Settling the Adam Smith/John Maynard Keynes Debate Once & for All
Common Core National Standards RI.11-12.2 & W.11-12-2
Academic Vocabulary Component/ Refer & Review to your Academic Vocab Chart
Academic Vocab Words Studied: pivotal, efficacy, legacy, omnipresent, fiscal, monopoly
Opening Statement for whole class discussion : Here's a statement for us to discuss before we begin our study of Adam Smith & John Maynard Keynes: Economic Systems never change. The strengths & weaknesses of each nations system are static.
Students will read about two of most influential economic thinkers in history. The debate between Adam Smith & John Maynard Keynes has raged for years between those who believe that government should play a very limited role in the economy, & those who see government's fiscal role as pivotal in keeping the economy on an even keel & rescuing it from the depths of recession & depression. The question is should there really be a debate. That's for you to decide.
Students will read about two of most influential economic thinkers in history. The debate between Adam Smith & John Maynard Keynes has raged for years between those who believe that government should play a very limited role in the economy, & those who see government's fiscal role as pivotal in keeping the economy on an even keel & rescuing it from the depths of recession & depression. The question is should there really be a debate. That's for you to decide.
Students will be directed to organize information in a chart form using a note taking system that avoids any appearance of plagiarism or copyright issues. From that chart, students will write a position paper where they summarize & paraphrase the key ideas arguments & details of both Smith's & Keynes' arguments. Students will also summarize & analyze the ongoing debate. They will consider which thinker's ideas are most important in our current economic circumstances. Before writing their essays, students will post blog entries & engage in a blogsphere discussion to clarify their thinking before writing.
Accessing Prior Knowledge
From earlier in the year, recall our study of Adam Smith, free enterprise, & laissez faire.
What were Adam Smith's key ideas? Discussion
Also, recall our study of the role of government in a free market system. We are just now embarking on a study of government's fiscal policy. What are the accepted roles of government?
Also recall our study of centrally planned economies & government's omnipresent role? What was that role?
Also recall our study of centrally planned economies & government's omnipresent role? What was that role?
Compare & Contrast Top Hat Organizer
Directions: Set up a top hat organizer where you list the important ideas of both men. Students will also include the those things that the two men have in common. In the final analysis, students will take a position on the debate itself & decide where they stand: Is it appropriate to see the debate as an argument between two opposite points of view? 2) Where do their points of view differ? 3) What do they have in common.
Activate Mental Images
It's helpful for us to develop mental images of the subject matter of our reading. Refer to the pictures to see what Smith & Keynes looked like. For Adam Smith, he wrote in in the middle 1700s when Great Britain was the most powerful nation in the world. Smith was Scottish which is part of the Great Britain. We imagine men in long hair wigs & short pants with stockings. Naval shipping & trade using sailing ships was a big part of the economy.
For the life & times John Maynard Keynes we have to think of the 1920s, 30s & into the 40s. He too was from Great Britain. His ideas most directly dealt with the British economy but many of his ideas can be applied to our economic system as well. We might visualize the Great Depression in Europe.
Directions: Read the following essay. Place the major economic ideas of both Keynes & Smith in the top hat organizer. You must use the 5 word system (no sentences please) where each note can not be in a sentence & can not be more than five words.
Academic vocabulary assistance: good readers & serious students seek to understand content by familiarizing themselves with unfamiliar words. Here is a dictionary link to help you.
Dictionary Help
While Smith is largely credited with being the champion of Laissez Faire (government keep your hands off) policies he did recognize the need for government to undertake certain roles including
1) protecting the nation from outside invasion 2) enforcing laws 3) projects that benefit the public at large like roads & schools. Here's interesting quote from Smith concerning government:
“Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.”
John Maynard Keynes published his famous book The General Theory of Employment, Interest & Money in 1936. Here Keynes deals with a very specific issue that occurs within the capitalistic free market system: that being recession & depression & all of the negative problems that go along with it including business failures high unemployment & poverty in general. Keynes saw the problem basically as one of not enough aggregate demand for goods & services in the economy. Demand translates into spending; spending translates into positive economic activity like job creation & investment He believed that government could play a significant role in getting the economy back on track. If investors are unable or unwilling to invest & individuals are unable or unwilling to spend, the economy will spiral down & come to a standstill. When aggregate demand for goods & services are in crisis, there is no one else around to make up for this loss of demand except the government. Government has vast resources to spend on a grand scale & to borrow. By spending on various projects & hiring people itself, government can create more income & therefore more spending which leads to more growth in the overall economy. Government can also tax less which leaves more money in people's pockets to spend on goods. These activities by government are known as fiscal policy. Keynes also believed if the economy becomes too overheated & inflation (the general rise in prices) emerges the government can reverse itself & spend less & raise taxes to cut down on overspending, which is the root cause of inflation.
