American Government 1.4 Economic Theories
SECTION 4 
Drill: Autocracy & Democracy 
Autocracy is a dictatorship or absolute monarchy; power and authority reside in a single individual.
Democracy: the people hold the sovereign power of government

LESSON OBJECTIVE
Students will identify the ways the United States has modified its free enterprise system by researching Marbury v. Madison, (Judicial Review) a famous Supreme Court case (1803).

I. The Role of Economic System
A. Governments provide for different kinds of economic systems.
B. Economic systems make decisions about what goods and services should be produced, how they should be produced, and who gets them.
II. Capitalism 
A.	is based on free enterprise
B.	The United States has a capitalist economy
C.	our government’s role in the economy has increased since the early 1900s.
III. Communism 
A.	is based ideas of Karl Marx, who argued that capitalism exploited workers.
B.	Marx predicted workers would eventually rise in a violent revolution. 

IV. Odds&Ends
A. proletariat are the workers 
B. capitalism is known as a free enterprise system
C. laissez-faire economy (aka) a hands-off economy
D. bourgeoisie are the capitalists or investors
E. Communist  is a command economy
F. Adam Smith provided a philosophy for free market system.
 	G. Karl Marx believed that under communism one class would evolve.
	H. Judicial Review- the ability of the Supreme Court to declare a law unconstitutional.

American Government 1.4 Economic Theories4 
Review:
1.	E
2.	A
3.	B
4.	C
5.	D
6.	D
7.	A
8.	C
9.	B
10.	B		

Marbury v. Madison, 1803 Judicial Review
1. The Marbury v. Madison case established the right of the Supreme Court to rule on the constitutionality of laws.

2. It provided a way to check the powers of Congress and the president, and thus more effectively balanced the powers of all three branches of the federal government.

3. On the one hand, Marshall declared the Judiciary Act unconstitutional because the power for Congress to pass such an act was not mentioned in the Constitution. Yet at the same time he believed the Supreme Court had the power to declare a law unconstitutional, even though this power was not specifically mentioned in the Constitution.

4. The Court’s power may say that it provides a check on Congress and more equally balances the power of the three branches of government. 

5. The influence of personal politics on Court rulings is improper may say that legal opinions should be based on a legal interpretation of the 

Summary: In today’s lesson we identified how the United States has modified its free enterprise system by researching Marbury v. Madison, a famous Supreme Court case.

Homework: Laissez-faire (economy) & Capitalism 
Laissez-faire (economy)- a hands-off economy
Capitalism - free enterprise system

Name ______________________________________________Class ___________ Date_______
American Government 1.4 Economic Theories
SECTION 
Match each item in Column A with the items in Column B. Write the correct letters in the blanks. 
Column A
_____1. free enterprise system
_____2. a hands-off economy
_____3. bourgeoisie
_____4. proletariat
_____5. command economy
	Column B
A. laissez-faire economy
B. capitalists
C. workers
D. Communist economy
E. capitalism

In the blank at the left, write the letter of the choice that best completes the statement or answers the question. 
_____6. Adam Smith provided a philosophy for this type of economic system.
A. communism 					C. socialism
B. mixed-market 					D. free market
_____7. In this type of economy, the government owns the basic means of production.
A. socialism 					C. laissez-faire
B. free market 					D. capitalism
_____8. Some argue that this type of economic system hinders economic growth.
A. free market economy 				C. socialism
B. laissez-faire economy 				D. capitalism
_____9. The United States has this type of economic system.
A. democratic socialism 				C. command economy
B. mixed-market economy 			D. socialism
_____10. Karl Marx believed that under this economic system one class would evolve.
A. free market 					C. socialism
B. communism 					D. capitalism

