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In my opinion, what Ms. Moore means is that people's lives and personalities are totally shaped by the circumstances and surroundings in which they live.
We can see that in how the kids behave in this story. Because they are all relatively poor, their outlooks on life are very different than those of the people who can actually shop at FAO Schwartz. The kids only know poverty.
This is something that Ms. Moore is trying to fight against. She wants the kids to see that where they are should not be permanent and that they should fight what she sees as injustice.
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