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Economics for Kids: Where does Economics come from? - Compass Classroom Blog

Economics for Kids: What Is Economics?

Abraham rose and bowed to the Hittites, the people of the land. And he said to them, “If you are willing that I should bury my dead out of my sight, hear me and entreat for me Ephron the son of Zohar, that he may give me the cave of Machpelah, which he owns; it is at the end of his field. For the full price let him give it to me in your presence as property for a burying place.” (Genesis 23:7-9, ESV)

We ended our last economics post by saying economics is man making choices as to how to best to use his limited resources in order to be a good steward before GodBut what exactly is economics? It's not like you can reach out and touch it. That's because economics describes the ways people consistently act in certain situations. I realize that sounds a bit abstract, but in practice, it is very concrete. For instance, when someone wants to buy something from someone, they have to give them something that person wants in return (normally money). This is a trade.

People have been trading with each other for as long as people have been around. This means the act of trading (and all that goes with it), is part of man's basic nature. It's the way he was created to act. In other words, God embedded certain characteristics in man that cause him to act in almost exactly the same way in certain circumstances.

These actions are so consistent that they can be called principles or laws. These principles rise out of man's unique nature from being made in the image of God. After all, we don't study the economics of dogs or cats or hamsters. Dogs don't trade; cats don't sell; hamsters don't negotiate. But people do.

Economics is therefore a uniquely human endeavor. If humans did not exist, there would be no economics. So although we said that economics had certain laws, those laws are a bit different than the laws of physics (such as the law of gravity). By using the word law, we just mean that something consistently happens in certain circumstances; it's as if God passed a law saying that it had to happen that way. In a sense, He did.

If you recall what God told Adam and Eve and all their children to do with the world, then you realize economic principles were assumed. His commands hinged on there being economic principles like trade and work and cooperation with which to populate the world with homes and towns and cities. God laid the foundation of economics as soon as he created man. It was one of man's key tools to being a good steward.

This means that we had better understand economics if we are to be good stewards. God has given you and all of your children unique gifts and resources that no one else in the world has in exactly the same way. He has put you in a certain society and certain time period. Paul tell us "He made from one man every nation of mankind to live on all the face of the earth, having determined allotted periods and the boundaries of their dwelling place." (Acts 17:26, ESV) This includes you.

Why did He do this? He did it so that you would use your gifts and your resources to build up His kingdom. This is something you need to explain to your kids: their daily work in whatever they are doing is an important part of building God's kingdom. Doing kingdom work isn't just about praying and worshipping and evangelizing; it's about fulfilling what God told Adam and Eve. When this happens in a society, then the end result is a prosperous, wealthy nation that blesses all those around it.

Take, for example, Great Britain in the 19th-century. Although it was far from a perfect society, many people in it were Christians who sought to submit their work to God and His will. They worked hard at their jobs, thereby creating countless  products and services that were used around the world to build up cities, plant crops, and travel great distances (at the time, England was one of the greatest exporter of iron goods around the world).

Not only that, but the British people formed missionary societies and took of their surplus to fund missions all over the world. They sent missionaries to China, India, Africa, South America and other remote places around the globe. All those missionaries were paid out of the pockets of average men and women just like you. Those missionaries went to countries and set up schools, hospitals, businesses, and churches - all of which are expressions of economic action, and all of which made a major impact on those less-developed cultures.

Today, there are now far more Christians outside of England than there have ever been in England at any time in history. God used the faithfulness of the British and their shrewd understanding of economics to build new civilizations across the entire world. It is true that not everything the British did was good and right - but that is the story of every people. The truth, however, is that the British did far more things right than they did wrong. There is a very good reason that English is the language of the world - and it has everything to do with the hard work and consistency of the British people.

We therefore see that economics comes from the way that man has been made. If you study those principles, then you can better understand the way that people work together economically. God has intended for us to do this in order to use economics to help build His kingdom around the world.

There is, of course, a big problem confronting us, and we hinted at it when we said the British were not perfect. Right after God created Adam and Eve, they fell into sin and God cursed the ground.

What does sin and the fall mean for economics? That will be the topic of our next post.

(If you'd like to learn alongside your kids, you can watch or download FREE our first lesson of Economics for Everybody online now.)

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