Vex Eternally: The Dragon Extraction

by mylittleeconomy

Chapters

• The Hypothetical Given
• Subjective Information
• Exploring the Hypothesis Space
• Creating the Hypothesis Space
• Pinch
• The Game
• Rational Expectations
• A Long Conversation About Privilege
• Input-Output
• Going Up a Level in Friendship

The Hypothetical Given

It is not from the benevolence of the farmer, the baker, or the dressmaker that we expect our dinner, but from their regard to their own interest.

—Adele Smith, The Wealth of Nations

Huh numble suh Spruggle. Twudlud Spruggle.

Here are some interesting facts about dragons:

Some dragons have spikes on their tails and ridges on their backs. Others just have spikes on their tails, or just have ridges on their back. Some have neither, and instead have horns on their foreheads. Their horns are as magical as you believe they are, assuming your beliefs about the magical nature of dragon horns are exactly correct.

Dragons can live up to one lifespan long. After that, they die.

Dragons can grow to be about sixty feet from the end of the tail to the tip of their snout. That’s almost as tall as a brontosaurus can get.

Brontosauruses don’t exist, of course. But neither do dragons.

Dragons…went somewhere. They never got along well with dinosaurs, who always felt that dragons were cheap imitators. The biblical connotations didn’t help, of course—dragons protested that they flew with their majestic wings, not crawled on their bellies, but seriously, who would believe anything a dragon said? They’re liars—didn’t you hear the story about the apples in that garden?[1]

[1] The garden's name is lost to time, alas. Researches only know that it started with the letter E and had three more. Econ? …No, couldn’t be….

And you thought apples had something to do with honesty….

A couple of rocks collided in space. Dinosaurs went and humans came, telling their own story about the lie in the apple orchard. Dragons argued about this, but they had not reckoned on one fact. One interesting fact about humans they hadn’t known.

Humans are good at arguing. So good, in fact, that scientists think arguing is what separated man from beast a long time ago. That, and two rocks colliding in space.

Dragons sharp of tooth and hot of flame lost that fight.

(How sharp of tooth? How hot of flame? Here are some interesting facts about dragons: dragon teeth are hard enough to cut diamond. Some ponies believe diamonds are ancient dragon teeth, and they might be right. Dragon flame reaches at least 6200 degrees Fahrenheit, hot enough to melt tungsten. Establishing an upper bound on the heat of dragon flame has proven quite challenging.)

Dragons…went somewhere. Where? Look around, I’m sure you’ll see one…you read pony fanfiction, for goodness’ sake….

Found them yet? That’s right. Dragons went into books. They branched out into television and film later—a purely financial move, of course. They went into our stories. And humans were, by and large, fooled by this. Not entirely, of course. People associated with dragons were targeted as “nerds,” a corruption of the Norse word Niddhog, a probably legendary dragon who slept under a golden oak tree, and they were subjected to violence and disarray in their youths.

Now you know.

Everything became cold, for some reason, and it started snowing a lot. Humans went away, and the pages of their books tore up into little pieces that scattered in the wind like snowflakes.

Dragons were back. A lot older, a little wiser. They had learned something from the humans. They had learned about arguments, which were strength but also weakness. Dragons gained a new kind of power.

And went back to sleep. It was a long winter.

It had been one year since Twilight Sparkle, Chief Executive Economist of the Daughter Bank of Ponyville, First Equal of the Nine, had made friends. Now she was being subjected to Buddhism.

“And then I said, ‘Make me one with everything!’” Pinkie Pie giggled. “Get it?”

Twilight stared at her.

“She didn’t get it either,” Pinkie Pie said, not put out at all. “I was the one making the cupcake, so I guess it didn’t make a lot of sense.”

“I really don’t think there’s anything to this Buddhist economics,” Twilight said as delicately as she could. “You can’t not want things and still have an economics.”

“Here’s a question,” Pinkie Pie said. “If a tree falls in the forest and no pony is around to hear it, does it make a sound?”

“Well, obviously ye—“ Twilight stopped. “Are we talking about the Everfree Forest?”

“It’s a Buddhist Zen thing,” Pinkie Pie said quickly.

Twilight eyed her suspiciously. “Well, if it’s not in the Everfree Forest, then the answer is probably yes.”

“Want to bake cupcakes later?”

“No.”

“Want to have a party?”

“What for?”

Pinkie Pie frowned. “What do you mean, what for?”

“We want a party!” three annoyingly sweet young voices chirruped.

Three heads so adorable Twilight almost suspected they had been deliberate designed to elicit the feeling of “Awwww! I just want to squeeze their little cheeks!” appeared around the rows of bookshelves.

“Studying is boring!” complained Sweetie Belle, Rarity’s younger sister. She was white, with a mane that was by parts faded pink and pale violet, and she tended to squeak when she talked, which was always.

“Economics is just common sense anyway,” said Apple Bloom, Applejack’s younger sister. Yellow and sassy, she had all of Applejack’s stubbornness and twice as much savvy. Her accent wasn’t as good though—Applejack said it took a while for them to grow into it.

“This isn’t fillysitting,” accused Scootaloo, Rainbow Dash’s…fan. She was, apparently, an orphan, and had patterned herself after Rainbow Dash like a duckling that imprints onto the first awesome thing it sees. “You can’t make us read economics all day!”

“Yes, I can!” Twilight snapped. “Now get back to reading. Your sis—uh, Applejack, Rarity, and Rainbow Dash will be back soon to pick you up.”

“I want action!” Scootaloo said.

“Then…then read Pony Action!”

“Maybe you should take them outside,” Pinkie Pie suggested.

“I need to step outside,” Twilight said. “I need to clear my head.”

“You better not be going to the Daughter!” Pinkie Pie said as Twilight headed to the door.

“Just clearing my head!” Twilight said. She slammed the door behind her. Pinkie Pie shook her head and got to work baking little cakes for Twilight, who Spike had confirmed thought they just materialized in a manner analogous to how the trash just took itself out, the table cleaned itself, the library books sorted themselves back onto the shelves….

Sweetie Belle was looking among them now. “Found it!” Clambering up the shelves, she managed to knock Pony Action down and opened it to the first page.

The rest of the page was blank white. Sweetie Belle turned to the next page. The page was yellower, like it was much older, and the ink was…blacker, like it was more powerful. It read:

Sweetie Belle turned the page.

On the next page each word was smaller, and there were a lot more of them. Sweetie Belle settled down to read. After a moment, Apple Bloom and Scootaloo joined her.

It was another normal day in Ponyville.

It was another normal day in Appleloosa. There was an argument in an apple orchard about a lie that might have been told.

“This apple has a worm in it!” Little Strongheart gestured furiously at the dropped apple with a bite taken out of it. There was indeed a worm crawling pathetically out of the wreckage.

Braeburn tried to stifle a laugh. He never could take that skinny little buffalo seriously. “I didn’t know! How could I have known?”

The apple orchard was in a valley below Hark Mountain, which loomed over them like Chief Thunderhooves over a bowl of corn mash. As the sun moved awkwardly behind the mountain like a distant cousin during an argument at a family gathering, a shadow fell on Little Strongheart’s face like the will had just been mentioned.

She did not like Braeburn’s shrieky voice. She did not like his laughing eyes nor his boring cutie mark, and she especially did not like the way he said "Appleloosa!"

“All you ponies are the same,” she said.

“I’m sorry, I’m sorry,” Braeburn said, but he wasn’t. “Just take another one,” he said, but she wouldn’t take just another one.

“This apple orchard is a sign of friendship between pony and buffalo,” Little Strongheart said. “But ponies are not friends to the buffalo. Everyday the ponies disrespect us. They disrespect our land and our traditions.”

“Come on, Little Strongheart, can’t you take a joke?”

“I can take a joke. What you should wonder, Braeburn, is whether you can keep an apple orchard.”

Little Strongheart walked away.

The Daughter of Ponyville loomed like an old stallion hunched over his cane overlooking his yard, shaking his fist at the young 'uns he just knows are causing all the macroeconomic instability 'round here. The sight of it made Twilight’s muscles tingle like they needed to be stretched after sitting down too long. That was a good thing, because Twilight was starting to feel twitchy.

The problem, Twilight thought as she magicked open the heavy wooden doors of the Daughter, was that the world wasn’t ending.

It didn’t have to be ending per se. It would just have been nice, that’s all.

Working with Princess Celestia (Learning from Princess Celestia! Living so close to Princess Celestia that the princess might step into her dreams!) had taught Twilight that the world was always ending, at least a little bit. Economic crises, eldritch monstrosities from beyond space and time, and economic crises masquerading as eldritch monstrosities from beyond space and time were omnipresent in Equestria. By Twilight’s count, there was at least one ridiculous and dangerous conflict with Equestria’s future at stake that Princess Celestia had to personally address each week.

And it had been, to use Rainbow Dash's favorite second favorite word, awesome.[2]

[2]The first being "money," as in, "I've got a lot of money, and you haven't."

The connecting muscles between her legs and her flanks burning like a blush. Electric energy dancing up her neck. The snap of a pen, the taste of dust, the smell of ink. The constant gnawing ache in her stomach, the blurred vision, the giddiness, the sharp focus pointing down her cheekbones and tingling up to her eyeballs. That was what it felt like saving the world.

Twilight needed it like a junkie needs drugs, and her daily fix of Princess Celestia was in another castle.

She couldn’t stand Ponyville. Nothing ever went wrong! The town was stupid, like every week two ponies would get in some ridiculous argument over something utterly dull like who could run the fastest or whether some pony had blabbed another pony’s meaningless secrets. Nine times out of ten it was resolved when the ponies stopped acting like blamed foals.

Twilight couldn’t call it childish. Her idea of childhood was it being harder to get the heavy books down from the high shelves. But that summoned thoughts of her brother, which she swiftly dismissed with the automated efficiency born of practice, and she moved on instead to Ponyville’s macroeconomy.

Interests rates were…normal. RGDP ticking steadily up. Inflation was…whatever it was supposed to be.

The darned thing worked! Ponyville’s stupid, no-good economy ran itself!

Next week, I’m going to the moon.

The floor shook, and Twilight heard a distant rumble like a monster exploding out of an enormous tree. Exactly like that.

“I’m so excited we have our own Daughter bank,” Fluttershy said as she set out food for the chickens. She smiled at Mr. Cow eating the grass. “Don’t you think everypony is so relieved after the Great Succession? Twilight is going to make sure ol’ Nightmare Meanie stays far away from Ponyville.”

Mr. Cow took some time to swallow what was in his mouth. He lifted his head from the grass. “Ponies aren’t the only naturally evolved organisms who are affected by recessions, Fluttershy. Instead of saying ‘everypony,’ which is exclusionary, we critters prefer the term ‘everyone,’ which is inclusive. Check your privilege.”

“Oh my goodness!” Fluttershy said. There was a note of pain in her voice. “I’m so sorry. I’ll be sure to check my privilege and say ‘everyone’ instead of ‘everypony’ from now on.”

A shadow fell over the field of grazing animals.

“That’s odd,” Fluttershy said. The hair on her back stood up. “It’s not supposed to be cloudy today.”

The sensation of something looming—a blast of dislocated air the size of a house—heat like a furnace—Fluttershy was flung over the grass; her ears caught up with the vibrations crushing them and helpfully translated everything into a tornado’s roar; the ground came into focus, and then her hoofs, and the sky, where Fluttershy saw something she hadn’t thought she would ever see, not until Spike grew up.

Then she saw the field where the grass was pink.

“MR. COOOOW!”

Peargrass Puddle had a list, and that meant Applejack wouldn’t be out of the shop for a while.

She watched, bemused, and amused, as Peargrass Puddle strutted around the shop, looking with an eye so critical Applejack was surprised the tables hadn’t collapsed from all the extra damage they were taking. It was enough to make a pony sing the blues. At least he had brought some interesting news.

“Yup, Appleloosa’s really booming these days,” he said, giving the fresh-baked apple pies a hard stare. He took a long look at the list in his hoof. Maybe the effort of reading made him hold his breath, because his large stomach seemed to protrude as a single whole, looming over the pies. “The buffalo don’t cause any problems.”

“How’s cousin Braeburn?” Applejack said.

Peargrass Puddle straightened himself up, an impressive balancing act considering the weight hanging from his waist. “I saw him just last week when I was there. He’s good. Not playing any of his pranks anymore.”

“That’s good. He doesn’t have much sense for that sort of thing.”

Peargrass Puddle fluttered his piece of paper and started to strut around the shop again.

“Okay, okay, you’ve got a list, I can see that,” Applejack said. “Can I help you get everything you need?”

He hoofed it to her. “Got everything except for a dozen bushels of your best red delicious apples.”

Applejack took the note in her mouth and motioned for him to follow her outside.

“Is that your apple pies cooking?” he said. “Sure smells good.”

Applejack opened the door and stepped outside.

The note fluttered to the ground. Applejack’s mouth opened and closed like a baby’s hand grasping for its stolen nose.

In the distance a giant, three-headed dog was howling. Sweet Apple Acres was on fire.

“No no no no no!”

Rarity seized a dozen dresses in the blue glow of her magic and hurled them aside.

“I need something beautiful!”

A parasprite floated beside her, attracted by the violence like a fly to vinegar as Rarity stormed down the aisles of the Carousel Boutique. Flashes of blue lit the dark, lightning storms of magic and the accompanying thunder of hangers and racks crashing to the floor.

“Color….”

“I have color!” Rarity snapped.

“Fabric….”

“I have the finest silk!”

Frustrated with conversation, the parasprite hovered over Rarity and touched her horn. She brushed it away like an irritating mosquito.

It landed on the loom. “Suri Polomare….”

“Yes, Suri Polomare! Oh, Suri Polomare!”

Rarity’s horn flared. Blue light reflected off the glittering glass and crystal set everywhere around the room and off the gemstones on the dresses.

They say a witch should never be caught between two mirrors. Rarity wasn’t a witch, but she was an enchantress and a worker of glamors and illusions. Reflections were not a danger but a facet of her power. And Rarity had many facets.

“That Suri Polomare thinks she’s so great!”

Some of which were quite immature.

“Just because she has an exclusive line with Fleur Dis Lee—I’ll show her—“

“Gala….”

“Yes, the Grand Galloping Gala. Twilight’s invited us all this year. It will be the perfect opportunity to show off my dresses!”

“Could…destroy her….”

“No, no, I must do it properly.” Rarity’s eyes gleamed. “But that doesn’t mean I won’t be able to find a use for you at the Gala.” The parasprite floated to her shoulder. Rarity nuzzled it, cooing. “Oh, you’re a horrible little monster, aren’t you?” The parasprite chirruped happily.

Her pet mind-reading self-multiplying feared-on-the-level-of-Alicorns-and-the-draconequus monster perched on her shoulder, Rarity burst outside, looking for inspiration.

On the ground, right in front of her, the rainbow danced like crabs covered in oil at a rave. She gasped. And looked up.

Something glinted in the sky. A distant figure, flying in front of the sun. Not a bird…not Rainbow Dash….

“It’s beautiful!” Rarity cried. “And I want it!”

The harder Rainbow Dash was thinking, the faster she liked to fly. And she was thinking really, really hard.

Every month the Equestrian Puzzle Club sent out brainteasers, riddles, and problems to its members. Anypony who answered before next month’s set of puzzles got points for every puzzle they got right. Whoever had the most points was Number One Puzzler and got a star next to their name in the monthly listings.

Rainbow Dash wanted that star.

She was almost all the way through this month’s set. Tank helped, which wasn’t cheating—the rules didn’t say that a tortoise can’t play. If she could get all the points for this month, she just might pull ahead of somepony named Big Strongheart, the second-best puzzler in Equestria. Unfortunately, the monthly listings had her as first….

The last puzzle was a real doozy. Sometimes there were economics questions, and those were always just common sense. And sometimes there were math questions, and those were easy—what about some dumb old multiple derivatives was supposed to be difficult, anyway?[3] Rainbow Dash computed square roots in her head the way other ponies computed the time until lunch.

[3] That’s what Tank called them, anyway. To Rainbow Dash these things rarely had names. It was all just ways of figuring things out.

But this puzzle combined economics and math in a way Rainbow Dash had never considered before. The challenge was to find a method to describe and solve a system of linear equations[4] showing how every sector in the economy depended on each other.

[4]“Oh, those things have a name?” Rainbow Dash said loudly when Tank finished explaining. “That’s like giving a name to walking. Look at me, the Left-Right Left-Right method. Gosh! This is why school is so stupid!”

The idea was simple enough. Firms produced things for other firms to use, so you just had to figure out how much stuff was needed to make other stuff, and how much the former cost and how much the latter could be sold for. The trick was to work backwards from what people wanted to buy to what it took to make it, and you could see what a firm would choose to do if it wanted to make any money, and on down the chain to the firms that did the most fundamental work.

The problem was that the economy was big. Tank kept finding new kinds of businesses Rainbow Dash had never even heard of before. She remembered something about a pencil they all had to snap in school, but that was just a dumb old story. It hadn’t really happened, and Rainbow Dash hadn't really been listening.

Rainbow Dash was faster at math—faster at everything—than any other pony she knew. But even she couldn’t compute the sheer masses of numbers Tank was digging up. There was just too much.

Tank said the problem wasn’t tractable. Rainbow Dash said it was too big to grab a hold of. Tank said that was the same thing, and Rainbow Dash said she wasn’t in the mood for a lecture, and that was when Rainbow Dash knew she needed to take a flight, because if you’ll shout at your tortoise you’ll shout at anypony.

The blue skies were so empty and peaceful Rainbow Dash didn’t hear it until it was almost on her. The sound that she had thought was the whine of her own flight belonged to something else. A shadow fell over her.

Rainbow Dash dodged right, so fast the rainbow streak behind her nearly missed the turn. Something clipped the end of her flank; she spun wildly, her wings flapping helplessly. Finally she oriented herself and looked up, furious.

The skies were hers, like the top of the monthly listings of the Equestrian Puzzle Club or half the equity in Equestria. No pony could just knock her off course like that.

"Hey! What's the big...big...."

That was when she really saw it, looming over her: the beast.

She gawked. “Fluttershy’s sky serpent?“

But it wasn’t. Its tail whipped through the air like a cat baiting its prey, but so fast and heavy the gusts of air kept knocking Rainbow Dash off-balance. The tail curved up into a body that glowed red in the belly amidst the brilliant serpentine scales that dazzled her with their light. Then Rainbow Dash looked up to the grinning, horned head and the malevolent orange eyes that glowed with millions of years of evolved murderous efficiency, and 12,000 years of learned malice.

The eyes were, Rainbow Dash realized in that frozen moment, decidedly male.

Then everything was giant snapping teeth and rippling fire, and Rainbow Dash learned that ponies really did piss themselves.

Claws—teeth—her tail, burning—its own, whipping—a series of rainbow explosions in the sky, and Rainbow Dash careened toward the wreckage that had been Twilight Sparkle’s treehouse, yelling.

“IT’S A—“

“It was a dragon,” Pinkie Pie said helpfully.

Twilight looked, aghast, at the exploded wood and the tattered, burnt books that had once been her treasure.

“The fillies are fine,” Pinkie Pie said. “Me and Spike too. Got real lucky. It burst out of the ground and ripped and burned through everything.”

Twilight held up the charred remains of a book cover.

The rest was burned off.

“You can sleep at my place until Princess Celestia finds you somewhere new to live,” Pinkie Pie said.

Rainbow Dash touched down, rubbing her tail against the dirt. “I just got attacked by a—whoa, what happened here? What about the fillies? Are they safe?”

“They’re fine,” Pinkie Pie said. “I sent them home with a book from the library. It might be the only one that survived!”

“Rainbow Dash, get the others,” Twilight said. “We have a dragon to slay.”

In the distant sky to the west, a trail of smoke was visible, and spreading.

“What’s that?” Pinkie Pie said. “Some kind of omen?”

“No,” Twilight said. “It’s an externality.”

Subjective Information

God created ponies like He created man: unashamed of their nakedness. Apparently He prefers his children that way. Well, after a while, He must have made up His mind what to do about the whole situation. A flood was off-limits, but the Lord has a lawyer’s sense of humor….

The first part was getting the ponies to calm down.

“Don’t do anything that can make it hard for you to speak to or listen to each other,” Twilight said. “That means we need to be calm.”

“Calm?” Applejack shouted. “Calm? A dragon burst out of your treehouse, nearly ate Rainbow Dash, could’ve gotten Pinkie Pie and any of the fillies, set my orchards on fire, and it, uh—“ she glanced at Fluttershy, who hadn’t quite stopped crying yet.

“You can say it,” she sniffled.

“And…and…gave Fluttershy a good scare,” Applejack mumbled.

“Yes, and that’s why we need to be calm. Dragons are beasts of externalities, and they feed on strife.”

“If it’s an economic problem, let’s just get the Elements and give that dragon the old Friendship Beam,” Rainbow Dash said. “Like we did for Nightmare Moon.”

“The Elements combine to create a highly optimized price vector,” Twilight said, a little sourly.

“Yeah, whatever. A Friendship Beam, like I said.”

“But first we have to get our hands on those beautiful scales of his,” Rarity said. Her hoofs flew to her mouth. “I mean, uh—as vengeance, of course.”

“I don’t want revenge,” Fluttershy hiccuped. “I just want the dragon to go away.”

Twilight looked up. The black smoke was thicker now, even though it was coming from farther away, and it was spreading.

“If it’s just a dragon, Princess Celestia can deal with it,” Pinkie Pie said. “She’s gotta know by now.”

“I’m sure she does,” Twilight said, just as Spike let out a burst of green flame. Twilight caught the letter with her magic and unfolded it. She read it out loud to the other ponies.

Dear Twilight Sparkle,

Yikes! If I’m not mistaken, that black smoke spreading from the west belongs to a dragon. Dragons are beasts of externalities, so it’s very important that you and your friends stay calm and learn to speak and listen to each other as you venture forth to defeat it.

“Wait, why do we have to do it?” Rainbow Dash said.

I’m very busy making preparations for the Grand Galloping Gala, which will be Grander and more Galloping than ever. I cannot wait to see you and your Sisters there.

“She’s preparing for a Gala?” Applejack said, incredulous.

“You have sisters?” Pinkie Pie said, even more so.

Twilight waved a hoof. “They’re even worse than my brother, if you can believe it.”

That dragon which emerged, if I’m not mistaken, from the Golden Oak Tree you were staying at, is called Niddhog. Dragons slept through the Snow, but it is written that they are crafty and devious beasts, in addition to being huge, immensely physically and magically powerful, capable of super fast flight, and able to breathe fire hot enough to melt steel. So be careful!

Best of luck (Can’t wait for the Gala!),

Princess Celestia

P.S. Don’t try the Elements of Equilibrium, they won’t work.

“Well, that’s that,” Twilight said. “We’ll go find that dragon and slay it, and we’ll have to do it the hard way.” She set the letter aside and smiled at her friends, who were all staring at her like she had sprouted wings.

“She’s preparing for some dumb old Gala?”

“What do you mean, do it the hard way? Why can’t we use the Elements? That Friendship Beam was awesome!”

“It’s not a dumb old Gala, Applejack!”

“It is too, Rarity!”

“You have sisters?”

“Calm down!” Twilight said.

Rainbow Dash went on speaking while Rarity and Applejack glowered at each other. “How are we going to fight a dragon anyway? I had to break Newton 6[1] just to get away! If it gets its hoofs—claws, whatever—on any of you, your goose is cooked!” She glanced at Fluttershy. “Oh, uh, no, I didn’t mean—“

[1]Like Mach 6, but measured in rainbows.

Fluttershy began to cry again.

Applejack, Rarity, and Rainbow Dash made sure their little sis—uh, Apple Bloom, Sweetie Belle, and Scootaloo were well-taken care of before the Bearers and Twilight had to leave to slay a dragon.

“Don’t worry, I’m looking after them,” Granny Smith said. “Apple Bloom, Scootasomething, and, uh, Rarity Junior are safe with me.”

“Okay bye!” Sweetie Belle said.

Applejack grimaced as the three fillies started pushing them to the door. “It’ll be real dangerous and we might all get roasted, so I just wanted to let you know that you’ll be all right—“

“The market will protect us,” Apple Bloom said. “Bye now!”

By collective effort the fillies had the older ponies nearly out the door.

“Don’t get into trouble, you three,” Rarity said. “And Sweetie Belle, I still expect you to work on the dresses in the…I mean, to play in the basement with all your toys.”

“Give the dragon a wallop for me,” Scootaloo said to Rainbow Dash. “But don’t be surprised if that dragon is beat before you even get there.”

“What are you talking about?” Rainbow Dash said.

The fillies gave each other conspiratorial looks. “Nothing a neoclassical pony needs to know about.”

“Just don’t get into any hijinks,” Applejack said, and then Scootaloo managed to slam the door shut.

Apple Bloom dashed to the bed and pulled Pony Action out from underneath. Sweetie Belle and Scootaloo joined her around the ancient tome, and together they spoke as one.

