Crab economics, commonsensible.org
Crab economics, commonsensible.org

Crab Economics

A Commonsensible approach to economic history, theory and future...

 

Ok so imagine you’ve got a big fish tank. It’s empty except for a million tiny crabs. These crabs like to collect grains of sand; they're almost greedy about it. They also live off the sand, eating a grain every week. The sand is magnetic so it sticks to and attracts other grains of sand. In the beginning of the life of your tank, a pile of a billion grains of sand materialises in the middle of the crabs. They all race to the sand and grab as much as they can get. Some crabs have bigger claws than the others and they get more sand grains. They have no problem about this because they think it just means they are elites and deserve it. Because it’s magnetic, they also get additional sand when they have a few grains of it. Also, some of the crabs fight each other and steal the losers’ sand. Very soon, all the sand is gone and a handful of big clawed crabs are sitting on big piles of it. A lot of other crabs have only some or none. Some of the crabs are nice and they give away a few grains to the crabs with only some or none. However, some of the crabs are not nice and they bully the other crabs and take what they can. Eventually, most of the sand is with a handful of bully crabs and with even less, nice, but big clawed, crabs. The crabs like to have their shells cleaned by other crabs so they swap a few grains of sand, to the ones with only some or none, for a good shell cleaning. The crabs that don’t want to clean or who don’t know how, without any grains of sand to eat, die. At the end of this beginning stage, there is now only a handful of shiny crabs with most of the sand and a large amount of other crabs who get by, cleaning the rich crabs. They don’t get enough sand, generally, and so they are weak and ill.

 

After some time, the owner of the tank sees what is happening and puts in more sand. He throws another billion grains in. However, a lot of this instantly sticks to the big clawed crab’s piles, because of the magnetism. Because there is no such thing as “enough sand”, the big clawed crabs grab whatever else doesn’t stick to their piles. The other crabs, as before, got only some or none. However, some of the crabs get industrious and band together, taking on one of the bullies and winning. They divide its pile amongst themselves. However, as they really like sand, this cooperation doesn’t last and eventually one of the group of industrious crabs has a big pile of sand. The magnetism and hunger for sand just makes it all worse. This goes on for a bit until you’re left with a bunch of the original shiny big clawed crabs on huge piles of sand and a few new shiny crabs on moderate sized piles and a lot of crabs with only some or none. The majority of crabs who have only some or none get by, by cleaning, or they die. They are still weak, but now they are unhappy too.

 

There are still some nice crabs, but most of what they give away ends up with the bully crabs (because of the magnetism and greed) or is eaten by the poor crabs for survival. The nice crabs think it’s because the poor crabs are stupid or weak or both. The bully crabs think everyone is stupid and weak except for themselves. The very rare occasions that a poor crab becomes rich are seen as proof that the system is ok which is lauded by the rich crabs who like the status quo. The poor crabs just wish they had more than enough like the rich crabs.  All of them are weak, ill and unhappy. Most of them don’t want to steal or be slaves so they try a third approach. In a corner of the tank some of them band together again and this time steal a rich crabs pile and kill it too. At first, they distribute the sand equally to each other, but soon the crab that is doing the distributing forgets itself and hangs onto most of it. The rich crabs in the rest of the tank encourage it and do their best to mess up the new system in the corner of the tank. Very soon, it’s just as before, a few shiny big clawed crabs sitting on huge piles of sand.

 

(Continues after advert...)

