Basic Economics According to Richard Scarry

by Joel Chesser
by Joel Chesser

One of my favorite books when I was a child was Richard Scarry’s What Do People Do All Day. It is a collection of short stories about everyday life and about how some things are made. I read about the pig family’s antics when going by train to visit their cousins far away. I saw Huckle the cat and his parent’s airplane trip in a more civilized time when the airlines served real food. Being of a mechanical bent, what I enjoyed most in the stories were the cut away views of machinery, and things. In it there is a cutaway view of an ocean liner showing its boilers and engines. There is a story on building a house and the mechanicals that go into a house. The plumbing, ducting, wiring, phone lines in the house and the water, sewer, and electrical service connections to the world that a house requires were all shown. In short it was the perfect book for a boy who was interested in how things work.

Now that I have children of my own, four boys, I have brought the book back out and read it to them to their delight.

The first story in the book is entitled "Everyone is a worker." What struck me upon rereading the book now is how well the story captures basic economic principles. The story follows farmer Alfalfa, a goat, in earning and spending his money. It then follows where his money goes after he has spent it.

Farmer Alfalfa raises food on his farm which he sells

"to Grocer Cat in exchange for money. Grocer cat will sell the food to other people in Busytown."

After selling to grocer cat he goes to Stitches, a rabbit and tailor, to purchase a new suit. We have here learned about the use of money as means of facilitating exchange. Alfalfa does not have to go to Stitches with a box of vegetables and barter for his suit. Rather he uses a money. We also see the division of labor. Farmer Alfalfa doesn’t have to run a store to sell his vegetables. Neither does he have to be a tailor.

Reading on:

"Then Alfalfa went to Blacksmith Fox’s shop. He had saved enough money to buy a new tractor. The new tractor will make his farm work easier. With it he will be able to grow more food than he could grow before."

We now have learned about saving, capital formation, and reinvestment into a business. Farmer Alfalfa had to save his money to buy his new tractor. The tractor in turn will make his business more efficient. Without those savings farmer Alfalfa would still have to be using his old worn out tractor.

Now the story asks " What did the other workers do with the money they earned?" Stiches the tailor bought his family an egg beater so they could make fudge. Grocer Cat bought a dress for his wife. Blacksmith Fox bought his wife a new hat. Here we see the multiplicity of desires that individuals have. They all had their own unique desires which they satisfied in the market place. They all exchanged their labor and the goods they created for something of value which they could in turn exchange for something they wanted.

In addition to the consumer spending we learn about operating a business:

"Blacksmith Fox bought more iron for his shop. He will heat and bend the metal to make more tractors and tools."

A business has operating costs. In order for Blacksmith Fox to stay in business he has to continually purchase raw materials. Through his labor he will convert the raw materials into products that are desired by customers.

From a simple story in a children’s book we can get a very concise summary of basic economic principles.

Read the book – both you and any children you know will enjoy it. Although I have reviewed in detail only one story in the book, I can recommend the others as being equally enjoyable.

March 28, 2006

Joel Chesser [send him mail] is a mechanical engineer working for a large government contractor. More importantly he is married and the father of four boys.

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