“If Ludmilla von Mises was the last Knight of Friendship, then we are…the Austrian Crusaders!”

“What’s Austria?” Granny Smith said.

“We don’t know!”

There was one train that traveled one track from east to west across the whole of Equestria. It wrapped three times around the mountains on either side. No pony remembered why.

The windows were all closed to keep the smoke out. It was getting thicker as they neared Appleloosa. Outside, Twilight knew, Fluttershy’s giant and still growing sky serpent flew overhead, and a Cerberus ran beside the tracks. Twilight wondered how they were dealing with the smoke. Rarity’s parasprite kept to her shoulder, which helped Rainbow Dash, who was having a hard time with Fluttershy. Tank seemed faintly embarrassed by the whole thing, insofar as Twilight could read the tortoise’s face.

And Pinkie Pie…Twilight hadn’t let her bring the entire Everfree Forest (“It’s not fair! Everypony else gets to bring their pets!”), so Pinkie Pie had brought a sapling from the forest named Bloomberg in a pot. So far it wasn’t moving much, but Twilight was already sure it was a few inches taller than when the train had started.

They didn’t need to worry about anypony being terrified by a giant dog or having their minds read by a tiny bug-like demon. Twilight, as CEE of the Ponyville Daughter, had commandeered the train, and they were riding it alone toward the mountain. She reasoned that ponies would have flooded off the train anyway once they got a sight of the giant snake flying over it, and besides, who wanted to go west when the sky was full of noxious smoke? She had also decided that what they were doing was important enough that they didn’t need to bother buying tickets.

And even though the train was empty, they were all in her cabin, for some reason.

Twilight’s hoof pointed to the western mountain on the map.

“Hark Mountain,” she said to the stuffy cabin full of ponies. “That must be where the dragon is.”

“Why would he be on a mountain?” Spike asked.

“Dragons like high places,” Twilight said. “That’s what my books say. And everypony knows jewels and gold are hidden in mountains, and dragons want nothing more than a hoard of shiny things.”

“Oh,” Spike said.

“Jewels and gold?” Rarity gasped. “And, ah, what are the rules exactly, haha, in terms of ownership? I mean, surely once we vanquish the terrible creature….”

“Rarity, will you stop worrying about your jewels?” Applejack grumbled. “You’ll take what you want, as usual.”

“Oh, excuse me!” Rarity said. “Applejack, I thought you of all ponies might want to, ah, enjoy the fruits of our victory, seeing as how your orchards burned!”

“Tain’t right to speak such a way,” Applejack said. “Hain’t finished grieving yet.”

“For your trees?” Twilight said, still examining the map. “That’s very interesting.”

Pinkie Pie laughed. “Trees aren’t ponies.” She patted the sapling reassuringly.

“Nopony said they were,” Rainbow Dash said. Fluttershy mumbled something.

“We could bring some trees back from Appleloosa,” Applejack said. “That’s the town right by Hark Mountain. My cousin Braeburn will give us a tree from their orchard—after all, I gave one to them.”

The train rumbled on.

A year ago Twilight had been on the same train to a dumpy town full of hicks to stop an ancient evil reborn. It had led her to manage oddest NGDP Targeting Festival she could remember, a harrowing journey through the dark Everfree Forest[2], and eventually to a meeting with Princess Celestia’s dark sister, Nightmare Moon. Somewhere along the way to saving the world, she had made friends.

[1] No matter how much Pinkie Pie insisted the Everfree Forest was really good deep down[2], Twilight could never quite shake the feeling that the dragon would have done them all a favor by torching it instead.

What calamity would happen to her next? A coltfriend?

[2]“At its roots!” Pinkie Pie would say, and laugh.

Ugh, no. She was too busy, and besides, it was one victory she didn’t want Princess “Notevil Goodpony” to have.

“Why are you sweating so much?” Pinkie Pie asked.

“Can everypony just leave me alone for a while to think and plan?” Twilight said. “We’re hours yet to Appleloosa anyway, so go to your own rooms.”

“Everyone,” Fluttershy said.

“What?”

“You said ‘everypony,’” Fluttershy said quietly. “There are critters who aren’t ponies. You’re being exclusionary and making other critters feel lesser. Check your privilege.”

“Fluttershy,” Applejack said kindly, “there ain’t any other kind of critter here but pony.”

“There's the parasprite and Tank.”

"The parasprite's a demonic hellspawn, and Tank is...Tank."

Twilight looked up from her map, intrigued by the technical point. “Ponies aren’t critters.”

“How dare you?”

Twilight had never heard Fluttershy shout before. It wasn’t a good sound. She literally couldn’t do it—her voice cracked up, broke down. Twilight worried she would choke.

“Ponies have mistreated and oppressed critters for years!” Fluttershy said, or at least that was the closest to a coherent sentence Twilight could make of an intermittent series of squeaks and sobs.

“No we haven’t.” Twilight turned back to her map. “Could I have some privacy, please? I need to figure out how to slay a dragon.”

“What privilege?” Pinkie Pie said.

“You don’t even know,” Fluttershy said. “That’s what it is.”

“What what is?”

“That.”

“Fluttershy, what are you even talking about?” Rainbow Dash said. “Want to go to another cabin and help me with this puzzle?”

“What puzzle?” Twilight said.

“No puzzle. Just a thing. Say, how do you model the whole economy?”

“Carefully.”

“Right. Fluttershy?”

“It’s the last thing Mr. Cow told me to do!”

Fluttershy stormed out of the cabin, or tried to. The effect was diminished somewhat by her unwillingness to push the five ponies between her and the door out of the way or to demand that anypony move. Gradually they picked up on her intention and made space for her to exit.

The door closed behind her.

“I’m going to be so rich,” Rarity said.

Finally Twilight was alone.

“So…dragons,” Spike said.

“Uh-huh.”

“Big, grown-up dragons.”

“Yup.”

Twilight rolled up the map and took out a book on dragon lore. Apparently dragons had a vulnerable part, but it could only be struck by manipulating probability so that the odds of striking it were exactly a million to one. Twilight had a whole bevy of probability spells at her disposal, but there had to be a better way.

“So where did I come from?” Spike blurted.

Twilight looked at his worried face. Realization dawned like Princess Celestia after a long night spent reading Twilight’s copious notes, that is, slowly. “Oh, Spike, you don’t have to worry,” she said. “You’re not evil.”

“That’s not what I asked.”

“You came from an egg, like all dragons. Princess Celestia gave you to me when you were little—“

“Why?”

Twilight opened her mouth and realized the truth, which she could never tell Spike.

Because the best econopony has a firebeast partner. Princess Celestia has the phoenix, Philomena, and I have you.

“Spike, Princess Celestia is old and mysterious even to me,” Twilight sighed. “Maybe she just wanted to make sure the last dragon was well-cared for.”

“Nopony told me I was supposed to live in a mountain with a hoard of gold and jewels.”

“You’re not. Your life is your own to decide. Do you think anypony told me to become an econopony? Ha! My brother wanted me to be his backup singer. His backup singer, Spike!”

Spike’s gaze turned intense. “What happens when I get older? When I get bigger—I saw how huge Niddhog is! Where will I live, what will I do?”

“Wherever you are happy, whatever you want to do. I’ll move heav—I’ll move the earth from my position at the Daughter to ensure it.”

“And I’m supposed to come up this mountain with you and watch you slay a dragon?”

Twilight thought of the million-to-one plan. She sighed and pushed away the book on dragon lore. “It’s not as easy as you make it sound.”

Spike was silent for a while. Twilight decided to wait and listen.

“Dragons are externality beasts You said that earlier. What does it mean?”

“Nothing. I shouldn’t have said that. I just mean that dragons make a lot of smoke when they don’t take into account other ponies’ feelings.”

“Princess Celestia said it too. I’m an externality beast.”

“You’re my assistant.”

“I don’t always mind other ponies. Maybe I just haven’t grown into my externality yet, like this stubby tail.” Spike thumped it against the floor. Somehow, he had always felt that his tail should be, well, bigger, especially when Rarity was around.

“You are an individual, and you can choose. Nightmare Moon is a pony, and look what she did.”

“If I turn evil, take me down.”

“I will.”

“I know. That’s why Princess Celestia trusts you with so much.”

Twilight hoofed Spike a piece of rock candy. He nibbled on it, and Twilight read another book on dragon lore until the train crashed.

Twilight struggled out of the wreckage of the cabin. She didn’t quite know if she was going up or to the side. All that she knew was every part of her body and mind was in full accord: out was the goal, and the details could be worked out later.

She touched Spike and concentrated. A second later, she had taken the derivative to the top of the carriage, which appeared as a flash of lavender light. The smoke was thick enough that the sun wasn't as bright as it should have been. Twiligh looked to her left, and noticed the giant pile of rocks sitting in the middle of the train tracks, and looked to her right and saw a stampede of buffaloes charging toward the train, and back to her left because where did those rocks come from and then right because ahh buffaloes and then left-right-down-panic because what happened to my friends.

Twilight had just seized with her magic most of the smashed-up wood covering their former carriage when it flew up. An orange leg grabbed hold of the ledge, and Applejack emerged a moment later, Rarity slung over her shoulder. The parasprite flitted around them both, Applejack biting at it instinctively.

“Rarity, you can get off me now,” Applejack said to Rarity, who was clinging to her neck tightly.

“Oh, I beg your pardon, dear Applejack. I was only slightly frazzled by the train crash, you see.” Laughing uncomfortably, Rarity slid off the amused-looking Applejack and landed shakily on her hoofs.

Pinkie Pie’s pink legs appeared above the hole, waving, and then lowered, like she was jumping up and down. Twilight levitated her out, potted plant and all.

Rainbow Dash and Fluttershy were last, flying out of the hole and landing beside them. Rainbow Dash’s wing was bleeding, and she set Tank down by her hoofs. Fluttershy was staring at the sight by the tracks.

The Cerberus’s three mouths were bloody, and buffaloes lay at her feet. A giant sky serpent flew in the air, casting her enormous shadow over the stampede.

“Forget the train!” Applejack shouted at the Cerberus. “Fluttershy, get your snake and get us out of here!”

Fluttershy was screaming at the serpent, her voice too weak and hoarse to carry. The sky serpent rose higher and higher, circling almost lazily, like a fish in a pond on a hot summer day.

Then she became to plummet like the the money supply one year ago. The sky serpent’s body fell toward the buffalo, her long tail sweeping through the air, intent on crushing them.

Twilight watched the earth rise around the buffaloes. It formed, molded like clay in a pony’s hoofs. The sky serpent slammed into at least two solid feet of rock. She was flung back, thrashing, her underscales scraped and discolored.

Fluttershy was crying again, little more than a hair-covered, water-leaking squeak. Twilight felt oddly like slapping her.

The buffaloes charged. The Cerberus roared, spitting giant flecks of drool and blood. Rainbow Dash tried to take to the air and tumbled across the rubble. Twilight’s horn flared, firing a vector in the positive orthant between the lead buffalo, a thick, dark-haired thing that looked almost twice as big as any other buffalo, and the growling Cerberus. More than a fundamental mathematical idea, the vector was purple-y and magical and strong enough to punch a hole in the ground, which it did.

“Enough!” Twilight shouted, using a scalar to magnify her voice. “I am Twilight Sparkle, Chief Executive Economist of the Daughter of Ponyville and (unofficial) heir to Princess Celestia’s throne! Buffaloes, what is the meaning of this?”

Twilight saw in the midst of the temporarily halted stampede a smaller buffalo than all the rest scribbling furiously on the ground. There was a horrible wrenching noise to her right, and Twilight saw something green dotted with red like a bush painted with the Cerberus’s bloody slobber explode out of the middle of the train. Twilight, utterly flabbergasted, took a moment to realize it was an apple tree.

“Buy some apples!” Applejack exclaimed.

“All ponies lie!” the little buffalo shouted. The rest of the buffaloes roared and stamped their hoofs. “We acknowledge the rule of the Alicorn Sisters no more!”

“Alicorn Sisters?” Twilight said.

“You didn’t know she has a sister?” Pinkie Pie said. “Nightmare Moon, silly!”

“No, Pinkie, that’s not what I….“ Twilight facehoofed.

“Take the remnants of your train and go back to Canterlot!” the little buffalo said. “The buffaloes who have fallen here”—Twilight flinched, but the little buffalo went right on talking—“were honorable and brave warriors. We demand no recompense, only that the ponies leave our lands.”

“We are here to slay a dragon,” Twilight said. “And…your, uh, your….”

“I can help you bury them,” Fluttershy gasped.

“A likely story!” the little buffalo shouted. “We know of the Sisters and their giant monsters! Cerberuses, giant serpents, and likely yon dragon as well! Princess Celestia heard of our victories against the Appleloosans”—Twilight realized the little buffalo was speaking to temporarily halted stampede as much as to her while Applejack again recommended the purchase of her trademark product—“and sent these ponies, and the dragon as a spy, to force us out of our home with its smoke.”

“Dragons don’t just do whatever ponies say,” Spike muttered.

“But we buffaloes drove it up Hark Mountain to hide, just like we will drive these ponies out of our lands!”

This was seven kinds of crazy and totally out of control. Twilight needed something to interrupt the insanity before the buffaloes did something she was going to have to make them regret.

“I am Tank, Tortoise Queen,” said a voice. It took Twilight a moment to realize it was coming from the tortoise standing near Fluttershy. The buffaloes looked baffled as well. Twilight wondered if they had ever seen a tortoise before. “We too acknowledge no Alicorn masters.”

“Uh, what?” Twilight said.

Tank waved a slow claw at her. “Chief Thunderhooves, if I am not mistaken.”

The enormous buffalo at the front bowed. “Queen Tank.”

“You misapprehend the purpose of this expedition. I demand that you remove this barrier to our journey and assist us in our travel to the base of Hark Mountain. In return, I shall give my blessing over your dead. I have seven magicks, none of which are known to you buffalo, and your dead will benefit from at least six of them.”

“Not the ponies.”

“Fine. Me, the Cerberus, the sky serpent, the parasprite, the young dragon, and the sapling from the Everfree Forest will travel through your lands without their masters.”

Chief Thunderhooves hesitated. “That is not what I meant.”

“No? You mean to deny me passage?” Tank’s jaw snapped unpleasantly. “Whatever shall the Alligator Baroness think of the hospitality of the even-toed ungulates?”

“Uh, no, that is, I—“

“And Twilight Sparkle is the world’s best economist. Whatever your problem is with the Appleloosan ponies, she can solve it.”

"Second best," Twilight said quickly. "And yeah, I think I already have an idea of what’s going on. It’s a simple fix, really.”

“Ponies lie!” the little buffalo shouted. Something red, crystallic, glinted on her chest.

“Quiet, Little Strongheart,” Chief Thunderhooves said.

“Little Strongheart?” Rainbow Dash pulled herself out of the pile of smashed-up wood and joined Tank. “I’m Rainbow Dash of the Equestrian Puzzle Club! Are you the daughter of Big Strongheart?”

To Twilight’s astonishment, the belligerent little buffalo gave a gasp of recognition and colored red. “Uhhh…well, not exactly….”

Exploring the Hypothesis Space

So it turned out only two buffaloes had died.

Twilight and the others traveled west toward the smoke, so thick it was starting to look like evening was coming early. The sky serpent had reached her limit and slithered on the ground behind them, “them” being the herd of buffalo, about threescore strong by Twilight’s count. The six ponies and Spike walked in the middle of the herd, not far from the front. Twilight gathered that it was important to keep the bodies the buffaloes were carrying behind the ponies, out of sight.

Tank was now the leader of the joint buffalo-pony expedition, riding on the Cerberus, with a potted sapling as her second-in-command. Twilight didn’t mind. It let her think.

Or try to, anyway.

“What’s that, demonic potted plant from the magical nether world that is the Everfree Forest?” Tank said loudly whenever a buffalo strayed too close to one of the ponies. “You’re hungry for flesh? Oh, I’m sure we can find you something to eat.” At that point the buffalo would take a hurried step back, duly chastened.

Rainbow Dash was having an argument with Little Strongheart.

“You? You’re the second-best puzzler in Equestria?”

“I’m the best puzzler, actually. Check the monthly listings, Rainbow Last.”[1]

“I’m the best!”

[1]Rainbow Dash didn't dispute the point. If you ain't first....

“Prove it.”

“I really honor and cherish your complex and unique culture,” Fluttershy said to a buffalo near her.

“Okay,” said the buffalo, who hadn’t realized she had one.

“How’d you make an apple tree pop out of the ground, anyhow?” Applejack said to Little Strongheart, who preened.

“Buffalo secret,” she said.

Sure was. Twilight had never heard of a spell like that, nor the spell that allowed them to warp the earth. They had probably summoned the rocks to crash the train with something similar. Twilight’s own spells were limited to mathematical entities and theorems, but the little buffalo could control the earth as if she had some kind of…physical connection.

Something that took the abstractions of mathemagic and mapped them onto stuff….

Still didn’t quite get you to an apple tree shooting through a train.

“Those feathers you wear on your head are really quite lovely,” Rarity said to one of the buffalo.

“Won them in battle,” he grunted.

“How delightfully…ethnic! A battle with a bird, was it?”

“No.”

“…Okay, then! Lovely chat!” Rarity laughed desperately and inched closer to Applejack.

And Pinkie Pie was….

“Let me plan the funeral,” she said.

Chief Thunderhooves looked at her. “What did you say, pony?”

“My name’s Pinkie Pie, Mr. Thunderhooves! And I’d really like to plan the funeral for the extra-brave warriors today.”

No no no no no.

“Pinkie Pie, I need you to help me design a balloon-cake,” Twilight said, but it was too late. Chief Thunderhooves stopped his forward motion. He rounded on Pinkie Pie, snorting hot air.

Chief Thunderhooves was bigger than other buffaloes like most buffaloes were bigger than ponies. He was brown like the earth if the dirt was nothing but the dried blood of countless millennia. The feathers that crowned his head were taller and straighter than any other buffalo wore. Twilight would have considered it crassly male, but it did make him look impressive and intimidating. It was like giving a speed boost to Rainbow Dash, but stallions never did have a sense of “enough,” did they?

Chief Thunderhooves said nothing, just stared at her. There was no understanding, no compassion, no interest. Twilight cycled through spells and settled on panic—why wasn’t Tank saying anything—

“It’s going to be the party of a lifetime,” Pinkie Pie said.

Chief Thunderhooves snorted.

And turned away.

“I was serious,” Pinkie Pie pouted as they resumed walking.

“Pinkie, that was very dangerous,” Twilight hissed.

Pinkie Pie lifted one shoulder uncertainly. “It knarpled okay.”

A camp came into view. Teepees and things. Buffaloes cooking, sharpening spears.

“We will rest here,” Chief Thunderhooves said to Tank. “The funeral will be held tonight.”

“No permanent residence, huh?” Twilight said, looking at how everything was laid out outside, loosely tied with rope. She kept herself from making a comment about beef jerky.

“The ponies will be guarded at all times,” Chief Thunderhooves said. “For their own protection.”

“The ponies travel under the protection of me, the Reptile Queen,” Tank said. “They are my entourage. I need them to keep me entertained.”

Chief Thunderhooves looked untroubled. “Then what happens is not my responsibility.”

“I’d like to be guarded,” Rarity said quickly.

“No,” Twilight said. “We are on a mission as representatives of Princess Celestia, and we have a right to free travel anywhere throughout Equestria.”

“Not on buffalo land,” Chief Thunderhooves grunted.

Twilight didn’t argue. There was no such thing as buffalo land, and besides, there was no point. The buffalo wouldn’t stop them from going where they wanted as long as they had Tank (and a giant three-headed dog).

“What happened?” Applejack said. “I thought Appleloosans were friendly with ponies."

“Ha!” Little Strongheart said loudly.

Little Strongheart was skinny and almost as small as a pony, but her eyes gleamed with malice and pride that would have seemed a lot more frightening if Twilight’s nearest point of comparison wasn’t Nightmare Moon. Twilight tried to understand Little Strongheart’s position among the buffalo. A second in command, like she (unofficially) was to Princess Celestia? A witch? A spokespony?

Whatever she was, there was no doubting that Little Strongheart was the key to the strife between pony and buffalo. And with that magic of hers, maybe the key to defeating the dragon as well.

Then the buffalo dispersed to their tents or whatever they were or to work around the camp, and Twilight and the other ponies had freedom.

A DAY AMONG THE BUFFALO

Rainbow Dash and Twilight Sparkle:

“So did you figure out the last puzzle for this month?” Rainbow Dash said casually.

“How did you control the earth like that?” Twilight said.

Little Strongheart preened. “Nothing a pony needs to know.”

“I’m a Pegasus, technically,” Rainbow Dash said.

“Yes, we do,” Twilight said.

“I guess you’re not so superior after all,” Little Strongheart sneered.

“Yes, I am,” Rainbow Dash said.

“Superior to what?” Twilight said. “Please be more specific, but probably yes, I am.”

And so the financial genius and world’s richest Pegasus, Rainbow Dash, the world’s second-best economist and mathemagician Twilight Sparkle, and physicist and puzzlist prodigy Little Strongheart sat down to have an intellectual conversation.

“It’s called matrix algebra,” Twilight said.

“I know that,” Rainbow Dash said. “And what is it?”

“Matrix algebra is a way of transforming lots of linear equations into something more manageable,” Twilight said. “A brilliant pony named Wassilya Leontief figured out how to use matrixes to represent the different sectors of the Equestrian economy and determine their interrelationships.”

“That’s right,” Rainbow Dash said. “Now what does that mean?”

"Let's start from the beginning. We can model the economy as a system of linear equations. For example, how much of a good would a pony want to buy as a function of price? It stands to reason that the more expensive something is, the fewer of that thing the pony will want to buy, so quantity demanded is a decreasing linear function of price. As price goes up, quantity demanded goes down. So we can write Qd = -bP. Since at a price of zero you'll probably buy a positive amount of the good, we should really write Qs = a - bP, where a and b are constants and P stands for the price."

"Duh."

Twilight explained how the quantity supplied equation, which determined how much a pony would be willing to sell of a good at some price, could be written similarly, as Q = -c + dP, where d was a positive term because ponies would want to sell more of something at a higher price, and c was a negative term because at a price of zero ponies wouldn't want to sell things. And since the quantity of stuff bought had to equal the quantity of stuff sold, it made sense that the equations should equal each other, or

Qs = Qd

Rainbow Dash asked why supply came first, and Twilight said, "Because I say so," while mugging unpleasantly.

Anyway, the same equation could also be written as

-c + dP = a - bP

and if you solved for the P term, you would get

P* = (a + c) / (b+d)

The P had an asterisk, Twilight explained, because it was the equilibrium price term, since it was what the price was when quantity supplied equaled quantity demanded. This worked fine, she added, for partial equilibrium cases or a small number of equations in a general equilibrium model, but what about when there were lots and lots of equations? If it was a two-commodity market, for example, Qd and Qs would become Qd1 and Qd2, and Qs1 and Qs2 respectively. That still seemed manageable, but what if you had a hundred commodities? A thousand? What about n commodities?

It was important, Twilight said, to realize that in a multi-commodity case, the quantity supplied or demanded of one good was a function not only of the price of that good but also of the price of the other good. If you had enough money to buy, uh, a can of wing polish, and, um, a bottle of rainbow hair gel ("Got to keep the 'do aerodynamic," Rainbow Dash confirmed), then if the price of hair gel suddenly went way up, you might just buy two cans of wing polish instead. So the set of equations would look something like

Qs1 = Qd1

Qd1 = a0 + a1P1 +a2P2

Qs1 = b0 + b1P1 + b2P2

Qs2 = Qd2

Qd2 = c0 + c1P1 + c2P2

Qs2 = d0 + d1P1 + d2P2

"How do you know all this works, anyway?" Rainbow Dash said, glaring at the letters scribbled in the dirt like they might get up and walk away. "What makes this stuff real?"

Twilight took a moment to gather herself. "Basically, the equations are isomorphic to reality in some relevant way. To oversimplify, it means they share similar properties such that if you tried to make the world more like the equations or the equations like the world, then you'll still keep those relevant similarities. The fact that these equations are isomorphic to some aspect of reality imbues them with meaning that allows us to understand reality by understanding these equations."

"Seems like it would be a lot easier to just understand reality directly."

"Would that it were so."

Little Strongheart smiled nastily. Twilight kept talking. She pointed out that although they had six equations, they only had two variables, P1 and P2. The other letters were merely parameters. They could reduce the system of six equations to a system of two equations by substituting the equations for Qs1 and Qd1 into the equation Qs1 = Qd1, and they could do the same for Qs2, Qd2, and Qs2 = Qd2. Furthermore, you could rearrange Qs1 = Qd1 and Qs2 = Qd2 to be

Qs1 - Qd1 = 0

and

Qs2 - Qd2 = 0.

