AdamSmithWorks Teaching Resources


 “The gap in basic living standards is narrowing, with an unprecedented number of people in the world escaping poverty, hunger and disease.”


This is the finding from the UN Development Report in hailing the marked drop in extreme poverty from 18.2% in 2008 to 8.6% in 2018.  As global poverty falls and hundreds of millions earn rising incomes, global income inequality is also reduced.

To quote Deirdre McCloskey*, “the poorest since 1800 have been the greatest beneficiaries of commercially tested betterment.” The average poor person in the United States today lives better than any rich person of the 18th century as capitalism (or innovism, as McCloskey prefers) enriched the equality of access to life-changing goods, services, methods of production, healthcare, daily comforts and more. 


Poor Compared to Whom? 

But what about the news of wage stagnation and particular demographic poverty in rich countries including rising homelessness in cities such as Los Angeles and San Francisco? How do we compare absolute poverty statistics of people living on $2 a day in Cameroon to the relative poverty within the U.S. at various income levels? Nearly one in six U.S. children live in poverty today. After multiple iterations of anti-poverty programs, education and healthcare initiatives, food insecurity and tenuous housing circumstances plague many poor families. 


As free and responsible global citizens, how should we consider our role toward the poor throughout the world?  Should they be less of a concern to us than our domestic poor, or the poorest in our own communities? The UN Sustainability Goal of extreme poverty eradication by the year 2030 may be unrealistically ambitious.  How would you prioritize this goal among domestic and global concerns that compete for scarce resources? 


Stay tuned for next month’s topic! We hope to enhance your classroom discussions with more collections of Smith -related resources in this New Year! Thanks for joining us and for sending us suggestions.


~ The AdamSmithWorks Educational Resource Team

* Our sister site Econlib recently hosted their first VRG focused on McCloskey's new book, Why Liberalism Works. As with some of ours, participants were invited to pose questions to McCloskey, which our own Amy Willis posed to her in this AMA (Ask Me Anything). Enjoy!

Straight to the Source.

The AdamSmithWorks reading guides use three types of questions and highlighting to help guide readers. The three types of questions are based on the Great Books Shared Inquiry Handbook



This excerpt is from The Wealth of Nations, and begins with the line, "Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniencies, and amusements of human life."  How can Smith's explanation facilitate our thinking about poverty today?

This excerpt is from The Theory of Moral Sentiments, and includes the line, "The mere want of fortune, mere poverty, excites little compassion. Its complaints are too apt to be the objects rather of contempt than of fellow-feeling. We despise a beggar; and, though his importunities may extort an alms from us, he is scarce ever the object of any serious commiseration." Does this suggest Smith was not as interested in the poor as he ought to be?

How much does altruism motivate us?

 In the past, some scholars saw a contradiction between the ideas in Wealth of Nations (WN) and The Theory of Moral Sentiments (TMS).  This contradiction was called the “Adam Smith problem.”  Today most scholars do not see a contradiction.  TMS was written first and focuses on moral behavior, which is personal.  WN focuses on markets, which are more impersonal and on decisions that are based more on self-love or self-interest.  Prices and profits are necessary to create the incentives that lead to material progress.  Nevertheless, Smith believed ethical behavior, ethical standards, and sympathy for others were equally necessary for a just and vibrant society.

In this lesson, the students test Smith’s ideas on sympathy by playing a famous game in economics and ethics known as the Ultimatum Game.  

For Further Exploration

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