Economic Literacy Activity Pack

 Debt and Development Coalition Ireland:
All Hallows,
Grace Park Road,
Drumcondra, Dublin 9
Ph/Fax: + 353 1 857 1828
e-mail: ddc@connect.ie

Written by Emily Kawano
Institute for Popular Economics
Email: e@kawano.freeserve.co.uk


 Module One: Introduction to the Economy


This Economic Literacy workshop aims to introduce participants to economics using learner centred and participatory methods. This is intended to be a one day workshop for groups of approximately 8 to 14 people. It is aimed at those with no background in economics. There are extensive facilitator notes included to guide trainers/facilitators through the day.

Suggested format:


10.00 Welcome (30 min.)

10.30 What is the economy? (45 min.)

11.15 Tea/Coffee Break (15 mins)

11.30 Changes in the Irish Economy (1 hr.)

12.30 Lunch

1.30 The money-go-round (Circuit of Capital) (1.5 hrs.)

3.00 Tea/Coffee Break (15 min.)

3:15 Snapshots of global capital (30 min.)

3:45 Action and reflection (30 min.)

4.15 Evaluations (15 min.)

4.30 Ends


Table of Contents

A. Welcome (30 min.)
i. Introductions (10 min.)
ii. Activity: Hopes and fears (15 min.)
iii. Agenda review (3 min.)
iv. Groundrules (2 min.)
     
B.

What is the economy? (40 min.)
  i. Brainstorm (5 min.)
  ii. Input/discussion (35 min.)
     
C. Changes in the Irish Economy (1 hr.)
  i. Draw the economy, past and present:
     
D. The money-go-round (Circuit of Capital) (1.5 hrs.)
  i. Guided discussion (30 min.)
  ii. Small group exercise (1 hr.): Boosting profits and the money-go-round
     
E. Global trends (30 min.)
  i. Input (10 min.)
  ii. Small group exercise (20 min.)
     
F. Reflection and action (30 min.)
  i. Small group discussion - What am I taking away with me? (15 min.)
  ii. Reportbacks/discussion (15 min.)
     
G. Evaluation (15 min.)
     
List of Handouts
  Handout 1 - The Money-go-round (Circuit of Capital) -(print in landscape mode)
  Handout 2 - Global Trends


A. Welcome (30 min.)

i. Introductions (10 min.)

Facilitator introduces him/herself - housekeeping items can be mentioned etc. Facilitator can then ask participants to introduce themselves: names, organisation, training background etc.

ii. Activity: Hopes and fears (15 min.)

Objectives:

  • " To share hopes for the workshop which can help the facilitator shape the agenda.
  • Because economics is often so intimidating, it is very important to give participants a chance to express their fears and anxieties. It gives the facilitator a chance to address and allay the fears, and also participants are usually relieved to see that others have the same fears.

Materials: Flipchart paper, Bluetack, Post-its, Pens

Put up two sheets of flipchart paper, one with hopes and the other with fears as a heading. Circulate pads of post-its. Give participants a few minutes to write their hopes and fears on the post-its - one per post it. (Fears regarding this workshop can include fears that extend beyond the workshop - eg. I am worried that my child wasn't feeling well this morning. These worries can affect concentration and it can be helpful to be able to 'vent' a bit.)

Collect the post-its, read them out and put up on the appropriate heading. Try to group similar comments together. Briefly respond to comments.

Facilitator's notes: Try to reassure people who are fearful about economics and remind them that this training is intended for lay people with no background in economics. Participants often discover that they know a lot more about the economy than they ever imagine.
If participants raise hopes about a certain topic, you can point out on the agenda where that will be covered, let them know that it is regretfully beyond the scope of this training, or make changes to the agenda. A bit of flexibility in the agenda helps participants feel that they have input into the training. If there is a strong desire in the group to cover a certain topic, try to make adjustments if possible. Needless to say, this depends on whether the facilitator feels comfortable/prepared with covering the new topic. It also means that probably some other piece of the agenda will have to be cut.

iii. Agenda review (3 min.)
Go over the agenda and make changes if appropriate.

iv. Groundrules (2 min.)
Agree the groundrules for the day/session. If you have time you could brainstorm the groundrules. Here are some of the standard ones, ask if there are any additions.

