How an Economy Grows and Why It Crashes

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To protect the island from hostile invasion, the senate would 
create and oversee a navy of spear-packing war canoes.
To promote social stability, and to protect every islander’s 
rights to life, liberty, and property, the senate would 
establish a system of courts to settle disputes, and a police 
squad to enforce the decrees of the judges.
And to promote commerce, the senate 
would build and maintain a series of 
lighthouses to protect sea 
traffi c from the island’s 
treacherous cliffs.
In order to fi nance this modest apparatus, the islanders 
agreed to pay a yearly fi sh tax. All the fi sh sent in to the 
government would go into a special government account at 
the bank. The senate would draw on these funds to meet its 
expenditures.
But as the island was populated by fi ercely independent 
citizens, many were wary of investing too much power in too 
few hands. 

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