Economics are dead simple: If Joe wants a new roof made by John, John makes the roof and Joe writes him an IOU (worth of a new roof). So next time John want something done he knows Joe is good at, John can use this IOU to trade for Joe's work. When it becomes ridiculous is when Joe can't write this IOU, but only James has the power to write IOU's. Now Joe has to lend an IOU (worth of a roof) from James who writes this IOU with his magic pen. So now Joe uses the IOU to pay John. What happened? Joe is in debt with James (who has done no work) equal to the worth of a roof + interest John has a IOU equal to the worth of a roof. Joe has to work for James to repay the IOU (worth one roof + interest) So John has worked hard to provide Joe with a new roof, Joe is breaking his back doing work for James. And James is best of, doing no work at all but getting Joe to work for him with a strike from his magical IOU pen. One could say 2 slaves and one master were created, with the power of writing IOU's Now James can control the economy of their little community, since only he can write IOU's. If he wants a economic boom, he will write IOU's easily without questioning. But if he wants to create a crisis, he refuses to write a single IOU, without these IOU's Joe and John can't trade, so all activity stops..