Economics In Equestria

by Sturm Panzer

Economics in Equestria

Economics In Equestria:

Theory of Hybrid and Caste Economics

By Sturm Panzer

Monetary Coinage:

The coins, (termed “Bits”,) used in Equestria show up a number of times, and are most commonly used by Earth Ponys. Likewise, Earth Ponys seem the be the ones most likely to possess or seek possession of them (EG: Applejack at numerous times) Usage of coins by Unicorn or Pegasus ponys seems rare.

These coins are all of a uniform size, shape and colour, which would indicate that there is only one type of coin in common circulation. This is unusual, but not unheard of (QV: Thaler - http://en.wikipedia.org/wiki/Taler )

The coins make a distinct light-weight metallic sound, which would seem to indicate that they are all made of some light-weight metal. Given the overall thickness of the coins, if they were made of most precious or even base metals, they would be very heavy to carry any significant number of them. This would seem to indicate that they are either an alloy (like modern coins), or they are made of some unusual lighter-than normal metal. Given that it seems unlikely that Equestria possesses the required technology to refine and smelt aluminum (2000’c temperature required to extract aluminum from raw ore) , the coins are most likely an alloy involving tin. Given the pale-yellow colour, which similar to polished brass, it seems likely the coins are made from brass. Brass would be easy to create, as it was manufactured for statues circa 2000 BCE.

The low metal-value of the coins would be deliberate, QV: Mining below.

Coins would likely be emblazoned for easy identification. Likely one side having the visage of Princess Celestia, the contents of the other side is more questionable. Perhaps the earliest coins would have a visage of Princess Luna on the other side, with that changing to an Image of Canterlot after her imprisonment, or any of a number of other significant events to create different series of coins for collectors. The new coins could have reverted back to Princess Luna on the reverse side.

Mining:

There is no evidence of mining on any noticeable scale in Equestria. Underground excavations seem to be done for a purpose specific for that excavation (making a basement/cellar/tunnel to another location/etc).

There is plenty of evidence of metallic tools/smithing/fabrication.

It’s well known that Unicorns can detect gemstones, even at a young age (“Dumb rock!”) Gemstones are often used to ornament clothing, including costumes worn by young ponys. The ease of acquisition of them by Unicorns, as well as the casual use of gems for ornamental use would give them a very low economic value.
It is likely that Unicorns would be able to detect metal ores in much the same manner that they can detect gems, using a very similar spell. Combined with the Unicorn’s telekinetic abilities, it would make location and extraction of metal ores very easy, with minimal damage to the environment.

Smelting could also be easily managed by using magical furnaces to generate the temperatures required. The liquid ore could be telekinetically moved by Unicorns from the smelter pots, directly to the moulds/dies for minting coins. The press/stamp for minting the coins could also be easily handled via telekinesis, as well as the gathering of minted coins. (QV Applebuck Season episode, Twilight moving apples)

Smelting and casting/manufacturing of other metal objects/tools could be handled in a similar fashion by Unicorns.
The ability of Unicorns to readily detect and excavate gemstones and “precious” metals (gold, silver, etc) means that the coinage and economic standards can not be based on the value of a rare earth (EG: Gold Standard). Instead the economic standard must use an artificially maintained rule to prevent economic chaos. An artificially valued currency combined with a large barter system would fit this requirement.

Craftsmanship:

Crafting of items can be managed by Earth Ponys, which seem particularly adept at ingenious inventions (QV: the ‘train’ and Pinky Pie’s inventions, including the flying machine.)

The majority of the manufacturing/building seems to be done by Earth Ponys, despite the ability of Unicorns to be able to do the job faster and easier. This also goes for harvesting crops, which seems to be almost exclusively an Earth Pony occupation.

Literature would appear to be the opposite, as a Unicorn can effortlessly write entire pages of text as fast as they can think it, while Pegasus and Earth Ponys must use a pencil held in the mouth, making any significant amount of writing difficult and arduous.

Fine manipulation is required for crafting works of art, fancy clothing and other high-value items, making them difficult for an Earth Pony or Pegasus to manage, especially when compared to the degree of precision and speed that a Unicorn can manage.

