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Teacher’s Guide

CapitalismGrades 5-12

CATV

CREDITS

Program P roduc t ionSunburs t V i sua l Med ia

Teacher ’s Gu ideKr i s t i e Micha lowsk i , M.Ed .

P r i n t Mate r ia l Des ignDesk top P roduc t ions

© 2001 Sunburst Visual Media, a division of Global Video, LLCHawthorne, NY 10532

Approximate running time: 19 minutes

Capitalism

© Sunburst Visual Media, a division of Global Video, LLC Capitalism

TABLE OF CONTENTS

Guide Information ..............................................5

Fast Facts ............................................................7

Before Viewing Activities ....................................9

During Viewing Activities ..................................13

After Viewing Activities ....................................17

After Viewing Quizzes ......................................21

Additional Resources ........................................23

Answer Keys......................................................29

Script ................................................................36

© Sunburst Visual Media, a division of Global Video, LLC Capitalism5

ABOUT THIS GUIDEProviding students with visual media is an excellent way to take them out of the classroom and into the real world. Our programs offer real-world footage, dynamic graphics,engaging dramatizations, and first-person testimonials that keep students interested and help themvisualize difficult concepts. More importantly, they reinforce critical learning objectives shaped by stateand national educational standards. However, the learning doesn’t begin and end when the programdoes. You can make the learning experience even more effective by using the materials provided inthis Teacher’s Guide.

Guide Information

This guide is divided into the following sections:

• Fast Facts are designed to give your students a quick overview of the information presented within the video.

• Before Viewing Activities help identify what students already know about the subject, what they are curious about, and what they hope to learn.

• During Viewing Activities may be used during viewing to enhance students’ understanding of the video.

• After Viewing Activities help students summarize and draw conclusionsfrom the information that was presented.

• After Viewing Quizzes test students’ retention of the information presented in the program and activity sheets.

• Additional Resources are designed to help you extend the information presented in the program into other areas of your curriculum.

• Answer Keys are provided for relevant activities or reproducible pages.

• Script content is provided in an unabridged version for future reference.

6Capitalism © Sunburst Visual Media, a division of Global Video, LLC

GuideInformationPROGRAM OVERVIEW

Capitalism This guide will give students an overview of how this economic system was developed. It delvesinto the roots of capitalism and presents its existence in today’s world. The DVD/video willdiscuss the first famous capitalists and if this economic system is good for everyone.

This information-packed DVD/video targets different learning styles by presenting theinformation visually and orally. It is presented in a format that will keep students engaged withthe material. The use of “text boxes” with key terms as well as definitions, charts, and dialogfrom the host allow students to comprehend the material presented.

VIEWING OBJECT IVESAfter viewing the DVD/video and utilizing the activities provided in the teacher’s guide,the students will be able to:

• Define and use the vocabulary associated with capitalism

• Summarize how capitalism came to be

• Differentiate between capitalism and other economies

• Assess the effects of capitalism on people

• Identify the five Capitalist Freedoms of Adam Smith

• Understand how monopolies work

7© Sunburst Visual Media, a division of Global Video, LLC Capitalism

• Adam Smith: economist and philosopher in the 1700s. Designed modern capitalistic theory.• In 1776 Smith wrote Inquiry into the Nature and Cause of the Wealth of Nations. Claimed that

nations would become wealthy only when its citizens were free to pursue their own interests.• Karl Marx and Friedrich Engels are the most influential critics of capitalism.• Marx wrote The Communist Manifesto. It addressed the exploitation of the lower class worker in a

capitalistic society. Marx wanted to get rid of capitalism and replace with communist system.• Factory Act of 1833: government intervention. Laws protect workers in a mostly capitalist system.• Flaw of capitalism: Formation of monopolies• Sherman Antitrust Act of 1890: legislation to thwart monopolies• The Great Depression of 1929-1939 officially began with the stock market crash.• 1933: Franklin D. Roosevelt

• The New Deal — helped turn the economy around• FDIC: Insured bank deposits• SEC: monitors stock market• Work Programs for the unemployed

• John Maynard Keynes, 1936: The General Theory of Employment, Interest and Money• Macroeconomics• Supported increase in supply of money

• 1962: John F. Kennedy:• Consumer Rights

• Right to Safety• Right to be informed• Right to choose• Right to be heard

• Regulatory Agencies of federal government:• Occupational Safety and Health Administration (OSHA): requires businesses to provide a safe

and clean place for its employees to work• Federal Trade Commission (FTC): establishes safety standards for automobile manufacturers• Food and Drug Administration (FDA): ensures the products on our shelves are safe to consume• Environmental Protection Agency(EPA): enforces limits on pollution through he Clean Water Act

and Clean Air Act

Fast FactsFAST FACTS

8

Fast Facts

Capitalism © Sunburst Visual Media, a division of Global Video, LLC

VOC ABUL ARYCAPITALISM — an economic system

CAPITAL — anything that is used to create more wealth. Ex. Money, assets,resources

CAPITALIST — anyone who invests in a business

ECONOMICS — the study of the production, distribution, and consumption ofwealth and resources

FREE-MARKET ECONOMIES — based on private ownership where people can invest as they wish

COMMAND ECONOMIES — controlled by the government where people are laborers andconsumers

DEPRESSION — a period of economic downturn

COMMUNIST SYSTEM — all people will have equal ownership and an equal interest in thesuccess of production

MONOPOLY — having complete control over a product or service

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) — insured bank deposits

SECURITIES AND EXCHANGE COMMISSION (SEC) — monitors the buying and selling of stocks and bonds

WEALTH OF NATIONS — 1776, Smith: Claimed that nations would become wealthy onlywhen its citizens were free to pursue their own interests

COMMUNIST MANIFESTO — 1848, Marx: It addressed the exploitation of the lower classworker in a capitalistic society

FACTORY ACT OF 1833 — laws that protected workers that comprised the purely capitalistsystem

SHERMAN ANTITRUST ACT OF 1890 — legislation to thwart monopolies

THE NEW DEAL — a number of governmental programs aimed at turning theeconomy around; created in 1933 during Franklin D. Roosevelt’spresidency

MERCANTILE SYSTEM — governments controlled much of the land and resources;regulated their economies so the exports outnumbered theimports

BOOM AND BUST — a label put on the cycles of unbalance that plagued the capitalistsystem


Name Before ViewingActivity 1

9

Put On Your Capitalist CAPFill in the chart. Before viewing the DVD/video, “CREATE” a list of facts that you already knowabout capitalism in the “C” column. During the DVD/video, “ASK” any questions aboutinformation you do not understand and would like to know more about. Write these down in the“A” column. After viewing the DVD/video and participating in various activities, “PRINT” youhave learned about capitalism in the “P” column.

