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Economics for Kids: Let's Start at the Very Beginning - Compass Classroom Blog

Economics for Kids: Let's Start at the Very Beginning

The earth is the Lord's and the fullness thereof, the world and those who dwell therein, for he has founded it upon the seas and established it upon the rivers. (Psalm 24:1-2, ESV)

I think it took me two years to figure out how to understand economics. In hindsight, it wasn't because economics was so difficult. It was because I didn't know where to start.

At the time, when I looked at economics, I felt like I'd fallen into a big, multi-story maze. This may be how you feel when you look at economics. You know it's important, but what is it really about? You probably wonder how you can teach something to your children that you don't really understand yourself.

I have good news for you: you can understand economics, and you can teach it to your kids. You just have to know where to begin.

There is, unfortunately, a lot of bad thinking that passes itself off as "good economics." It's been happening for centuries. Smart men like Thomas Malthus, Karl Marx, John Maynard Keynes, Milton Friedman and many others have made the same essential mistake when they started thinking about economics.

But they did not start with God.

GOD'S OWNERSHIP

This may sound like a curious omission, but it ultimately leads to the undoing of all their thinking. Each of these men represent different economic systems that generally disagree with each other. But the one thing in which they all agree is that God has nothing to do with economics. This is a fatal flaw, since, after reading Psalm 24:1-2 above, you know that God's ownership of the world is the most important principle of economics. 

Put in more economic terms, the earth is God's private property. He created it; He can do what He wants with it. This is actually a pretty simple concept for kids to grasp. In fact, God formed each of us to innately understand the ownership of private property. What do little kids say when they can first learn to talk about their toys?  "Mine!"  The concept of ownership is embedded in our DNA.

After all, God made Adam in His image.

In other words, Adam was a rational, intelligent, personal being who could own and control things. Look at what God tells him right after he made him: "Fill the earth and subdue it, and have dominion...I have given you every plant yielding seed that is on the face of the earth..." In next chapter, Moses tell us God put Adam in the garden "to work it and keep it."

OUR OWNERSHIP

This brings us to the next principle of economics: God gave man the world to take care of it for him.

Again, in more economic terms, man is God's steward or manager. He is supposed to follow the rather broad instructions God gave him in the garden. God is still the ultimate owner, but man is a sub-owner, working for God. This, too, is pretty easy for kids to understand.

What was Adam supposed to do in this world? Once he was married to Eve, he was supposed to create a family, who would in turn make more families, who would in turn plant crops, raise animals, cut down trees, dig up iron, build houses, make cities, and worship God with music and art. Your children will get this - just ask them how many natural resources there are in the world, and how many different ways there are to use them. Just look around - there are limitless things that we have made from what God created.

MAKING CHOICES

And all those things around us were made as a result of choices.

Someone chose to take wood and make your dining room table instead of a bunk bed. The metal in your car could also have been used for aluminum foil. The paper of your Bible could  have been used to make a newspaper. The point is this: everyone everywhere is making choices every day as to what they are going to do with the limited resources that they own or control.

Economics is therefore all about making choices.

Which brings us to a simple definition of economics: economics is man making choices as to how to best to use his limited resources in order to be a good steward before God.  

Economics starts with God and ends with man. There is, however, a lot more to be said about man and economics. And kids can understand every bit of it.

(If you'd like to learn alongside your kids, you can watch our first lesson of Economics for Everybody online here - or download the first two lessons for free right now.)

Economics for Everybody is 40% off now!

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