Supreme Court Case Study 1 The Supreme Court’s Power of Judicial Review
Marbury v. Madison, 1803
Background of the Case 
The election of 1800 transferred power in the federal government from the Federalist Party to the Republican Party. In the closing days of President John Adams’s administration, the Federalists created many new government offices, appointing Federalists to fill them. One of the last-minute or “midnight” appointments was that of William Marbury. Marbury was named a justice of the peace for the District of Columbia. President Adams had signed the papers, but his secretary of state, John Marshall, somehow neglected to deliver the papers necessary to finalize the appointment.
The new president, Thomas Jefferson, was angry at the defeated Federalists’ attempt to “keep a dead clutch on the patronage” and ordered his new secretary of state, James Madison, not to deliver Marbury’s commission papers. Marbury took his case to the Supreme Court, of which John Marshall was now the Chief Justice, for a writ of mandamus—an order from a court that some action be performed—commanding Madison to deliver the commission papers inaccordance with the Judiciary Act of 1789.
Constitutional Issue 
Article III of the Constitution sets up the Supreme Court as the head of the federal judicial system. Historians believe that the Founders meant the Court to have the power of judicial review, that is, the power to review the constitutionality of acts of Congress and to invalidate those that it determines to be unconstitutional. The Constitution, however, does not specifically give the Court this right. Chief Justice 
American Government 1.4 Economic Theories…Continued
John Marshall, as a Federalist, believed strongly that the Supreme Court should have the power of judicial review. When the Marbury case presented the perfect opportunity to clearly establish that power, Marshall laid out several points which the court believed supported the right of judicial review. At the time the decision was viewed as a curtailment of the power of the president, but people today recognize that the case established, once and for all, the importance of the Supreme Court in American government.

The Supreme Court’s Decision 
Justice Marshall reviewed the case on the basis of three questions: Did Marbury have a right to the commission? If so, was he entitled to some remedy under United States law? Was that remedy a writ from the Supreme Court?
Marshall decided the first question by holding that an appointment is effective once a commission has been signed and the U.S. seal affixed, as Marbury’s commission had been. Therefore, Marbury had been legally appointed, and Madison’s refusal to deliver the commission violated Marbury’s right to the appointment. In response to the second question, Marshall held that Marbury was entitled to some remedy under United States law. The final question examined whether the Court had the power to issue the writ.
Marshall explained that the right to issue writs like the one Marbury was requesting had been granted the Court by the Judiciary Act of 1789. This law, however, was unconstitutional and void because the Constitution did not grant Congress the right to make such a law. In his written opinion, Marshall defended the right of the Court to declare a law unconstitutional: “It is emphatically the province and duty of the judicial department to say what the law is . . . . If two laws conflict with each other, the courts must decide on the operation of each.” The Supreme Court thus became the final judge of constitutionality, thus establishing the principle of judicial review.
At the time observers were much more interested in the practical result of the ruling— that the Court could not issue the writ, and could not, therefore, force the appointment of Marbury. Congress could not expand the Court’s original jurisdiction, and the Constitution does not give the Court the authority to issue a writ. They paid much less attention to the long-term implications of the decision. Here is how a constitutional scholar evaluates the Marbury decision:
“Over the passage of time [the] Marbury [decision] came to stand for the monumental principle, so distinctive and dominant a feature of our constitutional system, that the Court may bind the coordinate branches of the national government to its rulings on what is the supreme law of the land. That principle stands out from Marbury like the grin on a Cheshire cat; all else, which preoccupied national attention in 1803, disappeared in our constitutional law.”
Not until fifty years after rendering the Marbury decision did the Court again declare a law 

DIRECTIONS: Answer the following questions on a separate sheet of paper.
1. Why is the Marbury case important in the history of the Supreme Court?
2. In what way did the Marbury decision enhance the system of checks and balances provided for in the
Constitution?
3. Constitutional scholars have pointed out there is an inconsistency in Justice Marshall’s opinion with respect to what the Constitution specifically provides. What is that inconsistency?
4. The United States is one of the few countries in which the highest court of the land has the power to declare a law unconstitutional. Do you believe that such a power is of benefit to a country?
Explain your answer.
5. Justice John Marshall was a Federalist who believed in a strong national government and certainly moved in this direction with his Marbury ruling. Do you think it is proper for a Supreme Court Justice to allow his or her personal political opinions to influence the rulings of the Court?

In your own words, summarize today’s lesson.