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Twilight Sparkle, Unicorn Economist

by mylittleeconomy

Chapter 32: Marginalism

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Mr. Bear deposited Twilight in a chair, accepted a biscuit from Fluttershy, and shuffled out to do bear things.

“I’m so pleased you visited me.” Fluttershy bustled about lighting a fire and fetching blankets and tea. “Do you have a headache?”

“Can't remember. Why are there two of you?”

“Just sit, sweetie.” Fluttershy draped a heavy blanket over her. She tapped Twilight on the shoulder, watched her slow reaction, pulled her chair closer to the fire. “I’m going to brush your fur, okay?”

“Fluttershy, I'm not a critter!”

“Sorry! It's a habit. Now you just rest your head.”

“Fluttershy….” Twilight stopped. Fluttershy was staring at her. Her big eyes seemed to expand until they filled the whole room. Twilight felt herself growing sleepy, very sleepy, although not too sleepy to remember to donate something to Fluttershy's animal sanctuary....

...Oh. That was right. Fluttershy's animal sanctuary had run out of money. They had no choice but to close up....

Water flooded inside the walls of Fluttershy's cottage.

“Waaaaaaaahhhh!”

Twilight snapped out of her trance. “Fluttershy, what's wrong?”

“I’b—going—to—lose—by—adibals!” This confession induced another round of sobbing.

“There, there.” Fluttershy crying was an odd sight; it looked loud, but all that came out of her mouth was an extended squeak, like a door rocking back and forth on a rusted hinge. “Is it because your pricing strategy is irrational?”

“You are really bad at cheering ponies up,” Fluttershy sniffled.

“It's good news. Imagine if your sanctuary were simply economically nonviable. We can fix this.” Probably.

The sad yellow Pegasus wiped her eyes. “No talking, go to sleep.”

“Flut—”

“I mean it.”

The words were spoken with such conviction that Twilight did stop talking. She got the impression Fluttershy wouldn't let her keep talking even at the expense of her animal sanctuary, not if it meant a friend, or maybe even just a critter, hurt....

...But they'll all hurt if you don't talk to me. Stuck between a snuggle and a soft place, eh, Fluttershy?

“What if I told you I knew one weird trick that could save your sanctuary?”

“R-Really?” Fluttershy blew her nose into a tissue, which made a sad pffl.

“Economists hate me,” Twilight assured her. “But I'll have to talk.”

Fluttershy looked torn.

“Stopping me from talking won't stop me from thinking,” Twilight said. “I’ll stress out more if I can't help you and never get to sleep.”

“Oh, fine,” Fluttershy said. “But not for long!”

"Then I need you to answer a question: where is everything?" Twilight's head hurt too much to actually look around, but she was working on a hunch.

“Oh, you noticed.” Fluttershy sat in an uncomfortable-looking wooden chair nearby. “It’s normal, I'm always out of pet supplies.”

“You probably charge the lowest prices of anypony.”

“I want everypony to be able to take care of the critters in their life even if they can't afford to.”

"That doesn't work. If you want to make money—”

“I don’t care about money.”

“Really? You raise so much of it. Seems like every store in Ponyville has a little cup where you can donate to your animal shelter.”

“I don’t care about it.” Fluttershy’s eyes were burning a hole in the wooden table. “I don’t care about running a successful busin. I just want to take care of the naturally evolved organisms. Money is just a way of doing that. I’d throw it all away. I’d throw everything away, except my friends.”

“Because you care about the—the organisms.”

“It’s not about caring. It’s…somepony’s got to.” Her eyes were as wide as saucers and wet with the condensed tea of sadness. “Somepony’s got to. That’s all.”

“Suppose I told you that you don’t need to care either?”

Fluttershy raised her eyes. “What?”

“You—” it broke her heart— “You don’t need to care, Fluttershy. That’s the beauty of a market. You don’t need to care at all.”

“What are you talking about?”

“You want to make sure that everypony can care for their pets—or, uh, whatever relationship based in mutual dignity and respect.”

“Pets is fine.”

