You stick the two identical looking pooky bits in your lugholes (one in each) and you hold the flat piece against a motor, your back, chest or whatever you wish to hear thumping. The sound waves of your heart pumping, which are usually emitted out through your chest(and back) are captured in the area covered by the stethoscope and travel up the tubes to your ears. No electronics involved, at least not the last time I played with one while waiting for my kid's exam to finish.
Believe it or not, there are actually people who collect those things as a hobby. The history of the stethoscope is quite interesting. Go to
http://www.antiquemed.com/
when you have a few minutes to spare.