July 8th, 2009
How Insurance Has Shaped Our World
Lesson Overview

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TOPIC / SUBJECT MATTER: Economics, World History, Personal Finance

TIME ALLOTMENT: Three to four 45-minute class periods

In this media-enhanced lesson utilizing clips from the PBS series THE ASCENT OF MONEY, students will be introduced to the concept of insurance and the role it has played in determining the world’s political and economic landscape since its inception in the 18th century. An Introductory Activity will explore students’ own attitudes toward insurance, asking whether they regard it as a right or a privilege.

The Learning Activities will begin by explaining the origins of the modern insurance fund, with an online activity to help students understand the law of averages upon which insurance is founded. The expansion of insurance from a privately purchased (and often unaffordable) privilege to a state-sponsored right is explored through the narrative of modern Japan, whose militaristically motivated pre-World War II policies of universal health care helped lay the foundations for the postwar “welfare state”—a socialistic model that came to be widely adopted throughout much of the industrialized world. Finally, the history of modern Chile is used to illustrate how some of the inherent shortcomings of the welfare state came to be addressed—for better or worse—by a return to a system of privatized, capitalistic insurance which has come to define much of modern economic conservatism.

A Culminating Activity asks students to compare and contrast the insurance systems of several different nations based upon what they’ve learned throughout the lesson about the relative pros and cons of varying approaches.


By the end of this lesson, students will be able to:
• Explain how the first modern insurance fund was created
• Define Bernoulli’s Law of Averages
• Describe the origins and foundations of the modern welfare state
• Describe the shortcomings of the welfare state and how they have been addressed by Milton Friedman and other conservative economists
• Compare and contrast the insurance systems of several modern nations


Clip 1:

Who Bears The Risk?

Clip 2:

The Birth of Insurance

Clip 3:

From the Cradle to the Grave

Clip 4:

Trickle Down Economics

Access the streaming and downloadable video segments for this lesson at the Video Segments Page.

Ken White’s Coin Flipping Page
A simple site demonstrating Bernoulli’s Law of Averages through a coin-toss simulator.

The Uninsured in America: The U.S. vs. Other Nations
A PBS “Online Newshour” site featuring a comparative breakdown of health insurance systems in six different countries.


National Standards for Economics
Standard 4: Role of Incentives

• People respond predictably to positive and negative incentives.

Standard 10: Role of Economic Institutions

• Institutions evolve in market economies to help individuals and groups accomplish their goals. Banks, labor unions, corporations, legal systems, and not-for-profit organizations are examples of important institutions. A different kind of institution, clearly defined and enforced property rights, is essential to a market economy.

Standard 15: Growth

• Investment in factories, machinery, new technology, and in the health, education, and training of people can raise future standards of living.

Standard 16: Role of Government

• There is an economic role for government in a market economy whenever the benefits of a government policy outweigh its costs. Governments often provide for national defense, address environmental concerns, define and protect property rights, and attempt to make markets more competitive. Most government policies also redistribute income.

Standard 17: Using Cost/Benefit Analysis to Evaluate Government Programs

• Costs of government policies sometimes exceed benefits. This may occur because of incentives facing voters, government officials, and government employees, because of actions by special interest groups that can impose costs on the general public, or because social goals other than economic efficiency are being pursued.

Standard 19: Unemployment and Inflation

• Unemployment imposes costs on individuals and nations. Unexpected inflation imposes costs on many people and benefits some others because it arbitrarily redistributes purchasing power. Inflation can reduce the rate of growth of national living standards because individuals and organizations use resources to protect themselves against the uncertainty of future prices.

Standard 20: Monetary and Fiscal Policy

• Federal government budgetary policy and the Federal Reserve System’s monetary policy influence the overall levels of employment, output, and prices

National Standards for History
World 5-12 Standards

Era 7 – An Age of Revolutions, 1750-1914

Standard 5D
The student understands transformations in South, Southeast, and East Asia in the era of the “new imperialism.” Therefore, the student is able to:

• Analyze Japan’s rapid industrialization, technological advancement, and national integration in the late 19th and early 20th centuries.

Standard 6A
The student understands major global trends from 1750 to 1914. Therefore, the student is able to:

• Assess the importance of ideas associated with nationalism, republicanism, liberalism, and constitutionalism on 19th-century political life in such states as Great Britain, France, the United States, Germany, Russia, Mexico, Argentina, the Ottoman Empire, China, and Japan.

Era 8 – A Half-Century of Crisis and Achievement, 1900-1945

Standard 1A
The student understands the world industrial economy emerging in the early 20th century. Therefore, the student is able to:

• Explain leading ideas of liberalism, social reformism, conservatism, and socialism as competing ideologies in the early 20th-century world.

Standard 2B
The student understands the global scope, outcome, and human costs of the war. Therefore, the student is able to:

• Analyze the role of nationalism and propaganda in mobilizing civilian populations in support of “total war”
• Assess the short-term demographic, social, economic, and environmental consequences of the war’s unprecedented violence and destruction

Era 9 – The 20th Century Since 1945: Promises and Paradoxes

Standard 1A
The student understands major political and economic changes that accompanied post-war recovery. Therefore, the student is able to:

• Explain how the Western European countries and Japan achieved rapid economic recovery after World War II.
• Analyze connections between the political stabilization of Western European societies and the Marshall Plan, the European Economic Community, government planning, and the growth of welfare states.

Standard 2B
The student understands how increasing economic interdependence has transformed human society. Therefore, the student is able to:

• Compare systems of economic management in communist and capitalist countries and analyze the global economic impact of multinational corporations.

Standard 3A
The student understands major global trends since World War II. Therefore, the student is able to:

• Analyze causes of economic imbalances and social inequalities among the world’s peoples and assess efforts made to close these gaps.


For each student:
• Computer with internet access and audiovisual projection system
• Blackboard or whiteboard
• “Who Should Pay?” Student Organizer (PDF) (RTF)


Prior to teaching this lesson, you will need to:

Preview all of the video segments and Web sites used in the lesson.

Download the video clips used in the lesson to your classroom computer, or prepare to watch them using your classroom’s Internet connection.

Bookmark the Web sites used in the lesson on each computer in your classroom. Using a social bookmarking tool such as del.icio.us or diigo (or an online bookmarking utility such as portaportal) will allow you to organize all the links in a central location.

Make copies of the “Who Should Pay?” Student Organizer.

Next: Proceed to Activities

Lesson plans for THE ASCENT OF MONEY were created by the LAB@Thirteen, Thirteen’s Community and Educational Outreach Department.

Inside This Lesson

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