How an Economy Grows and Why It Crashes



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how an economy grows

13
C H A P T E R
2


A
ble, the entrepreneur, seems to have a bright future. 
But what about the rest of the island? Haven’t we just 
created a caste system of the have and have-nots? Will 
Baker and Charlie suffer because of Able’s success? Not 
likely. Although it was never his intention to benefi t 
anyone other than himself, Able’s capital helps everyone 
nevertheless. Let’s see how.
14



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
16
After witnessing the ease with which Able now catches his 
fi sh, Baker and Charlie asked him to share his innovative fi sh 
catcher.
“Hey, Able,” said Charlie, “since you use that thingy only 
every other day, how about you let me use it the day you’re 
out doing other stuff?” 
 “C’mon, share the wealth, 
buddy,” added Baker. 
But Able didn’t just 
fall off the tuna truck 
yesterday. He remembers 
his self-sacrifi ce … he 
remembered their scorn, 
and he thought of the 
risk. “What if they break my net? What if they just don’t 
give it back? Then it’s back to square one for me. So long, 
designer leafwear!”
With all this downside, Able turned them down. “Sorry, guys, 
no can do. I made my own net, so can you. At least you guys 
know that the thing works!”



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