Races as Castes:

Each of the three races of Pony (Unicorn, Pegasus and Earth) live in significantly different lifestyles, roles in Equestrian society, as well as different mindsets.

Earth Ponys:

Earth Ponys appear to be the most numerous race of pony. They seem responsible for most of the construction, manufacturing, and agriculture. They build and settle the new towns (QV: Appaloosa).

In major settlements (Manehattan, Ponyville) Earth Ponys outnumber Unicorns by roughly 10-1 (An average low of 8-1 and an average high of 12-1 was observed in random sampling of crowd shots.)
Earth Ponys make up the vast majority of “public service” workers (Mr&Mrs Cake, Aloe/Lotus, Octavia/other musicians, most waiters/servers, Cheerilee the teacher, Mayor Mare)

Pegasus Ponys:

Pegasus Ponys are primarily tasked with weather control duties. They have a factory in Cloudsdale where they produce weather. Presumably their efforts are to enhance/alter existing weather patterns, to create rain when needed for crops, as well as clearing clouds to prevent too much rain, or to ensure certain days are clear for special events.

Almost all Pegasus Ponys seem to have at least rudimentary training/skill in weather control, with few exceptions (Fluttershy, who spent most of her life on the ground.)

Pegasus Ponys also form the bulk of Princess Celestia’s Royal Guard.

In addition to having the weather factories, Cloudsdale is also the home for most Pegasus Ponys, as it seems rare for them to live or spend much time in the Earth Pony’s communities. (Few Pegasus Ponys are seen in crowd shots of Ponyville, and none are seen in the few Manehattan shots.)

Unicorn Ponys:

Unicorn Ponys are most commonly found in Canterlot where they have the highest density of population, but still being outnumbered there by Earth Ponys by roughly 4-1 (as seen in a random sampling of crowd shots)

Given the innate ability for all unicorns to use magic to various degrees, their supremacy over the other races of Ponys is virtually assured. They certainly form the inherited royal bloodlines (QV: Prince Blueblood)

The small numbers, which are highest in the Capital, along with magical ability, and royal blood, it is not difficult to make the further extrapolation that Unicorns, as a race, are effectively the Noble Caste.

A limited number of Unicorn Ponys are found in the Royal Guard. It seems likely that they would be leaders/officers. The Unicorn Guardponys seen were Princess Celesita’s escort/bodyguards (Cutie Mark Chronicles episode)

Fame:

Fame is the term I’ve chosen to represent a level of social status within Equestrian society.
It’s an unspoken, unmeasured indicator of status. Each pony would be aware of the level of another pony on a fairly instinctive level. Wealth, magical power, birth, occupation can all affect one’s Fame.

Fame would also depend on location. EG: All of the Mane 6 are well-known in Ponyville, but they are relative unknowns in Canterlot.

Accident of birth can result in a much higher level of Fame (EG: Prince Blueblood). Likewise, changes in social status can radically affect Fame (EG: Twilight becoming Princess Celestia’s personal pupil.)

Actions can affect the level of one’s fame for good and bad: Defeating Nightmare Moon. Rainbow dash wining the Flying contest. And so on.

An individual’s occupation can also affect one’s Fame.

A Pegasus Pony would gain Fame for working in the weather factory and for weather control (EG: Rainbow Dash). Even more so as a member of the Royal Guard, whom even Twilight, (the Princess’s pupil,) had to obey.

A Unicorn could gain Fame as a crafter of some type. (EG: Rarity)

Earth Pony’s ability to gain Fame would be much more limited, but those working could gain Fame (Applejack), or by sheer popularity (Pinky Pie).

Fame as Currency:

Fame is more than just status. It’s effectively currency of a sort.

An individual of sufficiently high Fame can expect certain demands for good/services be met by those of lower Fame. Examples of this are often seen in the series where the Mane 6 are get things (often food) with no payment given for them.

Those of lower Fame receive payment for goods and services in the form of a small increase of Fame just from having the patronage of a high Fame pony. (EG: Mr&Mrs Cake would have gained greatly by hosting Princess Celestia for tea.)

