Animal farm chapter 6 summary sparknotes

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Animal farm chapter 6 summary sparknotes

Suggested Discussion Topics, Questions, & Drawings can be located by clicking on the chapters listed below. Return to Animal Farm by Dr. Burton A. Abrams Please email Dr. Abrams by clicking above with any questions or comments. Map of Animal Farm Map of Animal Farm Chapter I. A Brief History of Animal Farm Once upon a time there was a farm owned by a Mr. and Mrs. Jones. Mr. Jones mercilessly exploited the animals on the farm until one day the animals rose up in rebellion and forcibly evicted Jones and his wife from the farm. Animal Farm, a farm ruled and governed by the animals themselves, was established. The pigs, led by Napoleon, were the brightest of the animals and soon came to dominate the governance of the farm. Boxer, the powerful horse, worked tirelessly for the farm's goals. His motto, "I will work harder!" served to inspire the other animals. As time passed, however, the ideals of Animal Farm were corrupted by the greedy pigs. "FOUR LEGS GOOD, TWO LEGS BAD" became "FOUR LEGS GOOD, TWO LEGS BETTER." "ALL ANIMALS ARE EQUAL" became "ALL ANIMALS ARE EQUAL BUT SOME ANIMALS ARE MORE EQUAL THAN OTHERS." Soon the pigs were drinking, gambling, and carrying on in a way that made them indistinguishable from human beings. Even Boxer, his body broken by the hard demands placed upon him, was callously discarded by the pigs and was sent to the glue factory. Fifty years have passed since the last contact with Animal Farm. Now, more of the story can be told... Chapter II. The Wooden Oat Trough Economic Concepts The Economic Questions: What? How? Opportunity Costs Public Good and the Free-Rider Problem Synopsis We open to find Animal Farm suffering from serious economic problems. The Central Committee has ordered an inappropriate crop to be planted and the workers are poorly assigned to their tasks and strangely lethargic. Under the farm's economic system, the questions concerning what is to be produced and how it is to be produced are answered by the Central Committee. The key economic problem on the farm is one of poor economic incentives. The farm's output is essentially a public good. No animal's efforts alone have a noticeable effect on output. Further, the consumption benefits going to each animal (WOT and AFM) do not depend on his or her contribution to achieving the public good (the farm's output). Milton's remark that oats are not free refers to the opportunity cost of oats which is explained in a later chapter. . Discussion Questions 1. On Animal Farm, the decision what to produce is made by the Central Committee? In a market economy, who makes the decision what to produce? What factors influence the decision? 2. Animal Farm's population has grown over time. Does a bigger population make it more or less difficult to get animals to work for the farm's output (the public good)? (Hint: Compare and contrast families and nations) 3. It appears that the Central Committee is making some bad economic decisions. Barley is a poor choice for a crop and Annie is not allowed to work in the fields. Is this just bad luck or might there be a reason for their decisions? (One hint: What can barley make? Who might like this good?) Chapter III. To Each According to Need Economic Concepts The Economic Question: For Whom? The Distribution of Income Equity The Law of Diminishing Returns Synopsis The economic question concerning who will get the output (For Whom?) is also answered by the Central Committee. The rule, "To each according to need," nominally serves as the criterion for distributing the farm's product. The Central Committee wrestles with the problem of defining need. Every definition of need established by the Central Committee seems to generate unintended effects. Milton's remark about the flower pot is a classic illustration of the law of diminishing returns. The land within the flower pot is fixed. Initially, additions of water, fertilizer and labor yield significant output. The ability of more inputs to yield increases in output diminishes rapidly. On Animal Farm, the population has been growing while the land and other inputs haven't changed. New workers are not adding as much to output as the existing workers. Marginal productivity is declining. Discussion Questions 1. Is it possible that additions of water and fertilizer to a flower pot could reduce the flowers produced? If so, what would you say is the marginal productivity of those additional factors? 2. What is "need?" Is it possible or likely that once need is defined in a society, people become needier? Chapter IV. The Four Modernizations Economic concepts Equity Market allocation of resources Public allocation of resources Central planning Synopsis We get a peek at the operation of the Central Committee and see the formula that is used to determine each animals's AFM allowance. The Committee recognizes that changes must be made in order to save the farm from economic collapse. The Committee discusses the "Responsibility System." Concerns are raised about taking economic decision-making away from the Committee and turning it over to the market. Problem In the previous chapter, the spokespig for the Central Committee announced that its members would accept only half the allocation of AFM that they were entitled to receive. Using the formula for the distribution of AFM, how will the typical pig on the Committee fare compared to a pig not on the Central Committee? Chapter V. The Responsibility System Economic concepts Opportunity cost Economic incentives Market pricing and the distribution of output Inflation Commodity speculation The invisible hand versus central planning The division of labor and the gains from trade Synopsis Milton explains why the free oats aren't free. The Responsibility System is introduced on the farm and the lethargic behavior of the animals disappears. Buck makes a killing in berries and is well on his way to becoming rich. Inflation rears its ugly head. Milton mentions an ominous "invisible hoof" as the reason for the farm's new-found prosperity. Questions/Problems 1. Buck introduces berries in 1 R.S.. In 2 R.S., more comrades produce berries and the market price falls dramatically. Show using supply and demand curves why the price falls in 2 R.S. 2. In 1 hour, Median can plow 20 square feet of land or pull 100 weeds. Gertrude, the goose, can plow 5 square feet or pull 60 weeds. Buck can plow 40 square feet or pull 150 weeds. Median doesn't think trading services with Gertrude can be beneficial since he can both pull weeds and plow faster than she. Buck, on the other hand, receives weeding services from Gertrude in exchange for plowing. Who's right? Buck or Median? Explain using examples. 