“Uh, good. And you think you can help them with ultra-low prices.”

“So that they can buy what they need.”

“No.”

Fluttershy was silent. The table bore the burden of her despairing gaze. Twilight went on.

“You already know you can’t help everypony. But you can help the next pony.”

Outside the snow of Second Winter blew across the hills. An aching pain throbbed in Twilight’s forehead. No matter what she willed, the reality of a concussions was going to assert itself….

“Don’t think, I have to help everypony,” Twilight said. “Think, I have to help just one more.”

“That’s what I’m trying to do.”

“Keeping your prices low reduces the number of ponies who can buy your goods. That’s because it reduces the number of goods you can supply in the first place. If you charged a reasonable price, maybe you wouldn’t need those donation cups. Okay? But I want to talk about how you can a price that will do that. Imagine a room full of ponies arguing with each other about who should get your pet supplies.”

“Like how you wanted us to about your extra ticket to the Grand Galloping Gala.”

“Right. Everypony is in this room together bidding on your pet supplies. That’s how they talk to each other. It doesn’t matter what they’re bidding on, it good be fish food or food bowls or whatever.”

“I’m out of both anyway.”

“What they will find out bidding for your pet supplies, and what you need to realize, is that there is a maximum number of ponies you can help. As prices get bid up, even as you’ll make more money and be able to maintain ever-greater stocks of supplies, fewer ponies will be willing to pay for them. As prices get bid down, even as more ponies will be willing to pay for them, you’ll be able to maintain fewer supplies. No matter which way you go, the result is the same.”

Twilight struggled to sit herself upright. “Imagine two lines pointing in opposite diagonal directions overlaid on top of each other so they look like an X. As you move to the right or the left, one of these lines goes down, and the other one goes up. You—”

“Hold on.” Fluttershy got up and came back with a pencil and a sheet of paper. She drew an X and looked at Twilight. “Okay.”

“All set? You can see that they intersect at one point.”

“Yes. That’s right.”

“Notice anything interesting about that point?”

“Well, you were talking about one going up and the other going down….” The Bearer of the Element of Rationality trailed off. Twilight dropped her hoofs in front of the fire and wriggled at the warmth.

“I do notice something,” Fluttershy announced. “If one of these lines represent how many pet supplies I will sell at different prices, and the other represents how many pet supplies everypony will buy at different prices, then the point at which they intersect is the highest possible number of ponies who can buy my products. Past that point, as my line goes up, theirs goes down below that point. And before that point, even though their line is higher than that point, mine is lower. No matter what, there’s no point we can both get to that’s higher than that single point of intersection.”

“Great!” Twilight beamed. “Fluttershy, you’re brilliant.”

“Oh, no, that’s really too much.” Fluttershy turned a bright shade of red for a moment, then somberness overtook her. “And I can make more money selling more of my products and even save the sanctuary.”

“This is good news! Everypony wins.”

“Not everypony has a lot of money.”

“Huh?”

“You said everypony is in a room talking, and they talk with money bids. So ponies with less money have quieter voices.”

“Voices as soft as a shy Pegasus’s?” Twilight hazarded.

“It’s not about me. It’s about the ponies no pony can hear. Who can’t compel or persuade others to respond to their needs, so ponies like me have to….”

“Have to what?”

“Have to choose.”

“No, let them choose! Like I did with the ticket, remember?”

“And did it work out like you expected?”

Twilight thought of the missing clown-dressed mare and how four of her friends had spontaneously gone bankrupt simultaneously. “There were some unanticipated complications,” she admitted.

“Things changed in ways you couldn’t have imagined.”

“Yes…?”

“As if your single action brought an entirely different world into being. They say that by saving a life, you save the whole world. But you can’t save them all. You showed that. There’s a maximum. So you have to choose who. So you have to choose which world.”

The fire popped and sizzled as the logs beneath it slowly died. Twilight watched the snow falling outside, pulled by inexorable gravity. Princess Celestia said that long ago the snow had fallen of its own accord, without the help of Pegasi, though she hadn’t worked out how the sky had known when the seasons were supposed to change. There were zebras at work right now figuring that out.

