Stephanie Herman, a "homeschooling mom of two boys who has taught high school economics in a homeschool coop," was kind enough to send me a review copy of her book Cost Benefit Jr., which provides "an economics curriculum for young children (ages 8 to 10)." It teaches economics through stories to which small kids should be able to relate, and the end of each section has some exercises that will help kids master the concepts.
It's a really great little book; one of its major strengths is periodic side boxes featuring a cigar-chomping jerk named "Mr. Greedy L. McMeanie" that show how even though Greedy L. McMeanie is a jerk who doesn't care at all for his customers and who only seeks profit, he is forced by competition to provide them with what they want at prices they are willing to pay.
Suppose you could eat ice cream and french fries for lunch and it would only cost you $5 while eating salad would cost you $7.50. Are the ice cream and french fries cheaper? Probably not: you might not feel as good (and therefore, you might not be as productive) later. Furthermore, if you keep eating like that you're probably going to have health problems later. When you consider all the costs involved, the "cheaper" meal doesn't look so cheap, after all.
This also provides a nice jumping-off point for a discussion of externalities. A lot of people are claiming that the government has to regulate our health decisions because my bad health decisions impose an externality on you since you're partially responsible for paying for my government-provided health care if I'm on Medicaid or something like that. This is an example of an "externality" that isn't: if it weren't for the government giving away free health care, people would internalize the costs and benefits of their actions. If someone else is going to pay for your heart surgery, why not eat ice cream and french fries for every meal?
It's a very neat little book, and I think economics educators–especially home schoolers–will find it extremely useful.
A point of disagreement with your analysis of health care regulation: even people who do a good job of internalizing health costs and benefits may find themselves with serious medical issues that they cannot afford to treat – with or without insurance. Also, consumers do not know all the potential health risks involved in the choices they make — from the foods they eat to the kinds of activities they participate in. What if the salad is loaded with fattening and sugary dressing and the produce is contaminated with toxic pesticides or e-coli? And the french fries are baked organic sweet potato fries. Fries might actually be a better choice. Should consumers be expected to have complete information all the time? Not possible.
Did you receive any consideration for this recommendation? I note that you did not indicate otherwise.
Are you vouching for the economics in the book? The description of the book at the site where you can buy it indicates no formal training in economics for Herman; while a layman or autodidact could certainly write such a book, do you feel that it is free of errors?
@John: Thanks; I didn't (I was sent a review copy of the book). I'm not at all clear on the rules governing disclosure for compensation. I generally try to err on the side of caution and disclose, but I recently learned that I only have to disclose when I get valuable consideration in direct connection with a particular post.
@asg: it's for pretty small kids, so the economic analysis is pretty basic and straightforward.
Whether or not Ronald Reagan's mandate on hospitals not to let people die justifies the health insurance mandate in the ACA, that's not an externality. An example of an externality is when CO2 emissions inflict harm on others that is not reflected in the financial cost to the emitter.
Thanks for the prompt answer. I would note though that one need not only comply by the written rules. We can always go beyond what is required, specially when your behaviour is aboveboard in the first place.
Helps to prevent any negative thoughts from even forming in the minds of your audience.
@John Smith: thanks; that's one reason I usually try to go above and beyond with disclosure. In this case, it just didn't occur to me.
Also, I should note that the last couple of paragraphs in this post aren't from the book; they were among some suggestions I made for taking some of the ideas further if she wants to discuss externalities in either a later edition or in a followup for older kids.
Having not read the book, I don't know the full context of Greedy McMeany. It may just show that even if he is a greedy mean guy it produces better outcomes. But why imply profit makers are more greedy and mean than the average human? This is a remnant of Marx's characterization of Capitalists. It still lives strong in our national consciousness.
The point about the name Greedy McMeany is that he doesn't have to be a sympathetic figure in order for us to appreciate his existence. The naive analysis unfolds like a Hollywood screenplay with sympathetic good guys and unsympathetic bad guys.
The McMeany device lets children see past the black-and-white story and start to appreciate the dense, multilayered fabric that is human society, economic and otherwise.