Asterix is about a small village of Gauls in what is now France. The Gauls have a magic potion which makes them invincible. As a result the Romans can’t seem to put them down. In one of the original Asterix comics, one of the schemes Rome comes up with to put down the Gauls is to make them into capitalists. Preposterous, a student of the infamous Latin School of Economics convinces Ceasar:
After which Preposterous goes into the woods to find Obelix, where he pretends to be interested in the boulder that Obelix carries on his back, the Menhir.
Preposterous convinces Obelix to start his own company. He employs some portion of the village to hunt boar (which is his favorite activity). Eventually he doesn’t find much time for his friend, Asterix.
Eventually Asterix comes up with a plan to use Preposterous’s plan against him, to increase Menhir production. How long can Rome sustain this demand?
The Romans are stuck with too many Menhirs! They don’t know what to do with them, they seem to have kept the Gauls busy but they now have a supply of Menhirs which they are not sure what to do with. There is this law in economics called ‘Say’s Law’; the caricature version is that supply creates its own demand. (The non-caricature is here.) Prima facie, it seems like there is now a huge supply of Menhirs; but will there now be a demand for them?
Preposterous decides to take the Menhirs to Ceasar, and convince him to create this demand:
Eventually, something goes wrong: Roman merchants want to enter the market! This is problematic, the reason Ceasar wants to create demand for Menhirs in Gaul is that he wants to keep them busy from engaging in war. But more competition would decrease the price of Menhirs, which may make going to war seem more attractive again!
Ceasar bans other merchants from selling Menhirs but then they institute a boycott against Menhirs. Eventually Ceasar lets them compete, but soon the following scene plays out:
I recommend you read this whole issue (takes 15 minutes). Is Say’s law vindicated? It seems like it is but the story is a bit complicated, it isn’t clear what to make of the kind of demand that was taking place here. One could perhaps say that Ceasar was creating artificial demand for the sake of peace. It does not seem to be in principle unsustainable that Ceasar buys Menhirs from the Gauls for a long time but he must maintain both demand and a monopoly. One could also just more directly interpret this story as an instance of the austrian business cycle theory: Rome is the government intervening and leading to a misallocation of resources.
Another lesson we can learn here is about free trade. Obelix, in fact, does not like hunting just for the boar it outputs. Instead, he has a preference for hunting with his friend Asterix, after which they will enjoy the fruits of their own labor. This means that specialization in production of Menhirs, which are his comparative advantage, was in fact, NOT good for him. When people’s happiness depends not only on the kinds of goods they consume but ALSO on the kind of activity they partake in, then the theorems of free trade are defunct.
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