Adair County R-1 Social Studies
  • Mr. Sullivan's Classes
  • 2015-2016
    • Personal Finance 2015-2016 >
      • Checking Accounts
      • The Best Jobs and the Worst Jobs
    • Missouri History 2015-2016 >
      • Missouri Unit One: Geography
      • Missouri Unit Two: Demographics
      • Missouri Unit Three: Native Americans >
        • Blog: Native Americans In Missouri Project
      • Missouri Unit Four: Arrival of Europeans >
        • Missouri Unit Four: Part Two-Americans
      • Missouri Unit Five: Countdown to Statehood >
        • Missouri and its Capital City
      • Missouri Unit Six: Missouri's Early Days (1821-1860) >
        • Fur Trappers
        • Pony Express
        • Steamboats
        • Railroads
      • Irish Immigration in Missouri
      • German Immigration to Missouri
      • Age of Benton >
        • Lewis Linn: Missouri's Model Senator
        • David Rice Atchison
        • Frederick Bates
        • John Scott
      • Missouri Unit Seven: Civil War >
        • Slavery
        • Missouri Prior to the Civil War
        • John Scott and Abolitionism
        • 1861 >
          • Salem Ford Project
          • Civil War in Missouri Google Map Project
        • 1862
        • 1863
        • 1864
        • 1865
      • Missouri Unit Seven: Civil War
      • Missouri Unit Eight: Late 19th Century >
        • Radical Rule in Missouri >
          • The First Normal School
          • Missouri Outlaws
          • 1875 Constitution
          • Farmers and Governent
        • Kirksville Tornado, April 27, 1899
        • Kansas City
        • St. Louis
        • Champ Clark
      • Missouri Unit Nine: Missouri At War (Spanish-American War, World War One, World War Two >
        • Missouri Artists and Authors
      • Misouri Unit Ten: Developing Society (1945-1980)
      • Missouri Unit Eleven: Famous Missourians >
        • Boss Tom Pendergast
        • Harry S Truman (1884-1944)
    • American History I 8th Grade 2014-2015 >
      • American History I 8th Grade 2014-2015
      • Unit One: Geography
      • Unit Two: Early North American Cultures >
        • Early Inhabitants (Chapter One)
        • Chapter One Section One
        • Section 1 Early Peoples
        • Section 2 Cities and Empires
        • Chapter One Section Two
        • Chapter One Section Three
        • Section 3 North American Peoples
      • Chapter Two: Exploring the Americas >
        • Chapter Two Section One: A Changing World
        • Section 1 A Changing World
        • Chapter Two Section Two: Early Exploration
        • Section 2 Early Explorations
        • Chapter Two Section Three: Spain in America
        • Chapter Two Section Four: Exploring North America
      • Chapter Three: Colonial America >
        • Chapter Three Section One: Early English Settlements
        • Chapter Three Section Two: New England Colonies
        • Chapter Three Section Three: Middle Colonies
        • Chapter Three Section Four: Southern Colonies
      • Chapter Four: The Colonies Grow >
        • Chapter Four Section One: Life in the Colonies
        • Chapter Four Section Two: Government, Religion, Culture
        • Chapter Four Section Three: France and Britain Clash
        • Chapter Four Section Four: The French and India War
      • Unit Three Origins of Our Nation 1763-1791 >
        • The American Revolution (Chapter Six) >
          • Section 1 The Early Years
          • Section 2 The War Continues
          • Section 3 The War Moves West and South
          • Section 4 The War Is Won
        • A More Perfect Union (Chapter Seven) >
          • Section 1 The Articles of Confederation
          • Section 2 Convention and Compromise
          • Section 3 A New Plan of Government
      • Unit Three: Europeans and the Americans
      • Unit Six Civil War and Reconstruction 1846-1896
      • The Road of Turmoil (Chapter Fifteen)
      • The War Between The States (Chapter Sixteen)
      • Reconstruction-Carpetbaggers and Bluebellies (Chapter Seventeen)
    • American Government 3rd Hour-Second Semester >
      • Chapter One "People and Government" >
        • Section 1 "Principles of Government
        • Section 2 "The Formation of Governments"
        • Section 3 "Types of Government"
        • Section 4 "Economic Theories"
      • Government-Chapter Two Origins of American Government
      • Government Chapter Three-The Constitution
      • Government Chapter Three-The Constitution
    • Seventh Grade Civics 2014-2015 >
      • Unit One Foundations of Citizenship [Chapters 1 & 2] >
        • Citizenship and Government in Democracy (Chapter One) >
          • Section One Government of the People, by the People, for the People
          • Section Two The Path to Citizenship
          • Section Three The Diversity of Americans
        • Roots of American Democracy (Chapter Two) >
          • Section One English Heritage of Our Nation >
            • Blog: Seventh Grade Chapter Two Section One
          • Section Two The Birth of a Democratic Nation >
            • Blog: The Boston Tea Party
          • Section Three The Nation's First Governments
          • Chapter Two: The First & Second Continental Congresses and the Declaration of Independence >
            • Declaration of Independence >
              • The Declaration of Independence
              • Blog:Declaration of Independence
          • Section Three The Nation's First Governments
      • Unit Two Blueprint for a New Nation [Chapters 3 & 4] >
        • Signing the Constitution
        • The Constitution (Chapter Three) >