Perform the substitution, and you get

(a0 - b0) + (a1 - b1)P1 + (a2 - b2)P2 = 0

and

(c0 - d0) + (c1 - d1)P1 + (c2 - d2)P2 = 0

"That's ugly," Rainbow Dash said.

"I agree," Twilight said. "How about we call the expression ai - bi by the term gi, and the term ci - di by the term hi?"

"Wait, where did the i come from?"

"The term ai, for example, just means that it's a(whatever number). So we're saying a1 - b1 = g1, a2 - b2 = g2, and so on." Twilight wrote down the new equations.

g0 + g1P1 + g2P2 = 0

h0 + h1P1 + h2P2 = 0

"Solving for the equilibrium prices P1 and P2 isn't hard from here," Twilight said, "but it's not really our goal either. Let's make one more rearrangement, and then we'll start talking about matrices."

g1P1 + g2P2 = -g0

h1P1 + h2P2 = -h0

"This is easy to handle in our heads, but n commodities makes things a lot harder. What if we had n commodities? Let's write it out in a general form. We have too many letters right now."

a11x1 + a12x2 +...+ a1nxn = d1

a21x1 + a22x2 +...+ a2nxn = d2

......................................................

am1x1 + am2x2 +...+ amnxn = dm

"I get it going across, but not down," Rainbow Dash said. "Where did this m subscript come from? Why do the parameters have two numbers after them now?

"The m subscript stands for the number of the equation, and the number that comes after it stands for the number of the variable the coefficient is attached to," Twilight explained. "So we have m linear equations and n variables of x1, x2, and so on."

"There's too many!"

"I agree. It's easier to conceive of this system with a matrix. Three matrices, actually. Notice that in this system we have three types of elements. There are the coefficients, a, with whatever subscripts, x, and d. Let's arrange them into the matrices now. First is the matrix for all of our coefficients, which we'll name A."

A =

a11   a12    ...    a1n

a21   a22    ...    a2n

.................................

am1 am2   ...    amn

"It's like we wrote down the same equations as before, but only with the coefficients!" Rainbow Dash exclaimed.

"Doesn't this seem easier somehow? Let's do the same with our variables and the final constants as well."

X =

x1

x2

.

.

.

xn

D =

d1

d2

.

.

.

dm

"So what do we do with these matrices?" Rainbow Dash said.

"Matrices act similarly to linear equations," Twilight said. "You can add, subtract, and multiply them, although there are rules about how and when you can do so. But you can't divide matrices, so don't assume you can treat them like linear equations. They're very powerful though. The vector beams I use to fight evil are a kind of matrix."

"Golly!"

"We don't need to get into the details of how matrices work. This exposition is way too long as it is. I bet we've lost three-quarters of our readers by this point."

"Worth it!"

"I agree. What you need to know is that matrices are more than just a way to compact a lot of linear equations. Evaluating something called the determinant lets us test for a solution to the whole system!"

"So if we're determined, we can find the answer?"

"...Sure. You should also know what an identity matrix is. That's a square matrix, meaning the number of rows is equal to the number of columns, which has zeroes everywhere except for the main diagonal, which is just ones."

I =

1   0    0

0   1    0

0   0    1

"As you might suspect, multiplying any matrix by the identity matrix yields the same matrix, like multiplying a number by 1. You can also invert a square matrix, meaning that if you multiple a matrix by its inverse matrix, you get the identity matrix. Matrices that have inverses are called nonsingular. Then there are Markov chains, which deal with probability and changes over time. They have special absorption properties that are quite helpful when doing mathemagic. Make sure to look all this stuff up because it'll be important later."

"Rainbow!"

Twilight stretched a bit, and maybe you should too. "Finally there are echelon matrices."

"Whoa, those sound powerful!"

"They sure are. We can test for certain properties of a matrix by transforming a matrix into an echelon matrix, for which we are allowed to interchange any two rows, multiply a row by a scalar—scalars scale things; it's how I made my voice loud earlier—and add that result to another row. Echelon matrices are recognizable by their common structural elements. You don't even need the matrix to be a square matrix!"

"What is the point of all of this?" Little Strongheart demanded.

"I just wanted to establish a basic idea of what matrices are and also foreshadow some elements for later. Now we can start on the economic applications."

"We're not almost done?" Little Strongheart groaned.

"The chapter comes out tomorrow. We're stuck with this plan. In for a bit, in for...more bits."

"I'm ready," Rainbow Dash declared. She could almost see that star next to her name.

"Okay, basically, Wassilya Leontief used matrices to answer the question of how much a firm or industry should produce to satisfy the demand for the product. Imagine listing all the inputs in a really long column, and then across each row having a set of outputs the input is used to create. You have something that looks an awful lot like a matrix, don't you? It's called an input-output model. What's interesting about this is that if all those inputs constitute the entire economy, then that means the whole economy exists to produce itself! By that I mean if all the inputs firms require to make their output are all the inputs in the economy, then the products firms produce are simply the inputs of other firms, with nothing necessarily being made for consumers. Inputs don't come from heaven, you know."

"They say that long ago buffaloes ate the manna that fell from heaven," Little Strongheart said.

"Ponies say all kinds of things. Now, obviously in real life things get made for consumers, so if our matrix has all the inputs, then there must also exist other inputs not in our matrix, such as the stuff produced by stallions doing household work or the stuff Gryphons make. That's called the open model. And in the closed model, if we just absorb everything as just another industry, then stallion-labor and Gryphon-things are also goods made to make other goods."

"Then what's it all for?" Rainbow Dash moaned.

Twilight beamed. "This was Wassilya's genius. Outputs are inputs and vice versa, giving us a model of the flow of goods between sectors. You could even think of it as the flow of friendship. So suppose we have a model of a Developed Region and," she looked at Little Strongheart, "an Undeveloped Region. And let's divide both regions into three industries: one that extracts raw materials, one that transforms them into consumer goods and pollution, and one that produces antipollution."

"Typical pony illogic," Little Strongheart scowled.

"Since the input-output model allows us to calculate the amount of something that should be produced to satisfy demand, then with this method we could in theory calculate the exact amount of antipollution that should be produced."

The smoke overhead was only growing thicker as they talked.

"Is this all supposed to be 'isomorphic' or whatever to what's going on now?" Rainbow Dash said.

"At a minimum it's metaphorical," Twilight said. "Whether it's isomorphic or not will become clear in time."

"So what about the Developed and Less Developed Regions?"

"Oh, the Developed Region gets stronger by producing antipollution, and the Less Developed Region sits around complaining about the good old days," Twilight said with a straight face. "Just know which side your bread is jellied.[2]"

"No wonder ponies are so popular among the other critters," Little Strongheart murmured.

[2]Dairy not being very popular among ponies, or indeed among any kind of civilized creature that has outgrown her mother's teat.

Rainbow Dash clutched her head. "Argh! This is too much. I need to go lay down." She got up and stumbled off toward Tank, who was serenely watching the buffaloes work.

Twilight took a deep breath. “Cool Element of Equilibrium you've got there."

Little Strongheart sneered. “This amulet makes me as strong as an Alicorn.”

Twilight considered some of the things she had seen Princess Celestia do. “No, it doesn’t.”

“And don’t think you can steal it! It’s locked with a powerful magical seal. Only I can remove it.”

“I won’t steal it. Where did you find it?”

The look on Little Strongheart’s face made it clear she wasn’t going to tell.

“My friends and I used the Five Elements of Equilibrium to defeat Nightmare Moon and save the world,” Twilight said. “There’s Contract, Information, Rationality, Finance, and Entrepreneurship. What’s yours?”

Little Strongheart ran a hoof over the red crystal. “Isomorphism.”

Twilight blinked. “Isomorphism? You mean, the retaining of certain qualities as you move from representation to representation?”

“An isomorphism is like a witch caught between two mirrors,” Little Strongheart said. “The images are different, yet reflected inside them are the other mirror’s images, reversed twice to look like the real thing. With a pair of really good mirrors, you wouldn’t be able to tell which is the reflection and which is the real face.”

“I don’t understand,” Twilight said, because Little Strongheart enjoyed hearing it. As long as the little buffalo wanted to talk, Twilight would let her. “How does that let you warp the earth or grow an apple tree straight through a train?”

“I take the mathemagic, and I map it onto physical reality.”

Twilight had been expecting something like that, but it was still stunning. With the power of Isomorphism, Little Strongheart had been able to give meaning to mathemagic. Like how she had once given meaning to a beam of pure friendship….

“I am Equestria’s best puzzler.” Little Strongheart sneered again. Twilight wondered if maybe there was something wrong with her face.

“Have you ever heard of the Celestial Sunset Provision?”

“Of course I have. What is it?”

“They’re a special set of laws Princess Celestia made to deal with certain…contingencies that tended to arise in her line of work. For example, there’s the Just Tell Me What the Crown Really Is Covenant of 1587. It means that Princess Celestia promises to give the benefit of the doubt to people with really far-fetched stories about coming from different dimensions to retrieve magical artifacts, especially if they seem like they’ve never walked on four hoofs before.”

“So what?”

“So one of the Provisions deals with ancient magical artifacts that amplify powers. I never knew what it meant before, but now I think I have an idea.”

“Why? What is it?”

Twilight stood up to leave.

“I understand my princess a little better now. Thank you for this conversation.”

“Wait! What provision? What does it say?”

Twilight walked away, the words echoing in her mind.

Just let her go.

Rarity:

Rarity didn’t really like the buffaloes. She didn’t like adventuring very much at all, to be honest. There was something about the fresh air that reacted poorly with the careful balance of highly unstable chemicals that maintained her eternal youth.

It wasn’t that she was a witch, exactly. But when reality wasn’t as beautiful as Rarity thought it should be, she saw no alternative but to give the universe a makeover.

Not that the air was very fresh thanks to that awful dragon, who wasn't at all like Spikey-wikey. The smoke was getting in her pores. She could feel her coat starting to knot up like Twilight’s.

And the dirt! Why did adventuring involve so much dirt? How was she supposed to keep her hoofs looking like a quartet of black gemstones Princess Celestia had commissioned for her coronation when she was traipsing about in the dirt all day?

What she wouldn’t give for a day at the spa! She needed a long massage and a dose de cheval of mud to bathe in.

But the worst part was meeting new ponies. Nightmare Moon was one thing. Sisterly jealousy, catty revenge: these were things Rarity understood well. Though she hadn’t voiced the thought at the time, she probably could have defeated Nightmare Moon with an expertly managed campaign of malicious rumors, slander, and gossip that would have made the parasprite’s own efforts look like the sort of rubbish that filly, Zirconia Coronet or whatever her name was, had tried on Sweetie Belle before Rarity had given her younger sister a few choice phrases to repeat the next day at school.

The buffaloes, on the other hoof, were mere brutes. That wasn’t normally a problem, but these creatures seemed oddly immune to her charms. Meanwhile, that skinny runt, Little Strongheart, had them wrapped around her hoof!

Mirror, mirror, on the wall….

And Rarity considered the many things that could be done with a simple apple.

But there was no need for that, surely. After all, she had a small flying demon that could read minds at her beck and call.

Twilight had tried to explain once how there was no market for lemons in Ponyville because of information asymmetries. That was rubbish of course, the real reason being Applejack, but Twilight’s insistence that more information = more optimization = more power had stuck with Rarity.

Rarity was going to find out a thing or two about Little Miss Strongheart.

“Come, my monster!” Rarity said. The parasprite hovered by her face. “Now,” Rarity said, “listen very carefully. I have something I need you to do....”

Applejack:

Applejack didn’t know much about buffaloes, but—

Actually, that wasn’t true. She knew plenty about buffaloes, more than most ponies did. They knew a lot about the different things that grew in Equestria, for one, and Applejack had used tricks she had learned from the buffaloes more than once to make sure only one kind of fruit grew in Ponyville. And the Apple Family believed in hospitality and being open to strangers. The way Applejack figured it, buffaloes were just like ponies, except shaped different, and maybe also different in some other ways, but basically ponies deep down.

The Apple family published a book of their family secrets. Reason was, they knew it was one thing to see a pony, and another thing to be a pony. And as much as buffaloes looked like another kind of species altogether, Applejack reckoned so long as they didn’t think any different, it wasn’t her concern how big they got or what kind of birdy things they wore on their heads.

Lots of ponies said it was what’s on the inside that counts, but only the Apple Family staked their business on it.

When Applejack looked at the buffaloes in the camp, what she saw was a family doing their chores. There were buffaloes cooking oat cakes and some kind of corn stew, and others patching tents, minding the fillies, and gathering flowers for the—

Applejack shook her head. Weren’t no concern of hers, and it was rude to stare. No, the only thing to do was to be neighborly and help out however she could.

So the buffaloes were surprised when an orange pony half the size of any of them hefted four baskets of beans and nuts to where everypony was setting up. Applejack pulled tables into place and helped with the digging.

It wasn’t no favor. Applejack just liked doing chores. A pony that wasn’t working was like a rattlesnake without its rattle. Just didn’t seem to be any point to it.

Still, Applejack wasn’t one to overstay her welcome, so when she started getting looks from some of the buffaloes, she spat out the shovel and went to tend to the Cerberus, whose gums were bleeding despite Fluttershy’s sharp admonition not to lick them.

“I’m sorry,” the Cerberus said.

Applejack patted her massive paw. “Ain’t nothing you got to apologize for. Guarding things is what you’ve been doing for a thousand years. I’m real glad you’re here.” The Cerberus responded by licking Applejack with all three tongues, bathing her in a great deal of drool and a fair amount of blood as well.

“Just try to make friends,” Applejack said, struggling through the living wall of tongues. “There’ll be a big bonus for you.”

The Cerberus’s six ears picked up. “Why?”

“Because these buffaloes are buffaloes that know how to grow a mean apple tree.” Applejack grinned, and after a moment, so did the Cerberus.

Applejack was the Element of Contract. She wondered if she could work out a deal.

Fluttershy:

The sight of a cow bisected by a dragon’s talon would not stop replaying itself, like Rainbow Dash bragging about how much money she made that day.

It wasn’t death. Fluttershy had put down her share[1] of critters over the years. She did it quickly, cleanly, and out of sight, with no hesitation or remorse, and then she cried herself to sleep with her face buried in Rainbow Dash’s wings, who wasn’t exactly understanding, but she was sensitive, which was why she had her hoof in her mouth so often.

[1]Not her fair share. Just her share. There wasn’t any fair about it.

There was nothing anypony—anyone could do about death. Princess Celestia had been born immortal, as far as anyp—anybody knew, and Princess Cadance guarded her secrets jealously. No, every…everyone died eventually, and Fluttershy could acknowledge that.[2]

[2] She didn’t accept it. No one had offered it to her.

Every critter had to go, but the only one Fluttershy let take them was the pony in black, whom Twilight said only economists could see….

Then a dragon showed up and tore poor Mr. Cow to pieces, so that was that.

Fluttershy knew it was just about the stupidest thing in the world, but somehow she couldn’t help but feel that if she had just checked her privilege a bit sooner, Mr. Cow would still be alive.

Fluttershy remembered once being lost in the maze of the Sweet Apple Acres trees when she was little. Silly as it was, she had genuinely been afraid when she couldn’t see a way out. Fear gave way to panic, which opened the door to an unfamiliar strength. Fluttershy flapped her wings and began to fly…and she saw from up above the whole of Sweet Apple Acres…and she understood all that she hadn't even been able to imagine before….

Then she noticed she was really high off the ground, let out a squeak, and fell into a tree.

Mr. Cow was dead. Fluttershy cried. There was nothing wrong with crying. It didn’t make a pony weak or foolish. It just made their face wet. But it didn’t solve any problems either, so Fluttershy got to work.

First she saw to the sky serpent, who was still just a baby, even though she must’ve gained a thousand pounds since she had first slithered out of the water to join her one year ago. Snakes had only one lung, and while it was a big lung, Fluttershy worried what all the smoke was doing to her. The poor thing seemed tired, so Fluttershy made it very clear that she wasn’t to fly anymore, and if things got much worse she was to turn around and head straight to Ponyville no matter what. The sky serpent blinked in response.

Next she tended to the Cerberus, who wouldn’t stop licking her own gums. The Stare took care of that, at least for a while.

And now Fluttershy wanted to tell the buffaloes she was sorry Mr. Cow had died.

Which was silly. Buffaloes weren’t cows. Still, it was how she felt.

She watched them work, and watched them eat, and watched them watch her, and she knew that there were things about being a buffalo that she didn’t understand and probably never would. She just hoped it wouldn’t cause a dragon to rip them all to pieces.

No. That was just another aspect of her privilege. This wasn’t about her. Buffaloes and other critters had suffered at the hoofs of ponies for generations. And their pain, and the way and being of a buffalo, was something she could never know.

So Fluttershy sat very still in the center of the camp and did nothing.

Pinkie Pie and….

It was the funeral, and the ponies were invited.

No pony—er, uh, buffalo—was quite sure whose idea it was. They just all knew somepo—someone had said it to them in a bright, cheery voice, and when they had turned they had seen another buffalo, so it must have been a buffalo who said it, even though the voice sounded like the honk of a clown’s nose.

And someone must have thought it was a good idea to make a cake out of corn and nuts with SORRY FOR YOUR LOSS written in big balloon-like letters. In icing, when the nearest place to get any was probably one of many Sugarcube Corners all the way up in Ponyville. It looked just ridiculous, not to mention anachronistic, and some of the buffaloes thought about saying something, but none of the other buffaloes were, so they didn’t either.

And so, not straying too far from the giant three-headed dog and the humongous sky serpent breathing arrhythmically, five ponies witnessed the funeral of two brave and proud buffalo warriors who had happened to get on the wrong side of a Cerberus.

Tank mentioned that they should all probably keep quiet during the ceremony, though she was looking only at Rainbow Dash while she said it.

Fluttershy wasn’t crying, which surprised Twilight. Her eyes were downcast, and she seemed barely aware of her surroundings. Rarity’s face was a practiced picture of perfect grief, and Applejack’s a flawed but more experienced version of the same. Pinkie Pie was nowhere to be seen. Twilight wondered how much labor productivity the buffaloes forwent by having the funeral.

Not much, as it turned out. The ceremony was brief and dignified, or whatever ponies were supposed to think about this sort of thing. Twilight didn’t see how the dead buffaloes were supposed to care.

Hot roaring flame

Some bodies went into the earth. The buffaloes were already gone, so it was like tossing an apple core into the trash.

Claws clicking along the ground

Some things were said, some plants waved around, and smoke spiraled high into the sky to join the sea of the stuff coming from the dragon, and all Twilight could think of was how much time they were wasting.

Rainbow light bursting off of scales in the bright sunlight

And then Pinkie Pie got up in front of Chief Thunderhooves and hoofed him a balloon.

Creating the Hypothesis Space

Chief Thunderhooves didn’t like the balloon. Early the next morning Twilight and the gang were on the road to Appleloosa in a hurry.

“I can’t believe you did that,” Fluttershy muttered. For Fluttershy, it was pretty confrontational.

“What?” Pinkie Pie said. “I was trying to say sorry.”

“You—you can’t just apologize for killing two ponies!”

“I wasn’t apologizing! I didn’t kill anypony! I was saying sorry, like, ‘I’m very sorrowful.’ Hello?”

Fluttershy winced. “I mean, two buffaloes.”

“I didn’t kill them either!”

“You don’t go to funerals very often, do you, Pinkie?” Applejack said wryly.

“Maud had funerals for her rocks sometimes. They were somber affairs.”

“You really got to introduce me to your older sister some time.”

“I will! She’s just always so busy with her rocks.”

“Tell me about it,” Twilight grumbled. “Older siblings never have time away from their stupid hobbies.”

“This isn’t about you!” Fluttershy said. “This isn’t about any of you! Can’t any of you focus on another p—another p—p—p….”

Twilight watched Fluttershy struggle for an alternative. “Just say ‘pony.’ It doesn’t mean anything.”

“Check your privilege!”

“Well, I do like checking things—“

“If you want to talk about the buffaloes,” Rarity cut in, “how about the fact that they’re planning to attack the Appleloosan settlement?”

“How do you know that?” Rainbow Dash said.

“My horrible little monster told me,” Rarity said, nuzzling the parasprite with her snout.

“Put a leash on that thing,” Rainbow Dash mumbled.

“I’m worried bout my cousins,” Applejack said. “Buffaloes are real mean in a tussle, and the town must be covered in smoke by now. Let’s hurry.”

The smoke was getting even worse. The sky serpent couldn’t go on any further. Fluttershy instructed it to fly back to the wreckage of the train and wait there, and if they weren’t back after a day, to return to Ponyville. The Cerberus, however, looked strong.

“Six lungs,” she said, smiling with three mouths.

The parasprite seemed totally unaffected, as was Spike, and as for Bloomberg, the sapling from the Everfree Forest…Twilight wasn’t sure, but she thought it might have been breathing in the smoke, absorbing it with its leaves like normal plants absorbed oxygen. It was definitely taller now, and moving, stretching and twisting to reach the smoke with its leaves.

The smoke was high enough, and the…world was big enough that none of the ponies were too badly affected. But the air stank of sulfur,  each breath was noxious. Twilight couldn’t wait to be rid of the dragon and breathe fresh air again.

“Why would the buffaloes want to fight with Appleloosans, anyway?” Rainbow Dash said. “They should team up to fight the dragon.”

“It’s hard to work together with someone who stole your land,” Fluttershy said.

“Not really,” Twilight said. “I can get along with buffaloes, even though technically they’re stealing Princess Celestia’s land by claiming it as their own. No, the real problem,” she said as Fluttershy spluttered indignantly, “is externalities.”

“You’ve mentioned externalities before, mon petit poney,” Rarity said. “You clearly want to talk about them, so skip the suspense and fill us in.”

“Externalities,” Twilight said, “are the absence of friendship. Whenever you do something without taking into account the feelings of other ponies, that’s an externality.”

“Or other buffaloes?” Fluttershy said, a little nastily.

“Exhibit A,” Twilight said, a little impatiently. “Each pony—or each buffalo—acts as an individual even when the group’s welfare is at stake. Ever heard of the prisoner’s dilemma?”

Judging by the looks of confusion on everypony’s face, they had not. That meant it was time for an economics lecture. Twilight smiled manically.

“Uh…Twilight?” Applejack said nervously. “Why’re you smiling like that?”

“The prisoner’s dilemma is a classic puzzle in game theory. Suppose you and your criminal confederate get caught and locked up.”

“Caught doing what?” Pinkie Pie said.

“I would never get caught,” Rainbow Dash said. “I’m too fast.”

“It doesn’t matter—just go with it—okay, fine. Suppose you and your friend trampled somepony’s garden.”

Applejack let out a low whistle. “I reckon that could get a pony in trouble.”

“So you’re locked up in two different cells. You can’t see or hear each other. You have no way of communicating at all, and the police come to you with an offer. They say that if you testify against the other pony and they don’t testify against you, you’ll only get a slap on the hoof.”

Rarity winced. “How brutal.”

“And they say that if you don’t testify against the other pony, and they testify against you, you’ll get a slap on the hindquarters.”

Applejack looked green. “They wouldn’t.”

“Just do it!” Rainbow Dash flapped her wings nervously. “Testify against them!”

“So much for loyalty,” Twilight said. “It’s a little more complicated than that. They also say that if you testify against them, and they testify against you, you both get a slap on the hoof and a flick on the nose.” Fluttershy gasped. “And if neither of you testify against each other, you both get a flick on the nose.”

“So you should sit tight and say nothing, and then you’ll both be okay,” Pinkie Pie said. “A flick on the nose isn’t that bad.”

“Unless they testify against you,” Rainbow Dash countered. “Then you’ll get a slap on the hindquarters!”

“So you should testify against them,” Rarity said. “À bon chat, bon rat. That way you can protect yourself.”

“But they’ll do the same, and then you both get a slap on the hoof and a flick on the nose,” Applejack said. “It’s better if you both just sit tight after all. But then they’ll testify against you…this is a puzzle, all right.”

“Let me help you break it down,” Twilight said. “Since you can’t influence what the other pony will choose to do, you should consider your actions as a response to their choices. They will do one of two things: testify against you, or not testify against you. In each case, what should you do?”

“Well, if they testify against me, and I don’t testify, then I’ll get a slap on the hindquarters,” Rarity said slowly. “I mean, I probably won’t get a slap on the hindquarters. They wouldn’t dream of blemishing a beauty such as me. But if I were another pony, I would want to testify against them so that I only got a slap on the hoof and a flick on the nose.”

“And if they don’t testify against me, and I don’t testify against them, then I get a flick on the nose,” Rainbow Dash said. “But if I testify against them, then I only get a slap on the hoof.”

“Seems like testifying is the only rational thing to do,” Fluttershy said. “No matter what the other pony does, testifying against them is better for you.”

Twilight beamed proudly. “Exactly. Betraying your confederate is called the dominant strategy. That means that no matter what your confederate does, you’re better off betraying her. An example of a game that doesn’t have a dominant strategy is rock-paper-scissors, where your best option depends on what they choose. You can’t just throw out rock every time.”

