G'day, Jimmy!

So you want to learn some Economics? That's great to hear because barely anyone knows anything about economics these days. And that's great for the powerful.

Tired of being manipulated, Jimmy? Wanna learn something about how things work? Then sit down and get comfy!

---

Quite a strong postulation, isn't it, Jimmy?

But it damn make sense: when was the last time Mother Nature gave you candy? When was the last time that it picked a fruit from the tree and gave it to you? When was the last time that it built a tower and give you internet?

Nothing in this world is a gift of nature, Jimmy (besides your OWN ugly unprepared scrawny body, of course); if you are eating an apple right now, someone had to take tons of trees out of the ground, clean the land, farm and collect the apples 6 months later. Even if the apple is not "farmed", someone still had to leave the tribe, find an apple and bring it to you.

But working is mean and stressful. I want to sit down in my apartment, smoke pot and complain on Reddit all day!

I wish things were like this, Jimmy; but they aren't. If you want to live like that, you either get a slave or convince someone to produce for you (generally your parents). But take a note: it's logically impossible for everyone to live like this. If mom and dad want to survive and keep you fed, they'll need at some point to consume their own production.

So what is Production?

If everyone is born poor, production is the generation of goods that suspend this poverty for a while. What? You'll grow hungry again and the machines will demand maintenance.

So, how do we Produce and suspend poverty, after all?

---

Okay, Jimmy; your stomach hurts. You're REALLY hungry. You want to eat a chicken.

There are 3 Ways to get it:

a) Go there and generate one, dumbass!

This is the most basic form of production: applying Capital and producing.

What is Capital? Capital is when you, Jimmy, don't simply loath around and consume: you actually SPEND YOUR FREE TIME time to go clean the land to make a Chicken Farm and DON'T CONSUME the food that you have - you actually use it to feed your animals

So what we get from this? Capital is abstention of consumption. If you want to start a business, you'll need to do not spend a lot of money and time on yourself and actually dedicate them towards the business. Think about every sort of activity, Jimmy: it's true for ALL of them.

But you face a problem. When your chicken is almost perfect to be eaten, Doug steals your chicken!

b) Theft / Expropriation

So you spent months of your life preparing that Chicken and Doug just steals it!

Just f*** it, Jimmy! Why you even bother producing if someone else is just gonna claim it? Let's steal things!

Oops... Everyone started stealing things. Now no one wants to produce, no one can accumulate enough Capital (in this scenario, rations for animals) to feed their animals until they grow,and now everyone's starving!

Don't worry, Jimmy: you're not alone. Some of the most fertile land in the world face starvation because the people there just can't produce without getting interrupted. Generally, not even by thieves; but by politicians! Crazy world, isn't it, Jimmy?

Damn you, capitalistic pig! You're trying to convince me about property rights, aren't you? S H A R E the W E A L T H!

Wait, Jimmy!

Even if you want to share the wealth, you must first enable wealth to exist! The nature won't give you your free goods! Someone has to produce it and you must seize from them just enough for you to keep living and for them to keep producing!

The proof of this is the LAFFER CURVE: shorter tax rates (less Doug stealing food) in the short term enable more revenue (more chickens to steal) in the long term!

c) But I'm screwed, man! Doug got my chicken! I lost all my capital! How am I gonna feed my family? - Trade

Good old Trade comes to help!

Let's suppose Jennifer comes to the tribe bringing a chicken. You won't steal from her, so you decide to trade. You give her something that she wants in exchange for something that you want (the chicken). How do you know that you both want what you are trading? Simple: why would you trade it if you did not think that the deal was the best that you could get when you traded? If I trade a banana for an apple, it's obviously because FOR ME, the apple has more value than the banana and for the other part, the banana is better than the apple.Of course, uncertainty is a part of the economics. I might discover that I've suddenly become allergic to apples later on!

A complementary analysis for why people trade is the Ricardian Method: Portugal is a good land for wine and Britain is a good land for sheep. Why would you produce wine in Britain if the you could dedicate the whole land for sheep and produce maximum amounts of sheep; and then trade the sheep for Portugal, which will be producing max amounts of Wine? 


Which arrangement (producing either sheep and wine in both Portugal and Britain, or producing only what these countries can make the best) gives you more sheep and more wine at the end? Even little Scotland that can't produce anything well at all is better off because Scotland can produce something (albeit badly) so at least Britain won't have to waste perfectly good land and what it does not produce the best.


