Capitalism starts early.
My daughter is 7 (almost 8) and about to start 2nd grade. Somewhat precocious, she has been consumed since she was 5 with building and managing a mall when she gets older. The mall’s focus will be to cater to the wants of children. In many ways, that is the target of most malls anyway. I will not provide the mall’s name but it is part of a brilliant marketing plan.
Her enthusiasm has infected her friends. Each child has been assigned jobs (even I have a position in the Karaoke section of the music store-not a bad job and a pretty good idea). She and the other kids are under the impression that the mall creates all of the stores. I have tried to explain that the mall owners lease out space to people with stores. In their view, this mall will create and own and stock every store. Thus, every unit sold goes into their pockets.
I love this idea for reasons that go beyond have a billionaire child someday (and do not think that this dream does not enter my fantasies every now and then). The greater value is that as she has grown older, some of the real-life business lessons that arise in this context are starting to sink in. Though she still does not accept the idea of a mall as just being space for independent vendors, she is beginning to understand that no matter how much she saves for it (every penny she makes from birthday gifts to tooth-fairy rewards); the property purchase and mall construction will need financing.
This morning she told me that all of her friends will get equal shares of the money they make. I explained that they should not get equal shares as she will be the one to have to pay back the bank should the mall fail. Since she is procuring the bank loan and servicing it (yes, she did get this concept!), she should get most of the profits. She understood that if the bank failed, her friends would not have to pay back the loan. She would. As she grasped the concept, she told me she would create a fund each month that she would have on hand in case things did not go well.
These rudimentary concepts about business and capitalism become part of our common discussions as she is so single-minded in this venture. She understands more about the mechanics of business than I understood after graduating college with my B.A. in journalism (and maybe even with my J.D.). While I may be dense, I do not doubt that many of these concepts are lost on millions of adults with voting privileges.
She and her friend set up a lemonade stand last week and they made $3. One mother suggested they send it to the Katrina victims. They both declined. They told her the money is for the mall. No social consciences? They will employ hundreds of people if this project works. Her plan is a major contribution to society. I’ll have her reading Hayek once we finish the Harry Potter series.