ErgotView OnlineDeathonomicsErgotOh, Princess! That it were possible To undo things done; to call back yesterday; That Time could turn up her swift sandy glass, To untell the days, and to redeem these hours! Or that the sun Could, rising from the west, draw her coach backward; Take from th' account of time so many minutes, Till she had all these seasons call'd again, Those minutes, and those actions done in them, Even from her first offence; that I might take her As spotless as an angel in my arms! But, oh! I talk of things impossible, And cast beyond the moon. The MARE drinks from the POND. In a Flash it is Gone. Now Damned with Gluttony, to the MARE the other Sins no longer seem so villainous. One in particular she has eyed with interest for quite some time.... —A Mare Killed with Kindness. This is a story about ponies and death. Ponies have died for a long time. They have gotten very good at it. According to plays, ponies used to take ages to die. A spear-thrust alone wouldn’t do it, and even the most potent poison left time for a monologue and dramatic flourish before a pony collapsed to the floor. Nowadays dying takes ponies no effort at all. This is a story about ponies and death…and economics. It begins with our economist, Twilight Sparkle. It begins with Twilight Sparkle running. She is about to die. Twilight Sparkle ran through the upstairs of her treehouse, barely dodging the shuffling, mindless ponies who lunged at her as she passed. She half-fell half-teleported down the stairs, landing in a painful heap on the floor. But it didn’t hurt half as bad as having half her ribcage crushed. Twilight kept running. She could flee, abandon the treehouse to the madness and destruction. But it would mean leaving her books. A heavy thump from upstairs stole her attention. They were coming. She had to decide. No. Instead she tore across the room, seeking refuge in the shelves of books that spread across the room like tombstone stacks, the panic response part of her brain being somewhat disconnected from the threat evaluation module. The pen is mightier than the sword, it is true, but not in a here-and-now sort of way. Twilight huddled in the back of the room. They were coming. They came down the stairs, hard hoofs striking the wood like hammers. Five of them, all after the same prize. Twilight fought to keep her ears raised to listen rather than flattened against her head. They were coming through the shelves. They had a way of finding her, or it, they could sense it somehow. No matter where she ran, they would find her. Twilight’s Hobbesian heart prepared to die. Her Smithian soul spoke. “Girls, let’s be reasonable,” she trembled as they emerged from the sanctuary of dead trees and dead ponies. “There’s no need to fight over scarce resources.” Her five best friends shuffled towards her with the unthinking, hungry stares of zombies or prepubescent fillies at a BBBFF concert. “Give me the ticket,” Rarity said. “I need to be at that gala. Showing off my latest designs, meeting all the high-society ponies…it’s where I belong.” “I need an in with anypony who has connections to financial regulators,” Rainbow Dash said. A sheen of sweat covered her face like wet plastic. “It’s the biggest party ever!” Pinkie Pie said. “I have to be there to introduce my newest line of pastries and pastry products!” “I want to meet the pony in charge of Missing Animals,” Fluttershy said. “To, um, voice some concerns I have about her operation. In the nicest possible way, of course.” “I don’t know what this Grand Galloping Gala is or why anypony would care,” Applejack said, “But since everypony else is hankering for that ticket, I want it too.” They pressed around her. “Spike!” Twilight shouted. “Spike, help!” “He won’t answer,” Rarity said. “We…made it so he won’t answer,” Fluttershy said. “Now give us…the ticket….” “The ticket….” “The ticket….” Black, greedy hoofs reached for her. Twilight screamed. “I’ll auction it off!” The sound reverberated through the ancient wood of the treehouse. It shook the Bearers, who remembered too well a darker pony and a more terrible cry. They stepped back from Twilight, who had read about the nature of non-market competition over resources. Quite reasonably, she thought she was about to die. When a soldier is pushed to her limits, when her sword has grown too heavy to wield and she can no longer run in her boots, yet the press of pointed metal surrounds her, sometimes, if she is well trained, if she has faced Death before and still doesn’t like the look of her, sometimes what comes out of her is everything. Economists are used to thinking of the world as…elastic in a way physicists would find alien. Value can be created and destroyed, after all, unlike matter and energy. But if we restrict our analysis to the glandular, meaty stuff of sweat, blood and memory, no pony can become anything that she is not already. Though no pony can be more than herself, it’s worth pondering whether a pony can be less than herself. Rarity would tell you that most ponies never fully become themselves. They speak like other ponies, act like other ponies, even wear the designs of other ponies—she’ll help the poor creatures, but that hardly precludes making a sale—and the tiny little part that makes a pony that pony and no pony else stays chained up in some mental basement, fed on twice-digested neuronic slop, and, on those rare occasions when a pony needs to be herself, the door creaks open, and the dim light reflected from a rusty blade reveals a pair of glowing red eyes…. …Which might tell you more about Rarity’s reading habits than the pony condition. Fluttershy, if she could be distracted from her animals long enough to answer, might point out that if all ponies are unique in some way, then being yourself by definition is something that’s never been tried before. In Twilight’s vernacular, self-confidence is an untested hypothesis. Imagine being told that in order to live your life as you, you have to be the first to be you, and everypony is watching. This fact explains a lot about e.g, high school, Rarity’s old hunting ground. If you asked Pinkie Pie or Applejack, they wouldn’t understand the question, and by the way, not to be rude, but are you going to just stand around talking or were you planning to buy something? Rainbow Dash wouldn’t let you inside until you could prove you aren’t a cop. (And Princess Celestia would say that the real pony always comes out when she’s really up against it, where every tried-and-true method has failed and there’s no place left to go but somewhere new. She would also say, alone in private her best students, that most new hypotheses really are terribly wrong, and ponies are right to be afraid of them. And when you get the chance to ask Death what she would say, she might grin and tell you the princess’s argument implies a selection effect.) But maybe you would say something different. The point is, what I’m trying to get at, is that what a soldier pony draws out of herself in that adrenalized state of fury and power is only more of herself. And if what she is is a warrior, then everything borrowed fades, and the warrior takes over completely…. The ponies of one of the desert tribes have a legend about a pony named Samantha. In battle she was mighty and fierce, and her enemies knew it. They sent seven hundred ponies against the lone Samantha, and— I already told you it’s a legend. You know who won. Is it possible that one pony can vanquish seven hundred? Of course not. But if you ever have the misfortune to look into the empty black eyes of a pony on the brink of death as she lifts a sword that should be too heavy, as she takes a step forward with legs that should be exhausted beyond movement, as she gazes into your eyes and through them, then you might think that there’s something to this legend after all. If you still have a head to think with, that is. (In the collapsing chamber of the soldier’s thoughts that she can no longer access, as a blackest pony in a blackest cloak locks the pieces of her mind with care, compassion, and zero mercy, the voice of some distant descendant screams, “To the very margins! To the very margins, and strike them with such momentum that they are forced outward! If the force blows you back, let it, because now you can really gather some speed….”) Anyway. Twilight was an economist, and when backed into a corner, economics bubbled out. “I’ll give the ticket to whoever demands it the most,” said Twilight, caught in that curious place between terror and the pure rush of economics. “That is, I’ll give it to whoever names the highest price they’re willing and able to pay for it.” They stared at her. “Ten bits,” Applejack said. “What what what?” said Rarity, scandalized. “You want us to bid on the ticket? Like commoners?” Twilight briefly wondered just what Rarity thought the life of a “commoner” was like. “I’m not going to buy the ticket from you,” Rainbow Dash said. “That’d be weird. Why can’t you just pick somepony to give it to?” “Five bits,” Applejack said. “We’re trying to decide how to allocate a scare resource,” Twilight said. “You can’t beat the price system for allocating scarce resources.” “I still got some of the rotted apples we usually throw out,” Applejack said. “What’s a ‘scarce resource,’” Rainbow Dash made hoof-quotes in the air, “And how does a price system allocate them?” Twilight beamed through the terror. “I’m so glad you asked! You see, a scarce resource is something a pony wants more of than she can get….” At this point Twilight made the fatal mistake of trying to explain price theory to her friends. They stared when she explained that most of the things ponies want to use have alternative uses. This is called scarcity, she said, and it is often considered the fundamental quality of economics. They frowned when she pointed out that ponies needed some way of allocating those scarce resources in a rational manner. They looked at each other when she proposed that a system that allowed ponies to freely attach relative numerical weights to each and every resource for sales so that the resources would be pulled in the direction of the greatest weights would maximize the value of the resources, if the ponies each had a finite amount of weight such that assigning a weight to one good meant less weight could be assigned to another good. That way ponies would assign the most weight to their most valued resources, and less weight to their less valued resources, ensuring the resources would go where they are most valued and away from where they are least valued. Maximizing the value of the resources, Twilight said breathlessly, was a good thing, the very best thing. They stepped back nervously when she said that such a system was called a price system, and it was the reason all the ponies here were alive today. Her eyes wide with worshipful adoration, she gushed about the complex problem of global coordination among ponies so diverse that, that, that you don’t even know how diverse they are, and how a price system makes solving this impossible, literally impossible, problem so easy that you pay less attention to it than you do the weather. At an urgent nod from the others, Pinkie Pie sneezed away the exposition. “Oh, Twilight, economics is just for saving the world from the forces of evil,” Pinkie Pie said brightly, wiping her nose on the back of her leg. “No pony actually cares.” Twilight had to concede that Pinkie Pie probably had the empirical edge on that point. “Have I ever told you all about how pencils are made?” she tried, but her friends turned away. “Twilight sure is weird, y’all,” Applejack commented as they headed toward the door. “I can’t believe she wanted us to pay money for that ticket,” said Rarity, appalled. “What happened to patronage? What happened to class?” “Twilight’s weird all right,” Pinkie Pie said. “She’s so weird I even wrote a song about her!” Rainbow Dash rolled her eyes. “Here we go.” Pinkie Pie sang, “She’s a weirdo economist, her stomach is bottomless, if she gets near your pastries they’ll disappear down her esophagus—” “You said I could have those!” Pinkie Pie’s singing voice floated out the door. Twilight heaved a sigh of relief. Almost subconsciously she pinched the side of her stomach. Despite all the “scientific research” that “proved” having friends is “healthy” according to a bunch of psychologists who aren't even real scientists nothing beat constant social isolation and desperate loneliness for keeping a trim figure. Dear Princess Celestia, Why did you send only two (2) tickets to the Grand Galloping Gala, knowing that I have five (5) friends, not counting Spike? Your faithful student, Twilight Sparkle To the Chief Executive Economist of the Daughter of Ponyville Twilight Sparkle, Did you teach them about scarcity and the price system yet? Cheers, Princess Celestia P.S. Enclosed are four additional tickets to the gala. The Daughter of Ponyville that Princess Celestia had made was wrought not by the esteemed architects of Canterlot but by the humble Ponyvillites. This was symbolic, Princess Celestia said, of the need for the Daughters to be enmeshed in and able to represent the diversity of the nine regions, and also it saved on construction costs. The Daughter of Ponyville, which Twilight privately thought of as the One Bank Mark II, was a curious blend of wood and brick, with carpeted interiors and plenty of space for cabinets, shelves and an enormous spinning table on which Twilight kept all manner of different up-to-date reports and data in a very carefully organized order. She wasn’t sure it was really the most optimal way of managing her work, but spinning the table was a lot of fun. When she wasn’t at the treehouse taking care of Spike, Twilight was entrenched firmly within the Mark II and its thick double-locked doors. Taking care of Ponyville’s monetary matters in the aftermath of the Great Nightmare was important and difficult, and she was pleased to learn that it was easy to let the work expand to fill the time. Habits of mind are the hardest to change. The body is dumb and follows like a sheep, but the brain is smart and figures out how to get stuck in all kinds of interesting and, eventually, fatal places. She missed Princess Celestia, of course. She missed her a lot. Which isn’t to say that her brain wasn’t running a very efficient simulation of the princess all the while she was in the Mark II. The voice of Princess Celestia guided the money supply of Ponyville as if with an invisible hoof. One long night trying to make accounts add up—the Ponyvillites had been buying and selling way more than Nightmare Moon’s money drought should have allowed for—Twilight brought a pillow into the Mark II and caught a few fitful hours of sleep before resuming work. After that, it was easy to start sleeping in the bank. A knock at the door. Twilight awoke with a start. She peeled her face off the drool-damp pillow and stared groggily and the door. Another knock. “What time is it?” Twilight said in that slurred, mumbling morning voice that so enchants one’s significant other and no pony else. She had covered the windows with thick curtains some time ago. Twilight pushed herself up at the third knock and stumbled toward the door. Suspiciously she peered through the peephole. It was Pinkie Pie, or rather, Pinkie Pie’s hoof as it swung up for another strike. With some effort Twilight managed to undo the locks and pried open the door. She was rewarded by nearly being punched out by Pinkie Pie, who was going for a fifth knock. “Hi, Twilight!” Pinkie Pie said in that cheerful, bright morning voice that makes one's significant other want to commit murder. “We haven’t seen you in a while since you locked yourself away in here!” Twilight blinked. How long had it been? “Anyway,” Pinkie Pie continued, her bright, beaming eyes blinding Twilight like she was staring into twin lamps that emitted long random strings of high-pitched squeaks, “I was wondering if you wanted to come eat dinner with us.” “Dinner?” Twilight squinted at the darkening evening sky, still more natural light that she had gotten in the past week. “What time is it?” “Time to see your friends, silly! Got to put the economics on hold!” Twilight flushed the latter sentence away and focused on the former. “Friends?” “Yup! Me, Applejack, Rainbow Dash, everypony! You know, your friends!” “Oh.” Twilight cast a longing look into the gloom of the Mark II. “I thought that was just for saving the world from the forces of evil. I didn’t think anypony actually cared.” “You thought wrong! Now get moving, sister!” Twilight demurred. Pinkie Pie insisted. And that is the story of how Twilight was dragged kicking and screaming through a dirt road to one of the many Sugarcube Corners Pinkie Pie had stationed around Ponyville like silent, cake-filled sentinels. There she met her friends, and, after realizing that the world wasn’t ending and no pony was about to rip her limb-from-limb for a golden ticket, she managed to relax a bit, though she was still mad about being caked in a fine layer of dust, not to mention the fact that Pinkie Pie apparently thought cake was dinner. Spike was there, subdued sitting next to Rarity, and Twilight began to have suspicions about who had really set this up. Rarity did most of the talking, as usual. “…And that’s when I said, ‘Discount? Does my boutique look like some kind of thrift shop for ponies to go bargain-hunting? Get out!’ Honestly, the nerve of some ponies.” “So you didn’t make the sale?” Applejack asked. “I didn’t want to make the sale, not to a pony who doesn’t appreciate my art,” Rarity sniffed. “But that wasn’t even the worst customer I had this week. Just the other day this frightful mare came in asking for a dress all in black, with a black cowl. I asked what style and cut. She said a poison dress. Well, we had a chat about that, and it turned out that didn’t mean quite what she thought it did. So she said she needed a dress for a funeral. I asked if she wanted a veil. She said no, she needed to see well. I asked if she wanted something a bit trimmed around the hoofs so she wouldn’t trip. She said she didn’t trip. Well, it was quite bizarre. I mean, I made the dress of course, but honestly, it was unnerving.” “Now that you mention it,” said Applejack, “A pony visited our farm yesterday asking if we had black apples. Funny question. I told we as we had only red, green, and yellow. She asked if we could do one black, and I told her she had a lot of nerve coming in here and asking us to change things up.” “There, um, was a pony who wanted to adopt a bat,” said Fluttershy. “To, uh, pull her her carriage. I said we were out of bats, and I thought to venture that bats can’t pull carriages, but she said, no, I didn’t understand, she wanted a skeletal bat. I, uh, thought it was a little odd, so I even mentioned that a skeletal bat would be dead, and she said yes, it would be.” “I just remembered!” Pinkie Pie slammed her hoof on the table in excitement, nearly upsetting the grasscakes. “Just the other day a pony came to the Corner to buy a black cake. I said, ‘You mean chocolate?!’ and she said no, she meant black.” Everypony looked expectantly at Rainbow Dash, who shrugged. “Stocks don’t come in black,” she said. “Or skeletal. I’ve had a pretty normal week.” Now five heads swung toward Twilight Sparkle. “I think it’s obvious that this town is full of weird ponies,” Twilight said grumpily. “I’ve been busy doing important work in the Mark—in the Daughter, and—“ “Twilight’s staying shut inside and avoiding her friends,” Pinkie Pie said loudly. “—And I haven’t really noticed anything more unusual than usual lately,” Twilight said, glaring at Pinkie Pie. She pushed away from the table, stopping only to horn-grab half-a-dozen cupcakes for later. “I’ll be in my castle preventing economic catastrophe. Don’t bother me if Equestria isn’t in danger.” But Twilight awoke next morning to the sound of somepony knocking on the door. Blearily she opened it. Applejack’s brown cowpony hat was pulled over her distraught, conflicted face. She had looked a lot more confident confronting the Cerberus than she did now. “It ain’t quite the same as Equestria being in danger,” Applejack said. She looked at the ground, then behind her. Twilight rubbed her face. “Applejack, what do you need?” Applejack didn’t quite look at her. “I need your help,” she said. “Sweet Apple Acres is losing money. We’re going broke.”