C A P

CREATE a list of facts

PRINT what you have learned

ASK your questions

Discussion Read the questions and write down your ideas about each one. Then discuss your answers with yourclass. Remember these questions while viewing the presentation.

1. What is capitalism?

2. Who is considered the “creator” of capitalism?

3. When was capitalism created?

4. What does capitalism require?

5. What occurred in the Industrial Revolution?

6. What are some flaws of capitalism?

7. What does the phrase “boom or bust” mean?

8. What was the official cause of the Great Depression?

9. Do you know what John Maynard Keynes wrote?

10. What regulations did Franklin D. Roosevelt create in his terms in office?

Capitalism © Sunburst Visual Media, a division of Global Video, LLC10




11

Think—Pair—Share

Step 1: Think — Do you know who the “father” of capitalism was? What is required to be acapitalist? Why did capitalism come about? Take time to think about somequestions you have about capitalism.

Step 2: Pair — With a partner, discuss the questions you each had about capitalism. Writedown the five most important or interesting questions on five note cards.

Step 3: Share — Put the “best” question on top of the other note cards. Read the “best”questions to share with the class. Allow each pair to share at least one.

Teacher Note:• You could ask the other students what they thought the answer might be after each question is

read. • Another activity could be to have that pair listen to see if the DVD/Video answers their particular

question and write the answer down while viewing the program.

Supplies:

• Five notecards per pair



True or False?Before viewing the video, read each statement. Decide if the statement is true or false. Think abouthow you would explain your answer. After watching the video, go back over the statements anddecide if the statement is true or false.

Before ViewingTrue /False

After ViewingTrue /False

The girl who runs a neighborhood lemonade stand is a capitalist.

Free-market economies are based on private ownership.

Capitalism does not require freedoms.

Karl Marx was a critic of the Communist system.

The Sherman Antitrust Act was legislation to thwart monopolies.

The “Invisible Hand” controls the capitalism economy.

John F. Kennedy was responsible for the legislation of the Consumer Rights.

In a depression the demand for goods and services increases.

The SEC insures bank deposits.

The formation of monopolies is a flaw of capitalism.


Name During ViewingActivity 1

13

Show Me the $$ — GraphicOrganizerIn the spaces provided, write facts from the DVD/video to help you remember important informationabout capitalism.

Capitalist’s Ladder Climb the ladder to become a wealthy capitalist…in knowledge! In the spaces provided, writeinformation from the DVD/video to help you know all the facts about capitalism.





15

Capitalism Dates uring the DVD/video, write as many facts that go along with the topics listed in the timeline below.

170

017

50

-185

017

7618

48

189

019

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-39

196

2

Capitalist Times Reporter You are a reporter for the Capitalist Times. Organize the information you are collecting by writingnotes in the appropriate places. You have three “interviews” to conduct and research notes tocollect.



5 Freedoms ofCapitalism:

Sherman Antitrust Act:

Monopoly:

Great Depression:

The New Deal:Consumer Rights:

Misc.:


Name After ViewingActivity 1

17

Capitalism — Word SearchFind your vocabulary words listed below in the puzzle. They may be across, up and down,backwards or diagonal. Cross through the letters used in each word. Write the letters in the orderthey appear in the spaces below. A message will then be revealed.

ADAM SMITHFDICKARL MARXCAPITALCAPITALISMCAPITALISTDEPRESSION

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ ,__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ ____ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ ____ __ __ __ __ __ __ __ __ __ .