Okay, but what if I have absolutely nothing to give but my time and strength?

Karl Marx explains: you sell your labour force.

Jennifer heard that a nearby tribe is desperate for chickens and will give absurd amounts of resources in exchange for them. But Jennifer is just one and she can't raise that many chickens. So she takes a risk: she pays you to help her!

You see, the chickens might not sell and Jennifer will still have to pay you! But if the chicken sell, YOUR revenue won't be nearly as big as Jennifer's! If it was as big as Jennifer's, why would she hire you if her profit would be 0? Jennifer, the employer, is risking goods in the beginning in the HOPE that they will pay off more in the future than she's spending now. You see: you working did not produce Jennifer's profits because the chickens can still not sell; yet the opposite is true: Jennifer expecting the chickens to sell has made her hire you. Expectation of profit generates jobs, not the opposite.

Now that you've worked and you've SAVED capital all over again, you can try starting your chicken farm. Let's hope Doug won't steal anything!

Wait, you don't think this is working? You think it'd be better if all capital just belonged to Doug? You think Doug will get everything for himself and then distribute it to you? Well, Jimmy... It's time we talk INTERVENTIONISM.

---

Mmm... Communism...
I'd like to read more...

*Bursts through the door* "Death is a preferable alternative to Communism!"

Well, shit.

Considering this is on a writing site I expected it to explain money systems probably in a fantasy setting. Although this does it as a general overview of economics. (and a good one) I'm not sure it's useful. Abstractness away from the relevant/expected topic. 

p.s. I also would like to read the continuation anyway. 

So I'm gonna add some of my own. 

Jimmy is a guy that needs money. everyone needs money right? So he thinks about how he can make said money. He has woodworking skills. Others don't, which means he has a profitable skill. He can do something others can't and can be paid to do it for them. This is specialization. 

Jimmy starts making wooden mallets. There are plenty of people needing to mallet things who want one and cannot make their own so they will buy it. This is demand. The willingness of people to buy a thing. Alot of demand would mean people want to buy a lot of mallets, whether that means one man is going to own a mallet collection. Or a thousand separate people want one each. A small amount of demand would mean a few people want to buy a mallet. (why a mallet. cos I like typing the word)

So Jimmy spends some money to get some wood. This is an investment. He plans to turn the wood into a mallet which is worth more than the wood. This is a value increase. And if Jimmy sells the mallet he will make a profit equal to the amount of gets paid for the mallet minus the investment which is the wood. 

He makes the mallet it takes him an hour. He then spends the next 3 hours on the village square seeing if anyone wants to buy his mallet. Someone does, yay for Jimmy. He gets 10 dollars. Because why use a currency you would have to translate here. The wood costs him 1 dollar. So he pockets 9 dollars of profit. This little escapade took him 4 hours from making it to selling it. So Jimmy is being paid $2.25 per hour. 

$2.25 an hour is not enough for Jimmy. His next-door neighbor is making $50 an hour at the whorehouse. So Jimmy would have to work 22.2 hours of work to screw the neighbor. Either She is expensive or Jimmy isn't being paid well enough. 

Jimmy thinks about how he could increase the efficiency of his mallet business. He could lower the quality of his mallet. Maybe not sand it to such a nice finish. Then he could make more mallets in less time. Aka make more money. However, if he lowers the quality of the mallets someone may not buy it for $10 anymore. Maybe they take their mallet buying somewhere else. Where they think they are getting their money's worth. That is competition. 

Jimmy is in quite a bind. However, he has a great idea. He spends most of his time trying to sell the mallet on the streets. 3 of the 4 hours is spent on the sale aspect. So he finds a man who is good at sales. A shopkeeper. Now the problem here is the shopkeeper doesn't want a mallet. He has a mallet at home. (are you tired of the word mallet yet) However, the shopkeeper is just like him. He needs money to screw his neighbor so he is trying to make more money too. Jimmy makes a deal. He will sell the mallet for a little cheaper than its worth to the shopkeeper. $6 Which is quite a bit less. And the shopkeeper will then sell it to someone else for what it is worth $10. Now the shopkeeper gets to make a profit too. He bought a mallet for 6 and sold it for 10 making $4 in profit. Selling things is his job and specialty after all it doesn't take much effort for him. 