Allocating Scarce ResourcesView OnlineDeathonomicsAllocating Scarce ResourcesTwilight had to teleport through the clear glass doors of the Sugarcube Corner. That was because it was packed so tightly with ponies that the door wouldn’t open. With her front hoofs firmly pressed against her ears in a futile effort to drown out the noise, Twilight teleported to a relatively empty corner, squeezing aside two ponies screaming at each other about cake. Squashing fleeting memories of a blurred dark pony as a noise bomb went off inside Twilight’s head, she muscled her way through the crowd, intent on ignoring everypony. “—What I like about the PinkieCake is that it has such a great eater interface—“ “—No worms—“ “—I love being able to customize my own—“ “—And it’s only slightly more expensive—“ Twilight shut her ears to the insanity. The whole place was a madhouse, a habitat warped by the sheer mass of Pinkie’s craziness, which Twilight was convinced existed in physical form in a mostly closed-off dimension and had the density of a black hole. Pinkie’s brain was the conduit, and like planets trapped in their doomed orbits, ponies swirled around Pinkie like moths to the light. And eventually enough cake had pretty much the same effect on ponies as fire did on moths. She pushed her way past an obstinate and severely overweight stallion bragging about how he had updated to the Premium Dessert Plan Star Plus Extra, which meant that he could get icing anywhere, and stopped to lean against a long counter crowded with ponies and cakes. “How can I help you today, miss?” said a bright young pony behind the counter. “Just catching my breath,” Twilight panted. “And it’s madame, as in, madame economist.” “How can I help you today, madame economist?” Twilight looked at her. “With what?” “With cake and cake accessories, of course. This is the Party Bar. Cakes, batters, icing, spoons, whisks, bowls, pans, spatulas, eggs, egg beaters, egg-beating technique—“ “No!” The fat stallion from before lumbered up to the bar, not exactly pushing so much as rolling Twilight away. “Hey, uh, I really like Sugarcube Corner cakes and stuff,” he said, sweating profusely. “Wonderful, sir. How can I help you?” “Well, I got into cakes the usual way. Baking birthday cakes, that sort of thing. I knew some of my friends were into Sugarcube Corner, but I didn’t know much about it. Well, one day I tried the, uh, I think it was a peanut butter brittle cupcake, and wow, it was just amazing.” “Oh, great!” “So I started branching out, made some apple cakes, gave a Marechusetts cream pie a shot, and, you know, I got the cake bug in me. Bought all the Sugarcube Corner equipment and books, and of course I come here every day for at least one square meal of cake. So now I’m working on a better than clop cake—“ “Very good, sir!” Twilight wasn’t fully recovered, but the knowledge that the opportunity cost of waiting was listening to more of this drivel sent adrenaline flooding through her. She had made it past pony-snatching vines; she could get through a crowd of cake-filled, terribly sweaty ponies. She was almost to a counter lined with cakes with a cash register in the center when she heard a pony say, “Well, muffins simply don’t have the same eater interface, you know, it’s all about the eater interface—“ And inside Twilight Sparkle, something snapped. “What,” she said loudly, “Is an eater interface?” The pony turned to look at her, surprised. “You know, the way your hoofs and mouth interact with the cake.” Twilight stared at her. “It’s very important,” the pony said. “Only Sugarcube Corner does it right. Have you never eaten a cupcake before?” She snickered, elbowing her friend. “Cake is okay every once in a while, but most of the time I’d rather have a muffin or something, honestly,” Twilight said. The silence blasted through the room like the rage of an Alicorn. “HEY, EVERYPONY! YOU BETTER BE READY TO PARRRRTAY!” The ceiling exploded pink. Helium-inflated balloons fell from within a porridge of confetti and gummy worm streamers. In the midst of it all was the pinkest pony, standing on the counter. “PINKIE!” the assembled ponies cheered. Pinkie Pie spread her hoofs over the mass of frenzied fanatics. “I’m so glad to see you all today! Who’s ready for some cake?!” The crowd’s response was incoherent. Some ponies were screaming, others openly weeping. “It’s really her!” a filly sobbed to a mare Twilight hoped was her mother. “She really is real!” “We can’t eat cake on a cold stomach!” Pinkie said. “We have to work up an appetite! Let’s all do the Physical Perks!” Twilight watched as her last hold on reality slid away entirely. Pinkie was leading the entire store in calisthenics. “And one two three four one two three four!” Pinkie leaned up from one leg, bringing her front hoofs around in a tall arc and down until they were touching the other hind hoof. The worshipful ponies below followed in creepy unison. “And one two three four two three four one….” Pinkie Pie blew on a whistle to signal the end of the Physical Perks. “Who’s hungry?” The crowd roared its cake-lust. “But first we have to do one thing!” Pinkie Pie pointed to a monitor that lowered down onto the west wall. The still image of a tired, harassed-looking stallion that Twilight didn’t recognize flickered onto the screen. “Oh no, it’s Mr. Landbiscuit! He wants to compete for Sugarcube Corner’s market share!” Ponies hissed. Others screamed. After just fifteen seconds of his image on the screen, expressions of rage erupted from the ponies. They hopped up and down, roared their fury and fright. “Swine!” a pony screamed. “Swine! Swine!” Twilight was suddenly glad Fluttershy wasn’t there. On second thought, Twilight fervently wished Fluttershy was there. She could use a bodyguard. The ponies didn’t rest. The noise intensified, built to a crescendo, and as Twilight stuffed her hoofs over her ears and tried not to remember, a book bounced off of the monitor. The ponies threw spatulas, pans, spoons, anything they could get their hoofs on, but not cake, never cake. They stopped. Pinkie Pie had spoken. “That was fun,” she said. The monitor withdrew, and, shakily, so did Twilight’s hoofs from her ears. She looked up at Pinkie Pie. She was standing on two legs. In her hoof she held a streamer. “Let’s eat cake,” Pinkie Pie said. Ponies crowded around the counter, but they didn’t push. They seemed to know exactly where to go and how to make maximum use of the space as if they had done this a thousand times in exactly the same way before. “I’d like a Ultra Super Deluxe Choco-Plutium Butter Filled CupKooky,” a pony said. “Plutium-95 or 97?” Pinkie Pie said, smiling with teeth so white Twilight could hear them gleam. “Well—“ “97 has sprinkles!” It was 97, then. The pony was funneled to the back and another flowed in to fill the space. Pinkie hefted a board covered in bright pink marker onto the counter. “I’ve got a whole new line of products with ingredients from the Everfree Forest! Be sure to try one!” Twilight blanched. “I’ll have a JokeCream Cupcake,” the pony at the front said. “You got it, mister! Two bits.” Money and cake exchanged hoofs. “I’ll take a JokeCream Cupcake!” “Hmm…three bits!” Twilight blinked. More JokeCream Cupcake orders followed. Every time, Pinkie Pie charged a different price. Different items were ordered, but each time it was the same. Pinkie Pie didn’t name a consistent price for anything. Twilight couldn’t take any more of it. Pushing, shoving and teleporting her way to the front, drawing angry mutters and barbed comments that cut off when they saw her cutie mark—she was the Chief Executive Economist of the Daughter of Ponyville, after all—Twilight stood in front of Pinkie Pie. “Pinkie,” she said, and there was a little voice inside Twilight’s head telling her that she was about to pull the rug out from under the universe, but it wasn’t Princess Celestia which means it wasn’t as good at economics as she was, so she ignored it and said, “You can’t charge a different price each time for the same good. You just can’t.” One hour earlier: There was a Cerberus lounging under and around the apple trees of Sweet Apple Acres, and a crowd of ponies gathered around her taking pictures. “Apple Bloom’s idea,” said Applejack, meaning her absurdly cute yellow little sister. “That doggie ain’t much of a farmer, but ponies like to pay money just to see her.” “But not enough, I take it?” Twilight said. “Things’ve been tight around here ever since the Great Succession,” Applejack said. “Come to think of it, they were tight before then too.” The brilliant red orchards than ran on as far as the eye could see seemed as healthy as ever. The trees were so thick with fruit they sagged, and even from a distance the leafs glistened with water. Stallions toiled the fields, pulling plows and gathering apples, which seemed to involve kicking the tree trunks until the apples fell off the branch. “You should see it in bloom,” Applejack said. “Apple Bloom reckons we should start charging ponies for that too.” “I’m sure it’s beautiful.” “It’s been in my family for generations.” “And you’re going to lose it.” Twilight meant it to check—Applejack, like the stallions below, was beating around the bush. But her friend hung low like Twilight had kicked her in the ribs. Twilight didn’t know what to say, and Applejack didn’t give her any clues. After a moment, Applejack took her inside. “I never had much sense for business, I reckon,” she said. “Acres seemed to run herself. I just made sure everything kept happening. Maybe—maybe I was a bit stubborn.” A yellow head poked out from under the stairwell. “A little?” Apple Bloom cried, indignant. “Just a little? You never change nothing!” Twilight winced at the assault on grammar, but Applejack didn’t back down. “I brought the Cerberus here, didn’t I? And let the ponies pay to take pictures!” “That was my idea! And I had to brush her teeth ‘cuz you were scared!” “You try climbing inside the mouth of a monster that tried to eat you twice!” “A thousand years of plaque! A thousand years!” By this point they were both red-faced and huffing. Twilight watched in amazement as the sisters faced off. “Anyway, you’re too young to understand business matters,” Applejack muttered. “Might as well be talking to a shrub.” That was when Applejack found herself pinned to the wall, surrounded by the glow of lavender magic. “Listen to your little sister,” Twilight said, her eyes boring holes in Applejack. “She—is concerned. About your choices.” “Some choices!” Apple Bloom humphed. “Tain’t a choice if it’s just reading out of a book.” “All right, all right,” Applejack said, waving her legs frantically. “You can put me down now. Don’t you know it’s rude to go hoisting ponies up in their own homes?” Twilight let her down, and, wisely, Apple Bloom let her gather herself. “We’re losing money, and that’s a fact,” Applejack said, looking somewhere to the left of Twilight’s ear. “And I don’t know what to do about it.” “I have some ideas,” Apple Bloom began, but a look from Twilight hushed her. “If you’re losing money, that just means your revenue is lower than your costs. How much money are you losing when you sell an apple?” “Right now we lose a bit every bushel we sell.” Right now? “Why don’t you just raise the price of a bushel?” Applejack had a look on her face like Twilight had just suggested that she learn to fly. After a moment’s silence, Twilight coughed. “Applejack?” “Huh?” “I said, why don’t you raise the price?” “The price is three bits.” “Yes, but why?” “Because that’s our low low bargain offer guarantee one time only buy now and get a free copy of Secret Recipes of the Apple Family—“ “You can’t ask her that!” Apple Bloom said scornfully. “She just starts reciting out of that d-d-durned book again.” “Apple Bloom!” Applejack snapped. “Don’t talk about the Book that way! I’ll wash your mouth out with apple soap!” “Yeah!” Twilight added. “Don’t talk about books that way! I mean, uh, wait a second, Applejack, does this mean you never change the price of your apples?” “Never,” Applejack said proudly. Twilight stared. Talk about the law of one price. “Applejack, you can’t charge the same price for a good no matter what. You just can’t.” “Why not?” “Why not?” “Because,” Twilight said, forgetting about the hungry ponies pressing behind her as the familiar rush of economics swelled within her, “Prices have meaning.” Pinkie Pie’s eyes swelled with the burning anticipation of a forthcoming economics lecture. “Prices are a measurement.” Twilight decided to be direct as possible. Applejack needed help. “Just like height, weight or temperature, prices are a measurement. And it’s very important to get that measure right. Look, if you weigh fifty stone—“ “Less than that,” Applejack muttered. “—But you say that you weight only forty-five, you’re going to get into trouble. And even if you do go around telling ponies you only weight forty-five stone, the reality is you weigh fifty.” Applejack looked at her. “What’s a price measure?” “Relative scarcity,” Twilight said. “Prices convey information about the relative scarcity of the good being sold.” Pinkie Pie screwed up her face, her strategy for handling novel information. “What’s relative scarcity?” “Scarcity is the extent to which ponies want more of some resource than they can have. Relative scarcity is how true this is of some resource relative to another.” “Oh. So?” “So prices aren’t simply an arbitrary choice or some meaningless number that goes along with a good,” Twilight said. “They have deep social significance because they determine how resources are allocated.” “What does this have to do with me saving Sweet Apple Acres again?” Applejack asked. Twilight ignored her. “Resources are…everything. They’re how ponies accomplish their goals. Allocating them correctly is maybe the most important task a society faces. Prices are how that gets done. “It goes like this. Everypony has some money, some bits. Bits are what we use to bid on resources. Because bits can be used to buy everything, ponies are going to spend their bits on the things most important to them. Prices get bid up on the most important things. Less important things cost less.” “Just a hot minute there,” Applejack said. “Only thing more important than food and water is a good night’s sleep, but one of Rarity’s dresses fetches a whole lot more.” “The diamond-water paradox,” Twilight beamed. “What you have to understand is that ponies don’t face choices between Water and Ridiculously Fancy Dresses. They face a choice between some water and a dress, and prices are determined by choices. Prices represent the marginal value of a good, the value of just one more unit given the current amount, not the total or average value of the good or how much you would be willing to pay for it if you suddenly found yourself without any at all. “But you’re skeptical. So consider this. If ponies value a good more highly than it’s currently priced at, they’ll bid up the price trying to get it. If they value a good less than its current price, they’ll take some of the bits they’re spending on that good and direct them elsewhere, essentially bidding the price of the good down. As long as ponies are free to spend their bits as they please, the most valued goods will be priced higher and the less valued goods will cost less.” Pinkie Pie frowned. “That sounds…bad.” Twilight shook her head. “You’ve got it exactly backwards. Prices are a measure, the effect, not the cause. Scarcity is the real problem, and prices help us solve it. When a price goes up, that tells ponies the good is more valuable. It tells them to make more of it or go find more of it, to direct less valuable resources towards producing more of that more valuable resource. When a price goes down, that sends a signal telling ponies the good is less valuable, to direct resources away from producing it and toward producing goods that have become relatively more valuable. On the consumer side, a high price tells ponies to use less of that resource because competition for it is fierce. Lower prices tell ponies they should make more use of that resource more since fewer ponies will mind. On the margin, of course.” “Or think about it this way,” Twilight said, now slightly desperate at the looks of sheer confusion on the Apple sisters’ faces. “The cost of a good is what you give up to get it. That’s called opportunity cost, or just ‘cost’ for short. When a good costs more, that means we're devoting more resources to producing it. And doesn’t it make sense that we should devote more resources to producing important things and fewer resources to producing less important things? It’d be crazy if we were giving up more valuable things to get less valuable things! Just crazy!” “Yeah…crazy,” Pinkie Pie said nervously, taking a step back. “Twilight, have you considered the fact that some ponies have more bits than others? Doesn’t it seem like they have an unfair say in how resources get allocated?” “Oh, you mean Rainbow Dash?” Twilight shrugged. “Why shouldn’t some ponies have more of a say in how resources get allocated? They’re better at turning them into valuable things.” “Now that’s about the most untrue thing I’ve ever heard,” Applejack said. “The point is,” Twilight said loudly, “Prices aren’t something you can just ignore or treat flippantly. They are the only measure of critical information: relative scarcity. “And another thing. Everything I said about directing resources away from producing one thing and toward producing another is true of your business as well. The cost of Sweet Apple Acres is the alternative uses all the resources you employ could be put to instead. If the best price you can charge for your apples is still losing you money, then that means Sweet Apple Acres isn’t as valuable as something else that could be done with these resources. It means it shouldn’t exist.” Applejack’s eyes narrowed. “I don’t think you’ve ever come into my house without managing to insult everything in it.” Twilight stamped her hoof. “Dammit, Applejack!” Apple Bloom’s hoofs flew to her ears. She squeaked. “I-I mean, darn it, Applejack.” Twilight took a deep breath. “I’m not the one saying Sweet Apple Acres isn’t worth it. You are. When you charge a price that isn’t enough to cover the costs of your business, you send a signal to everypony that Sweet Apple Acres isn’t worth the cost of its existing. If you want to change everypony’s mind, you need to charge a price that earns your business a profit. If such a price exists.” “Of course it does!” “Good. Then find it.” “How?” Pinkie Pie asked. “Just set the price equal to the marginal cost of producing the good in question like everypony already does.” “Oh, okay.” Twilight waited, nervous tension swirling in her stomach and lactic acid from standing in one place so long building up in her knees. Applejack was thinking. “I reckon…I reckon I could allow as how you might have a point,” she said slowly. “Maybe…maybe the prices could…you know….” “Change?” Applejack winced. “Wouldn’t put it that way.” Apple Bloom gasped. “Does this mean we can buy one of those fancy new tractors to pull a plow?” “Over my dead body.” “So what signals are my prices sending?” Pinkie Pie asked. “No idea.” “Oh,” Pinkie Pie said. “You should talk to Pinkie Pie about this price system of yours,” Applejack said. “Her prices are shiftier than a rattlesnake.” There was a lull in the conversation, which the hungry ponies interpreted as a cue to start shouting. “Pinkie Pie is perfect! She doesn’t have to change anything!” “What does an economist even know about the value of anything?” “All hail the Queen of Cake!” “Hey!” Pinkie Pie jumped onto the counter, glaring down at the 20% of ponies who bought 80% of her cakes. “Twilight is my friend!” “She likes muffins!” screamed a terrified pony in the back. “So what?” Pinkie Pie demanded. “I don’t even know why you ponies get so worked up about that stuff. There’s practically no difference between a muffin and a cupcake anyway! Friends don’t attack friends for liking different stuff from them. Differences are part of what makes friendship special.” “What have we done?” the ponies sobbed, instantly changed by those simple words, at least when they came from Pinkie Pie. Pinkie turned to Twilight. “Seriously though, muffins over cupcakes? You are weird.” “I reckon I’ve been awful suspicious of you,” Applejack admitted. “Never trusted city slickers much. Talking fast, everything changing all the time. But friends should be willing to listens to their friends’ ideas with an open mind.” “Didn’t help that I keep insulting your business,” Twilight smiled. “You’re not alone in that bucket. I was so busy trying to honor my family that I forgot to honor my family.” “Well, economists are known for their ability to provide useful advice to businesses,” Twilight said with a straight face. “I’ll leave you two to it. Sweet Apple Acres looks like it’s in a pair of capable hoofs to me.” Unable to look at the two sisters together any longer, Twilight left. Twilight said goodbye to Pinkie and teleported past the mob of cake-eaters eager to resume their shopping. Outside, she walked the dirt road slowly, distracted by her own troubled thoughts. It hadn’t just been Applejack. Pinkie Pie didn’t do it either. Twilight had to know. Her economics instinct said, no we don’t, the theory is right, of course it’s right. Her science instinct said, we have to check. Then Twilight realized her economics instinct was going against her science instinct. This had never happened before. Feeling ill, Twilight trotted up the path to the Carousel Boutique. At nighttime Sweet Apple Acres was the dim glow of vivid colors in the darkness. Not that Applejack needed much light. She knew every inch of the expansive orchards. The rustling leaves in the gentle wind would’ve spooked any other pony, but to Applejack they were the trees talking to her. “Change is coming,” she said to an apple tree that was sixty years old. “More than just a giant three-headed monster, I mean.” Applejack turned at a noise that was very much like a pony spitting out a piece of apple, except it was dry and it clicked. “Well, what did you expect?” Applejack cried, marching over and grabbing the rest of the apple. “Come back in the morning when we sell these, and you can get a good one. Look! This apple is so rotted it’s turned black!” Closing up a Sugarcube Corner was a lot like putting a foal to bed, Pinkie Pie reflected. It was a lot of work, noisy and sometimes messy, and then, poof, silence. In the darkness, something creaked. Pinkie Pie’s ears twitched. There was a sound like something taking a bite out of a cake and chewing, except it was very dry. Then it spat the cake out. There was a clicking sound as it did. Pinkie Pie stilled her beating heart. Nothing that ate cake could be bad deep down. “No good?” She walked over and sniffed at the dessert. “Oh no, this one got stale so fast! That’s why you didn’t like it. Come back in the morning and you can try something better, I promise. That’s funny. I don’t remember icing this cake black.”