ECONOMICSFACTORY ACTBOOM AND BUSTCOMMAND ECONOMIESCOMMUNIST MANIFESTOCOMMUNIST SYSTEMCONSUMER RIGHTS

FREE MARKET ECONOMIESFRIEDRICH ENGELSGREAT DEPRESSIONJOHN MAYNARD KEYNESMERCANTILE SYSTEMMONOPOLYSEC

SHERMAN ANTITRUST ACTTHE NEW DEALWEALTH OF NATIONS

T H E G R E A T D E C O M M U N I S T M A N I F E S T O C P

L R E S S I O N A F F E C T E D F N O I S S E R P E D A E N

O A U G H P E O P L E T H A T R I T W C C H A N G E P D A M

E R E I C A N P U B L I C S I C E E O N T I M E N I T A B O

U T L D E T T I N G T H E E O G A M O V E R N M T E N T B E

C O M E W I N V O L S V D N E L M D I N T H E A E C O N O M

Y T A E I E Y T L N E R S M T A V H Z I U F L A E T Z C B A

R T Y A B P N R L D I U L H N G R Y Y F H I Q K L D X P Z G

L G I O W L W E R C M H O D O M S F X J S R Z D I W G T J N

M B T U G O G K H E O F E P G H M V Z T Y I Z S L Y M D K A

D A C W U R A E R T N C H K G F I R N N O Z W R L S J R X D

F Y E T Q R N R I A O R L W T J V R B U V A A S I D F X K A

T E S U L G I X T N C E P X L B O I S A S X E L W A M S R M

L X L M E G Q I O T E T C A T S U R T I T N A N A M R E H S

J G A L H M O M N S T V O U H S M H X Q Y T Q M T C R G G M

C R S T Z N I A F U E C X F K O N U H E I Y P G Y U T R V I

X O S J S E N Y N B K A X A H Q P I K P G O W W V I B E W T

M U M S S H N B B D R P V C F I N D A Z N Y S K O P U A N H

S C I M O N O C E N A I A T M E R C A N T I L E S Y S T E M

D T F J U U V F Z A M T K O V A S A A C Y P X Z T X X D L O

L Y S N V N B T K M E A N R N E Z K R U G K O U P O V E A N

A C U J M P I A Y O E L A Y C D V H D V M E H K B U M P B O

Q R I Z M I W S H O R F A A S I I K L G I F V B G P J R N P

U I M T T U K H T B F M O C K M L F D M D G C N M D U E S O

G U E S A M I W Y S N V D T C P F I U C I S A N W T A S O L

X G U L Y N F X P H Y K B W M B Q S D M K P N T V E M S C Y

A T H P I U M J O E Z S X J P U M X L H H W U Q D V X I V N

G A K V E W B J O C Y T T E V L M S B D J H V U U C D O I O

U K B W T D B H M H Q V J E D Y Q T W K N R Q S C F X N O O

Z Z C N L X W A Z P H R M Y M X Y K B T W L T X H Z A L Y N


Name AFTER ViewingActivity 2

Word WiseBelow are words associated with capitalism. Try to use all the words in a paragraph or two.

ACROSS2. Anything that is used to create more wealth. Ex. Money, assets, resources 5. Insured bank deposits7. Monitors the buying and selling of stocks and bonds9. Governments controlled much of the land and resources; regulated their economies so the exports

outnumbered the imports11. Controlled by the government where people are laborers and consumers 12. A period of economic downturn 13. A number of governmental programs aimed at turning the economy around; created in 1933

during Franklin D. Roosevelt’s term 14. An economic system 15. Laws that protected workers that comprised the purely capitalist system 16. The study of the production, distribution, and consumption

of wealth and resources 17. Having complete control over a product or service

DOWN1. Claimed that nations would become wealthy only when its citizens

were free to pursue their own interests 3. A label put on the cycles of unbalance that plagued the

capitalist system 4. All people will have equal ownership

and an equal interest in the success of production

5. Based on private ownership where people can invest as they wish

6. Anyone who invests in a business 8. Legislation to thwart monopolies 10. Addressed the exploitation of the

lower class worker in a capitalistic society



19

CrosswordFigure out what words the clues below represent. Fill in the words across or down depending onwhere the clue is given in the table.

1

2

3

5

7

9 10

12

11

14

16

17

15

13

4

6

8



Compare/ContrastIn the Venn diagram below compare and contrast the Mercantile System, the Capitalist System, andthe Communist System.

Capitalist System Communist System

Mercantile System


Name After ViewingContent Quiz

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Content QuizCircle the letter of the best answer; fill in the blank with the best answer; or write true or false for each statement.

1. Who is considered the designer of capitalism?a. John Maynard Keynesb. Karl Marxc. Adam Smithd. None of the above

2. Who was an influential critic of capitalism?a. John Maynard Keynesb. Karl Marxc. Adam Smithd. None of the above

3. Which one is not a consumer right?a. The right to safetyb. The right to make a profitc. The right to choosed. The right to be informed

4. __________________ is a label that was put on the cycles of unbalance that plagued the capitalistsystem.

5. _________ True or False? In 1933, one out of every four Americans had lost his/her job.

6. _________ True or False? Capitalism does not exist in today’s society.

7. List the five Capitalist Freedoms according to Adam Smith.

a. ______________________________________________________________________________

b. ______________________________________________________________________________

c. ______________________________________________________________________________

d. ______________________________________________________________________________

e. ______________________________________________________________________________

8. List three agencies that are responsible for consumer rights.

a. ____________________

b. ____________________

c. ____________________


Name After ViewingVocabulary Quiz

Vocabulary QuizWrite the letter of the word to its definition in the space provided.

A. Boom and Bust

B. Capital

C. Capitalism

D. Capitalist

E. Command Economies

F. Communist Manifesto

G. Communist System

H. Depression

I. Economics

J. Factory Act of 1833

K. Federal Deposit Insurance Corporation (FDIC)

L. Free-Market Economies

M. Mercantile System

N. Monopoly

O. Securities and Exchange Commission (SEC)

P. Sherman Antitrust Act of 1890

Q. The New Deal

R. Wealth of Nations

____ 1. Anything that is used to create more wealth. Ex. money, assets, resources

____ 2. anyone who invests in a business.

____ 3. Smith claimed that nations would become wealthy only when its citizens were free to

pursue their own interests.

____ 4. monitors the buying and selling of stocks and bonds.

____ 5. all people will have equal ownership and an equalinterest in the success of production.

____ 6. addressed the exploitation of the lower class workerin a capitalistic society.

____ 7. a number of governmental programs aimed at turningthe economy around; created in 1933 during FranklinD. Roosevelt’s term.

____ 8. controlled by the government where people arelaborers and consumers.

____ 9. governments controlled much of the land andresources; regulated their economies so the exportsoutnumbered the imports.

____ 10. the study of the production, distribution, andconsumption of wealth and resources.

____ 11. based on private ownership where people can investas they wish.

____ 12. legislation to thwart monopolies.

____ 13. insured bank deposits.

____ 14. an economic system.

____ 15. laws that protected workers that comprised thepurely capitalist system.

____ 16. a label put on the cycles of unbalance that plaguedthe capitalist system.

____ 17. a period of economic downturn.

____ 18. having complete control over a product or service.


Be a Capitalist

Have students think of a fake business where they could become a capitalist. How would they getinvestors or capital to create their business? Use the five Capitalist Freedoms to guide them in theirplan.

Debate

After studying the other types of economies, have students debate on which is best communism,capitalism, etc. Students could work in groups of three or four. They should have examples of theireconomy along with its pros and cons.

