Studied the development of the inderstanding of elementary economic systems in 120 working class children of both sexes aged between 6 and 12. Methods employed included a procedure whereby children had to detect absurdities, a task in which the children played the role of shopkeeper, and semi-structured interviews. It was shown that the youngest children already had the basic idea of the wage-system, i.e. selling one's labour, but were confused about the monetary transactions in a shop and failed to appreciate that a shopkeeper has himself to pay for goods. When this began to be understood children thought that goods were bought and sold at the same price; hence they conceived of two parallel but unconnected systems, which led them to believe that the payment for shop assistants came from some external source. Grasp of the way the two systems intermesh was not reached until about 11, unless direct questioning triggered off earlier insight. Findings are discussed in the light of the modified Piagetian approach put forward by Furth et al. (1976).