers of the nation who drink the tears of the unfortunate from goblets of gold.” Another one of the cahiers condemned the courts of nobles as “vampires pumping the last drop of blood” from the people. Another complained that “20 million must live on half the wealth of France while the clergy . . . devour the other half.”

Delegates of the Third Estate declare themselves to be the National Assembly, representing the people of France. They take the Tennis Court Oath, vowing to create a constitution. The National Assembly later issues the assignat as currency to help pay the government’s debts.

Delegates to the Estates-General from the Third Estate were elected, though only propertied men could vote. Thus, the delegates were mostly lawyers, middle-class officials, and writers. They were familiar with the writings of Voltaire, Rousseau, and other philosophes. They went to Versailles not only to solve the financial crisis but also to insist on reform.

The Estates-General convened in May 1789. From the start, the delegates were deadlocked over the issue of voting. Traditionally, each estate had met and voted separately. Each group had one vote. Under this system, the First and Second Estates always outvoted the Third Estate two to one. This time, the Third Estate wanted all three estates to meet in a single body, with votes counted “by head.”

After weeks of stalemate, delegates of the Third Estate took a daring step. in June 1789, claiming to represent the people of France, they declared themselves to be the National Assembly. A few days later, the National Assembly found its meeting hall locked and guarded. Fearing that the king planned to dismiss them, the delegates moved to a nearby indoor tennis court. As curious spectators looked on, the delegates took their famous Tennis Court Oath. They swore “never to separate and to meet wherever the circumstances might require until we have established a sound and just constitution.”

When reform-minded clergy and nobles joined the Assembly, Louis XVI grudgingly accepted it. But royal troops gathered around Paris, and rumors spread that the king planned to dissolve the Assembly.

Reading Check


Why did the Third Estate object to each estate's having one vote in the Estates-General?

The Destruction of the Old Regime

Declaration of the Rights of Man

In late August, as a first step toward writing a constitution, the Assembly issued the Declaration of the Rights of Man and the Citizen. The document was modeled in part on the American Declaration of Independence, written 13 years earlier. All men, the French declaration announced, were “born and remain free and equal in rights.” They enjoyed natural rights to “liberty, property, security, and resistance to oppression.” Like the writings of Locke and the philosophes, the constitution insisted that governments exist to protect the natural rights of citizens.

The National Assembly issued this document in 1789 after having overthrown the established government in the early stages of the French Revolution. The document was modeled in part on the English Bill of Rights and on the American Declaration of Independence. The basic principles of the French declaration were those that inspired the revolution, such as the freedom and equality of all male citizens before the law. The Articles below identify additional principles.

Therefore the National Assembly recognizes and proclaims, in the presence and under the auspices1 of the Supreme Being, the following rights of man and of the citizen:

1. Men are born and remain free and equal in rights. Social distinctions may be founded only upon the general good.

2. The aim of all political association is the preservation of the natural and imprescriptible2 rights of man. These rights are liberty, property, security, and resistance to oppression. . . .

4. Liberty consists in the freedom to do everything which injures no one else. . . .

5. Law can only prohibit such actions as are hurtful to society. . . .

6. Law is the expression of the general will. Every citizen has a right to participate personally, or through his representative, in its formation. It must be the same for all, whether it protects or punishes. All citizens, being equal in the eyes of the law, are equally eligible to all dignities and to all public positions and occupations, according to their abilities, and without distinction except that of their virtues and talents.

7. No person shall be accused, arrested, or imprisoned except in the cases and according to the forms prescribed by law. . . .

11. The free communication of ideas and opinions is one of the most precious of the rights of man. Every citizen may, accordingly, speak, write, and print with freedom. . . .

13. A common contribution is essential for the maintenance of the public [military] forces and for the cost of administration. This should be equitably distributed among all the citizens in proportion to their means.

Thinking Critically

1. Summarize

Summarize article 6. Why is this article especially significant?

2. Identify Central Issues

What central idea does this declaration share with the American Declaration of Independence?

The King Concedes

On October 5, about six thousand women marched 13 miles in the pouring rain from Paris to Versailles. “Bread!” they shouted. They demanded to see the king.

