Another Fable About Knowledge, Supply, and Demand

A long time ago there was an island Kingdom called Elltaes. There were many wonderful things about the Kingdom. It was beautiful and had many natural resources. The people, on the surface, were warm and welcoming. And the Kingdom had so many wonderful things about that many people wanted to move there from other more drab and boring places.

One person who wanted to move to the Kingdom was a big manufacturer of communicating devices called BigChips. BigChips made things that allowed people to share their ideas, pictures, and random thoughts. It was a huge business. The Manufacturer moved his factory and workers to the Kingdom. The workers were happy, and so, for a time, were the Elltaens, because the workers brought money and bought their goods.

But then the prices of food started to rise. There was not enough food. And everyone had to pay more for avocados, the most important food staple on the island. In fact the symbol of Elltaes was an avocado with a crown. And yet, the prices kept going up. The locals blamed the newcomers.

“They have so much money,” cried the natives. “And the Farmers are greedy and keep making more and more expensive avocados!”

The King didn’t know what to do. Should he talk to the Farmers and ask them what they think? After all they understood farming and how to grow the sweet, tasty avocados everyone loved so much.

“You’ve limited how many avocados we grow,” they told the King. “We run out of stock too quickly, and people keep offering more and more for the next batch we can produce.”

The King thought for a moment that perhaps he should allow the Farmers to grow more.

But an advisor he trusted said that was a bad idea.

“Think of it King,” said the wily advisor. “If you let them grow more fruit, they’ll make even more money. We should let them grow more only if they pay for the right to produce the extra avocados; those Farmers will pay their fair share!”

The advisor even said that the Farmers were to blame for drawing in the Manufacturer, since part of the character of the Kingdom was it’s wonderful avocado crop.

The King was perplexed. He called the advisor and said he wanted to hear from the Farmers. After all, what would happen if they had to pay to produce more? Would they? Would it make things better?”

The Farmers knew better. Paying for extra avocados wouldn’t lower their price. Sure there would be more, but the costs to make them would be higher. The Farmers would have to pass those costs on, so it wouldn’t make any difference. More food, but more costs meant higher prices still.

“Don’t ask them,” said the advisor. “Sure the Farmers know a lot, but they make money at this; they aren’t real people.”

He pointed to some people walking down the street.

“Let’s ask them what they think,” said the advisor. “After all, they eat food and they love avocados; and they don’t make money selling them.”

So a crowd gathered around the King.

“Keep the price low!” they shouted.

“It’s the Farmer’s fault; make them pay!” said another group.

“Make them sell some avocados for less!” yelled some others.

So the King made the Farmers produce more avocados, but charged them to grow the extra avocados. More and more people moved to the island. BigChips was doing really well. The workers paid more and more for the avocados, even though the price was going up. Even some of the Farmers gave up. But it was OK since with every crop they produced they set aside a few hundred avacados for people with less money. Those were gone in an instant, though.

For the poor locals, it wasn’t so good. Most of them gave up eating avocados and had to eat other things. Some were lucky enough now and then to win the lottery for the set aside avocados. But it was always a long shot. It was sad since the green fruit was so much a part of their identity. They hated the new workers and the King. And so the King demanded more avocados and charged the Farmers more. And there were more set aside avocados. And the people still paid more. This kept going and going and going.

And everyone lived unhappily ever after.

Sort of.

The Farmers kept growing avocados. And the high paid workers kept buying avacados. I guess the people who lived unhappily ever after were, well, the people who couldn’t pay for avocados, the ones the King set out to help.

And the moral of the story is…..well, I don’t think I have to tell you do I?

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