There were rumors of a creature in the forest.

“Nope,” Twilight said when her friends came to her. “We already went to the forest twice to save Equestria. Seriously, I have better things to do.”

“You promised to do friendship things with us!” Pinkie Pie pointed an accusing hoof.

“We have to find a bonding activity that doesn’t involve risking our lives for the fate of the world,” Twilight insisted, oblivious to the economics of signaling. “We can do a nice, normal slice-of-life—no! Just a regular story about ponies living their lives, okay?”

Applejack looked at the friendship schedule. “Says here you’re supposed to foalsit our little sisters for the afternoon while me, Rarity and Rainbow Dash go mud sliding.”

“I thought we were going shopping,” Rarity said.

“That’s what I meant.”

Rainbow Dash crossed her front legs. “Scootaloo isn’t my sister.”

“She isn’t?” Twilight said. “Are you sure?”

“I…I’m not.”

Twilight turned the page. “So, as you can see, the classical economists had a confused notion of value, believing that labor was ‘embodied’ in cost. This gave rise to a number of misconceptions, but what is more important is what the classical economists were able to get right. Tina Malthushoof, for example, despite laboring under a number of misapprehensions, was able to deliver a coherent explanation of the formation of general gluts—“

“I’m booored,” Scootaloo complained. The other two fillies nodded their heads. In addition to Apple Bloom, yellow, sassy and adorable, there was Sweetie Belle, Rarity’s sister, who squeaked when she talked, which was always. Completing the trio was Scootaloo, she of nebulous relation to Rainbow Dash. Twilight thought of her as “the orange one.”

None of them were interested in economics. That left Twilight fresh out of ideas, except for maybe a lobotomy.

“I want to go outside,” Scootaloo whined.

Twilight looked out the window. “It doesn’t seem like Equestria is in danger.” A thought occurred to her. “Do you want to become as big and strong as Princess Celestia? Because I—“

“We want to play,” Scootaloo said. “You know, fun?”

“I haven’t been this bored since I tried drinking orange juice that one time,” Apple Bloom sighed.

“You girls could come over to Rarity’s basement and help me make dresses,” Sweetie Belle said. There was something slightly artificial to her tone, as if the offer was something she had memorized and been looking for an opportunity to repeat.

“We…we could play ‘pop the bubble?’” Twilight invented wildly. The only part of games she understood were the rules. “How about making shadow prices on the wall? Or guess the Lagrange multiplier!”

“The what?” Sweetie Belle squeaked.

“We’re going to play hoofball,” Scootaloo decided.

“Yeah!” Apple Bloom said.

“Hoofball?” A vein throbbed in Twilight’s forehead. “Hoofball? Do you even know how many oopsy-bumps ponies get on their heads every year—“

Twilight hid her face beneath her hoofs.

“They’re fillies,” Applejack explained patiently. “Can’t go shouting at fillies for liking hoofball. ‘Sides, I like hoofball. Who doesn’t?”

“I’m sorry,” Twilight mumbled. “I—I wanted to be popular with them, that’s all. I wanted to be the cool older mare.”

“Did you try economics?”

“Was there an alternative?”

Applejack and Rarity looked at each other.

“Twilight…how shall I put this?” Rarity said delicately. “Most fillies aren’t very interested in economics.”

“I was.”

“Yes, well…um…most fillies really do prefer things like hoofball and BBBFF. Maybe you could—“

“Never!”

“Twilight, let me tell you something embarrassing,” Applejack said. “Apple Bloom wasn’t interested in apples very much when she was just a foal. She liked…other things.”

“What do you mean?”

Applejack closed her eyes. She was clearly remembering something painful. “She liked lemons. Couldn’t get enough of ‘em.”

Rarity put her leg around Applejack. “Sweetie Belle was the same. She wore these awful onesies all the time. And she had terrible taste in bonnets.”

“So what did you do?” Twilight asked.

