by Amy Shuffelton
and Noah Sobe
Running a day camp for children and a seminar
for teachers at the same time, as we did in Slovakia in August 2001, meant
that we had two separate peep towns running simultaneously in the same
building. The towns were built and governed independently; each town
also had its own currency and its own corporations. Both towns were
part of the Republic of Peeps, though, and conditions were ripe for trade.
The trade that did arise brought up some challenging questions for economists
in the Republic of Peeps.
The children were able to build the town
of "PipsYork" outside on real grass in the courtyard. The teachers
built their town of "Pipsovce" inside a classroom on sheets of plywood,
as after-school Village programs typically do. The teachers, who
like the kids were all from Eastern Slovakia, arrived to begin their workshop
at the beginning of the second week of the three-week summer camp, which
meant that the kids had a head-start. By that point the PipsYork
economy was already thriving. PipsYorkers had a rich array of products
that they were already selling among themselves, including pillows, tents,
peep plates, tents, their town's newspaper and hedgehogs (pick your color).
Just a couple of days into the teacher workshop, at a point when the teachers
had little more than their checkbooks but a growing realization that they
wanted hedgehogs, etc. and had a limited time to make them themselves,
we organized a market-day. The residents of the two towns met to
exchange goods.
What happened was interesting, but first
a general note about Village economies. As is sometimes pointed out
by older kids, Village economies are not accurate simulations of real,
adult economies. (Incidentally, there's a growing underground movement
in the Republic of Peeps to call the non-peep world the 'muggle world'.
'Real' is problematic because it implies that Village's world of peeps
is not real, which runs counter to what we all know to be true.)
For one, each town has its own National Store from which all materials
that enter the peep town must be purchased or imported. We make this
requirement a national law because we think it's a crucial way to make
the peep economy function at all: no one can just bring in wood from home,
everything must be purchased in peep money. This makes earning a
salary for work at the peep bank or running a painting business pay off.
(Settlers and peeps start with some initial capital, loaned by the National
Bank to peeps who use the land they own as collateral.) Teachers,
who set the store’s prices, have complete control over the prices of raw
materials.
In Slovakia that August differences in
the economies of the two towns were complex. A short recap is that
each child started with 1000 PipsYork dollars, and each teacher with 1100
Pipsovce dollars, which seems similar until you add that for complicated
reasons wood at the National Store in Pipsovce was 250% more expensive
than at the Store in PipsYork. Furthermore, the children had the
initial advantage of having a more well-developed economy, in which there
were finished products to buy with the money they had. In essence,
then, at the outset a PipsYork dollar went much further than a Pipsovce
dollar.
We set up the market day because it would
be fun for all but also as an experiment. What would producers and
consumers decide to do? Keep in mind that opportunities for barter
were limited (because the teachers hadn’t made much of anything yet), but
that teachers wanted to buy things in PipsYork. There was also the
longer term to consider; because Pipsovce had the more skilled workers
and was clearly going to develop its economy soon, PipsYork’s great advantage
couldn’t last. (As someone pointed out, with its natural beauty --
tree, grass and sunshine -- but limited technological development, PipsYork
could be aptly compared to Slovakia!) Seeing this as an opportunity
to teach something about economics, especially exchange rates and international
trade, we first struggled ourselves to understand the situation and then
to determine what we could teach and how to do it.
There was an early call for the national
government to set an official exchange rate, but our instinct was that
the exchange rate should be settled upon by the peeps themselves according
to their needs. The price of bread equivalence was proposed first
until one of the kids pointed out that that bread was more expensive, in
terms of Slovak Korun, in Austria than it was in Slovakia (not to mention
that there were no bakeries in either peep village). More and more
Slovakia's economy is becoming integrated into the European Union, and
awareness of this by both the kids and the teachers added a special significance
to our discussions about wealth, currencies and imports & exports.
At the first market-day most of the kids
of PipsYork set their prices in PipsYork dollars since they couldn't see
what value Pipsovce dollars would be to them. The teachers had to
find someone who would sell them PipsYork dollars in exchange for Pipsovce
dollars. To initiate exchange, a peep named Synko Disco set up an
exchange booth with outrageously bad rates. He’d sell you 1 PipsYork
dollar for 10 Pipsovce dollars; or sell you 4 Pipsovce dollars for 1 PipsYork
dollar. This meant that on every exchange his profits were high,
but also that anyone willing to take a risk could open up a rival
exchange with better rates. (Synko Disco was a citizen of neither
town; a roving and shady figure pulling the wool over the eyes of the Republic’s
Finance Ministry, he had nothing to lose.) A kid from PipsYork might
do this if she thought that eventually there would be some value to her
in having the teachers' Pipsovce dollars. No one did this, but they
did negotiate better rates on a sale-by-sale basis. At the end of
the day, some kids had handfuls of Pipsovce dollars, which they took to
the Pipsovce branch of the bank, where they opened accounts. Later,
they were able to use this money to buy teacher-made goods.
That afternoon separate town meetings were
held to discuss the financial and trade situation. The Pipsovce teachers
first talked about the necessity of building up the domestic tent and hedgehog
industries to compete with PipsYork. We, as the ultimate organizers
of both programs, wanted to find some way to get more sophisticated than
a mercantilist economic perspective that viewed imports as lost wealth
or exports as the only route to it. Ultimately, Pipsovce decided
against going into direct competition with PipsYork products but did develop
a town economic strategy so they could even their balance of trade.
The PipsYork newspaper perhaps benefited most from the expanded market,
quickly adding a Pipsovce section and easily becoming the dominant media
presence in both towns.
Do we have to do two Villages at once so
there's this kind of trade? some of the teachers attending our seminar
asked us. No, we said, and we explained that economics, currencies
and trade had only happened to become a focus of these particular villages.
While every Village program gets children thinking in deeper ways about
community life and teaches discussion and communication skills that aid
civic participation, there are more specific lessons that vary from Village
to Village. In one town, intellectual property rights questions might
come up and the students could learn about civic participation and self-government
by working out a patent and copyright system. In another, some system
of representative government might consume their attention, with the children's
civic lessons coming through discussing checks-and-balances and experiencing
the effects of their design for delegating powers. As teachers we
capitalize on whatever events, conflicts and interests emerge in a particular
group. The economic experiments from the summer of 2001 are one more
example Village’s specific and varying lessons.
(December 2001) |