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Tuesday, October 31, 2006


Happy Halloween!

Tonight, after my daughters and their friends went trick or treating, and came back with nearly identical sets of candy (they went to the same houses, afterall), they sat down to trade. Their tastes were diverse enough that there was actually quite a lot of candy traded. I estimate that each girl traded over one-third of her original candy for something different. Some pieces were traded more than once.

At the end, each girl was far happier with her new set of candy. Each girl valued her new set of candy significantly more than the old set. It was fun watching seven and ten year olds using trade to create value out of thin air.

After her friends left, I mentioned this value creation to my ten year old daughter. Much to my amazement, her reply was, "yeah, I was thinking about that as we were doing it." I recently read her "The Invisible Heart: An Economic Romance" and apparently she really has grasped many of the ideas presented in that book.

I've been troubled by the complete lack of understanding of basic economic principles by most people in the world and one of my goals is to help people grasp at least some economic concepts.

At least I seem to be succeeding at home.

1 comment:

Howard said...

The benefit of voluntary exchange demonstrated in the clearest way possible. Understandable to all but the most highly educated. BRILLIANT!!!

(Note the it requires individuals to be free to act upon their own differing preferences)