Applejack smiled. “I found a way to connect apples to her life. I made fruit puppets to teach her about the origins of Equestria and how Princess Applestia overthrew the evil Lemon King. We played apple-toss and sang apple songs. You know, fun stuff for kids. I fed her an all-lemons diet until she was sick at the sight of them. Kids love food. And at night when she was asleep I whispered to her in Applenese, the ancient language that must be spoken on the day of the eclipse to summon Lord Smooze—“

“I put poison ivy in all her ugly clothes,” said Rarity.

Twilight wasn’t listening anymore.(1) A plan was beginning to form. She wrote a letter to Paint X, Princess Celestia’s court artist. A day later, she got a response.

Yes.

Twilight sent the details to her, and a week later, something arrived in the mail(2)….

Twilight hummed to herself. The sun was shining, the world wasn’t being threatened by an eldritch monster(3), and she had new books.

Comic books.

Also, she was now totally the cool older mare.

“Wowww!” said Scootaloo, entranced by the strong colors and bold lines that defined Paint X’s acclaimed art.

“Let me see!” Sweetie Belle and Apple Bloom crowded around their orange friend. “Coooool!”

“Economics always was cool,” Twilight said, gazing at the horizon, the wind blowing her mane. “You had to discover the coolness in it for yourself.”

“Why, these fillies are just like us,” Scootaloo said. “They like to play hoofball, hang out with colts, and learn about the history of banking reform!”

“And they like making dresses in their sister’s basement!” Sweetie Belle said.

Apple Bloom pointed eagerly to something on the page. “Look, that’s Applenese she’s speaking! It means”—she squinted, concentrating—“‘The—the blood of a dozen vir-virgins at the height of the e…eclipse? will arouse Smooze from his slumber….”

Scootaloo turned the page.

"The Story of Robyn Crusoeflank," she read. The other two fillies leaned over her shoulder to read.

“Hooray,” said the three fillies.

"Thank you Princess Celestia," the three fillies chorused.

“Amazing!" Scootaloo said. "So that’s where money comes from! I never even wondered where the Friendly Poor Fund for Friendly Orphans got it from.”

Twilight nodded. “Today, your journey has begun.”

The three fillies looked at her solemnly. “Will we ever be able to come back? Will things ever be the same again?”

“You will be able to return to Ponyville,” Twilight said, almost sadly. “But you will not be able to come back.”

Scootaloo put her hoof out. “Then let’s make a pact, girls. Let’s promise together to become Wizards of Economy and find our true names—“

“Don’t believe everything you read,” said a deep voice. “Anthropological evidence you need.”

Twilight turned around. Walking their way was a zebra. Twilight knew it was a zebra because it had long black and white stripes alternating down its coat, and gold jewels in its pieced ears and hanging around its neck. That was, she realized guiltily, all she knew about zebras. Good thing Fluttershy wasn’t there. The clinking of gold earrings stopped as the zebra did, standing before them with an unreadable expression. At least, Twilight couldn’t read it. She really hoped it was because the zebra was stoic and not because all zebras looked the same to her.

“Forgive me, pony, for my quirk. It comes with such a simple perk. Strive I do to speak in rhyme to give the children a good time.”

“Hi, Zecora!” the three fillies chorused.

“Hello, children, I see you there reading economics, a frightful snare.”

“Excuse me,” Twilight said. “I don’t mean to be speciesist, but who are you?”

“I am from the forest. My name is Zecora. And you are Twilight, the nomenklatura.”

Twilight blinked. “You know who I am?”

“What concerns the Bank concerns us all. Even we zebras heed the Princess’s call.”

Twilight was having a hard time dealing with the rhyming, but she was afraid pointing it out was speciesist. In her indecision, Sweetie Belle seized the opportunity to show Zecora the comic books.

“What an odd take on the origins of money. Scientific work should not be a priori.”

“I assure you, the logic is sound,” Twilight said, suddenly cold.

“Sound it may be, but who is listening? I think you will find my evidence interesting.”

“Money has three functions,” Twilight said. “As a medium of exchange, a unit of account, and a store of value. They’re all important in their own way, but I think any reasonable person can agree that the role money plays in reducing transaction costs is key to its inception. Barter doesn’t work.”

