Middle and High School … from a Montessori Point of View
Well, it’s really kilobucks and economic systems, but that does not have the same rhythm for a title. We’re reprising the market versus socialist economies simulation game, my student came up with last year for his IRP.
I though I’d also include a little lesson on the metric system as a subtext. Hence the creation of the kilobuck. I’ll also talk about the centidollar, decidollar, decadollar and hectadollar.
Using the actual U.S. wealth distribution data from Norton and Arieli (2011; pdf), I created a little addendum to our exercise on the distribution of wealth.
I started with the definition of wealth. Students tend to think you’re referring to annual income, so I gave the example of someone who does not have a job but owns a house; they have no income but some wealth in the value of the house. Alternately, someone who has $2 million in the bank, but owes $4 million, actually has negative wealth.
Then I drew a little stick figure diagram to represent the population of the United States. With ten figures, paired up, that gives five parts, aka quintiles.
Students were then presented with an empty bar graph and asked, “How much of the U.S.’s wealth is owned by the wealthiest 20% of the population?” Instead of asking in percentages (as are shown in the graph), I asked them to assume that the total wealth in the U.S. is $100 trillion.
The first suggestion was $35 trillion, which is shown below. Others offered different amounts, ranging up to $50 trillion. Someone even suggested $15 trillion, which is not possible, since that would mean that the wealthiest 20% have less than 20% of the total wealth of the country.
Once they got the idea, I showed them what the graph would look like in an idealized socialist country, where everyone had the same wealth.
Finally, I asked my students to fill in what they believed to be the actual case for the U.S. for all five quintiles. The results had to add up to $100 trillion. They gave me their numbers individually before we broke up our meeting, and I entered it in the U.S. distribution of wealth spreadsheet to produce a graph.
After lunch, I showed them the results.
For dramatic effect, I hid the last two bars at first. We talked over their numbers, then I showed them the equal distribution case (which they’d seen before), and finally the actual distribution.
The response was salutary; a moment of surprised silence and then whispers. What then followed was a nice, short discussion. I pointed out the pie charts showing the U.S. versus an equal distribution, versus Sweden and asked what they would do, if they were an autocratic monarch, or if they were the president to make the U.S.’s distribution more equal.
We talked about the government just taking private property, like the communists did. Then we talked about progressive taxation. We ended by talking about the estate tax, and meritocracy, which we’d touched on in the morning.
I thought the exercise worked very well. Not only did we get into an interesting economic issue, but got some practice with math and interpreting graphs too.
SPENT is an online game that challenges you to survive for a month while facing the choices of someone poor, living in the United States.
The choices are hard, but the game ties in well with the personal finance part of the curriculum, as well as the consideration of the wealth distribution.
One of our economics assignments this cycle asks students to divvy up $200,000 among a group of ten people. One is a divorced mom, another a playboy, a third a bank manager, you get the gist. The purpose is to compare what students think it should be, to what a socialist might believe, to students’ estimation of reality. I’m really curious to see what they come up with.
Michael Norton and Dan Ariely have some actual data on the wealth distribution in the United States that might really challenge some assumptions (Norton and Ariely, 2011 pdf). They asked survey respondents what percentage of wealth they thought was owned by the poorest 20% of U.S. citizens, the next 20% and so on. They also asked what kind of wealth distribution people though would be ideal. Finally, they compared what people thought to what was actually there.
People, apparently, really underestimate the income inequality in the U.S..
A second part of the same study gave people pie charts of wealth distribution in different societies and asked them to pick out which one they would prefer to live in if they were dropped at random into one of these societies. They compared the more socialist-like Sweden, to the U.S., and to a perfectly even distribution. People greatly preferred societies with a more equal sharing of wealth.
I think I’m going to have to modify this assignment to use these graphs. I’ll also have to use their definition of wealth:
Wealth, also known as net worth, is defined as the total value of everything someone owns minus any debt that he or she owes. A person’s net worth includes his or her bank account savings plus the value of other things such as property, stocks, bonds, art, collections, etc., minus the value of things like loans and mortgages.
–Norton and Arieli (2011): Building a Better America – One Wealth Quintile at a Time in Perspectives on Psychological Science
Economist Stephen T. Ziliak’s reflections on poetry are quite appropriate for the moment, since we’re doing both poetry and economics this cycle.
Invisible hand;
Mother of inflated hope,
Mistress of despair!
–Stephen T. Ziliak: Haiku Economics
Zilak says that, “Poetry can fill the gap between reason and emotion, adding feelings to economics.”
He particularly loves the haiku, because it is such a wonderful metaphor for economics: “less is more, and more is better.”
Each poem is the length of about one human breath. This constraint, though severe, is more than offset by a boundless freedom to feel.
–Stephen T. Ziliak: Haiku Economics
Creativity is said to lie at the intersection on disciplines. This is an excellent example of it.
Another wonderful Strange Map. This one answers the question, “What if U.S. states were renamed for countries with similar sized economies?”
One of my students, Ben, discovered NationMaster.com while looking up statistics for corn production as part of his small group’s work on seeds of change. It seems to be a wonderful source for economic and geographic statistics. From their site:
[NationMaster is] a massive central data source and a handy way to graphically compare nations … a vast compilation of data from such sources as the CIA World Factbook, UN, and OECD. Using the form above, you can generate maps and graphs on all kinds of statistics with ease.
Interesting fact: China is the second largest producer of corn in the world.
Jeremy Singer-Vine has cute little tool for translating economics jargon from the Federal Reserve meetings into plain English. The Planet Money Program on NPR used it to translate the FED’s latest plan into something much more readable without, I think, loosing much of the meaning. The design of the tool is quite nice but it must be pretty tricky to implement unless the FED’s statements are much more formulaic than I hope they are.
For example:
FED: Longer-term inflation expectations have remained stable, but measures of underlying inflation have trended lower in recent quarters.
Translation: Inflation has gone from low to super low.
My favorite part of the translation:
FED: Information received since the Federal Open Market Committee met in September confirms that the pace of recovery in output and employment continues to be slow.
Translation: The economy still sucks.