Surpluses and ShortagesView OnlineDeathonomicsSurpluses and ShortagesThe trip to the Carousel Boutique was made lively by the sight of a pony leaping out of the glass window on the second story. No, Twilight thought as she caught the pony in the inconsistently colored glow of her magical levitation, the pony had been flailing through the air as if she had been pushed by something…or somepony. “And never come back, do you hear me?” Rarity screamed from the window. “Never!” “Hi, Rarity,” Twilight said, depositing the traumatized pony on the ground. “Twilight! What a surprise! Do come in!” “I apologize for that little…tête–à–tête, so to speak, earlier,” Rarity said. She gestured to an ornate sofa with an unusual layout. “Have a seat on the tête–à–tête. To what do I owe this visit?” Twilight chose a simple chair. The sitting room of the Carousel Boutique was classic Rarity: classy and rare, with layers of purple curtains to produce the desired lighting. Rarity flopped down on the tête–à–tête, looking slightly defensive. “Well, you can’t blame me, Twilight. After all, now I have to pay for the broken window!” “Actually, there’s an interesting economic parable about a broken window—“ Twilight began. “But you would simply not believe that pony! Il a la tête dans le cul,” she muttered. Twilight looked at the couch. “What?” “Anyway, what have you come to talk about?” Rarity asked. “I am always delighted to entertain the chief executive economist of our very own bank, not to mention my friend, but you do strike me as the direct type.” Rarity leaned her head on her hoof and smiled. She looked…relaxed, in a way that surprised Twilight. Something about the end of the world and all life on it being pushed back to its previously scheduled date of three or so billion years from now brought out a healthy glow to her features Twilight hadn’t noticed before. “I need to know if you use marginal cost pricing,” Twilight blurted. Rarity clapped her hoofs. “Tea! Cake! How could I be so rude? Do excuse me!” —and Rarity vanished to another room only to reappear a minute later bearing a tray. She set it down on the table and levitated the silver tea pot in a blue glow. “Tea?” she asked. Twilight stared nervously at the incredibly fragile and expensive-looking teacups. “I’m more of a coffee drinker.” “It’s heavily caffeinated,” Rarity assured her. “How else would I get my work done?” She chuckled. “I’m not Applejack; I don’t force my sister to do labor! Sweetie Belle voluntarily helps me spin, weave, loop, cart, carry, and box with those tiny, tireless hoofs of hers. Oh, how much fun she has playing on the dressmaking machines in the basement—“ “Caffeine?” “Yes.” “Okay.” Rarity poured the tea and pushed a cake in Twilight’s direction. “What’s on your mind?” “Marginal cost pricing,” Twilight said. “Do you do it?” Rarity stared at her. “What on earth is marginal cost pricing?” Twilight jolted; it was either the shock or the caffeine kicking in. “M-M-Marginal c-cost pricing! When-you-set-the-price-of-a-good-equal-to-the-marginal-cost-of-producing-it!” Rarity raised her eyebrows; Twilight’s teacup was clattering against the plate held in her trembling hoof. “Twilight, dear, I’ve never heard of any such thing. Perhaps you shouldn’t drink any more of that tea. It’s quite strong.” “I-I was t-talking to Pinkie Pie—“ Rarity nodded sagely. “Ah, that’s what happened.” “—And she priced things randomly, and Applejack wasn’t any better, never changing her prices ever, and I don’t know what to doooooo!” By now Rarity looked quite alarmed. She set her teacup down carefully and faced Twilight. “Twilight, I’m sure to an economist this esoteric question of pricing must seem quite important, but to us businessponies prices are simply a means to an end. Look at Fluttershy, who always sells below market value because she wants to make sure everypony who needs her products to care for an animal can afford them—” Twilight gasped hoarsely; it sounded a lot like a death rattle. “—Or take me. I am a designer, but you would not believe how many ponies utterly fail to appreciate what I do. Not only do they want to give me their…input,” Rarity held the word in her mouth like it was something wet and smelly that had crawled under her bed and died, “But also they want to bargain.” “What—“ “All prices are stated upfront! The price never changes, guaranteed! Your money back with return of dress in original condition on date production began!” Glimpsing the depths of another pony’s madness helped sooth Twilight’s. She took a deep breath, reminding herself of the time she had had the temerity to think Princess Celestia was exaggerating the ubiquity of rational behavior (Twilight had only been just a filly, still unwise and foolhardy). But her princess had smiled, looking directly at Twilight as if she knew what she was thinking, and began to discuss the budget constraint.... “Rarity, you should see discussing prices with the customer as a useful way to gleam information about the demand for your products—“ Twilight began. “Demand?” Rarity shrieked. “How dare they demand anything from me? They should worship my dresses!” By now she was standing, breathing heavily. At some point the tray had been upset. “Why can’t I ever talk to one of you without insulting your deeply held values?” Twilight sighed. “Probably because you can’t stop thinking about how much we’d be willing to pay to keep them.” Rarity gasped, a hoof flying to her mouth. “That was cruel of me! I’m so sorry.” Twilight shrugged. “Pay me five bits and I’ll be indifferent. They looked at the spilled tea soaking into the floor. “Sorry about your carpet,” Twilight said. Rarity waved a hoof. “I’ll fo—ask Sweetie Belle to make another.” They settled down again, Rarity beaming like the perfect host despite the scent of caffeine, which Twilight’s nose could detect in a way that would impress a shark, rising from the floor. “Twilight, I threw a pony out of the window of the second story earlier,” Rarity said. “Did you notice?” “I did.” “I hope it didn’t disturb you.” “Applejack lets fillies pay to climb into a Cerberus’s mouth so they can take pictures, and Pinkie Pie is some kind of cult leader," Twilight said. “You could say that my sense of…impropriety is undergoing a dramatic recalibration. But since you mention it, I am curious as to why you threw a pony out of the window of the second story earlier.” “She—well, the dress was late—some adjustments had to be made—she didn’t realize light green and chartreuse are different colors—and she wanted a discount. I’m perfectly sane.” Rarity beamed. “Rarity,” Twilight said carefully, “As an economist, I fully respect how you take pride in your work. And I have always felt that scientists and artists are closely related species of the same genus. Truth is Beauty, or Beauty is Truth, or something like that.” “More a function of color and shape than truth,” Rarity mused. “But there is such a thing as a price too high,” Twilight said. She waited for the thunderclap, but it never came. Rarity looked confused. “A price…too high?” she said, testing out the words like they were tea without caffeine: comprehensible in principle, yet coming from a frame of mind she could never hope to fathom. “A price too high,” Twilight repeated. “Prices, you see, are a measure”—at this point Twilight launched into an overlong and familiar lecture on the role of prices in allocating scarce resources— “And that’s how chocolate is made,” Twilight concluded. “Now it’s worth considering just what happens when the price is, well, wrong.” Rarity already looked bored. “It is?” Twilight’s brain promptly auto-lobotomized its ability to read Rarity’s facial expression. “Yes,” she said. “It is. Rarity, do you ever have trouble moving your dresses? Finding clients and so on?” “True patrons of the art are as rare as true friends,” Rarity admitted. “Except to Pinkie Pie, who is something of a friend-slut.” “But what if you paid them to buy your dresses?” Rarity’s eyes turned glassy. Twilight could only guess that she was evacuating some inconvenient thoughts from her own mind. “Sorry, Twilight, I must have misheard you. What were we talking about? Fashion?” “I was saying, what would happen if you paid ponies to buy your dressing? A negative price. They’d be lining up to buy them. You’d sell out of everything within the week, and never mind the size or cut!” “Twilight, I regret to inform you that you are utterly mad.” “The point is,” Twilight said loudly, “Prices regulate quantities. They determine how much of what gets sent where. When prices are higher, ponies buy fewer things. Higher priced dresses mean fewer dresses get sent to ponies. When prices are lower, ponies buy more things. Lower priced dresses means more dresses get sent to ponies. The inverse relationship between prices and how much of what gets sent where is called the Law of Demand,” she added, “Since a pony’s demand is how much they’re willing and able to pay for a quantity of some good.” “That’s fascinating, Twilight—“ “Really?” “No.” Rarity folded one hoof over the other. “Are you saying I should…lower my prices?” “Sometimes, maybe,” Twilight said quickly. “It’s worth considering. Rarity, I know how much you want ponies to appreciate your dresses, but no pony can appreciate them when they can’t afford them.” “They buy food, don’t they? They have bits to spare!” “You’d benefit as well. Every dress you don’t sell because your price is too—is higher than some ponies in their philistine ignorance might not want to pay—is a cost you incur with no compensation. If you were willing to lower your prices to match the demand for your product, then you could make more money by selling dresses that no pony wants to buy at their current price. That’s your supply—how much of something you’re willing to produce at every price—and at the price that sets the quantity supplied and demanded equal to each other then the amount produced will equal the amount bought—there’ll be no dresses that go unsold and no ponies who want for dresses—an equilibrium—“ “Equilibrium? I thought that was just the name of our rainbow attack when we combine powers. I didn’t think anypony actually cared.“ “I care,” Twilight said. She was sweating. It was a good kind of sweating, the after-dark kind of sweating that happens under the bedsheets. “I care a lot.” “I can smell that. But Twilight, my, ah, ‘supply,’ as you say, doesn’t work like that. I simply can’t bear to part with my dresses for anything less than their true value.” “Oh, well, now I understand the problem. Rarity, value is subjective. Some ponies care about dresses a lot—on the margin, which is what matters. Others less so—on the margin again. There’s no question of external, objective truth here, just the individual pony’s preferences.” “I don’t think you really appreciate my dresses,” Rarity said acidly. “Probably not. Isn’t that my point?” Rarity surprised Twilight with silence; she looked away, thinking. “You’re saying that I could make money by being more…accommodating? That is a persuasive line of reasoning, to be sure.” Twilight beamed. “Everything has a price.” Rarity still looked pensive. After a few minutes, Twilight excused herself and left. She had one last pony to speak with. At some point Rarity realized her legs were cramping. She half-fell off the couch and stumbled toward the stairs. It was dark. Was Sweetie Belle still in the basement? Rarity yawned. She had meant to spend an hour or two revisiting some of the no-sales, beautiful dresses she made that couldn’t find a buyer…but perhaps that could wait. Still, there was one thing she had to take care of. Never leave a customer waiting. Rarity trotted up to the fitting rooms and gasped at the sight of her black dress hanging beautifully on the thin pony’s frame. “Oh, darling, that is you!” she exclaimed. “This look will knock them dead!” It was dark, and Twilight was tired. Her legs complained as she headed toward Fluttershy’s animal sanctuary. She ignored them. They were not as good at economics as she was. Twilight had never seen Fluttershy’s sanctuary at night before. Owls rotated their heads and blinked at her. She heard frogs croaking in the grass, and some kind of…lemur? hung from the fence by its tailed and chattered in her direction. Behind the fence was a deep shadow, and when Twilight peered closely at it, she realized it was a… …Giant snake. Twilight took deep breaths, stilling her rapidly beating heart. Fluttershy had a flying serpent that was gaining a hundred pounds a week. She knew that, they all knew that. It was just a giant flying snake. Nothing to be scared of. Twilight knocked on the door, or tried to without making any actual noise, not wanting to wake the sleeping animals. She was surprised when the door opened at the softest of taps. “Oh, hello, Twilight,” Fluttershy said. Her eyes were red-rimmed, and she sounded stuffy and hoarse, like she had been crying. “Won’t you come in? If you want, I mean.” Twilight nodded and followed Fluttershy inside. Fluttershy took her through the store on their way to the back. It was…empty. Nothing sat on the shelves, even places that were clearly marked for pet food or fish bowls. And judging by the dust that floated everywhere in the dim light, the store had been empty for a while. “Fluttershy, what happened?” Twilight asked. Fluttershy sniffled as they sat down at a table in the back. She reached for a box of tissues. “I-I sold a puppy today to a filly and her family,” Fluttershy said. Then she began to wail. It was weird to listen to; it looked loud, yet coming out of Fluttershy it sounded like a strained, extended squeak. “Oh,” Twilight said. She had meant the store. “Um…congratulations?” “T-Thank you,” Fluttershy choked out. She blew her nose into a tissue wetly. “Do you always cry when you sell a pet?” “Y-Yes,” Fluttershy hiccuped. “But is it a good thing or a bad thing?” “Good. She has a family to l-love her!” “So you’re crying because…?” “It was my puppy!” Fluttershy wailed again, and she began to sob. “If it makes you cry then maybe you shouldn’t be in the pet trade,” Twilight said. She waited to see if this logical piece of advice would soothe Fluttershy’s anguish, but she went right on crying quietly, her head in her hoofs. Twilight still wanted to know about the store. “Fluttershy, why is this place so empty? The shelves are bare.” Fluttershy wiped her eyes on her leg. “H-Huh? Oh, it’s always like that. I don’t even bother shelving new inventory because they sell out so quickly.” “Why’s that?” Fluttershy shrugged despondently. Tears welled in her eyes again. Twilight was a scientist, trained to see patterns. A sneaking suspicion began to form. “Fluttershy, what kind of prices do you charge relative to other stores that sell pets and pet-related products?” “They’re really, really low,” Fluttershy said. “I want to make sure everypony can buy the things their pet needs!” “Oh, well, that’s just silly,” Twilight said as Fluttershy began to cry again. “You should charge a higher price so that the products go to the ponies who really need them, not just anypony.” “Cheer up,” Twilight added after a pause. “Your pricing strategy is irrational, which means it can be fixed.” Strangely, the bearer of the element of Rationality only cried harder at this news. “There there,” Twilight said. She patted Fluttershy awkwardly on the leg. “There there. Everypony makes mistakes.” Fluttershy blew her nose again. Sniffling, she looked at Twilight. “What are you talking about?” “Let me explain the basics of the price system.” She did. “Got that?” Twilight said. “No,” said Fluttershy, indignant. “Usually when I’m sad Rainbow Dash would tell me a story from the stock exchange, or Pinkie Pie would sing a silly song." “And I’m here to teach you economics!” Twilight beamed. “Isn’t this fun?” Fluttershy glared at her. Twilight continued. “Prices don’t simply determine where resources go,” Twilight said. “They also determine to whom resources go.” “Obviously,” Fluttershy muttered. “When prices are lower, ponies buy more,” Twilight said. “But producers supply fewer goods at a lower price because they stand to make less money per unit sold. So a too-low price leads to a shortage of goods, as more ponies have the money and inclination to buy a good than producers are willing to supply. The result is empty shelves in the store. Shopping suddenly feels like a race as suppliers quickly sell out. Ironically, it’s harder to get your hoofs on something when the price is too low!” “I’m sad,” Fluttershy said. “So only some ponies can get what they want during a shortage. But who gets their hoofs on these under-supplied, over-demanded products?” “And probably experiencing separation anxiety.” “As the price rises, fewer ponies will want to buy the same amount of the good. The ponies who will be still willing to buy the good at the equilibrium price level where the quantity supplied is equal to the quantity demanded are the ponies who most value the resource, the ponies who want it the most. These are the ponies who really need your help! But when you lower the price, you encourage more ponies to compete for fewer goods. Now these ponies who really could use a bag of feed or a toy for their pet are battling with ponies who simply are picking something up because it’s so cheap and might come in hoofy eventually. The resources no longer go to who is willing to pay the most but who happens to be nearby or gets their first. Economists would say that the resources are being allocated by time rather than money, and time is much less likely to correlate with value.” Twilight held her breath, waiting for the element of Rationality's response. “So you’re saying,” Fluttershy said slowly, “That by raising the price, I protect the ponies who need the products most from the competition of ponies who can afford to do without?” “I don’t like to talk about ‘need,’” Twilight grimaced, “But yes.” Fluttershy’s tears had stopped. She looked deathly serious. “I—have to think about this. I’m not sure I’ll know how to charge the right price after doing it wrong for so long.” “I can give—lend a book to you about price theory. All you have to do is”—Twilight hesitated—“Use marginal cost pricing.” Fluttershy sighed. “What’s that?” “Marginal cost pricing is when you set the price of the good equal to the marginal cost of producing it. But it’s really a principle of rational behavior in general: do something until the marginal benefit of doing it equals the marginal cost of doing it. “By marginal I mean the point at which choice occurs. The marginal unit is the ‘just one more.’ If you produce 500 units of something and are debating producing a 501st, that’s the marginal unit.” “Should I?” “Should you what?” “Produce a 501st unit.” “That depends on whether the price you can sell it at is greater than, equal to, or less than the marginal cost of producing it.” “The marginal cost is just the cost of producing the marginal unit?” “Exactly. So the decision to produce another unit is simply the question of whether you profit from doing so. If the marginal cost is ten bits, then if you can charge higher than ten bits, go ahead and produce it. If you can only sell the marginal unit at less than ten bits, then don’t produce it. If you can sell it at exactly ten bits, it’s a wash. You’re indifferent to producing the marginal unit. You can make the decision for every unit this way and work your way up to 500 of them. “And this is true of every single decision you ever make. Do something if it makes you better off. Don’t do it if it makes you worse off. If it doesn’t affect you, who cares?” “Brilliant.” “I know! But there’s a catch: marginal benefit falls. The more you do or have of something, the less it makes you better off. In the case of a business producing something, at first their goods will be bought buy ponies who desperately need them and are willing to pay a lot. But as they produce more and more, the marginal consumer becomes ponies who are less interested and willing to pay less. But again this is generally true. When you want something sweet, the first bite of cake is heavenly. By the tenth bite, you’re just eating it because it’s there. By the hundredth bite, you’re about to burst and sobbing helplessly as Pinkie Pie forces another mouthful down your throat—sorry. I had a weird experience at a Sugarcube Corner today.” “There’s no other kind at the Sugarcube Corner.” “So you can see that an activity, whether it’s working a factory or eating cake, becomes less beneficial as you do more of it. That means a behavior that is beneficial at first will grow less so over time and eventually become harmful. So you want to do something until the marginal benefit equals the marginal cost because—“ “I get it,” Fluttershy said. “Sometimes the marginal benefit of doing something is less than the marginal cost, so you just shouldn’t do it. Sometimes the marginal benefit is higher, and you should do it. But as you keep doing it, the marginal benefit falls. If it falls below the marginal cost, you’ve overdone things. But if it’s still above the marginal cost, you can still squeeze some good out of doing more of whatever. You only want to stop when the marginal benefit is equal to the marginal cost.” Wow, Twilight thought, impressed. Maybe Fluttershy has the makings of a great econopony. “Exactly,” Twilight said. “And that’s why marginal cost pricing is what rational businessponies should do. If the price is above the marginal cost, then you can benefit by producing more until the marginal cost rises to meet the cost. If the price is lower than the marginal cost, produce less until the marginal cost falls below the price. As you said, you only want to stop when the price is equal to the marginal cost.” Fluttershy sniffled wetly. “That really didn’t help me feel better.” “Me neither,” Twilight said. She stared despairingly at the table. “Twilight?” Fluttershy said. “Are you all right?” “No.” “Why not?” “Nopony uses marginal cost pricing.” “Oh.” There was a pause. “Um…so?” Twilight didn’t answer. She continued to stare at the blank table. “Would you like to hold something fluffy and soft and warm while it sleeps?” Fluttershy asked. “That’s what I do.” “No.” Twilight stood jerkily. “I need to go. Thanks for letting me talk.” Fluttershy watched her go. After a while she blew her nose again, got up, and went outside. She flew over the fence as silently as a shadow is invisible in the darkness. All her naturally evolved organisms were here, most sleeping. The owls hooted congenially at her, and the woolly lemur climbed around toward Fluttershy, hoping food might appear from her hoofs. The margay in the corner was only pretending to sleep as it eyed the frogs hopping through the grass. They were her responsibility, and she would do whatever it took to protect them. Twilight thought there was a way of thinking about how to do things…how to make everything happen in the right amount, in the right way, to the right ponies at the right time. Maybe she was right. If it meant she could save everyone, it was worth considering. A hoofstep within the fence that she didn’t recognize. Fluttershy tensed. But none of the naturally evolved organisms awoke or made a sound. Fluttershy took a deep breath and turned. “Oh, it’s you again. I don’t know how you heard that one of our bats just died recently, but I’m not—“ A pile of bits fell at her hoofs. Fluttershy stared at it. Then she turned to get her shovel. “Wake up, Spike!” Twilight shouted as she climbed the stairs of the treehouse, slamming the steps with her hoofs. “Wake up!” Spike appeared at the door, looking groggy but alarmed. “Twilight, what’s going on?” “A letter. We’re sending this out to all the Daughters.” “And the One Bank?” “Of course!” Twilight sat down to compose her letter. To the most esteemed econoponies of Equestria, Today I spoke with the preeminent businessponies of Ponyville about their pricing strategies. I do not know how to say this any other way, so I will say it plainly. They do not use marginal cost pricing. Send surveys to all the businesses of your domains. Ask them if they use marginal cost pricing, if they even know what marginal cost pricing is. I am doing so, but I can already predict the answers. We must explain this, and we must explain this now. Do firms not use marginal cost pricing? Are firms not profit-maximizing? Are ponies irrational? A fundamental tenet of price theory is under attack, and we, the leaders of the econoponies and by extension the world, must respond. I fear something terrible is coming Ponyville’s way, or was already here, waiting for me. I am —Twilight fought with her arm, which was suddenly rubbery and weak. She couldn’t make it write— Confused. I need —Again— Help. Your sister, student, and the servant of Equestria, Twilight Sparkle Twilight wrote the same letter out eight more times and handed them to Spike. “Send it.” He read it quickly. “Are you sure?” “Send it!” Spike rolled the letters up and swallowed them one by one. They vanished in a burst of green smoke. Soon they would reach the other banks. Part of Twilight, most of her, feared the response would be swift, brutal, and utterly humiliating. But another part of her feared it wouldn’t be. “Twilight?” Spike reached out to her, hesitated. “Go to sleep, Spike. And pray that in the morning I have been revealed to be the world’s biggest fool.” Twilight damped the candle. In the darkness, it was hard to sleep. Miles away a pony streaked through the air on the back of a winged skeletal monster. She wore a stunning black dress that would have clung in all the right places on any other pony. On her it billowed loosely, as if it lacked anything substantive to hold onto. She touched down at the Everfree Forest, now unguarded, and the giant bat waited by the entrance while its master went inside. The terrible, murderous vines and thorns rose to hinder her as she stepped into the forest, but she scattered rotten apples and stale cake around her. The vines grabbed the offering and let her be as she walked through the maze, never stopping to check her direction. Instead she seemed sure that wherever she was going was the right direction, that the world itself would turn to ensure it, and maybe she was right. She stopped in a clearing lit by a weak pale blue glow. There was a tall statue of a pegasus holding a spear in one hoof and a book in the other. Below the statue, an inscription. The pony read it. Then she went up into the air by the statue’s head. She was not floating in midair. She had simply decided to occupy that space. A scythe gleamed brilliant in the near-darkness. It hovered by the neck of the stone pegasus—and cut. The head of the statue fell to the ground, and that’s when the Everfree Forest began to rise.