Now Jimmer here is feeling like he got screwed out of the $4 the shopkeeper made in profit. But after making a mallet he just instantly sells it to the shopkeeper and goes back to mallet making. Now he spends not 1 of every 4 hours mallet making. He spends the whole 4 hours making mallets. So in 4 hours before he was making 2.25 an hour now he is making 4 mallets in the same time at a cheaper price. 6x4=24 in 4 hours. divide by 4 and you get $6 dollars an hour. So even though he is being paid less per mallet he is now making more money per hour because the business is more efficient. No need to stop to sell the mallet.

Now you might be asking how close is jimmy to screwing the neighbor now. Well 8.3 hours or so. He can now screw the neighbor so much more often. 

However, he is still not satisfied. He wants more money. He wants to make it rain so to speak. (I'm having fun with this if you couldn't tell)

Now there are several things he could do. He could make more expensive mallets. Made of better material. Have carvings and other cool shit. But no one would buy an expensive mallet so there is no demand hence no profit in expensive mallets. How about making more mallets. But he is already working as fast as he can. Maybe he will become a master mallet maker and will be able to make mallets very quickly one day. But the improvement would only be 20 maybe 30 percent. He wanted to make it rain so a couple dollars more an hour wouldn't cut it. 

He walks around the village and sees the blacksmith and apprentice working the forge. He has another great idea. $6 an hour ain't bad in this village. You can visit the brothel once every couple of days. Some people can't make that much money. They were like him making 2.25 an hour. So he finds a man making mallets. This is Jimmys arch-nemesis. If he went away then Jimmy's mallets would sell for more because there would be less supply of mallets. So people who needed a mallet would pay more to get one. Because if they didn't buy from him they couldn't have one. This is supply and demand. If everyone was making mallets no one would buy them and they would be worth nothing. 

Anyway. Jimmy tells his arch-nemesis that he will buy all of their mallets at $5. That is half what Mr nemesis is selling them for, but Jimmy explains that if he sells them to him he wouldn't have to go around trying to sell his mallets. So he could spend more time making them and end up making more money. Mr nemesis is wary but agrees to try it out. Now Jimmy is a distributor for his Arch-nemesis. 

Jimmy buys the mallets at $5 sells them to the shopkeeper at $6 making $1 profit every hour from his previous arch-nemesis. It pains him that his arch nemesis is now making more money, but since he also gets more money he can't complain. Jimmy is now making $7 an hour. Not much of an improvement. But now it only takes him 7 hours to get enough money to screw the neighbor. Nice :)

Still not satisfied Jimmy still thinks hard on how to make it rain money. He finds a street kid begging in the village. He hands him $1 because now Jimmy makes that by simply walking to his Arch-nemesis's place then to the shopkeeper's place. So it has far less value to him. He looks into the beggar's bowl and sees $1.20 and because he has been thinking about making more money so much lately he figures out the beggar makes so little money each day. He would never get to visit the neighbor. Jimmy feels sorry for the beggar. 

Maybe the beggar should make mallets like him. Then a great idea hit Jimmy. The beggar would love to be able to make a living but didn't know how. If Jimmy taught him then the beggar would be able to make Jimmy mallets like his Arch-nemesis and Jimmy could make more money. 

He gets to work. The beggar agrees readily and Jimmy spends some time teaching instead of making mallets himself. This is another investment. Spending time in which he could be making mallets means he won't be making money on the mallets he didn't make. This is an opportunity cost. In the same way as having $10 in a locked box you can't get to is an opportunity cost. You could be spending that money on growing the business to make more money. 

Then BAM. The beggar quickly learns to make mallets and sells them to Jimmy for $3 and Jimmy is making bank (6 the sell price, 3 the buy price, 6-3=3 for every hammer the beggar makes). Jimmy makes 6 an hour himself. 1 from Mr nemesis and 3 from the beggar. Jimmy is making $10 an hour. Which means he can screw the neighbor every 5 hours of work. He can now go every day if he wanted to. 

