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The economics of trading candy

By
Dan Mitchell
Dan Mitchell
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By
Dan Mitchell
Dan Mitchell
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November 1, 2012, 3:26 PM ET
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FORTUNE — The 1st of November is known to many American children as “Candy Trading Day.” BuzzFeed has produced a helpful, educational (and slightly profane) video to help kids with trading strategies and the economic theories behind them.

http://www.youtube.com/watch?feature=player_embedded&v=wGdYhmFH-DQ#!

One strategy is to create “flavor affinities” (“Nut based/Crunch,” “Fillings/Softs,” and “Fruit/Sours”) and use them to gain marketplace advantage. “The Smarties Gambit” involves trading up from Fruits/Sours for a full-sized Snicker bar. It’s a highly risky maneuver, but these markets are not for the faint of heart.

MORE: Roku looks beyond the box

Another tip: “Avoid anyone who suggests dumping all the candy in a pile and rationing it out based on hunger — they are Marxists.” John Maynard Keynes, we learn, “suggested taking 40% of the candy from the children with the most, burying it in the ground, and then giving the candy-poor children jobs digging it up.”

For some reason, the video fails to mention Friedrich Hayek, who theorized in his great work, The Road to Black Licorice, that, rather than trick-or-treating, all neighborhood children should assemble before each house and place open-outcry bids for their treats.

Also unmentioned: Joseph Schumpeter’s idea to have kids strip all their candies down into their component parts and reassemble them using new ingredients, thereby creating entirely new, innovative kinds of treats. This, Schumpeter believed, would give those children a huge advantage over kids sitting there with nothing but Milk Duds.

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By Dan Mitchell
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