Those of higher Fame may simply refuse an offer of service from a lower Fame pony, denying the lower Fame pony the chance to gain Fame from the higher Famed pony’s patronage. This may be more common when high Fame ponys see a low Fame one trying to act above their perceived station (EG: Applejack only got one customer at the Grand Gala, and they paid in bits.)

Fame would literally function as an unspoken unit of barter, with ponys parlaying meagre amounts of it in exchange for goods and services.

Disclaimer:

The concept of ‘fame as currency’ was first detailed (AFAIK) in the book “Destiny’s Forge” by Paul Chafe (Baen Books)

The Kzinti “Strakh” was adapted by me to fit into a more hybrid, caste-based economy.

Comments

[XX55XX]

Cool stuff, but this reads more like a socio-economic survey of Equestria rather than a true economic analysis. Given that we have huge gaps of information in terms of how the Equestrian economy is managed, it's likely that Equestria possesses only a very rudimentary free-market economy at best. There is no doubt, a central bank circulating the bits, but whatever role they play in controlling inflation and the money supply is unclear.

[Reik]

Very interesting. Im especialy interested in the last few paragraphs relative to "Fame". It seems that "Fame" is similar to Capital in the real world. It also appears that Equestria has its own form of class struggle between the bourgeois and the proletariat. I intend to refer to this when writing my own story.

Really good stuff. Wouldn't mind future essays detailing Equestrian technology and culture.

[Sturm Panzer]

4398
The impact of societal forces directly affect the economy in various ways, especially in a caste-based society, which Equestria appears to be.

4400
There isn't much in the way of a 'class struggle', since there's essentially the dictates to live in peace, at least as far as canon goes. Certainly revolutionary plots are easy enough to introduce and have been done before.

[PonyBlue]

I have a theory why the pegasi make up the bulk of the Equestrian guard.
1. They have wings, thus the Equestrian guard have a high level of innate mobility.
2. Weather control. Is an awesome weapon on any battle field. Combined that with unicorn magic, I believe a relatively small guard can keep a large group of ponies under control.

It is also interesting to note that most unicorns in canterlot has celestial symbols as cutie marks. I am guessing most of the nobility are actually related to Princess Celestia and perhaps Princess Luna.

I agree with your point that the Unicorns really do make up most of the nobility class. That would go along way to explain how twilight is supporting herself. Twilight Sparkle is probably Lady Twilight Sparkle.

Twilite Sperkle: The lady of the library.

No I appericate the insight that you offer into the socio economical system of equestria here.
I am particularly interested in this concept of "Fame" how may such a thing be measured or kept count of for those who did not witness certain events
(Ex. someone is out of town while Celestia is being patronized* upon by the Cakes) * probably the wrong word but whatever
how would that pony be able to know of the change in Fame? public gossip? or opinion?
anyway it is a good thought training.

Equestria is a free market governed by a monarchy.

This is why they have so much wealth and can provide for everyone.

They respect individual rights.

[Ariel Schnee]

"Given that it seems unlikely that Equestria possesses the required technology to refine and smelt aluminum"

Who needs tech to do it when you can have some unicorns smelt it for you at whatever temperature you need and refining.

[kknd2]

47573
That would likely require highly skilled specialists if temperature manipulation (though having Pegasus support to create a blast furnace effect would likely help) thus imposing a practical scarcity. Time that most Unicorns would likely see as better spend on administrative duties.

That is of course, my thoughts on the matter.

[Sturm Panzer]

47573
58375

Aluminum is very difficult to smelt. the main method used is extremely high voltage electrolysis. Trying to us magical means to create and sustain the level of current required to do that would be nigh-on impossible, or at least impractical.

In addition, aluminum is mainly found in bauxite, a hard silicate that needs to be broken down to get the raw aluminum.

The difficulty in producing usable aluminum, along with is very low tensile strength makes it a fairly impractical metal for them to try to find a use for it. Never mind the extreme difficulty they would have in even figuring out what aluminum is in the first place, and then puzzling out how to refine it.

Especially when steel would be much more readily available.

