How an Economy Grows and Why It Crashes

H O W   A N   E C O N O M Y   G R O W S   A N D   W H Y   I T   C R A S H E S
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But beneath the surface, there were real problems brewing. 
With no personal incentives to take risks and make 
profi ts, the Fishing Department failed to 
become a model of effi ciency. 
The rate of increase of actual fi sh 
production did not rise as fast as the 
supply of Fish Reserve Notes 
that the Senate put into 
circulation. 
Soon so many Fish Reserve 
Notes had been issued 
that the technicians had 
to increase the conversion 
rate. Ten to nine gave 
way to fi ve to four. This 
meant that offi cial fi sh 
were now 20 percent 
smaller than real fi sh.
When that proved insuffi cient, the 
conversion dropped to three to two, 
and eventually two to one.
As offi cial fi sh became smaller and 
smaller, it soon became apparent 
that the islanders could no longer 
survive on just one fi sh per day. 
Most now ate two per day, at 
minimum. 

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