          • Section One The Road to the Constitution
          • Section Two Creating and Ratifying the Constitution
          • The United States Constitution
          • Section Three The Structure of the Constitution
          • Section Four Principles Underlying the Constitution
        • Section One The President and Vice President
        • The Bill of Rights (Chapter Four) >
          • Section One First Amendment Freedoms
          • Section Two Other Guarantees in the Bill of Rights
          • Section Three Extending the Bill of Rights
      • Unit Three Citizenship: Rights and Responsibilities [Chapters 5-8] (New: Ch. 5, 9, 10, 11 resp.) >
        • The Citizen and the Community (Chapter Five) >
          • Section One The Rights of Citizens
          • Section Two The Duties and Responsibilities of Citizenship
          • Section Three Volunteering in Your Community
        • Political Parties and Politics (Chapter Six) (New Ch. 9) >
          • Section One Development of American Politics
          • Section Two Organization of American Political Parties
          • Section Three Role of Political Parties Today
        • Voting and Elections (Chapter Seven) (New Ch 10) >
          • Section One Definition of a Voter
          • Section Two Election Campaigns
          • Section Three Elections and Funding the Campaign
        • Influencing Government Through Public Opinion and Interest Groups (Chapter Eight) (New Ch. 11) >
          • Section One Public Opinion
          • Section Two The Mass Media
          • Section Three Interest Groups
      • Unit Four The National Government (Chapters 9-12) (New Ch. 6-8) >
        • Congress (Chapter Nine) (New Ch. 6) >
          • Section One How Congress is Organized
          • Section Two The Powers of Congress
          • Section Three Representing the People
          • Section Four How a Bill Becomes a Law
        • The Presidency and the Executive Branch (Chapters Ten & Eleven) (New Ch. 7) >
          • Section One The President and Vice President
          • Section Two The President's Job
          • Section Three Making Foreign Policy
          • Section Four Presidential Advisers and Executive Agencies
        • The Judicial Branch (Chapter Twelve) (new Ch. 8) >
          • Section One The Federal Court System
          • Judicial Section Two
          • Section Two How Federal Courts are Organized
          • Section Three The United States Supreme Court
          • Section Four Presidential Advisers and Executive Agencies
      • Unit Five Political Parties and Interest Groups (Chap 6-8) (New Ch. 9-11)
      • Unit Six State and Local Government (Chapters 13-15) (New Ch. 12-14) >
        • State Government (Chapter 13) (New Ch. 12) >
          • Section One the Federal System
          • Section Two The State Executive Branch
          • Section Three The State Legislative Brancy
          • Section Four The State Judicial Branch
        • Local Government (Chapter 14) (New Ch. 13) >
          • Section One County Government
          • Section Two Town, Township, & Village Governments
          • Section Three City Government
        • Community Issues (Chapter 15) (New Ch. 14) >
          • Ch14sec2 Education and Social issues
          • Environmental Issues (Chap. 14, Sec. 3)
      • Unit Seven The Individual, the Law, and the Internet >
        • Legal Rights and Responsibilities (Chapter 16) (New Ch. 15) >
          • Section One The Source of Our Laws
          • Section Two Legal Rights and Responsibilies
          • Section Three Types of Laws
        • Civil and Criminal Law (Chapter 17) (New Ch. 16) >
          • Section One Civil Cases
          • Section Two Criminal Cases
          • Section Four Young People and the Courts
      • Chapter Twelve The Judicial Branch
      • Resources and Assignments
  • 2013-2014
    • History of the West >
      • Chapter 14 The Vision of Sitting Bull >
        • Biographies of Important Participants
      • Chapter Sixteen-Chief Joseph and the Nez Perces
      • Chapter Nineteen-Paiute and Shoshone Indians
      • Resource and Assignment Page
    • Advanced American History >
      • Documenting Life in Photographs >
        • The Magnet Mother
        • Dorothea Lange
        • Walker Evans
        • Marion Post Wolcott
        • Otto Hagel
        • Alfred Eisenstaedt
        • Eddie Adams
        • Peter Stackpole
      • The Dust Bowl
      • Student Pages >
        • Franklin Delano Roosevelt-New Nationalism
        • The Grenada Invasion
        • The Persian Gulf War
        • Pictures
        • Photographs of the 1930's
        • Wounded Knee Incident of 1973
        • The Shaker Religon
        • Racial Acts Against Asians
        • The Alamo
        • The Life and Legend of Jedediah Smith
        • The War of 1812
        • Meriwether Lewis: An American Hero
        • Daniel Boone: American Trailblazer
        • Mary Ludwig Hays McCauley-"Molly Pitcher."
        • John "Liver Eating" Johnston
        • Nathan Hale
        • Anne Hutchinson
        • Treaty of Paris
        • Annie Oakley
        • The Pony Express
        • Mormon Religion
        • Government and Racism
        • Racial Tensions
        • Chinese Immigration Act
        • Anti-Asian Conflicts in the United States
        • Racial Acts Against Asians
        • May Day Riots
        • The Imperialism of Alaska
        • Nicaragua
      • Chapter Three: The English Colonies >
        • King Philip's War
      • Salem Witch Trials
      • Utopian Societies
      • Utopian Communities
