Have you ever heard the stories of Goldilocks and the
Three Bears, The Three Little Pigs and The Big Bad
Wolf, and Jack and the Beanstalk? Well, did you know
that they were based on economics? No? I'll tell you
the real stories...but I can't remember how fairy tales
begin. Can you help me?
Oh yeah – once upon a time, there was a little girl
named Goldilocks who had unlimited wants. She
wanted a big house, a fancy car, and to vacation in
Greece twice a year. She worked hard, and was
definitely a consumer. Today, her goal was to relax a
bit and spoil herself. Goldilocks decided to take her
hard-earned money and visit The Three Bear's Bed
and Breakfast for the night. There, she could fill her
economic wants without lifting a finger.
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The three bears – Papa, Momma, and Baby – are
producers. Not only do they run a bed and breakfast,
but Papa also creates products to sell at the inn –
chairs and beds and dishes made from the natural
resources that surround them, the trees from their
forest. Momma also makes baked goods and arts
and crafts to sell. It seems that the more people stay
at the bed and breakfast, the more people want to
visit and stay. The Bear's created a great demand for
their goods and services, and keeping supply up
was becoming more and more of a challenge.
Goldilocks arrived at the bed and breakfast – a
business she inspired after imposing upon The
Bear's year earlier (you've probably heard that story
before!) and was excited to return. She wanted to
see the successful business and its effects on the
local economy. The Bear's had built such a
successful business that other businesses were
started, and the small town was booming with
commerce.
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Goldilocks pulled up to the inn, and Baby Bear met
her at the door. “May I take your bags, Goldi?” he
asked. “Thank you!” she replied. They walked
through the hand-carved wooden doors and into
the lobby of the bed and breakfast. “You're all
checked in, Goldilocks.” said Momma Bear. "It was
this level of service that makes everyone want to
come back," Goldilocks thought to herself. “You'll be
staying in Suite 1,” said Momma.
She settled herself into her room. The bed and chair
were perfect – just right – as Papa Bear had made
bed after bed and chair after chair to find the perfect
level of comfort for his guests. That evening,
Goldilocks went down to dinner. Momma Bear
made her favorite dish, macaroni and cheese. It was
perfect – just right for Goldilocks.
The whole weekend was the best example of
hospitality. The Bear's understood how to run the
perfect business, all because a little blonde tornado
turned up unexpectedly, and broke everything, once
upon a time.
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Here's another story – this one's a bit different than
you might remember.
Jack and his mother lived on a farm on the edge of
town. They worked and worked hard for their
money, but their income was still a bit low. The hot
summer took its toll on the vegetables, and the
family had to raise the price of their produce to cover
their losses.
“Jack,” his mother said, “I need you to take these
beans into town. Trade them at the dairy for some
milk.” Jack agreed, took the bag of beans, and
headed to town. He daydreamed as he walked, and
as soon as he spotted the dairy, he ran into a
suspicious-looking fellow. Literally – Jack wasn't
watching where he was going and “SMACK!” right
into the old man!
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“Hey!” cried the man. “You ran into me! I'll make you
a deal – I'll forgive you if you take it. There's a good
amount of incentive to take it anyway, but how about
you give me those beans, and I'll give you (and he
pulls out three small items from his pocket) THESE
magic beans!)”
“Magic beans?” Jack thought to himself. “Gee, what I
could do with magic beans! Maybe if I throw them
outside of my window, a huge beanstalk will grow all
the way up in the clouds where the giants live and I
could climb it and...” Then Jack remembered that
the family needed milk, not magic beans. They had
limited resources these days and he had put in so
much work – his own human resources grew the
beans from seeds! So much work. So much effort.
“No, thank you sir – I am sorry I ran into you, but it
was an accident. I'll watch where I'm going from now
on.”
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The old man shrugged and said “It was worth a shot,”
then walked away. Jack refocused and thought
about his opportunity cost. “If I had taken the man's
deal, he thought, I wouldn't have the milk we need. It
would have been a loss to take a deal like that!”
Reaffirmed that he made the right choice, Jack, and
his beans, made their way to the dairy. The beans
and milk were an equal transaction, and Jack's trade
added to the circular flow of the economy – he took
money, bought the seed, planted the seeds, cared
for them, grew the beans, harvested them, traded
them, and now has milk to consume. And this time –
no giants!
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There is one last story to tell – have you heard about
the three little pigs? Well, they own a business now –
Three Pigs Construction – and they have been
working to expand the town with new houses and
buildings. They hired Wolf as an employee, a
one-wolf demolition crew. That huffing and puffing
comes in handy when old buildings need to come
down or land needs to be cleared! That was Wolf's
specialization: demolition. The Pigs were also
involved in specialized work: one was a master with
straw, another with sticks, and the third with bricks.
The first two pigs had to keep their specializations as
hobbies, however, because straw and sticks are not
up to building code.
Wolf and the Pigs grew an interdependence within
their business – Wolf demolished whatever needed
to be demolished, and the Pigs build shiny, new,
brick buildings in their place. The division of labor
helped too – each construction worker knew their
role within the business, so work was done efficiently.
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The Pigs added to the local capital resources by
building roads, bridges, and factories, which added
more goods and services to the town. The town had
more resources, and eventually, many of the town's
businesses were profitable. With the profits came
taxes, and though the Pigs didn't enjoy giving up
their hard-earned money to pay them, they
understood that the taxes help to pay for public
goods and services, and they enjoyed giving back to
the community that they, quite literally, built.
The Three Pigs Construction company had many
successes, no competition from other construction
companies, and the Pigs, Wolf, and the town lived
happily ever after.
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- The End -
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Teachers: feel free to use this story andthe conversation starters with yourstudents! Please comment and let meknow how you're using Fairy TaleEconomics in your classroom!
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