[Draco Dei]

My own thoughts off the top of my head (mostly from an engineering perspective):
IF you can build a robust enough wire coil in series with the electrolysis chamber (or bank of leyden jars in parallel with it?), you MIGHT be able to spread out the current delivery from repeated lightning bolts generated by pegasi enough to achieve electrolysis. We know from "Look Before You Sleep" that magical lightning rods exist, although I do seem to recall that half the point of a lightning rod is that it tends to dissipate the charge in its area thus making lightning strikes at that point less likely. Given this second point, it depends on how the magic enhances the lightning rod exactly and how closely the pegasi can regulate the lightning bolt energy levels and frequency to deliver enough current, smoothly enough, to keep the reaction moving forward without slagging the coil/shorting out the leyden jars/making the reaction chamber explode.

As for high-temperatures... I will point out that the ruler they dote on is in charge of sunlight. As such, while there is no hard evidence for this, it is not unreasonable to assume that they have a fairly advanced understanding of optics (they certainly seem to have a good knowledge of astronomy* and perhaps orbital mechanics**), which may have been applied to the creation of solar furnaces. Certainly cloudy days would not be something that would interfere with such an operation (cloud-cover may even be the "off switch"). Actually, for some purposes, the mirror(s) aren't even necessary, since the pegasi that could herd the clouds away from or over them could probably just lightning-bolt the object to be heated from every direction.
*the report that Twilight was writing in "Owl's Well that Ends Well".
**the equations on the blackboard in "Call of the Cutie".

Are you taking into account the existence of the hydro-arcanic dam in "The Mysterious Mare-Do-Well"?

I will also say that the existence of magazines and newspapers strongly suggests that Equestria has printing presses (although they may lack movable type). This would seem to imply to me that there is no technological barrier to Earth Ponies being writers (and certainly the presence of basic schooling implies that most of them CAN write). The pen begin mightier than the sword (especially in a society that seems to have relegated swords and tail-flails/maces to their history) this puts any ideas that might be raise of them being cut out of the loop in matters of political discussion on somewhat shaky ground. This is without even taking into account the supreme quality of Celestia, and perhaps even Luna.

Now for some repeating of stuff I have heard. I can't remember the source, but I expect it would stand or fall on its own merits in any case. I merely mention it so I am not taking credit for someone else's work. If people prefer I can put some effort into finding these sources.
It has been mentioned in other places (Maybe an essay or comment on an essay on a non-media focused site? Elsewise, perhaps TVTropes or one of the Tangency threads at forum.rpg.net?) that the assignment of certain jobs to certain ethnic groups does not have the same social implications it does in the real world, due to it being perfectly sensible since the average difference in effectiveness as, say a bureaucrat between a pegasus or earth pony on one side, and a unicorn on the other is much greater than the average difference in skill at a given task between two ponies of the same phenotype (which may or may not be a species). This is as opposed to real life where there is a very real question if the intrinsic rather than socially derived difference in ability between various ethnic groups, is merely very small, rather than actually non-existant. Gender dimorphism MIGHT be a better real-life example to work from. In any case, this would also have something of a leveling effect on wages.

I also seem to remember someone pointing out somewhere that "earth pony" DOES NOT seem to mean "lower class" necessarily. The evidence given to support this was two out of three of the EARTH ponies I will now name (I can't remember which ones are people that Rarity is at pains to impress/overwhelmed to have as a client: Hoity Toity, Photo Finish, and Sapphire Shores.

[Draco Dei]

Also, what is the Kzinti “Strakh”?

Mmmmh... Good theory also for determine the nature of the Equestrian currency.
I think also that Equestrian economy is influenced by the Cutiemarks. If ponies are born with blank flank, they will try every activity to find what is their special ability, and when they find it and they're awarded with their cutiemark, they would practice that ability.
Applejack, for example, when she gains her cutimark, she's sure that she doesn't have to follow the city life but be an apple farmer.

Quite interesting, I never looked into the exact population statistics and assumed that the caste system of pre-Equestria had been largely abolished by this point but clearly, it remains, at least in some limited form.

Thank you for the thoughts.

[FuturamaFan]

Overanalyzation FTW!

