How Economics Can Strengthen the Teaching of U.S. History

1. How Economics Can Strengthen the Teaching of U.S. History Council for Economic Education March 21, 2009 Mark C. Schug, Ph.D. University of Wisconsin-Milwaukee

2. Overview • Problems teaching history • How economic thinking might help • Features of Focus: Understanding Economics in U.S. History • Lesson 5 Demonstration

3. Problems Teaching U.S. History • Schools rely on U.S. history to teach • Our national identify • An academic understanding of our past • But, history teaching is criticized as being • Boring in content and pedagogy • Superficial • Trivial • Remote

4. Problems Teaching U.S. History • Students usually take 6 semesters of U.S. history: • Grade 5: 2 semesters • Grade 8: 2 semesters • Grade 11: 2 semesters • Yet, national tests show that achievement in history is low.

5. U.S. History Achievement Levels: 1994, 2001, 2006 NAEP

6. Civics Achievement Levels: 1994, 2001, NAEP

7. Economics Achievement Levels: 2006, NAEP

8. What Can Economics Contribute? • Economics stresses the idea that all people make choices. • But, they don’t know at the time what the consequences of their choices will be.

9. All social phenomena emerge from the choices that individuals make in response to expected costs and benefits to themselves. Paul Heyne Individual Choices

10. John Maynard Keynes • The inevitable never happens. It is always the unexpected.

11. Who Would Have Predicted in 1980? • The collapse of the Soviet Union. • The reunification of Germany. • Nelson Mandela becoming President of South Africa.

12. Who Would Have Predicted in 1980? • Economic stagnation in Japan in the 1990s. • Record U.S. economic expansion in the 1990s. • An attack on the World Trade Center on 9/11. • All-out war in Afghanistan and Iraq.

13. Who Would Have Predicted in 1980? • The financial collapse of 2008 and the 2009. • An African American President of the United States in 2009.

14. They Didn’t Know How It Would All Turn Out • In writing history or biography, you must remember that nothing was on track. Things could have gone any way at any point. As soon as you say “was” it seems to fix an event in the past. But nobody ever lived in the past, only the present. TALKING HISTORY WITH: David McCullough; Immersed in Facts, The Better to Imagine Harry Truman's Life By ESTHER B. FEIN Published: August 12, 1992 New York Times

15. They Didn’t Know How It Would Turn Out • The difference is that it was their present. They were just as alive and full of ambition, fear, hope and all the emotions of life. And, just like us, they didn’t know how it would all turn out. • The challenge is to get the reader [student] beyond the thinking that things had to be the way they turned out and to see the range of possibilities of how it could have been otherwise. • David McCullough

16. The Economic Way of Thinking • Focus: Understanding Economics in U.S. History introduces students to the economic way of thinking. • It stresses how people at the time were making choices in response to anticipated benefits and costs. • This approach allows students to be “present-minded” about the past.

17. Introduction to the Economic Way of Thinking

18. Guide to Economic Reasoning • Focus:Understanding Economics in U.S. History uses six principles of economic reasoning to solve mysteries in U.S. history.

19. Guide to Economic Reasoning 1. People choose. 2. People’s choices involve costs. 3. People respond to incentives in predictable ways. 4. People create economic systems that influence individual choices and incentives. 5. People gain when they trade voluntarily. 6. People’s choices have consequences that lie in the future.

20. Why Did the Colonists Fight

21. Why Did the Colonists Fight? • At first glance the American Revolution seemed inevitable: • Sugar Act in 1764 • Stamp Act in 1765 • Tea Act in 1763 • Neither side was willing to back down.

22. Colonists lived in relative safety due to British military protection. Royal Navy protected American shipping. The Colonists Were Safe

23. The British spent heavily to protect the colonies from French forces and their Indians allies. The French and Indian War lasted from 1755-1763. The Colonists Were Safe

24. By today’s standards colonial life was rough. But by the standards of their own time, colonists enjoyed a high quality of life. Growth of production Lived longer than most Average incomes were as high or higher than in England Better educated The Colonists Were Prosperous

25. The Colonists Were Prosperous • “Even today, relatively few countries generate average income levels that approach the earnings of free Americans on the eve of the Revolution.” (Walton and Rockhoff, 2002)

26. The Colonists Were Free • The colonies were a long way from Britain. • Transportation and communications were slow. • English authorities were inclined to leave the colonists more or less alone.

