The Trading Game provides an active and engaging introduction to some of the key dynamics of trading relationships between different countries and regions. It incorporates information about trade in Canada in general and the Pacific Rim in particular. A debrief discussion at the end of the activity allows for students to reflect on the application of the game to the real world and on the benefits and challenges of global trade. The game is informed by the big idea of Interdependence.
The game can be played at the beginning of a unit on trade and the economy. It is also useful for a summary activity at the end of a lesson or unit of work. The debriefing discussion at the end of the game may be richer if the students already have some understanding of the main concepts of trade.
This activity is inspired by a game developed by the UK non-profit organization, Christian Aid. The original game can be accessed at: http://learn.christianaid.org.uk
45 – 60 minutes
Our planet includes industrialized countries such as Canada, the United States of America, the members of the European Union, South Korea, Japan, Singapore and Australia. These countries have some of the highest standards of living in the world.
Other countries such as Brazil, China, Malaysia, Indonesia and India have large and growing populations, but the wealth of the countries may be less evenly distributed. Still other countries are poor and lack education, natural resources, transportation infrastructure, financial systems, or government policies that support international trade.
Finally, all countries are exposed to changing market conditions and the introduction of new technology that has an impact on the demand for and the supply of goods. This often leads to political pressure to try to protect industries that may be affected by the forces of change. However, change in economic conditions also brings with it opportunities.
The goal of the Trading Game is to demonstrate how trade between different countries actually works and who may benefit. It aims to help players understand how trade affects a country’s prosperity. While it provides only a simple outline of some very complex relationships, one of its aims is to show some of the key factors that determine those relationships.
Before playing the game, the teachers should make a connection with students’ understanding and experience of trading. Are there any forms of trade in which they or their families engage?
- The teacher leads and controls the game. The students role-play different countries or country groups. The game also needs a banker. This could be another teacher, a parent or a student.
- As their country or country group, participants produce shapes out of paper. Each shape has a different value. The making of shapes from the paper represents the manufacture of products from raw materials.
- Groups sell their products (i.e. their paper shapes) to the banker. The aim of each group is to make as much money as possible.
- While manufacturing and trading occur, the teacher can change the terms of trade and create new trading situations that reflect real-life situations.
- The new terms of trade affect the way countries trade, either by stimulating an increase in trading or restricting a country’s manufacturing capacity.
- When manufacturing and trading is finished, the teacher should guide a debriefing discussion. Participants share their experience of playing the game, consider how their role in the game reflected real-life world trading systems, and explore some of the ethical dimensions of international trade.
The game works well with a group of 15 to 30 players. (It is possible to run two separate games simultaneously with a group of more than 30 players.)
- To illustrate how trade can benefit or impact the economic development of various countries, or trading blocs.
- To explain how trading relationships work.
- To enable players to experience unequal trading relationships.
- To generate interest and discussion about the world trading system.
- 30 sheets of unlined letter size paper
- Several packs of play money, including 20 of the same denomination (e.g. $100)
- 70 identical stickers (e.g. stars)
- 4 pairs of scissors
- 4 rulers
- 2 compasses for drawing circles
- 2 triangles
- 2 protractors
- 12 pencils
- 1-2 large sheets of paper for the shape diagrams and rules (see Resources section)
- 3 large manila envelopes
- Copy the shape diagrams and rules onto a board, or display them using a computer and projector or Smart Board. (Students need to be able to these clearly throughout the game).
- Organize the tools and resources into the following sets, and place in envelopes:
- Arrange the furniture so that each group has a flat working area and can move freely around the room.
(N.B. These are for the teacher’s reference, and should not be read aloud to the students.)
- Split the players into groups as shown below:
- Allocate each group an area in the room and a set of materials as indicated. Do not let groups open their resource envelopes until the game begins. Do not point out to the groups that they are receiving different sets of materials.
- Give the banker a copy of the shape diagrams, a pen and the extra play money. Tell the banker that they are responsible for:
- Checking the groups’ shapes for quality (accuracy) and paying them the appropriate amount
- Rejecting any shapes that are not of an acceptable size or quality
- Keeping note of any changes in the shapes’ values during the game
- Read out the objectives and rules of the game (See How to Play: Instructions for Students, below).
- Review with students, as necessary, the process of making the shapes using the geometry tools available.
- Make sure that everyone can see the shape diagrams and game rules.
- Repeat the rules once more and then announce that ‘manufacturing can begin’.
- At the beginning of the game, students may be confused or puzzled, and ask you questions about the resources and tools that they have and do not have. They will likely ask you if they can borrow or trade resources or tools. Do not answer their questions, but simply repeat the rules. After a minute or two of confusion, students should start moving around the room and begin trading. It is important that the initiative comes from them, and not from you.
