We had our first simulation in class today. The class was divided into consumers and entrepreneurs. Consumers had human, natural, and capital resources that could be taken by the entrepreneurs to be turned into econos. The ultimate goal was for the entrepreneurs to earn money and for the consumers to get econos. This simulation provided some insight into why the American market economy is awesome.
1) Inequality: As exemplified by students able or unable to make a profit in the simulation, capitalism creates a playing field with winners and losers. The winners consist of people who can adapt and find ways to take advantage of current situations. According to Hibah Yousuf from CNN, Obama admits 95% of income gains go to the top 1% of the earning population. This survival of the fittest suits human evolutionary nature and allows meritocracy to take place. Although some may argue that this results in very few winners and many losers, such as in the case of anti-entrepreneurial monopolies, the American economy has protective antitrust laws in place to maintain a healthy level of competition. Repeated attempts for a stable economic system without inequality have only proved everyone becomes losers (Think Stalin and Chairman Mao; the only winners were themselves). A dose of inequality is essential for a stable economic system.
2) Choice: A consumer-driven economy provides allows consumers to have choice. During the simulation, no consumer was forced into buying econos from a specific entrepreneur. If a consumer felt that the entrepreneur was charging too much, the consumer could find a different entrepreneur. Consumers having choice raises living standards since entrepreneurs are forced to improve or demonstrate the benefits of their products.
3) Opportunity: Although it is not an even playing field, the American economy still allows for the opportunity to become a winner. Different people can have different advantages such as economic status or social connections, but in the big picture people have the opportunity to play the game. In the simulation, some students were granted with extra resources or money. This gave them a greater advantage, but some other students who did not have the advantages were still able to gain more econos or money than students who had initial advantages. Meritocracy allows people without wealth or ranking to have a chance at contributing to society. That's freaking awesome!
Great post, Michelle! I like that you were able to distill the entire simulation into three major points. I agree that choice, opportunity and like you said, a "dose of equality," are all important to American economy. At the same time, I think it's vital to find a balance between inequality on the playing field and opportunity. When people do not have the opportunity to better their own situation, there's a large wealth disparity.
ReplyDelete@Michelle Deng
ReplyDeleteThis is a great summary and analysis of our simulation in class, Michelle. I'd have to argue though that circa the third round, many of the entrepreneurs did not know what to do with their financial gains and were unable to, as you put it, "adapt to the situation." I remember waiting in the corner for a consumer who had money to pass my way, but ultimately since the flow of money had stopped, consumers had no means to pay the entrepreneurs. I definitely agree with your point about the "protective antitrust laws" that are in place in commerce today; you did a really good job of paralleling a solution to the simulation to our world today.
I know this can't be represented in the simulation, but do you think there are still factors of American society that prevent the ideal of total equality of opportunity? I feel as if in many professions there exists discrimination based on background, gender or sexual orientation. In theory, this is the land of opportunity, but in some aspects social barriers prevent that from being the reality.
ReplyDelete@Annie Gaffney
ReplyDeleteI definitely think there are still factors that prevent total equality of opportunity, and although there may not be equality of opportunity, I think education is a key to providing some sort of opportunity to everyone.
I like what you say about education being important so that there is more equality of opportunity. Being informed seems to be important so that people can best use their skill sets. However, I also think that some of the things Annie listed as factors that limit the equality of opportunity cannot easily be overcome even through education. Some of those things such as sexual orientation are based on stigmas that are ingrained into the culture. That sort of thing is much harder to fix.
ReplyDeleteObviously the simulation could not perfectly resemble the American economy. One thing, though, that I did find interesting, was that the entrepreneurs' goal was to accumulate as much money as possible. This seems to create a flaw in the simulation. If everyone in the economy tried to just accumulate as much money as they could, and never spent it, the economy would never "flow" and would therefore crash. In fifth period, I think we saw a little bit of this going on. As a consumer, I tried to sell to a many entrepreneurs who refused, as they were interested in keeping all their money. (because for entrepreneurs, money was the goal) In a sense, this created a small scale economic stand-still. In America, where so many people are driven to spend money for materialistic things, this actually helps create money flow. I feel our simulation didn't really resemble this, as entrepreneurs goal was to only get more money. I hope this makes sense. Again, I'm not trying to say the game did not resemble the economy well. I'm just pointing out an area of discussion where we can contrast out game with the real American economy.
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