Wednesday, September 7, 2016

The Value of Trade by Andrew Jobson

The Value of Trade

Teaching Economics again gave me the chance to use a fun introductory activity I learned long ago from a GCEE (Georgia Council for Economic Education) workshop.  The goal is to show how trade occurs because people feel that they have gained.  In other words, with voluntary exchange, everyone wins.

You start by preparing a small opaque bag of goodies for each student in the class.  I have typically used candy, but you can use other small items depending on the age of the students (nickels, erasers, pencils, stickers, etc.).  The bags should have some variety, reflecting the disparate resources that we all have.  It’s also okay to give some bags more than others for the same reason, although each should have at least enough to engage in some trade.

After warning the students to keep their contents secret for now, distribute the bags and ask each person to rate his or her satisfaction level with the contents on a scale of 1 to 10. The students should write the number down, although they don’t have to announce it.

I don’t remember if I learned the lesson this way, but I started by putting students in groups of three to compare bags and trade if they were interested.  After a few minutes, I expanded their “market” and let them move around the entire class to see what people had and to offer trades.  (Having recently revisited Smith’s Wealth of Nations, I was thinking about his comments on the value of large markets.)

Following the entire class trading market, the students (at least those who engaged in trade) re-evaluated their satisfaction.  Now we compared their initial rating with their revised rating and discussed the changes.  A few items that we addressed:  1) Why did most people’s satisfaction go up? 2) Do you see any trades that you think were bad trades? Why did they happen?  3) What happened when the market expanded?  How does this relate to world trade today? 4) At least one person traded, not because he valued the items he got in trade, but because he valued the friendship of another student more than the contents of his bag.  This was an interesting scenario which led to a discussion of how “self-interest” occasionally means more than simple economic status.

I know this isn’t original, but it’s fun and helpful to the students.  I love and value reading, but anytime we can get them to do something active (especially at my all-boys school), it’s a good day.  I hope you find it useful.  

Note from Susan Gable ( Director of Educational Curriculum) – The activity Andy describes here is exactly the activity in our educational video Win/Win – A Trading Game. If you’d like to see a classroom demonstration of the activity to get a better understanding of how to do it, watch the video or select it for your Free Annual Video DVD. Additional resources are available with it as well.

An educator of 22 years, Andy Jobson has taught government, economics, and U.S. History. Currently teaching English literature at Riverside Military Academy in Gainesville, GA, he’s also been an administrator, a STAR teacher twice, and taught elementary school with Teach for America.