Saturday, June 24, 2006

How to teach basic economics to children

Arthur Foulkes wrote a great description of how he taught young children basic economic theory. His account opens with:

"But when are you going to get to the economics?"It was the end of my first day volunteering to teach "basic economics" to a group of fifth graders. The teacher looked bemused as she asked the question."That's what I'm doing," I whispered a little curtly in reply.Realizing her offense, she quickly explained her meaning: "You know, with all the graphs and big words and stuff."

Arthur writes about how he taught young children basic economic ideas. By setting up concrete examples of economics the students understood the basics, without the graphs and big words.

His first lesson was on trade. He gave each child an inexpensive gift and then allowed the children to trade. At first he only allowed the students to trade with their neighbors, but then they were allowed to trade with anyone in the class. He points outs to the children that they were only makings trades when both sides were happy with the exchange. He also forces a few trades and talks with the students about "fair trade."

To teach about money Arthur had the children act out a short story about the problems of trading when you want something like shoes, but the person who has extra shoes doesn't want what you have. In acting out the story the children again had a very concrete example of the role and power of money.

In the third week Arthur divided the class into two "villages" to teach them about savings. The first village never saved, just fished and partied. The second village used savings to increase their standard of living. By the end of the lesson most of the class said they would want to be in the village which saved.

To teach about how competition worked Arthur made one student a gas station owner, and the rest of the class had to "commute" back and forth across the room. The gas station owner got to charge whatever he wanted, so he charged a high price. Then Arthur made a few more students gas station owners, and quickly the price of gas came down.

For the final lesson in economics Arthur again bought some inexpensive gifts, but this time he gave them some play money. They had an auction. After all the items were sold, Arthur led a discussion about how some items which were scarce had a higher price.

This is a great approach for teaching children the basics of economics. This is something which could easily be done with a few families. If you are interested in teaching your children the basics of economics, go check out Arthur's full article.

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Anonymous said...

where s the link ?

scatty said...

It sounds like the game the Settlers of Catan is a great way of learning about economics. My son received it for his birthday and my kids (and I) love it. You have to deal with all the issues that this teacher raised.

Wacky Hermit said...

I bought my eight year old some potpourri and fabric bags, and let her make sachets. Then I gave her some space at my farmer's market booth and she sold them there and also by going door to door around the neighborhood. She's learned a lot about saving and prices, and between that and a lemonade stand, she and her friends earned enough money to all go to the movies.

She has turned out to be a great budgeter. We give her a budget and she picks out party favors for her birthday party. As soon as we have enough money, we're planning on giving her $500 for the redecoration of her room, to spend as she sees fit. To prepare for this, she's keeping a notebook with pictures cut out of magazines and ads, of furniture and decorating ideas she likes. And we've gone out shopping and discussed how if she spends $350 to get the bed she wants, she won't have enough money to replace the carpet. We've talked about buying used furniture.

I figure it's never early enough to teach kids to make the hard decisions about deploying limited resources. Giving them some control over decisions turned out to be a great way to keep them from whining over not getting what they want.