The Full-Cost Pricing ControversyView OnlineDeathonomicsThe Full-Cost Pricing Controversy“An apple, an apple, and an apple, please,” said Fluttershy. “If you’re not busy. I don’t mean to impose.” Applejack hesitated. “You want three apples?” “No. An apple, an apple and an apple, please. It’s, um, more rational. I think.” “It’ll cost a bit extra for making me think,” Applejack said. “That’s fine.” Fluttershy passed a bit over the counter. “But, um, I think you, uh, owe me a bit for charging me.” Applejack pushed the bit back across the counter. “Fine, now can I get you your three apples?” “No! An apple, an apple, and an apple! Please.” Fluttershy took her apple, apple, and apple and went out the door. While it was open, a distant high-pitched EEEEeeeeEEEEeeee filled the room. It muted again as the door slammed shut. “The forest is getting worse,” Apple Bloom said. “Hope Pinkie Pie fixes it soon.” “She’s doing her best.” “That’ll be a bit for the observation, by the way.” Applejack grudgingly fished out a bit and flipped it to Apple Bloom. “I hate the price system,” she grumbled. Twilight Sparkle’s morning began with an insistent rapping on the door. She called for Spike twice but received no answer. Muttering, Twilight dislodged herself from the bed and noticed a pile of letters sitting by the door. Spike must have left them there. Her heart leapt as she remembered the message she had sent out to the other banks. There came another loud series of knocks at the door. Twilight didn’t mind having an excuse to put off reading the letters as she stumbled downstairs, running a magicomb clumsily through her mane. She peered through the peephole. It was the mayor. Twilight didn’t know what the mayor actually did. She couldn’t be the mayor of Ponyville because she didn’t have any civil function beyond making unnecessary speeches at events. There were no taxes to collect, the utilities ran themselves, and Twilight considered herself the de facto ruler of Ponyville (or at least Princess Celestia’s representative). Twilight wasn’t even sure if she was the mayor or if Mayor was her name…but that couldn’t be, could it? Twilight opened the door. “Hello, mayor.” The grey-haired pony was red with fury. “Twilight Sparkle, I have very cross words for you!” Twilight sighed. “We can’t supply the amount of money the market demands, we have to supply the amount it needs, which is a lot harder than it sounds—“ “I am talking,” the mayor snapped, “About what you have taught your friends about the price system!” Twilight groaned and rubbed at her face. “It’s too early in the morning for this.” “It’s three in the afternoon!” So Twilight listened as the (?) m/Mayor explained. She had been out in the bright early morning, enjoying the feel of her hoofs on the dirt. The sun was shining, the birds were chirping, yada yada. Twilight rolled her eyes as the mayor went on. The Ponyvillites were so simple. In Canterlot ponies had been sophisticated. Even Rarity would have been outclassed by the court ponies. Anyway, the mayor happened to spy Pinkie Pie on the road, carrying a basket of ingredients from the Everfree Forest. She stopped to say hello, and they chatted in the friendly, useless sort of way that drove Twilight up a wall. “Oh, Pinkie, the anniversary of Ponyville’s founding is soon,” the mayor had said. “Can I count on you to remind ponies who visit a Sugarcube?” “Sure,” Pinkie Pie said. “For a price.” The mayor blinked. “What?” “I’ll let ‘em know, but it’ll cost you a bit per pony.” “Ah, yes, economics is very ‘hip’ now that we have a bank of our own,” the Mayor chuckled. “Very funny.” “I’m not kidding. Shake on a bit per pony right now or I’m walking.” “Pinkie, you can’t be serious.” “I am. Oh, and I’ll need you to compensate me for initiating a conversation with me. Otherwise you’re stealing my time.” The mayor stammered, flabbergasted. “Pinkie, I—I don’t know what to say. What has gotten into you?” “Economics has. We’ve got to maximize the value of our scarce resources, and that means allocating them by a price system. Twilight Sparkle says so, and we’re friends so I believe her. Now make yourself scarce while I allocate myself to the Sugarcube Corner, which needs me to maximize the value of these ingredients.” “She specifically cited you, Twilight Sparkle,” the mayor said. “What do you have to say about Pinkie Pie’s behavior?” “Awesome.” The mayor’s angry face loomed above Twilight’s. “And it wasn’t just Pinkie Pie. Applejack charged me for looking at her apple orchards! Fluttershy made me pay for listening to the sweet sounds of her songbirds, and Rarity said that I was imposing a cost on everypony wearing a mane in this style and shouldn’t go out unless I can make up for it with bits! Now what are you going to do about this…this pricing of things?” Twilight beamed. “Coasepony is best pony.” She shut the door. There was an economics puzzle that required her attention. There was a knock at the door. Twilight sighed and opened it. Rainbow Dash was hovering above the mayor, who seemed to have fallen somehow. Rainbow Dash’s face was blue with rage. “Twilight Sparkle, stop sleeping and get outside RIGHT NOW!” It was pollen. At least, that’s what Rainbow Dash said, and Twilight believed her. A hoofful of the stuff made Twilight’s eyes water and her nose itch like a mosquito was acting out a Shakesponyian tragedy on her snout. In the distance a mass of the stuff hung in the sky ominously, a snot-summoning cloud of misery, scratchy throats, and a severe uptick in the demand for tissues. Even as they watched, a fat blob of pollen shot into the sky, adding to the cloud’s mass. It came from the direction of the Everfree Forest. “It’s clogging up the skies and it’s coming our way!” Rainbow Dash shouted. “This is all your fault!” “My fault? What did I do?” “You freed the Everfree Forest! I flew as close as I could and saw it pumping the stuff out like a FlimFlam cider machine!” “I was unconscious when Applejack and Pinkie made that deal with the forest!” “You have to do something before it kills us all!” “I control the money supply! What am I supposed to do about it? Besides, it’s only pollen. It can’t hurt us.” Twilight sneezed. “Probably.” “Pinkie is on her way over right now to talk to the forest,” Rainbow Dash said. “But that cloud of pollen is going to play havoc with the weather. Enough of it in the sky and Ponyville won’t survive. Nothing will. We need sun and rain. I don’t think it’s regular pollen either. It’s magical Everfree Forest pollen. Probably it eats ponies somehow.” “I’m sure Pinkie Pie is already figuring out how to bake it into a cake,” Twilight snapped. “Princess Celestia wouldn’t let the forest threaten Equestria.” “She wasn’t supposed to let the money supply fall either,” Rainbow Dash countered. Twilight had no snappy retort. An ear-splitting siren caught her attention and promptly punished her for it, like somepony shouting, “Hey, Twilight!” at a dodgeball game. It was high-pitched and excruciatingly painful to hear, rising and lowering in pitch and volume in a way that made it impossible to ignore. Twilight’s hoofs clapped over her ears. Thirty seconds later, the siren faded. “Not a siren,” said Rainbow Dash, who seemed pale. “Pinkie Pie said it was the forest crying. Screaming, maybe; she’s not sure. She charged me a bit for that information. Can you believe it?” “The mayor was saying something about that….” Rainbow Dash looked sour. “Thanks to you and your ‘economics,’ and ’education,’ everypony thinks they ought to charge everypony for everything, and I mean everything. Saying hi to Rarity this morning ran me five bits!” “She’s just letting you know how valuable her time and attention are—“ “She’s being a jerk!” Twilight, who based on her personal encounters with the word thought it meant “somepony who thinks like an economist,” nodded. “Even Fluttershy charged me!” Rainbow Dash continued. “I at least managed to get a Friendship Discount out of her, but she kept giving me this look like I was personally starving all her animals to death. Oh, and she fined me for saying ‘animals’ rather than ‘normally elongated whatevers!’” “Coasepony is best pony,” Twilight repeated. Rainbow Dash took to the air again, flitting about agitatedly like a bee. “Twilight, I hate to say it, but you and I are the only sane ponies left in this town. I’m going to see what I can do up in the sky. You need to get this price system and the forest under control!” Rainbow Dash left, a rainbow streak trailing behind her. Twilight looked at the growing distant mass of pollen, her eyes watering at the very sight. For some reason she thought of the Snow. And bicycles. Few records remained of the time of the humans and their crazy bicycles. Princess Celestia had all of them, and that meant Twilight Sparkle had read them too. Humans were handed, bipedal creatures from before the time of Alicorns. Princess Celestia said the humans had been richer than the ponies were. A the height of their majesty and power they built bicycles because they did not have wings to move places quickly. Twilight Sparkle had pointed out that if they were so rich, then they should have been able to beat the Snow like the Diarchs had. Princess Celestia had nodded. Humans, she said, had been better at cooperating than ponies. That was why they were richer. They had also been worse at cooperating than ponies. That was why they were dead. “Resources have alternative uses,” Twilight mumbled, only vaguely aware of the concussed mayor lying prone on the ground. “Resources are things that can be used, and in more than one way for more than one pony. Ponies own these resources, and they use them for themselves or give them to other ponies in exchange for some of those ponies’ resources. With money, ponies can express how much of their claim on resources they are willing to sacrifice to obtain some resources, and the ponies willing to sacrifice the most, to leave resources to other ponies, get the resources. Value is maximized. Giving-unto-others is maximized. Friendship is maximized.” In the distance a green-yellow mass tumbled into the sky, adding to the bloat of powder cloud that sat in the sky with potent inertia. It seemed to be constantly rippling. But it only worked—friendship only worked—when firms maximized profits, Twilight Sparkle realized. A firm maximized profit when it sold as little as possible for as much as possible. When it did that, it ensured that resources flowed to the ponies most willing to sacrifice their claim on alternative resources to obtain them. But if firms gave resources to ponies who weren’t willing to give as much to others in exchange for those resources, the incentive to be nice broke down…. Twilight was an economist. She believed in incentives. Businesses maximized profits when they set the marginal revenue of their product equal to the marginal cost. That was Logic. The businesses of Ponyville didn’t. That was Not Logic. And that was a Big Deal. Again Twilight felt her eyes being drawn to the thickening cloud of pollen in the sky. Call it niceness bribes. Some ponies have to believe in selfishness. Fine. Sometimes Twilight was one herself. So call it niceness bribes. Businesses maximized profits by bribing ponies to leave as many resources for others as they could bear. The market system was cooperation enforced by kindness. Provide for others on pain of snuggles. Twilight thought of the humans, who were better at cooperating than ponies, and who had died because they were couldn’t cooperate. Princess Celestia had once said in an unguarded moment that she thought that the humans might have created the Everfree Forest. That they had made, somehow, the original pollen. Too much of it, and some other things had happened—even now, thousands of years later, Princess Celestia was still piecing together the puzzle like the atmosphere she and her sister had stitched together from corpses, clues and energy buried in the frozen ground—and the Snow came, and the humans went, as it were. At the end they had used a lot of bicycles. It hadn’t helped. Privately, Twilight thought humans sounded mean. Ponies were nice. They didn’t need all that much encouragement to be friendly. “Listen hear, you darned ground!” somepony shouted in the distance. “If you want the right to be in the same place I’m going to put my hoofs on then you ought to pay me first!” Such a tiny push. Was it possible to have too much friendship? Or…the wrong kind of friendship? “If they were really your friends they wouldn’t call you names. If they were really your friends they wouldn’t pick on you. If they were really your friends they wouldn’t…they wouldn’t….” The mayor groaned. “I need ice for my head.” Twilight hesitated. Then she brought the mayor a bag of ice. Free of charge. She felt nervous about it. There had to be a way of finding a balance, a harmony among every interest. You couldn’t assume knowledge of the solution into the heads of the problem-solvers. The humans had died at their richest. That was just…stupid. Twilight resolved to do better. She went inside. There was a pile of letters from all the banks of Equestria that needed her attention. Miles away, a pink pony bearing a box of cupcakes skipped toward the Everfree Forest. The forest closed the entrance and ignored the small hoofs pounding on the trees. It… …Not remembered. The forest didn’t have a brain, exactly. But there were things that had happened, and things that had happened because those things had happened, and all those causes could be seen, smelled, heard, touched, tasted and knorped in every inch and motion, every pattern of bark and the sway of a leaf, the bite of a thorn…. It was a time for a change. First, the castle. Vines surrounded it, rushing past a sea serpent who could only duck underneath the water with his children as the black tendrils wrapped around the castle. When they withdrew a moment later, it was rubble. In a clearing lit pale blue, a broken statue and its inscription were torn apart and smashed into dust. The forest shaped itself. The guardian was gone, the promises all broken. The new masters, the sun-pony and the moon-pony were distracted. The old master was…inert. So the forest drew everything up from its roots, pulled stem and leaf and all spare mass together, molding it according to something that couldn’t be called memory but was remembered all the same. It made a pod. A bulb. A cannon, standing as high as half a dozen ponies and even fatter around, and it was pointed at the sky. It hadn’t done this in a long time. The pollen shot out with the force of a lightning bolt. It was felt as far away as the Crystal Empire, where the force of a lightning bolt was well-known and watched for. And the pollen in the sky continued to grow. It amassed, and when the winds blew, the spores spread… …They spread to the city of Detrot, where brothers Flim and Flam were demonstrating a marvelous technique for using water to break the ground open, where thousands of years of pressure had turned dead things into fuel. They sniffed, and sneezed. Their eyes watering, they looked together toward the horizon in the direction where Ponyville lay. …To a cave hidden deep within the the mountains of Equestria, where the drifting spores disturbed a sleeping dragon. Highly attuned to the conditions of the skies that the ponies had so artfully controlled for so long, the dragon snorted and wondered if there might be an opportunity to stretch its wings soon. …The pollen even reached Canterlot, where the familiar stench distracted Princess Celestia from her sister’s location for the briefest instant. A month of work lost. Her mood worsened. …It scared a baby sky serpent that weighed nearly half a ton, who began to have second thoughts about flying. It upset the pegasi who managed Ponyville’s weather. It gathered like dust on a statue that looked like a cross between a dragon and a horse. And other brief stories we have no time for. The forest would blot the sky and start again. Wait. One promise left. A hundred dark vines rushed for the apple seeds planted at the entrance, for the false words, the lies. A pink pony stood in the way. She held a cupcake like a cudgel. Twilight opened the first letter. Dear Twilight Sparkle, You have got to be kidding me. Signed Twinkleshine, Chief Executive Economist of the Daughter of Manehattan At first the letters were dismissive. Some ponies were kind, within their limited experience with that quality. To my Beloved Sisters, Sent surveys. Twilight Sparkle’s results confirmed. Have no explanation at present. Will wait for further corroboration. With love, Frida Gallup, Chief Executive Economist of the Daughter of Fillydelphia But most were not, even given that hooficap. Dear Sisters, The surveys are rubbish. Firms profit-maximize. There is no other way to make sense of them in an economic context. To paraphrase dear Alberta, I feel sorry for the (poor) economist. The theory is correct. As for the rest of you girls, the Great Succession was not so long ago, and we of the Daughters face a significant opportunity cost when we turn away from restoring the world. Don’t bother replying, Joan Candymane, Chief Executive Economist of the Daughter of Longedon Sisters, Ponies are rational. It is called the budget constraint; look it up. Rationality is both a weak and a necessary assumption. Economics without rationality is like physics without atoms. It is what we study. As for profit maximization, it is simply a corollary. Didn’t check, don’t care, busy saving world, Jenny Stirrup, Chief Executive Economist of the Daughter of Fillydelphia But even as their words fell like whips on Twilight’s brittle pride, the results poured in. To Whom It May Concern (You girls), Rational choice theory is just a theory. Open your eyes. When is the last time you saw anypony behave rationally? You were never supposed to take marginal cost pricing literally. Even if ponies were rational, which they are not, how would they determine the marginal cost of or the demand for their goods? Did Twilight Sparkle seriously think ponies sit in their chairs thinking, “Time to set the marginal revenue equal to the marginal cost of my products?” It is not a literal descriptor but a prediction and explanation: ponies behave as if they are rational businessponies who set MR = MC. Duhhhhh, Fanny Hoofbottom, Chief Executive Economist of the Daughter of Baltimare P.S. Results corroborated. Paddock and Martingale send confirmation as well. Bizarre. And the problem took shape. Dearest Sisters, Survey results interesting. Businessponies believe in “full-cost” pricing. Summary: take “full cost” of producing good, add markup. No measure of consumer demand is taken. Baffling. Am baffled. Thoughts? Surveys, examples coming with letter. Please be decent. With love, Frida Explanations started flying thicker than the pollen spreading over the sky. Come on, girls, Read a textbook. The actual decision processes of ponies are not modeled or even mentioned. Therefore no amount of evidence showing that they think in certain ways can refute any of our knowledge. Ponies are not modeled, profit maximization is modeled, a model that is incredibly powerful (I hate to admit it, Joan, but that’s not flattery). If the model works, but ponies don’t, then ponies must behave as if the model is true. Twilight needs to go back to econ 101. The rest of you should consider joining her. Groan, Fanny Dear Sisters, Arriving with this letter is an an example deriving marginal cost pricing from these so-called full-cost pricing methods, based on the survey results. What ponies have chosen to think of as marking up a full or average cost is plainly marginal cost pricing in practice. There is no mystery here except how Twilight Sparkle could have ignored this possibility. Actually, considering the axe she has to grind with me, no mystery at all. Back to work, Joan Spike returned, struggling up the stairs with a pile of letters that must have come out on the way. Twilight sent him out to Rainbow Dash’s house. He came back ten minutes later, huffing and puffing with a bemused tortoise in his hands. Twilight levitated the surveys, Joan’s work, and an economics textbook in front of Tank. Wordlessly she clambered onto the table and took a slow look at the numbers, pausing only to direct Spike to acquire some lettuce. He returned with a head of fresh lettuce just before he hiccuped, convulsing as a torrent of letters burst out of his mouth in a stream of green fire that burnt the floor. Twilight barely noticed as she summoned the letters to her. The argument was in full swing. Joan’s argument was hotly disputed by Frida, or at least as hotly as Frida disputed anything, and Jenny considered the very idea of it utterly contemptible, which was par for the course with Jenny. Fanny’s argument that ponies implicitly obeyed the theory regardless of their own ideas about the matter was toyed with, rejected and accepted with all manner of modifications in caveats by everypony involved. Twinkleshine was being a…bright young pony. Sisters, The Coaseponyean creedo says that what you don’t understand is a constraint you don’t realize. What could be missing? Jenny Dear sisters, Here’s a puzzle: MR = MC is dependent on the assumption of profit maximization. But what kind of an assumption is profit maximization anyway? IRL ponies face a great deal of uncertainty: each choice a set of overlapping possibilities. I mean, we know unemployment happen! Consider an example: a pony has a choice between a high-variance strategy with a higher mean profit or a low-variance strategy with a lower mean profit. Which is profit maximizing? How can a pony be said to be maximizing anything in that world? Just a thought, Trixie Lulamoon, Vice Chief Executive Economist of the Daughter of the Crystal Empire Twilight’s eyes flashed. “Spike!” Spike groaned from where he lay on the floor. Every few seconds a letter would burst out of his mouth and land on the floor beside him. “Whaaa?” he moaned. Twilight didn’t answer. They got it! By Celestia, they got it! Not the answer, of course, if it was easy she would have seen it, but the other ponies were taking it seriously. They weren’t confused by marginal cost pricing or dismissing it. They