Wednesday, November 7, 2007

Classroom Discussion Starter - 10 Minute Lesson

Several quotes in The Wealth and Poverty of Nations struck me as good introductions for classroom discussion, either to start off a lesson or to wrap it up if you found that you have a few unused minutes because your plan worked better than you expected. Let me give them to you and offer some ideas to guide discussion.

"Is inflation a kind of impersonal lie?"
This is great way to start or end your discussions of inflation and/or monetary policy. Consumers, investors and businesses plan for the future - some farther than others, but we'll pass on that for the moment. In their planning they anticipate costs, usually in terms of price. To what extent does inflation complicate planning? Does allowed inflation constitute a willful misleading by policy makers of those trying to plan future activity? How does low or zero inflation help the economy?

"...the rich [countries] see the peril -- at least some do -- and their wealth permits them to spend on clean-up and dump their waste elsewhere. They also abound in good ecological advice to the new industrializers. These in turn are quick to point to the pollution perpetrated by today's rich countries in their growth period. Why should today's latecomers have to be careful? Besides, most developing countries are ready to pay the environmental price: wages and riches now; disease and death down the road ... Meanwhile who can confine pollution and disease? The rich are frightened, even if the poor are not. The rich have more to lose."
If you discuss economics and the environment, this is a good quote. It summerizes much of the current focus on environmental issues as it applies to developing nations. At the same time, it shows that there is a cost for short-term vs. long-term thinking. One of the best lessons of economics is that the costs of our decisions lay in the future. Is it foolhardy to count on/hope for a technology that will allow us to reverse environmental problems? This can also be used in tandem with discussions about the problems arising with the Three Rivers Dam project in China, or land-clearing by burning in places like Brazil.

I look forward to your comments.

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