“That barter doesn’t work any pony would agree. Barter is found in no society.”

“Wait, what?”

“Anthropologists have searched far and wide to find barter on some distant tide. We have not found any evidence that the story in this comic book makes much sense.”

Twilight couldn’t imagine how difficult it was to communicate in couplets. “Do—do you want to speak normally? Not to be speciesist, but—“

“Money has its origins not in barter. Put your money on debt, it’s smarter.”

“Debt? Oh, no, it’s never debt, why does everypony in the ‘social sciences’(4) who’s not an economist think it’s always debt—“

“Economists in the armchairs think, that no pony will smell the stink, of their made-up just so models, which consider evidence a hobble.”

“Is it hard rhyming while doing that?”

“A speciesist at heart lets her bigotry out like a fart. Not silent, sometimes deadly, and yes, thank you, it isn’t easy.”

“Fight! Fight!” Scootaloo said.

“I got two bits on Zecora,” Apple Bloom said.

“What? Not me?” Twilight said, hurt.

“Sorry, we like Zecora. She’s like a cool older mare who teaches us neat stuff about science.”

Twilight turned red, a remarkable feat for a pony already purple.

“Is that the scream of steam ejecting from your ears, or is it the sound of an ego shattering I hear?”

Twilight glared at her. “You—how do you know the fillies?”

“Pinkie Pie pays us to fetch ingredients from the forest when she’s too busy,” Scootaloo said. “We met Zecora there.”

“What was she doing there—you should be in school! And the forest is still too dangerous for fillies to go running about!”

“Rainbow Dash says school is just about showing off,” Scootaloo said dismissively.

“That’s because she never graduated!”

“Rarity says you can’t make a stunning dress if you’re not willing to suffer a little hoof cramp,” Sweetie Belle said. “No pain, no profits.”

“Remind me to have a talk with your sister about filly labor laws.”

Instantly Sweetie Belle’s eyes welled with tears. She burst into loud sobs, her screams cracking into impotent squeaks whenever she managed to draw breath.

Twilight lifted a hoof helplessly. “What—I didn’t—“

“Now you’ve gone and done it,” Apple Blossom said accusingly, holding Sweetie Belle. “Sweetie hates the LL word.”

“It’s—not—my—fault!” Sweetie Belle sobbed. “I—wanna—work—with—Rarity! WAAAAAAAAAHHHHH!”

“I—I’m sorry,” Twilight said quickly. “I didn’t mean to upset you. I don’t even remember anything about any silly labor—I mean, LL…thing, look, it’s all water under the multi-part priced bridge. Let’s just forget about any silly laws, okay?”

Instantly Sweetie Belle’s eyes dried up. “Okay! Thanks, Twilight!”

“I….” Twilight couldn’t think of anything to say. Had she just been outsmarted by a filly?

“Amusing as it is to see the unfolding of this travesty, I have business with Rainbow Dash, so if you excuse me I think I will pass.”

“Hold on,” Twilight said. “As ruler of Ponyville—“

“What?” The three fillies looked at each other.

“—I have a right to know what you’re up to in the forest. We only just established the new contract, and I can’t allow anything to threaten it.”

“Fear not, pony, for I come in peace. No forest do I seek to fleece. In the forest much is hidden of Equestria’s history unbidden.”

“You’re…reverse-engineering the past?”

“Yes, good guess.”

“Does the princess know?”

“Of course, horse.”

“Well…I guess it’s not a problem then.”

“When the shattered atmosphere returns in full, the heavens the sisters will no longer pull. Equality and peace will reign, and on no magic will depend our rain.”

“…Huh,” Twilight said.

“Now I must be gone in a flash if I am to make my meeting with Rainbow Dash.”

“Wait.”

Something in Twilight’s voice must have made Zecora stop. She turned around.

“What is it you want, other than to interrupt my jaunt?”

“You were saying something about money not coming from barter. Explain.”

“The CEE’s command I cannot deny, thought I fear she will think my claim a lie. Unpleasant for a pony to be wrong, making it difficult to get along.”

“Not me,” Twilight said. “I was trained by the best.”