    • Personal Finance 3rd Hour >
      • Resource and Assignment Page
    • Seventh Grade Civics >
      • Chapter Twelve The Judicial Branch >
        • Section One "The Federal Court System"
        • Section Two "The Lower Federal Courts"
        • Section Three "The United States Supreme Court"
        • Section Four "The Court at Work"
      • Resources and Assignments
    • Missouri History >
      • Chariton Collector
      • Coal mining in Northeast Missouri
      • German Immigration to Missouri
    • American History I >
      • Chapter Seven "A More Perfect Union" >
        • Section One "The Articles of Confederation
        • Section Two "Convention and Compromise"
        • Section Three "A New Plan of Government"
        • Resources
      • Civics In Action: The Constitution >
        • Section One "The Constitution"
        • Section Two "The Federal Government"
        • Section Three "Citizens' Rights and Responsibilities"
      • Unit Four "The New Republic" >
        • Chapter Eight "A New Nation" >
          • Section One "The First President"
          • Section Two "Early Challenges"
          • Section Three "The First Political Parties"
        • Chapter Nine "The Jefferson Era" >
          • Section One "The Republicans Take Power"
          • Section Two "The Louisiana Purchase"
          • Section Three "A Time of Conflict"
          • Section Four "The War of 1812"
        • Chapter Ten "Growth and Expansion" >
          • Section One "Economic Growth"
          • Section Two "Westward Bound"
          • Section Three "Unity and Sectionalism"
        • Unit Five "The Growing Nation" >
          • Chapter Eleven "The Jackson Era" >
            • Section One "Jacksonian Democracy"
            • Section Two "Conflicts Over Land"
            • Section Three "Jackson and the Bank"
          • Chapter Twelve "Manifest Destiny" >
            • Section One "The Oregon Country"
            • Section Two "Independence for Texas"
            • Section Three "New Settlers In California and Utah"
          • Chapter Thirteen "North and South" >
            • Section One "The North's Economy"
            • Section Two "The North's People"
            • Section Three "Southern Cotton Kingdom"
            • Section Four "The South's People"
          • Chapter Fourteen "The Age of Reform" >
            • Section One "Social Reform"
            • Section Two "The Abolitionists"
            • Section Three "The Women's Movement"
          • Unit Six "Civil War and Reconstruction" >
            • Chapter Fifteen "Road To Civil War" >
              • Section One "Slavery and the West"
              • Section Two "A Nation Dividing"
              • Section Three "Challenges to Slavery"
              • Section Four "Secession and War"
            • Chapter Sixteen "The Civil War" >
              • Section One "The Two Sides"
              • Section Two "Early Years of the War"
              • Section Three "A Call for Freedom"
              • Section Four "Life During the Civil War"
              • Section Five "The Way to Victory"
            • Chapter Seventeen "Reconstruction and Its Aftermath" >
              • Section One "Reconstruction Plans"
              • Section Two "Radicals in Control"
              • Section Three ""The South During Reconstruction
              • Section Four "Change in the South"
          • French and Indian War
          • Resource and Assignment Page
      • Personal Finance 7th Hour
      • Pop Culture-Second Semester >
        • Levittown and American Suburbia
        • "You're Next! You're Next!" The Saga of Invasion of the Body Snatchers
        • Resource and Assignment Page
      • American Government 3rd Hour-Second Semester >
        • Chapter One "People and Government" >
          • Section 1 "Principles of Government
          • Section 2 "The Formation of Governments"
          • Section 3 "Types of Government"
          • Section 4 "Economic Theories"
        • Government Chapter Three-The Constitution
        • Chapter 5 The Legislative Branch
        • Chapter Twenty-One "Social and Domestic Policy"
        • Resource and Assignment Page
      • American Government 7th Hour-Second Semester >
        • Chapter One "People and Government" >
          • Section 1 "Principles of Government
          • Section 2 "The Formation of Governments"
          • Section 3 "Types of Government"
          • Section 4 "Economic Theories"
        • Government Chapter Three-The Constitution
        • Chapter Twenty-One "Social and Domestic Policy"
        • Resource and Assignment Page
  • test page
  • Mr. Sullivan's Classes 2014-2015
    • Missouri History 2015 >
      • Missouri Unit One: Geography
      • Missouri Unit Two: Demographics
      • Missouri Unit Three: Native Americans >
        • Blog: Native Americans In Missouri Project
      • Missouri Unit Four: Arrival of Europeans >
        • Missouri Unit Four: Part Two-Americans
      • Missouri Unit Five: Countdown to Statehood
      • Missouri Unit Six: Missouri's Early Days (1821-1860) >
        • Fur Trappers
        • Pony Express
        • Steamboats
        • Railroads
      • Missouri Unit Seven: Civil War >
        • Slavery
        • Missouri Prior to the Civil War
        • 1861
        • Salem Ford Project
        • 1862
        • 1863
        • 1864
        • 1865
      • Missouri Unit Eight: Late 19th Century >
        • Kansas City
        • St. Louis
      • Missouri Unit Nine: Missouri At War (Spanish-American War, World War One, World War Two