Interview

See if students know anyone who went through The Great Depression. Have students preparequestions that would relate to capitalism. Maybe the individual would come and talk to the class anddiscuss what it was like

Monopoly

Have students play Monopoly in groups of four or five. Identify the principle of the game and whateffects it would have on the people who lose. Relate it to the Great Depression and discuss similarities.

Newspaper Articles

Have students look through a current newspaper. Students should bring in an article that relates tocapitalism. It could be something about one of the agencies that was created due to capitalism. Havethem read the article and summarize it briefly. They should also state why they feel it has to do withcapitalism. They can also “highlight” the vocabulary words found in the article. Share articles with theclass.

Photo Interpretation

In the Internet Sites section, there are two sites that have photographs taken during the IndustrialRevolution and The Great Depression periods. Have students pick a photo that “speaks” to them.Have them write a story that would go along with the photo or write a letter pretending to be theperson in the photograph. Tell of the economic conditions and how it is affecting them.

AdditionalResourcesInterdisciplinary Ideas

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Portrait Gallery

Many different individuals were involved with the development of capitalism. A biography report ora “portrait” gallery could be done on them. Have students simulate how the people looked andhave a gallery show where other classes come and learn about these individuals. Have studentshold picture frames and retell their facts. You can address research skills in this unit. Individualscould be: Adam Smith, Karl Marx, Friedrich Engels, Franklin D. Roosevelt, John Maynard Keynes,John F. Kennedy, Andrew Carnegie, or Cornelius Vanderbilt. One could also encourage students todo the workers or laborers.

Research

Have students choose a subject from the video that interests them and about which they would liketo find out more. Final products can vary from posters, multimedia, food, or presentations.

Topics could include:

• The New Deal• Monopolies• Communism• Stock Market Crash• Sherman Antitrust Act• Factory Act of 1833• Physiocrats• FDIC• SEC• Food and Drug Administration• Occupational Safety and Health Administration• Environmental Protection Agency

AdditionalResources


Interdisciplinary Ideas


AdditionalResources

• Who would you consider notable capitalists in today’s society?

• Do you feel capitalism is the best type of economic system for the United States? Whyor why not?

• Do you think something like the Great Depression could happen again? Why or whynot?

• It is said that war can pick up the economy. Do you agree with this statement based oncurrent events?

• The organizations that were made in The New Deal are still around today. Do they stillwork and how have their functions changed?

• Should the government be involved in the economies? What do you base your answeron?

• Are there any monopolies in our society today? What are they?

Classroom Discussion Prompts

Downing, David. Capitalism. Heinemann Library, 2003. Series book. For grades 6 - 8. Tells howcapitalism developed and what it is today. Includes the benefits and downfalls on today’ssociety. Great graphic representation.

Friedman, Milton. Capitalism and Freedom. University of Chicago Press. 2002. Economist MiltonFriedman presents the various merits and responsibilities of the private enterprises. For olderstudents. Has index.

Grant, R. G. Ideas of the Modern World: Capitalism. Steck-Vaughn, 2001. Part of a series. Forgrades 6 - 8. Offers an introduction to capitalism. Very basic text with fact boxes andcaptions.

Grant, R. G. Ideas of the Modern World: Protesting Capitalism. Steck-Vaughn, 2004. Part of aseries. For grades 6 - 8. Shows the opposition of capitalism, but how it is still a veryprominent part of the world we live in. Discusses the history of capitalism and alternativeways others thought of to run the economy. Basic text. Includes timeline.

Heilbroner, Robert. 21st Century Capitalism. Norton, 1994. Presents the history of capitalism.Offers various scenarios for the future. For older students.

Hess, Karl. Capitalism for Kids. Enterprise Publishing, 1987. A book stressing that the capitalisticsystem is the best one around. Shows the positive side of capitalism to kids. Places strongemphasis on ethics for the entrepreneur. Feels that each person should be responsible forhis/her actions and choices.

Moriarty, J.T. The Rise of American Capitalism: The Growth of American Banks. Rosen CentralPrimary Source, 2004. Part of a series: American’s Industrial Society in the 19th Century.Discusses the economic history of the United States. Shows how capitalism grew, and showsthe many different types of money. Includes information about the depression and recession.Shows effort to create a stable monetary system.

Well, Wyatt C. American Capitalism, 1945-2000: Continuity and Change from Mass Production tothe Information Society. Ivan R. Publishers, 2003. One sees how the different economicconditions are now compared to 1945. Also shows the circumstances that are still the same.Easy to read for older students.

AdditionalResourcesSuggested Reading List



Below are a list of sites that you may use to find more information about capitalism. Due to routineweb maintenance, not all of the links will be accurate at the time of access. If the link is notavailable, try to conduct a search on that topic from the main site or from a search engine.

Center for Advancement of CapitalismThis site’s purpose is to advancing individual rights and economic freedom in the United States.Contains articles, newsletter, and much more. Check out the Frequently Asked Question section foryounger students. The rest of the site is for older students.www.capitalismcenter.org/default.htm

Daily Lesson Plan: Is Monopoly the Microsoft Board Game?A three-day lesson plan for students grades 6 - 12. Very specific instructions to follow. The “FurtherQuestions to Discuss” section is interesting.www.nytimes.com/learning/teachers/lessons/19981022thursday.html

FSA/OWI Collection SearchAmerican Memory Library of Congress site. Search for photographs from The Great Depression oranother time in history. Can search by state to see what their town might have looked like back then.Great for visual learners.memory.loc.gov/ammem/fsaallquery.html

Photos of the Great DepressionAn About.com site with wonderful pictures depicting this time in history. You can view photos fromthe following categories: dust storms, farms for sale, migrant workers, women and children,unemployed, civilian conservation corps, breadlines/soup kitchens, and many more.history1900s.about.com/library/photos/blyindexdepression.htm?once=true&