In our most recent economic recession, many of Keynesian techniques were employed. The government cut taxes; they allocated large amounts of funds for projects that employed many people; they gave many financial institutions large loans to keep them stable & they used monetary policy to keep interest rates low.
1) Adam Smith hated any & all government involvement. Give evidence as to the truth or fiction of this statement
2) What issue or problem in the economy was Adam Smith addressing in the Wealth of Nations?
3) What problem was Keynes trying to solve with his writings? How does he think the problem can be solved?
4)How do you imagine the economies were different in Keynes' time as opposed to Adam Smith's time?
5) What did George W. Bush mean when he said at the point of the government bailout of the banks in 2009 that "we are all Keynesians now?"
6) What do you think Keynes thought about the self-regulating potential of market economies?
7) Ask for clarification on anything from the writing that you don't understand? Do it in a thoughtful way, explaining what it is you don't understand.
8) You can choose to comment on your schoolmates comments, adding support or extending their point or disagreeing. You must clearly explain your argument & offer reasoning or evidence.
Activate Mental Images
It's helpful for us to develop mental images of the subject matter of our reading. Refer to the pictures to see what Smith & Keynes looked like. For Adam Smith, he wrote in in the middle 1700s when Great Britain was the most powerful nation in the world. Smith was Scottish which is part of the Great Britain. We imagine men in long hair wigs & short pants with stockings. Naval shipping & trade using sailing ships was a big part of the economy.
For the life & times John Maynard Keynes we have to think of the 1920s, 30s & into the 40s. He too was from Great Britain. His ideas most directly dealt with the British economy but many of his ideas can be applied to our economic system as well. We might visualize the Great Depression in Europe.
Directions: Read the following essay. Place the major economic ideas of both Keynes & Smith in the top hat organizer. You must use the 5 word system (no sentences please) where each note can not be in a sentence & can not be more than five words.
Academic vocabulary assistance: good readers & serious students seek to understand content by familiarizing themselves with unfamiliar words. Here is a dictionary link to help you.
Dictionary Help
The Great Debate
Adam Smith Vs. John Maynard Keynes
The debate between free market capitalists who believe that government should not interfere with the workings of the free enterprise economy & those who maintain that the government has a crucial role in managing the economy has raged for generations. Those who advocate laissez faire policies are considered followers of Adam Smith, who thought & wrote in the middle 1700s. Those who believe in strong interventions of government are often referred to as Keynesians, because they followed the basic teachings of John Maynard Keynes. Adam Smith wrote in the middle 1700s during the age of the enlightenment & concerned himself primarily with need for the monarchies of the time to divorce themselves from domination of economic activity. Adam Smith was the first to offer an explanation of how a market based economic system works. His classic work, An Inquiry into the Nature & Causes of the Wealth of Nations was written in 1776. Specifically, the British monarchy was quite fond of giving monopolies to those with strong connections to the British crown. Smith who was a highly respected university scholar, argued that economic activity was being stifled by an inefficient system that held back the productive potential of independent entrepreneurs & businesses. Smith believed that free enterprise without intervention & control by the government, a stronger, more lucrative economy could be built & maintained. By allowing individuals to seek out & maximize their own self interest plus competition among businesses, a harmonious market system would be created. Smith believed that an invisible hand would rein other the market & there wouldn't be the need for government interference. The economy would be self-regulating. This became the battle cry of the supporters of a capitalistic, free market, free enterprise system. Today many people who believe the government interferes to the detriment of the economic system cite the work of Adam Smith. Adam Smith, like most economists up until the 1930s, did not concern themselves with the problem of unemployment.While Smith is largely credited with being the champion of Laissez Faire (government keep your hands off) policies he did recognize the need for government to undertake certain roles including
1) protecting the nation from outside invasion 2) enforcing laws 3) projects that benefit the public at large like roads & schools. Here's interesting quote from Smith concerning government:
“Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.”