[Charade]

Mind=blown

[Techogre]

As far as aluminium goes, I in my fanfic treated it as a metal that comes in two types, base and noble. (EDIT: This is how I will be treating it in the rewrite)

Base aluminium is the same as the stuff we have, nothing special. It's made when bauxite is smelted with magic at any point in the process, including mining. While valuable, it is not produced in quantity and is considered a curiosity. It's usually made when the making of noble aluminium goes wrong. This represents over 99.999% of aluminium production. In such a magic rich environment as Equestria failure is almost guaranteed.

Noble aluminium is created by any mining and smelting process that does not use any magic. Until refined, magic use in the vicinity of the bauxite ore will polarize the metal, making it just ordinary aluminium. In addition to the physical characteristics of base aluminium it can also act as a storage and focussing medium for magic. The jewellery the Princesses wear, as are the pieces worn by the Elements of Harmony, are made of noble aluminium with a thin gold or silver plating. There is typically 100kg produced each year. About 100 grams is required to be considered useful for the of the typical unicorn, Twilight would need about 500 grams, and the Princesses would need 4 or 5 kilograms. Insanely valuable and usually reserved for more powerful unicorns and government use.

[Thespurgin]

This sounds like an excerpt from a book Twilight would read.

Very well thought out, though the lack of any direct involvement with the cast or any pony for that matter makes this more a supplementary material or a treatise on the economics of a theoretical world than a fanfic.

I'm not complaining, it made perfect sense to me.

Perhaps more detail could be applied in subsequent expansions on the topic... or it could even be used as a basis for a story? Say Luna wanted to learn and put into practice modern economic theory to catch up from her moonride and enlists the mane-6 to help or something? I see potential for a number of derivative works here, and I love a good foundation stone.

[Mazamba]

A fairly interesting read but I've always considered Equestria to be an egletarian society since it is rather obvious that being an Unicorn does not automatically make one a noble (Rarity and her family) nor does being an Earth Pony make one a plebeian (Filthy Rich, Hoity Toity, Etc.).

In fact, Equestria is in many ways an ideal society with an ancient and intelectual ruler and happy citizens that always have a job that they enjoy since it is based on their own strengths and preferences. I'm actually rather jealous of them in that aspect, getting a Cutie Mark when one finds their special talent would make carreer choices a lot easier.

In that aspect, education also comes into question since we only know that elementary schooling is a fact, though it is also possible that their society does not differ between elementary, middle, and high school though it is not known whether Universities exist since even Twilight is still a student. We can't even get a clue as to what grade they may be in since we only know that the Mane6 is between the ages of 16 and 18 with Fluttershy being the oldest. From what I have observed, mandatory education probably stops somewhere after 16 since all of the Mane6 lives indepentently and hold a steady job.

Going back to the economy, jewels are ridiculously common to the point that they are as valuable to them as glass beads are to us in most cases. However, one must point out that certain types of gems are still considered valuable due to their rarity (no pun intended). Examples include Baby Blue Sapphires, Fire Rubies, and exceptionally large gems although this last example is based on the Hearth's Warming Eve episode from Princess Platinum's quote, suggesting that their homeland was not as rich in minerals.

I'll have to agree with Draco Dei that you failed to mention the existence of electricity in Equestria. However, judging that the fact that oil lamps, candles, magic, and fireflies are the preffered methods of ligthing, it is most likely for industrial use (eg. aluminum smelting).

As an afterthough, aluminum was considered a precious metal in the middle ages due to its impractical manufacture. Since gold is so common, it is not beyond acceptance that Equestrian currency is backed by aluminum instead of gold. It is certainly more practical than artificially backed currency that would be worthless outside of Equestria, although it is not even clear whether any other countries exist in that world other than the home of the Changelings.

There are different accents and languages, which suggest that either multiple countries or regions exist or that there was a period of unification at some point or another. Once must remember that languages often merge or are erased whenever a large country encroaches another, but accents and dialects often remain. There could also be an attempt at cultural preservation if Equestria is that type of nation.

[Mazamba]

*Egalitarian. Sorry.