Teaching Resources: The Evolution of CapitalismLesson plan for students to understand the evolution of capitalism. Interesting twist on why capitalismevolved in Europe and not somewhere else. The lesson plan features a great simulation game to beplayed in small groups along with very thought-provoking questions designed to help studentsunderstand the concept of capitalism.www.fee.org/vnews.php?nid=457

Wikipedia: CapitalismQuick facts and words about capitalism. Easy to navigate. Use an outline to go right to a topic youare interested in. The text is concise and informative. There are numerous hyperlinks throughout thepage that take readers to additional information on specific terms.en.wikipedia.org/wiki/Capitalism

American Experience: Andrew CarnegieLesson plan from PBS about Andrew Carnegie. Includes the Industrial Revolution and its effect onpeople. The page includes numerous discussion questions along with links to additional outside

AdditionalResourcesInternet Sites

28

resources.www.pbs.org/wgbh/amex/carnegie/tguide/index.html

New Deal NetworkNeed information about The New Deal? This is the site for it. Includes photos, documents and lessonplan ideas. The site is devoted to the public works and arts projects of the New Deal. You’ll find thissite very easy to navigate.http://newdeal.feri.org/

AdditionalResources


Internet Sites


Answer Key - Before Viewing Activity Sheet 4

True or False?Before viewing the video, read each statement. Decide if the statement is true or false. Think abouthow you would explain your answer. After watching the video, go back over the statements anddecide if the statement is true or false.

Before ViewingTrue /False

After ViewingTrue /False

✔The girl who runs a neighborhood

lemonade stand is a capitalist.

✔Free-market economies are based on private ownership.

✔Capitalism does not require freedoms.

✔Karl Marx was a critic of the Communist system.

✔The Sherman Antitrust Act was

legislation to thwart monopolies.

✔The “Invisible Hand” controls the capitalism economy.

✔John F. Kennedy was responsible for the

legislation of the Consumer Rights.

✔In a depression the demand for goods and services increases.

✔The SEC insures bank deposits.

✔The formation of monopolies is a flaw of capitalism.

30

Answer Key - During Viewing Activity Sheet 3


Capitalism Dates uring the DVD/video, write as many facts that go along with the topics listed in the timeline below.

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Answer Key - After Viewing Activity Sheet 1

Capitalism — Word SearchFind your vocabulary words listed below in the puzzle. They may be across, up and down,backwards or diagonal. Cross through the letters used in each word. Write the letters in the orderthey appear in the spaces below. A message will then be revealed.

ADAM SMITHFDICKARL MARXCAPITALCAPITALISMCAPITALISTDEPRESSION

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ ,__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ ____ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ ____ __ __ __ __ __ __ __ __ __ .

ECONOMICSFACTORY ACTBOOM AND BUSTCOMMAND ECONOMIESCOMMUNIST MANIFESTOCOMMUNIST SYSTEMCONSUMER RIGHTS

FREE MARKET ECONOMIESFRIEDRICH ENGELSGREAT DEPRESSIONJOHN MAYNARD KEYNESMERCANTILE SYSTEMMONOPOLYSEC

SHERMAN ANTITRUST ACTTHE NEW DEALWEALTH OF NATIONS

T H E G R E A T D E C O M M U N I S T M A N I F E S T O C P

L R E S S I O N A F F E C T E D F N O I S S E R P E D A E N

O A U G H P E O P L E T H A T R I T W C C H A N G E P D A M

E R E I C A N P U B L I C S I C E E O N T I M E N I T A B O

U T L D E T T I N G T H E E O G A M O V E R N M T E N T B E

C O M E W I N V O L S V D N E L M D I N T H E A E C O N O M

Y T A E I E Y T L N E R S M T A V H Z I U F L A E T Z C B A

R T Y A B P N R L D I U L H N G R Y Y F H I Q K L D X P Z G

L G I O W L W E R C M H O D O M S F X J S R Z D I W G T J N

M B T U G O G K H E O F E P G H M V Z T Y I Z S L Y M D K A

D A C W U R A E R T N C H K G F I R N N O Z W R L S J R X D

F Y E T Q R N R I A O R L W T J V R B U V A A S I D F X K A

T E S U L G I X T N C E P X L B O I S A S X E L W A M S R M

L X L M E G Q I O T E T C A T S U R T I T N A N A M R E H S

J G A L H M O M N S T V O U H S M H X Q Y T Q M T C R G G M

C R S T Z N I A F U E C X F K O N U H E I Y P G Y U T R V I

X O S J S E N Y N B K A X A H Q P I K P G O W W V I B E W T

M U M S S H N B B D R P V C F I N D A Z N Y S K O P U A N H

S C I M O N O C E N A I A T M E R C A N T I L E S Y S T E M

D T F J U U V F Z A M T K O V A S A A C Y P X Z T X X D L O

L Y S N V N B T K M E A N R N E Z K R U G K O U P O V E A N

A C U J M P I A Y O E L A Y C D V H D V M E H K B U M P B O

Q R I Z M I W S H O R F A A S I I K L G I F V B G P J R N P

U I M T T U K H T B F M O C K M L F D M D G C N M D U E S O

G U E S A M I W Y S N V D T C P F I U C I S A N W T A S O L

X G U L Y N F X P H Y K B W M B Q S D M K P N T V E M S C Y

A T H P I U M J O E Z S X J P U M X L H H W U Q D V X I V N

G A K V E W B J O C Y T T E V L M S B D J H V U U C D O I O

U K B W T D B H M H Q V J E D Y Q T W K N R Q S C F X N O O

Z Z C N L X W A Z P H R M Y M X Y K B T W L T X H Z A L Y N

T H E G R E A T D E P R E S S I O N A F F E C T E D E NOU G H P E O P L E T H A T I T C H A NG E D A M E R I C A N P U B L I C S E N T I M E N T A B O U T L E T T I N G T H E G O V E R N M E N T B E C O M E I N V O L V E D I NT H E E C O NOM Y

32

Answer Key - After Viewing Activity Sheet 3


C

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CrosswordFigure out what words the clues below represent. Fill in the words across or down depending onwhere the clue is given in the table.