understood what was at stake. They understood that the very heart of economics had just skipped a beat, and its left arm was feeling awfully strange. They understood what would happen if they failed here. “What happens if it goes away?” Twilight Sparkle had asked when she was but a filly. “Everypony dies,” Princess Celestia said, more harshly than she intended. “In the amount of time that it takes a pony doing absolutely nothing to die.” Princess Celestia, Twilight realized much later, had thought she meant the price system. Twilight had meant the science of economics. Her…sisters, Twilight had never been comfortable with that, but now it felt very nearly right, were panicking. That was obvious. And something she would need to discuss with the princess once her own hoofs stopped shaking. She was in charge of one-tenth of the Equestria economy. Panic would be catastrophic. But they were together in this. They understood. Twilight kept repeating that to herself over and over as she obliviously reread the same line of Joan’s latest tirade three times. She remembered, briefly, in a distant sort of way that this was what it felt like to have friends. The methodical scratching of Tank’s pen across the paper and the occasional stream of fire from Spike were the only sounds in the room. Twilight was about to compose her own letter for Spike to send out when something happen. Her sisters had solved the problem. Salutations, Sisters, We have all been overthinking this (though perhaps we cannot accuse Twilight Sparkle of this crime). Let’s check the, hah, microfoundations. What incentive do ponies have to respond honestly to surveys? None. Prediction: dishonest surveys. What incentive to ponies have to use marginal cost pricing? Simply…everything. Prediction: ponies use marginal cost pricing, they just don’t talk about it. Preferences are revealed through actions, not words. Sincerely, Paddock Pokey, Chief Executive Economist of the Daughter of Whinnysota Dear Sisters, The question is not which assumption may be incorrect but which predictions. Pauline is correct; we did not predict survey results but the actual behavior of the firm. If we erred in our predictions we can work backwards to troublesome assumptions. But there is no use in talking of true or false assumptions, only how useful they are in generating true but not false predictions. Sincerely yours, Martingale Farrier, Chief Executive Economist of the Daughter of Neigh Orleans P.S. This was fun, a good if frivolous break from convincing the Neigh Orleanians that I’m not plotting to inflate their wealth away for the sake of my own sick amusement. We should correspond more often about current economic problems and publish the results. I am sure it would be of interest. The public journals of the Daughters…d-logs? Dlogs for short? That just sounds silly! Twilight’s leg trembled as she reached for the next letter. They hadn’t been there; they hadn’t seen. Even Frida was just looking at surveys. She hadn’t faced a pony who looked her in the eye and told her she priced randomly. Her heart skipped a beat as she unfurled the last letter and glanced at the name at the bottom. To the Chief and Vice Chief Executive Economists of the Daughters of Equestria, I think you’re all right! Don’t fight, or you’ll make Momma sad. What does everypony think of my new official stamp, made by the new court artist Paint X? Love, Princess Celestia It was a good stamp, Twilight admitted grudgingly. She would have been the first to see it back when she was Princess Celestia's number one assistant. Now things were changing. The controversy over "full-cost pricing" as Frida had put it, was ended. No more letters remained. Spike closed his eyes. In a few minutes he was asleep, snoring gently on the scorched wood floor. Twilight tottered unsteadily down the stairs. She wanted so badly to believe that it had all been in her head. Nightmare Moon herself hadn’t been as scary as Applejack’s stubborn refusal to change her prices. At least recessions made sense. But Twilight couldn’t shake the feeling that the others had merely come up with a very clever way to assuage their own panic. Nervousness settled inside her gut like a third helping of cake. Somepony knocked at the door. Twilight opened it in a daze. It took her a few moments to realize the ponies her eyes were looking at were Applejack, Rainbow Dash, Rarity and Fluttershy. Behind them the sun was setting, the pink glow barely visible through the haze of pollen. “It’s been hours and Pinkie Pie isn’t back,” Rainbow Dash said worriedly. “And the pollen isn’t stopping. We have to do something about the forest.” “What? Oh. F-Fine,” Twilight said. “Should we get our Elements?” Applejack asked. “No. We’d need Pinkie Pie. Besides, they only work if economics does.” “How about my Cerberus? The sky serpent?” “We’re not using force. We’re going to talk. I’m an economist, for Celestia’s sake! And you ponies are—“ Twilight cut herself off in time. There were worse things than ponies who misused the price system, she told herself. She couldn’t think of any at the moment, but surely there were. Her eyes were already watering. “Go get all the tissues you can and meet me back here in fifteen minutes. This has been the worst forty-eight hours of my life.” "Knock on wood, huh?" Applejack said, grinning. Her face turned serious. "That'll be three bits for the pun."
Opportunity CostView OnlineDeathonomicsOpportunity CostHELLO. YOU ARE ABOUT TO DIE. WOULD YOU LIKE TO TRY OUR LATEST PRODUCTS? Her nostrils firmly clogged with wads of tissue paper, Twilight Sparkle led four-fifths of the Elements of Equilibrium out of Ponyville to where the Everfree Forest waited. Twilight was preparing to take down a killer forest and rescue Pinkie Pie with the science of friendship. The four ponies behind her were charging each other money. “Applejack, you’re blocking my view,” Rarity complained. “You have no right to impede the travel of my photons. Pay me ten bits or get out of the way.” “And you’ve got not right to be sending those annoying sound waves of yours to bounce around in my ears,” Applejack countered. “How about you allocate your lips together if you don’t want to pay me twenty bits?” “Will both of you shut up?” Rainbow Dash said, flying a few feet above them. “Hey, Twilight, what if the Everfree Forest got infected too and makes us pay money to get Pinkie Pie back?” “It would be a lot better than fighting and a good deal simpler than talking,” Twilight said nasally. “And therein lies the wisdom and efficiency of a monetary means of allocating resources.” “Pinkie isn’t a resource,” Applejack said crossly. “Yes she is,” Twilight and Fluttershy said at the same time. They looked at each other. “Twilight, um, I don’t mind if you want to take my dialogue,” Fluttershy mumbled, “But it would be right to, um, pay me for it. Maybe two bits a line—“ “Shut up!” said Rainbow Dash. Twilight rolled her eyes. Above them the pollen rippled like a slandered pond suffering execution at the hoofs of a bored filly with a pile of rocks. It was getting thicker as they neared the forest. Twilight’s throat was getting itchier. She kept blinking away tears, and she had to keep the river of mucus dammed up in her nose with wadded tissue paper held in place by magic. “Twilight,” Rarity said, “Are you going to pay us back for all that tissue paper? I’ve decided on an interest rate of—“ “Shut up! Ah—SNNRRRHHRRRUUUUNNNK!” Twilight sneezed. A tidal wave of mucus formed by the accumulation of an accelerated thousand years of allergies smashed into the paper-and-magic levee of the tissue paper. The resulting explosion went off inside Twilight’s head like a dirty bomb that left brain cells drowning in the flood and feeling rather disgusted about it. She stumbled, lost her footing and nearly fell. “You okay?” Rainbow Dash asked, swooping low beside her. “I’m fine,” Twilight said hoarsely. “Let’s keep going. AahhhhSNNRNRHK!” “SNGGHHRRRLLMMPHHMMGRGHGMM!” Twilight focused on putting one hoof in front of the other. It was better than focusing on the narrowing stream of air that was still able to force its way past her swelled throat. The forest seemed so far away. The ground was so blurry. She couldn’t tell where she was going. “Twilight!” A hoof grabbed her by the snout and pulled her around. Twilight blinked tears from her eyes and focused on the face of Rainbow Dash. “You started walking in the wrong direction. Everything okay? You’ve been sneezing a lot.” Twilight nodded. It wasn’t obvious to her how to guide coherent syllables through the blocked path from her lungs to her lips. Her head felt like it was about to explode from the build-up of internal pressure. “SNNNNGGGHHRHRHRHKHKHKH!” “Twilight?” “GGHRHRMRPRH!” “Twilight.” “HaaaaGHRUAAAGUUGH!” “Twilight!” Distantly Twilight was aware that her body had lost a lot of water through her tear ducts and the rivulets of snot that managed to escape through the molecule-thin gaps between the tissues and the inside of her nostrils. She couldn’t remember the last time she had been able to take a full breath, and the sneezes rattled her brain around inside her skull like she was a rookie prizefighter up against the world champ. But up close all she could tell was that Rainbow Dash was turning sideways. For some reason there was suddenly a lot of dirt in Twilight’s peripheral vision, hovering like a wallflower at a party, and then it was all up in her face like it had reached a tipping point of alcohol consumption and was determined to have fun or die trying. Twilight fell over. The magical grip clogging up her nostrils faded. The dam burst. “EEEEEEEEEWWWWWWW!” “No!” Rarity screamed. “No, no, no!” “Rarity—“ “Kill it! Kill it with fire!” “Twilight’s our friend—“ “She’s gone now! Kill it!” Rainbow Dash knew a lost battle. She turned to Applejack. “Can you lasso her out of the…the swamp?” “Five bits a rope,” Applejack said quickly. “She could die!” “Ten bits a rope.” Rainbow Dash contemplated pushing Applejack in along with Twilight. She turned to Fluttershy, who was at a safe distance and still backing away…and gave up. “Fine, I’ll dig her out myself,” Rainbow Dash said. “I just want you all to know that this is fifty-two percent uncool.” Holding her breath, Rainbow Dash approached Twilight’s prone form lying in the greenish sludge until she was hovering over her. Now she just needed to find a relatively clean place to grab. Rainbow Dash reached down, but jerked back as a series of dry sneezes racked Twilight’s body. She worried about that. She didn’t think it was possible for a pony to sneeze her internal organs out through her nose, but after seeing Twilight’s allergies interact with the Everfree Forest Rainbow Dash wasn’t sure anymore as to how she would bet on that question, and Rainbow Dash was always sure of how she would bet on any question. She wasn’t often right, but she was sure…. She laid a hoof on Twilight and instantly regretted it. Sticky strands tugged at her hoof when she pulled away. “Rarity, I could really use your help clearing the snot away—“ “Kill it! Burn everything!” Rainbow Dash gritted her teeth. She would have to do this alone. Or maybe she wouldn’t. Rainbow Dash remembered something. She was rich. “Rarity, how much would it cost for you to be willing to clear the mucus away?” “Kill—fifty bits.” “Done,” Rainbow Dash said. “Applejack, you said ten bits for a rope? How about that plus another ten to carry Twilight back?” “Sounds about right,” Applejack said. “Fluttershy—I see you hiding behind that tree—a good doctor can cost upwards of fifty bits for a visit, right? I’ll pay you to care for Twilight.” “She, um, needs water,” Fluttershy said from behind the tree. Rainbow Dash had to strain to hear her. “But maybe we should wait until we get away from the pollen or she’ll just, um, burst. Again.” “Fine.” Rainbow Dash paused. “I hate you all, just so you know.” “So long as you’re paying us, we don’t really care,” Rarity said. “Coasepony is best pony,” Twilight gurgled. They rushed Twilight home and into bed. Spike ran to get water. She was moaning, babbling incoherently. “Shares always reflect the full amount of available information,” Twilight said feverishly. “When ponies fail they reveal a preference for failure. Edgeworth boxes can solve everything—” Rainbow Dash slapped her across the face. “Stay with me, Twilight!” “Transaction costs are indistinguishable from shipping costs!” Rainbow Dash slapped her again. Spike came in carrying a bucket of—make that stumbling with a bucket of—falling over, no longer quite with a bucket of water, which flew through the air and deposited its contents on Rainbow Dash. Her rainbow mane drooped with comic precision, but Rainbow Dash had just spent an hour in the company of three ponies who thought the world owed them money for having the temerity to be under their feet. She grabbed Spike by the ear and pulled him up roughly. “Get the water.” “Yes, Miss Dash.” “Do it right.” “Yes, Miss Dash.” “Pour it down her throat. Don’t open any windows. Don’t let her go outside.” “Yes, Miss Dash.” “Right.” Rainbow Dash released him and turned to the other ponies. “I am going to go feed my tortoise, and then I am going to call the Wonderbolts here. With their financial wizardry, we just might be able to buy Ponyville and put a stop to this price system. Spike? Take care of Twilight. We’re going to need an economist before this is over.” “We can deduce the existence of unobserved historical events from first principles!” “Slap her if she keeps doing that. The rest of you…I don’t know, do something useful. RD out.” Rainbow Dash left. Twilight awoke with a headache that felt like somepony was squeezing her head in a vice while at the same time somepony else pumped air in through her ears. Her skin felt oddly rubbery, and it didn’t seem to fit quite right, like a dress that shrank in the wash. “That was a blarf adventure,” Twilight groaned, holding a hoof to her head. She looked around. She was in her room, lying on her bed. Somehow they had survived. Twilight wasn’t entirely sure what had happened after the initial explosion, but she was glad to see that the inside of her bedroom wasn’t covered in green goo. Her bed, however, was extremely damp, as if a bucket of water had been repeatedly spilled on it. Hesitantly, like a newborn foal that had just undergone the worst baptism, Twilight slid off the bed onto her hoofs. She stood shakily and managed to make it to the door. “Spike?” she called, pushing the door open. It swung open as if being pulled by somepony. “Twilight!” Spike screamed, tripping over his own tail. A bucket sailed out of his hands and clipped Twilight on the side of the head. She fell, and so did the bucket, spilling out its contents over the floor. Spike rushed to her side. “Twilightareyouokaydoyouneedwater— “Spike—“ Spike slapped her. “OhmyCelestia Rainbow Dash told me to do that I would never please don’t be mad I’ll get another bucket—“ Gently but firmly, Twilight gripped Spike in her magic and levitated him away. She pulled herself up, wincing at the pain in her temple. Her mind felt like it was splitting in two, unsure of what was real anymore. She, the very pony who had triumphed over Nightmare Moon, had lost to a battle to allergies. Sometimes a pony had to know when she was beat. “Spike? Take a letter.” Dear Princess Celestia, I don’t know if you’ve noticed, but the Everfree Forest appears to have snapped and is now pumping out tons of pollen. It is blotting out the sky and we all may die. Please help. Sincerely yours, Twilight Sparkle The reply was almost immediate. Twilight Sparkle You are the one who removed the guardian I placed at the entrance to the forest. You are the one who removed a giant serpent from the forest and read the inscription on the statue of Frankie Knight. You are the one who thought scattered apple seeds could replace ancient magic and old contracts. Clean up your own messes. You have a Daughter, now act like an adult. Signed, Princess Celestia Twilight locked the door to the bathroom. “Twilight?” “Twilight, it’s been an hour. I really need to pee!” “Go in the bucket!” It was so deep into the dead of night that it was nearly resurrected and become morning by the time Twilight exited the bathroom. Spike was snoring on the couch. A mare in a very black dress sat at the table. Behind her was the silhouette of something large and birdlike, buried in the gloom. “Hello, Twilight Sparkle,” said the lady in black. “A pleasure to meet you again. It’s been, what? Picoseconds?” “Less than that, I’m sure,” Twilight said. There was still some red around her eyes. She hoped it wouldn’t be visible in the dim candlelight. “Can I get you anything? Tea? Coffee?” “Coffee.” “Let me guess, you take it black.” The lady grinned. Twilight made coffee and hoofed a cup to the other mare, who sipped at it. “Careful, it’s hot.” “But not hot enough,” the lady sighed. “I’ve never tasted anything colder.” “Really?” “Yes, it’s as cold as nothing.” “I’m not in a good mood. What do you want?” The lady crossed her legs. “I wanted to thank you, Twilight Sparkle. Because of you, the Everfree Forest was left unguarded. I penetrated her—“ “Her?” “Of course. She only does this pollen thing once every millennium or so. What gender do you think she is the rest of the time?” Twilight tried to wrap her mind around the idea of a forest having a gender—let alone two of them—and gave up. “So what happened?” “I cut off the head of that Frankie Knight statue. These are modern times. You should be pleased. An end to neoclassical rubbish, to that age when no pony knew anything.” “When was this?” The lady told her. “So it was you!” Twilight shouted, pounding her hoof on the table. The lady winced. “Mind Spike. He’s a baby, and he had a long day.” “It was your fault the forest freaked out like this!” “No. Nothing is my fault.” “What happened? Why did decapitating a statue make the forest react like that?” “This is the dawn of a new age. Dragged kicking and screaming, as they say. Princess Luna is freed. Dragged kicking and screaming. The Daughters are spread over Equestria like lilies over a grave—“ “It’s not at all like that!” “I’m limited in my metaphors. Can you blame me? No, you cannot. Much trouble is coming your way, Twilight Sparkle. An end to things. Dragged kicking and screaming.” “Now you can see the future?” “I did not say you would bring change. Much the opposite. Life is good for you. I keep up with many ponies, as you know.” “It must be an economist,” Twilight said, “Since only economists can see you aside from when ponies are—you know.” The lady grinned. Twilight continued. “It must be somepony important, smart, and powerful. So it’s somepony at a Daughter. It’s something bad. So it’s Trixie.” “Only economists can see me,” the lady agreed, taking a sip of coffee. She made a face. “Only economists can….” Twilight’s eyes widened. “Oh.” “Mm?” “I taught them how to think like economists.” “Mm.” “Must have been a crazy week for you.” “Unusual, to say the least.” Twilight spoke, more for her own benefit than the lady’s. “The price system works because it allows us to compare anything to anything through the medium of money. This itself is made necessary by the condition of scarcity, which says we can't have all the apples and oranges we please, but instead we must choose, sacrificing some apples to gain some oranges. How many apples is an orange worth? Well, if an apple is worth two bit and an orange is worth one, we have our answer. Now we make can make the intelligent, rational decision as what to do with our apples and our oranges, knowing how much they to sacrifice of one should we want the other. And once we have that answer, we can scrub the model clean of money and keep the value ratio.” “I see why you’re so popular,” the lady murmured. She gave up on the coffee, pushing it away. “Ponies come for a chat and get a lecture on economics.” “And we can create an infinite chain of comparisons. If an orange is worth two apples, and an apple is worth two pears, an orange is worth four pears. And so on. It’s not just fruit. It’s everything. It’s everything because these prices, these exchange ratios of value, are determined by pony action. When a pony buys something, the scarcity of it increases. The demand for it increases. The price of it rises. With all the buying and selling, the interactions of thousands, millions of ponies determines the exchange ratios. The full sum of pony action as it relates to everything apples determines the price of apples. And so on for everything else." Twilight swallowed. “Sometimes, ponies risk their lives.” The lady didn’t answer. “The fundamental action of the economic pony is sacrifice. Scarcity means that ponies can’t get everything they want. So they have to choose, and sacrifice the less-preferred alternative. When they do so, they establish the exchange ratio between the thing gained and the thing lost. On the margin.” “On the margin,” the lady said almost at the same time. She lifted her cup as if it were a toast. “Ponies risk their lives,” Twilight repeated doggedly. “Not just brave dumb things like going to tell off a forest or play games with an Alicorn. Crossing the street. Running when it’s wet. Playing sports or eating food without cutting it up so fine you could never choke. Cutting food with anything sharp enough to do so. If ponies didn’t want to die at any cost, they’d spend their lives in a rubber seal and never do anything.” The lady grinned. “That wouldn’t help.” “So you can put a price on life. Ponies do every day. And you can say, ‘four apples are worth seven minutes of life.’” “More than that, if they’re apples from Sweet Apple Acres. Or so I’ve heard. The one I had was rotten.” “And if ponies are sacrificing their lives all the time, why, you could say, on the margin, they die a little every time they choose.” “Talk about a slice of life story.” “That’s why economists can see you,” Twilight said firmly. “We know you’re with us whenever we choose. And ponies are always choosing.” “Except at the end. Then it’s out of their hoofs.” “It’s scary.” “I wouldn’t know.” “The forest is scared.” “Could be.” Twilight wasn’t ready to give up. “But they should know. They have a right to know. It’s the truth.” “That every day they commit suicide a hundred times? I doubt many ponies find the notion as romantic as you do. Rarity is a dressmaker, and quite good at it, I should add. Why should she want to trade her clock for an hourglass?” “Fluttershy understands,” Twilight said stubbornly. “Yes, and she’s virtually crippled with anguish every time she gives away an animal. Excuse me. Naturally evolved organism. She has had to bury so many of them.” “Not all of us respond like that,” Twilight insisted. “I don’t.” “But you have no friends.” “I do! There’s Pinkie Pie and Twinkleshine—“ Twilight stopped, confused. Who were her friends? She knew she must have some. The lady grinned. “What were you doing, locked in the bathroom for two hours?” Twilight didn’t answer. The lady continued. “Ponies hurt so much, so easily. They can’t lose anything. They can’t face the prospect of losing