John Maynard Keynes published his famous book The General Theory of Employment, Interest & Money in 1936. Here Keynes deals with a very specific issue that occurs within the capitalistic free market system: that being recession & depression & all of the negative problems that go along with it including business failures high unemployment & poverty in general. Keynes saw the problem basically as one of not enough aggregate demand for goods & services in the economy. Demand translates into spending; spending translates into positive economic activity like job creation & investment He believed that government could play a significant role in getting the economy back on track. If investors are unable or unwilling to invest & individuals are unable or unwilling to spend, the economy will spiral down & come to a standstill. When aggregate demand for goods & services are in crisis, there is no one else around to make up for this loss of demand except the government. Government has vast resources to spend on a grand scale & to borrow. By spending on various projects & hiring people itself, government can create more income & therefore more spending which leads to more growth in the overall economy. Government can also tax less which leaves more money in people's pockets to spend on goods. These activities by government are known as fiscal policy. Keynes also believed if the economy becomes too overheated & inflation (the general rise in prices) emerges the government can reverse itself & spend less & raise taxes to cut down on overspending, which is the root cause of inflation.
In our most recent economic recession, many of Keynesian techniques were employed. The government cut taxes; they allocated large amounts of funds for projects that employed many people; they gave many financial institutions large loans to keep them stable & they used monetary policy to keep interest rates low.
Checking for Understanding
Blog on
Respond to two the following prompts by blogging your comments below. If you have a Gmail account you will need to put in your logon info. If you don't have a Gmail account you will have to set one up. (It only takes a minute.) Make sure to you keep track of your password & other logon info. Do not share it with others. In order to get credit you must include your full name & the period number in your comment. You must also respond using well written sentences. Your responses must be supported with evidence & sound reasoning. You can certainly question any of the viewpoints presented, including the comments of other students, but you must include thoughtful reasoning. Always be respectful & serious. Respond to two of the following.1) Adam Smith hated any & all government involvement. Give evidence as to the truth or fiction of this statement
2) What issue or problem in the economy was Adam Smith addressing in the Wealth of Nations?
3) What problem was Keynes trying to solve with his writings? How does he think the problem can be solved?
4)How do you imagine the economies were different in Keynes' time as opposed to Adam Smith's time?
5) What did George W. Bush mean when he said at the point of the government bailout of the banks in 2009 that "we are all Keynesians now?"
6) What do you think Keynes thought about the self-regulating potential of market economies?
7) Ask for clarification on anything from the writing that you don't understand? Do it in a thoughtful way, explaining what it is you don't understand.
8) You can choose to comment on your schoolmates comments, adding support or extending their point or disagreeing. You must clearly explain your argument & offer reasoning or evidence.
Discussion Task/Guiding Questions
Now that we have had a chance to dialogue via the blog, lets take a few minutes before you write to clarify a few important themes when it comes to understanding & applying the knowledge of Keynes & Smith. Here is a question that I would like everyone to discuss with a partner in Think, Pair, Share format. I will call on people randomly to respond & also give volunteers a chance to contribute.
Question: 1) In what way has Keynes & Smith influenced our economy today? Think about both the day-to-day operation of our economy & how the government responds to economic problems. Consider the economic system of the U.S.
Time to Write
Now that you have collected this information, it's time to write your summary. Your job is to write an explanatory text clearly encompassing the salient ideas of both Adam Smith & John Maynard Keynes. You must also describe the "debate" between hard line free marketers & Keynesian liberals. Your thesis must include a statement regarding the appropriateness & the degree to which the two men can be compared & contrasted. Carefully read the rubric provided below.
Rubric
4 Excellent; 3 Proficient; 2 not proficient; 1 inadequate
a) Introduce the topic; organize complex ideas so each new elements builds on that which precedes
b) develop the topic thoroughly by presenting the most significant & relevant facts
c) use a variety of sentence types, & transitions
d) use language that is specific to economics
e) provide a concluding statement that is supported by the details & evidence that precedes it.
Adam Smith & John Maynard Keynes Compared & Contrasted
Economic Theories of Adam Smith & John Maynard Keynes
Now that you have collected this information, it's time to write your summary. Your job is to write an explanatory text clearly encompassing the salient ideas of both Adam Smith & John Maynard Keynes. You must also describe the "debate" between hard line free marketers & Keynesian liberals. Your thesis must include a statement regarding the appropriateness & the degree to which the two men can be compared & contrasted. Carefully read the rubric provided below.
Rubric
4 Excellent; 3 Proficient; 2 not proficient; 1 inadequate
a) Introduce the topic; organize complex ideas so each new elements builds on that which precedes
b) develop the topic thoroughly by presenting the most significant & relevant facts
c) use a variety of sentence types, & transitions
d) use language that is specific to economics
e) provide a concluding statement that is supported by the details & evidence that precedes it.
Links
Here are some links if you want to learn more about Keynes & Smith
Paul A. London Adam Smith & John Maynard KeynesExcerpts & Quotes from Adam SmithKeynesian Economics in a Nut ShellAdam Smith & John Maynard Keynes Compared & Contrasted
Economic Theories of Adam Smith & John Maynard Keynes