Much of the crowd’s anger was directed at the Austrian-born queen, Marie Antoinette (daughter of Maria Theresa and brother of Joseph II). The queen lived a life of great pleasure and extravagance, and this led to further public unrest. Although compassionate to the poor, her small acts went largely unnoticed because her lifestyle overshadowed them. She was against reforms and bored with the French court. She often retreated to the Petit Trianon, a small chateau on the palace grounds at Versailles where she lived her own life of amusement.

The women refused to leave Versailles until the king met their most important demand—to return to Paris. Not too happily, the king agreed. The next morning, the crowd, with the king and his family in tow, set out for the city. At the head of the procession rode women perched on the barrels of seized cannons. They told bewildered spectators that they were bringing Louis XVI, Marie Antoinette, and their son back to Paris. “Now we won’t have to go so far when we want to see our king,” they sang. Crowds along the way cheered the king, who now wore the tricolor. In Paris, the royal family moved into the Tuileries (twee luh reez) palace. For the next three years, Louis was a virtual prisoner.

Church Reforms

The National Assembly soon followed the king to Paris. Its largely bourgeois members worked to draft a constitution and to solve the continuing financial crisis. To pay off the huge government debt—much of it owed to the bourgeoisie—the Assembly voted to take over and sell Church lands.

In an even more radical move, the National Assembly put the French Catholic Church under state control. Under the Civil Constitution of the Clergy, issued in 1790, bishops and priests became elected, salaried officials. The Civil Constitution ended papal authority over the French Church and dissolved convents and monasteries.

Reaction was swift and angry. Many bishops and priests refused to accept the Civil Constitution. The pope condemned it. Large numbers of French peasants, who were conservative concerning religion, also rejected the changes. When the government punished clergy who refused to support the Civil Constitution, a huge gulf opened between revolutionaries in Paris and the peasantry in the provinces.

A New Constitution and New Fears

The National Assembly completed its main task by producing a constitution. The Constitution of 1791 set up a limited monarchy in place of the absolute monarchy that had ruled France for centuries. A new Legislative Assembly had the power to make laws, collect taxes, and decide on issues of war and peace. Lawmakers would be elected by tax-paying male citizens over age 25.

To make government more efficient, the constitution replaced the old provinces with 83 departments of roughly equal size. It abolished the old provincial courts, and it reformed laws.

To moderate reformers, the Constitution of 1791 seemed to complete the revolution. Reflecting Enlightenment goals, it ensured equality before the law for all male citizens and ended Church interference in government. At the same time, it put power in the hands of men with the means and leisure to serve in government.

War with Austria

European rulers opposed the French Revolution because they were afraid that revolutionary ideas would spread to their own countries. European rulers were afraid of having their privileges, their property, their religion, and their lives threatened if the French revolutionary ideas were to spread. Even "enlightened" rulers turned against France.

With the Declaration of Pilnitz European rulers threatened to intervene to protect the French monarchy. The king of Prussia and the emperor of Austria (Marie Antoinette's brother) issued the Declaration of Pilnitz, threatening to intervene to protect the French monarchy.

The French declared war on Austria, Prussia, Britain, and others, which caused those great powers expected an easy victory since France was divided by revolution, facing crises at home.

Rise of the Paris Commune

Paris, too, was in turmoil. As the capital and chief city of France, it was the revolutionary center. A variety of factions, or dissenting groups of people, competed to gain power. Moderates looked to the Marquis de Lafayette, the aristocratic “hero of two worlds” who fought alongside George Washington in the American Revolution. Lafayette headed the National Guard, a largely middle-class militia organized in response to the arrival of royal troops in Paris. The Guard was the first group to don the tricolor—a red, white, and blue badge that was eventually adopted as the national flag of France.

A more radical group, the Paris Commune, replaced the royalist government of the city. It could mobilize whole neighborhoods for protests or violent action to further the revolution. Newspapers and political clubs—many even more radical than the Commune—blossomed everywhere. Some demanded an end to the monarchy and spread scandalous stories about the royal family and members of the court.

Reading Check


What was the significance of the Constitution of 1791?