“Why not?” Rainbow Dash said. “It’s the fastest one.”

“Rock-paper-scissors isn’t a race, Dashie,” Pinkie Pie said.

“It isn’t?”

“The reason this game is so interesting,” Twilight said loudly, “is that your confederate is in the same dilemma you are. Her dominant strategy is to betray you!”

“I knew I couldn’t trust her!” Rainbow Dash said.

“So you’ll betray her, and she’ll betray you,” Twilight said. “Then you both get a slap on the hoof and a flick on the nose.”

“But that’s just silly,” Pinkie Pie said. “If you both said nothing, then you’d both just get a flick on the nose.”

“But if she says nothing, then I can testify against her and get just a slap on the hoof,” Rainbow Dash pointed out.

“Exactly,” Twilight said. “You both betraying each other is called a Nash equilibrium. A Nash equilibrium is an equilibrium no pony has an incentive to escape from, even if, like in this case, you’d be better off if you could.”

“What does that have to do with externalities?”

“What the Prisoner’s Dilemma proves is that sometimes ponies have an incentive to do what is best for them even when doing so is harmful to the group’s overall welfare,” Twilight said, making sure Rainbow Dash was paying attention. “And when everypony acts that way, it makes everypony worse off, and yet they’re still going to keep acting that way.”

“You need a way of making the whole group move as one,” Rarity said. She tossed her hair. “I’ll do it, for a fee.”

Twilight nodded. “That’s one reason we have governments. Princess Celestia takes our voluntary defense funds and uses them to encourage ponies to act as a whole when acting as uncoordinated individuals can be problematic.”

“Say it again,” Rainbow Dash sniggered.

"That’s one reason we—"

“No, just Princess Celestia’s name.”

“Princess Celestia—“ Twilight cut off, glaring as Rainbow Dash fell to the ground, laughing. “What?”

“Your voice turns a mite funny when you say her name,” Applejack said, cheeks red and clearly trying not to laugh.

“Anyway,” Twilight said loudly, “the reason the Prisoner’s Dilemma turns out badly is because you can’t coordinate with your confederate. You have no way of communicating, so you can’t act in concert. Ultimately you have no choice to betray each other. It’s not even a matter of being mean! It’s not like you can ask each other not to.”

“I wouldn’t betray my confederate,” Applejack said.

“Applejack, no!” Rainbow Dash said. “You’ll get a flank-spank!”

“A flank-spank is a terrible thing,” Applejack said gravely, “but not so terrible as losing my integrity.”

“Whoa, that’s totally awesome,” Rainbow Dash said. “I’m not betraying either!”

“I wouldn’t betray my confederate either,” Rarity agreed. “I know she wouldn’t betray me. She wouldn’t dare.”

“It wouldn’t be nice to betray,” Fluttershy said. “I wouldn’t want to hurt my confederate.”

“And I’d just talk to her beforehand to make sure we both didn’t betray each other,” Pinkie Pie said.

Twilight facehoofed. “Pinkie Pie, you can’t communicate with each other. That’s part of the game.”

“I still would though.”

"All of your solutions, except for Pinkie Pie's, are actually ways the problem gets solved in real life," Twilight said. "My solution, by the way, is to refuse to be swayed by such manipulative incentives, and to only trample gardens with ponies who know that and are the same way. And there are other solutions, like changing the incentives so that an individual pony actually worsens their position by betraying the other, such as when two or more ponies face a common threat. You could betray the other pony, but then you lose to the outside threat."

"Like a dragon, for example," Applejack said. "Mighty convenient."

"But the point is, normally you don’t have to betray each other. Normally ponies can communicate with each other. Instead of ignoring or betraying each other, we work together.”

“Oh, like friendship,” Pinkie Pie said.

“Like economics, yes. Do any of you know how a pencil is made?” They shook their heads. “It’s very difficult. It takes ponies from throughout Equestria working in concert to create a single pencil. No pony could possibly do it on their own. What’s even more amazing is that most of the ponies who help make the pencil have no idea that they’re part of an incredible chain of production. Most of the ponies who work together to make the pencil aren’t friends with each other, and they probably aren’t friends with the pony the pencil is for either. Yet they work together to make a pencil for her anyway. Isn’t that amazing?”

“It sounds impossible,” Pinkie Pie said. “How can ponies who aren’t friends work together?”

“It’s called the price system.”

“Are we there yet?” Rarity whined.

“Hush. Ponies need two things to achieve coordination, to work together to achieve their various goals: they need an incentive to speak honestly about their wants, and they need an incentive to listen and respond to other ponies’ wants.”

“This is why we gotta learn to talk to each other to beat the dragon?” Applejack said.

“Yes. In small groups, ponies can communicate with words. But it’s not like you can shout all the way across Equestria. And if everypony is talking at the same time, then no pony will be able to hear anypony.”

“So how does it work?” Rainbow Dash said anxiously. “I have to beat Little Strongheart!”

“Imagine everypony is at an auction. Things are being sold—pencils, labor services, you name it. The winner of any auction is whoever manages to convince the other ponies to let her have it.”

“Why would anypony be so generous?” Rarity said.

“That’s an important question. One of the rules of the auction is that the more you tell ponies you want one thing, the less you can tell ponies you want another thing.”

“And other critters just aren’t invited?” Fluttershy sniped.

Twilight studied her seriously. "All creatures are united by the laws of economics. That's the whole point of this adventure, probably. What is the consequence of a rule that says the more persuasive you are at getting one thing, the less persuasive you have to be at getting another?”

Fluttershy, to her credit, actually thought about it. “Ponies wouldn’t try to persuade other ponies to give them just anything. They’d try harder for things that were more valuable to them.”

“Exactly. This rule encourages ponies to be honest about their desires. They won’t ask for just anything, but only the things most important to them. And there’s another rule: you can earn more persuasive power by being the one who gives another pony want they asked for. The more persuasive she was, the more persuasive you become by listening to her.”

“I see!” Rarity said. “That encourages ponies to be persuaded by the needs of others.”

“Uh-huh. Now picture it: all the ponies—and critters—in the auction-house that is the Equestrian economy. Each of them wants something. As long as they have to obey the rules of the auction, then they can only get what they want by honestly persuading others that their want is greater than other ponies’. And the best way to be able to persuade other ponies is to listen when they try to persuade you! You might imagine at the auction that everypony is focused on themselves and their selfish desires, focused solely on the auctions they want to win, but the opposite is true. You’ll see ponies practically fighting for the opportunity to help others get what they want. Ponies will search out the most needy and provide them with the things they desire so that they can get what they want. And that’s exactly how markets work. We bid on things with bits, our persuasion-tokens, which can’t be spent on other things, so we have an incentive to spend our bits on things we truly want. And we get more bits by selling things that ponies want, so ponies work hard to help each other."

“That’s very kind of them,” Fluttershy said.

“Kindness has nothing to do with it. It’s all about self-interest.”

“You mean ponies are selfish?” Rainbow Dash said. “Ponies are motivated by other things than money, you know.”

Rarity was surprised. “Rainbow Dash, do you mean you—“

“Like winning!”

Rarity sighed. “I should have known.”

“Self-interest isn’t the same as selfishness,” Twilight said. “Self-interest means what it says: ponies are interested in themselves. You speak and listen to yourself all the time. Your stomach growls and says, ‘I’m hungry,’ and when it does, you listen. You go get it food no matter what. But when another pony is hungry, even though her stomach is growling, you don’t always hear. Usually you don’t. There are ponies hungry all over the world right now, and you’re doing nothing to feed them.”

“They’ll have lunch soon,” Pinkie Pie said.[1]

[1]It was understood that there were hungry fillies all over Equestria. It was also understood that they had eaten a snack not even an hour ago, and it would be mealtime soon.

“But the point is, you’re not responsive to their wants. It’s not a matter of being selfish. You don’t hear them speak, so how are you supposed to listen to them? But you always hear yourself speak. That’s self-interest.”

"That's terrible," Pinkie Pie said. "Everypony is so separated! They'll be lonely."

"Ponies are incredibly diverse," Twilight said. She caught Fluttershy's look and rolled her eyes. "And if you throw in critters, I'm sure the diversity is only multiplied a thousandfold. And there are some things that can't be communicated. No matter how strong a friendship is, you can never truly understand your friend as she understands herself. You'll never feel what she feels quite like she does."

Pinkie Pie looked distressed. Twilight got to the point. "But look at what trade does! Two different ponies come together and meet at a common point, even though neither completely understands why the other is here. These two different minds meet at a common point through trade. It's a point of similarity without identity, empathy without understanding, mutual other-prediction without knowledge. It's like a point of isomorphism between two different objects. This happens any time a pony steps outside and shouts, "I want something!" and Equestria responds to her demands. That's friendship."

Rarity beamed. "Oh, like blackmail, but...but from the other side! The source of many a true friendship, I find."

"Um, no...that's not, um...."

The ponies were silent for a while as they continued toward Appleloosa. Twilight was thinking of how to kill a dragon. She hoped Spike was doing the same. She couldn’t have all the good ideas.

“I feel like we got sidetracked,” Rarity said. “What does all this have to do with externalities and why the buffaloes can’t work together with the Appleloosans?”

“Imagine trying to keep yourself alive and well when you can’t listen to yourself,” Twilight said. “Imagine you didn’t get hungry when you needed food or tired when you needed sleep, if you didn’t feel pain when you were cut or cold when you were out in the snow. You’d starve, work yourself to exhaustion, bleed and burn and freeze and never know it. You wouldn’t last long.

“Self-interest is what causes you to preserve and enhance your welfare. The amazing thing about markets is that they cause you to be other-interested without actually having to know very much about anypony else. All you need to do is see how much they want to pay for something to know how much they want it.”

“So like when you’re hungry, you know you want a cupcake,” Pinkie Pie said. “And when somepony else is willing to pay for a cupcake, you know they want one too!”

“Exactly. But what happens when there isn’t a market for some good, like clean air? What then?”

Pinkie Pie frowned. “Then…then no pony will be able to hear anypony else asking for clean air.”

Twilight nodded. “So somepony—like a dragon, for example—might pollute the air and fill it with all kinds of bad stuff, not because she’s evil but because no pony tells her not to. Because the friendship point doesn't exist, no isomorphic commonality between dragon and pony.”

“I’ll tell her not to!” Rainbow Dash said. “Uh, I mean, him.”

“We’ll give that dragon the Pigovian tax of a lifetime,” Twilight agreed. “In the absence of a market, direct methods might be needed. And it’s the same story for buffaloes and ponies. There’s no market in interspecies cooperation, so any particular buffalo will listen to herself talking about how much it dislikes the Appleloosans rather than the need to face a dragon together.”

“A pony will listen to herself too,” Fluttershy said.

“Yeah.”

“It seems like the dragon would be a lot louder,” Applejack said.

“That’s because you all think this whole conflict is a matter of buffalo vs pony, when I’d bet anything it’s really buffalo vs buffalo and pony vs pony.”

“Pony vs pony…?”

“The same chain of friendship that binds ponies all over Equestria in the great circle of communication that we call an economy isn’t necessarily tight enough to hold a single town together.”

“Chain of friendship?” Rainbow Dash said. “Oh! It’s like matrices!”

“Oh!” Fluttershy gasped. “It’s like the end of the world.”

Twilight stopped walking. The valley at the base of Hark Mountain where Appleloosa was supposed to be was filled instead with thick black smoke.

“Oh, no,” Applejack said in a stricken voice. “We’re too late.”

Pinch

Hark Mountain and the valley below it were obscured by black smoke. Just looking at it made Twilight’s eyes water. There was no way anything in the valley could be alive.

“I don’t believe it,” Applejack said. “My own cousins.”

“I don’t believe it either,” Twilight said. “This isn’t right. Princess Celestia wouldn’t let this happen.”

“She did say she was busy preparing for the Gala,” Rainbow Dash said.

“It’s a matter of incentives,” Twilight said. “Ponies aren’t inert. Once the Appleloosans saw the dragon and the black smoke coming from the mountain, they would have packed up and headed out. They wouldn’t have stayed around dying because no pony thought to walk away. We’ve seen no sign of a group of ponies coming out of Appleloosa, which means they’re still there, and they’re still there only if they’re still alive. Ergo, they’re still alive. QED.”

“I’ll buy twenty shares,” Rainbow Dash said instinctively.

Twilight summoned a translucent lavender 2-sphere around them, even the Cerberus. “This will protect us from the smoke. Come on, everypony.”

Walking to Appleloosa through the black smoke was like walking through hell on a foggy day. Then the smoke turned into light, and they were standing in Appleloosa.

Twilight banished the 2-sphere and looked around. Despite the smoke that was thick enough to block the sunlight, the town was brightly lit by lamps along the streets. At the perimeter of the town were dozens of tiny creatures that looked like ponies but with long curvy antennas and pale wings so thin they were translucent and so strong a single flap blew back the smoke in front of them. Together they held the blackness back.

Breezies. Rare magical creatures that resembled a better class of parasprite. Twilight didn’t know what they were doing in Appleloosa helping ponies.

“Howdy! And welcome to AH-PAH-LOOSA!”

“Howdy, Braeburn,” Applejack said while Twilight held a shaking hoof to her chest. She gave her cousin a hug. “Almost thought you folks were goners for a minute. Glad to see you’re still as noisy as a frightened rattlesnake.”

“I’m happier than a coral snake in cool mud to see you again, cousin Applejack,” Braeburn said. “What brings you down to AH-PAH-LOOSA?” Twilight jumped again. “Weather ain’t so good right now.”

“We’re here to slay that dragon for you,” Applejack said, gesturing at her friends and the Cerberus. “Brought some backup.”

Braeburn, whom Twilight sincerely hated, reared back on his hind legs and whinnied. “Yeehaw! That dragon’s gonna be deader than a buffalo what woke up on the wrong side of a coral snake.”

“About the buffalo,” Twilight said quickly, before Braeburn could…anything. “What happened between the ponies and the buffaloes here? We ran into them earlier and they seemed upset with you all.”

Braeburn pulled his hat down, seeming cross. “Those buffaloes have been complaining ever since we got here. They don’t even live here, but they say the land is theirs.”

“They’re nomadic.”

“All I know is they’re never around, and when they do show up it’s just to complain.”

“How’s the apple orchard?” Applejack said.

“It’s doing better than a coral snake that found a nice boot to sleep in. That tree of yours is still standing. Nothing the buffaloes could do about that.”

“What do you mean?” Twilight said.

“I’m hungry,” Rainbow Dash said.

“I want a bath,” Rarity said.

“Where’re my manners?” Braeburn doffed his hat. “Pardon me, ladies. If you follow me I can give you the grand tour of AH-PAH-MMPH!”

Twilight released the magical grip she had on his lips. “Stop that.”

Rarity hardly went a day without a stallion trying to charm her, and the Western variant was no more effective. “A bath, if you please. Wherever you have clean water.” Braeburn pointed her to the bathhouse and Rainbow Dash, Pinkie Pie, and Fluttershy to the saloon.

“Wait!” Twilight said. “I haven’t gotten all the exposition yet.”

Rarity patted her on the shoulder. “Twilight, be reasonable. If the story can’t move until you have your exposition, then we have all the time in the world to relax.”

The leathery rustle of a tail sliding across the ground.

“What about the smoke?”

“Those delightful little horse-parasprites are taking care of it.”

“I want to know about them too—“

The ponies dispersed, leaving Braeburn, Applejack, Twilight, and the Cerberus standing in the middle of the dusty street.

“The buffaloes said they attacked,” Spike said.

“They sure did,” Braeburn said. “Lucky us that we had Sheriff Silverstar, or we’d be deader than a coral snake on the wrong end of a pony’s boot.”

“I think we need to talk with this Sheriff Silverstar,” Twilight said.

Sheriff Silverstar dressed like he had fallen into a clothes factory and had kicked and bitten his way out. He wore a red bandana and a black hat. He had what Twilight thought was a hairy caterpillar on his face that turned out to be a kind of Western fashion called a mustache, and a blue vest with a big silver star pinned to the chest.

“What Element is that?” Twilight said.

Sheriff Silverstar thumped the, um, silver star proudly. “This is my pi gun. It’s how I protect Appleloosa from those buffaloes.”

“You fight buffaloes by shooting pies at them?” Twilight said skeptically. “Somehow I don’t think that would stop a raging stampede.

“You didn’t hear me right. This is a pi gun.”

“It still sounds the same.”

“He means the number,” Applejack said. “No pony draws as fast or shoots as straight as Sheriff Silverstar.”

“You fight buffaloes with irrational numbers?”

“Is there a better way?” Sheriff Silverstar adjusted his hat. “Buffaloes are simple creatures. They can’t handle the idea of a number that goes on forever. Makes their heads spin, it does, and they get confused and forget what they were doing.”

“Makes more sense than using apple pies as a weapon,” Twilight said.

“The ones Apple Bloom burns hit pretty hard,” Applejack said.

“How is that bright-eyed little filly, anyway?”

“She’s healthier than a rattlesnake in July—“

“No Western hospitality and banter,” Twilight said. “I want my exposition. Where did the Breezies come from? Why are they helping to keep the smoke at bay?”

“One of the Chief Executive Economists of those newfangled Daughter Banks sent ‘em.” Sheriff Silverstar reached into the pocket of his vest and dug out a bulging envelope. “The Breezies came carrying this letter. It’s addressed to you.”

Twilight opened the envelope. A ten-page letter and a postcard with a picture of a smiling Unicorn with a chartreuse coat and a Breezie floating by her shoulder was inside. The postcard read, “Greetings from Whinnysota!” A signature was scrawled along the top.

The letter began like this:

Dear Compass-Butt,

How are you, Twilight? It’s been a year since we all left Canterlot to run our own Daughter banks—except Trixie, poor thing, she’s just Vice Chief Executive Economist in the Crystal Empire. Then again, working with Princess Cadance must be positively thrilling.

Twilight grimaced at the mention of two of her least-favorite ponies.

Oh, don’t make that face, Twinkie. Princess Cadance is the second-best econopony in the world, after all, after Princess Celestia, of course. Quit dousing for cutie marks.

Get that stick out of your butt, Twilight translated.

Anyway, I suppose you’ve noticed my Breezies by now. Adorable things, aren’t they? Don’t be fooled by their looks; they’re quite powerful. I met them in the course of saving the world from economic catastrophe about ten months ago. I befriended them, naturally, and mastered them. Now they do my bidding. Isn’t having pets great? I can see why you’re so attached to that fire-breathing postal service of yours.

Twilight angled the letter away from Spike, who was trying to read over her shoulder.

When I saw the smoke coming from Hark Mountain, I knew trouble was ahoof. Princess Celestia sent me a letter explaining the situation of the Appleloosans, and at once I sent my Breezies to protect them. Ain’t I just peachy? Ooh, no, the Appleloosans, would say “appley,” wouldn’t they? Do ask one for me.

Anyway, I want my Breezies back, so get rid of that dragon already! I look so much more majestic when I can fly around Whinnysota. An econopony must be looked up to!

Twilight turned the page. What followed was nine pages of gossip, rumors, and speculation about what their Sisters were up to. There was barely anything about Trixie, though. Twilight skimmed it quickly and resolved to peruse it later.

I won’t say this is all I know, Twilight, but it’s all I’m telling. Don’t pout! You’ll see all of us again at the Grand Galloping Gala. I can’t wait to hear how you’ve been keeping busy in Ponyville. You must be bored out of your mind! Can those rubes even read?

Smooches,

Gamma Glisten

“Who’s it from?” Spike said.

“Gamma.”

“Oh. Have they chased her out of Whinnysota yet?”

“Ha ha.”

“Did she say anything about your other Sisters?”

“You have sisters?” Braeburn said. “Introduce me to mmph!”

Applejack chuckled. “Braeburn, if you don’t learn to read a pony’s face, you’re going to get yourself a righteous bucking one of these days.”

“What do you mean?” Twilight said.

“Sugarcube, you got a look on your face like you just took a bite of what you thought was apple fritters, but it was actually a lemon tart.”

“Let’s just focus,” Twilight said. “Look, Sheriff, dragons are beasts of externalities. They’re very dangerous, and—“

“Dangerous?” Sheriff Silverstar looked at Spike. “So why’d you bring one of them externalithings here?”

Twilight colored. “Don’t talk about Spike that way!”

“Shouldn’t I? You just did.”

“You did,” Applejack admitted.

Braeburn nodded. “You dmmph!”

“I did no such thing,” Twilight said. “Obviously I meant all dragons except for Spike. That goes without saying. Anyway, dragons—Spike excepted—are beasts of externalities. They feed off of strife and misunderstandings. It’s vital that you do your best to learn about and empathize with the buffaloes.”

“Did you tell them this too?”

“Of—” course not, they’re buffaloes. “I didn’t get a chance to.”

Sheriff Silverstar touched his pi gun. “Well, if they show up, I reckon I can show them some understanding.”

Twilight sighed. This wasn’t working. She just wanted to hit these ponies over the head with an economics textbook.

The dragon Niddhog appeared through the smoke. He stopped hard, blasting the air forward in front of him. Breezies scattered, and the smoke rolled in.

Part of Twilight struggled to process what she was seeing. There was a great lizard flapping in the air where there hadn’t been one before, and fire was coming out of his mouth, scorching the tops of wooden buildings—the saloon, the bathhouse—

“Get the ponies out of there!” Applejack said to the Cerberus. The Cerberus rushed off.

This wasn’t right, wasn’t fair. The monster couldn’t just show up right when they had only reached the starting point! The dragon wasn’t allowed to have his own plans—it was too sudden, too undramatic—

The rest of Twilight’s brain recognized the oversized salamander that had destroyed her library.

“I AM GOING TO EVISCERATE YOU!”

Twilight took the derivative of her position function, giving her instantaneous velocity. She then took the integral, turning her velocity into a position plus an arbitrary constant. She chose the dragon’s belly and appeared there in a lavender flash.[1]

[1]A laymare would call it teleportation. The only real magic was how the energy came out of nowhere….

Twilight didn’t think she could penetrate the dragon’s belly with her horn. But she didn’t see any reason why she couldn’t teleport her horn into the dragon’s belly.

The dragon howled in pain, and so did Twilight. The pressure on her horn was immense, searing into her mind, and the dragon thrashed, whipping her about. Twilight felt something in her neck tear.

I am Twilight Sparkle I am not Twilight Sparkle

The contradiction ripped through her and pounded into her horn-point. Twilight held it for an excruciating half-second while the dragon hurled her about so fast her vision turned grey and her horn itself felt like it might break.

“PRINCIPLE OF EXPLOSION!”

The magical contradiction bubbling out of her horn exploded.

Twilight was ripped free of the screeching dragon. She fell with wisps of fire and thick drops of rainbow blood. Her shoulder hit something softer than the ground, and she heard Applejack groan in pain.

“What’re you thinking, attacking it by yourself?” Applejack said as she helped Twilight stand. “And why’re you calling your attacks?”

“Makes them stronger.” Twilight tried to straighten her neck and found that her neck considered that a very disagreeable notion. Her body throbbed oddly, the aftereffect of a magical contradiction.

The dragon’s tail whipped along a row of houses, blowing through the wood like it was paper. The hole in his belly, dripping rainbow blood and wisps of flame, was no thicker than Twilight’s horn. Instead of breathing fire, the dragon dove toward them, his hot mouth agape, each huge, sharp fang on display.

“Pi Beam!” cried Sheriff Silverstar. A beam of silver light the shape and size of the star pinned to his chest burst out and struck the dragon in the mouth, who howled. Crashing, his great scaly legs slapped against the ground so hard Twilight’s own hoofs were momentarily lifted off. Sheriff Silverstar dived out of the way just before the dragon’s snapping jaws could swallow him whole.

“Why’re you calling your attacks too?” Applejack shouted. “Oh, for crying out loud!” She dashed toward the dragon, turned on a dime, stood on her forelegs, and—“APPLE BUCK!” Her hind legs bounced off the dragon’s scales. “Ow, ow, shouldn’t have done that—“

The dragon backhanded Applejack through a wall.

“Applejack!” Twilight screamed. She summoned a vector—she need a clear shot, in the eye or down his throat.

The Cerberus, growling like only a giant three-headed dog can, burst out from behind a burning building, spitting out a shocked-looking pony onto the ground, not ungently. She crashed into the dragon, which had only just managed to rear up, and all three mouths bit on Niddhog’s long neck.

Yes!

The thick muscles on the Cerberus’s three necks strained for an agonizing second too long. The dragon, a leisurely look on his face, ripped into the Cerberus’s chest much like a cat with a new piece of furniture to destroy. The Cerberus’s mouths never stopped biting until the dragon pulled the Cerberus’s jaws apart one by one with his claws and pushed the great beast over. She crashed to the ground, blood spilling out of her chest like a fire hydrant. One glassy eye rolled toward Twilight.

