Friday, February 5, 2010

Economic Theory Part 4: Government

Economy Year 10:

Suppose the population of each farm grew by 1 person once more. One farm has now successfully baked bread. In exchange for a portion of bread, they buy a spot at the market. The pottery barn uses their freed up labor from farming to produce various pottery objects to sell at the market. Now, bread, produce, pots, and meat and dairy are sold at the market. The bakery farm splits. Half keep to farming while the other half sell their land to the hunters in exchange for meat for 2 years. They then spend all of their time working on pots. The surplus farm offers to allow members from the other farms to study under its elders in exchange for various products or labor. The surplus farm devices a system to keep track of the transactions that take place at the market. They open a booth to do the transactional accounting. He creates a coin to symbolize the value of goods that have been exchanged between farms. Since the farms are able to keep their goods at the market instead of transporting them back and forth, they use the coin system. A carrot is printed on the coin representing the first surplus crop.

Economy Year 11:

Suppose the population of each farm grew by 1 person once more. The first decade is over. There is now one farm that specialize in meat and dairy, one farm that produces pottery, one farm that produces bread, one farm that produces surplus crops, provides irrigation, teaching, a marketplace, and accounting, and 3 farms that work their own lands and provide labor to the other farms in exchange for goods. One of these farms suffers illness and famine. They are unable to produce the needed crops to fulfill their obligations to the other farms. Desperate, they raid the nearby farm, killing all of its inhabitants and taking their food and goods. News of the raid reaches the other farms. They all gather together and enter into a social contract whereby each farm will contribute a man for the common defense of the rest of the farms. They agree to elect a head of this unit, called a mayor. The newly elected mayor takes each of the men and raids the renegade farm. After a conflict that leaves 2 of the mayor’s men dead and all but 3 of the renegade farms men dead, the renegade’s are forced into a “jail”. They are forced to do labor to improve the common areas of the rest of the farms. Several members of the mayor’s men must continue in their service to guard the renegades during their confinement. Because these men cannot contribute to their former farms, they become a burden. However, since all farms did not need to have men permanently assigned to duty, it is agreed that volunteers from any farm can enter into a permanent police force. They will be paid wages for their service that they can use to purchase goods at the market. In addition to their wages, the police also need funds to provide for the feeding of the prisoners and the upkeep of the jail. Each farm agrees to pay to the mayor 1% of their earnings. This money is then used to fund these new endeavors. The mayor also quits his farm life and becomes the permanent administrator of the public funds and police force. The renegade farmland is divided evenly amongst the remaining farms. A portion of it is used to construct a permanent jail and housing for the police and mayor. While all of this happens, each farm continues to make progress, increasing their output. Each farm sends its newest member to the surplus farms “school”. The hunters develop new weapons that can be used to bring down animals from further distances. The surplus farm school researches a new method of transportation whereby a wheeled cart can be fixed to draft animals to carry goods. The year comes and goes. The first foundations of a government are created along with a treasury.

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