Section 2 Radical Revolution and Reaction

1. Using print and Internet sources (a reference to La Marseilloise is made above, an English translation is also available), familiarize yourself with the lyrics to The Marseillaise, God Save the Queen (not the pop version),

and The Star Spangled Banner. How do they vary in subject matter, tone, theme, and style, and how are they similar?

Not required, but if helpful, create a chart listing your findings.

Bibliographic resources for the French Revolution

Previous to or the buildup to the Revolution

Cf. The Coming of the French Revolution (Princeton Classic Editions)
by Georges Lefebvre.

The Fall of the French Monarchy 1787-1792 (The French Revolution) by Michel Vovelle.

Great Fear of 1789
by Georges Lefebvre.

General works on the Revolution

The Crowd in the French Revolution (Galaxy Books) by George Rude.

A Short History of the French Revolution, 1789-1799 by Albert Soboul.

The Abolition Of Feudalism: Peasants, Lords, And Legislators In The French Revolution, by John Markoff.

Interpreting the French Revolution by Francois Furet.

Citizens: A Chronicle of the French Revolution by Simon Schama.

The Radical Revolution

The Sans-Culottes
by Albert Soboul.

The Vendee: A Sociological Analysis of the Counter-Revolution of 1793 by Charles Tilly.

Revolutionary Themes After the Revolution

Reflections on the Revolution in France (Oxford World's Classics) by Edmund Burke.

The Age of Revolution: 1789-1848 by Eric Hobsbawm.

Work and Revolution in France: The Language of Labor from the Old Regime by William H. Sewell Jr.

The Course in German History by A.J.P. Taylor.


Chapter 10 Test Prep page


These questions may be--but there is no guarantee--on the Test. They are here as possible questions on the Test for study purposes.

The Enlightenment and the American Revolution (1700–1800)
Philosophy in the Age of Reason


Enlightenment Ideas Spread Self-Test


Birth of the American Republic Self-Test


Chapter Self-Test


Sec. 1 The French Revolution Begins


HW: email (or hard copy) me at

1. Monday HW

p. 334, Picturing History, What happened to the royal family after their capture?

Email only if you answer (i.e., you voluntarily choose to participate):

Last week what I liked least about the class was . . .
Last week what I enjoyed most about the class was . . .

Study for the Test on Ch. 10, Wednesday

Get a Voki now!

1. Tuesday HW

What was the significance of the Constitution of 1791?

2. Study for the Test on Ch. 10, Wednesday

Chapter 10 Test Prep page

Honors World History II Chapter 10 Test Prep Page


Get a Voki now!

1. Wednesday HW

p. 335, #4

Get a Voki now!

1. Thursday HW

p. 335, #5

1. Friday HW

p. 335, #6

Reminder: Ch. 11 Sec. 1 Quiz is on Tuesday.

Get a Voki now!

Honors Business Economics Chapter 2, 21 October 2010


Current Events (current French and English economics compared):

Strikes across France intensified with police firing tear gas at protesters in the city of Lyon. About 1,000 high school students went on strike, overturning rubbish bins, smashing bus stops, and setting fire to stacks of free newspapers. The students and labour unions see President Nicolas Sarkozy's pension reform - raising the retirement age from 60 to 62 - as an attack on their well-deserved social protections. Workers at all 12 of France's fuel producing refineries have also joined the protest. Strikers burned tires outside an oil refinery in Donges, near Nantes in western France.

Chancellor George Osborne proposes that 490,000 public sector jobs will be cut by 2014.

FAIR USE NOTICE: This video may contain copyrighted material. Such material is made available for educational purposes only. This constitutes a 'fair use' of any such copyrighted material as provided for in Title 17 U.S.C. section 107 of the US Copyright Law.

At least one pundit warns about a period of unrest: Will the Federal Reserve Cause a Civil War?

According to the article: "November 3rd, the day after the election, is when the Federal Reserve's next policy committee meeting ends, and if you thought this was just another boring money meeting you would be wrong. It could be the most important meeting in Fed history."

A Brief History of the Federal Reserve


The Ch. 2 Sec. 1 Quiz is on Tuesday.

The Chapter 1 Test Make-Up should be done today.