      • Misouri Unit Ten: Developing Society (1945-1980)
      • Missouri Unit Eleven: Famous Missourians
    • History of the West 2014
    • Advanced American History 2014-2015 >
      • Minorities and Eurocentrism
      • Washington D.C. Sites
      • Do Historians Get it Right?
      • The First Americans
      • Blog: The Real Columbus
      • Blog: Witchcraft in America
      • War of 1812
    • American History I 8th Grade 2014-2015 >
      • Unit One Prehistory to 17th Century >
        • Early Inhabitants (Chapter One) >
          • Section 1 Early Peoples
          • Section 2 Cities and Empires
          • Section 3 North American Peoples
        • European Exploration (Chapter Two) >
          • Section 1 A Changing World
          • Section 2 Early Explorations
          • Section 3 Spain in America
          • Section 4 Exploring North America
      • Unit Two Colonial America 1587-1770 >
        • English Colonial America (Chapter Three) >
          • Section 1 Early English Settlements
          • Section 2 New England Colonies
          • Section 3 Middle Colonies
          • Section 4 Southern Colonies
          • King Philip's War
        • Growth of the Colonies (Chapter Four) >
          • Section 1 Life in the Colonies
          • Section 2 Government, Religion, and Culture
          • Section 3 France and Britain Clash
          • Section 4 The French and Indian War
      • Unit Three Origins of Our Nation 1763-1791 >
        • Route to Independence (Chapter Five) >
          • Section 1 Taxation Without Representation
          • Section 2 Building Colonial Unity
          • Section 3 A Call to Arms
          • Section 4 Moving Toward Independence
        • The American Revolution (Chapter Six) >
          • Section 1 The Early Years
          • Section 2 The War Continues
          • Section 3 The War Moves West and South
          • Section 4 The War Is Won
        • A More Perfect Union (Chapter Seven) >
          • Section 1 The Articles of Confederation
          • Section 2 Convention and Compromise
          • Section 3 A New Plan of Government
      • Unit Four We The People 1789-1825 >
        • America in Infancy (Chapter Eight) >
          • Section 1 The First President
          • Section 2 Early Challenges
          • Section 3 The First Political Parties
        • Jeffersonian America (Chapter Nine) >
          • Section 1 The Republicans Take Power
          • Section 2 The Louisiana Purchase
          • Section 3 A Time of Conflict
          • Section 4 The War of 1812
        • Growth and Expansion (Chapter Ten) >
          • Section 1 Economic Growth
          • Section Two The Duties and Responsibilities of Citizenship
          • Section 2 Westward Bound
          • Section 3 Unity and Sectionalism
      • Unit Five From Infancy to Infamy 1820-1860 >
        • Jacksonian America (Chapter Eleven)
        • Manifest Destiny (Chapter Twelve)
        • Two Sides of a Coin-North and South (Chapter Thirteen)
        • The Age of Reform (Chapter Fourteen)
      • Unit Six Civil War and Reconstruction 1846-1896 >
        • The Road of Turmoil (Chapter Fifteen)
        • The War Between The States (Chapter Sixteen)
        • Reconstruction-Carpetbaggers and Bluebellies (Chapter Seventeen)
    • Personal Finance 2014 >
      • Budget Spreadsheets
    • Seventh Grade Civics 2014-2015 >
      • Unit One Foundations of Citizenship [Chapters 1 & 2] >
        • Citizenship and Government in Democracy (Chapter One) >
          • Section One Government of the People, by the People, for the People
          • Section Two The Path to Citizenship
          • Section Three The Diversity of Americans
        • Roots of American Democracy (Chapter Two) >
          • Blog: Seventh Grade Chapter Two Section One
          • Section One English Heritage of Our Nation
          • Section Two The Birth of a Democratic Nation >
            • Blog: The Boston Tea Party
          • Chapter Two: The First & Second Continental Congresses and the Declaration of Independence >
            • Blog:Declaration of Independence
          • Declaration of Independence
          • Section Three The Nation's First Governments
          • The Declaration of Independence
      • Unit Two Blueprint for a New Nation [Chapters 3 & 4] >
        • Signing the Constitution
        • The Constitution (Chapter Three) >
          • Section One The Road to the Constitution
          • Section Two Creating and Ratifying the Constitution
          • The United States Constitution
          • Section Three The Structure of the Constitution
          • Section Four Principles Underlying the Constitution
        • The Bill of Rights (Chapter Four) >
          • Section One First Amendment Freedoms
          • Section Two Other Guarantees in the Bill of Rights
          • Section Three Extending the Bill of Rights
      • Unit Three Citizenship: Rights and Responsibilities [Chapters 5-8] (New: Ch. 5, 9, 10, 11 resp.) >
        • The Citizen and the Community (Chapter Five) >
          • Section One The Rights of Citizens
          • Section Two The Duties and Responsibilities of Citizenship
          • Section Three Volunteering in Your Community
        • Political Parties and Politics (Chapter Six) (New Ch. 9) >
          • Section One Development of American Politics
          • Section Two Organization of American Political Parties
          • Section Three Role of Political Parties Today
        • Voting and Elections (Chapter Seven) (New Ch 10) >
