, Newburyport, MA


August 24, 2013

A lesson in capitalism, one cup at a time


Her dad and I bought the lemonade mix. She borrowed a pitcher and plastic cups from Chip next door, and an umbrella for the table and chair that I let her use and the men set up. I lent her a cash box with change in it. When the enterprise was more successful than expected, her mother quickly made more lemonade while Maya kept selling.

The meals tax didn’t apply because her customers kept walking. No government so far has asked for income or property taxes. So, all she had to do was pay the help — her mom — and pay back the capitalists — Chip, her father and I — who provided the up-front money and infrastructure for the business. The rest was profit, earned by her entrepreneurship and hard work.

She gave her twin brother a few dollars for running errands. Had around $35 left because none of the adults demanded repayment or dividends on their investment. If we had, she’d have taken home only $20. She could have re-invested some of it to grow the business, hire employees, if she’d wanted to make a career of lemonade.

And that, children, is how capitalism works, when it actually works.

Aidan had no interest in running a business. He earned $5 cash from me for stomping all the cardboard boxes I’d been collecting for recycling; pure muscle enterprise, no risk, no overhead, no tax reporting. He got to keep it all.

Barbara Anderson of Marblehead is executive director of Citizens for Limited Taxation and a regular columnist.

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