Figuring out how the world could be what it already had been….

“No.”

“Huh?”

“I said no.” Twilight sort of rolled over and looked at Fluttershy, who was frowning at the X she had made on her piece of paper. “You don’t have to pick. They’ll pick.”

“But—”

“They’re better at picking than you are.”

“No! I have to be there for the ones who can’t speak.”

“Look at the X! You can only hear so much. Let them pick whose voices are heard.”

“I think what I’m hearing is your concussion.”

Twilight blinked. “Wow, that might be the nastiest thing I’ve ever heard you say.”

“Sorry.”

“It’s okay, you can always pay me not to care.”

“That’s not how caring works.”

“I think it is. Go back to the ponies all in a room together bidding on things. Suppose any price wins the bid. Do you know who the most special, important pony in that room is?”

“…The winner?”

“The last winner. The one who, if the price had been just a teensy bit higher, would have lost. She helps you find that point of intersection.”

“…Oh!” Fluttershy said. “She’s the pony I lose if I raise the price.”

“That’s right. But she’s also the pony you lose if you lower the price.”

Fluttershy frowned. “But she can afford it at the lower price.”

“Maybe.” Twilight was too tired to move her face much, but she would have smiled like a cat. “It’s uncertain, isn’t it? Your goods are cheaper, sure, but there’s fewer of them. See, you can’t really stop ponies by bidding by setting your own price. They’ll just bid in other ways. If you’re selling three food bowls and there’s five ponies who want to buy them, they’ll ‘bid’ by racing to be first in line!”

“At least it’s a bid the silent could win.”

“Maybe you do mix up the bowl-pony distribution, at a loss of total bowl-pony pairs. But that last winner, why do you think she was on the fence about buying your stuff in the first place? Because she’s made a choice.”

“But—”

“She looked at all the things she needed help with in her life, and judged that she would commit only so much to asking you for help. Do you think she’s going to be the fastest runner?”

“Maybe.”

“Maybe. Bear in mind a pony could always take the surplus they don’t have to spend thanks to your low, low prices and pay somepony fast to race for them. That’s basically what Rainbow Dash does for a living.

“But it’s unlikely. What’s more likely is that she’s the pony you lose going both ways, whether your raise the price or lower it. There’s only one thin, narrow route to rescuing her. She’s called the marginal pony. Find her, and save her. That’s how you do the most you can.” Twilight swallowed. “That’s why you don’t need to care.”

“You didn't drink any of your tea. Do you want me to pour you a hot cup?”

“Fluttershy—”

“You’re right,” Fluttershy sighed. “Although it’s not quite the same as saying that it’s the right thing to do.”

“It’ll save your sanctuary for sure. Probably. Talk to Applejack about it.”

“Tea?”

“No thanks. Rarity gave me some. My kidneys are wiped out.”

“Then rest. I’ll have Mr. Siberian Tiger take you home in a short while.”

Snow fell, and Twilight, who decided Fluttershy was joking, closed her eyes, and listened to the fire crackle, and forgot entirely about the most important thing that had happened since she had vaporized the tickets.


A lone figure whose cloak was indistinguishable against the night sky trod through the snow, dragging a shovel along behind her.

The mare in black traveled south for ten miles or so until the Everfree Forest emerged out of the snowy gloom.

It was unguarded.

In she walked.

She walked past very large rats and over pits of lightning sand. No vines could touch her, no thorns snagged her black cloak.

She walked toward the clearing that held the symbol of promise between the Everfree Forest and Ponyville.

In the utter darkness of the trees, the edge on her shovel gleamed.

Author's Notes:

What keeps us all being friends if we don't have to? Give an answer in the comments, but it is more important that you show your work.

In the next chapter we discuss the cutie mark of the Everfree Forest, and then there will be a short break as I work on the remainder of the second half of this story.

Next Chapter: The Everfree Forest's Cutie Mark: Property Rights Estimated time remaining: 3 Hours, 59 Minutes
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