UNIT ONE:THREE WORLDS MEET LESSON 1 THE NEW WORLD WAS AN OLD WORLD FOCUS:UNDERSTANDING ECONOMICS IN UNITED STATES HISTORY ©NATIONAL COUNCIL ON ECONOMIC EDUCATION,NEW YORK,NY 1 LESSON 1 THE NEW WORLD WAS AN OLD WORLD LESSON DESCRIPTION tlers had spread new diseases for which Indians This lesson introduces the Guide to had no immunity. The high death toll from these Economic Reasoning. Students use the diseases greatly reduced the Indian population Guide to analyze certain practices of three of New England and, thus, their need for land. Indian tribes at the time Europeans first Wampum refers to small cylindrical beads encountered them. Students also use the Guide made by Indians, often from shells. Indians of to solve two historic mysteries. the Northeast used wampum with one another primarily in inter-tribal gift-giving. But MYSTERIES wampum soon became a medium of exchange for 1. There are many instances in which use in transactions between Indians and American Indians were forced off their European traders. Because the cost of holding an lands by European settlers. Yet, there were inventory of money for purposes of exchange was also instances when Indians sold the lands high, self-interest encouraged a search for they had inhabited for centuries. Why did cheaper substitutes. Many colonists adopted the Indians of New England willingly sell wampum as a medium of exchange. Some colo- their land to Puritan settlers? nial housewives made wampum as a profitable sideline to their household tasks. Eventually, 2. Why did the Iroquois, whose legends say white-owned businesses began to produce they developed wampum, later buy wampum as a full-time enterprise. wampum from European producers rather than make it themselves? Why didn’t the Iroquois and other Indians continue to produce wampum? They were more ECONOMIC HISTORY profitably employed trapping beaver and other small fur-bearing animals and processing them Like other people throughout the world, for trade. Time spent making wampum would North American Indians had to decide how to have been time taken away from the more prof- make the best use of their scarce resources — itable beaver industry. land and natural resources, labor and whatever tools and equipment they possessed — in order Economists use the term opportunity cost to to attain an acceptable standard of living. The denote what a person gives up in choosing to do Guide to Economic Reasoning lists princi- something. The concept of opportunity cost helps ples that describe how people make such deci- to explain specialization. The Iroquois special- sions. Illustrations of the principles can be found ized in trapping and processing beaver pelts. The in the behavior of various Indian groups, as opportunity cost of their choice to specialize was shown in this lesson. the time they could have spent making wampum. But trapping beaver was more prof- Contrary to popular belief, Indians from many itable than making wampum, and the Iroquois tribes enjoyed good relations with whites, espe- chose the most profitable alternative use of their cially when the whites did not try to take land time. By comparison, most European colonists that the Indians claimed. Indians wanted the were not skilled hunters; some of them found it goods that European traders and settlers made more profitable to make wampum than to travel available, such as metal tools and weapons, cloth into the wilderness to trap beaver. and clothing. In the case of the New England tribes, Indians were willing to exchange their land for trade goods because they felt that they had more land than they needed. Tragically, one reason for that surplus is that the European set- 2 FOCUS:UNDERSTANDING ECONOMICS IN UNITED STATES HISTORY ©NATIONAL COUNCIL ON ECONOMIC EDUCATION,NEW YORK,NY THE NEW WORLD WAS AN OLD WORLD LESSON 1 CONCEPTS TIME REQUIRED • Economic systems 45 Minutes • Opportunity cost MATERIALS • Scarcity • A transparency of Visuals 1.1 and 1.2 • Specialization and trade • Copies for each student of Activities 1.1, 1.2, 1.3 and 1.4 OBJECTIVES Students will: PROCEDURE 1. Identify principles of economic reasoning 1. Tell the students about a scholarly finding illustrated in passages describing the that we now know was incorrect: Until lifestyles of three North American Indian recently, some scholars estimated that, tribes. before the arrival of white settlers, only about a million Indians lived in the area 2. Use principles of economic reasoning to that is today the United States. According analyze two situations in which Indians at to this view, North America was nearly an first appear to behave unreasonably. “empty continent,” open to European settle- ment with little need for consideration of CONTENT STANDARDS the small number of Indians who lived Economics there. Today we know that, at the time • Productive resources are limited. Columbus landed, at least 20 million Therefore, people cannot have all the Indians lived in this area. But by the