ACROSS2. Anything that is used to create more wealth. Ex. Money, assets, resources 5. Insured bank deposits7. Monitors the buying and selling of stocks and bonds9. Governments controlled much of the land and resources; regulated their economies so the exports

outnumbered the imports11. Controlled by the government where people are laborers and consumers 12. A period of economic downturn 13. A number of governmental programs aimed at turning the economy around; created in 1933

during Franklin D. Roosevelt’s term 14. An economic system 15. Laws that protected workers that comprised the purely capitalist system 16. The study of the production, distribution, and consumption

of wealth and resources 17. Having complete control over a product or service

DOWN1. Claimed that nations would become wealthy only when its citizens

were free to pursue their own interests 3. A label put on the cycles of unbalance that plagued the

capitalist system 4. All people will have equal ownership

and an equal interest in the success of production

5. Based on private ownership where people can invest as they wish

6. Anyone who invests in a business 8. Legislation to thwart monopolies 10. Addressed the exploitation of the

lower class worker in a capitalistic society

1

2

3

5

7

9 10

12

11

14

16

17

15

13

4

6

8


Answer Key - After Viewing Content Quiz

Compare/ContrastIn the Venn diagram below compare and contrast the Mercantile System, the Capitalist System, andthe Communist System.

•Freeto own

property•Individual

capitalists &entrepreneurs own the

shops and factories•Made their own decisions•Production based on supply and

demand•Free to make a profit•Free to compete•Motivates producers to improve

quality, efficiency, and make a betterproduct at a lower price

•Consumers can buy where and whatthey want

•Laborers able to choose where theywant to work as long as they are

skilled

•Individualsshould not ownfactories or farms

•Encouraged workers tounite and demand protection

from governments

•Factory Act of 1833

Capitalist System Communist System

Mercantile System

•Government controls land and resources

•Regulated economies to have exports higher than imports

•Collected high taxes or tariffs on imported goods

•System good for national governments•Worker or business owner had little control

34

Answer Key - After Viewing Content Quiz


Content QuizCircle the letter of the best answer; fill in the blank with the best answer; or write true or false for each statement.

1. Who is considered the designer of capitalism?a. John Maynard Keynesb. Karl Marxc. Adam Smithd. None of the above

2. Who was an influential critic of capitalism?a. John Maynard Keynesb. Karl Marxc. Adam Smithd. None of the above

3. Which one is not a consumer right?a. The right to safetyb. The right to make a profitc. The right to choosed. The right to be informed

4. __________________ is a label that was put on the cycles of unbalance that plagued the capitalistsystem.

5. _________ True or False? In 1933, one out of every four Americans had lost his/her job.

6. _________ True or False? Capitalism does not exist in today’s society.

7. List the five Capitalist Freedoms according to Adam Smith.

a. ______________________________________________________________________________

b. ______________________________________________________________________________

c. ______________________________________________________________________________

d. ______________________________________________________________________________

e. ______________________________________________________________________________

8. List three agencies that are responsible for consumer rights.

a. ____________________ c. ____________________

b. ____________________ d. ____________________

Boom and bust

True

False

Freedom to own property

Freedom to make a profit

Freedom to compete

OSHA

FTC

FDA

EPA

Freedom to spend money as consumers wish

Laborers are able to choose where they want to work a long as they are qualified


Answer Key - After Viewing Vocabulary Quiz

Vocabulary QuizWrite the letter of the word to its definition in the space provided.

A. Boom and Bust

B. Capital

C. Capitalism

D. Capitalist

E. Command Economies

F. Communist Manifesto

G. Communist System

H. Depression

I. Economics

J. Factory Act of 1833

K. Federal Deposit Insurance Corporation (FDIC)

L. Free-Market Economies

M. Mercantile System

N. Monopoly

O. Securities and Exchange Commission (SEC)

P. Sherman Antitrust Act of 1890

Q. The New Deal

R. Wealth of Nations

____ 1. Anything that is used to create more wealth. Ex.money, assets, resources

____ 2. anyone who invests in a business.

____ 3. Smith claimed that nations would become wealthyonly when its citizens were free to pursue their owninterests.

____ 4. monitors the buying and selling of stocks and bonds.

____ 5. all people will have equal ownership and an equalinterest in the success of production.

____ 6. addressed the exploitation of the lower class workerin a capitalistic society.

____ 7. a number of governmental programs aimed at turningthe economy around; created in 1933 during FranklinD. Roosevelt’s term.

____ 8. controlled by the government where people arelaborers and consumers.

____ 9. governments controlled much of the land andresources; regulated their economies so the exportsoutnumbered the imports.

____ 10. the study of the production, distribution, andconsumption of wealth and resources.

____ 11. based on private ownership where people can investas they wish.

____ 12. legislation to thwart monopolies.

____ 13. insured bank deposits.

____ 14. an economic system.

____ 15. laws that protected workers that comprised thepurely capitalist system.

____ 16. a label put on the cycles of unbalance that plaguedthe capitalist system.

____ 17. a period of economic downturn.

____ 18. having complete control over a product or service.

B

D

R

O

G

F

Q

E

M

I

L

P

K

C

J

A

H

N


Script

SCENE ONE

Kirsten Schaefer

Do you know what’s going on here? All these people… buying… selling… trading…

negotiating… they are all part of an economic system called Capitalism.

So what’s a capitalist system? Let’s take a closer look. In the business sense, the word

“capital” means money…assets… resources…wealth. Capital is anything that is used to create

more wealth.

But, the money that you have in your pocket doesn’t count as capital. The money you spend

on clothes and food might make you happy, but it doesn’t make you more money.

On the other hand, the money spent to build a factory is an investment. Capital investments

enable businesses to offer goods and services and make a profit. Capital also includes items

used to make money… like tools, buildings, and machines.

