Students in Mrs. McNamara’s AP Microeconomics class were joined by students from Mr. Cucinella’s World History class to get an introduction to the markets through a simulation of 17th Century European emigrants seeking passage through the indenture process.
Students participated in a role play where some were agents, representing offers for passage and some were emigrants of varying talents and skills. With price defined as length of service, in their interactions through multiple rounds of exchange and handshake agreements, students were able to converge an an indenture length of 5 years, which is close to the historically held average 4 years, 8 months. Students were able to identify that it was market, as an allocator, that set the price, not some outside force. Heavy emphasis was placed on the fact that the market as an allocator only works if there is a strict rule of law enforced, as was the case with indentures, as they were binding contracts. This work sets the stage for the students to take a deep dive into the analysis of market forces and prices as behavioral incentives.
Economic historians Gary Walton and Hugh Rockoff note that by 1775, more than 1/2 million Europeans – mainly English, Scotch, Irish and German – ¬had crossed the Atlantic and about 70% had come as indentured servants: individuals engaged in a binding contract for a length of servitude in exchange for price of passage, which at that time exceeded nearly 2 times the annual wages of those seeking employment in the American colonies…not to mention filling the need for the labor necessary to build the early American economy.