27. The Colonists Were Free • Samuel Eliot Morison (1965) writes “British subjects in America … were then the freest people in the world.” • Practiced in self government • Freedom of speech, press and assembly. “The hand of government rested lightly on Americans.”

28. The British colonies in America grew and prospered. Since the colonists were economically successful under British rule, why did they seek independence? Why would colonists fight a revolution against Great Britain, one of the world’s most powerful nations and, in many ways, when it was safe, prosperous and free? Lesson 7: Mystery

29. Apply the Guide to Economic Reasoning 1. People choose. 2. People’s choices involve costs. 3. People respond to incentives in predictable ways. 4. People create economic systems that influence individual choices and incentives. 5. People gain when they trade voluntarily. 6. People’s choices have consequences that lie in the future.

30. People Choose • The colonists decided that fighting the Revolution offered the best combination of benefits and costs they could attain.

31. People’s Choices Involve Costs • Questions of cost loomed large. • They risked losing: • Guaranteed market for some goods. • Subsidies and bounties. • Military protection

32. People Respond to Incentives • After 1763, new taxes and regulations became more restrictive. • Sugar Act • Stamp Act • Tea Act • These actions provided an incentive to fight.

33. People Create Economic Systems • The Navigation Acts (1651, 1660, 1663) changed the rules of the game. • Britain was more willing to enforce the rules resulting in higher prices for colonists.

34. People Create Economic Systems • Trade was allowed only in American or British vessels. • All imports were through British ports.

35. People Create Economic Systems • Enumerated goods (tobacco, sugar, cotton, indigo, rice, and naval stores) from the colonies could only be shipped to England. • Townsend Act placed new taxes on tea, glass and paper.

36. People Create Economic Systems • Agricultural land was very important to many colonists. • Quebec Act of 1774 • Enlarged the size of Quebec. • Destroyed western land claims of Massachusetts, Connecticut and Virginia.

37. People Gain from Voluntary Trade • Trade was very important to the colonial economy. • Colonial producers saw Britain’s tightening mercantile policy as an obstacle to free trade.

38. Future Consequences • Changes in British policy increased the risk that the future would not be as safe, prosperous and free as the past had been. • Economic growth was in doubt. • Self-government was threatened.

39. The colonists fought the Revolution because benefits they had obtained - - especially prosperity and self-government - - were threatened. The prospect of fighting to secure these benefits for the future outweighed the other choices. Solve the Mystery

40. Table of Contents

41. Table of Contents Unit 1 Three Worlds Meet 1. The New World Was an Old World 2. Property Rights Among North American Indians

42. Table of Contents Unit Two: Colonization and Settlement 3. Why Do Economies Grow? 4. Understanding the Colonial Economy in a Global Context 5. Indentured Servitude: Why Sell Yourself into Bondage? 6. Specialization and Trade in the Thirteen Colonies

43. Table of Contents Unit Three: Revolution and the New Nation 7. The Costs and Benefits of American Independence 8. Problems under the Articles of Confederation 9. The U.S. Constitution: Rules of the Game

44. Table of Contents Unit Four: Expansion and Reform 10. Rising Living Standards in the New Nation 11. How Did Cotton Become King? 12. Francis Cabot Lowell and the New England Textile Industry

45. Table of Contents 13. Improving Transportation 14. Investing in American Growth 15. Why Did the Indians of the Great Plains Invite White Americans into Their Land? 16. Andrew Jackson and the Second Bank of the United States 17. Free the Enslaved and Avoid the War

46. Table of Contents Unit Five: Civil War and Reconstruction 18. Why Did the South Secede? 19. Economic Analysis of the Civil War

47. Table of Contents Unit Six: The Development of the Industrial United States 20. Was Free Land a Good Deal? 21. The Changing U.S. Economy 22. The Demand for Immigrants 23. Bigger Is Better: The Economics of Mass Production

48. Table of Contents 24. Industrial Entrepreneurs or Robber Barons? 25. The Economic Effects of the 19th Century Monopoly 26. Could the U.S. Economy Have Grown Without the Railroads? 27. Free Silver or a Cross of Gold

49. Table of Contents Unit Seven: The Emergence of Modern America 28. Money Panics and the Establishment of the Federal Reserve System 29. Who Should Make the Food Safe?

50. Table of Contents Unit Eight: The Great Depression and World War II 30. Whatdunit? The Great Depression Mystery 31. Did the New Deal Help or Harm Recovery?