Suppose your friend wants to start a dog-washing business. He asks you to loan him money to

buy supplies. In return he promises to pay you one third of the money he makes washing

dogs. And you don’t have to do any of the work!

The money you loan to your friend… is capital.

The supplies your friend buys for his business… such as the washtub, dog shampoo, and

towels … are also considered capital.

Anyone who invests in a business is a capitalist.

That’s right… the little girl down the street with the lemonade stand… she’s a capitalist. So is

CAST

Kirsten Schaefer ............................................................................Host

Script

the man who owns that landscaping business.

Capitalism is an economic system. Economics is the study of the production, distribution, and

consumption of wealth and resources.

Economic theories are based on the fact that resources are limited. We can’t all have

everything we want, so we put a value on resources, which limits our ability to consume them.

Various economic systems have existed throughout history. They are characterized by who

controls the means of production like factories and natural resources. Free-market economies

are based on private ownership. Individuals are free to own businesses and invest capital as

they wish.

At the other end of the spectrum, command economies are controlled by governing entities.

The government owns or controls the means of production. Individuals only serve as laborers

and consumers.

Of course, these are just theories. Throughout history, philosophers and economic theorists

observed social, political, and economic conditions. They came up with new ideas hoping to

correct problems in current economic systems.

SCENE TWO

Kirsten Schaefer

Adam Smith is credited with designing modern capitalist theory. Smith was an economist and

philosopher in Scotland in the 1700’s.

At that time, Europe’s major nations competed under the mercantile system. Governments

controlled much of the land and resources. In order to build their national wealth, they

regulated their economies to make sure exports outnumbered imports.

They collected high taxes or tariffs on imported goods. This system was good for national

governments, but the common worker or business owner had little control of their own affairs.

By the mid 1700’s, European laborers became frustrated with this system. A group of French

economists called Physiocrats urged governments to stop interfering in foreign trade. They

called their policy “laissez faire” which means “hands off.”


Script

Adam Smith agreed with the Physiocrats. In order to stimulate an economy, government

involvement in commerce must be severely limited.

In 1776 he published “an Inquiry into the Nature and Cause of the Wealth of Nations.” The

book was a big hit. Smith claimed that nations would become wealthy only when its citizens

were free to pursue their own interests. In serving themselves, he said, people will best serve

society.

Smith’s work established the conditions or freedoms that are necessary for a capitalistic

system to operate. [These conditions are still true today.]

(1) With the freedom to own property, individual capitalists and entrepreneurs own the shops

and factories, and make decisions about what to produce and how much. These decisions

are directed by the laws of supply and demand rather than government controls.

(2) The freedom to make a profit motivates business owners to produce, or supply, what

consumers want to buy, or demand.

(3) Business owners are also free to compete with each other for customers. Competition

motivates producers to improve quality and efficiency of production, so they can offer

better products at cheaper prices and still make a profit.

(4) On the other side of the equation, consumers have the freedom to spend their money as

they wish. They can shop around for the best deals, which forces business owners to be

competitive.

(5) And finally, laborers are able to choose where they want to work as long as they are

qualified. Supply and demand operates the same for labor as it does for products.

Workers needing jobs will train for the skills that are in demand.

In theory, as long as all of these freedoms are protected, the elements of a capitalist economic

system would balance out naturally. Smith called this principle the “invisible hand.” As long as

citizens were left to pursue their own goals, they would achieve economic harmony.


Script

SCENE THREE

Kirsten Schaefer

Gradually, this new capitalist system took hold in Europe. England was the first to benefit from

the new free-market system.

Entrepreneurs found capitalists to put up the money for new factories, and they hired workers

to produce goods. Motivated by competition and the need to be more efficient, entrepreneurs

constantly looked for new and better ways to produce materials.

Soon steam-powered machines and ingenious inventions contributed to a drastic leap of

progress called the Industrial Revolution.

This economic boom increased the standard of living of many industrialists and laborers. New

comforts and conveniences improved the lives of many. But not everyone was fortunate. In

reality, the economic balance was not as easy to achieve.

The quick progress of the Industrial Revolution caused the labor market to fluctuate. The high

supply of labor drove the price of wages down. This was good for factory owners, but bad for

laborers.

With nearly all government regulation eliminated, factories were free to pursue profits at just

about any cost. Aside from low wages, workers often labored in unsafe, filthy conditions.

Environmental conditions suffered as well. Factories had no requirements regarding waste

disposal. Steam-powered machinery burned coal which filled the air with soot. Water and

sewer systems in the cities were inadequate to handle the influx of people, creating health

hazards.

About 75 years after Adam Smith’s capitalism idea had taken hold, these mounting problems

influenced a new generation of philosophers who proposed solutions.


Script

SCENE FOUR

Kirsten Schaefer

German philosophers Karl Marx and Friedrich Engels were probably the most influential

critics of capitalism. In 1848 Marx published The Communist Manifesto, which addressed the

exploitation of the lower class worker in a capitalist society.

Marx predicted that exploited workers would revolt against the awful conditions and unfair

distribution of wealth, and they would overthrow the capitalistic governments of the world.

Marx’s solution to rid the ills of capitalism was to replace it with a communist system, which

would distribute wealth evenly. All citizens would have equal ownership of the means of

production, so that they all have an equal interest in its success.

Marx felt individuals should not be allowed to own factories or farms. He believed those in

control are driven by greed, just as the governments in control before them.

Marx’s communist revolutionary movements did not succeed at overthrowing capitalist systems

during the 19th century. But in Europe, they did encourage workers to unite and demand

protection from their governments. And the government stepped in beginning with the Factory

Act of 1833. These laws protected workers but compromised the purely capitalist system.

By the 19th century, the United States also experienced successes and failures at the hands of

a capitalist economy. But the United States wasn’t as quick to let their government interfere.

