Monday, June 3, 2013
The Well - An Economic Horror Story for Children
Grandpa tells a horror story to his three grandkids, Ray, Shawn, and Jenna:
"Once upon a time there was a very rich kingdom," Grandpa began. "The land was rich and the people hard working and generous. However, there came a time when there was a famine in the land. Famines had come before and the people had gotten through them by always preparing ahead for times of need. But this famine was much worse than in the past.
“Why?” asked Ray.
“Well some say it was because of some bad decisions made by the parliament regarding trade and money, but regardless . . .”
“What’s parliament?” asked Shawn.
“Parliament is a legislative body elected by the people to make laws. Can I go on with the story now?”
“Yeah, but don’t get grumpy, grandpa,” said Jenna.
“As I was saying, there was a really bad famine in the land and many people suffered. The elderly in particular suffered. Many had retired from their farms and had little water. Good King Franklin decided that this was not right. Old people should not be forced to live with little or no water. He had parliament pass a law requiring everyone to bring water from their home wells and dump it into a community well to be used by the old people.”
“That’s nice,” said Jenna.
“That’s not nice,” said Ray. “What gives the king the right to take away someone’s water to give it to someone else?”
“Parliament did,” Grandpa said.
“It is as simple as that?” asked Ray, “They can just take someone’s water to give to someone else?”
“Well, yes, it’s a way for everyone to help poor old people.” Grandpa said.
“But why get the help through the king?” asked Shawn. “If you needed water, Grandpa, I could give you some.”
“Ah, but parliament felt it could do a better job. And the amount of water they demanded was low, only one out of one-hundred buckets. For the first few years everything ran fine. You see, the number of old people in the land was not that many. There was enough water for their needs and the level of water continued to rise.”
“Because more people were putting water into the well than taking it out?” asked Shawn.
“Correct. As the years went by, the king and parliament added more types of people that could draw water from the well, such as orphans and the disabled.”
“That’s nice,” said Jenna.
“It meant having to raise the amount of water the peasants had to bring to the well,” Grandpa said. “People went along because they were told that one day when they were old, they would be able to draw water from the community well. More years past and a new king inherited the throne. His name was King Lyndon and during his reign he made some big changes to the well. For one, he noticed that many old people got sick and did not have a way to get help from a doctor. He had parliament pass a law to give the old people water that they could barter with the doctor to get health care. He also noticed the well was overflowing with water. Far more water was being poured in the well by the peasants than taken out by the elderly. He had wars to pay for and other government spending needs. Going to the people to tax them was dangerous, they might refuse or even revolt. So he came up with a great plan—Parliament would take water from the well and drop in a rock of the same volume with the message I.O.U. painted on it. The people never knew that Parliament had been using the water for other purposes because the IOU rocks all sank to the bottom of the well and the water level did not decrease.”
“That’s pretty tricky, Grandpa.”
“Yes, it is,” Grandpa said, “but not everyone was fooled. There was a well warden who was charged with monitoring the well. It was a pretty sleepy job for many years, but eventually the well warden decided to match the water level of the well with the number of people that would need the water once they retired. He was surprised by what he found out and ran to tell the king and parliament. 'Oh great king,' he said, 'We have a big problem with the well.' 'What is it?' the king asked. 'Once upon a time we had very few people drawing water from the well and many people putting water in. Things have changed. There are more old people needing water and because the peasants are having fewer children, there are less people adding water to the well. I figured out that at the rate the old people are taking the water, it will all run out before the young people retire.' The king met with his parliament to decide what to do. Nobody wanted to tell the people about the problem. The people were already dumping in almost one out of every six buckets into the community well. There was no way parliament could ask them yet again to bring even more water. One of the king’s counselors pointed out that they did not have to do anything. There was plenty of water in the well for now and maybe over time the problem would go away. Regardless, they would be dead by then and another generation could deal with it. More years went by and more people retired and began drawing water from the well while there were fewer young people bringing less water to the well. The water level was
no longer overflowing and the IOU rocks, once deep at the bottom of the well, were now closer to the top and visible for all to see.”
“But isn’t an IOU rock the same as water?” Jenna asked. “I mean, you can trade the IOU rock and get the water back, right?”
“Well, yes, but do you know where the water came from?” Grandpa asked.
“No,” Jenna said.
“From the same peasants,” Grandpa said.
“Wait,” Ray said. “Doesn’t that mean that the people have to bring double the water? First, when they originally brought the water and later to replace the IOU rock?”
“Yes, I told you it was a scary story,” Grandpa said.
“But this is hardly fair,” Ray said. “What if the peasants refuse to replace the IOU rocks with new water?”
“Then the water in the well is much less than appears and it runs out even sooner. But regardless, the well warden had carefully measured the water levels and kept track of the birth rates and death rates of the people in the kingdom. When the community well had started, the elderly might on average use water from the well for five or six years before passing on. Now there were many more old people and they were living much longer so that it was not uncommon for an old person to draw water from the community well for thirty years or more. As a result, many old people had more water than the young people who were required to fill the well.”
“Well, since it was the king and parliament that created this problem, how did they fix it?” Shawn asked.
“Oh, they didn’t fix it, Shawn,” Grandpa said. “Parliament recognized that old people vote and they liked their generous supply of water, much more than what they had brought to the well during their working days. The biggest losers were the young children and the people that had not even been born. It would be during their lives that the water in the well would be all gone, but they obviously couldn’t vote so there was no reason to fix things.”
“This is a dumb way to get water to old people,” Ray said. “If I was king, I would have made sure everyone saved up their own water for when they were old. And if someone was not able to save enough then their children and grandchildren could help.”
“Well, that was how it was before King Franklin,” Grandpa said. “It didn’t work out well for everyone, but it worked for most people. In the pursuit of helping old people, King Franklin’s idea ended up ruining the kingdom. Eventually everyone ended up with less water than before and the kingdom suffered from the result of taking from the working young to give to the nonworking old. And nobody lived happily ever after. The End.”
“That’s a stupid ending, Grandpa,” Shawn said.
"Well then, young people," Grandpa said. "It's up to you to change the story so it has a better ending. Can you do it?"