anything. Ask a pony to think for five minutes about…about locking their door at night in case a hungry bear wanders by. What happens?” Twilight had, in fact, had such conversations with ponies dozens of times, not about bears in particular, but all conversations about economics are conversations about loss. They always ended the same way. “You tell them how to save their lives. Then they attack you.” The lady nodded. “I think economists don’t have many friends because they can’t.” “Princess Celestia is very popular.” “Not one pony in ten can explain what she does with the Bank,” the lady said, waving a hoof dismissively. Part of her sleek black dress fell back, revealing what should have been a leg. Twilight looked away. “Maybe the sort of things it takes for a pony to become very good at anything,” Twilight said, “Detracts from the sort of things it takes for a pony to become very good friends with anypony.” “Could be.” The lady snuffed out the candle. In the darkness Twilight heard a sound like bone tapping methodically on wood. TAP. TAP. TAP. “I am tired,” Twilight announced, in case anypony was listening and cared. “Drink the coffee.” Twilight did. It was cold and tasted like wet dirt. “Thank you for your hospitality,” said the lady. There was a sound like a pony pushing back a chair to stand, but lighter, as if the pony was very thin. “I must be going now.” “Will I see you tomorrow?” “Yes.” The lady went outside. Her beast followed, and so did Twilight. It was darker than anything Twilight had seen besides the depths of the forest. There were no stars or moon up above, their light unable to pierce the thick pollen that set Twilight’s nose to running. The lady climbed on top of the creature. Twilight saw that it was a bat, or in the likeness of one. “Come back whenever you want,” Twilight sniffed. She wiped at her snout. “We could be friends, I think.” The lady looked at her. “Please visit,” Twilight said. “Pinkie Pie does amazing things with cakes. I’m sure she can put together something you can eat.” The lady threw back her head and laughed. CLICK. CLICK. CLICK. Lightning failed to flash dramatically, or maybe it couldn't be seen through the pollen. The bat-creature flapped its wings. And they were gone. Twilight thought for a while, even though her throat started to itch. Distantly she heard the muffled rumble of thunder. Then, when she had her answer and the question to match, she went inside to take Spike up to bed. She thought about whispering something to him like, “I am just going out. I may be some time.” But she didn’t. She left the treehouse and trotted down the path to Rainbow Dash’s house. She knew the solution to the full-cost pricing controversy, and now she needed the Elements of Equilibrium to put it into practice. Twilight sort of wished that Princess Celestia had once told her something like, “There will come a time when a great forest threatens Equestria, and you will have to find the microeconomics deep inside of you to put a stop to it,” but she hadn’t. Maybe after all this was over she would write a letter to the princess pointing out the missed opportunity. She knocked on Rainbow Dash’s door. There was a sound of somepony shouting, something like, “…And tell Soarin—more like Borin’, amirite— I could buy Cloudsdale and everypony in it, including him—oh, excuse me, that’s the door.” Rainbow Dash opened it. “Hi, Twilight. Are you feeling better?” “Gather the others, please,” Twilight said. “We are going to use a moderate advance of some significance in microeconomic theory to soothe a rampaging magical forest, saving our friend and indeed possibly the world, as was, alas, not foretold by Princess Celestia.” “Okay. Can I get you anything? Coffee?”
EvolutionView OnlineDeathonomicsEvolutionSoon one morning Death comes a-creeping in the room Soon one morning Death comes a-creeping in the room Soon one morning Death comes a-creeping in the room Oh my Princess, oh my Princess what shall I do You may call your mother Your mother will be no use Call your mother Your mother will be no use Call your mother Your mother will be no use Oh my Princess, oh my Princess what shall I do You had better hush, hush, hush Somepony's calling my name Hush Somepony's calling my name Hush Oh my Princess, oh my Princess what shall I do? But the MARE is trained not to pray too long. She considers the material of her HOOFS, and a PLAN begins to form.... It was as dark as the inside of a casket. Twilight had asked Rainbow Dash to turn off the lights. Some things were easier in the dark. Baby steps, a revolution on the margins…. In the darkness, sounds were…not louder, but soundy-er. Twilight couldn’t see anypony. But she heard their breathing. She realized she had never listened to ponies breathe before, not really. She didn’t know what the back of her hoof looked like either. There was, Twilight reflected, a lot she took for granted. Imagine the scenario. You are in a house, not your own. It is dark. You cannot see anything, and then, within the darkness, you hear someone breathing…. Are you scared? If not… …And Twilight was not… …The question is, why not? Enough stalling. Twilight Sparkle took a deep breath. She knew what she had to say. “Bluueeewaaaah.” Even in the dark, as if compelled by the fundamental laws of comic timing, the four ponies glanced at each other. By tacit mutual agreement, Rarity said what they were all thinking. “Twilight, that is, our dear friend, I regret to inform you that you might have sneezed some of your brains out through your ears—“ “No,” Twilight said, her breath coming quicker. “It’s just—hard to say.” For some reason, Twilight thought of the day she had nearly been torn apart limb from limb for the sake of a ticket to a party. Or at least, she thought it was a near-death experience— “Just what were you girls planning to do to me if I didn’t give you that ticket? And what did you do to Spike?” “We were going to ask really nicely,” said Fluttershy, “And if that didn’t work, we were going to ask even more nicely.” “As to Spike,” Rarity batted her eyelashes innocently, “A mare has her ways.” “I thought so. I mean, I think so.” “Twilight, we’d have to be crazier than a rattlesnake that’s been out in the sun too long to want to hurt a pony over a ticket,” Applejack said. “I still don’t know why anypony wanted that piece of paper anyway.” “Actually, I’ve just remembered,” Twilight said, blinking pointlessly. “Princess Celestia sent me four more tickets, so we can all go to the Gala.” “Oh, my,” Fluttershy said. “How wonderful.” Suddenly—even later, Twilight couldn’t explain exactly how or when the transition occurred, but suddenly Fluttershy’s eyes were visible. They looked as big as saucers, and they gleamed with their own internal light of innocent hope, flickering as if the slightest disappointment would provoke tears of inconsolable woe. “Um, Twilight, do you think we might be able to have a ticket each, if we said ‘please’ very nicely?” “Yes, obviously, now stop looking at me like that! Seriously, how do ponies resist you when you do that?” “They don’t.” Again, in mysterious unison, everypony stared at where her voice was coming from. “Not in a bad way!” Fluttershy said quickly. “Ponies just seem to like doing me favors.” Her eyes turned enormous again. “You will all forget this conversation.” “Anyway,” Twilight said, “I have something very important I want to say to you all. I only wish Pinkie Pie were here as well.” “We’ll get her back.” Rainbow Dash said. Her voice brimmed with honest confidence. It was a different sort of confidence like that which surrounded Princess Celestia like the fifth fundamental force, and Twilight suddenly missed it. It felt like a knife in her side. She shook her head. There was no knife in her side. Rainbow Dash was not going to hurt her. She was honestly the loyalist of ponies. When a soldier is pressed to her limits, surrounded on all sides, her back sliding down the wall as she collapses to one knee, she might see a mare in black in the corner of her vision, sharpening her scythe until it is the thinnest margin in the universe, ready to make the smallest possible change… …Or she may fall through the wall, which was permeable after all. And on that side the ponies surrounding her may just be her new best friends, and their swords might turn out to be elaborate cakes they baked to surprise her. (Were they ponies before? What was that wall, anyway?) Okay, look, it might not be likely, but it could happen. I’m just saying. (Which side are you on? And how do you cross the boundary…?) Twilight swallowed. And started to talk about economics. “Nooooo,” Rainbow Dash groaned, covering her ears. “Stop iiiiit.” Twilight continued anyway. She had to hear it with her own ears if it was ever going to make any sense to her. “I solved the full-cost pricing controversy, I think. Most of it, anyway.” “Um, we don’t know what that is,” Fluttershy said. “But it sounds fascinating!” Applejack said. Twilight could hear the salespony’s smile plastered on her face, making a distinct rubbery sound as it stretched from ear to ear as if to share in the pain her brain was anticipating. It was, Twilight realized, not so dissimilar from the smile of friendship, which was fake not in anticipation of reward but because it cared. But it looked the same to the pony on the receiving end…. “Fake” was probably the wrong word. No faker than any other time a pony parted with something she wanted to get something she wanted even more, which is to say, whenever a pony made a choice…. “Marginal cost pricing is profit-maximizing,” Twilight said. “Everypony knows that.” Some noises of alarm from the other ponies indicated that, in fact, everypony did not know that. Fluttershy, however, was silent. “But you ponies don’t use marginal cost pricing,” Twilight said. “No businesspony does. Most of them take the ‘full cost’ of the product and add a markup, which is basically like finding the length of the hypotenuse of a right triangle by squinting at it sideways, taking the length of one of the other sides and adding your best guess to it.” “Makes sense,” three ponies said in unison. “I was confused for a while,” Twilight admitted. At least studying under Princess Celestia for years had made that part easier to say. “I didn’t think we could just dismiss the survey data, however artfully. I didn’t think we could pretend it all worked out to marginal cost pricing somehow either. Then you ponies started taking the price system almost as seriously as I do, and I didn’t know what to think.” “Wait, we are getting paid for this, right?” Rarity said, sounding alarmed. “Rainbow Dash said she would pay us for our time,” Applejack said. Twilight heard a thump from Rainbow Dash’s direction that sounded like a hoof meeting a forehead in consternation. Twilight Sparkle wasn’t really listening. “Then I had a conversation with a lady in a dress, and she gave me an idea.” “Well, I do my best,” Rarity said. “Not you. The lady. I know you’ve all seen her.” “She doesn’t appreciate apples much,” Applejack said dismissively. “She pays well, though,” Fluttershy whispered. “Who?” said Rainbow Dash. “I realized I was placing my faith in life,” Twilight said. “I should have placed my faith in death.” There was a thoughtful pause. “Yayyy….” Fluttershy said uncertainly, her voice trailing off with a dying squeak like the sound of air escaping a deflating balloon. “What I mean is, there are two ways to view marginal cost pricing and profit maximization: as a choice, and as a condition of survival. We thought that businessponies must choose to profit maximize, but the plain truth is that businessponies can do whatever they like. There’s nothing in the laws of economics that says they have to try to maximize profits, and even if they do, there’s nothing in the laws of economics that says they’ll be terribly good at it. “The other way of looking at profit maximization is that it’s a condition of survival. Businesses that lose money go out of business. Businesses that make money stay in business. And marginal cost pricing is how you make the most money. As long as businesses compete with each other for their market niches, so to speak, there will be pressures eliminating businesses that fail to price rationally, while businesses that profit-maximize or come pretty close will stay around. It’s kind of like evolution by natural selection. No biologist would say that organisms must say they'll try to reproduce, but if they don’t reproduce, they’ll disappear. The relevance to friendship is obvious, and is left as an exercise for the listener.” “Huh?” was the general consensus. Twilight gritted her teeth. It felt like her tongue was actively fighting her, her throat closing up to prevent the words coming out, unless that was the allergies again. Was a short lifetime of pride worth so much? What would it take for her to give some up, on the margin…? Twilight was aware that even as she asked the question she was standing across from four ponies dear to her. Was the whole of Economestria nothing more than a complex and elaborate metaphor designed by an inscrutable alien being to teach her a series of lessons about economics and friendship? Pinkie Pie wasn’t there, even though her presence was the most appropriate. That was probably a metaphor for something too. “I curse all gods,” Twilight said, just in case any were listening. She was not going to let anyone turn her into a friendship lesson. She would do this for her own sake, pedagogical opportunities be damned. “Times’ a-wasting, Twilight, and it’s my money on the line,” Rainbow Dash said. “Mind hurrying this up?” “What I learned today—“ Twilight stopped. She sounded like a character in a Saturday morning cartoon show. “Ahem. As an economist, I placed my faith in rational pony behavior. That faith was damaged, to say the least, when I met you all.” (Rainbow Dash nodded proudly.) “But I was not wrong to put my faith in optimization, if you can see the difference. The economy is something greater than individual choices, though it may be nothing but the sum of them, or the simultaneous firing of them, as it were, or however you like to imagine the economy.” “Apples,” Applejack said immediately. “Apples everywhere.” “I don’t find it easy to trust other ponies,” Twilight admitted. “It probably has something to do with having been trained for years in a hypercompetitive environment where everypony was gunning for the pony at the top, which, naturally, was me, being the best economist. Let’s just say I can avoid a tripwire in my sleep, which in fact I had to do once. Also being betrayed by my brother, who was supposed to spend his life forever with me, not that stupid Princess ‘Definitely Notevil Goodpony’. Also this one time I bought myself a cake for my birthday, and I took a big bite out of it, and it turned out they had accidentally used sugar instead of salt. It tasted like an ocean of disappointment.” “You’re a survivor,” Rarity said, unable to stop herself. Twilight, who despite all her experience with it sometimes couldn’t tell when somepony was making fun of her, nodded solemnly. “Even if everypony in the world was crazy, the economy would still work by the process of market selection. I can’t trust individual ponies, but I can put my faith in something greater, something more…automatic, that works by logic because there is no separation between the fact of its existence and the logic that explains it. “Maybe the same is true for friendship. Nowhere is it written that a friend of mine can’t rip my heart out of my chest with her bare hoofs for the sake of a gala, but it is true that a pony who does things like that isn’t very good at friendship. Not in the individual ponies…but I can put my faith in the laws of friendship themselves.” She was still managing to pursue the most roundabout method of production possible. Somehow, it wasn’t efficient. What gave? Twilight did. “Anyway, what I’m really trying to say is, I’m sorry for spending all day in the daughter and generally not paying attention to you girls. I want to be friends, and not just because we’re all in a magical mare team that seems to be saving the world every week.” “If I’m following,” Fluttershy said slowly, “You want be friends with us because if we killed you, you wouldn’t be friends with us. We haven’t killed you, therefore we’re friends, QED?” Twilight beamed. “Yup!” “It’s, um, a very peculiar definition of friendship.” “Clearly it’s only a starting point, a definition that will be clarified and expanded upon in future lessons—no! I am my own mare!” “Uh, girls, Pinkie Pie is stuck in a forest, and she’s going to be absolutely livid when she gets out,” Rainbow Dash said. “Does anypony here want to be between her and a Sugarcube Corner when that happens? Let’s rescue our friend already. She could be dead, and then we wouldn’t be friends with her anymore, like Twilight said. Keweedee.” “I agree,” Twilight said. “We need to go speak to the Everfree Forest right now. The Frankie Knight statue was destroyed, and the Knightian code no longer holds. I think the forest is as scared as I was, maybe more. She’s more used to being betrayed by ponies than I am.” “Did you just call that forest a she?” Applejack’s eyebrows wriggled like drunk rattlesnakes, an effect that was lost on everypony in the darkness. “We’ll do it alone,” Rainbow Dash said. “Twilight can’t go near the forest with her allergies.” “As to that,” Twilight said, “I have an idea. But I’ll need everypony’s help. Fluttershy, I need your giant baby sky serpent to carry me to the entrance to the forest inside her mouth.” “She’ll probably start eating you. It’s nothing personal, of course,” Fluttershy added, “She’s just a baby and hasn’t learned not to eat everypony yet. But she digests very slowly, so if you’re quick it’ll be okay.” “Right. Rainbow Dash, I need you to guide the serpent to the forest. I don’t trust the sky serpent’s navigation, seeing as how she hasn’t not killed me a hundred times yet. Also, bring Tank. We might want her to take a record of what we’re saying. Applejack, you’re riding in on your Cerberus. We're going to need security.” “I don’t think she’ll mind guarding ponies from the forest for a change,” Applejack said. “I can, um, help fight if you need me to,” Fluttershy said. “Fine, you’re with Applejack. And—Rarity?” “I—I am friends with ponies because they haven’t killed me a lot,” Rarity said, sounding curious and horrified, like she was watching a alien slug of logic crawl slowly but inexorably up the side of her flank toward her ear canal…. “I mean, how else would you know if you were friends with somepony if they hadn’t not killed you?” “We are all being perfectly logical,” Twilight said firmly. “You are coming in the snake too. I need you to maintain a magical shield around my body to protect me from the pollen. I can’t do it because I need to concentrate.” “And what will you be doing?” “I will be applying economics to a real-world situation,” Twilight said proudly, much like how a toddler might announce their first successful use of the toilet, or at least their intention to do so. “Such a thing has never been attempted before. It will take all my might and wit.” She stood tall. A light shined from her horn. In the deep black darkness of the shadow the pollen cast, it was as bright as a newborn star, beaming all the brighter for its fierce ambition to one day become a sun. “We five ponies are gathered here tonight to protect Equestria from a terrible danger. We do not do so for the glory, although there will be glory. We have not assembled as one to strike out against the darkness because it is right, although it is right. We do not come bearing light so that all ponies may know us for what we are, their defenders and saviors, although they will know us. We do it because we are the Five Full-Sisters of Friendship, and we will fight o’er many furlongs for our friend, whom we love and who does not kill us every day. Now who is with me?” “Just one question,” Rarity said. “How much will we be getting paid for this?” Traveling in the mouth of a baby giant sky serpent was not exactly comfortable, but at least it was pollen-proof. Still, something about the way they were slowly being forced deeper and deeper into the serpent’s stomach was disquieting. Rarity was taking that concept to an extreme. “IT’S EATING MEEEEEEEE! HEEEEELP!” Rarity clung to a flap of belly inside the giant snake’s stomach, sobbing frantically. Twilight was just behind her, supporting Rarity’s weight on her head. “Stop kicking, Rarity! You’ll knock me loose!” “I never should have agreed to this! I don’t care how much I’m being paid! My life is priceless!” Twilight clung to her own piece of flesh and tried to push Rarity up. She hadn’t planned to support Rarity, but Rarity’s panic moved so fast Twilight honestly worried for a moment that by the time they got there fifty years would have passed. Now they were being slowly pushed deeper into the, ahem, belly of the beast. At least there didn’t seem to be any stomach acid yet. “Rarity,” Twilight grunted, redoubling her grip on the stomach wall, “Nothing is priceless. You implicitly put a price on your life every day by taking mundane risks—“ “This is different! You said value is subjective! My life has infinite utility to me!” “Obviously it doesn’t, or you’d never get out of bed!” Twilight said, her face flushed red with the strain of sustaining Rarity, who did have a weak grip. “Anyway, utility isn’t even a thing. That’s why we use indifference curves.” “I’m not indifferent to losing my life!” “You are for enough money!” A loud thump rocked them all, knocking them loose of their holds on the stomach wall. They landed on the bottom, momentarily dazed. “I think we landed,” Twilight managed after a few seconds. “Rarity, are you ready? I need your magic. Imagine I’m a dress, and you can’t let even a speck of dust fall on me.” Rarity’s eyes were wild and unfocused. “H-How much am I going to sell you for?” “A hundred thousand bits. It’s an order from Princess Celestia herself.” “Oh, my….” Rarity trailed off. Twilight sniffed. She smelled something burning. Wait, ponies couldn’t literally blow a fuse, could they? “Rarity—“ A blue glow surrounded Twilight. She found herself held to Rarity’s chest in a hug so tight Twilight eyes bugged out of her skull. “I will protect you!” Rarity sobbed. “My dear, my precious—“ Coughing, Twilight concentrated her magic. A second later, they disappeared in a flash of magic and reappeared on top of the snake’s back. “Oh my Celestia,” Rarity gasped, releasing Twilight. “We’re saved!” Twilight wasn’t so sure. Hesitantly, she breathed in, all too aware it could be her last. She hadn’t even thought to bring water. It was one thing to say that everypony put a price on life every day and quite another thing to pay the bill. Twilight breathed out. She didn’t sneeze. Her throat didn’t even itch a little bit. Twilight offered a silent prayer of thanks to the profit motive and looked around with light from her horn. They were about twenty feet from the entrance to the forest, a distance mostly covered by