 

 

The owner of the tank comes along again and sees what is happening. He decides to cast a magic spell this time that makes some of the sand disappear to a pile outside the tank. It’s a special spell which works by making any crab that has any sand, suddenly have less sand than before over a period of a month. He also adds a machine that drips the confiscated sand into the tank a few grains at a time and then he goes away again. However, because of the magnetism, this machine just makes matters worse and it generally makes the big piles bigger. Whatever doesn’t stick is taken. As the crabs are aware of the new disappearing sand situation, they are even more aggressive and hungry for sand. Because of the constant drip, the magnetism and the disappearing sand, most of the crabs with the big piles, keep their piles largely intact; they might not grow any bigger, but they don’t get much smaller. However, for the crabs with only some or none, the disappearing sand is a tragedy and they all start to die off. Wanting to have their shells still cleaned all the rich crabs agree that they should keep some of the cleaner crabs alive so they all lend a little of their sand to the poor crabs, the nice ones give more and the bullies give less. However, as before, it’s not really enough, so the cleaner crabs continue to get weaker and ill, in fact, now there are a lot of crabs that aren't really crabs at all; so transfigured are they. Also, because of the magnetism and the hunger for sand, a lot of the redistributed sand just ends up back with the big piles. Finally, because it’s a loan, the poor crabs have to give back some of their sand and end up with even less sand than before to meet the repayments and to live.

 

The owner of the tank comes back one last time and sees what is happening. Seeing also how his efforts haven’t worked, he gives new, large amounts of sand to the rich crabs, hoping more of it will trickle down to the poor crabs, especially through loans. Unfortunately, this again doesn’t really work, because of the magnetism and hunger for sand, and because of the disappearing sand and the repayments, eventually there are only the rich crabs left with a few poor sad cleaner crabs hanging on, paying back loans and cleaning the elite crabs. There’s no more nice crabs left either as, over the months, they have lost all their sand (and died or become cleaner crabs) or become not-nice crabs. The rich elite crabs just think that's the way of the tank and the cleaner crabs aren't able to do any better. It’s a pretty sad and unattractive scene. The owner of the tank gives up and is about to destroy the tank when he decides to give it to a new owner instead.

 

This owner is smart. He knows that he has to codify the idea of enough and end the greed. It takes some doing but he convinces the crabs to stop being greedy, most of this effort was done by the rich crabs themselves. He explained that if the crabs stopped competing with each other and decided an amount that was enough to eat and enough to keep for their collections then he would make sure every crab got this amount. Any crabs that didn’t change he either removed from the tank or bound their claws until they mended their ways. He also revokes the magic spell and removes the dripper and outlaws loans. He then takes all the sand back and replaces it with non-magnetic glass granules and gives every crab the same amount. They don’t mind, its similar to the sand. In the beginning he also gives a little extra to the poor crabs to make them healthy again and to instil a sense of justice and for them to catch up on cleaning their own dirty and (now) deformed shells.

 

After a bit of time, all the crabs have equal piles of glass granules, enough to eat and enough to keep and everyone is healthy, shiny, happy and, above all, nice; as now they could be. When a crab with small claws drops a granule, crabs with the big claws use these assets to help the small clawed crab. It’s a much better state of affairs, everyone is content and the tank is pleasing to look at now too. This all gets them to see the benefit of being nice as in the first system only a few were happy and in the new system, everyone is happy; it is self-evident the same way it is self-evident that it is a more pleasing tank to look at. Also, because everyone isn't stressing about sand, a group of them figure out how to cure the deformed shells. If any new crabs arrive, the new owner makes sure they get the same amount of glass as the rest and he makes sure they all have enough to eat and to keep as he's the only one with the big pile. Finally, he forbids the existence of cleaner crabs and institutes a rotation system of cleaning. He still takes payment but this goes to the owner who makes sure the balance is maintained and the glass is distributed as necessary; he still allows for some crabs to lose a little and some to gain a little, but the days of the big piles and zero piles are over. He teaches the crabs how to manage the system and leaves them to it. He shows them that previous owners couldn't manage the system, but that doesn't mean that all owners can't. He tells them, though, that it's better if they manage themselves. He also leaves the crabs with a message: “It is up to you to keep the equilibrium, to know when you have enough, to use your assets to help others to have the same, to be nice, to always do your best without eye on reward, to share the tasks and to all be happy, it has to come from you!”

 

Andrew

 

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