“Yay!” the fillies cheered. “Zecora’s gonna teach with rhyming!” Twilight tried not to hate them.

“Let us start from the beginning, or against reason we shall be sinning. State the position you think is true, and we will see what is on the other horseshoe.”

Twilight decided to give that one a pass. Speaking in couplets was probably taking up half the zebra’s cognitive capacity. …That wasn’t speciesist, was it?

“My position is, I think, the normal one,” Twilight said. “Money evolved as a response to the inefficiency of barter. Imagine an economy where Robyn Crusoeflank catches fish and Friday gathers coconuts, but there is no Princess to create money. You have one market, the market of fish-for-coconuts, which is also the market of coconuts-for-fish. Robyn wants to drink some coconut milk, and Friday could use some protein in her diet, so they will trade coconuts for fish. Sounds good, right? There’s a catch: fish and coconuts don’t keep. Robyn can’t buy coconuts whenever she wants because Friday won’t accept fish unless she wants to eat them right then. Coconuts that fell from the tree last longer than fish, but Robyn likes them when they’re freshest, so Friday can’t buy fish unless Robyn wants some coconut milk right then. Trade isn’t going to happen unless both ponies are hungry!”

“Their circadian rhythms will align, and everypony will know the time to trade their goods on the market, but more likely still is stark debt—“

“I’m still talking. The problem Robyn and Friday have is called the double coincidence of wants. Imagine how difficult life would be if you couldn’t buy anything unless the pony selling it to you happened to want the fruits of your labor or capital right then.”

“Markets would not persist unless debt did exist—“

“Still talking. So then a third pony shows up named, say, Selestia.”

“It sounds the same to my ears. Written jokes I cannot hear—“

“Yeah, yeah. Anyway, while Robyn catches fish and Friday gathers coconuts, Selestia takes shells from the shore and puts a perfect little circle in them with her incredible, beautiful magic. She is wonderful and kind, and everypony loves her.”

“You have issues,” Scootaloo said.

“Probably a hoofball-related injury has rendered me delirious,” Twilight snapped. “Anyway, Selestia has her beautiful shells, which Robyn and Friday would like. Now we have three markets, the coconut-for-fish market, the coconut-for-shells market, and the fish-for-shells market. Exchange is even more complicated. Let’s say Robyn wants some shells, but Selestia isn’t hungry for fish. She would like some coconuts, but Friday has all the shells she wants for now. Friday wants fish, but Robyn isn’t interested in coconuts now. What a mess! It gets even more absurd when you realize that Robyn, Friday and Selestia will want coconut milk, shells, and fish tomorrow.”

“They could just talk to each other,” Scootaloo pointed out.

“Fine, let’s say there are twenty goods. Or two hundred if you like, however many you need to see the point that saying, ‘Hey, if you give your fish to Friday and she gives her coconuts to Selestia and she gives her shells to you, then…’ doesn’t work for an economy that can sustain a standard of living much higher than what you would have on a desert island. The point is, barter is a terribly inefficient mode of exchange.”

“On that I think we can agree. What comes next shows our diversity.”

“I’m just going to ignore your rhyming for now. So barter is a terrible mode of exchange for getting anything done. The double coincidence of wants is overwhelming if you want an economy bigger than two or three ponies. But look at what makes Selestia’s shells different: unlike fish and coconuts, they can’t really be consumed, and unlike fish and coconuts, they don’t go bad. You don’t need more seashells every day, and ponies can hold onto their shells for a long time. That’s not a metaphor for my friendship development, by the way,” Twilight added, looking defiantly up at the sky. “I can’t be ridden!”

Zecora looked at the fillies, who shrugged.