          • Section One Definition of a Voter
          • Section Two Election Campaigns
          • Section Three Elections and Funding the Campaign
        • Influencing Government Through Public Opinion and Interest Groups (Chapter Eight) (New Ch. 11) >
          • Section One Public Opinion
          • Section Two The Mass Media
          • Section Three Interest Groups
      • Unit Four The National Government (Chapters 9-12) (New Ch. 6-8) >
        • Congress (Chapter Nine) (New Ch. 6) >
          • Section One How Congress is Organized
          • Section Two The Powers of Congress
          • Section Three Representing the People
          • Section Four How a Bill Becomes a Law
        • The Presidency and the Executive Branch (Chapters Ten & Eleven) (New Ch. 7) >
          • Section One The President and Vice President
          • Section Two The President's Job
          • Section Three Making Foreign Policy
          • Section Four Presidential Advisers and Executive Agencies
        • The Judicial Branch (Chapter Twelve) (new Ch. 8) >
          • Section One The Federal Court System
          • Judicial Section Two
          • Section Two How Federal Courts are Organized
          • Section Three The United States Supreme Court
          • Section Four Deciding Cases at the Supreme Court
      • Unit Five Political Parties and Interest Groups (Chap 6-8) (New Ch. 9-11)
      • Unit Six State and Local Government (Chapters 13-15) (New Ch. 12-14) >
        • State Government (Chapter 13) (New Ch. 12) >
          • Section One the Federal System
          • Section Two The State Executive Branch
          • Section Three The State Legislative Brancy
          • Section Four The State Judicial Branch
        • Local Government (Chapter 14) (New Ch. 13) >
          • Section One County Government
          • Section Two Town, Township, & Village Governments
          • Section Three City Government
        • Community Issues (Chapter 15) (New Ch. 14) >
          • Section One How a Community Handles Issues
          • Section Two Education and Social Issues
          • Section Three Environmental Issues
      • Unit Seven The Individual, the Law, and the Internet >
        • Legal Rights and Responsibilities (Chapter 16) (New Ch. 15) >
          • Section One The Source of Our Laws
          • Section Two Legal Rights and Responsibilies
          • Section Three Types of Laws
        • Civil and Criminal Law (Chapter 17) (New Ch. 16) >
          • Section One Civil Cases
          • Section Two Criminal Cases
          • Section Three Court Proceedings in Criminal Cases
          • Section Four Young People and the Courts
        • Citizenship and the Internet (New Chapter 17) >
          • Section One Civic Participation
          • Section Two Challenges for Democracy
          • Section Three Regulating the Internet
      • Unit Eight The Economy and the Individual >
        • What is Economics? (New Chapter 18) >
          • Section One the Fundamental Economic Problem
          • Section Two Making Economic Decisions
          • Section Three Being an Economically Smart Citizen
        • The American Economy (New Chapter 19) >
          • Section One Economic Resources
          • Section Two Economic Activity and Productivity
          • Section Three Capitalism and Free Enterprise
          • Section Four The Economy and You
        • Supply and Demand (New Chapters 20 & 21) >
          • Section One What is Demand?
          • Section Two Factors Affecting Demand
          • Section Three What is Supply?
          • Section Four Factors Affecting Supply
          • Section Five Markets and Prices
        • Business and Labor (New Chapter 22) >
          • Section One Types of Businesses
          • Section Two Labor Unions
          • Section Three Businesses in Our Economy
      • Unit Nine The Free Enterprise System >
        • Government and the Economy (Chapter 19) (New Ch. 23) >
          • Section One The Role of Government
          • Section Two Measuring the Economy
          • Section Three Government, the Economy, and You
        • Money and Banking (New Chapter 24) >
          • Section One What is Money?
          • Section Two The Federal Reserve System
          • Section Three How Banks Operate
        • Government Finances (New Chapter 25) >
          • Section One The Federal Government
          • Section Two State and Local Governments
          • Section Three Managing the Economy
      • Unit Ten The United States and the World >
        • Comparing Economic Systems (New Chapter 26) >
          • Section One International Trade and Its Benefits
          • Section Two Economic Systems
          • Section Three Economies in Transition
        • Comparing Systems of Government (New Chapter 27) >
          • Section One Types of Governments
          • Section Two A Profile of Great Britain
          • Section Three A Profile of China
        • An Interdependent World (New Chapter 28) >
          • Section One Global Developments
          • Section Two The United Nations
          • Section Three Democracy and Human Rights
  • Sully's Social Studies Sources and Resources
  • Personal Finance 2014
  • Budget Spreadsheets
  • Political Parties and Politics (Chapter Six) (New Ch. 9)
  • Section One Development of American Politics
  • Section Two Organization of American Political Parties
  • Section Three Role of Political Parties Today
  • European Exploration (Chapter Two)
  • The Declaration of Independence
  • Declaration of Independence
  • Trump

