Young children have a very limited understanding
of income. From birth children have wants. They innately understand that their wants
are greater than what is available in the world. And they understand that their wants
are satisfied by their parents. So a child’s view is very simple: Want=get. If they want
food, parents provide. If they want toys, parents whip out the credit card and a toy
is delivered. Of course, some children don’t get everything
they want so they already understand scarcity. But in all cases the equation is simply want
=get (or not get as the case may be). As adults our equation is a bit more complex.
Wants=work=get. For Nathan, the Last Mountain Man, his want for food and shelter was fulfilled
by his own labor. But in our more complex society we exchange our labor for money and
money for the goods and services that satisfy our wants. We participate in our economic
and financial systems. So this is our challenge – to help children
understand the simple idea that our wants can be fulfilled by our labor. Children are
often lacking the awareness that each of us is capable of creating something new – something
that did not exist before. Through this process we create value – value that can be stored
as money, saved, and exchanged for things we want in markets. There are many decisions
we make that affect the value of our labor. If our labor is highly valued then we can
earn higher income through which we can more easily satisfy our wants. The decisions children
make today may affect their human capital and may affect the value of their labor in
the future. The time for making smart decisions is never tomorrow.