3. Assume Median, Gertrude and Milton spend 14 hours a day working their plots of land. Construct a daily production-possibility frontier for each of the comrades. Using the curves, try to show how both Milton and Gertrude can move outside of their production-possibility curve. 4. Is Buck morally right in charging so much for his berries? Explain. Chapter VI. Buck's New Products Economic concepts Product innovation Monopoly Public policy and the public interest Synopsis Buck discovers honey and a process to make dripless candles. Needless to say, this will make Buck even more wealthy. The Central Committee decides that it must take over the production and sale of Buck's new products because of their importance to the farm. Buck gets depressed. Questions/Problems 1. Are there any goods or markets that governments in market economies take over for exclusive production and/or distribution? What is the justification for this? Is this always in the best interests of the society? Discuss. 2. What is a monopoly? Did Buck have a monopoly in the production of honey? Candles? Berries? 3. Is Ford Motor Corporation a monopoly? Why or why not? Chapter VII. The Bank Economic concepts Banks Financial intermediaries and the allocation of capital Financial intermediation Nominal interest rates Real interest rates Synopsis Animal farm's first bank opens in 3 R.S.. The animals are reluctant at first. Soon, with a little incentive, they excitedly deposit their AFM. They anticipate receiving 5% interest and eventually getting loans from the bank to assist in building new stalls which they urgently needed. Milton recommends that Buck avoid doing business with the bank. Milton, as usual, proves to be correct. Question/Problems 1. What is a "nominal interest rate?" A "real interest rate?" 2. Assume Buck had deposited 100 AFM in the bank at the beginning of 3 R.S.. A. After 1 year, how much AFM would the bank give Buck? B. Assume 1 ear of corn costs 1 AFM at the beginning of 3 R.S.. The farm has 30% inflation in 3 R.S. and the price of corn follows the average price of goods. At the end of 3 R.S., how many ears of corn can Buck buy with the money the bank would return to Buck? Is Buck better or worse off? Chapter VIII. The Invisible Hoof Economic concepts Work versus leisure decisions Production for need not greed Externalities and economic regulation Inflation Money creation Printing money to finance budget deficits The desirability of the independence of central banks Synopsis The animals have once again taken to sleeping in the fields. This time, however, the reason is quite different. The animals are not "free riding" but, rather, choosing to "purchase" leisure. The Central Committee doesn't like it. Members also do not like the growing production of flowers. They think flowers are frivolous and contribute nothing to the real welfare of the farm. Flowers also make pigs sneeze. Inflation worsens. We see how the Committee is able to buy so many goods in the market. The Committee sends Epicurus to the market with a suitcase full of newly printed AFM. Questions/Problems 1. Is the Central Committee justified in banning the production of flowers? Do market economies ever ban the production and sale of some items. Is this justified? Discuss. 2. Air pollution is a negative externality. Does the production of flowers generate negative externalities? Does this justify regulating flower production? Is prohibition a good public policy? If flowers generated no negative externalities, would a prohibition ever be justified? Discuss. 3. The Central Committee serves as the Central Bank for the farm as it controls the farm's printing press for AFM. Discuss the pro and cons of having the Central Bank under the direct control of the government as opposed to being an independent bank similar to the Federal Reserve System in the United States. 4. The decision to purchase goods is influenced by the buyer's income. Does income affect an individual's choice to consume leisure as opposed to working? Discuss. Chapter IX. Joint Ventures Economic concepts Joint ventures Price controls Prohibitions Barter Synopsis The Central Committee announces all their prohibitions and price controls. Shortages arise in the market. Barter arises. Laws are passed to prevent problems associated with barter. Laws beget more laws. Milton explains joint venture and Buck hears about democracy. Questions/problems 1. What is a "price ceiling?" A "price floor?" 2. Draw supply and demand curves for berries and impose a price ceiling below the equilibrium price. What occurs in the market? Chapter X. Equity versus Efficiency Economic concepts Commodity speculation as a hedge against inflation Equity Efficiency Synopsis The Central Committee adds a new wing to their Hall. Milton discusses with Annie important economic issues surrounding equity, efficiency, inflation and democracy. The secret of the new wing is revealed. Buck and Milton are arrested for treason. Problems/Questions 1. How are consumers voting with their dollars for the goods they want similar to citizens voting for elected officials? How are they different? Discuss. 2. What is "equity?" "Efficiency?" If a government forces an equitable economic outcome, will efficiency suffer? Discuss. Chapter XI. The Trial Economic concepts The cause of inflation: Too much money chasing too few goods. Short-run versus long-run effects in markets. Synopsis Buck and Milton are put on trial. The Central Committee presents evidence that Buck and Milton have conspired to cause inflation and undermine the authority of the Committee. It is revealed that Milton has been reading books and that he must be the comrade spreading rumors of an "Invisible Hoof." They are convicted but Epicurus attempts to save his friends by revealing the truth about the Central Committee. Epicurus finds himself convicted as well. Questions/Problems 1. The Central Committee has been injecting newly printed money into the farm's economy. Discuss why this might be the cause of continuously rising prices on the farm. this good?) X11. The Animal Square Incident

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