Ted (merovingian) wrote,
Ted
merovingian

Stretching a Dollar with the Multiplier Effect

The tiny island of Gedanke is lush and temperate, with plenty of natural resources and wonderful brightly-colored birds. There are about 300 people living on the island.

The economy is unusual in that there's only a single dollar in the whole economy. The Gedanke dollar is not a piece of paper, but a block of elaborately carved obsidian, easy to recognize, impossible to lose and very difficult to forge. They use it as trade currency. You can only buy with that one dollar, so, at any given point in time, one person has a dollar and everyone else is broke.

Nobody on Gedanke barters, loans or saves money. People are sometimes charitable, but not especially so. Employment is uncommon - most people are sole proprietors or contractors. Imports and exports are basically impossible. Everybody gets the dollar eventually, basically, but some people get that dollar more often, if a lot of people want what they offer. When you get the dollar, everyone expects you to spend it immediately on something you want or need.

(One time, about ten years ago, a boatmaker sold a boat for a dollar, then demanded a huge amount for his dollar - demanding ten times what other people got for a dollar, and threatening to save his dollar until his demands weren't met. He got the price he demanded, but nobody gave him money ever again. He left, poor and hungry, a year later.)

I visited a friend there. He used to be a freelance paramedic ($1 per incident) but now he runs the local ISP (cost: $1 a year, no idea how he pays for the trunk line). He lives in a fancy modern apartment ($1/month). He took me to a fairly decent restaurant ($1/season), where I got tasty rhubarb pie. The waiter, who was also the owner's son, was a little rude to me but I had a nice time there anyway
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