Chapter 1 Section 4
"Economic theories"

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Facebook and many other websites make money the same way that network television does, by selling advertisements.  In our market economy, producers use ads to inform consumers about their products.  They are typically willing to provide funding in return for having their products displayed on the website, television channel or radio broadcast.  It makes the consumer aware of their products.


Economics is the study of how limited resources are used to satisfy people's seemingly unlimited wants.  Some resources are natural materials, such as land and water, while other human resources include knowledge and labor.  There is never enough resources to produce all that people could want, so societies have to decide how resources will be used.  Some political systems let a free market determine how resources are used.  Other political systems use government regulation or control to allocate resources.


Economic systems get classified in two ways.  One way looks at how economies actually work.  The other way looks at the political ideology that is connected to an economy.


There are three categories used to classify economies by how they work: a traditional or pre-modern economy, a market economy, and a command economy.  To group theres economies, one will use related political beliefs such as capitalism, socialism, and communism.

The Role of Economic Systems

There are three questions that must be answered by each economic system.  
"What and how much should be produced?"  
"How should goods and services be produced?" 
"Who gets the goods and services that are produced?"


People in different historical circumstances have answered these questions in various ways.  Societies with more political freedom tend to have relatively free or unregulated economies.  Those societies with less political freedom have economies under more government control.
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Capitalism

Capitalism is an economic system where freedom of choice and individual incentive for workers, investors, consumers, and business enterprises are emphasized.  The government believes that society is best served by whatever productive activity individuals choose.  Pure capitalism has five characteristics: private ownership and control of property and economic resources, free enterprise, competition, freedom of choice, and the possibility of profits.

