economics

Teaching economics to children

It’s a strange business, the economy. It runs the world and is answerable to nobody, but most of us know very little about economics. If we’re dissatisfied with our lives, we’re likely to blame the government and vote for change. But if the incoming politicians are operating by the same economics, the underlying causes of instability and injustice remain unchanged. Since we don’t understand the real forces at work in society, we only ever call for superficial changes.

There’s a real case to be made for economic literacy. We really ought to teach economics to children, from the basics of saving and investing, or how markets work, right through to accounting for externalities or the limits to growth.

Is it possible to communicate the idea of externalities to a child? Here’s economist Sanji and the Baker:

It’s about a little boy in a fictional Middle Eastern country who lives above a bakery. He cannot afford to buy anything from the bakery, but he loves to smell the smells and he even designs a contraption to help him smell everything better. The baker is this grouchy old man who gets really annoyed and demands the boy meet him in court – he wants the judge to order the boy to pay for the smells. So the judge orders the boy to bring five coins the following day. The next day the baker and the boy come back to the judge, and the judge clinks each coin loudly into a metal bowl. He asks the baker, ‘Did you hear that?’ and the baker says ‘Yes!’ And the judge says, ‘Did you like the sound of that money?’ And the baker says, ‘Yes!’ And then the judge says, ‘Well, consider yourself compensated!’ And he gives the coins back to Sanji. That story is about what in economics we call an externality: when something that somebody produces has either a benefit or a cost for other people that is not included in the price. So in this case it’s the smell of the baked goods – other people can enjoy the smell, but they don’t have to pay for it. That’s a positive externality. A negative externality is pollution: when firms produce goods but they pollute the environment and nobody pays for it. It’s a very sophisticated concept, and yet here it is, in this picture book for young children.

Rodgers has specialised in teaching economics to children, and she lists in this interview. She also runs , a project at Rutgers University where you can browse children’s book by subject or check out their . You can too.

If you’re involved in the post-growth movement, you may have already encountered the unofficial mascot the Lorax. (Unofficial because the Seuss estate says no). Dr Seuss’ book is about the Once-ler who plunders the forest, and the Lorax who ‘speaks for the trees’. The Lorax is used in classrooms to talk about the environment, and you can . There’s a movie in development, so it might be better known in a couple of years time.

Not having children of my own just yet, this isn’t something I know a whole lot about. What books and movies have you found useful?

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