  • Respect diversity of opinions, backgrounds and experiences
  • No side conversations
  • Allow equal participation
  • One speaker at a time
  • Confidentiality - anything personal said in the room stays in the room.
  • Turn off mobile phones

B. What is the economy? (40 min.)

Objectives:
  • To introduce and define the economy.
  • To bring out the issue of gender, the care economy and its invisibility.
  • To look at the interdependence of market, care and state economy.
  • To point out that economies are social creations and therefore are subject to change

    Materials: Flipchart, markers, bluetack

i. Brainstorm (5 min.)

  • Draw a simple picture of a house and then ask what kind of activities go on in the household? Write responses on the picture.
ii. Input/discussion (35 min.)
  • The word economy comes from the Greek roots oikos + nomos = management of the household. So the economy is the management of the household of the nation or increasingly, the management of the global household. But note that almost all of the household activities that you listed are invisible in mainstream economic analysis.
  • Many of these household activities are part of what we call the 'care economy': bearing and raising children, caring for sick, elderly, or disabled, cooking, cleaning, shopping, and community work (draw out this point from the brainstorm above). The care economy is about social reproduction. To put it in cold economic terms, the people who work in the market and state spheres are born and cared for in the care economy. The state and market economies could not function without the care economy.
  • We can use the 3 spheres diagram (below) to show how the market and state economies are interlinked and interdependent with the care economy.
  • Mainstream economics focuses on the market and the state economies, but the care economy is invisible.


Discussion question: Why is the care economy invisible?

Facilitator's notes:
  • Because it is not part of the market economy. It is not 'commoditised' (produced for sale).
  • Because it is unpaid - it is not monetised.
  • Because it is women's work.
  • Because it is not highly valued (partly because of 1, 2 and 3).
  • Because it is part of what is defined as the 'private' sphere.

Discussion question: What are examples of activities in the intersecting areas?

Facilitator's notes: Here are some examples:
  • Market/State: public-private partnerships, state owned enterprises
  • Market/Care: private childcare, private nursing homes, private schools, cleaning services
  • Care/State: publicly funded childcare, nationalised healthcare

Discussion question: How have the three spheres changed? Which have gotten bigger, smaller, have the areas of intersection changed?

Discussion question: What is the impact of the invisibility of the care economy for women?

Facilitator's notes: Some examples:
  • Women often have a double work burden - work in paid employment plus unpaid care work - which goes unrecognised.
  • Women face various economic constraints due to their care work responsibilities (e.g. no time for training programs or overtime, need for job flexibility, need for time off to care for sick child, etc.)
  • Economic policies are made without considering their impacts on women's invisible labour. For instance, budget cuts that force the closure of local clinics often result in women having to spend more time caring for sick members of her household.

Input/Summary:

  • Economies are social creations - contrary to what mainstream economists might have you believe, there is nothing inevitable or 'natural' about them.
  • There have been many different economic systems throughout the history of humankind: hunter gatherer, feudal, communist, capitalist. Capitalism is a relatively young economic system, emerging around 400 years ago (1600s). In contrast, hunter gatherer systems survived for many thousands of years.
  • Since the economy is a social creation, if we are unhappy with its consequences, we can change it.
  • The current dominant economic system is capitalism, characterised by private ownership, production for profit, wage labour, market exchange, commodity production (goods and services produced for sale in the market as opposed to being used.)
  • The current variant of capitalism is neoliberalism: 'free trade', free market, minimal government. We will discuss neoliberal in some depth later.
C. Changes in the Irish Economy (1 hr.)


Objectives:

  • To give participants a chance to talk about their own experiences and observations.
  • To look at changes in the economy from the participants' perspective.

  • To establish a base of reference for future discussions. There will probably emerge various experiences that you can use to illustrate economic trends such as inflows and outflows of foreign investment, or privatisation.

  • To give participants the opportunity to engage in issues through a visual medium.

Materials: Flipchart paper for the small groups and bluetack, coloured markers - enough for each group to have several colours

i. Draw the economy, past and present:

Split into small groups of five or so people. Give each group coloured markers and flipchart paper. Ask them to take 25 min. to draw:

  • The economy of the recent past - ie. within your memories. You can define your own boundaries: local, regional, national, global economies. Try to include things like inflows and outflows of money, wealth, jobs, and people.

  • Use a different colour to draw in changes in the economy.
  • Please choose someone to report back on your drawing. Each group has 3-5 minutes.

    Report backs (10min.) and discussion (15 min.)

D. The money-go-round (Circuit of Capital) (1.5 hrs.)

Objectives:

  • Look at the basics of production and the 'law of accumulation'.
  • Look at issues of race, class and gender, technology, markets, imperialism.