“Anyway,” Twilight coughed, “The final important difference is that while ponies only want fish and coconuts at specific times, they’re always happy to have some more shells. So what might happen over time is that Robyn would trade some coconuts to Selestia for some shells. Then instead of trading fish to Friday for her coconuts, Robyn might trade some of her new shells for Friday’s coconuts. Since Friday doesn’t always want fish, but she is always happy to have Selestia’s exquisitely holed shells whenever they’re available, the trade works even if Friday doesn’t want any fish right then. And Friday can do the same, buying Selestia’s shells with coconuts and then trading the shells for Robyn’s fish even when Robyn doesn’t want any coconut milk. The double coincidence of wants as a problem seems to have been solved. Finally, Selestia would be willing to give Robyn and Friday some shells even when she didn’t want coconuts or fish as long as she can later demand some amount of fish and coconuts from them without giving up more shells.”

“That sounds all backwards,” Apple Blossom said. “It oughta be the ponies who get the shells from Selestia who can turn them back into fish and coconuts later—“

“Why do you even know that? And—“

“Why would ponies need new shells one they had enough to trade?” Sweetie Belle asked.

“Because…because Princess—I mean, because Selestia makes them all slightly different, and it’s the beauty of each one that makes them valuable, so they can’t just trade them back and forth—“

“Seems kind of pointless,”  Scootaloo said. “Nothing’s changing, they’re just giving each other shells now.”

“Exactly. The shells represent a promise to perform a future exchange in time. Robyn gives some shells to Friday for her coconuts, saying, ‘I know you don’t want fish now, but later if you show me some shells I will give you coconuts,’ which is exactly what they need to solve their problem. By serving as a medium of exchange, money solves the problem of the double coincidence of wants through time.”

“What if they run out of shells? Wouldn’t all the trading stop?”

“Selestia could just break all the shells in half, and then they’d have twice as many again.”

“Oh.” They all stopped to consider the macroeconomic wisdom of that hypothetical response.

“A good story, it is true, but the problem is, it is not true,” Zecora said.

“Eh,” Twilight said, shaking a hoof back and forth. “You’re reaching.”

“Zecora’s gonna rhyme now!”

“Yeah! Teach us science with rhyming! It’s the only way to make science fun for fillies!”

Twilight glowered. “Did…did Rainbow Dash put you three up to this? Because I will depress the Ponyville economy so hard—“

“Let’s start with the basic point of which I agree. Barter is inefficient for the economy. So inefficient it is that it's never observed. No evidence of barter has been preserved.”

Twilight sighed. “This is going to take forever if you keep forcing everything to rhyme.”

“Shush!” Scootaloo said, her eyes wide. “I’m learning science!”

“Economists thought barter would persist, but in fact it’s too inefficient to exist. Money did not emerge from barter since it is too rare to be a starter.”

Twilight rubbed her chin. “You’re saying barter couldn’t produce money because it’s too rare a phenomenon to spark a process like the one I described? That…has to be wrong….”

“Ponies must still find ways to trade, but with gifts not barter the exchange is made. One pony says, ‘I like that hat.’ The other says, ‘You can have it’—that’s that! But later the pony returns and says, ‘My, you look lovely in that fez.’ She notices a shiny watering pail—the hatted pony gives it, and that’s the sale. Debt, you see, is the key to making exchanges in time, a mechanism sublime.”

“So instead of using money to represent an agreement to trade later, you just remember who owes who what. But how does money result?”

“We see that money comes from bureaucracy, not, as you hope, the aristocracy. Ancient temples managed thousands of laborers, and their needs and outputs had to be measured. Money emerged as a series of fixed equivalents, the unit of account being the key instrument.”

Twilight was still busy translating the rhyme-speak into something comprehensible. “If I understand the argument, it is that large-scale non-state institutions organized massive amounts of labor, and in order to do so properly they needed to established fixed relations between the amount of stuff necessary to sustain each laborer, and the amount of stuff each laborer produced. These fixed equivalents were essentially primitive prices. But that’s not exactly money. I mean, it’s not used to buy things, is it?”

“Silver we shall say was the metal of choice, and to the trader it gave a voice. Not in terms of spot transactions, but rather it allowed credit in on the action.”

Twilight winced at the abuse of poetry. “So…so instead of a gift economy dependent on implicit mutual understandings that a hat given now will later be replaced by a watering pail from the recipient of the first gift, traders could use the fixed value of a silver dollar as established by a temple to make deals based on credit. So if a silver dollar meant ‘a day’s worth of meals to sustain a typical pony,’ then you could buy a single meal's worth of food at one-third of a dollar on credit, which would be a lot more efficient than the gift economy. But what about cultures that didn’t have such temples?”

