How the American Free Enterprise System Creates Jobs and Prosperity Lesson 1 – An Historical Perspective How the American Free Enterprise System Creates Jobs and Prosperity is a nine lesson (with Prologue) mini-course of study designed to provide students with a big picture understanding about how the American free enterprise system works and the importance of entrepreneurship and innovation in the context of the global economy. This course is offered by Entrepreneurial Engagement Ohio, which is 501(c)(3) non-profit with the mission of promoting entrepreneurial, economic, business, and scientific literacy of students. © - 2016 John Klipfell and Entrepreneurial Engagement Ohio Lesson One - A Historical Perspective Key Points To Take Away: 1. The American free enterprise system has created jobs and prosperity despite all the challenges it has faced. 2. Generations of innovators & entrepreneurs before us have created the jobs and prosperity we enjoy today. 3. Few countries in the world enjoy a standard of living that approaches that of the USA. Recession Name Peak Unemployment Rate Understanding Great depression (1929-33) 24.9% Recessions Recession of 1937-38 19.0% Recession of 1945 5.2% Recession of 1949 7.9% Recession of 1953 6.1% Recession of 1958 7.5% Recession of 1960-61 7.1% Recession of 1969-70 6.1% Recession of 1973-75 9.0% Recession of 1980 7.8% Early 1980’s recession 10.8% Early 1990’s recession 7.8% Early 2000’s recession 6.3% Great recession 2007-2009 10.0% Source: Wikipedia Source: US Census Bureau Percentage of US Labor Force Employed In Agriculture 100 75 % of Labor Force 50 25 0 1980 2000 1920 1940 1960 1870 1900 Year Source: US Census Bureau & US Bureau of Labor Statistics Total US Civilian Labor Force 160 Civilian Labor Force (millions) CivilianLabor Force 120 80 40 0 1960 1980 2000 2010 1870 1900 1920 1940 Year Lesson One - A Historical Perspective Can our economic system continue to create the millions of jobs needed to continue American prosperity? Yes, but only if people understand how our economic system works. Lesson One - A Historical Perspective Without constant innovation and pro-active risk taking in pursuit of new opportunities, existing business may not survive and new businesses and jobs won’t be created. Lesson One - A Historical Perspective John D. Rockefeller Andrew Carnegie Harvey Firestone Henry Ford Quick fixes ≠ Continued jobs and prosperity Long-term solution = A renewed focus on entrepreneurship Lesson One - A Historical Perspective The United States: • 3rd largest country in terms of population: 320 million • Largest economy in the world • Highest standard of living among the major countries of the world (excludes countries with less than 10 million population) Lesson One - A Historical Perspective World Bank 2016 World Economic Indicators Report Standard of Living $60,000.00 $55,900.00 $51,320.00 $47,620.00 $45,000.00 $44,700.00 $44,250.00 $30,000.00 Per CapitaIncome Per $15,000.00 $0 United States Saudi Arabia Germany Austrailia Canada Rank 1 2 3 4 5 Standard of Living $60,000.00 $55,900.00 $45,000.00 $40,100.00 $39,500.00 $38,120.00 $35,450.00 $33,650.00 $30,000.00 Per CapitaIncome Per $15,000.00 $0 United States France United Kingdom Japan Italy South Korea Rank 1 6 7 8 9 10 Standard of Living $60,000.00 $55,900.00 $45,000.00 $30,000.00 $22,160.00 $19,560.00 $16,840.00 $15,570.00 Per CapitaIncome Per $15,000.00 $13,480.00 $0 United States Russia Turkey Mexico Brazil Argentina Rank 1 11 12 13 14 15 Standard of Living $60,000.00 $55,900.00 $45,000.00 $30,000.00 Per CapitaIncome Per $15,000.00 $13,170.00 $12,700.00 $10,280.00 $10,190.00 $8,450.00 $0 United States China South Africa Egypt Indonesia Philippines Rank 1 16 17 18 19 20 Standard of Living $60,000.00 $55,900.00 $45,000.00 $30,000.00 Per CapitaIncome Per $15,000.00 $5,710.00 $5,630.00 $5,350.00 $5,090.00 $3,330.00 $1,500.00 $0 United States Nigeria India Vietnam Pakistan Bangladesh Ethopia Rank 1 21 22 23 24 25.