the sky serpent’s face. Rainbow Dash was huffing and puffing beside Tank. Twilight wondered just how much effort it was to haul a tortoise while flying as fast as a sky serpent. “I’m okay,” Rainbow Dash panted when Twilight and Rarity came over. “It was easier than a stock rainboom.” Twilight nodded. “Tank, I need you to write down everything we say. Can you draft a contract for us that looks really legal and proper?” “She doesn’t do speed,” Rainbow Dash said. “But she’ll remember everything.” “That’ll do.” A few minutes later Applejack and Fluttershy arrived on the back of the Cerberus, who splattered enormous flecks of drool everywhere as she came up behind them. The look in her eyes was the look one might wear if Cthulu had kindly asked for a ride and was now idly looking out the window of the passenger side. Twilight realized having Fluttershy travel on the Cerberus’s back might have been a bad idea. Applejack and Fluttershy came down and joined them. Four Elements of Equilibrium were gathered, and the last was only a few meters away as the Bearers and Twilight approached the wall of vines. They were going to put an end to this exogenous shock. But the wall of thorns and gnarled trunks was forbidding. Before, when Nightmare Moon had unwittingly called the Elements into being, the entrance to the forest had been open—open like a waiting mouth full of teeth, but open. Now the twisted trees were thick with black vines that showed no passage. The only light came from Twilight’s horn, and the shadows in the trees looked like faces. The roots of the trees were intertwined, wrapping around each other so tightly there was no getting through. It looked scary. Then Twilight thought that maybe the trees were just holding hoofs. Slowly, Twilight approached the forest. “Hey,” she said, suddenly all too aware how out of her depth she was. It’s not like she had a friendship speech just waiting inside of her. “I, um, that is, I have something to say.” She cleared her throat. “Forest, I know we seem different, but if you look a little deeper, I think you’ll see that we have a lot in common. I mean, I was just like you—that is, until a little ago, you were just like me. But now I’m here to tell you that the science of friendship—well, what this is about is, anyway, is that—oh, I didn’t say, my name is Twilight Sparkle—anyway, I can help you see another way. So if you could just,” she gestured to the gate of vines, “Get up—“ “Get down!” Rainbow Dash shouted. She caught Twilight in a flying tackle and carried her to the dirt. Twilight heard a vine whip through the space her body had just occupied. “It’s gonna come around!” Applejack warned from atop the Cerberus’s back. Fluttershy and Rarity scurried behind the sky serpent’s enormous girth. “We can work together!” Twilight pleaded as Rainbow Dash forced her away. “I’m not like the Alicorn from before, I’m not trying to win a crown—“ Rainbow Dash pushed Twilight further away, which meant that the forest was almost completely hidden in shadow again. “It’s gonna make a sound,” Rainbow Dash said to Applejack. “I’ll go up, you go down. If we work together, we can help Twilight get that contract—“ More vines scythed out of the darkness, but Rainbow Dash was faster. By the time Twilight’s brain caught up with her eyes, Rainbow Dash was a dark blur in the air, recognizable only by the rainbow streaks reflected in Twilight’s glow. The Cerberus dashed forward, trapping vines underneath its heavy paws and snapping at the ones in the air with all three heads. Twilight raised her forehoofs in the air, trying to send a message of peace to the forest, which probably wasn’t half as noticeable as a giant Cerberus, now bleeding from a dozen small wounds, biting vines out of the air. Twilight waved her hoofs desperately and then dropped them, helpless. “Twilight!” Rarity called from behind the giant snake, “Honestly this could be going a lot better, and that’s being generous!” “It’s a kindness to expect a forest to be—loyal!” Applejack grunted, trying to maintain her balance on the Cerberus. “Enough to make me laugh!” “Twilight, you have to help the forest see—eek!” Fluttershy shrieked and ducked down as a vine bounced off the sky serpent’s tough scales. A sonic whine rising into the sky told Twilight Sparkle that Rainbow Dash was building speed. She looked up just in time to see the start of Rainbow Dash’s descent. There was a tearing sound like the air itself was being ripped apart. “Time to show you all that I can be!” Twilight shouted, “STOP!” And everything went dead. Cautiously, Twilight opened her eyes and nearly fainted at the sight. All the vines and trees in sight, even the Cerberus and Rainbow Dash, were outlined in the lavender glow of her magic. They were also completely still. “Oh dear,” Twilight said, like a coyote who has run over a cliff and only just noticed the lack of solid ground supporting it. “Um—Rarity, Fluttershy, help—“ Everything went blacker. And stayed that way when she awoke. Twilight realized after a disoriented moment of confusion as to her own state of consciousness that she was inside the sky serpent’s stomach, still an improvement over a pool of snot. She could feel her friends warmth around her, hear their breathing mixed together. “Who was that pretty lady?” Twilight moaned, sitting up and quickly regretting it. Her horn ached. Thauma trauma. It took a long time to heal. “Twilight’s awake,” Rainbow Dash announced. “Okay, now we can go kick that forest’s trunk—“ “No,” Twilight said. “We’re doing this peacefully.” Wincing, Twilight summoned a shield around herself, lit her horn with light, and teleported them outside, where upon she stumbled, fell, and nearly lost her shield. “Twilight!” Rainbow Dash was beside her in an instant. “Go back inside the snake’s belly. You don’t have any tissues, and I am not cleaning that up again—“ “I’m fine,” Twilight insisted, gritting her teeth, but she didn’t refuse Rainbow Dash’s weight to lean against. Rarity cast her own shield over Twilight, and Twilight gradually lessened her own. The pain in her horn was severe now, like a blind idiot dentist was drilling it down and the painkillers had worn off. Her other friends gathered around. “So what’s the plan, Twilight?” Applejack asked. The Cerberus was licking its paws beside the sky serpent, and she sniffed at Applejack’s tail with its two other heads. “Fluttershy,” Twilight said, “How would you get a frightened naturally evolved organism to trust you?” “I would be very patient,” Fluttershy whispered back. “We can’t wait,” Rainbow Dash said. “Pinkie could be starving in there, and it’s still pumping out pollen.” Twilight tended to avoid certain subjects. Mares and stallions—she had far more important things to do, she told herself. But finally something clicked. “It’s—she’s trying to reproduce,” Twilight said, gazing up at the thick blanket of pollen that covered the sky. “Before she—um. Oh dear.” “What do we do?” Rainbow Dash said. Twilight blinked. “We—ow—wait.” She turned off the light from her horn and recast her shield. “I can shield myself for a few more hours. The rest of you should sleep now and when you wake up Rarity can shield me again while I rest.” Rarity immediately lit her own horn, casting them in a pale blue glow. “Twilight, I can’t help but notice that you seem to be speaking as if we will be staying here. I thought we would get Pinkie Pie, Equilibrium Beam the forest, and leave. Aha.” “Transaction costs are too high right now. We’re staying until the forest trusts us.” Rarity’s mouth opened wide, and Twilight knew she was about to start whining. “Name your price.” Rarity was silent for a moment, her mouth hanging open, ready to explode, but a wire had been cut. “W-What?” “Name your price. I’ll pay it. Same for all of you. We’re staying here.” Rarity’s mouth closed and opened again. “Uh—Twilight—“ Twilight turned to Applejack. The pain was really quite intense now, a background radiation that burned her mind from the inside out. It was remarkably clarifying. “Send the Cerberus back for food and water. I’ll compensate you later. Tank can write it all down. Fluttershy, can the serpent stay here for a few days—“ “A few days?” Rarity shrieked. The forest rumbled. Twilight heard roots slithering across the leaves and dirt. “Yes, a few days,” Twilight said. “I will pay for it all, so keep it down. Fluttershy, is the serpent okay here?” Fluttershy nodded. “Good. I think it’s night time, so you all should get some sleep. Tank and I will entertain each other.” “Are you sure you’re okay?” “Ow—yes.” “Don’t play cards with Tank,” Rainbow Dash warned. “She’s the best bluffer I’ve ever met.” “Good advice. Good night.” The ponies settled down to sleep, except for Rarity, who seemed to be struggling with the idea of dirt as something that didn’t only happen to other ponies. Finally she managed to nudge the other three into a sort of living pillow and lay down on them, still whimpering like something inside of her had broken utterly. Then it was night, finally. Twilight allowed herself to focus on the the ache behind her eyes and in her legs, which was better than the piercing pain in her horn. She wondered where Nightmare Moon—no, where Princess Luna was, and what she was thinking, if she liked the pollen, hated it, or was somewhere else entirely. Even the dark Alicorn herself had not been able to block Princess Celestia’s sun so effectively…. Dark as the night was, it wasn’t silent. Leaves rustled, things slid across the dirt, roots shifted, trunks groaned, and, every fifteen minutes or so, a boof shuddered through the ground, shaking them. The other ponies shifted and mumbled, except for Rarity, who screamed quietly every time it happened. Twilight wanted a way to track the time without the sun. After a bit of trial and error she managed to construct a makeshift hourglass out of the dirt, nothing precise but good enough. Tank tapped her on the knee and scratched at the ground. It took Twilight a while to understand, but eventually she traced a chessboard for them and gathered bits of stick and rock to represent the pieces. She made a second hourglass, and they played. Tank moved slowly, which gave Twilight time to think. And realize. She was playing chess. With hourglasses. Twilight thought a bad word.(1) “Tank,” she said, as the tortoise indicated she wanted to move her knight(2), “Have you ever had the feeling you’re just a pawn on a chessboard being manipulated by forces beyond your comprehension?” Tank watched Twilight move her piece for her. After a few minutes of reflection, she shook her head no. Twilight considered her next move. “Is that because you and Rainbow Dash bought the chessboard?” Another long pause. Nod. Twilight, who hadn’t yet learned to pay much attention to her friends’ advice, took the idea to heart. Time passed, about three days, by Twilight’s reckoning. They ate apples and drank the water the Cerberus brought. Tank kept them entertained with lessons on probability theory, accounting practice and legal history. Rarity and Twilight alternated sleep schedules, and when Rarity tired, Twilight crawled into the sky serpent’s mouth to catch a few hours of sleep. Meanwhile, she was thinking. When they could afford no more time, Twilight teleported out of the sky serpent—just in time, as the serpent had started to produce stomach acid—and roused the other ponies. “We are the ponies of no system,” Twilight declared. Dragged kicking and screaming indeed! “No hoof can arrange us like pieces upon a chessboard—“ “Huh?” Rainbow Dash said tiredly. They were all deeply exhausted. Three days of inactivity in near-total darkness had taken its toll. “—We have our own principles of motion, and we are not aimed at checkmate but to save our friend. Also the world I guess.” Twilight slowly approached the fortress of trees. They drew back, shuddering violently, and vines shot forward but didn’t touch Twilight as she walked through them to the base of a tall trunk. “I’m going to be myself,” Twilight said softly, almost cooing, like she sometimes did to Spike. “No matter what I do. And if we’re different, forest, I want you to be true to you. If you work with me, we can put our differences aside. I promise you ponies and trees can stick together to save Equestria’s hide. Er, bark.” There was a moment of tense silence, and then Twilight heard a voice. “Twilight?” “Pinkie? Pinkie!” The other ponies joined her. “Pinkie! Are you okay? What happened? Is it really you?” “Um…well, the forest and I had a little disagreement, I guess, and um, it’s been a while, I suppose. There, uh, wasn’t much to eat, and the blue flowers I used in my cupcakes seemed edible, and uh, I think I have telepathic powers now. I’ve been using them to talk to her.” Twilight blinked. “Pinkie—“ “Also I can fly. Anyway, I think the forest wants me to help translate.” 1) ”Drat.” 2) Normally represented as a hunched-over primate.
The Use of Friendship in SocietyView OnlineDeathonomicsThe Use of Friendship in SocietyLet me tell you the story of an empire that began with a pencil. The story does not begin with a pencil. The story begins with colors: pink, purple and yellow, and how beautiful one pony looked…. Her name was Piera Pareta. She was the most beautiful mare in the world, and no stallion could view her face without falling in love. This proved to be quite bothersome. Piera thought economics was a lot more interesting than stallions, and did her best to avoid them. That was why she was annoyed one day to see a stallion enter the library after almost a year of solitude. She would have to find a new hiding spot. Piera was struggling to stuff her tent into her Edgeworth Box when she heard the stallion come up the stairs. She hid her face against the wall, but the stallion walked past her without even glancing her way. The first fish to evolve legs and flop awkwardly out of the water probably wasn’t half as surprised as Piera. Hesitantly, she turned around and watched the stallion feel his way along the shelves. Eventually he selected a book and sat down at a table with it. A few hours later, he returned the book and left. Piera considered running, but she had nowhere to go. The dusty upper floor of the library was her home—well, it was the cat’s home, but Piera had fought tooth and hoof for her corner, and she was keeping it. After a while she relaxed and started to read again. Piera had the oddest habit. When she was thinking, she spoke out loud, carrying on a conversation with herself. This caused her no end of trouble, as she would often be nodding and mumbling, “Yes, yes, that works,” as a suitor or three knelt before her, jostling with each other and making promises, offers and declarations of their love. Piera tended not to notice these things while she was lost in thought, and she was often horrified to wake up the next day to find a severed dragon’s head and perhaps a suitor or two's laid atop a pile of bloodstained jewels outside her door. That was why she almost didn’t notice when the stallion returned. Piera held her breath. The stallion climbed the stairs, turned past her without looking, and felt his way through the shelves again until he found a book he liked. Then he sat down, opened the book up, looked at it, returned it a few hours later, and left. This continued for several days. Eventually Piera hardly noticed him anymore, treating him much like how a cat treats a human without a food-opener, i.e., not at all.. She read her books, argued with herself, and she screamed when he tapped her on the shoulder. “Quiet down!” the librarian snapped from below. Piera’s face burned hotter than the sun. The sight of her blushing was like a sunset viewed through a lot of air pollution. It was deeply beautiful and profoundly moving, and it made her life very difficult. “Excuse me,” the stallion said, “I heard you talking—“ “Sorry!” Piera whispered, wishing she didn't sound so much like an angel singing a lullaby to a little foal on Hearth's Warming Eve just as the first snow began to fall. “I’ll keep it down.” She hoped he wasn’t the sort who would try to fight an ursa major to impress her. Piera always felt vaguely guilty when she saw the smear on the ground. “It’s fine, actually. I thought what you had to say about the natural rate of interest was very interesting.” “Oh, that,” Piera said, blushing for the first time in her life without being afraid she might start a war. “Some ideas are just begging to be refute—wait, what?” “It is an exciting time to be an economist,” the stallion agreed. “I heard young Frankie Knight speak a year ago about her ideas on the source of profits. It set my all my hairs on edge, and I have quite a lot of them.” “Uh, hello?” Piera gestured at her face. “Anypony in there? Can you see me?” “I can’t, in fact.” Piera blushed again, hoping that a war might start to draw their attention away. “Oh, um—sorry. It’s just—I saw you reading. Um. I’m not ableist.” “I never said you were. In fact, I like to look at books.” “But you can’t read them?” “No. But if I can’t see anything, I would like it to at least be a book. Generally, I strive to be as metaphorical as possible.” Piera waved a hoof in front of his face. “Stop that.” “You can see!” “No, but sighted ponies are incredibly predictable. Why does anypony think it’s a good idea to ‘test’ a pony’s blindness?” Piera looked desperately out the window. “I think a war is starting—“ “Tell me more about the natural rate of interest.” Piera did. So it went. The stallion visited the library and Piera everyday. They discussed the latest economics research and debated everything from interest rates to the trade cycle. They even befriended the cat, marking their concord with a small crystal statue the stallion bought.(1) They had one debate that never ended. “I can make a pencil,” he said. “From scratch? Alone? Commercial grade? You cannot.” “I can,” he insisted. Finally she challenged him to prove it. So the next day, he didn’t return. Piera shook her head wryly and began another book. The stallion’s journey began in the cedar forest of Ostleregon. To cut down the tree he needed a saw made of metal. So he went to the iron ore mines of Whinnysota. He needed a shovel, and a pickaxe, both made of metal with wooden handles. He was beginning to get the feeling the problem was circular. While he scrabbled for ore with his bare hoofs, he began to get hungry. But he could not buy food without forfeiting the challenge. He had to make it himself. He scavenged, but it was time-consuming and forced him to roam away from the mines. He dedicated himself to learning the seasons and the soil, planting crops and waiting to harvest them. He stamped on grain until it became flour, and added water he gathered to turn it into dough. This all became a lot easier when he finally had a shovel, but before he could have his shovel he needed a smelter and a mold. This took some time. Finally he had his pick-axe too, and soon his saw. He gathered up his things and, carrying as much seed as he could, returned to the forests of Ostleregon. He cut down a small cedar tree and turned it into lumber. He knew he needed to cut the log into a pencil length slat not one-fourth inch thick. It took many tries to get this exactly right. Then he realized he needed to return to Whinnysota to make a kiln, which he hauled back to Ostleregon to dry the slat. He learned how to tint the wood, and then he kiln-dried it again. Then he learned to make wax from a plant, which he applied to the slat, and then dried it again in the kiln. Now he had a wooden slat the length and thickness of a pencil that looked pretty, like a commercial-quality one, instead of a natural sickly white. All this was complicated somewhat by his blindness. Piera checked her watch. The next part was difficult. He made another tool with the ore in Whinnysota and used it to cut eight grooves into the wooden slat. He made another slat and cut eight grooves into it as well. Then he went to Broncodale to gather graphite. He still wasn’t sure how he would glue the slats together. He mined the graphite and mixed it with clay from Marissippi. He went to Mexicolt and learned to make wax from the candelilla leaves, which he mixed with the graphite as well. He returned to find his wood, equipment and machines had all been stolen, including the wooden slats. So he started over. When he had two slats again and the graphite, he laid the graphite in one of the slats. Now he needed glue, but he didn’t know how glue was made. When he found out, he decided to opt instead for a glue made out of wheat. He planted the wheat and waited. He used the glue to hold slats together. From this he cut eight pencils. This proved to be important, as weather, accidents, mishaps and crime took seven of them over the years. He learned to grow castor beans and refine the oil. He used them to make the lacquer, although getting it to turn yellow stumped him for a while. He learned to make a film formed by applying heat to carbon black to make a label on the pencil. He mined zinc and copper and transformed it into sheet brass to make the ferrule. He built a ship—another long story—to take him across oceans to gather rapeseed oil and reacted it with sulfur chloride to make the factice, the ingredient to make the eraser (boy, was he surprised to learn that). Pumice and cadmium sulfide were also involved, and rubber as a binding agent. Finally he had his pencil. A long time had passed. Piera was curious to see the result of the experiment, so she became immortal, still waiting every day at the library for the stallion to return. The cat had died, which was sad. Piera buried her at night when no pony would see her face. The stallion returned. He presented the pencil to Piera, who frowned skeptically at it, but it looked close enough. She was willing to concede the point. “Let’s get married,” she suggested. “I don’t love you,” he said. “I just wanted to see if I could falsify your hypothesis.” This story is mostly true, although some later historians disputed the point about the cat. But it is known to every student of economics, the story of how a pencil is made, the incredible vast amounts of knowledge and labor it takes to create a single, simple pencil.(2) It is a solemn tradition in Equestria that when this story is told, everypony who hears it breaks a pencil in half. For the most amazing thing about a pencil is that for all the effort and knowledge it takes to create one, you can buy a dozen for a bit these days. Where are you shopping? Oh, yeah, the deals are pretty good there right now. Yeah, well, you know how it is when the school year starts up again. Hey, can I borrow your pencil? I’ll give it back—thanks. Hey, look, if I shake it like this it looks all floppy…. This story was on the mind of Twilight Sparkle as she prepared to draw up a contract with a scared mom-daddy forest trying to impregnate the sky.