It’s amazing to watch children figure out how the world operates. Everything is foreign to them and the possibilities of how things could work are practically limitless. A pair of pliers could just as easily be a funny bow legged cowboy as they could be a tool for grabbing and pulling things.
This makes it even more amazing when their blank slate minds tackle complex systems and somehow are able to come up with ideas that took modern civilizations centuries to develop. In a different era, these children would have been instant prodigies. Millionaires and revolutionaries by the age of 10. But they were born too late and now they are just regular children.
Take my daughter Clara for example and the subject of economics. She has been asking for a long time to start a lemonade stand this coming summer. She has the whole thing planned out. She knows what she wants the table to look like (custom built of course), and how she is going to make the lemonade using her special blend of real lemons soaked in lime juice, which she and her sister call by the copyrighted brand name “Lemon Stremon”. She has it all drawn up on construction paper in crayon, with flow charts and diagrams and stuffed in portfolios to take around to banks to argue for business loans, practically.
So, I sat down with her the other day to discuss pricing.
“We’ll have to go to the store and buy the materials,” I said.
“And we’ll have to add up how much everything costs,” I continued.
“And then we will have to use that to figure out how much a cup of lemonade costs, and then increase that how much you want to make as profit and then that will be the price you will sell each cup for.”
She immediately started shaking her head. “No. That’s not how I’m going to do it, Dad.”
“What?” I was surprised. “I don’t understand. That’s how business works,” I explained. “The sale price, minus the cost of labor and materials equals your desired profit. There’s really no better way to do it.”
“No, Dad,” she insisted. “There is.” She made a condescending motion with her hand for me to sit down and learn. “Okay. Here’s my idea. I’m going to give the lemon stremon lemonade away for free!”
I blinked at her. She grinned back.
“I don’t understand.”
She sighed and her shoulders fell under the weight of my ignorance. “You see? I give the lemon stremon lemonade away and people will say, ‘Oh Wow! This is delicious! I want more lemon stremon lemonade!’ and then,” her eyes twinkled, “then we can sell it for whatever we want to.”
There was a cold silence in the room as I stared at my little girl, slowly realizing that her tiny princess mind had just spontaneously developed the business model of a neighborhood drug dealer.