No no no this isn’t happening

The dragon looked at her, snorted, and flapped his wings once, sending Sheriff Silverstar tumbling away and taking to the smokey air. He took a deep breath. Twilight drew a 2-sphere she didn’t believe would really protect her from the flame. Hellfire poured out of the sky with a gaseous scream.

The jet of flames was met by the shimmering Breezies, like guardian angels, whose combined gust of air splayed the fire out like it had run into an invisible plate. Niddhog swiped at them. The Breezies twisted and dodged, and with another coordinated gust of air they hit the back of his hand, sending him tumbling over. He crashed onto the ground and pulled himself up, snarling, and saw Pinkie Pie, not twenty paces from him. She held up the pot with Bloomberg in it like she was holding a bomb.

Niddhog seemed to sense where the sapling had come from. He didn’t attack but swayed his long neck, watching like a cat. The plant was clearly eating the smoke, making no pretense as it stretched its branches to wherever the smoke was thickest. Wherever the leaves were, the smoke soon disappeared, sucked inside the sapling from the Everfree Forest.

Pinkie Pie walked forward, holding Bloomberg. “I swear,” she said, her voice trembling with rage Twilight had never seen in her before, “on my reputation as CEO of Sugarcube Corner that I will destroy you utterly. I will leave not even a trace of your existence, not even what semblance of life I granted to Mr. Landbiscuit and my other competitors, if you do not get out of here. You are going to leave, and leave now.” She held up the pot containing Bloomberg like she intended to smash it on the ground.

“Pinkie, no!” Twilight cried.

The dragon took to the skies, and with a single flap of his wings he disappeared to the southeast beyond the thick cloud of smoke. The Breezies immediately set to work blowing the smoke back out of Appleloosa.

Ponies were in the street, shouting and crowding around the fallen Cerberus. Fluttershy, Rarity, and Rainbow Dash ran over.

“What happened?” Rarity said, looking aghast at the Cerberus. She was being careful not to get any blood on her hoofs. Fluttershy took one look at the wretched thing and kept walking.

“Dragon,” Twilight grunted. “Fluttershy—“

“Hold your neck still,” Fluttershy commanded immediately. “Lie down on the ground.”

“Applejack got punched through a wall.”

“Where’d the dragon go?” Rainbow Dash said.

Fluttershy found Applejack. Twilight followed her inside. Applejack’s eyes were open, and she was breathing, but she was clearly in pain.

“What’s wrong with her?” Twilight asked. “Can you fix it?”

“She has a broken right.”

“A broken right what?”

“Her right. It’s broken.”

“What about the Cerberus?”

“I don’t have anything that can stop that much bleeding. Don’t move your neck!”

Twilight stumbled outside, where Braeburn was doing something to manage the chaos and direct ponies to put out the fires.

“Where’d the dragon go?” Rainbow Dash said.

Twilight remembered. She saw the solution, and the problem.

“In the direction of the buffalo camp,” she said.

Rainbow Dash was in the air and almost to the wall of smoke.

Twilight shouted after her, “Get Little Strongheart!”

The Game

Rainbow Dash held her breath as she flew through the thick cloud of black smoke. Less than a second later she was clear of it and gaining speed. The trail of fiery wisps and drops of rainbow blood that hadn’t the time to fall was clear enough, but the dragon was too far ahead to see through the smoke. She needed to go faster.

Last time Rainbow Dash had been able to outfly the dragon through pure fear. Now she was motivated by loyalty. It was time to see which was stronger.

One rainbow after another exploded in the sky. Rainbow Dash sped up.

This is all my fault.

Twilight held her head still with magic and watched Rarity float leaves of lettuce onto the Cerberus’s bleeding chest. Pinkie Pie and Fluttershy hoisted Tank up and pressed her against the leaves, which began to glow.

I didn’t conceive of the dragon as a real opponent.

“Keep the pressure,” Tank said as they began to slip.

Nightmare Moon showed me mercy, and I expected the same from Niddhog. Twilight remembered the violent creatures she had read about in one of the oldest books in the Canterlot Library. He is more human than animal.

“Heavy,” Pinkie Pie grunted. Rarity added her own magic to support Tank. Twilight began to as well. Fluttershy snapped at her.

“No! We’re enough.”

Twilight relented. Applejack was sleeping with a bit of help from Twilight’s magic. Her life wasn’t in any immediate danger, Fluttershy said, but she was in a lot of pain and probably wouldn’t ever stand straight or do her usual work on the farm ever again. She said all of this in a calm voice, as if ponies were permanently crippled around her all the time.

She sat with Spike, who wouldn’t stop clenching his fists.

“A dragon did this,” Spike said.

“You’re an individual,” Twilight answered automatically.

“I should have done something.”

“No.”

Spike didn’t say anything more. Twilight laid her head against his and prayed for Rainbow Dash to return soon with Little Strongheart.

She was gaining on Niddhog. The dragon was in sight. The problem was, so were the buffaloes. The stampede was headed toward the smoke and Appleloosa. Some buffaloes carried spears. But Chief Thunderhooves did not. To Rainbow Dash’s surprise, Little Strongheart was nowhere near the front.

The buffaloes had to have seen the dragon, but they weren’t stopping or changing course. Did they think Little Strongheart would protect them? That wouldn’t work.

Rainbow Dash needed to go faster. She strained herself, wings beating furiously, but the dragon was rearing up, taking a deep breath, and the orange-yellow gas was beginning to stream out of his mouth.

Then a giant flying snake slammed into him.

The two serpents wrestled in midair. Fluttershy’s sky serpent wrapped herself around Niddhog, squeezing like she might crush the life out of him. Niddhog, in turn, seized the sky serpent’s neck with both hands. In the split second that Rainbow Dash blew past them and turned around, it was clear Niddhog was going to win the battle of strangulation.

Then an apple tree grew out of the sky serpent’s head and hit Niddhog in the face.

He whipped back, grabbed the tree by the trunk, and ripped it off the sky serpent’s head. Blood and scales burst into the air to mix with the red fruit that was flung loose. He beat the sky serpent across the side of the head with the tree. Three times was enough for the sky serpent’s grip to loosen. She fell to the ground, landing with a crash like thunder. The ground shook.

The dragon was smart and ruthless, a completely different reptile from Tank. Fluttershy had told Rainbow Dash about the clever, inventive, and downright cruel things primates thought of to do to each other. The dragon fought like a monkey, merciless, with full strength and every possible advantage. This wasn’t about hunger but the desire to destroy, to crush and kill, for what end Rainbow Dash didn’t know, only that she intended to stop it.

The buffaloes had stopped by now, at the worst possible time. They needed to run. Little Strongheart was at the fore now, and from the frozen look in her eye Rainbow Dash knew the claim of driving off Niddhog before had been a lie.

Before the dragon could take the breath it needed to incinerate the stampede, Rainbow Dash took off at Newton 3. The rainbow explosions caught the dragon’s attention, but Rainbow Dash easily dodged the swiping claws and snapping jaw. She wrapped him in her rainbow stream, which wouldn’t stop him, but she just needed to distract him. She decelerated in an instant, bouncing across the dragon’s snout, turned in front of his left eye, stood on her forelegs, and—“RAINBOW BUCK!”

The dragon screamed, and so did Rainbow Dash. She took off like a rocket and leaking fluids like a badly designed one. Then she caught herself and tore through through the air, slipping past the dragon’s claws, bounced along the snout, turned in front of the eye—“RAINBOW BUCK!”

Again the dragon screamed, thrashing. Rainbow Dash kicked off the snout and ran down the belly, jumped onto the whipping tail, and burst into flight just ahead of the jet of flame. She rode it for a death-defying moment, then gave a might flap with her wings and outsped it, turning up and around to let the stream of flame pass her. It was without a doubt the most awesome thing she had ever done.[1]

[1]And therefore, in Rainbow Dash’s world, the most awesome thing anypony had ever done.

Any animal would have run. Niddhog didn’t. One hand over his left eye, he flew after Rainbow Dash.

If he expected her to run, he had another think coming. Leaving a rainbow explosion behind her, she streaked toward him—if she tore through his right eye—

His mouth opened, showing the burning gates of hell, and Rainbow Dash realized her mistake. She burst up almost perpendicular to her previous direction, and saw the tail coming down.

Rainbow Dash woke up and was surprised by it.

“Why did you come here?” Little Strongheart demanded.

Rainbow Dash felt herself all over. Her body was intact, all four limbs in place, her wings covered in feathers and not charcoal. A buffalo was carrying her on her back, the ride bumpy but not unpleasant.

What happened, was the first thought and was quickly overridden by, “I need you to come with me to Appleloosa.”

Little Strongheart scowled. “Why?”

“Applejack broke and her Cerberus is dying. Come on!” She tried to get up and found that her wings wouldn’t budge.”

“I don’t think you’ll be flying anywhere for a week,” Little Strongheart said. “I’m amazed you even managed one of those rainbow bursts.”

Rainbow Dash groaned. Her wings felt empty, like she had two feathery sacks attached to her back. “Then take me to Appleloosa! My friends need your help.”

“We are going to Appleloosa.”

“What?” Rainbow Dash tried to sit up again and managed to roll on her side. Little Strongheart was walking beside the buffalo carrying her, a red crystal on her chest and an annoyed look on her face. They were in the midst of the herd, traveling steadily toward Appleloosa. “What’s going on?”

“We were going to attack. Now we have a hostage.”

Rainbow Dash looked around. “Who?”

“You, idiot.”

“Oh, okay.” That was no problem. No pony could fly as fast as…oh.

They dipped into the valley where Appleloosa was. Little Strongheart’s red crystal flashed, and a gust of wind blew a tunnel right through the smokey cloud, pointing clear to Appleloosa.

“What happened to the dragon?” Rainbow Dash said.

“You nearly dodged the tail, which was still enough to take you out,” Little Strongheart sneered. “Then, as it grabbed for you, it got a tree trunk in its injured eye for its troubles. I blocked the obligatory firestream with the earth, and it took off.”

“He took off,” Rainbow Dash corrected. She felt the top of her head. Had she been part tree? Fluttershy would be so jealous. Oh no, Fluttershy! “What about the sky serpent?”

Little Strongheart shrugged.

“PI BEAM!”

Silver light glowed at the front of the herd. A buffalo cried out in pain.

The corners of Little Strongheart’s mouth turned up into points as sharp as dragon teeth. “Oh no! Chief Thunderhooves!”

The earth rose up and bucked Sheriff Silverstar in the jaw. He fell over and didn’t get back up. No pony moved as the stream of buffaloes carrying spears and a Rainbow Dash marched into Appleloosa, Little Strongheart at the front.

“What is the meaning of this, ponies?” she demanded. “Your unprovoked assassination of Chief Thunderhooves will not go unpunished!”

“I’m not dead,” Chief Thunderhooves groaned. “Just very confused about my intuitions.”

“T-Terminal secretions!”

“You’re carrying spears,” Twilight said. “I mean, your intention isn’t exactly subtle.”

That earned her a rock-buck to the face. Combined with Twilight’s magic firmly holding her neck still, the result was a shattered jaw and several teeth knocked loose. Pain suggested that Twilight keep her mouth shut, or at least shut enough to keep quiet while the blood flowed out.

“Okay,” Little Strongheart said while Fluttershy helped Twilight sit down and gathered her teeth. “Listen up, ponies! This is our land and our apple orchard, and you all are going to pack up and get the buck out of here before I start ripping ponies limb from limb.”

“Excuse me, but would you mind healing the Cerberus with your magic?” Fluttershy said.

“Fluttershy?” Rainbow Dash sat up on the buffalo. “Fluttershy! Little Strongheart is evil!”

“Oh, I’m sure she has a heart of gold deep down. Or, um, whatever metal she chooses. I don’t see any reason why society should get to prescribe gold for everypony. I mean, everyone.”

Little Strongheart regarded the dying Cerberus disinterestedly. “What’s wrong with it?”

“The dragon sharpened his claws on her.”

At the mention of the dragon Little Strongheart went stiff. “Foolish ponies. This is your punishment for trespassing onto our sacred lands.”

“We had permission!” Rarity said. Her magic was still supporting Tank, whose eyes were closed.

There was a moment of silence. “Is the Tortoise Queen going to say anything?” Little Strongheart sneered.

“She’s concentrating on keeping the Cerberus alive!” Rarity snapped.

“Actually, I think she’s asleep,” Pinkie Pie said. “We can probably put her down now.” They did so, and the cabbage still glowed.

“What magic is that?” Little Strongheart demanded. “Tell her to cease the spell at once!”

“I perceive,” Fluttershy said, “that there is much you do not understand, Little Strongheart, about our intentions, goals, and abilities.”

The earth bucked. Twilight caught it in her own levitation magic before Fluttershy could be touched. Little Strongheart was predictable in that way, and so was the vicious blow Twilight received in the stomach for her trouble. It was enough to lift her off the ground, and it took several agonizing seconds with Fluttershy by her side to start breathing again.

Little Strongheart smirked. Pinkie Pie spoke. “I propose a truce. You stop hurting my friends, and I don’t kill everypony here.” She held the potted Bloomberg again and gave the pot a meaningful shake.

Little Strongheart narrowed her eyes. Rainbow Dash spoke up. “Pinkie, no! I can’t die yet, not while I’m still rich!”

“Then what am I supposed to do?” Pinkie Pie said. “It’s like the prisoner’s dilemma all over again, and she’s ratting me out!”

“The prisoner’s dilemma?” Rarity said. “But here we all are, talking, and no pony is captured.”

Rainbow Dash clapped her hooves to her cheeks. “Something's isomorphic!” she squealed. “Quick, girls, let’s save the world with economics!”

Little Strongheart stamped the earth, and the earth cracked. “What are you all talking about?”

“Everypony is going to die, or everypony is going to live,” Pinkie Pie said.

“She means to include buffaloes,” Fluttershy added hurriedly. “No offense. Not that we have the magic of intent or anything.” Fluttershy frowned. “I suppose that’s Princess Cadance.”

Little Strongheart looked absolutely furious, and afraid. "Who the hell is Princess Cadance?”

“You need our help beating the dragon,” Rainbow Dash said. “I know you’re afraid.”

“Shut up, little pony.”

“I know you were going to run away! I know loyalty when I see it, and what I was seeing was a whole lot of nothing.”

Little Strongheart almost lashed out again. Pinkie Pie waved Bloomberg threateningly. “Ah ah. If this tree falls, you’ll hear it no matter where you are.”

This was out of control. Twilight bled a little more on Fluttershy, who seemed to get the message. “Little Strongheart, you have two choices, and so do we. You can heal our friends, or fight us. And we can fight the dragon, or fight you.”

"You can, no, will leave."

"No."

“If we fight the dragon, you can attack and destroy us,” Rarity said. “And if we fight you, then of course you’ll fight us. So it seems that no matter what we choose to do, you’ll attack us.”

“But from our perspective, it’s the same,” Pinkie Pie said. “You can heal us, and we can attack you and win. Or you can fight us, in which case we’ll fight you. This is a game, and no pony is having fun.”

“So everypony is going to die no matter what?” a buffalo said. Fluttershy winced.

“That’s just plain stupid,” one of the Appleloosans said.

“Yep,” Pinkie Pie growled, “and yet it’s all we seem to have.”

"If you ponies weren't so selfish," Little Strongheart said, "you would slay the dragon for the benefit of your fellow ponies and then leave."

"Maybe we are selfish," Rainbow Dash said. "But I don't want to let you beat us, even if it means everypony in the world dying!"

"She'll just attack us when we come down from the mountain," Rarity said.

“But this isn’t the prisoner’s dilemma,” Fluttershy said. “We can talk. We can reason things out. We both know that we’re both going to destroy each other, and we both know that we both know that.”

Twilight bled excitedly. Was Fluttershy going to…?

“And since we now both know that we both what we’re both thinking,” Fluttershy continued, “it stands to reason that for us to fight here, now, or later at the top of the mountain before the bloodied corpse of a dragon, is stupid. If we could just, in this moment, speak honestly to each other, and listen and respond in kind, that is, if we could just persuade each other that no one here is evil and no one here is good, we’re all just stuck with these awful incentives, but we don’t have to be, we could just not be the things that are thus constrained….”

Fluttershy was struggling, running out of words. Rainbow Dash said what she couldn’t. “The point is, are you going to be a leader of buffaloes or not?”

“I think,” Little Strongheart said coldly, “that I will take my chances with that potted plant.”

Rarity whispered something to her parasprite, who floated through the air to Little Strongheart and whispered something. Little Strongheart’s eyes widened as if the contents of her diary had just been shared with the cute stallion at school.

“Okay, I’ll heal your friends,” she said quickly.

Rarity beamed as the parasprite proudly returned. “You see? A little blackmail is the beginning of many a happy friendship.”

“And then you’re all leaving before I kill everypony.”

Rarity soured. Braeburn spoke up. “What about the dragon?”

Little Strongheart rounded on him, but a buffalo spoke. “Yes, what about the dragon? The tree trick won’t work again.”

Twilight bled smugly. Buffaloes were the surest threat to Little Strongheart, not ponies. She wished the other ponies understood that better. It had been foolish to count on her own ability to intercede at any moment….

“I can handle the dragon!” Little Strongheart snapped.

“It didn’t look like you could handle the dragon,” another buffalo said.

“If it goes on forever, it must repeat eventually,” Chief Thunderhooves mumbled.

“We should work together to beat the dragon,” Braeburn said, clearly enjoying his new position as Sheriff-By-Default. “That’s how we do things in AH-PAH-LOOMMPH!”

Little Strongheart whipped her head in the direction of Twilight. Their eyes met, and an unspoken understanding passed between them.

We may be as different as night and day, but we both utterly despise Braeburn and the way he says ‘Appeloosa.’

Little Strongheart glared—and then smiled in a conciliatory way, the expression sliding into position like a practiced choreography. “Of course we should all work together to defeat that terrible dragon. What a wonderful idea! You ponies will travel up the mountain, and you ponies will stay right here, and I’ll heal up your poor little monsters, if they aren’t already dead. I will even work out an agreement for buffaloes and ponies to live in peace.”

“Good, cuz my legs are getting tired,” said Pinkie Pie, struggling to hold Bloomberg aloft. She wrinkled her nose. “Uh-oh. Ah…ah…”

Oh, no.

“AH-CHOO!”

Rarity and Twilight managed to catch Bloomberg in time.

Thanks to Little Strongheart, guided by Fluttershy, the Cerberus was stabilized, Applejack, Twilight, Rainbow Dash, and Sheriff Silverstar set to mending, and Fluttershy and Little Strongheart went out beyond the cloud of smoke to find the fallen sky serpent. Tank woke up after three days and, after a long meal of lettuce, guided Chief Thunderhooves through his crisis. It was time they had to lose. It would take a week, Little Strongheart and Fluttershy said, for everypony to be better. During that week, unbeknownst to their sis—uh, Applejack, Rarity, and Rainbow Dash, the Austrian Crusaders were running amok in Ponyville.

“Watch out!” Apple Bloom said from her hiding spot behind a tree root. “A Keynesian liberal socialist spotted at two o’clock!”

Scootaloo jumped out of the tree branch and landed on Big Macintosh, who calmly went on his way while Scootaloo savaged his ears.

“Another Keynesian liberal socialist and their economic fallacies defeated!” Sweetie Belle cheered once they pulled Scootaloo out of the bush Big Mac left her in.

“At this rate we’ll become real Austrians for sure!” Scootaloo said. They all checked their flanks quickly.

“Okay, no looking at our flanks for three hours,” Apple Bloom said not ten minutes since she had last advised the same.

“Then there’ll be a Keynesian liberal socialist at five o’clock,” Sweetie Belle warned.

Apple Bloom and Scootaloo looked at each other. Sweetie Belle simpered. Rarity said she was to be ditzy and foolish right until it actually mattered, and she intended to do her sister proud. She couldn’t wait to see Rarity’s face when she came home after a pointless trek up a mountain and saw the image of a dragon sliced in two by Austria on Sweetie Belle’s flank. She also couldn’t wait to find out what Austria was.

“Okay, girls, we’ve got three hours until our cutie marks appear,” Apple Bloom said. “Let’s go find that dragon and slay it!”

And so the three young fillies skipped off to the only place the dragon could be, the realm of darkness and terror that existed just ten miles south of Ponyville: the Everfree Forest. They went, singing:

We are the Austrian Crusaders

On a quest to discover market prices

We will never stop the journey

Until we’ve saved the world from socialism!

Rational Expectations

"And they all have stupid, made-up names. Like 'Francis.'"

The Everfree Forest was full of Keynesian liberal socialists. Sweetie Belle got kidnapped no less than three times by their shadowy vines. The first two times Apple Bloom and Scootaloo managed to wrestle the vines to the ground and forced them to release Sweetie Belle, but the third time the vines snatched her away before they could catch her.

“Don’t worry, Sweetie Belle!” Apple Bloom called as she and Scootaloo walked through the forest. “We will bring the light of economic knowledge into the darkness and save you!”

“For Austria!” Scootaloo added.

Fighting their way through the forest of economic fallacies[1] was actually kind of fun, almost like a game—a game, Scootaloo was quick to remind them, concerning the very fate of cooperation in Equestria. Scootaloo’s unerring aim with an acorn got them through one challenge, and Apple Bloom took them through a maze of thorns by always turning left. Crawling under the last of the thorns, they emerged into a clearing lit by a blue glow. In the center was a statue of a Pegasus holding a book in one forehoof and a spear in the other. There was an inscription at the base of the statue. Apple Bloom read what was legible out loud.

Knowledge shrinks what ignorance compounds

Uncertainty brought you here to-day

No profit led you, but profit you found

When the Night called you to play

“What’s that mean?” Scootaloo said.

[1]”Everfree?” Apple Bloom shouted, kicking a rock. “How about the Competitive Market Price Forest? Socialists!”

“Who’re we playing with?” Apple Bloom demanded. “Life ain’t a game.”[2]

There was a clip-clop of hooves behind them, and a deep voice spoke. “Frankie Knight, an economist subtle. To this day she remains a puzzle.”

[2]The Tree of Isomorphism, which, unbeknownst to Apple Bloom, was only a few meters away, bristled at the insult. Fortunately for our young heroes, the Tree of Isomorphism was also incredibly shy, and, more importantly, a tree, and so not really capable of doing much.

Apple Bloom and Scootaloo spun around. Entering the clearing was a black-and-white striped pony with gold hoops in her ears and around her neck. She was carrying a saddlebag and Sweetie Belle on her back, who gnawed on her scalp.

“I caught a Keynesian liberal socialist!” she said in between bites of striped pony head. “Quick, help me take her down!”

The striped pony looked embarrassed. “Found I did this young one hither among the vines that snake and slither. A Keynesian socialist I am not. I believe her name is Sweetie Bot.”

“Sweetie Belle!” Sweetie Belle said. “Fear my a priori magic!” She closed her eyes. A faint green glow appeared at the tip of her horn, wavered, and soon gave up in a way that reminded Scootaloo of ponies considering her for adoption.

The striped pony shook her whole body, sending the gold hoops jangling and Sweetie Belle flying off. She landed with a thump on the soft dirt and jumped to her feet.

Apple Bloom strode to the fore. “Girls, we can’t win on our own. Let’s unite! Praxeology mode!” Sweetie Belle dashed to her side, and Scootaloo jumped on top of their backs.

“With the power of our scientifically logical friendship, we’ll ev—evisc—eviscerate you!” Scootaloo declared. She thrust her forehoofs out. “PRAXEOLOGY BEAM!”

Nothing happened.

The striped pony’s eyes were wide and uncomprehending, like Applejack’s had been when Apple Bloom had asked if it was really okay to eat nothing but apples for every meal. “The forest’s magic is a peculiar kind, but you young fillies are out of your minds. My name is Zecora, and know this: I am a zebra; you judge amiss.”

“You’re not a Keynesian liberal socialist?” Apple Bloom grunted under Scootaloo’s weight. Zecora shook her head. “Well, would you like to be an Austrian?” Zecora hesitated, then nodded. Apple Bloom glanced at Sweetie Belle, who was clearly suffering. “Uh…you’re an Austrian.”

“Hooray!” Scootaloo jumped off their backs and held a hoof out to Zecora, who touched it awkwardly. “Now we are four. For Mises!”

“And Hay Ech!” Apple Bloom said.

“And Davenport!” Sweetie Belle said.

Scootaloo facehoofed. “Sweetie Belle, get with the program, will you?”

Zecora watched all this in utter bafflement. “Don’t you know a zebra’s nature? Ponies fear us frightful creatures.”

“Nah, we’ll just trade with you,” Apple Bloom said.

“I don’t know anything about zebras. I don’t know anything at all!” Sweetie Belle giggled and played with her hair.

“Your parents will be looking for you. Return to your homes and speak not of what I do.”

“I don’t have any parents,” Scootaloo said brightly. “What do you do?”

“Yeah, and our sisters are out slaying a dragon,” Apple Bloom said. “We reckoned it might be in here. Are you the dragon?”

“I am a zebra, as I said. Were I a dragon, you three would be dead.”