Chapter 2 Economic Systems and Decision Making

Chapter Overviews

Section 1: Economic Systems

Economic systems help societies provide for the wants and needs of their people. Three major economic systems have evolved over the years: traditional, command, and market economies. In the traditional economy, the WHAT, HOW, and FOR WHOM questions are answered by tradition, customs, and even habits handed down from generation to generation. In a command economy, a central authority answers the three basic questions. In a market economy, decision making is decentralized with consumers and entrepreneurs playing a central role. Most economies in the world today feature some mix of traditional, command, and market economies.

Chapter 2: Economic Systems and Decision Making


Drag and Drop




Section 2 Evaluating Economics Performance

The seven major economic and social goals used to evaluate the performance of an economic system are economic freedom, economic efficiency, economic equity, economic security, full employment, price stability, and economic growth. If the system does not perform as people would like, people can lobby for laws to achieve their goals. One example would be the Social Security program that was enacted to achieve the goal of economic security.

Rule of 72

Determinants of growth

Productivity and economic growth

Resolving Trade-Offs Among Goals, p. 46 Determining Cause and Effect:

Graphic Organizer

The action helps achieve the goals of economic security or full employment while working against the goal of economic efficiency.

Reading Check
Why do trade-offs among goals exist?

On-the-Job Video Gaming, p. 47

Sharkworld - A project management game, :58

Sharkworld is an intense experience of the exciting daily activities of an international project manager. The game allows aspiring project managers to experiment with project management in a setting where game and the real world are flawlessly intertwined. The game is played via both the online and mobile channels. Projects develop in (accelerated) real-time (24/7) so players have to keep up with a fast pace and act and intervene immediately. Additionally Sharkworld is propelled by an underlying suspense story.

The story is set in Shanghai, where a high-tech large scale shark aquarium is being built on an Olympic location. A Dutch installation company got the job but their last project manager on site has mysteriously disappeared. The Sharkworld player has to take his place. To successfully finish the project he needs to cooperate with for example the Chinese customer, the Chinese authorities and the workers on site. The game interacts with players in many different ways: through websites (both fictional and real), cut scenes, e-mail, newspaper articles, chat, voice-mails and text messages (on the players own telephone).

Sharkworld covers not only economic aspects of project management like planning and budgeting, but also social aspects, such as conflict management, cultural sensitivity and diplomatic skills.

The Reboot: Getting a Job in the Gaming Industry, 6:24

In-class assignment: Briefly describe the hiring process in the gaming industry. What do firms look for in a candidate? What do these insiders' suggest about how to break into the industry?

Working in the video game industry is one thing every gamer dreams of doing. According to, more than 50,000 people in North America alone play, create and design video games for a living. Many gamers would jump at the chance to be paid to play video games, but most don't know the first thing to do when it comes to getting their foot in the door. In this episode of The Reboot, host Rio Pesino speaks with video game recruiters from Bungie, LucasArts, BioWare, Ubisoft, THQ and FullSail about the hiring process, what they look for in a candidate and some insiders' advice on how to break into the industry.

Section 3 American Free Enterprise, p. 48

Free enterprise, another term used to describe the American economy, refers to the competition that is allowed to flourish with a minimum of government interference. A capitalistic free enterprise economy has five important characteristics: economic freedom, voluntary exchange, private property rights, the profit motive, and competition. Another key component is the entrepreneur, who is the risk-taking individual in the economy that starts new businesses and undertakes new ways of doing things in search of profits. The consumer is sometimes thought of as being "king" or sovereign of the market, and government is involved in the economy primarily because people want it to be involved. Because of the government involvement as the protector, provider, regulator, and consumer, the American economy can also be described as a mixed economy, or a modified free enterprise economy.

Guide to Reading

Section Preview

Content Vocabulary

free enterprise

voluntary exchange

private property rights


profit motive


consumer sovereignty

mixed or modified free enterprise economy

Taped in the 70s, Economist Milton Friedman informs Phil Donahue when asked to equate greed with capitalism, 2:30.

In-class assignment: Is capitalism to be equated with greed according to Friedman? Is greed found in other economic systems? Can greed (self-interest) be a good thing? Why or why not?

