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Monday, July 8, 2013

Economics Lessons from a 5 year old

I am in the States visiting family.  We went to the zoo.  On the way my grandson, Elliot, wanted to know why Nicaragua - meaning our house - was so far away.  Uncle Joseph, who is 17 and still lives in Nicaragua, was attempting to help him understand why we lived so far away, and then answer every question thereafter… Elliot is five.

I listened as Uncle Joseph tried to explain to Elliot about poor people.  After many questions came the one… “How can rich people make money from money?”  Jessica, Elliot’s mother, attempted an answer.


Note:  Elliot is a train enthusiast and – again- is five years old. 


“Let’s say Elliot, you buy a train for $100.  Then you sell tickets for $1 to ride the train.  When 100 people buy tickets you have gotten back the money you spent on the train, right?”


“Yeah.”


“So after you have sold 100 tickets all the other tickets you sell after that is how you make money.  You understand?”  (Remember he is five)


“But why can’t poor people make money?”


“Because poor people don’t have any money to buy a train with.  Poor people also have trouble getting jobs.”


“Why?”


“Well, you know how Nattie has to go to work in her car?”  

“Yeah.”


“Poor people don’t even have cars.”  (We were talking about Nicaragua.)


Silence for a bit.


“Why don’t the rich people give them rides in their cars?”

Why not, indeed.  -Kathleen