Tuesday, June 4, 2013

The Bastiat in a 7-Year-Old Boy

Conversation with my son Arnaud, age 7, last Sunday during lunch:

Me: "You know son, there's this great French economist Bastiat, he writes some cool stories, I think you'd enjoy reading his books."

Arnaud: "Oh yeah?"

Me: "Yes, kind of like Aesop fables [which he loves]. But his stories are real ones, about the economy, written 150 years ago."

Arnaud: "What did he write about?"

Me: "One story is about a child that breaks one of his home's window glass panes. His father is mad at him, but passersby say that this is good for the economy, so he shouldn't be mad."

Arnaud [startled]: "WHAT?"

Me: "What 'WHAT'?"

Arnaud: "Who are those silly people that would say something so stupid?"

Me: "Why do you think it is so stupid?"

Arnaud: "Because it's so obviously bad for the economy."

Me: "Is it? The passersby believe that if the broken window needs to be fixed then it will create work for the window repairman."

Arnaud [chuckling]: "This is so stupid... If his father spends the money fixing the window, then they won't have money for buying a new Lego set (did they have Lego sets at that time?), so it's obviously bad for the Lego factory. And the family now has the same window but no new Lego set, so the economy is worse off."

Me to my wife: "Isn't it telling that a 7-year-old boy knows more economics than most central bankers and finance ministers in this world of ours?"


Nicole Goate said...

This blog is simply yet so revealing. We practise economics in our every day lives yet most people have no idea about the fundumentals of our economy. Many people are ignorant of how economics interlinks with our countries politics, governmental structures, educational initiatives, industrial and business structures, our taxation structure, investment as well as our day-to-day spending. Economics how we generate a livelihood. It allows us to make predictions about the future and it allows us to be better equipped for any predicaments which we may face. Economics is more than just a field of study but rather an analytical, skilful and contemplative way of thinking.

My point is that parents should start investing in their children's future by educating them about the world which they live in. Teach them the fundamentals of economics. Better equip them for paramount principle of scarcity which they will face everyday.

Monique Eugenie said...

This article is an example of how illiterate we are when it comes to the economy and how our daily lives influence it.

It is of utmost importance to teach our children the importance of the role the economy plays in our lives. We have to educate ourselves to be able to educate our children on this matter.

Katlego Sewela said...

This article relevant to every single person in society. We need to understand how the economy works because it has a huge influence on our daily lives.