Sunday, May 25, 2008

Village Economics

Part I: The definition of The Village

To better explore the fundamentals of economics and politics, I want to ground my discussion in a example that is, while not perfectly realistic, at least physically plausible.

Let us consider a village. The village consists of 100 families. A family consists of some number of fully productive adults, plus non-productive or semi-productive children and elders. I will assume that the production and consumption of any family is linearly proportional to its size, and that each family has internally consistent interests, desires and political opinions. Thus I will cast all discussion in terms of an irreducible average family, i.e. the term "family" will, unless explicitly excepted, will refer to this average family.

I will initially assume that — trivial exceptions aside — each family is economically self-sufficient, there is no trade between families, and families cannot accumulate wealth, and that families and individuals coexist peacefully.

Economically, each family exercises 10 units of physical labor per day; I'll refer to these units as labor hours or just hours. Each labor hour produces one unit of "life support", which includes producing, processing and preparing food, manufacturing clothing, constructing and maintaining shelter, establishing basic sanitation; in general providing for the necessities of life, without which the family will die. For simplicity I'll refer to units of life support as pounds of food.

Each family consumes (on average) ten pounds of food per day. If a family consumes (on average) fewer than nine pounds of food per day, it will starve and die. I'll discuss why they produce and consume more than nine pounds of food per day in a future essay. A family cannot initially accumulate non-trivial wealth: all production is assumed to be immediately consumed, either utilized or wasted.

The individual families and their members are initially presumed to be voluntarily peaceful and honest: as a general rule, they do not kill or physically harm each other, steal from each other, lie to each other or make insincere promises. I'll discuss in future essays how these basic norms can be initially established, and how various physical and social changes can effect economic and political activity.

To summarize:
  1. The village consists of 100 families
  2. One labor hour produces one pound of food
  3. Each family exercises 10 labor hours per day
  4. Each family consumes 10 pounds of food per day
  5. Families:
    1. are self-sufficient
    2. do not trade
    3. cannot accumulate wealth
    4. coexist peacefully


  1. Now I need to know - in the village, who is number one?
    You are number six, I take it?

  2. I am not a number! I am a free man!


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