An Economics Fable

Once upon a time, there was a transportation company named Worldwide Transport, headquartered in Chicago. Increasing US trade with China had caused their business to suffer, as businesses relied more and more on ocean-going vessels for their transportation needs. So, Worldwide Transport applied all of the resources it could muster to the construction of a tunnel straight through the earth from Chicago to Beijing.

The construction of a large, safe tunnel was the most expensive endeavor ever undertaken in the history of mankind, but when it was completed, goods and huge amounts of materials could be dropped into the tunnel in Chicago to arrive in Beijing a few hours later, and vice versa. The ability to transport goods rapidly from one landlocked city to another on the other side of the world, at almost no cost, was a business revolution. Trade between the two countries prospered. As the standard of living rose, the Communist government of China slowly faded away in preference to democracy and capitalism. Worldwide Transport became the largest company in the world.

Soon, a Chinese drilling company, based in Shanghai, decided to enter into competition with Worldwide Transport. (In a precipitous global expansion, they had chosen a name that translates into English as “Global Prick.”) They undertook the construction of a tunnel straight through the earth from Shanghai to San Francisco. This set a new record for the most expensive endeavor undertaken in the history of mankind. However, Global Prick had to compete with both Worldwide Transport and entrenched companies shipping goods between Shanghai and San Francisco. Not only did they never recover their massive investment, they and all of their investors went bankrupt, plunging Asia into an economic depression lasting decades.

The government of California purchased the second tunnel for a minuscule fraction of its cost, closed it to transportation, and used it to channel lava between the earth’s core and the San Andreas fault. Over several decades, the pressures causing tectonic movements along the fault eased. The Bay Area experienced renewed prosperity from becoming earthquake free.

Tags: Economics, Humor

Created at: 23 May 2003 9:05 AM