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24-Jul-2006
Mother Goose and Trading, by Victor Niederhoffer

Mother Goose is a collection of 160 nursery rhymes that children around the world have been enjoying and learning from for hundreds of years. While it is customary to refer to nursery rhymes as a key part of the culture of children, a cornerstone of their education in familial relations, arithmetic, spelling, rhythm, and much more, it is oft neglected that most of the nursery rhymes have an important economic kernel to them as well.

Wonder, beauty, rhythm, romance, caprice, joy, kindness, naughtiness, outrage, pomp, zaniness are all things that children can learn about from nursery rhymes. The rhymes teach many lessons a child needs to learn in order to have a successful life. They are also a first glimpse of stories and themes that form many of the great plots in literature. Some of these themes are well summarized on the web site Mother Goose: A Scholarly Exploration.

The rhymes are generally classified into three categories. The first is songs for the benefit of the parents, to calm their fears and intimidate children into behaving well. Examples of these are 'Rock a Bye Baby', and 'Bye Bye Bumpkin'. The second category are lessons, to teach the child about the world, such as 'Once I Caught a Fish Alive'. Riddles and counting games, like 'Humpty Dumpty Sat on a Wall' or 'As I Went To St Ives' form the last category. According to the categorization, about one third of the nursery rhymes deal with numbers and teach valuable lesson of counting, but, sadly, missing from the categorization is a recognition of the rhymes' lessons for the markets and economics. Indeed a reading of the rhymes from that context shows that almost half have direct economic and market lessons.

More than two thirds of the rhymes refer to wisdom and lessons from the farm, because the book was first written in the late 18th century and is based on family activities of two hundred years ago. Most people lived on farms, and crop yields had not increased enough for much of an export so most of the families lived on a subsistence basis. Their lives had not changed much from times of two thousand years ago, and it was a hard life, with little time left for recreation or frivolity of any kind.

The following is a brief exploration of the lessons that the nursery rhymes teach about economics, markets, and trading.

A good way to start, and illustrate the prominence these lessons, is with a reading of 'Come out to Play'.

Boys and girls come out to play,
The moon does shine as bright as day;
Come with a hoop, and come with a call,
Come with a good will or not at all.
Lose your supper, and lose your sleep,
Come to your playfellows in the street;
Up the ladder and down the wall.
A halfpenny loaf will serve us all.
But when the loaf is gone, what will you do?
Those who would eat must work — 'tis true.

I find that about 50% of the rhymes have economic lessons in them and these can be classified broadly into 30% the importance of hard work, 25% the importance of investment and saving, 20% moral hazard and adverse selection, 20% the value of property and 5% miscellaneous.

Hard Work -- Little Boy Blue, Cross Patch, Pat a Cake, A Swarm of Bees in May, The Clever Hen, Baa Baa Black Sheep, The Black Hen, The House that Jack Built ...

The Importance of Investment and Savings -- SeeSaw Majorie Daw, Here Goes My Lord, Three Wise Men of Gotham Went to Sea in a Bowl, If the bowl had been strong ...

The Value of Property -- For Want of a Nail, The Hunter of Reigate, The Merchants of London ...

Moral Hazards and Adverse Selection -- Georgie Porgie, Old Woman, There Was an Old Man who Kissed a Maid, Little Maid, Young Roger and Dolly ...

Miscellaneous -- Humpty Dumpty, Birds of a Feather ...

Some rhymes with economic and market lessons:

Little Boy Blue, come, blow your horn!
The sheep’s in the meadow, the cow’s in the corn.
Where’s the little boy that looks after the sheep?
Under the haystack, fast asleep!
Pat a cake, Pat a cake, baker's man
Bake me a cake as fast as you can ...
Cocks crow in the morn,
To tell us to rise.
And he who lies late,
Will never be wise.
See Saw Majorie Daw,
Johnny shall have a new Master.
He shall have but a penny a day,
Because he won't work any faster.