Materials: Put together two sheets of flipchart on the wall to draw out the circuit of capital, bluetack, Coloured markers

i. Guided discussion (30 min.):
The circuit of capital

  • Start by proposing to the participants that they are going to start a business. What do they need to get started?
  • With participant input, draw out the circuit of capital (see Handout 1 - Money-go-round - but don't distribute it yet).

    ==> You start with money or capital (€), maybe borrowed from banks.

    ==> You need labour and you need Means of Production (MOPs) - inputs, raw materials, land, factory, machinery, etc.- which are combined in the production process.

    ==> You have output of a commodity (a good or service produced for sale) which you need to sell on the market for more money than you started out with (€€)

    ==> The difference between the money at the start and end of the process is the profits (€€- profits)

  • The law of accumulation is 'accumulate or die.' In other words, reinvest the profits to expand production and profits or die. Why is this?

    ==> If the capitalist doesn't reinvest, death for the firm will come from being put out of business by a competitor who has invested in new technology, new forms of workplace organisation, etc.

    ==> Competitive advantage may take the form of:

    • economies of scale - these are advantages that come from being big. Eg. mass production, bulk purchasing, etc.,
    • better technology,
    • workplace organisation (eg. team production, total quality management),
    • advertising and market share,
    • monopoly/oligopoly - a monopoly is where there is only one producer/provider of a product. An oligopoly is where there are a very small number of producers/providers.

    ==> So capitalism is driven towards increasing profits - not because of greed, (although this may also be a factor) but because of the system. Thus an appeal to ethics will not be successful unless ethical business practices enhance competitiveness.

    ==> Capitalism is driven towards accumulation and growth, which in turn, creates more jobs. Capitalism is thus very dynamic.

    ==> State - some of the profits have to go to the state in the form of taxes. The state in turn provides necessary support structures such as infrastructure, education, security, legal system, unemployment benefits, etc.

    ==> Leakages - some of the profits 'leak out' of the circuit of capital and therefore are not re-invested in production and job creation. Examples include:

    • Profit repatriation: profits are sent 'home' by foreign corporations. This is very significant in the case of Ireland where foreign corporations, on average, repatriate more than 100% of their profits. This is an accounting trick that lets foreign companies benefit from the lower tax rates in Ireland.

    • Real estate speculation: instead of investing in production and jobs, profits can be diverted into gambling on real estate. This is an activity that can reap tremendous profits and yet does not produce anything useful (other than pushing up prices), nor does it create jobs in the way that productive investment does.

    • Corporate buyouts (mergers and acquisitions): profits can be diverted into buying out other companies. This can be very expensive and high risk, but can yield huge profits. Corporate buyouts is a big money, big gambling game, but as with real estate speculation, creates little in the way of production or jobs. On the contrary jobs are usually cut as a consequence of corporate takeovers.

    • Finance: profits can be channelled into financial operations. For example, car companies making car loans. Again, this takes money away from investment in real production and jobs.

Care economy - note that we have here the market and the state economies, but the care economy is absent. We could draw in the care economy as a sphere of activity that is integral to the whole circuit of capital. Underscore the point that there's a whole lot of work going on that is unpaid, not recognized, mostly done by women and yet without which the whole 'visible' economy could not exist.


ii. Small group exercise (1 hr.): Boosting profits and the money-go-round

  • " Distribute Handout 1 - The Circuit of Capital. Assign each group a different segment of the circuit of capital: A - labour, B - MOPs, C - production, D&E output and markets. It might be best to save any points about F & G for the discussion part of the exercise since there's not a huge amount to say about these segments and the points may not be obvious to participants. Ask them to take 15 min. to come up with a list in answer the following:

    • How can the capitalist increase profits in each segment?
    • Think about how race/ethnicity/religion and gender come into play.

