Economics for Kids

I recently stumbled across a great article on economics lessons that kids develop throughout their childhood. In an article published by the Foundation for Economic Education, the author discusses common scenarios that lead to kids understanding principles behind exchange, value, and, at its heart, the idea in economics that there exists unlimited wants, but limited resources.

kids-swapping-lunch
Ever traded a lunch item for something you found more desirable? Welcome to the wonderful world of Economics

Think back to your childhood days; surely there was a moment when you began developing concepts of money, exchange, and scarcity. I remember bringing money to buy school lunches, and how every few years the school lunches would become more expensive (inflation!). Kids would trade lots of things on the playground, often without using money: a tub of jello would be exchanged for some yogurt, a rare Pokémon card for another, a rubber ball for someone’s spot in the handball line at recess. Certainly, there would always be desires, wants, haves and have-nots that emerged with the changing times. Some kids sold Hi-Chew gum in middle school at 100% markup because they were the only ones who were able to provide it during school hours. Others flaunted items of scarcity, whether that was an Abercrombie wardrobe, an iPhone (in the early days), or (especially in high school) a driver’s license.

All of these interactions hint at the formal world of economics. A 5th grader may not know how to formally define a game theoretic model of price asymmetry, but he could definitely tell you a story about some 1st grader trading away all of his good cards because another kid misinformed him about their value. A middle-schooler probably could describe scarcity value by describing a fad that people were willing to pay a lot of money for (Beanie babies, slap bracelets, or, more recently, slime).

tradingfoodielunch
These exchanges probably happen between some Silicon Valley youngsters

While the first part of the article is stellar, I disagree with some of the author’s latter points. I concur that reading Adam Smith to your five-year-old probably isn’t the best way to teach them economics, for example, but I disagree that one should wait until their kids are in their late teens to start delving into basic economics. Kids can definitely understand supply and demand, exchange, even some complex game theory (if framed in less-theoretical language)! Making use of everyday lessons can, at the very least, help the next generation learn more about an economic lens by which they can view the world, and perhaps effect change.

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