However, all things come to an end. The beggar with his newfound extra money from working goes to the shopkeeper to buy sweets. Then sees his own hammer for $10 he asks the shopkeeper and figures out he could be making much more money. $3 an hour means he visits the neighbor only once every 16.6 hours of work. While his boss Jimmy makes $6 an hour himself and $3 an hour from his work. Greed clouds his eyes and he forgets that Jimmy pulled him from absolute poverty and that he is still making more money now than Jimmy did for most of his life until he figured out the shopkeeper trick. He decides to sell to the shopkeeper directly. 

Jimmy felt betrayed. He didn't expect the beggar to do that. Now Jimmy isn't making bank anymore and can't visit the neighbor every day. Worse yet the beggar teaches one of his friends how to make mallets. Now there were 4 people in the little village making mallets at maximum speed. The shopkeeper notices that he is getting more mallets than he is selling. There was a pile of them in the back of his shop. This is an opportunity cost of space because he could have other things in that space that sell better. 

The supply is too high for the demand so he can only try to make the product more demanded. The shopkeeper lowers the price of mallets. There may not be many people in the village who are willing to buy a mallet at $10 especially with some of the poorer quality ones that have come from the beggar duo. But there are still quite a few people willing to buy mallets when they are $8. It is cheap after all. 

However, this affects Jimmy too. The shopkeeper isn't willing to lower his profit margin of $4 per mallet. So he needs to buy them for cheaper. He tells Jimmy and the beggar duo that he is buying the mallets at 4$ each now. 

This is terrible. That is still more than jimmy was making selling the mallets himself. But now he is only making $4 an hour. AND he had to stop buying his Arch-nemesis's mallets at $5 because he would be making a loss of $1 on every mallet if he bought them for 5 and sold them for 4. 

Jimmy is now making less than when he was selling directly to the shopkeeper by himself. 12 long hours of work before screwing the neighbor. haaah he sighed. He didn't give up. He kept thinking about how to make more money. Then he wondered how the fuck the neighbor gets $50 an hour to do what he would want to do. When he has to work his ass off making money.

Then he realized. He was willingly paying for it. He was the demand. It was worth so much because he was willing to pay that much. Angry at the unfairness of the world he stopped visiting the neighbor. He put his head down and made mallets while he thought of ways to make money. He saw other married couples in his trip to and fro the shopkeeper. He then figured out that if he didn't spend all his money on the neighbor he could have set up a proper woodworking shop by now. Started real apprentices and a wife would find Jimmy. A strong stable income of a proper shop always brought wives he thought. Now he was angry again. He thought he was fucking but he was being fucked. 

Jimmy vowed to make money fuck bitches. 

Jimmy slowly started to make savings. Soon enough Jimmy was ready. He had a plan. If there wasn't enough demand in this small village he would move to a bigger place. More people equals there are more people who will want a mallet. 

However, he had a choice to make. There were 3 cities he could move to with his budget. 1 Cerallis, 2 Bergandal and 3 Moredoor. 1 had the biggest population, but it was full of rich people. 2 was the smallest but closest and had cheap housing. 3 was a relatively new city that was still expanding and had a decent population. Jimmy thought long and hard about this. 2 was close and wouldn't take much of his money to move there, but it was the smallest. 1 had many rich people, but the housing prices were large and rich people didn't use mallets. 

Jimmy decided to go to 3 Moredoor. It had the population and since it was still expanding there was plenty of builders who might need a good mallet. This was his target demographic. aka the people he wanted to sell to.

He left the village and soon arrived and set up shop in Moredoor. (lol) "Jimmy's mallets" He found a shopkeeper and asked the price to sell his mallets. $7 more than the village but less than he thought. Then he remembered His arch-nemesis. He was only being paid $5 while he was being paid $6 for the same work. Jimmy told the shopkeeper to go fuck himself and found another shopkeeper across the street. This city had more than one shopkeeper. 3 hours and 7 or 8 shopkeepers told to go fuck themselves later Jimmy found one he liked. This shopkeeper would buy them for $9. That was more than the village originally paid. 

The shopkeeper explained that he was such a big shop that sold so many things, he didn't need to get as much profit from each item to make a good living. Jimmy didn't give a shit and just enjoyed the extra money. Get money fuck bitches after all. 

(anyways I just had fun writing this I will prob edit it at some point and post it as a short story lol. maybe continue it a bit from here. )

Who the hell is Jimmy?!

Anyway, a good place to research the world economy both in real-world and/or fantasy settings for your book is this guy: Economics Explained