Origins of Capitalism

The word "capital" means "money or wealth that is invested to make more money."  Such investment could not happen until people produced enough to have extra to invest.  A market system in which buyers and sellers compete to make money is at the heart of capitalism.  We can find capitalism beginning in Europe near the 13th century.  We see explorers and merchants opening trade routes to Asia.  They needed long-term investors to carry out their projects.  as trade increased, people made more money and re-invested it in other moneymaking schemes.


As the 18th century arrived, Europe had national states, a wealthy middle class used to banks and markets, and an aggressive attitude toward work and wealth.  They valued progress, invention, and the free market.  A free market meant that the government placed no limits on the freedom of buyers and sellers to make economic decisions.


Adam Smith provided a philosophy for free trade in 1776.  A Scottish philosopher and economist, Smith opposed what many nations were doing regulating trade in many ways, such as taxing imports.  Smith wrote in "The Wealth of Nations" that the government should leave the economy alone as much as possible.  He believed in a "laissez-faire" economy.  Laissez-faire is French for "to let alone."  The market would act as an invisible hand guiding economic choices for the best results.  In this belief, the action of buyers and sellers determines what is produced and bought, not the government.


Competition is healthy in this kind of economy because sellers compete over resources to produce goods and services at the most reasonable price.  At the same time, consumers compete over limited products to buy what they want and need.  These same consumers in their role as workers try to sell their skills and labor for the best wages or salaries they can get.
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Free Enterprise in the United States

A pure capitalist system doesn't exist in reality, but the American system of economy is one of the most capitalistic in the world.  Yes, there is significant government regulation, but it's goal is to preserve a free market.

The government's role in the economy has grown since the early days of the 20th century.  One reason is the fact the government itself has grown, becoming the single largest buyer of goods and services.  Another reason is that the federal government has regulated the economy more and more in the interest of consumer health and product safety.  Manufacturers in the early 1900s were less than scrupulous in their tactics and products sold to the general public.  Some promoted their product's ability to do things that did not really happen.  Patent medicines were rampant, advertising that they could cure anything from hiccups to cancer to baldness.  In reality, the products were heavily laced with alcohol and strong drugs, such as heroin, cocaine, and morphine.  Many products were promoted for use with infants.  One product even used the slogan "makes them lay like the dead till morning."  The general public may not have known what ingredients were in these products, but they certainly developed a desire for the consumption of these miracle formulas.
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Hostetter's Stomach Bitters contained more than 44% alcohol content. In comparison, a common beer contains only 5% alcohol and wines have only 11-12% alcohol content.
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Coca-Cola started out as a powder substance added to carbonated soda water for medicinal purposes. It also contained a certain amount of cocaine.
Then there was the concern toward the food industry.  Meat packing plants were filled with rodents and unhealthy storage practices.  Rats would drop feces and urine on or near the meat and it would end up in the finished product.  Some businesses might have placed poisons out to eradicate the vermin, only to have it end up carried to the meat by the rodents.  The Meat Inspection Act and the Pure Food and Drug Act, both were passed in 1906 and are early examples of government regulation to benefit the consumer.


Next, the Great Depression created an emergency that propelled government action.  Millions were out of work and the government created programs to provide basic economic security.  The Social Security system is one example.  The Tennessee Valley Authority, a public corporation competing with private companies to provide electricity, was another.


Many laws have been passed giving the government a role in such areas as labor-management relations, environmental regulation, and control over financial institutions.

Mixed Economies

Economists describe the American economy and others in the world today as mixed economies.  "Mixed economies mix elements of capitalism and socialism.  The American economy is basically identified with a capitalist economy, even thought it is a mixed economy.  It is rooted deeply in the value of individual initiative, that each person knows what is best for himself or herself.  It respects the right of all persons to own private property.  It recognizes that freedom to make economic choices is a part of individual freedom.  Regulation is usually accepted reluctantly and only when necessary for the protection of public welfare.
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Socialism

Our second economic system is that of socialism.  In this economic system, the government owns the basic means of production, determines the use of resources, distributes the products and wages, and provides social services such as education, health care, and welfare.


We find socialism developing after the start of the Industrial Revolution in the early 1800s.  Industrialization resulted in modern economies more productive, but it also created a great deal of suffering.  Workers lived in terrible poverty, working twelve hours per day, six days a week.  They lives in slums and had no power to bargain with employers.


Social reformers believed that with so much productive capacity, no one should have to suffer or starve.  They wanted the government to direct the economy in distributing goods and wealth more equally.  Some rejected capitalism and believed that only a violent revolution could create change.  Others believed reforms could be made peacefully and gradually by organizing the working class and the voters.  Even others tried to build ideal communities, or communes, where people were supposed to share in all things.