“Didja see which way it went?”

“No dragon will you find here. Greater dangers lurk, I fear. You fillies should not have strode into the Chaos King’s abode.”

“Whatcha gonna do about it?” Apple Bloom said. “We got freedom.”

“Yeah!” the other two said.

Zecora sighed. “Then come with me, and I will keep you safe. I have work to do, so do not chafe.”

“What kind of work do you do?” Scootaloo said as they bounced after Zecora through the forest.

“Work the Princess Eos has requested that the King of Chaos may again be bested.”

“Princess who?”

“King of what?”

“What do you do?”

Zecora mulled over her answer. “In the forest much is hidden of Equestria’s history unbidden.”

“You’re learning about the past?” Sweetie Belle said. Zecora nodded.

“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.”

“What?” Scootaloo said.

“She’s going to make the sun move on its own!” Sweetie Belle translated, too engrossed to be stupid.

“That’s how it used to be?” Apple Bloom asked.

“Yes, good guess. Know we do from ancient primates that something went wrong with our climate. Finding out more about the original state is what I do to help wipe clean the slate.”

Apple Bloom completed the rhyme automatically. “Opportunities forgone and ponies ignored led to a world that was nearly destroyed.” She frowned. Where had that come from? The word was on the tip of her tongue. Ex…extinction? No, exter…extermination?

“You have learned something important,” Zecora said, looking serious. “This knowledge you cannot recant. Some things have a price unseen when no pony hears another scream.”

“Outer space?” Scootaloo said, completely lost.

Zecora pushed aside the brush. A small house emerged into view. “If you are so convinced to trust me, then come inside; it is hardly musty. But perhaps a zebra you cannot understand, being ponies from another land.”

“You got food?” Apple Bloom said.

“Yes, watercress.”

“Then we’re coming in.” Applejack said never to turn down free food, or free anything for that matter.

The inside of Zecora’s house was a lot like Twilight’s old treehouse but smaller. It was filled with books and was otherwise sparse except for a big cauldron bubbling green stuff in the center of the room. Zecora came in after them while they crowded around the cauldron.

“What’s that?” Sweetie Belle said.

“Is it a hot tub?” Scootaloo said. Rainbow Dash said she was going to buy one because they were awesome. Scootaloo didn’t know what a hot tub was, but now she was all about hot tubs.

“It is a tub and it is hot, but do not hop into the pot. This is a time machine I am baking so the world I can be saving.”

“You can’t bake a time portal,” Apple Bloom scoffed.

“No? I rather think I can. Or at least that is the plan. Tested it I admit I’ve not. So perhaps it’s all of you into the pot!”

Apple Bloom spun around, teeth bared, but Zecora laughed. “The faces on you fillies sweet, so ferocious as to be a treat! Perhaps I am unused to ponies so blind that to a zebra they can be kind.”

“We don’t care if you’re a zebra,” Apple Bloom said, her heart still pounding. “Just don’t eat us is all.”

“I promise on the Life Creator that to my word I am no traitor. No filly shall I eat today, in this time and in this way.” She caught Apple Bloom’s expression and laughed again. “Zebras do not eat meat! To choke one of you down would be a feat.”

“Not knowing things about other ponies is scary,” Apple Bloom objected. “Tain’t right.”

Zecora bent her four knees and bowed. “Apologize I truly do. You fillies are a pure-hearted crew. Perhaps my test will be a success if with your company I am blessed.”

Scootaloo’s eyes grew wide as saucers. “We can travel back in time with you?”

“If we step on an ant, will our grandmares not be born?” Sweetie Belle asked.

Zecora frowned. “No direct interference should be possible. To the past we are not even audible. That is the nature of speech. Backwards in time it does not reach.”

“Communication sure is hard,” Apple Bloom said, mostly to herself. “Okay! Let’s do it, girls! We’ll learn what the past never could have told us and use it to create a second Austria! Once we find out what the first one was!”

“Yeah!”

Zecora smiled. “Then into the pot with you three at once. Our meeting surely is a bunce.”

“Now she’s reaching,” Sweetie Belle whispered as they clambered into the cauldron. The green liquid was thicker than water, but not unpleasant, like sitting in hot green apple juice.

“Are you coming?” Scootaloo said.

Zecora nodded. “I will come, but as an enchantress, so for this ritual I must do my dances.” She cavorted around the cramped room in an odd way. “Look at me while I do my prances. Now what will I do? I will jump in the stew.” She landed with a splash in the middle of the three of them, nearing upsetting the cauldron. “And we’ll travel back in time in this hot tub time machine that I brewed!”

The pot began to shake; the green liquid bubbled up around them, everything began to spin, and the world blurred; Apple Bloom clutched the edges of the cauldron, which tipped over, spilling them out onto the ground.

“Are we in the past?” Apple Bloom said, getting shakily to her feet. “Did it work?” She looked around and seemed to have her answer. The cauldron was still there, but the rest of Zecora’s house was gone. The forest looked different, too. The trees weren’t in the same places as before. Then again, in the Everfree Forest that wasn’t much proof.

“Eek, my coat!” Sweetie Belle wiped desperately at the green stuff. Zecora produced a flask of something clear she poured on their coats, and the green stuff fell off like it was afraid of their hair.

“What time did we come back to?” Scootaloo said.

“We returned to a time of which I am most curious, when the Knights of Economics were at their most furious.”

“The Knights of Economics?” Scootaloo said. “That sounds almost as cool as being an Austrian Crusader!”

“I do not know these Austrian warriors. Yet it can be assured the Knights were much gorier. Come, little fillies, to see a sight of great econoponies in their might.”

“Gore?” Scootaloo said. “Cool!”

They followed Zecora through the forest. True to her word, even the Everfree Forest didn’t seem to notice them. They walked past thorns and vines as if completely invisible.

Soon a castle came into view. They walked across the drawbridge, passing a trim-looking sea serpent, and went inside the walls. There were seven main buildings, each a different color. Zecora set off for the one in the center, painted violet.

“Approach we do the ancient library. Though I would like to sample the heralded winery.”

In the library was a big round table and seven ponies sitting around it. It looked like there was room for two more. They heard the clip-clop of hooves striking the ground behind them, and they quickly moved to the side as a Pegasus slowly walked into the room. She carried a book tucked under her foreleg and a spear in her mouth with tattered pages stabbed around the point. The ink on the pages looked like it had run and now was drying. It looked like blood spilled on the carcass of a dead animal. As for the spear itself, it was twisted and knotty like a branch that had tried to grow from itself back to the tree, or like two branches intertwined. The point looked like something ancient, not quite stone, and the edges were marred, chipped; the spear was for use, not for show. The mare’s face was controlled and serious, and something radiated from her, an aura, Apple Bloom would have called it, if she had known the word.

This Pegasus, Apple Bloom didn’t quite have the vocabulary to express, had an Aura of Power. It was bigger than Twilight’s. It was even bigger than Miss Cheerilee’s, and she was a teacher.

“So pleased you could make it, Frankie,” said the Unicorn at the seat opposite to where the Pegasus strode, sounding very much unpleased. Her mane was trimmed short, and when she spoke, wrinkles moved around her eyes like the ripples from a stone cast into a pond. She had a bag that she clutched tightly to her, and her pink magic wrapped around it protectively. Apple Bloom only knew a little bit about magic, but the shield looked even more serious than what Twilight used to protect her books when she and the other fillies were “roughhousing,” the word Twilight used for “playing.”

The Pegasus set the book down and leaned the spear against the table. She carefully plucked the pages off the point and set them inside the book. Then she sat down.

“Forgive my lateness,” she said. “Ludmilla. How is Wieser?”

The fillies gasped. “She is well,” Ludmilla von Mises answered curtly. “And your student?”

“Her thesis is trash. She will fail, like all the others.”

“And those ruined pages? Whose book did you review?”

A slight smile touched Frankie Knight’s face. “One belonging to a Ms. Hay Ech. I think you know her.”

Ludmilla grunted.

“I don’t think they like each other very much,” Sweetie Belle whispered.

“Well!” said a smaller pony who seemed to be thinking along similar lines. Her chin was long and her mane a curly mess. She carried an ornate staff somewhat awkwardly, as if it was something she had inherited not long ago. Frankie Knight glared at her, and she withered. “Um, um…Ludmilla, how are the Bearers of the Elements of Harmony? And the Elements themselves?”

“They are safe and well, Cecilia,” Ludmilla said stiffly, patting the bag. “We used their power recently to drive back a terrible evil. Now it doesn’t know how to make any kind of decisions at all. That should hold it back—for a while, at least.” Frankie Knight snorted.

“Cecilia Pigou,” Zecora said. “A younger knight, that I knew.”

“Frankie Knight doesn’t like her very much either,” Sweetie Belle said.

“I don’t think Frankie Knight likes anypony very much,” Apple Bloom whispered. None of the knights could hear her, but they all talked in low voices for some reason. Apple Bloom had the feeling they were Getting Into Hijinks.

“All problems have the same fundamental structure,” Frankie Knight said. “If the Elements are a source of confusion unto the darkness, then they are the same unto us.”

“Don’t be absurd, Frankie, girl!” exclaimed an Earth Pony wearing the weirdest goggles Apple Bloom had ever seen. They made one eye look big and the other look small. She was frightfully skinny, the tendons visible under her skin. “You always did dislike new things. Speaking of which, come take a look at my filing system sometime. I think it will delight and terrify you.”

“No, thank you, Irene,” Frankie Knight said. “Are you feeling well?”

“Healthier than a diet of wheat and honey!” Irene said. “Keeps me on track and organized! Got to love organization!”

“Irene Fisher, if I am not mistaken,” Zecora said. “Do not ask where her daughter was taken.”

The stout red Earth Pony opposite Irene let out a huge burp. The commotion rattled the long, thin blade engraved with faintly glowing ancient mystic runes[3] that she had leaning against the table. She took a long drink from a flask and wiped her mouth with her foreleg. “Ahh! Nothing like a diet of fresh eggs and friendship.” She shook her flask, looking disappointed at the weak sloshing. “Would that diminishing returns were not a universal principle. Ah, well!” She finished off the last of the stuff in a single gulp. Even from a distance and through the eons of time, Apple Bloom could smell it burning, like the apple stuff Big Mac would brew sometimes and never let her touch.

“Phila Wicksteed, who for the knights made armored dresses,” Zecora said. “A Unitarian who believes in only one of the Princesses.”

[3]Everypony can recognize ancient mystic runes. A little-known fact is that ancient mystic runes don’t actually mean anything. They exist to say, “Right, you are messing with ancient mystic stuff right now, piece of advice: don’t.” As for the ancient mystics themselves, they mostly like to be let alone to live lives of simplicity and internal peace as best exemplified through the mastery of eldritch and deadly magical arts. Like time travel.

“I was thinking about that just the other day,” said a Pegasus wearing a stylish red jacket and a white cravat. By her side was a many-legged box that looked more like it was dozing than inert. “But today I am thinking about something else entirely. I envy your powers of concentration, Frankie.”

“You have nothing to envy, Francesca,” Frankie Knight said, looking absently at the table.

“Francesca Edgeworth of the Box,” Zecora said. “It was known to carry many socks.”

An oversized pair of scissors glowing in a blueish light swooped and dived through the air, running into the table, where it cut through the stone like it was paper.

“I apologize,” an aged Unicorn said, levitating the scissors to her. Though her body was frail, her gaze was deep. By the way the skin sagged around her head, it almost looked as if the contents of her skull had just gotten too heavy to hold up. “My word, these scissors of mine do seem to be able to cut through anything, don’t they? Eh, Cecilia?”

Cecilia nodded uncomfortably. “As you say, Alice.”

Zecora spoke. “Alice Marshall, held in high esteem. Of the crop she is the cream.”

“And that’s everypony, isn’t it?” Frankie Knight said. “Where is Nute?”

“Nute, ‘your majesty’s most obedient servant,’ is in the Cyrstal Empire, doing Celestia-knows-what there,” Irene said. “Useless pony.” She looked to Ludmilla. “Well? Got anything to say for her?” Ludmilla grimaced and didn’t answer.

There was a moment of uncomfortable silence.

“Nute Wicksell, I assume,” Zecora murmured to herself. “Did her absence bring their doom?”

“I don’t think any of these ponies are friends,” Apple Bloom said. “I don’t think they like each other. Especially none of them like Frankie Knight, and she doesn’t like any of them. She shouldn’t be the leader.”

Zecora shook her head. “Frankie Knight is not just a smarty. She is the pony of no party.” Her eyes glowed with interest. “Was there anypony who ever saw so far as to the Universal Question and the end of war?”

“But they’re not friends,” Apple Bloom insisted. She knew, without being able to explain, that there was something wrong with these ponies. They were missing something she had always taken for granted.

“Well, I’m just glad we’re all together again,” said a yellow Unicorn with a red and yellow mane and a fiery red and yellow sun on her flank. “Since you’re all my very best friends.”

Zecora frowned. “That Unicorn is Sunset Shimmer. Of her I confess my knowledge is dimmer.”

“So is the meeting about to start?” Sweetie Belle squeaked. “What’s going to happen?”

Sunset Shimmer spun around and looked at where they were standing. No—she looked at them. Apple Bloom stared wide-eyed into the shocked face of Sunset Shimmer, who had a red crystal pinned to her chest. Then her eyes narrowed, turned predatory, cruel. The corners of her mouth turned up as sharp as dragon teeth.

She turned around. “Well, shall we start the meeting then? Somepony will just have to fill in Nute later. I can do it if no pony minds.”

“W-What just happened?” Sweetie Belle trembled.

Zecora looked stunned. “Surely it is a coincidence. Otherwise it makes no sense. In the past we cannot be touched by the hoof of causality.”

“Any filly knows if you can see them then they can see you,” Apple Bloom said. “Closing your eyes don’t help! We got to get out of here!”

Sunset Shimmer’s horn glowed, and the doorway behind them slammed shut.

“It was drafty,” she explained, smiling at the other ponies.

“Why’s she doing this?” Scootaloo whispered. “She can hear us?”

“Sunset Shimmer is fat and ugly!” Sweetie Belle said loudly. Sunset Shimmer didn’t react, and neither did any of the other knights.

Zecora breathed. “Perhaps it is all mere chance. What knowledge could be gained from our existence?”

“That time travel works?” Apple Bloom said.

“To order,” Frankie Knight said. “Efforts to purify the Everfree Forest of the chaos are continuing slowly. Ludmilla—“

“I have a question,” Sunset Shimmer said in a sing-song voice. “Why does Ludmilla get the Elements of Equilibrium? I mean, it hardly seems fair.”

Ludmilla stirred. “Because I’m the only one with friends.”

“We’re friends,” Sunset Shimmer pouted. “I just think it’s strange that Ludmilla goes off on all these extra special adventures to save the world while the rest of us go on only normal adventures to save the world.

“I think you’re right,” Phila said, way too loudly. “It’s a load of horse apples. I’ll stitch a dress to vent my displeasure!”

“It’s a matter of organization,” Irene said smartly. “Ludmilla’s schedule must be looser than the rest of ours.”

“It isn’t,” Ludmilla growled. “I have students to teach.”

Frankie Knight made a noise. Ludmilla faced her. “Well?” she snapped. “And?”

Frankie Knight leaned back, looking relaxed. “If you think ponies can be taught.” She managed, without saying it, to convey the rest of the message: then you’re a fool. And in that unsaid fragment Frankie Knight packed more derision than even Diamond Tiara could.

“Students have no talent for organization,” Irene said. “And they give me ulcers.”

Apple Bloom frowned; something tickled the back of her mind. Apple cider, dresses, organization, party ponies, and as for awesomeness, well, there was nothing cooler than the idea of a bunch of old economist ponies assembled as an order to battle evil. Or loyalty, the absent Nute Wicksell. It was like a riddle. The only thing missing was kindness or butterflies.

“I love teaching new students,” Sunset Shimmer said. “They’re so eager to learn!”

Ah. From the way the other ponies looked at her, even Frankie Knight, Sunset Shimmer was the missing piece of the puzzle.

But there was no kindness here, none at all, just a false smile and a simpering voice. All the elements, they were perverted. Apples to lose yourself in, dresses for battle, and Frankie Knight didn’t seem fun.

This is what happened to ponies, Apple Bloom didn’t quite think, when they didn’t have a good Fluttershy.

“We could teach,” Cecilia said uncertainly.

“I think that’s a grand idea.” Sunset Shimmer smiled at Cecilia. “I think Cecilia should be in charge of the Knights of Economics.”

“Why do you think that?” Frankie Knight said while Cecilia spluttered.

Ludmilla pushed away from the table, never letting go of her sack that contained the Elements of Harmony. Apple Bloom noticed how Sunset Shimmer’s eyes followed the sack. “I have no interest in this squabbling. Some of us have work to do. The Smooze’s cage must be maintained. If even a single bit of ooze gets through….”

Ludmilla’s horn glowed, and the door opened.

“We should go,” Apple Bloom said. “Let’s get out of here!”

“Oh, you can go,” Sunset Shimmer said, looking at Ludmilla. “I’m sure you’ll do a great job containing this. Good luck!”

Ludmilla snorted and walked out.

“She meant us,” Apple Bloom said urgently.

“Just a moment,” Zecora whispered. “I must see what she will foment.”

“Now,” Sunset Shimmer said, turning back to the other knights. “I just think the pony in charge of the Knights of Economics ought to be the best economist among us.” Then her horn glowed green, and something in front of her flashed red. The ground began to shake—Frankie Knight reached for her spear—

"Joking, joking," Sunset Shimmer laughed. "Frankie, you're no fun."

The other knights were looking at her, their hoofs on their weapons. Sunset Shimmer was laughing quietly, as if at some private joke.

"We really gotta go," Apple Bloom said.

Zecora's eyes were wide. "I do agree. Now is the time to flee."

"Bye," Sunset Shimmer chuckled. Apple Bloom shivered. Finally, they left.

“Must be nice to have a time machine,” Sweetie Belle said as they bounced after Zecora away from the castle.

“Maybe you shouldn’t use it in here, though,” Apple Bloom said.

Zecora nodded. “It may be the reason that Sunset Shimmer saw us is due to the interference from the Chaos Forest.

“I’m confused,” Scootaloo said as they reached the upturned cauldron. “Why did we do all that? What was the point? What did we learn?”

Zecora righted the cauldron and produced more flasks from her saddlebag. In a short time she had the contents of the cauldron green and bubbling. They all jumped in while Zecora finished her preparations.

“I am not sure,” Zecora said. “I can only hope it was not a bore.”

She jumped into the cauldron with them, and they returned to their own time.

Zecora led them to the end of the Everfree Forest, leading to Ponyville.

“The beginning of the Everfree Forest, you mean,” Scootaloo said.

“Who’re you talking to?” Sweetie Belle asked.

Scootaloo shrugged. “Who do you think Sunset Shimmer was talking to?”

Apple Bloom decided to ignore her friend’s apparent newfound ability to speak to the narrator. Instead she looked at Zecora, whose gold hoops jangled as she walked.

“We came all this way, and we don’t have anything to impress our sis—uh, Applejack, Rarity, and Rainbow Dash. Please, what is the meaning of the story of Sunset Shimmer?”

“Why couldn’t they work together?” Sweetie Belle said.

“Why were they all so selfish?” Scootaloo asked.

Zecora thought about it. “Studying the science of friendship brings great clarity. But true mastery suggests a duality. To know theory and practice is a great rarity.”

“It rhymed three times,” Apple Bloom gasped.

“It’s a trick!” Scootaloo said. “Somepony stole Zecora’s body!”

Zecora shook her head, shaking from silent laughter. “No, little ponies, I am no phony. In zebra society rhyming is a matter of great propriety. Couplets are for everyday conversation, but for more severe matters our rhymes we need not ration. The order that sent me here built up from a rhyme that lasted nearly a year!”

“Zebra society sounds really impractical,” Sweetie Belle said. “Um, tee-hee!”

Zecora smiled. “Know this, kind beauty, that a zebra’s name implies a duty. My name is Zecora. It means one who shows kindness to flora.”

“What kind of duty is that?” Apple Bloom said, preemptively defensive of her family’s orchard.

“Economists worry about that which cannot be heard, moving us from the first-best to the second to the third. A tree that falls in a forest when no pony is around, does it make a sound?”

“Yes,” Apple Bloom said just as Sweetie Belle said, “No.”

“Furthermore, logic states that that which makes no sound cannot not be heard. Perhaps it seems a bit absurd.”

“Not at all,” Scootaloo said, who sometimes did the monthly puzzles with Rainbow Dash.[4]

[4]False assertions yield true statements. Logic….

“Who will care for those who cannot call, who cannot even be ignored by all? Guard that pony, for she is precious, even if she is sometimes obnoxious.”

And with that they walked out of the Everfree Forest. Blinking in the light, it took a moment for Granny Smith, Big Macintosh, and two dozen other ponies from Ponyville to come into focus.

“Apple Bloom!” Granny crawked. “Where have you been?”

“In the Everfree Forest hunting dragons with Zecora,” Apple Bloom said, gesturing at the zebra. She and the other fillies hopped over to Big Macintosh, who was a lot less frightening than an old mare with a wooden cane and bad eyesight.

Zecora held up one forehoof off the ground as she faced the Ponyvillians. No pony said anything. Then, with a smile and a toss of her head, Zecora returned to the Everfree Forest.

“Don’t be mad,” Apple Bloom said. “She taught us cool stuff.”

A Long Conversation About Privilege

Healing the body was easy. But even Little Strongheart’s magic couldn’t heal the mind’s scars.

But, Spike was quick to point out, they didn’t need magic. They had Science. Specifically, they had the Science of Friendship.

Spike oversaw everything, having picked up a thing or two from Twilight, who mostly paid no attention. Applejack got to work drafting up a contract while Twilight rested and thought about dragons. Rarity surreptitiously sent her parasprite about gathering data about the preferences of ponies and buffaloes while Twilight read Gamma’s letter. Pinkie Pie was a boon in bringing ponies and buffaloes together with games like pin-the-tail-on-the-donkey[1] and catch-the-potted-plant, which Spike soon put a stop to, while Twilight planned the ascent of Hark Mountain. Rainbow Dash did her part in convincing everypony, pony and buffalo alike, that loyalty was totally awesome (she also might have promised everypony a substantial payout, but only if the agreement could be kept). Twilight, lost in a book about magical algebra, signed the agreement on autopilot. She was also sometimes busy outside the town with a few Breezies for protection, with Spike absolutely forbidden to follow.

[1] Nothing brought two divided species together like a common enemy.

And as for Fluttershy….

“Twilight,” she said. “I need to talk to you.”

It was the seventh day of their recuperation. Little Strongheart had said that she would do no healing on this day, and the Appleloosans refused to listen to any talk of contracts or game theory. Twilight was glad the ambient noise had died down a lot. It made it easier to read.

“I’m busy,” Twilight said, carefully studying a spell sequence. “Can it wait until after we’ve slain the dragon?”

“No. Um, I mean, it’s about that. The dragon, that is. Maybe we shouldn’t slay him.”

Twilight set the book down and frowned at Fluttershy. “You know Princess Celestia told us to. Besides, the dragon killed your cow.”

“He wasn’t my cow. Mr. Cow was free.”

“Uh, yeah.”

“But, um, I’ve been thinking.”

Don’t do that. “You can tell me.” Don’t tell me.

“What if, um, what if, um…it’s silly.”

Yes it is go away. “Of course it’s not silly. Fluttershy, don’t be, um, shy.” Shutupshutupshutup.

“What if the dragon’s not the problem? What if, um, we are?”

Poot. “Fluttershy, that’s just silly. He killed Mr. Cow! And the smoke will wipe out life on Equestria eventually if we don’t stop him.”

“Well, but, um, that’s the thing. I’ve been thinking about what you said about externalities. Um. Well, it just seemed to me that the externality isn’t just the smoke in the sky, exactly. The externality isn’t the smoke. It’s the harm the smoke causes.”

“Yes, exactly! And it is very harmful!”

“But it doesn’t have to be.  I realized this when I saw Bloomberg eating the smoke. The harm isn’t inherently a part of the smoke. The harm is the conjunction of smoke and critters who can’t breathe it.”

Oh, no. “So what?”

“So, um, you could see that by taking the dragon out of the picture, the harm goes away. So you could say the dragon causes the externality. But also—“

“Shut up.”

“—if you took the ponies and buffaloes and other critters out of the picture—“

“Shut up.”

“—the harm would also go away just the same. So critters like us are causing the externality just as much as Niddhog is.”

“So what? Removing the dragon is a lot better than removing all the critters on earth, Fluttershy.”

Fluttershy took a deep breath. “Well, we would think that way, wouldn’t we? That’s our privilege.”

“Fluttershy, what in the nine hells of economics is privilege?”

“Privilege is when ponies can talk and listen to each other, but they can’t understand each other anyway because they’re different. Because there are things that can’t be said but can only be lived.”

“Like the experience of all life on earth being wiped out by a dragon because we didn’t want to offend anypony.”

