The Voice of Reason: Capitalism for Dummies (or Liberals)

When my youngest son was probably 10, I thought I would give him a lesson in capitalism.

I placed 25 pennies out on the table in front of us, and divided the pennies into five groups of five pennies each. I told my son that each group of five pennies represented a company owned by one person, with each company hiring dozens of workers that receive paychecks.

Next, I added three pennies to each group, telling my son that these additional pennies signified profit earned by those companies. Next, I took one penny away from each group, saying that this represented the taxes paid by each company on that profit. With the profit that was left, 10 pennies in total, I divided them into two additional groups of five pennies each, telling my son that this signified that the owner used the profit to created two more businesses that hired people.

I then added three additional pennies to each of the seven groups of pennies, signifying profit earned, and then took one penny away as their taxes. With the additional 14 pennies of profit left, I created two more groups of five pennies each, and put aside the other four pennies to form yet another company, once we were able to earn enough profit to form another company of five pennies.



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