(3) The price system wasn’t simply about allocating scarce resources. It was something more, something about…coordination. The first rule of economics is that ponies are diverse. They have their own principles of motion that are not parallel lines. So why aren’t they constantly bumping into each other…? The answer was the price system. Ponies set prices by their behavior, and prices set the behavior of ponies. It was like a giant message board where all the ponies could gather to say, “I want this much of this,” “Well I want it more,” “Okay, I’ll try this then,” “I’m using it, but you can have some if you want it that much, and I’ll substitute for some of this instead,” a billion times a day, so fast and so wide-reaching, cooperation enforced on the margins by the promise of immediate rewards…. Twilight didn’t place her hoof on a tree trunk. The forest didn’t want to be touched, so she wouldn’t touch it. “Statues,” she said, “Aren’t really the same thing as a promise.” (She could hear Pinkie Pie pounding on the tree trunk like a drum.) “But it’s good to have something concrete,” Twilight said. “Something you can see and touch. Um. I’m not very good at this, am I?” She glanced at the other ponies, who had useless-but-encouraging looks on their faces. Not what she needed right now. She turned back to the tree. Did it even matter? It’s not like she could maintain eye contact with a forest. No…she didn’t need to. The most amazing thing about the price system wasn’t just that it coordinated ponies into a system of cooperation, but it did so with ponies who absolutely hated each other. Applejack didn’t sell her apples to ponies she liked. She sold them to ponies willing to spend money on them. Pinkie Pie didn’t make everypony undergo some kind of anti-muffin litmus test. The only qualification anypony needed to get their hoofs on one of her famous cupcakes was a wallet full of bits. Ponies are diverse, but they are united under the liquid flag of money. If Rarity made dresses for half-a-dozen ponies, they would all have different tastes in style, material and cut, but the one thing everypony would demand is for Rarity to make sure it stays within their budget. Appleloosans didn’t get along with buffalo, but that didn’t stop them from contracting out to buffalo firms that did the job faster for a lower rate. There were still plenty of old ponies who had some old-fashioned thoughts about cows, but that didn’t mean they wouldn’t hire cheap cow labor when the opportunity was present. And if a bear wanted to pay for lunch, no pony would refuse her service. The one species everypony looked upon with equal favor was specie…. Twilight firmly believed that the only thing stopping the market from expanding into space, bridging xenosystems like the ecosystems already united under it was shipping costs. But…it wasn’t that simple, was it? It sure was bothersome living in a world where you had to ask permission to expel carbon dioxide from your snout. Ohhhhhhhh. “I get it!” Twilight said excitedly. “Of course you’re scared, forest! Gosh, imagine taking millenia-old survivor of the Snow and plopping her in the middle of a hyperactive modern market. She’d be afraid to sign anything, never take a taxi anywhere, always worried ponies are exploiting and cheating her, and let’s be honest, they probably are.” “I didn’t do nothing,” Rainbow Dash said quickly. “I wasn’t even there.” “There are costs to transacting in the marketplace, transaction costs. Coasepony is best pony,” she added automatically, like crossing herself. “That’s why we have property rights.” Pinkie Pie drummed the tree trunk near Twilight. The forest was shaking, groaning, but Twilight was too excited to care about life and limb. On the margin, they were worth giving up for this. “The forest wants to know what you mean, exactly,” Pinkie Pie said. “Hey, this is kind of fun! I always knew I would end up combining music and telepathy to help a forest learn economics. Say, Twilight—“ “I just need something leading,” Twilight said hurriedly. “Property rights say that there are some things we don’t have to contract for. I don’t need to pay everypony who likes my grass tall if I want it cut short. This keeps the marginal rate of substitution as to the extent of the market tolerably high, if you see what I mean.” More drumming. “The forest says, not really,” Pinkie Pie reported. Twilight didn’t even care that she was talking to an evil ancient murderous forest anymore. This was fun. “I had friends, and then I got my hoofs on a scarce resource,” Twilight said giddily. “It was terrifying. I thought my life was going to be nasty, brutish and short.” “We were going to hug you,” Fluttershy protested. Twilight shuddered. “See? And they each had their reasons for wanting it. Pinkie Pie wanted to cater, Rarity to show off her dresses, Fluttershy wanted to…kidnap somepony, I’m not really sure—“ “Hug,” Fluttershy insisted. “But sometimes my knees cramp and I, uh, can’t un-hug, so I just sort of bring them with me….” “—Rainbow Dash was looking to relax with her legally earned gains, and Applejack simply wanted a ticket because they’re valuable. And how was I supposed to decide which—which of my friends should have—who was more important—that’s a terrible thing to do to a pony, now that I think about it. I’m kind of mad, now. Allocating resources is a horrible, thankless task. To allocate them to one pony is to not allocate them to another pony—values go unfulfilled, and the loss is always felt more sharply than the gain—the cold touch of scarcity—the margin shrinks, and the margin is her blade—“ The forest quaked. Black vines shot out and slammed against her shield. Pain seared through Twilight’s horn and down her spine, shaking her hoofs. She stumbled, reeled back; her eyes rolled up; she saw Rainbow Dash, Fluttershy, Applejack and Rarity all grabbed, pulled toward the dark shadows behind the formidable trees; the Cerberus and sky serpent were too slow. It hurt. Twilight set her hoofs on the ground. It hurt. She raised her horn. It hurt, and even so, with her magic she took all the vines, the trees, traveled down into the roots and was almost torn to mental pieces as the path split off exponentially faster than her reflexes— (A part of Twilight, the part that was simply a scientist, remembered to try agent-based modeling again with Rainbow Dash's help.) —There was a mind there, or something like it, some means of working purposefully with information. Twilight couldn’t understand it, but maybe it could understand her— “I am not trying to hurt you!” Twilight shouted. “Get that through your dumb, wooden…roots! No pony is trying to hurt you!” The vines stopped moving. The ponies they held were thrashing, shouting something, blurred distortions of noise and static. Twilight didn’t even care anymore. She was tired, something fat and wearing overalls in her nervous system was complaining about overuse and under-maintenance, something was broken, the budget constraint or whatever it was that kept your brain from being sneezed out through your ears…. It was worth it. That was the whole point. We give things up, and even though the loss hurts more than the gain heals, it’s still worth it. “I get it!” Twilight snarled. “Everyday, you hear ponies saying, it’s like, ‘Ooh look at that forest she’s all wooden, no brains in her at all, blah blah look how much water she’s drinking I bet she weighs a hundred tons!’ And they laugh, and it sucks, and you’re afraid of friendship, but they aren’t your real friends. We are friends! Me and you and Pinkie Pie and everypony else who’s name I can think of which isn’t anypony right now because I don’t even know where they went all off to the Daughters and now I only see my family through mail which comes out of Spike’s stomach and goes back in it when I send things out send things out and things come in budget constraint consumption function of income endowments money profits minus voluntary defense funds liquidity constraint must obey the liquidity constraint AND WE WON’T EVER HURT YOU!” Twilight tried to remember how breathing works. She only remembered the letters. “Talk is cheap, surveys aren’t worth the paper they’re printed on, uncertainty abounds, an overlap of diverging outcomes and assumptions don’t matter only outcomes OHHH THAT’S WHY YOU NEEDED A STATUE then I will cut off my left hoof my right hoof horn tail ears eyes nose mouth sell my books lend my books—“ Twilight heaved as the automatic order to breathe overrode the backlog of speech commands. She took a breath, and in the silence— KNOCK. KNOCK. KNOCK. “Um, I hope I got all that,” Pinkie Pie said. “That was a really weird speech, Twilight. I’ve never even heard a friendship speech like that before.” “Coasepony is best pony,” Twilight said. It was all that was keeping her upright. She didn’t see the vines drop her friends. She didn’t hear them land by her. She only felt them, the liquidity flowing into her horn, the focal point of the five full-sisters of friendship…. (For a Plank time, if even that, Twilight wanted a crystal—) Twilight’s eyes focused. Her legs stopped trembling. Some of what had been given up was being paid back with interest. The trees groaned. “The forest says, um, the forest says, what now?” said Pinkie Pie. There was a moment of very confused silence. “Are we going to become friends with a forest that keeps trying to kill us?” Rainbow Dash said skeptically. “It’d raise the value of our property if there weren’t any murder-forests nearby,” Applejack mused. “Friendly cuddle forests would probably be even better.” “There must be some incredible dyes in here I can use to make stunning dresses,” Rarity said. “And all kinds of naturally evolved organisms to play with,” Fluttershy whispered. “Not so fast,” Twilight said, almost laughing, but the piercing pain in her horn put an end to that notion. “Ow—I’ve realized something. Hey, am I a good friend?” Rarity, Applejack, Fluttershy and Rainbow Dash looked at each other. “Yes?” Rainbow Dash guessed. Applejack nudged Rarity. “Twilight, you’re friendly than a rattlesnake at a Mexicoltan dance. Ain’t that right, everypony?” “She made us sleep on dirt for three days,” Rarity muttered. Applejack stepped on her hoof. “Ow—yes, all right, she’s a great friend.” “You never listen when we talk,” Fluttershy whispered. “Exactly,” Twilight beamed. “I’m an—ow—terrible friend, like all of you said. There’s a saying in economics: ‘you can’t become friends with a cat in a day.’ Of course,” she laughed, “It’s a tautology, as befriending a cat is known to be completely impossible—“ “Why is my hair made out of snakes, and why are the snakes on fire?” Pinkie Pie said from behind the wall of trees. “But that’s not the point,” Twilight coughed. “The point is, we’ve been friends longer than I’ve been friends with anypony, and I’m still having a hard time getting used to the whole ‘listening when ponies who aren’t economists talk,’ and ‘don’t spend all day in the Mark II’ thing—“ “The what?” Applejack whispered to Rainbow Dash, who shrugged. “It’s going to take a while for me to become a true, true friend. All we can do is keep trying our hardest to push the margins outward. Because, you see, what this big, cartoonish, world-threatening sequence of events has all really been about is me learning to be more comfortable and open with other ponies.” Her friends clapped politely. “By the same token, we can’t expect the forest to become friends with us in a day. If we can keep her from destroying the world, that’s good enough for now. This story is really a story about a forest overcoming years of trauma and betrayal with the help of sincere friendship.” “Now,” Twilight said, turning her attention to the forest. “Let’s complete our talk about the price system, which is what this story is really all about.” “Hold on, I’m getting a psychic reading from the forest,” Pinkie Pie said. “It’s, um, wait a second…okay, the forest says, ‘No no please no anything but that please just make her stop talking about economics anymore I can’t take it I’m going crazy yeeeeaaargh.’” “Uh…really?” “Probably. The signal-to-noise ratio is pretty bad because there’s a constant background ‘Awww yiss more pollen mm nice pollen’ that I just try to block out.” “Um. Uh....” Twilight tried to recapture her focus. “That makes sense, actually. To the forest, economics probably seems like a weapon. I think the original Edgeworth Boxes—you know, the ones that follow you around on little legs— were made out of her wood. Well, um—“ Twilight cut off as she realized the other ponies were talking to the forest. “She talked to us for a long time about economics too,” Applejack said sympathetically. “Life can be hard sometimes. My name’s Applejack, by the way. I’ve been watering trees for years and still love it as much as I did my first day out among the apple trees.” “She went on and on and on,” Rarity agreed. “It was awful. Oh, my, this bark is gorgeous. Who does your leaves?” “I mean, it’s not like it didn’t make sense,” Fluttershy said. “But I didn’t ask for it, you know? I just wanted to plant my roots and absorb some water at the end of the day, not listen to a lecture on economics.” “The forest, says, um, the forest says, ‘Purrrr,’” Pinkie Pie reported. Twilight’s jaw dropped. “No. This isn’t happening.” But it was. A low rumbling built up from the forest. It sounded very much like an enormous wooden cat. “No,” Twilight said. “No no no no no—“ Rainbow Dash flew over to her. “Accept it. Those girls can make friends with anything. I hear Pinkie Pie’s older sister can make friends with rocks.” “…Sentient ro—“ “Nope.” “Surely—“ “Uh-uh.” Twilight stared. And reached a conclusion. “None of this is fair.” “Yup.” They continued to watch. “Is Rarity braiding that tree’s branch?” “Just give in and admit they’re better at this than you.” “I’m an economist! The science of friendship! Second only to Princess Celestia!” “Oh, look,” Rainbow Dash said, “Fluttershy just gave it a kiss.” “She’s a terrible murderous pony-eating forest that’s undergone the trauma of a thousand years of pain and fear!” “Sure is. And now it’s also a forest that purrs when Applejack give it trunk rubs.” “Graaaaaah!” “Go take a nap in the sky serpent again. Rest your magic. Tank’ll draw up something in the meantime.” “Stupid division of labor,” Twilight grumbled as Rainbow Dash helped her to the sky serpent’s mouth. “Dumb ol’ specialization and comparative advantage. Who needs it anyway, except for everypony who wants to live?” The agreement Tank wrote wasn’t stirringly written or particularly imaginative, but it was pragmatic and robust, even if there were far too many subclauses involving lettuce. The forest walls parted, revealing a pink and flustered pony covered in dirt. Her hair was filled with leaves and dirt, possibly because her head had swelled to three times its size. “I…I hear everything,” Pinkie said, staring wildly up out of the corner of her eye. She walked backward, dragging her head along the ground. “All the voices….” After a bit of of panic among her friends, Pinkie managed to communicate a herbal bath ought to do the trick. Unfortunately water turned into grapefruit when it touched Pinkie’s coat. (“What’s that supposed to mean?” Applejack said angrily.) They agreed to wait for the effects to wear off. Several hours later, Pinkie Pie’s head suddenly deflated with a zshwoop so fast it left a vacuum where Pinkie’s extra cranium had been. “Whoa,” she said, pulling her head up and clutching at it with her hoof. “That was a blarf adventure.” “Pinkie!” “Oh, hey girls,” Pinkie Pie said as they grabbed her in a group hug, even Twilight, who didn’t quite realize what was happening until her forelegs were already around Pinkie Pie. It was an odd sensation, like her heart was being microwaved. “Hey, what happened to the pollen?” It was true. No longer sustained by the will of the forest, the pollen was breaking up and falling away. It looked like the sky was pulling open the drapes. For the first time in days, Twilight felt the sun touch her face. It was still too bright to look at directly. But for a moment, she felt that she could. “Ow!” Pinkie Pie giggled. “Twilight, you can’t stare at the sun directly. Everypony knows that. So what happened?” Twilight rubbed her eyes and looked at the others. “We established property rights, so the forest can’t make pollen over Ponyville or she’ll be fined, and ponies can’t go into the forest without the forest’s permission or they’ll be subject to criminal penalties.(4)” she explained. As the CEE of the Ponyville Daughter, Twilight felt it was within her right to decide these things for the town. It wasn’t threats, and it wasn’t promises. It was just…the market, somewhere in between obsequiousness and contempt, fertile soil for friendship to flower and grow. “Also some kind of complicated deal involving ten thousand bales of lettuce and half the equity of Equestria as far as I can tell. I’m too tired to figure it out right now.” “Me and the other pegasi’ll clear the rest of the sky,” Rainbow Dash said. “We’ll need Rarity up there with us to—“ “NO!“ “—Kidding.” “Who’s a good girl?” Applejack cooed to the forest, rubbing a tree on the trunk. “Who’s not going to murder everypony?” Behind her the Cerberus whined unhappily. "Her name is Jackie," Pinkie Pie said laughed. "Jackie Viner." "Nice to meet you, Jackie," the ponies chorused. Twilight cleared her throat. “And I have an important friendship spee—no! I defy you, stars!” Pinkie Pie glanced at the other ponies. “How long as she been doing this?” “Ever since she sneezed her brains out through her ears,” Rainbow Dash grinned, clapping Twilight on the back. “Sometimes it takes an exogenous shock to break out of a harmful equilibrium,” Twilight said seriously. “Then you can find your way to a new one. In marginal steps, of course.” The forest rumbled contentedly. “Pinkie—“ Twilight was nervous suddenly, like she was back in school about to be tested on her economics. “I—what I told the other ponies before, when we were planning the rescue mission—that is, I—“ Twilight was interrupted by a pair of hoofs that pulled her into a mass of pink bushy hair and quite a lot of dirt and sticks. “Oh, Twilight, while I was under the effects of the Poison Joke, I heard every friendship speech in the world,” Pinkie Pie said. “I heard it.” “It wasn’t a friendship speech,” Twilight protested, but it was muffled by a mouthful of hair. “Everypony has a friendship speech inside of them,” Pinkie Pie said. She looked past Twilight, smiling at something only she could see, something beyond the other ponies, the forest, the world of Equestria and everything in it. “Who have you said a friendship speech to today? Exogenous shocks don’t grow on trees, you know!”(5) Anyway, there was much hugging and laughter, a few tears, resolutions to not charge each other money for everything anymore, and other mushy stuff we can skip. Pinkie Pie returned to oversee her Sugarcube Corners to the exultant joy and immense relief of thousands of ponies who had been forced to contemplate a future where cupcakes were mere sweet treats with icing and sprinkles rather than something to build a life around. The skies cleared, the ponies of Ponyville were suddenly very receptive to a speech from Twilight about how property rights reduce transaction costs, and a guard was posted to the door to Twilight’s Daughter to make sure she didn’t relapse. A friendship schedule was pinned to her door, and her friends came by every day to make sure it was still there. (But she didn’t need it.) Twilight sent out letters detailing the re-framing of the full-cost pricing controversy. None of the lonely guardians of friendship responded. Twilight was saddened by that, but it was a different kind of sadness from before. She wasn’t thinking about herself this time. Her thoughts kept coming back to one pony in particular. One letter came. Dear Twilight Sparkle I am very proud of you. Love, Princess Celestia Twilight knocked on the bathroom door. “Spike? When you’re finished, I’m giving you a hug.” It was, as usual, a happy ending in the land of Equestria. Though, to one mare, it was just another ending, neither happy nor sad. She watched the forest open at the close right beside Twilight Sparkle. Then she went a few hundred miles out to where a lizard had breathed its last. She sat on the rock afterward, sharpening her scythe on values, beliefs and dreams, pushing the margin out by shrinking the marginal unit, cutting the world into picoseconds, femtoseconds, attoseconds…. She was good at her job. She had been doing it for a very long time. She saw everything, as usual. She saw a dragon take to the sky for the first time in centuries, stretching its wings with a satisfied roar. She saw the FlimFlam brothers in their steam-spewing machines clank down the road to Ponyville. She saw Trixie Lulamoon, who saw her as well and wished she hadn’t as she trembled violently at the entrance to a cavern so deep and vast it could have easily fit a dozen full-grown earth serpents. And other things. Zeptoseconds, yoctoseconds…. Getting closer. One more. Her blade was so thin it split photons.(6) But it snagged on one strand. She looked along the line, not as thick as a billionth fraction of a single thread of spider silk. It pointed in the direction of Ponyville. She followed. It took her to the door of a treehouse. Inside the treehouse were six ponies, laughing. One of them had gotten a lot of cake on her face somehow. Beneath the icing was a purple coat, and the thin strand led to her heart and ended there. Twilight Sparkle had put a lot of stress on her body and her magic that long night in the forest. Now she stood, and as she did, a damaged connection was stretched beyond its limits—snapped— The mare had been doing her job for a very long time. In all that time, she had never considered that she might have her own...what was the word? Val-use? Val-you? (Val-ent-ine? Val-et-mine?) The scythe hovered over the strand that ended at Twilight Sparkle's heart. The mare, for the first time in her...existence, followed the line to the other end. And back to Twilight Sparkle, wiping icing off her face and getting a lot of it on the floor of her library. Death stared. Grinned. And left, rising into the air. (Or did the universe fall relative to her? Or is it all just metaphor, chess pieces on a board itself a piece-three on the great board that exists in nine dimensions…? Or some such thing....) She rises. Some ponies take longer than others. Some ponies have lived—been longer than others, and seen quite a bit. Their liquidity constraint is harsh, and they will take awhile. But.... Everypony has a friendship speech inside of them. And should you meet her, you might give her a hug. What’s the worst that could happen…? 1) Unfortunately the secret of how to befriend a cat was lost to economics researchers in the intervening years. 2) Some other things happened afterward. He died. She built an empire. And so on. Science continued its work. 3) “What,” she thought later. 4) A stern talking-to from a matronly mare, but it was nothing compared to the disappointed look on her face when the culprit turned to leave. 5) She was wrong. Deep within the Everfree Forest was such a tree. Perhaps it’s best Twilight Sparkle doesn’t know this. 6) Which gave pony scientists no end of trouble.
