Nicole Qaqundah

Econ 12

Prof. Foldvary

February 23, 2005



The Journey to Econville


Long ago, a young traveler named Tim searched the world far and wide for a town where he could live peacefully. Growing up, he had lived in an awful town with high prices, poor sanitary conditions, and a corrupt government who controlled everything. Peter could not stand the thought of living in such a terrible place for his whole life, so at the age of eighteen, he set off on a journey to find a more promising place to live; a place with freedom, opportunity, and potential for him to grow as a human being.

During Peter’s childhood, he had been fascinated with boats, and his only dream was to one day become a fisherman. Unfortunately, this was a fate unattainable for Peter. He lived in a town with strict social roles and regulations. No private citizen was ever allowed to choose his or her own profession; the government chose for the people in order to ensure that the town would benefit most greatly. Each person, when they reached eighteen was assigned their specific social role according to abilities, not their preferences. The government did no allow any of the citizens to make choices regarding the economy, laws, or systems in which the town operated. The government was tyrannical.

In addition to the tyrannical government, only government related companies were allowed to operate in the town. The government had a complete monopoly over the production and distribution of goods. Also, they had a monopoly on who to hire and how to distribute wages. The supplies of goods were rationed to the citizens and so products were constantly in demand since people never seemed to have enough of what they needed. Since there was only one company that controlled the entire town’s goods, people had no choice but to buy and use those products regardless of their personal feelings towards the unfair economy. All the profits went to the company and left all the other citizens behind in the dust. The wealth in the society was consumed by the very few elite members who were fortunate enough to be born into families linked to the government. Since most people did not care too much for the rules of this town, it quickly became overrun with pollution, litter, and crime. No one cared about anything; they saw no hope for improvements in the future, so they gave up. The people in this town were not very happy, but did not know what to do. Unlike most, Peter was not going to live his life in such a manner; he left the town and went in search of a place to realize his dreams.

 Peter traveled far and wide in search of this town he had essentially dreamt up in his head. As Peter went from town to town, across the vast, rugged terrain of his country, he came across some interesting people and places. After traveling for two years, he finally reached the town which he found most suitable for his specific wants and needs. He had finally reached Econville.

Econville was a small, sunny town near the coast. Its main industry was fishing so it was clearly perfect for Peter. The town government operated as a democracy, a style of government quite foreign to Peter; he was baffled by this strange system.

All markets in this town were completely atomistic – perfectly competitive and have a complete absence of pricing power. This absolutely wonderful for Peter; this type of economy was as far away from the monopolistic as it could possibly be. Since firms could easily enter and exist industries, Peter decided to start his own fishing company. Fixed costs would be low and there were no legal barriers to go through. As he quickly got acquainted with the people of Econville, Peter began making many friends, and in no time, he had put together a group of men to work in his fishing company. Since there was essentially no real competition, all firms in the fishing industry could sell their product at the prevailing market price. This was absolutely magnificent; Peter became a fisherman as he had always dreamed and he worked happily without the pressure of a competitive market always forcing him to produce more for less in order to make a profit. In this situation, all fishermen were in the same boat (pun intended) and worked happily side-by-side.

After achieving his goal to become a fisherman, Peter decided to expand his horizons. One day, as Peter was walking down the street after a long day of fishing, peter decided to stop and get a large chocolate ice-cream, but to his dismay, he realized Econville did not have any ice-cream shops in the whole town. Peter was undoubtedly disappointed and then was determined to solve this problem.

During his travels in search of Econville, he had stopped in many towns. One in particular stood out in his mind, Ice-Creamville. It was a town which focused on the production of ice-cream, and ice-cream alone. He stayed there for a few weeks and eventually was taught all that he needed to know about how to make and sell ice-cream. With this valuable information, Peter saved up his money, and after a year was able to open the first Ice-Cream shop in all of Econville. He was the first entrepreneur of Econville. Though Peter thought of keeping his knowledge about ice-cream production a secret and kept all the ice-cream profits to himself, he quickly remember the horrible, monopolistic economy he lived in as a child. He did not want to contaminate the good economy of Econville, so he shared his ideas, and Econville eventually became known as the town of Fish and Ice-Cream, and all the people in this town (including Peter) all lived happily in their friendly economy.