America had the advantage of starting out as a nation free from excessive government

controls. The Constitution limited government responsibilities to national security, management

of a unified monetary system, and overseeing interstate commerce, or trade between states.

However, urban areas in America suffered the same plight as those overseas. The horrible

experiences of the urban American laborer are described in novels such as Upton Sinclair’s

The Jungle.

Having come from the powerful governments of Europe only a century before, and having full

faith in the capitalistic system to survive these problems, American politicians and citizens

were hesitant to give government the power to interfere with the system.

Workers couldn’t get government protection from these factory conditions, so they banned


Script

together in labor unions to protest against powerful factory owners. Unions organized strikes

to demand higher wages and improved working conditions. Riots broke out causing injury,

death, and damage to property.

Initially, capitalists who were losing money at the hand of union organizations complained to

the government. They said unions were communist-driven plots that threatened free economic

progress. The government broke up many union organizations. But factory owners eventually

realized that it was to their advantage to compromise enough to keep the workers happy and

production lines moving.

Another major flaw of capitalism that Adam Smith failed to predict was the formation of

monopolies. Smith’s original theory only took into consideration small business owners. In the

United States, huge financial empires were forming.

Powerful capitalists used their wealth to dominate the ownership of important natural

resources. Without other suppliers to compete with them, these capitalists were able to

monopolize the market and charge outrageous prices.

US government became privy to these practices, and ruled that monopolies jeopardized the

competition that was necessary for a successful capitalist economy. The Sherman Antitrust Act

of 1890 was the first piece of legislation to thwart monopolies.

SCENE FIVE

Kirsten Schaefer

These power plays on the capitalist and labor sides of the economy were major issues through

the early 20th century. But as America’s economy grew stronger and more complex, so did

the cycles of unbalance that had always plagued the system, accurately labeled “boom and

bust.”

America suffered from recurring depressions in the economy. A depression is a period of

economic down turn. The demand of goods and services drops off, which causes the demand

for labor to decrease.

More people become unemployed, providing less money to purchase goods. A significant

event, like a war, can stimulate the economy back to normal. But in 1929, a culmination of

events brought about the biggest economic downturn in the history of modern capitalism.


Script

The Great Depression officially began with the stock market crash of October 1929. For a

decade after World War I, the value of certain stocks on the US market was steadily

increasing. Anxious investors wanting to get in on the boom borrowed money to purchase

stocks.

When the stock market reached its peak and prices began to come back down, stockholders

panicked, sending the market to crashing lows. Many banks went broke. People lost their

savings.

Thousands of businesses closed and farm prices hit all-time lows. By 1933 one of every four

Americans had lost his or her job. Families who couldn’t keep up with their mortgage

payments lost their homes.

Before the Great Depression economists believed the economy would fix itself as it had in the

past without any help from the government.

But hard times dragged on year after year. Jobs were hard to find, and wages were very low.

Millions of unemployed would have accepted any kind of pay just to work.

Demand was so low that businesses couldn’t afford to hire workers. And nobody had the

money to buy the goods that would stimulate the economy.

The vicious cycle had fallen so low it affected industrialized nations all over the world.

The Great Depression affected enough people, that it changed American public sentiment

about letting the government become involved in the economy.

When Franklin D. Roosevelt took office in 1933, he immediately established a number of

government programs, called the New Deal, that helped turn the economy around.

First, he saw a need to regulate the banking industry. The Federal Deposit Insurance

Corporation, or FDIC, was set up to insure bank deposits. Because fraud and dishonesty in the

stock market had been at least partly responsible for the crash, the Securities and Exchange

Commission or (SEC) was established to monitor the buying and selling of stocks and bonds.

To pump money back into the economy and encourage demand, Roosevelt created work

programs for the unemployed. The government hired workers to build dams, parks, sidewalks

and other public works projects.


Script

SCENE SIX

Kirsten Schaefer

Since the Great Depression, government’s role in maintaining a healthy capitalist economy

has grown.

British economist John Maynard Keynes published an important work titled The General

Theory of Employment, Interest and Money in 1936. In it he established a system for

measuring economies on a large scale, called macroeconomics.

He examined the causes of prolonged economic depressions, and concluded there were no

self-correcting mechanisms in capitalistic systems. His work supported the increased role of

government in capitalist economies that was taking place after the Great Depression.

His suggestions for government to control the supply of money and use its resources to spend

during periods of recession were also implemented, and have proven successful for steadying

the characteristic boom and bust struggle.

In the later part of the 20th century, the consumer movement took hold. In 1962, President

John F. Kennedy addressed Congress on the rights of consumers: (1) the right to safety; (2)

the right to be informed; (3) the right to choose; and (4) the right to be heard.

The federal government imposes regulations to protect consumers and laborers.

The Occupational Safety and Health Administration requires businesses to provide a safe and

clean place for its employees to work.

The Federal Trade Commission establishes safety standards for automobile manufacturers,

from the tires to the seat belts.

And the Food and Drug Administration ensures the products on our shelves are safe to

consume.

When comes to the effects of industry on our surroundings, The Environmental Protection

Agency enforces limits on pollution through the Clean Water Act and Clean Air Act.


Script

SCENE SEVEN

Kirsten Schaefer

Today in the United States, businesses have less freedom. These laws and restrictions have

come about gradually as society has seen a need for them.

Economists still disagree over how much the government should interfere. Some argue against

these mounting policies, claiming they restrict the freedom to trade, while others understand

that industry must be forced to be responsible.

The basic freedoms to own property, compete, spend, and seek employment are still in tact.

And probably the most important feature of capitalism, the incentive to make a profit, and to

improve on existing goods and services, is still very much alive.

No other economic system in the world has been responsible for so much progress and

achievement. As the strongest capitalist nation in the world, the United States has made great

strides in the advancement of technology, medicine, and ??...All because citizens of this great

nation were encouraged to exceed the accomplishments of those before them.

So toss that little capitalist a quarter and have sip of lemonade.


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