- Allow the manufacturing and trading to continue for 20-30 minutes, depending on the size and interest of the class.
- Observe what is happening. Things to watch for (and note down for discussion after the game) include:
- Which groups are able to manufacture and earn money immediately
- What happens when a group runs out of resources
- How groups go about accessing the tools or resources they need to make shapes
- What prices groups sell their extra tools or resources for and at what point in the game
- Any alliances and deals that develop
- During the game, influence its direction by introducing new trading situations. Examples are provided in the Create New Trading Situations resource (see Resources section).
- In your groups, you should try to make as much money as possible using only the tools and resources that you have in your envelope.
- You make money by manufacturing and selling goods. These goods are the shapes shown on the diagram, each of which has its own value.
- Take your shapes in batches of five identical shapes to the banker. The banker will check them for quality and pay you the appropriate price.
- The object is to manufacture as many shapes as possible – the more you make the richer you will be.
Background: What is International Trade All About?
International trade: the economic interaction among different nations involving the exchange of goods and services, that is, exports and imports.
A guiding principle of international trade is comparative advantage, which indicates that every country, no matter their level of development, can find something that it can produce cheaper than another country. The theory of comparative advantage says that it is beneficial for both a country and for the world as a whole if trade is allowed to take place based on comparative advantage because that will result in the most efficient use of resources. A country has a comparative advantage in producing a good relative to another country or the rest of the world, if the cost of producing the good is lower than it is abroad. Countries tend to export goods in which they have a comparative advantage and import goods where they have a comparative disadvantage.
The potential gains from trade are the improvements in social wellbeing and economic wealth made possible by countries being able to trade with one another, as compared with having a closed economy. Gains from trade arise from two primary sources. One source is the difference in factors of endowment: countries have different natural resources, different amounts of labour, and various types and stocks of capital. The other source is the economy of scale that allows countries to mass-produce goods, while their consumers enjoy the benefits of having a wide variety of product types available.
It is highly unlikely that a single country (or economy) will have all of the raw materials that are necessary to sustain life and create development. Countries that operate an open economy have the means to access, through trade, the resources that they do not have within their geographical boundaries. Closed economies do not. A country operating a closed economy must also be able to produce enough food for all of its citizens and is, therefore, highly dependent on agricultural and other farming methods. If the country suffers any adverse conditions, such as too much rain or not enough rain, this will have a direct impact on the economy and people may face chronic shortages of food. Countries that operate a closed economy tend to be less developed than those who trade freely because they have so many limitations.
Nevertheless, the gains from trade may not be shared equally even if the most efficient means of production are used.
Issues and Topics for Discussion
During the early stages of the discussion, help students to see that the game they just played isn’t simply a game, but rather a demonstration or representation of international trade in the real world.
If international trade is beneficial, is it always fair?
Some countries have more resources – be those raw products, human capital or tools and technology – than others. The game replicates this by giving some groups more resources than others. The students will likely become aware of this very quickly and you may well hear complaints of “It’s not fair”.
You can use the feelings of “unfairness” as a starting point to the discussion. Ask groups how they felt about having a different number and range of resources and tools. Have them support their feelings with examples of incidents from the game.
What is fair?
During the game, did the groups with fewer resources and tools find a way to strengthen their positions? If you noticed that groups formed alliances, arrangements or cartels, ask students to comment on their reasons for doing so and whether they achieved their goals.
Did all of the groups make some gains from trade? Ask the students to reflect on whether “the gains from trade” are always shared equally. What do they think might be done in the real world to achieve both an efficient use of resources and a fair outcome?
Support the students’ reflection on the difficulties of arriving at a just system of exchange between those with the raw materials and those with the economic power to buy, process and market them. If students feel that the current system of international trade is unfair, what system or arrangements would they put in its place?
What could the world be like?
If the world is an unfair place, and if we acknowledge that its structures need changing, what sort of attitude should we have towards the world’s resources and the use we make of them? What values other than economic efficiency might need to be considered in determining the international trade rules?
The concepts of gains from trade, justice, environmental stewardship and money are central to the perspectives of many peoples and cultures. Appreciating these concepts will give a fuller understanding of how the world’s present trading relationship may affect different groups of people.
Have the students share their perspectives. Include a discussion of First Nations’ perspectives as well as those of other cultural groups.
Have students write up their experience of the game and what they learned from participating in it and from the follow up discussion. The write up should include:
- Highlights from their experience of the game
- Strategies used during the game and how well they worked
- What they learned during the discussion
- Self-evaluation of their participation in the game and discussion
Play the Trading Game developed by Wap Sigatgyet Aboriginal Education Services (317 Ninth Avenue West, Prince Rupert, Tel: 250-627-1536). Facilitate a discussion with students about the similarities and differences between contemporary global trade and traditional Ts’msyen trade.