“The other possibility is a legal system to determine the stuff owed to the victim. If a pony loses an eye, she will demand a specific cut of the pie. Exact equivalences she will demand; the victim thus will the judge will remand. Pay her in pie and if you can’t, an amount of silver will be spent, from you in the nicest quantity, to restore peace and tranquility.”

“Fixed equivalences measured in a unit of precious metal as a function of a legal system imposing compensation from the guilty to the victim. It would have to be exact because the victimized would be very upset.”

“The answer is yes, my rhymes a success.”

“It sounds very un-pony.”

“It is a uniquely human one, and now the princess must guide the sun. Make of that what you will. Further secrets I shall not spill.”

“But how do you know it’s true?”

“Overwhelming evidence, and a bit of common sense. But mostly lots of evidence. If you have none, then let your theory hence!”

“I…I…I didn’t know I needed evidence! It’s just a story about the importance of a medium of exchange! Spot transactions are really convenient if you can do them! WAAAAAAHHH!”

“Please, calm down,” Zecora said after a moment of embarrassed silence. “I did not mean to make you frown. Science is fun for all the fillies if presented in a way that’s a little silly.”

Twilight wiped her eyes and looked at the three little ponies. Their eyes were wide, staring rapturously up at Zecora, who seemed faintly embarrassed by the attention. She snorted, her gold rings jangling.

“We zebra do not have a home. Our ancestral lands we cannot roam. To be treated joyously by the children, I cannot repay with anything given.”

“We could get you therapy for your speech impediment,” Twilight said, unable to stop herself.

Zecora sighed and turned away.

“Wait!” Twilight said. “Sorry. It’s been a while since I was with Princess Celestia. I’ve gotten used to being the expert on everything.”

“A comparison to the princess? From you I am sure it is meant to bless. My view of the Bank is not so high, but let her carry the sun; I don’t want to die.”

“What I mean,” Twilight said, “Is that even though I said my tale about the origins of money is just a story, I think I did really believe it. I didn’t have any evidence, but I couldn’t imagine anything else. Today I learned something very important about the limits of imagination and how wide the hypothesis space truly is, especially relative to my own sense of it. And in the end, our answers are not so different. It’s all about solving exchange through time as an answer to the non-conjunction of present wants or plans.”

Zecora inclined her head. “Then let us part as friends. No injury is there to mend.”

Twilight stuck out her hoof, and Zecora shook it.

Sweetie Belle sniffled. “It’s so beautiful.”

“If everything in school was taught with rhymes, I would pay more attention,” Scootaloo said.

“You said it," Apple Blossom agreed. "Hey girls, what do you say we go get some apple juice from Sweet Apple Acres to wash down all this cool knowledge?”

“Yeah! Do we have to pay?”

“Yes.”

Twilight was still watching Zecora walk steadily down the road.

“Are you okay, Twilight?” Scootaloo asked. “I hope Zecora didn’t upset you by one-upping you at your own game.”

“No, I’m fine. I like to learn things, and while interesting, it doesn’t exactly shake the foundations of anything important—“ Zecora disappeared around the corner, and Twilight took off at a gallop in the opposite direction.

“PRINCESS CELESTIAAAAAAAAA!”

1) She did feel bad about it afterward. Marginal steps.

2) That is, the magical pocket occupying fifth-dimensional space in Spike’s stomach.

3) She was wrong. Princess Celestia was at that very moment battling the Screaming Historicists, a race of warlike aliens threatening to destabilize the laws of economics with their anti-inductive ray guns. They were currently giving Princess Celestia a bit of trouble, and she was running out of tricks from her millennia-old bag, as anything that worked once would never work again. Nothing remained of the gold standard but smoking ash, and Say’s Law had been blasted into another dimension.

4) Twilight made hoof quotes at this point because obviously the set of social scientists equals the set of economists.