Opponents of socialism say that it stifles individual initiative.  They also claim that under a socialist government, high tax rates hinder economic growth.  Further, some argue that because socialism needs increased governmental regulation, it helps create big government and can lead to dictatorships.
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Some desire to see more of a socialist society in the United States. One of the concerns that often is brought up as a reason is the wish for universal healthcare.

Democratic Socialism

Socialists committed to democracy in the political sphere but want better distributing of economic goods are called democratic socialists.  In this system, citizens have basic democratic rights like free speech and free elections, but in the economic sphere, the government owns large industries and makes the economic decisions that benefit everyone.


Denmark, Norway, and Sweden are seen as practicing democratic socialism.  Since World War Two, democratic socialist countries kept a sharp focus on retaining control of key industries.  Some of these industries are steel mills, shipyards, railroads, and airlines.  These governments provide extensive welfare benefits to their citizens, like health and medical care and old-age pensions.


Recently, these countries have lessened government control of many economic activities but they have continued to provide generous social benefits.  The above mentioned countries all had prosperous economies as of 2008.
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Communism

Karl Marx was born in Germany and was a philosopher, writer, and reformer.  Living from 1818 to 1883, Marx new firsthand both early industrialization  and political rebellion.  He believed that capitalism would collapse.  Marx published "The Communist Manifesto" in 1848.  He went on to expand his views of capitalism in 1867 with "Das Kapital."


Marx saw the Industrial Revolution bringing about dramatic change.  Workers were now concentrated in factories and didn't own their tools.  Marx called this industrial working class the proletariat.  The industrial society was called the bourgeoisie.  Marx used this term to not just mean the middle class, but the middle class as owners of industrial capital, the means necessary to produce industrial goods, such as factories, land, water rights, or other necessary resources.  


Capitalists were the ruling class in Marx's view because they held the power over resources.  The workers ended up being paid a low hourly wage.  They didn't receive the full value of their labor since the owners paid them so poorly and kept the profits.  Marx saw the capitalist system keeping wages from ever rising above a subsitience level, just barely enough to survive.
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Class Struggles

Marx saw all human history as a class struggle between the workers and the owners.  In "The Communist Manifesto," he stated that there had always been this struggle between lord and master, feudal servant and feudal lord, but in the end, the struggle brought progress.  Bourgeois merchants may have opposed the interests of feudal aristocrats, but they created industrial wealth.


Marx predicted that the same would happen again, but the struggle would be between the bourgeois owners of capital and the workers.  Industries would consolidate so a small number of capitalists would own all of it.  These individuals would manipulate and rob the workers of more of the fruits of their labor.  The workers would in turn overthrow the capitalists.  Their revolution's goal would be socialism, or government ownership of the means of production and distribution.  Marx called his ideas "scientific socialism."  He thought it was scientific fact that communism would develop.


What would a future communist society look like?  Marx wasn't certain, but under communism, he predicted that there would be only one class,the working class.  All property would be held in common, and finally, there would be no need for government.


Marx claimed that the coming of communism was a matter of scientific fact and wrote about it with an almost religious passion:


"In short, Communists everywhere support every revolutionary movement
against the existing social and political order of things...
Let the ruling class tremble at the communist revolution.
The proletarians have nothing to lose but their chains.
[Working men] of all countries, unite!"
The Communist Manifesto, 1848

Communism, a Command Economy

In communist nations, government planners decide how much to produce, what to produce, and how to distribute the goods and services produced.  This system is called a command economy because decisions are made by the upper levels of government and passed down to managers.  In communist countries, the state owns the land, natural resources, industry, banks, and transportation facilities.  The state controls mass communication including newspapers, magazines, television, radio, the movie industry, and even the Internet.


Today only a handful of communist states remain in the world, most in Asia.  Like capitalist states, communist states vary in how much of the economy is state-controlled.  In the People's Republic of China, created in 1949, the government had tight control of the economy for years.  The Chinese government used five-year plans to establish precise goals for every facet of production in the nation.  It specified how many new housing units would be produced over the next five years, where they would be built, who could dwell there, and how much the rent would be.

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Mao Zedong was the historic founder of the Chinese Communist Party.  Since he died in 1976, China's economy has changed significantly.  It now has a mixed economy, with a number of capitalist elements in its socialist system.  Political freedom is still very limited, and for that reason, economic freedom remains limited as well.
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Chapter 1 Section 4 Assessment
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