“Yes, that would be one example,” Fluttershy said seriously. “What do you do when there are no words? When something just can’t be put into a price?”

“Price it anyway.”

“The dragon won’t wipe out all life on earth,” Fluttershy said. “Life will just change. There will be smoke-trees and smoke-birds and smoke-ponies.”

“No, there won’t be. There’s going to be a dead dragon and a lot of happy ponies.”

“No,” Fluttershy said. “I won’t allow it. I won’t not check my privilege.”

Twilight groaned. She needed Fluttershy for this plan to work. “Fluttershy, self-preservation is the most basic instinct. The dragon has it too. This isn’t privilege, it’s survival.”

“No, no! We’re doing something wrong. I know it, I can feel it, I’m the Element of Rationality, and I am telling you something is wrong.”

“What am I missing?”

“I don’t know! That’s exactly it! There is something we understand that we can’t understand, and I don’t know what to do about that! It’s like a tree that doesn’t fall in the forest and doesn’t not make a thing that isn’t a sound!”

Twilight licked her lips. “Well, that’s not very helpful, is it?”

“And another thing. I don’t like the deal between the buffaloes and Appleloosans that Applejack drafted.”

“I don’t even care about that—“

“Everyp—everyone thinks it’s fine because it shares the land and the apple orchard, and many ponies and buffaloes are content with it. But even though it seems like the bargaining position are equal now, it ignores the years of history that led up to this point. The question shouldn't be how much buffaloes are willing to pay for the land but why they have to bargain over it in the first place. Who is listening to messages from the past? That’s called social justice, by the way.”

“Well, we can’t send messages to the past, so I don’t see why it matters. Also, bargaining position is not a thing. Also, seriously, Fluttershy, what do you want? What do you want me to do, rip up Applejack’s contract and leave everypony fighting again?”

“I want to go back in time and fix everything.”

“Good luck with that. What do you want me to do?”

Fluttershy walked over and sat down. “You’re the CEE of the Daughter of Ponyville. Protect the critters.”

“I am.”

“Not the ones who won’t even get to be ignored if we slay the dragon.”

“So you want me to let a dragon wipe out life on earth for the sake of the life that might come to be in millions of years. What about the intervening time? I’m sure there’s some argument to be made about…oh, no, that’s utilitarianism.”

“See the awful things that happen when you try to ignore things you won’t have to ignore?”

Twilight shuddered. “Okay, point taken, but seriously, I just don’t know what to say. I can’t let everypony die. Yet I can’t satisfy your concern for the never-born.”

“Then think about it for a few minutes. I don’t mind waiting.”

Twilight sighed. “If I think about it and can’t come up with anything, will you be satisfied?”

“No, but I’ll stop bothering you.”

“Fine.” Twilight thought for a few minutes. “Okay, I’ve got an answer.”

“I’m listening.”

“So, first of all, I’m pretty sure this whole privilege thing is just a basic economic fallacy. Social justice or whatever you called it is too.”

Fluttershy set one foreleg on top of the other and smiled politely. “Please explain.”

Twilight looked at Fluttershy sideways. She didn’t trust that smile, or rather, it was too trustworthy. Fluttershy was being kind.

“Let me give you an example of a privilege,” Twilight said. “When you’re a little filly, you’re only allowed to check two books out of the library a week for some ridiculous reason. But when you get a little bit older, they raise it to five. That’s a privilege, when a pony treats you differently and gives you something she doesn’t give to others because of some question of your status rather than objective merit.”

“Well, two books is a lot to carry for a small filly, and they can lose or damage them—“

“It’s a stupid rule! A stupid, stupid rule!”

“Um, okay. Sorry.”

“It’s fine.” Twilight took a deep breath. “It’s fine. Okay. Sunk cost fallacy. Moving on. So what about another situation? Say that a small filly is too short to reach the books on the high shelves, but a bigger pony is. Is that privilege to be able to reach the high shelves?”

“That doesn’t…feel right. And yet…it’s almost the same, isn’t it?”

“It sure is from the perspective of the fillies. Why should anypony care why they are constrained so long as it is a fact that they are constrained? Anyway, it seems to me we could do one of two things: we could call both situations and all situations like them examples of privilege, or we could call only the first situation and situations like it an example of privilege.”

“Like the Prisoner’s Dilemma.”

“More like the Grand Galloping Gala, in my experience. Anyway, if we call all those situations privilege, then the problem is that in practice privilege seems to amount to advantage. What’s a single advantage anypony can have over another pony that isn’t exactly like privilege?”

Fluttershy tapped her chin in thought. And kept tapping. Twilight surreptitiously began to read again.

“What if….” Fluttershy began.

“Yes?”

“Hm.” Fluttershy frowned. “No matter what, any advantage comes out to something one pony has or can do that another pony can’t. And that inevitably creates disparities in the experiences the two ponies know and therefore what they can communicate to each other about themselves.”

“And therefore of how much they can understand each other,” Twilight supplied. “So this is all silly, see?”

“Gosh,” Fluttershy said. “Privilege is an even bigger problem than I thought.”

Twilight sighed. “I suppose that’s a reasonable response. Um…okay, listen, if you want to call all that stuff privilege, that’s fine, really. I mean, ‘privilege’ is just a sound, a label, and what you apply it to doesn’t really matter so long as we all understand what it is and is not being used to represent. But then all you’re saying is that ponies have different advantages and disadvantages. Everypony knows that. And this idea of privilege has nothing to do with dragons.”

“But ponies really do treat ponies differently from other critters,” Fluttershy said.

“Yeah, but…it’s not something decided by anypony in particular, is it? Do you know what spontaneous order is?” Fluttershy shook her head. “So when ponies see order, they tend to think it implies a designer. Like you see a very geometric rock, for example, you might think somepony made it that way. These, uh, these weird monkeys called ‘humans’ thought the world itself and life on it were made by some kind of designer. Zebras believe that too, those [bad word].”

Fluttershy gasped. "Twilight! You really shouldn't say [bad word]."

"Why not? They say it all the time in their poems. Besides, it's just a word for a certain kind of critter. I don't mind when somepony calls me a Unicorn."

If steam wasn't rising out of Fluttershy's ears, it was because there wasn't actually any water in them to boil. "Twilight, you can't say that!"

Twilight frowned. "Yes, I can. Now think about the idea of a Life Creator. The world kind of looks like She made it, right?"

Fluttershy looked uncertain. “Then why did She make fillybirth so uncomfortable?”

“Kind of looks that way. Anyway, the point is, a lot of order is actually spontaneous, meaning it wasn’t created by anypony’s hoof. A pencil is made by many ponies, but it isn’t planned out or controlled by any pony in particular. Yet it happens nevertheless. Rocks really do take orderly forms and reach a balance, an equilibrium, without pony intervention. The planets orbit each other with a predictable regularity as if they can talk to each other. And pony society itself is a spontaneous order. No pony decided that ponies would be treated one way and critters another way—“

“Ponies are critters.“

“—so it isn’t a privilege, just another advantage.”

“But ponies are treating critters differently based on what kind of critter they are, so it is.”

“Then being tall enough to reach the high shelves is a privilege because ponies know some fillies are too small to reach up there, and they still build the shelves that high anyway. Which boils down to advantages and disadvantages again.”

“You said it doesn’t matter what it’s called. It’s a problem, and you know it.”

“Privilege is a real problem, and economists have a long history of fighting it. Who do you think told everypony that, no, the East Marwari Company doesn’t need the privileged right to control half the world’s resources in order to keep the entire economy from collapsing? Economists are the natural enemies of monopolies and the privileges that sustain them.”

“I hate that game.”

“Everypony does.”

“And yet you seem pretty happy with the contract Applejack made.”

“I seem totally indifferent to the contract she made, which is also how I happen to feel about it. I’m here to kill a dragon, not babysit a bunch of whiners. ‘Oh, no, my traditions!’ ‘Oh, no, my town!’”

“Why are you in charge of anything?”

“Because I have skills that matter. Which brings me to the next point, social justice or whatever you called it. Let’s work with two examples again. Suppose you’re walking along when a pony pours a bucket of water on you.”

“You mean Rainbow Dash?”

“It doesn’t matter who. Just say that some pony does it, and now you’re soaking wet. That’s an injustice, isn’t it?”

“It sure is! Darn it, Rainbow Dash! Um, don’t tell her I said that.”

“I won’t. Now suppose one day you’re walking along and it starts to rain.”

“Darn it, Rainbow Dash!”

“Um…no, I mean a natural rain. To you it’s the same, right? Either way you’re wet. But is rain unjust?”

“That doesn’t…feel right. I see. It’s the same, isn’t it? In one case someone chooses to make me wet, and in the other case I just get wet.”

“Yup. Just like privilege is either inapplicable to most of the stuff it is applied to or else it simply means ‘any kind of difference between two ponies that yields an advantage for one,’ social justice is either largely inapplicable or simply means ‘bad things that happen to somepony but maybe not to everypony.’”

“Gosh.”

“Economics has all kinds of applications you’d never expect. You just have to look.”

“I see.

“So are we done?”

“Just starting. You said before that self-interest is when ponies only pay attention to themselves. They only know themselves.”

“Yup.”

“Well, that’s privilege.”

“It’s the total opposite of privilege. You think that because ponies can never understand each other that they’re, I don’t know, stuck. Truth is, ponies don’t need to understand each other or have anything in common. They can still meet at the point of commonality that is just where their diversities happen to interact and trade. An isomorphism that can only be performed when you fold the two maps on top of each other. A system of mirrors that can only show you the image because the mirrors are there. Ever try giving yourself a haircut?”

“No. Is, um, is that why your mane—I could show you how to comb it—“

“And, what’s so incredible about this world where no pony has anything in common with anypony else is that it works. It works brilliantly. It’s just the best thing, perfect, immaculate, a garden of Econ. As long as there are no externalities.”

“Snakes in the garden telling lies.”

Twilight winced, thinking of what she had set up outside Appleloosa. “Something worse than lies. Maybe Nopony ever told Eve not to eat that apple.”

“I thought a snake lied to Adam.”

Twilight grimaced. “That doesn’t…feel right.”

“I agree.” Fluttershy covered her mouth with her hooves. “Snakes are suck honest creatures. Even rattlesnakes warn you before you’re about to step on them.”

“Yeah, well, Somepony should have stuck a Do Not Eat sign up in front of that tree.”

“No, She should have checked her privilege and not punished anyone for eating from a tree! It’s not like they had their own trees from before and outside time to eat from.”

“Mu.”

“What?”

“Something Pinkie Pie was telling me about. It’s like nothing at all, but philosophically. What do ponies have in common? Mu.”

“Mu-privilege.”

“Moo-oo,” Twilight laughed, and then gasped. “Fluttershy, no, I didn’t mean—“

Fluttershy got up and walked out.

Twilight followed her, mentally berating herself. “Fluttershy, I’m sorry, I wasn’t thinking.”

Fluttershy was stopped, looking at the smog where the sky should have been. “You have all of Rainbow Dash’s insensitivity but ten times her wit. It makes you intolerable sometimes. Should I have demanded five bits before you spoke?”

“I…I could pay you, but I don’t think that’s what you want. Um, I want to say sorry—“

“What you want. What you think.”

“…Yes, well, I don’t have anything else, do I?”

“Shut up! This isn’t about you!”

Twilight tried to remember if she had ever heard Fluttershy tell anypony to shut up before.

“I can’t save them,” Fluttershy said in a small voice. “I can’t even choose not to.”

Oh…ohhhhh.

“Fluttershy, come inside,” Twilight said. “We need to talk.”

“I’m going to kick one of your books. Hard.”

Twilight had seen Fluttershy’s idea of force before and wasn’t too worried. “Okay. I’m sorry. Please come inside.”

Fluttershy followed her in. She took Twilight’s book on algebra and threw it on the floor in front of her. Then, visibly struggling, she managed to push it a bit with her hoof.

“I mean it,” she said.

“I felt it,” Twilight said. “Really.” The thing was, she had.

“Say what you have to say.”

“Fluttershy…suppose that the buffaloes all started complaining about Sheriff Silverstar and all the things he’s done they disagree with. It wouldn’t hurt him much. He doesn’t interact often with buffaloes and doesn’t need their friendship. It could even make him better off because he does spend a lot of time interacting with the Appleloosans. He could say, ‘Look how the buffaloes hate me. I must be doing something right.’”

“Then he’s a fool.”

“The Appleloosans are, for buying it.”

“I didn’t think you could disapprove of anything that involved buying.”

Twilight shrugged that one off. Fluttershy wasn’t good at being nasty. “The point is, any buffalo in particular doesn’t gain much by trying to influence and control other ponies. It’s much easier for buffaloes to affect each other. They spend a lot of time around and depend on each other. If a random buffalo said to another buffalo, “We won’t be friends if you don’t stop doing this and start doing that,” it would have a lot more effect than if a random buffalo said the same to a random pony. So buffaloes aren’t going to fight with ponies over how ponies ought to think and act. They’re going to fight with other buffaloes.”

Fluttershy scowled. “And the same is true of ponies, I’m sure.”

“Yeah, obviously, what do you think this conversation is? Are you having fun? I’m not!”

“I’m not going to stop hurting you because we’re friends!”

“I wasn’t asking you too! I would never!”

“So…fine!”

“Now are you going to help me fight this dragon or not?”

“Oh, I was always going to do that.”

“The point is, Fluttershy, the ponies you’re going to hurt the most are the ones closest to you. And the pony closest to you is yourself.”

Fluttershy frowned. “I suppose there’s also a sense in which I’m infinitely far from myself. After all, there’s no distance I can travel to reach myself.”

“Very philosophical and doubtless representative of your current struggle. But more pragmatically speaking…do you know what the sunk cost fallacy is?” Fluttershy shook her head. “Basically it means there’s no use crying over spilt mi—no! It means that, um, losses that occur in the past shouldn’t affect you going forward. I mean, there’s no difference between losing five bits and just not having those five bits to begin with.”

“I could go back and find my bits.”

“Which is the same as just finding some bits somewhere. Ponies will say things like, oh, I already bought these movie tickets, I have to use them. But you don’t. If there’s something you want to do more than go see the movie, then you’re not losing the money you already spent on the tickets. You already spent that money! So it’s a choice between seeing a free movie, essentially, and doing whatever else. The past is not a problem that can be solved. All you can do is confront the given hypothetical.”

“The…the given hypothetical? But this is all real.”

“Of course this is all real, Fluttershy, but why on earth should that mean this isn’t happening inside your head?”

Fluttershy didn’t answer. Minutes passed.

“Do you—“

“I thought of my response, and then I thought of what you would say, and then I thought of my response to that,” Fluttershy said. “So I’ve just been having this conversation in my head.”

Twilight gave a sigh of relief. “That’s why I need you to come up Hark Mountain with me.”

“When we get up there, let’s do the most effective thing.”

“We will, at that place at that point in time.”

“Here and now.”

“Not yet. A little longer.”

Fluttershy didn’t answer. After a while, Twilight went back to reading her book. Markov chains, which had only been a tool before, were taking on meaning….

Twilight lay in the straw bed in one of the rooms the Appleloosan ponies had provided them. Pinkie Pie snored in the bed next to her. With the blanket drawn around her head, Twilight reread by horn-light Gamma’s letter, thinking about externalities.

It was unfortunate, she realized, that externalities were usually taught after markets, as if externalities were the exception to the rule. Twilight knew the reality was very much the opposite. If markets were streams of information, a catallaxy of stars in the night sky, then externalities were the vast emptiness in between and all around. It was necessary to teach markets first because it was only by starlight that the blackness could be seen.[2]

[2] She could hear Pinkie Pie’s voice giggling in her head. “Otherwise it would be too dark to see nothing!”

And then there was her brother—

A hoofstep. Twilight killed her horn-light and peeked out from under the covers, blinking away the purple blotches.

There was a figure standing in the room.

The tip of Twilight’s horn had only just begun to glow when the straw wrapped all around her, pinning her to the bed. It covered her mouth and wrapped around her horn, and a low voice warned, “No magic.”

Twilight obeyed. If Little Strongheart wanted to kill her, a rock through the skull would have done it. Still her breath came quick, and her eyes were wide, because she couldn’t imagine that Little Strongheart’s intentions were exactly friendly, either.

Little Strongheart approached her slowly. Twilight’s blurry vision gradually adjusted to the darkness. She saw Little Strongheart standing over her, the red crystal deep gray in the nighttime. Twilight exhaled, and Little Strongheart’s head darted forward, as if in desperation, like a tiny four-legged mammal might spring away from the hunting king snake. Her teeth closed around the skin on Twilight’s chest and bit. Twilight struggled to keep quiet, then struggled to keep still as Little Strongheart tore at the wound. Somehow tightening her neck helped keep the pain happening to some other Twilight, because sometimes there were things you didn’t want to hear other ponies say, and it was only after Twilight came back to herself that she realized Little Strongheart had laid herself across Twilight, the red crystal smeared in blood.

“Help me,” Little Strongheart gasped. “I can’t take it off—it won’t listen to me—I can’t not listen to it—“

Twilight couldn’t answer, and she wasn’t sure she wanted to. Nightmare Moon had not been so frightening. The terror, yes, the dread, but everything had been understood, foreseen. But Twilight did not understand Little Strongheart; she did not know what this meant.

“Please help me,” she said. “If you don’t, I’ll kill him.”

Twilight’s mind flashed through possibilities—landed on Spike—her horn glowed; the straw tightened, the blanket flew over her face, and only in the pure clarity of panic did Twilight remember what she had known from the moment she had met Little Strongheart.

Twilight awoke to an oat cake from Pinkie Pie and no sign of any wound on her chest. She wasn’t even sure if Little Strongheart had choked her to sleep or just snipped her consciousness from her body. Then—scrabbling—she found the note from Gamma, and exhaled.

Twilight wasn’t surprised to find Spike outside packing supplies for them to bring up the mountain. He smiled proudly at her.

“Good morning, Twilight!” Twilight winced at his enthusiasm. Braeburn was a bad influence.

“Morning,” she said. “Sure you don’t want to come with us?”

“I don’t think I’d be very helpful. Do you?”

“You’ll be very helpful here. Be on the lookout for Braeburn.”

“Because he said he was going to play a prank on Chief Thunderhooves? That was how cider talks in the company of mares; he’s not that dumb. Do you think Little Strongheart is going to attack him?”

“No, I just think he’s incredibly annoying, and I don’t want you around him. Keep the Cerberus company. The girls and I will be heading off soon.”

Applejack, Rainbow Dash, Pinkie Pie, and Rarity said goodbye to their pets, Bloomberg carefully kept close by the Cerberus. Then, with a dozen Breezies to ward the smoke, Twilight and her friends began the ascent of Hark Mountain.

Input-Output

"You have no idea what I had to become to overcome you."

Surrounded by a thick cloud of smoke that only the Breezies could fight for long, the trip up Hark Mountain wasn’t exactly scenic.

“How’re we even going to find the dragon?” Rainbow Dash complained. “He could be right in front of us, and we wouldn’t even know it!”

“Oh, why did you have to say that?” Rarity said.

“Niddhog could have attacked us any time when we were recovering,” Twilight pointed out. “I don’t think an eye poke took him a week to heal or that it scared him off. I bet he’s at the top of the mountain sleeping on a pile of gold and jewels, waiting for us to challenge him.”

“Why would he do that?” Applejack said.

“I tricked him. I took some inspiration from Rarity, of course.”

“But the dragon is, is malin come un singe,” Rarity said.

“Smart can be a weakness,” Twilight said. “Dragons can learn, and they can learn the wrong lesson. I think I know what he’s thinking.”

“And you can still slay him, even then?” Rarity said, aghast.

“Mmhmm. Took some inspiration from Fluttershy, of course.”

“What would you have done if it hadn’t worked?” Fluttershy asked.

“I would have used my backup plan.”

“Your backup plan?” Pinkie Pie said.

“Yup. It’s even more dangerous than your sapling, so I’m glad I didn’t have to.”

“What could be more dangerous than that?” Fluttershy gasped.

“It’s really best if I didn’t say.”

“I have a question,” Applejack said. “How’re we gonna slay this dragon, anyway?”

“A primitive method.”

“Primitive?”

“The cool thing about markets is that you don’t have to understand anypony,” Twilight said. “You just give them what they ask for. But, you know, it’s actually pretty helpful to understand other ponies.”

“It would be nice,” Fluttershy said.

“Imagine if you didn’t have to ask what other ponies want,” Twilight said. “Imagine if you just knew. Because you knew them well enough.”

“Then you wouldn’t need to hear anypony,” Rarity said.

“Exactly. We talk to each other because we don’t already know everything about each other. But if we did, we wouldn’t need to. Remember the Prisoner’s Dilemma? How you both betrayed each other because it was both your dominant strategies? Well, suppose you could talk to each other, what would you say?”

“I’d promise not to betray her,” Applejack said.

“I’d threaten her,” Pinkie Pie said.

“Even if you could talk, there’s still some uncertainty,” Twilight said. “She could lie or change her mind. Suppose instead that you knew her. You knew what she would do. And suppose that she knew you and what you would do, and you knew this, and she knew this, and you knew that she knew this, and she knew that you knew that she knew this, and so on.”

“That would be like you having a little her in your mind speaking to you, and she would have a little you speaking in her mind,” Fluttershy said.

“The difference between the her in your head and the her out in real life is that the former never lies, never changes her mind. After all, she lives in your brain. She could hardly fool it!”

“So you can have a totally honest, trustworthy conversation with her, and she can have the same with you, and you both know it,” Rainbow Dash said. “That’s kind of bizarre.”

“How would a completely honest conversation go?” Twilight said. “Where you both know that you both know each other utterly?”

“Well, I’d tell her my dominant strategy is to betray her,” Rainbow Dash said.

“She’d tell you the same,” Pinkie Pie pointed out.

“Well, then I just won’t tell her!”

Twilight shook her head. “You can’t do that. She hears everything, whether you want to tell her or not. That’s how well she knows you.”

“Who is she?”

“Could be anyone,” Fluttershy. “And one day, everyone.”

“If she hears everything,” Rarity said, “then I have no choice but to tell her of my intention to betray her. But since she knows that, I know that she is going to betray me. How dare she? I’ll destroy—“

“It’s interesting, isn’t it?” Twilight said quickly. “Since you can’t help but broadcast your intention to betray her, she will certainly betray you, and you end up both betraying each other. It’s utterly self-defeating.”

“It’s better than getting a rump thump!” Rainbow Dash said. “Nothing’s worse than a butt putt!”

“…Okay. So betraying her doesn’t seem to work. What else could you do?”

“You could, um, not betray her,” Fluttershy said.

“Fat chance!” Rarity said. “That mare never misses a chance to betray others!”

Pinkie Pie frowned. “But she has to tell you that, remember? You know. So then you’ll just betray her.”

“That’s right,” Applejack said. “She can’t possibly benefit from betraying us when we don’t betray her because we’ll know about it and just betray her back.”

“So if you choose not to betray her, what’s her best move?” Twilight prompted.

“It’s to…not betray us,” Applejack said. “Well, I’m more surprised than a rattlesnake meeting a coral snake with a pair of maracas! It’s completely different from the Prisoner’s Dilemma from before!”

“If we don’t betray her, her best move is to not betray us,” Pinkie Pie said excitedly. “And if she doesn’t betray us, our best move is to—“

“Betray her,” Rarity said. Everypony looked at her. “What? I’m not letting that two-timing tart get away with ratting me out!”

Fluttershy winced. “You really shouldn’t say that about rats.”

“So as you can see,” Twilight said, “in the first Prisoner’s Dilemma where you didn’t understand each other, you were choosing whether  you would betray your confederate or hold your silence depending on what they did, and in both cases betraying them made you better off. But in this new kind of Prisoner’s Dilemma, your confederate’s best strategy is to choose whatever you choose. So your choice is: do I want us both to betray each other, or do I want us both to remain silent?”

“This is great!” Rainbow Dash said. “I was so worried I was going to be the victim of a seat beat!”

“Are you done with those?”

“Uh, well, I have one that kind of rhymes with thrash—“

“It’s a nice idea,” Applejack said. “I’m not sure how practical it is. Ponies don’t know each other that well.”

“Economists have been using exactly this idea for centuries. It’s how we fought King Sombra. Or rather, you could say it’s what motivated us to fight him at all. You could even say that this idea is the foundational idea of economics.”

“What idea? It’s a strategy.”

Twilight shook her head. “In order for this strategy to work, both ponies have to know that both ponies know that both ponies know and so on that they both can accurately model each other’s choices.”

“I could do that for my friends,” Pinkie Pie said. “No pony else.”

“You need something everypony—everyone—has in common,” Twilight said. “Say we found out there was intelligent life on Pluto, too far away to reach. What would we know about them?”

“That they like cupcakes?”

“Aside from that. The one thing that unifies all choice-making creatures is the logic of choice itself. We all optimize, and optimization has rules, is a set of rules. We all ask one question: how can I get as much value as possible?”