Milton Friedman, 1912 - 2006

Companies in the News

Hot Growth at Claire's

Characteristics of Free Enterprise Capitalism, p. 49

Economic Freedom

Voluntary Exchange

Private Property Rights, p.50

Profit Motive


Reading Check


How does voluntary exchange work in the free enterprise economy?

The Role of the Entrepreneur

Reading Check, p. 51


Why are entrepreneurs considered both spark plugs and catalysts of the free enterprise economy?

The Role of the Consumer

Reading Check


What role do consumers play in a free enterprise system? p. 52

The Role of Government




Consumer, p. 53

Modified Free Enterprise

Reading Check

Why do Americans want government to play a role in the economy? Use specific examples.

Profiles in Economics

Tony Hawk

Tony Hawk: Gliding into the future, 4:37

Tony Hawk helped bring skateboarding to the mainstream and turn the sport into a multi-billion dollar industry. He has ridden the sport's peaks and valleys in popularity and hopes to grow his business as the athlete turned entrepreneur pushes the limits of the sport.


Hayek's 'The Road to Serfdom' in Five Minutes, 5:01


In-class assignment:

What do all forms of collectivism (command economy) lead to?
Are there differences--in terms of control exercised--between Nazism or Communism?
How is order achieved in these systems?
Can democracies be on the road to serfdom?
In the 1940s, Look Magazine made a comic strip of Hayek's classic book 'The Road to Serfdom'. Hayek went on to win the Nobel Prize in Economics in 1974.


Hayek's central thesis is that all forms of collectivism lead logically and inevitably to tyranny, and he used the Soviet Union and Nazi Germany as examples of countries which had gone down "the road to serfdom" and reached tyranny. Hayek argued that within a centrally planned economic system, the distribution and allocation of all resources and goods would devolve onto a small group, which would be incapable of processing all the information pertinent to the appropriate distribution of the resources and goods at the central planners' disposal. Disagreement about the practical implementation of any economic plan combined with the inadequacy of the central planners' resource management would invariably necessitate coercion in order for anything to be achieved. Hayek further argued that the failure of central planning would be perceived by the public as an absence of sufficient power by the state to implement an otherwise good idea. Such a perception would lead the public to vote more power to the state, and would assist the rise to power of a "strong man" perceived to be capable of "getting the job done". After these developments Hayek argued that a country would be ineluctably driven into outright totalitarianism. For Hayek "the road to serfdom" inadvertently set upon by central planning, with its dismantling of the free market system, ends in the destruction of all individual economic and personal freedom. Hayek argued that countries such as the Soviet Union and Nazi Germany had already gone down the "road to serfdom", and that various democratic nations are being led down the same road. In The Road to Serfdom he wrote: "The principle that the end justifies the means is in individualist ethics regarded as the denial of all morals. In collectivist ethics it becomes necessarily the supreme rule."


Activity: Interdisciplinary Connection
Read 19th-century short stories by Russian authors such as Anton Chekhov or Nikolay Gogal. As you read, list details that describe effects of the Soviet Union's command economy--for example, details about jobs, economic and social status, property rights, individual freedoms, and the government. Write a report summarizing the economic effects that you fin din the story.
BULGARIA - From a Command to a Market Economy, 4:43
1.1 Quiz
IBM Corp. has launched CityOne, an online interactive simulation game designed to enable local government officials find innovative solutions for energy, water, traffic, banking and retail problems in their communities.
Players can explore more than 100 simulated crisis scenarios in CityOne. The solutions must balance various financial, environmental, social and budgetary goals. The solutions include technologies such as business process management, service reuse, cloud computing and collaborative technologies.

HW email to or hand in hard copy.

1. Activity: Hands-On Economics

Write an outline of a video game that would help employees learn an aspect of a job typically held by a teenager (for example, baby-sitting, retail, food service, yard work, dog walking, and so on). You should begin by identifying the overall job and then the major tasks involved in the job.

Think about how you could make the game educational and fun for employees.

Once we have numerous outlines, we can build on this beginning, form small groups, and each group can outline a game idea as finalists for a class game.

Then, students can vote on their favorite video game idea.

Reminder: the Ch. 2 Sec. 1 Quiz is on Tuesday.