Tuesday, February 2, 2010

Economic Theory Part 1:

I am going to begin a series of illustrations to show how I think an organic laise faire economy can work and what happens when government gets involved by shrinking down the economy to the size of a manageable population.  The population and complexity will continue to increase as the series progresses.

Economy Year 1:



Suppose there is a population of 5 people total. All 5 people are farmers that produce enough food for themselves. The year comes and goes, all things are equal.


Economy Year 2:


Suppose the population doubles to 10 people living on 5 plots of equal land, 2 people per parcel. Each farm, now needs to produce twice as much food, but with 2 people, they are able to split the work, produce enough for both, but each person able to work less than the 1 had to. One farm chooses to work extra and plant a plot of extra carrots. The year comes and goes, one farmer now has a surplus of carrots.



Economy year 3:


Suppose the population increases by 50%. Now each farm has 3 people each. Each farm must produce enough to feed themselves, but with the effort of three, they are able to work a little less. The farmer with surplus carrots offers to sell each of the 4 other farms it’s surplus carrots in exchange for a portion of their crops. The other farmers now do not need to grow carrots and simply increase their yield of the agreed to exchange crop. The farm with the surplus carrots applies the same effort again this year towards their crops. Instead of producing carrots, they equalize production on each crop. The third person is in charge of hunting food instead of planting. He is a successful hunter. Because of the addition of regular meat, their need for crops decreases, resulting in a surplus. The year comes and goes. Now one farm has a surplus of all crops.

2 comments:

Troy said...
This comment has been removed by the author.
Troy said...

I feel like I'm watching my son play AOE or Farm Tycoon. If the Farmers don't rest their crops the 7th year then they are pagans.