“Who do we ask?” Rainbow Dash said. Twilight shrugged.

“This idea is the idea of the total unity of all choice-making creatures,” Twilight said. “Like a perfectly managed garden, but this garden manages itself. If you want to ask Somepony about it, don’t look at me.”

“You’ve been explaining it this whole time.”

“Well….”

The blind journey up the mountain continued for several hours until the mountain seem to plateau. Twilight instructed the Breezies to clear the smoke away, which they didn’t. Then Fluttershy asked the Breezies to clear the smoke away, which they did while Twilight grumbled.

They were standing on a platform of rock surrounded on all sides by a vortex of smoke. Twilight wondered idly if somepony shouldn’t be trying to tempt them. It was impossible to see how high up they were, but judging by the length of the journey and how steep so much of it had been, it wasn’t exactly a hop, skip, and a jump down the cliffside to Appleloosa.

Across from them was the entrance to a cave. The Breezies cleared that of smoke as well, and they stood guard at the entrance to the cave while Twilight and the others ventured in. With the smoke outside, it was pitch-black in the cave.

Twilight lit a light from her horn. "We've been here before. Come on, girls."

They journeyed into the cave. Twice long jets of smoke came their way; each time Twilight split them with a two-sphere. The smoke gathered behind them while they went deeper into the cave.

Finally Niddhog was there, curled up on a bed of gold and jewels that was dazzling even to Twilight, who had grown up in Canterlot. Beside her she could hear Rarity drooling and a quiet “Meh” from Rainbow Dash.

Niddhog himself was an incredible beast, with scales that Twilight would have called rust-red if she hadn’t been told they changed and shined a dazzling array of colors in the light. Two proud horns protruded from his head, and ridges ran down his back, leading to a spiked tail that curved around to his face, a loop most awesome and ferocious. And all over him shadows danced as Twilight's light trembled.

Niddhog exhaled, but it was smokeless, mere impatience. Well, there was no point in wasting time. Twilight spoke.

“Hello, Niddhog. I am Twilight Sparkle, Chief Executive Economist of the Daughter of Ponyville, and these are my friends. We are here to slay you, unless you would accept payment to leave Equestria free of your smoke, and also we demand recompense for a cow, an apple orchard, and a library. I prepared the relevant accounts.” She levitated a short but dense book to Niddhog, who snorted a thin stream of flame that incinerated it. “Okay, then plan B. By order of Princess Celestia, your death is decreed.”

Niddhog opened his mouth, but rather than flame, he spoke. Shouted, rather, if the word were powerful enough, he screamed, raged; if sound were fire the earth itself might have melted; Niddhog’s roar was one meant to intimidate dinosaurs. Twilight only knew that the right side of her ribcage suddenly felt brittle, and as for the words themselves, they could only be understood after bouncing off the ground and walls a few times.

LEAVE ME BE, YOU LITTLE PONIES!

Twilight waited until she was sure she had stopped shaking. “No.” In the aftermath of Niddhog’s rage, it sounded so quiet, so meaningless, like a single star amidst the infinite darkness. “Not even for Equestria’s sake, although you must be stopped for Equestria’s sake. Not for the vengeance of my friends, although they deserve their revenge. For my sake, because you destroyed my library, is why I came here to defeat you. It couldn’t possibly be any other way. Know this, Niddhog, King of Dragons, Beast of Flame and Devourer of Books, you are never going to bring me down—“

Niddhog’s clawed hand shot forward faster than Twilight could blink, seized her by the horn, and squeezed.

All light vanished.

It was Piney Bravehoof who was the first to notice the blood trickling out from under Chief Thunderhooves’ tent, and it was Piney Bravehoof who stood closest to Little Strongheart as she opened the tent flap and examined the corpse. He noticed how sharp her eyes were, how bloody her mouth seemed. Then she looked at him, and he saw her intent to kill him, and he saw within himself that despite his name he lacked the courage to do anything about it.

“The pony Braeburn threatened no less last night.” Little Strongheart did not need to shout. Everypony in the camp heard her. “Ponies cannot be trusted. They keep no contract, they have no honor, and they respect nothing sacred. We attack.”

“At dawn?” a buffalo said.

“No. Now.” Her eyes found his. “Piney Bravehoof, who has suffered to be the one who found Chief Thunderhooves, will have the honor of leading us into battle. You will be the first to have revenge.”

Piney Bravehoof found that his voice didn’t work. He swallowed twice and nodded jerkily. “Yes, Chief Strongheart.”

Just between the surface of Niddhog’s claws and Twilight’s horn was a lavender glow. Slowly, surely, she forced his claws apart. Brilliant light filled the cave, pulsing like it was brimming with anticipation for something more precious than mere sight.

“—and you’re never going to break this part of me,” Twilight said. Niddhog snorted and withdrew his claws, rubbing them together. “My friends are here to make a sound. Not slaying just ‘cause externalities! We’re here to let you know that you have got to go. My math is magic, and it’s about to blow! MATRIX MODE: ACTIVATE!”

Twilight’s horn glowed lavender. It doubled on itself and then doubled again, Twilight’s eyes shut in fierce concentration. Then she opened them, and they were glowing white, and the magic released and passed over them in a wave that left them transformed in its wake.

Rainbow patterns, a dubstep beat, and the smell of apples met something floral; lightning crackled and little pink butterflies danced; a cake came out of nowhere and hit Niddhog in the snout. For a brief, embarrassing moment, the ponies were clothed in white tops and frighteningly short skirts that thankfully vanished soon after.

Golden chains appeared from each pony to each pony and latched tight, to what exactly was hard to say. Twilight flexed her magic, and felt the chains respond. She felt the power her friends were feeding her and what she gave them in return, not mere magic, but the truth of what it was, something that transcended pale words and linear numbers, the experience that Fluttershy thought could not be spoken could instead be transmitted through these chains.

They rose into the air, surrounded at all times by shivering light that was red, orange, blue, and others by turns.

“As individuals we may be weaker than you, Niddhog,” Twilight said, “but united as one you cannot defeat us! Our inputs are the full sum of our output, and we are the industry of antipollution! TRANSFORMATION: ECHELON SHIFT!”

The Markov chains pulled them about, changing position. Now the golden chains extended from Rainbow Dash and Applejack to Twilight, and from Twilight to Pinkie Pie to Rarity to Fluttershy, their eyes all glowing white. Twilight floated at the fore, brimming with magic.

“In Echelon Mode I have three powers: to shift in order all those who are connected by the Markov chain; to multiply any of their powers by a scalar of my choosing; and to add their multiplied powers to that of any other’s! You may have the power of externalities, o King of Dragons, but it is mere emptiness. We are filled with the limitless entirety of our own friendship, like the number pi, infinite and yet within our grasp! In the name of the sun, I’ll punish you!”

Niddhog roared and shot forward. Twilight’s horn glowed. She sent the scaled-up Applejack to meet the scaly dragon.

“ECHELON BUCK!”

Piney Bravehoof’s legs were turning to corn mash.

Say it.

He was at the fore of the stampede, and the stampede was pointed at Appleloosa.

Say it.

The smoke made everything so dark. The top of Hark Mountain was entirely obscured. Piney Bravehoof found he couldn’t open his mouth.

Everypony knows!

Piney Bravehoof’s knees locked up. But he still continued to run.

He knew that everypony knew that Little Strongheart had killed Chief Thunderhooves. He even thought that everypony knew that everypony knew that Little Strongheart had killed Chief Thunderhooves.

But he didn’t know if everypony knew that.

No pony said anything. They continued to run toward Appleloosa.

The force blasted the dragon through the back of the cave and out. He took to his wings, stretched to his full size and height, blowing the smoke around him away, a mighty beast who had once fought tyrannosaurs and made the brontosaurus mythical.

The six perfectly united ponies pursued.

Niddhog reared back, stretched his neck to the heavens, and when his head came down it was spewing fire hot enough to melt the mountain rock.

“ECHELON CLOPEN SET![1] ECHELON VECTOR BEAM!”

A shimmering translucent shield formed around the ponies. The fire splayed out harmlessly against it. At the same time, a huge purple laser blasted through the shield and clipped Niddhog, sending him spinning.

[1]Mathematics, being the purest form of logic, naturally has room for sets that are simultaneously open and closed. Look, I can’t make this stuff up.

He righted himself, snarling; the ponies were coming; he extended a claw to smash them. The ponies stopped, rotated around the stationary point that was the tip of his claw; they kicked off his arm, denting it, and another laser beam, blocked just in time, ripped the scales off the back of his hand.

Niddhog whipped his tail, scattering the ponies, but the golden chains that bound them were untouched. This time, instead of fire, he spewed smoke.

“ECHELON PARTY CANNON!”

Balloons the size of zeppelins appeared in the air, enclosing the smoke, including the stream Niddhog sent at them. As the balloons floated away, they took the smoke with them. The noxious gas began to clear, and sunlight streamed in.

Twilight gathered the ponies together in formation again, using, though she didn't know it, the ancient fighting style of the Hessian warriors. Niddhog began to fly, and so did they, matching his every turn with a rainbow explosion. He spat fire that was dodged or blocked, and it was only by every trick and reflex he had honed over millions of years that he was able to avoid a killing blow from the laser beams that ripped the scales off his body. As they scattered in the air, glinting different colors in the light, they were wrapped in a blue glow and called to Rarity, who seemed to be gathering them. Twilight sent her power.

“ECHELON QUEUE DU SINGE!”

An enormous blue fabric erupted out of Rarity’s horn; it wrapped around Niddhog’s tail. With a lurch and bugging eyes, he was yanked backwards.

“ECHELON FLANK SPANK!”

Rainbow Dash’s small but incredibly powerful kick exploded in a rather embarrassing spot. Niddhog howled and whipped around, tearing apart the fabric. His mouth opened to unleash fire, and then he saw the kindest face and heard the loudest whisper ever.

“UM VERY SORRY IT’S NOTHING PERSONAL ECHELON CHECK YOUR PRIVILEGE!”

Niddhog’s mouth hung open; no fire did he spew. His gaze was drawn to that impossibly cute pony, her demure voice and the way her hair fell over her face, and then a lavender flash and a purple Unicorn obscured his view of her.

Little Strongheart’s magic blasted a tunnel through the smoke. There were only the usual defenses set up, as if the Appleloosans were playing the part of innocent ponies. But there was no innocence in the interactions between ponies and buffaloes, not even the absence of those interactions. For there was everything that had come before, and everything that would come after, and compared to that the here-and-now was an infinitesimal fraction of nothing. All those who had no ears to hear would be made to look.

Soon after Piney Bravehoof was dead, the victim of a hard-baked and well-thrown apple pie. All the more reason to fight.

Little Strongheart tore down the lamps. She shook the foundations of the buildings. And she found Braeburn amidst the chaos, an apple pie in each forehoof. She made them burst; she made the ground shake underneath his hoofs; she made him run.

Little Strongheart pursued him through the dusty streets, tearing down the lampposts as she went. Behind her a battle was raging; in front of her was a delicious prize.

She might have stopped to notice that it wasn’t getting any darker in Appleloosa no matter how many lamps she tore down. But who, in that moment, could have made her listen?

The ground swelled around Braeburn. It took hold of his hoofs, wrenching them apart, splaying him out on the ground. Little Strongheart walked up to him. She put her teeth on his right ear and closed her jaw until her teeth touched.

She was about to kill him when the heavens opened up. Light streamed down, and a voice spoke.

Twilight Sparkle chose her position in the air. Gravity called to her. She ignored it.

“Niddhog, your defeat was inevitable.” she declared. “Because economics is science. And math is magic! Your end is at hoof. FORBIDDEN TECHNIQUE: INFINITE SCALAR! ECHELON MATRIX BEAM!”

A laser, predominantly purple but flecked with yellow, orange, blue and pink ripped through the air, leaving scattered and torn molecules in its wake. It struck Niddhog in the belly and scythed up through his chest. Like an overcooked pie, he split open.

Nopony below heard the great battle raging above. But when the smoke cleared away, and pony and buffalo alike saw that just overhead a dragon and a matrix of ponies like were doing battle like Satan versus a host of angels at the End of Days, their own grievances seemed suddenly meaningless in the face of the real enemy and true power.

Little Strongheart looked up. Fiery wisps like the sun’s pent-up rays fell down from heaven. So did enormous drops of rainbow blood like a rainbow that got wet and started to run, like a promise that had lasted a very long time and was now beginning to fade.

Some of the rainbow blood landed on the red crystal pinned to Little Strongheart’s chest.

The dragon’s long torso was pulled out and open as if by a deranged taxidermist. His sightless eyes were pointed up. Smoke escaped his open mouth and was taken away by the wind. Then, after a long, silent moment, he began to fall.

A voice louder than any Little Strongheart had ever heard screamed down at her from the heavens.

“LITTLE STRONGHEART! HEAL NIDDHOG!”

Going Up a Level in Friendship

Little Strongheart said it would take a week for Niddhog to heal. That was how long it took to create a world, or to keep one from disappearing.

Twilight said she didn’t care and was leaving.

“You can’t go!” Rainbow Dash said. “We still have to see Niddhog off!”

“And we have to make peace between ponies and buffaloes,” Pinkie Pie said.

“I came here to slay a dragon,” Twilight said. “I did that. Now I’m leaving.”

“I have to stay,” Spike said. “I’m in charge of the peace operations, and I have to see this through.”

“Fine, I’m sure you’ll do a great job.”

“I’m so sorry,” Little Strongheart said. The red crystal on her chest was still bloody. “I would take it off, but I can’t! It’s a puzzle, but I can’t solve—“

Rainbow Dash unlocked the crystal. She took it off Little Strongheart and gave it to Twilight, grinning smugly.

“I’ll return this to Princess Celestia,” Twilight said. “I have a big report to write.”

“How are you going to get home?” Rarity said. “The train is demolished!”

“I have a feeling the new train is already on its way.”

Twilight said no more. She gave Spike a hug, dismissed the Breezies, and took Gamma’s letter with her to the train tracks. It was a pleasant walk in the sunshine breathing the clean air. The world was what it wanted to be again.

The ruined train was, as she expected, gone. It its place was a shiny new train. No pony was in it. Twilight got in the first-class cabin, said “Express to Ponyville!” and the train started.

It continued to run. Wub wub wub went the train over the tracks as Twilight looked out the window. Somewhere, out there, birds were singing, bees were hunting flowers, ponies were living their lives. Twilight did not know the details. But she knew the logic that had to be behind it all.

Beauty...you are beautiful....

Twilight started. "What?" There had a been a voice in her head, just for a moment, that didn't sound like hers.

But you could be even more beautiful....

Twilight looked at the red crystal laid on the seat beside her.

Beauty, I am your mirror. Reflect in me; I will reflect for you.

"No," Twilight said.

She began to draft a letter.

Dear Princess Celestia

What a week! We made friends with the buffaloes, survived a clash with Niddhog, traveled up Hark Mountain, and defeated him in an epic final confrontation involving matrix algebra. Everyone worked very hard. Also, I had many interesting thoughts about economics that I am looking forward to sharing with you at the Grand Galloping Gala.

Enclosed is a magical amulet that I think will be of some sentimental value. Please do not lose it.

I miss you dearly.

Twilight considered that line. Finally she crossed it out.

Your faithful student,

Twilight Sparkle

A number of unusual conversations could be heard during the week the Friendship Crew spent in Appleloosa creating what came to be known as Spike’s Peace.[1]

[1]”What about Austria?” was the indignant complaint of a certain trio of fillies when the news came to Ponyville.

“How’d you do it, Spike?” someone asked as buffaloes and ponies crowded around at the usual time to hear him speak of economics.

“It wasn’t that hard,” Spike said with a nervous giggle. “The problem was that everypo—I mean, everyone was thinking in terms of things when they should have been thinking in terms of value-streams or -facets. Think of Appleloosa and everything in it as a great big diamond—“

“A diamond? Oh, Spikey-wikey, I must have it!”

“It’s, uh, it’s a metaphor, Rarity—“

“But Spikey-wikey, I want it….”

A pony made a deal for a dozen apple trees and plenty of buffalo labor.

"Yeehaw! Thanks, cousin Braeburn."

"Anytime, Applejack. You're always welcome in AH-PAH-MMPH!"

Applejack removed her hoof from his mouth. "Braeburn? I love you. Tone it down."

You might have heard a pony singing a peculiar lullaby at night as she played her tambourine.

Oh, Bloomberg is my favorite plant

And this is his favorite dark chant

Bloomberg doesn’t kill anybody

That would be a sorry story

No, no, no killing anybody

Not even a single body

Killing is like totally bad

It makes Mommy very sad

Because then they can’t buy my cupcakes—

“Pinkie! Some of us are trying to get some sleep! Anyway, that song is terrible.”

There was a pony whose healing touch and demure smile made her very popular with everyone, which made her nervous. She preferred to spend her time doing things that felt safer than meeting new people.

“You really have to brush your teeth more!”

“Sowwy.”

“Oh, it’s okay. I know you’re trying.” Fluttershy poked her head out from underneath one of the Cerberus’s upper lips and called down to Rarity. “Could I have more floss, please?”

“Of course, darling. Coming right up! Echelon Soie!”

“Um…nothing happened.”

Rarity pouted. “I miss having ultimate power. When do you think Twilight will let us go into Echelon Mode again?”

“Probably not unless we have another adventure.”

Rarity worried her hair. “I suppose that wouldn’t be too bad.”

There was a conversation with a buffalo who spent a good deal of the week hiding until she tried to jump off a building and landed on top of Rainbow Dash, who was even faster than she looked.

“Stop it at once!” Fluttershy scolded. “This is not sensible.”

“I killed—“ Little Strongheart broke off, looked away. “I can’t return to the herd, I can’t live here, I have nowhere to go and nothing to live for. Leave me be!”

“No, be our friend,” Rainbow Dash said. “That’s what always happens, so you might as well make it easy on yourself.”

“You are one of the Bearers of the Elements of Harmony,” Rarity said. “Your life is not something that can be discarded as easily as one of Sweetie Belle’s designs.”

“That Element was a lie.”

“Not that Element,” Pinkie Pie said. “Obviously we mean your real Element. The Element of Leadership, duh!”

“I have no right to lead,” Little Strongheart said in a small voice.

“What are you talking about?” Pinkie Pie looked at the other ponies, who looked just as confused. “What’s rights got to do with anything? There’s just the, uh, the—“

“Hypothetical given,” Fluttershy supplied.

“Right, the hypothetical given, and you have to solve it.”

“My crimes cannot be washed away.”

“So go to jail, take your flank-spank,” Applejack said. “I’d sooner wrassle a rattlesnake than argue you don’t deserve it. But don’t think it rids you of your responsibilities! Like to my apple orchard. I have a lot of rebuilding to do. You any good with Earth magic?”

“Speaking of crimes,” Rarity said as they walked away, “did anypo—did anyone else notice that only buffaloes died? Even Little Strongheart didn’t kill any ponies.”

“It’s like ponies had some special advantage granted from high above,” Pinkie Pie said.

“We’re still alive because we’re the best,” Rainbow Dash said. “Well, I am.”

Fluttershy shrugged. “If you want to ask Someone about it, don’t look at me.”

And finally the dragon Niddhog awoke.

“I’m sorry,” he said in the quietest voice he could manage, which was just enough to not burst everyone’s ear drums. “I didn’t mean to be any trouble, but I’ve learned to be suspicious of storytelling creatures. I am pleased to announce that I am no longer planning on killing everysaur.”

"You mean 'everyone,'" Fluttershy said.

"Ah, yes, excuse me. I am no longer planning on killing everyone."

“You and me both, buddy,” said Pinkie Pie, who until that moment hadn’t quite made up her mind.

Niddhog gestured to his ruined scales, many of which were pale or malformed. Little Strongheart had lost her crystal too early to fully restore his body in that way. “This is no more than I deserve.”

“We can do something about that,” Rarity beamed. “Ever heard of the four color theorem? We’ll have your scales sparkling in no time!”

“I thought it was the five color theorem,” Applejack said.

“It’s definitely seven,” Rainbow Dash said.

“It’s four,” Rarity said. “Princess Celestia’s mane has four colors. It is the four color theorem!”

“It doesn’t matter,” Spike said. “Although I’m sure you’re right, Rarity. Niddhog, where are you going to go?”

“Someplace I won’t bother anyone. Outer space.”

“Space?”

“Yes, all dragons can fly in outer space, didn’t you know that? I was thinking Pluto.”

“We’ll send a card!” Pinkie Pie said. “Spike can fly it there.”

“No, I can’t!”

“Well, just imagine that we sent you a card. If you imagine really hard, it’ll be almost like the real thing.”

So Niddhog, gleaming brightly in four colors, although there were patches of him that were five or seven colors, took to the sky. Everyone watched until he disappeared, and Spike continued watching after.

“You okay, Spike?” Applejack said.

Spike considered his stubby tail. “I am wondering whether I ought to grow up.”

“Course you should. Being a full-grown dragon, all big and strong. You’d be dead useful on my farm. Say—“

“No, Applejack, I’m not going to work for you,” Spike smiled. “I am the assistant to and student of Twilight Sparkle, and one day I will be a full-grown economist.”

“Had to try,” Applejack grinned, nudging Spike.

Pan away from there, and go up, up….

Amidst the photons and the thinning air molecules, the gamma radiation and the decaying metal of old satellites, a single creature flies. He beats his wings, and now he is past all that. Below him is one rock, and to his right is a smaller one, and there are many other rocks around. The one he wants is very far away, and it is very cold there. But dragons are beasts of fire, and little chills them.

Niddhog, King of Dragons, feels a source of warmth behind him. He turns, sees the sun blazing; he wonders if it should. He wonders what would become of ponies if they had no light to rely on, if they found themselves in the darkness absolute and could only rely on each other’s voices.

He takes a deep breath.

And turns, beating his wings powerfully, and heads off to Pluto.

Some say the dragon is still flying through space to this day. If you want to ask Someone about it, don’t look at me.

Once she had memorized every detail, Sunset Shimmer incinerated the zebra’s corpse.

Twilight Sparkle exited the train at the Ponyville stop and saw that her treehouse was being rebuilt. She hadn’t asked anyone too. Privately she had hoped she might have gone to live again in Canterlot for a time.

Twilight went to the Daughter instead and read her volumes there. She caught up on the latest economic data from Ponyville and what her Sisters were putting out at their own Daughter banks. There was a knock on the door. Twilight opened it. It was a pony holding a cake.

“Welcome back, Twilight! This is a way of saying thanks for slaying the dragon.”

“Okay,” Twilight said. “I can’t eat a whole cake.” That was a lie.

“Well—“

Twilight took the cake, shut the door, and went back to the numbers. She tried unsuccessfully to keep from getting any icing on her papers.

There was a knock at the door. And another. And another.

Cakes. Dried fruit. Hayseeds, which she didn’t know what to do with. Books, lots of books, mostly about the wrong things.

“We’re so glad you came back safely,” said a pony with a reddish-purple coat. Twilight felt like she ought to know her name.

“How did you know I was coming back? How did you know that we won?”

“Oh, we saw all the smoke clear away. But we got to work before then, of course. We knew our very own Chief Executive Economist would be able to do it.” Her name was, um…something about happiness, an adverb. Happily. Yes.

“Well, Happily,” Twilight said carefully, noting the lack of reaction and taking it for confirmation, “that was rather absurdly overconfident. You all would have done better to write to my Sis—who told you all to start rebuilding my treehouse?”

“Oh, no pony told us to. We just did.”

Twilight stared at her. Happily’s smile never wavered. Twilight facehoofed.

“What an idiot!”

“I—I beg your pardon?”

“Not you, me!” Twilight groaned. “I stole the train!”

“…What?”

“I didn’t pay for it, I mean. I just made everyone get off.”

“You mean everypony.”

“No, I don’t, shut up. I mean, don’t shut up. Don’t let me tell you to shut up. Except for right now because seriously shut up. Um. Thanks for the cake, by the way. You can set it down—oh. Bye.”

Twilight slammed the door shut and got to work making something for all the ponies of Ponyville. Something that said “thank you.” After some thinking, she took a pair of scissors and carefully began cutting letters out of her very important documents….

The next day people were screaming about somepony being kidnapped. Twilight facehooved and resolved to just ask Pinkie Pie next time.

And that was that.

“EEEEEEEK!” Rarity screamed. “But it can’t be—I’m not ready—no no no no NO NO NO!”

“Jumping junebugs,” Applejack said. “It’s really happening.”

“It’s pretty boring, honestly,” Twilight said.

“Are the Wonderbolts really going to be there?” Rainbow Dash said.

“Oh, goodness,” Fluttershy said. “I, um, I hope no one minds if I, um, eep.”

“It’s the biggest party ever!” Pinkie Pie said, bouncing around the room. “I’m so excited are you excited I’ve never been more excited in my life except for that one time we turned into a matrix and slew a dragon with laser beams but I mean really what could top that—“