time goods and services they want; as a result, Europeans began to explore north of they must choose some things and give up Mexico, the diseases they carried with others. (NCEE Content Standard 1) them had traveled ahead, wiping out the majority of the Native American inhabi- • Voluntary exchange occurs only when all tants. Lacking the immunity that participating parties expect to gain. This is Europeans had developed to smallpox, true for trade among individuals or organi- influenza, typhoid and even measles, zations within a nation, and among indi- Indians continued to die in horrifying num- viduals or organizations in different bers, even into the late nineteenth century. nations. (NCEE Content Standard 5) 2. Tell the students that the purpose of this • When individuals, regions, and nations lesson is to examine aspects of the lives of specialize in what they can produce at the some Indian people at the time when they lowest cost and then trade with others, first encountered Europeans. Scholars now both production and consumption increase. recognize that many Indian people lived in (NCEE Content Standard 6) complex cultures. The Choctaws, for exam- History ple, are descendents of the mound-builders of the Mississippi Valley area; the • Compare characteristics of societies in the Puebloans are descendents of the Indians Americas, Western Europe and Western who built cities at Mesa Verde, Chaco Africa that increasingly interacted after Canyon and many other sites in the 1450. (Era 1, Standard 1, National Southwest, and had trading relationships Standards for History) with the people of Central Mexico. • How early European exploration and colonization resulted in cultural and ecological interactions among previously unconnected peoples. (Era 1, Standard 2, National Standards for History) FOCUS:UNDERSTANDING ECONOMICS IN UNITED STATES HISTORY ©NATIONAL COUNCIL ON ECONOMIC EDUCATION,NEW YORK,NY 3 LESSON 1 THE NEW WORLD WAS AN OLD WORLD 3. Explain that there is one thing we know crops that otherwise would not have grown about people everywhere — Americans, in the dry land where they lived. Modern Europeans, Asians and Africans: they all Puebloans can often attain a higher stan- make economic decisions. We can under- dard of living by choosing to work at jobs stand economic behavior in any culture outside their pueblos.) according to certain principles. B. People’s Choices Involve Costs 4. Display Visual 1.1 (the Guide to (Choctaws over-hunted the buffalo that Economic Reasoning) to the class and lived in the southeastern forests. One cost review it briefly. of the meat and skin they acquired at any 5. Distribute Activities 1.1, 1.2 and 1.3 to time was meat and skin they would be each student. Explain that these activities unable to acquire in future years. Iroquois present case studies that describe in part went to war to obtain beaver pelts and how people from three Indian groups — European trade goods. One cost of war was the Choctaws of the Southeast, the the products that could have been made by Iroquois of the Northeast and the young men lost in wars. Puebloan men Puebloans of the Southwest — lived at the chose to hunt less and farm more; they time Europeans entered their regions. Like used considerable labor to keep their irri- the Europeans at that time, the Native gation systems working. One cost of more Americans had developed economic sys- agricultural production was meat the men tems. In many ways, they lived as well as might have obtained if they had hunted their average European contemporaries. more.) Like Europeans and all other peoples, C. People Respond to Incentives in Choctaws, Iroquois and Puebloans faced Predictable Ways economic choices. (Choctaws specialized in crafts such as 6. Display Visual 1.2. Orient the students to tool making because they knew they could the locations shown. give their tools as gifts and receive gifts in 7. Divide the students into groups of three to return. Gift-giving and gift-receiving con- four. Assign each group to read the three stituted a system of incentives. Iroquois case studies and to find, in each case expanded warfare in order to obtain beaver study, one example of behavior illustrating pelts that they could trade for valuable each of the six principles of the Guide to European trade goods. European goods Economic Reasoning. One student in were incentives. Puebloans cooperated to each group should record the group’s six build and maintain irrigation systems examples. Since the six principles in the because, with irrigation, they could Guide overlap, students may differ in increase their food supply. Increased food their identification of examples. Some was an incentive.) suggested answers follow: D. People Create Economic Systems A. People Choose That Influence Individual Choices and Incentives (Choctaws chose to produce more corn than they needed and traded corn for (Choctaw families followed economic desirable goods they couldn’t produce.