  • Reportback/discussion (45 minutes). Write up responses next to the appropriate segment of the circuit.
Facilitator's notes:
Some factors will straddle lines. Following are some examples with notes where there's a gender (G) or race (R) dimension:
A - Labor:

  • Divide and rule. This is a big one. The more divided the workers, the less power they have and the more vulnerable they are to attacks on wages, working conditions, union busting, increasing work intensity or work day, etc. Divide and rule exploits or foster divisions among workers based on race, ethnicity, religion, or gender. There are numerous ways that divide and rule can play out:

    ==> Labour segmentation: jobs are 'segmented,' meaning that they are unofficially reserved for a particular group, e.g. secretarial, nursing and teaching jobs are for women; white collar, managerial jobs are for white males; migrant work, domestic work, assembly line jobs are for people of colour (as well as whites), etc. This practice undermines any sense of unity among workers - instead of coming together as workers they are broken up into different interest groups. (G, R)

    ==> Replacement labour: In the U.S. groups of immigrants were brought in for agricultural or physical labour - whenever workers began to organise they would be replaced by another immigrant group. (R)

    ==> Using strike-breakers of a different race, ethnicity or religion. (R)

  • Workers can be paid less due to women's unpaid work in the care economy (G)

  • Use more contingent labour: temp, part-time, contract workers (G)

  • Hire undocumented immigrant workers. Due to being 'illegal' these workers tend to be afraid to report labour abuses or to unionise. (R)

B - MOPs:

  • Access to cheap primary goods from developing countries through conquest, colonialism, imperialism, neo-imperialism (domination of another country through its own complicit elite) (R)
  • Use cheaper, shoddy inputs

C - Production process:

  • Speed-up of production

  • Lowering health and safety standards

  • Mass production/de-skilling workers ? makes workers cheaper and more easily replaceable

  • Externalisation of costs: air, water, ground pollution, hazardous wastes. One strategy for getting away with this is by locating polluting industries in minority neighbourhoods, hazardous waste dumping in poor and marginalised areas or in the developing world. (R)

D - Output:

  • Produce poor quality goods

  • Produce profitable, though questionable goods, eg. tobacco, arms, coca-cola, GM foods. Example: G8 countries have been supplying more than £19 billion worth of arms a year to developing countries, fueling conflict and instability. The UK exports $1.5 billion to developing countries. Critics are pushing for an export control bill that would require looking at the implications of arms export on sustainable development.

E - Market:

  • 'Create' markets by appealing to status, fashion, sex, 'western' product (eg. baby formula, or Coke) associations.

  • 'Dumping' harmful goods in poor communities or abroad: drugs, alcohol, cigarettes. (R)

  • Using women's bodies and sex to sell products (G)

  • Commodified notions of femininity; shopping as female pastime (G)

F - Accumulation:

  • Lower corporate taxes & regulations, increase corporate welfare - facilitated in part by racial/ethnic divisions among working people that keep them from organising to use the government to redistribute income and wealth (R)

G - Capital:

  • Racist and sexist lending practices limit competition from minority owned businesses (G,R)
  • Preferential rates of interest for larger corporations
 

 

E. Global trends (30 min.)

Objectives:
  • Provide an overview of global trends
Materials: Handout 2 - Global trends

The Money-go-round exercise looks at how businesses are driven to increase profits and accumulation. This section looks at some of the actual trends in corporate concentration, profits, global inequality and poverty.

i. Input (10 min.)
Go over Handout 2 - Global trends as an overhead or have participants take turns reading the points. (A bit of participation that can help keep people engaged.)

ii. Small group exercise (20 min.)

Break into small groups. Ask people to discuss:

  • Are there any links between you - directly or indirectly - and the points on this fact sheet?
    There's no need to report back from the small groups. This discussion will feed nicely into the next one. You can keep people in the same small groups.

F. Reflection and action (30 min.)

Objectives:
  • To provide an opportunity to reflect on and process what they've learned.
  • To make links between the content of the workshop and their own lives and work.

Materials: flipchart paper, markers

i. Small group discussion - What am I taking away with me? (15 min.)

Put the following categories up on the wall:
  • New concept - what new concepts, definitions, analysis did you learn?
  • Eye-opener - what was startling, exciting, horrifying, etc.?
  • Application in work - is there anything that you've learned that can be brought into, or is useful to your work?
  • Application in personal life - is there anything that you could change in your life, for example, given the domination of TNCs you could try to stay away from the mega-stores, to buy local, etc.
  • Other

Break into small groups, distibute flipchart paper and markers. Ask people to discuss what they are taking away with them from this workshop and to put their points in the categories above. (15 min.)

ii. Reportbacks/discussion (15 min.)


G. Evaluation (15 min.)

Because some evaluation will have taken place in the exercise above, this may not take long. Ask participants to share any other comments. Things that they really liked, things they'd like to have seen changed. Check in with the hopes and fears to see if the hopes were largely realised and the fears allayed.