I recall an episode of Disney’s Recess called “The Economics of Recess.” Basically the kids at Third Street Elementary School implement their own form of currency. Dragon cards can be purchased at convenient stores and must be used to buy from-- the owner of the good-- a drink at the drinking fountain or rent a red kick ball to use at recess. While the markets for these goods are not well regulated, they represent a primitive economic system. T.J. Detwiler, the show’s main character, returns to school from being out sick to find recess operating under this new economic system.
The wealthy kids initially dominate the markets because most others can’t afford to actually buy the Dragon cards and must find other ways of obtaining them. Through this system, the economy at Third Street Elementary has its own Circular Flow Diagram. The kids who control the markets for passing through the lunchroom door and playing on the jungle gym represent the firms; the kids who buy the use of these goods and services represent the households. King Bob controls the jungle gym. If you want to play on it, you must pay King Bob 5 Dragon cards. When the kids buy time on the jungle gym, the Dragon cards pass through the markets for goods and services. In addition, King Bob pays kids (or households) 3 Dragon cards to carry his thrown or fan him—labor to help him as he reigns the playground and works to continue running his business of jungle gym time allocation. That exchange passes through the markets for factors of production.
T.J. begins to understand that the best way to make the big bucks on recess is to sell his labor to anyone who will buy it. He guards the door for Hustler Kid and digs for Sam and Dave the Digging Twins. He slowly makes enough Dragon cards so that he can not only by goods, but he can now pay others kids to do the work for him. He makes enough revenue to buy labor from other kids and still make a profit after paying his variable costs. He becomes the richest kid on recess. Unfortunately, Dragon cards are soon replaced by Ninja stamps and he has to start from scratch.
Though simple, the episode got me thinking about how often I see economics in action during my daily life. I am not a numbers-and-graphs person so many of the concepts in this class are hard for me to grasp. But I think the fundamentals of economics are pretty simple, and can be seen even in the most uncomplicated of cartoon shows.
This is interesting. One thing that really caught my attention was the shift from cards to stamps. I wondered why the cards maintained any value when every kid was bringing more into the market each day. Some sort of inflation would have probably occurred. But the kids shifted to a new currency in stamps. That's sort of interesting. I feel like this relates to the method our government uses (adding more and more money to the system) to stabilize the economy. Maybe one day our country will shift to a new form of currency or we may face high inflation.
ReplyDeleteThese kinds of shifts of currency seem to happen frequently on a micro scale, that is, smaller groups of people establish rates of exchange with barter goods de facto when the larger economy's currency experiences a high level of infation. The video we watched showed that cigarettes became currency in post WWII Germany. There are many many other occurences of this. The interesting thing about shifts in exchange mediums that the show didn't factor into account, is that in the real world (think pokemon) every card doesn't have the same value because of rarity. Back in the day, I know this kind of thing happened with pokemon cards but the exchange rate was the level of rarity, but unlike the show's example the rarity of the card actually reflects in some way the value of cards in dollar amounts. In the show the value of the cards was determined by the amount of time allowed on the jungle gym. I think this difference between the model (the show) and reality (pokemon) highlights the fact that even children are engaged in very complex economic situations whether they realize it or not; anectodal evidence for our "economic brain"
ReplyDeleteTo Derek's last statement in his comment, if we experienced high infation then we would see a change in currency, wether de facto or de jure. The relationship seems conditional rather than disjunctive.