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by Geoffrey Hart
Previously published as: Hart, G. 2020. Externalities. After Dinner Conversation. Nov. 2020, 1(5):36-49.
“In economics, an externality is the cost or benefit that affects a party who did not choose to incur that cost or benefit.”—James Buchanan and W. Craig Stubblebine (quoted in Wikipedia)
The library rolled heavily into town, bearing its cargo of knowledge mundane, esoteric, and somewhere in between. Its ancient axles creaked as it slowed, executed a graceful turn through the caravanserie, and came to rest, facing the town square and the well that travelers used. The horses, dust coating their sweaty flanks, snorted in anticipation. Willem waited for his apprentice, Thomen, to descend, then leaned heavily on the youth’s shoulder as he eased himself to the ground, wincing at the pain in his hips. Once both feet were firmly on the ground, he stretched mightily, his joints emitting an alarming series of crackling noises.
“Ahhh... that’s better. Fetch me some water. I’m feeling drier than Epicurus, and half as lively.” He kicked at the dust to emphasize his point.
The youth grabbed the tin bucket that hung from the wagon’s bench seat, behind the buckboard, and ran to the well. By the time he’d returned, Willem had unfurled their banner, which lay limp in the motionless air. While Thomen had been away, a discreet crowd had gathered, curious to learn what the wagon had brought them. The sage took a long drink from the bucket, then poured the remainder over his head. “Thanks.” He ruffled the youth’s hair, then gestured at the banner with a cocked thumb. Thomen seized the dangling end, nimbly swarmed up the back of the wagon, and tied the banner’s end to the cord they’d attached there for this purpose. In letters two feet tall, it read: “Library”. Below, in lettering you had to approach to read, it said “Master Sage Willem, Oikonomist. Knowledge revealed, affordable rates.”
Without being asked, Thomen unhitched the horses and re-hitched them to one of the many posts made available for this purpose. Then he made several back-and-forth journeys with the bucket to fill the trough. While the horses drank, he hopped into the wagon like the monkey he’d been repeatedly told he resembled, but had seen only in pictures, and returned bearing blankets to wipe the sweat from their broad backs. He also bore an assortment of brushes and combs to curry the dust of the road from their sleek hides. By the time he’d finished and gone in search of hay, Willem had unstrapped his folding chair and card table from the stowage beneath the wagon and was sitting in the shade, awaiting their first customer.
That customer was not long in coming. As he pushed through the small crowd, he was preceded by a smell that parted the bystanders and made the horses seem perfumed by comparison. Willem mastered himself with the ease of long practice, only a welcoming grin showing on his face. The peasant unceremoniously piled a heap of greasy coppers on the card table, paused a moment, then knuckled his forehead. “My daughter’s gums bleed, her teeth are loose as molting feathers, and she heals slowly.”
Willem pushed the man’s coins back across the table. “Seek the fruit with an orange rind that folk call sunsweet. Or the fruit with a yellow rind and intense sourness, known as sweet-tart, or its green-rinded cousin bitter-rind, the one with the intense bitterness. Feed her one a day until the bleeding stops, then weekly thereafter.”
The peasant spat upon the ground. “I can’t afford such luxuries.”
“Then seek rose hips, and crush them to make a tea. You can dry them, and they’ll keep over the winter. If none grow near you, brew a tea from the leaves of either of two evergreen trees that grow in these woods. In wet areas, you’ll find the first of them, named whitestripe: the leaves are thin and lay flat, emerging individually from the branches. The sprays of leaves are broad—about twice the width of your thumb—and the leaflets are no longer than the first joint of your thumb. They’re glossy green above; below, they’re a paler green, with white stripes that run along the branchlet on the bottom. Those are the stripes that give the tree its name. The second tree grows on sandy, rocky soil, yet reaches to the sky. It’s named duster, for the leaves are soft, needle-like, and long as your fingers. They emerge in dense sprays of five, bound together like the hairs in a dust brush—hence its name.” Thomen had returned, a bale of hay in his arms, and had been watching the interaction quietly.
“Thomen? Fetch Farrar’s book of trees.” He waited patiently for his apprentice to return, bearing a thick book. Willem flipped through the pages, stopping about a quarter of the way through. He turned the book towards the peasant. “They look like this.”
When the peasant had reclaimed his coins, he bowed and backed away, knuckling his forehead as he retreated. Thomen looked imploringly at his teacher, then spoke quietly so the onlookers wouldn’t hear. “Master, might we afford a sunsweet or one of the others? It’s been months.” The youth licked his lips.
Willem patted his apprentice’s curly hair. “If we have enough money left after buying necessaries, perhaps we can splurge on a few treats.”
“We’d have more money if you didn’t give away our services.”
Willem snorted. “One thing you must learn, apprentice, is when to demand an arm or a leg, and when it’s wiser to share our knowledge freely. There are consequences for any price, and they have to do with oikonomika.” He paused a moment, lost in thought. “Yes, perhaps it’s past time you began that study. Fetch the big leather book on the top shelf, the one with Oikonomika in goldleaf on the spine.”
Thomen climbed more grudgingly into the wagon this time. There came rustling sounds as he moved about the narrow aisle between the books. By the time he’d returned, clutching his prize, a small but exceptionally brawny man wearing a leather apron was chatting with his master. “So that, in sum, is the problem: my steel is too brittle. Which is undesirable from the perspective of repeat business, aye, but it’s worse than that: I sell the steel to knights and men at arms and others who have a nasty disposition, and are far too quick to use even that brittle steel to solve their problems—of which I’m now one. That being the case, its brittleness consoles me not, as even bad steel’s strong enough to open me from nave to chops.”
Willem met the smith’s gaze. “How much charbon are you using in the steel?”
“Charbon?”
“The materials like charcoal that you add to strengthen the steel.”
“Ah. About 2 per hundredweight.”
“Far too much. That will certainly make the steel brittle. Cut that amount in half, then in half again. Perhaps more, depending on what else is in the steel.”
“You’re sure?”
“In steel, as in life, moderation is best.”
The smith placed a silver coin on the table, bowed somewhat dubiously, and walked away.
Thomen looked up from his book. “Master? How did you know that obscure fact.”
“It’s not nearly so obscure as you’d think. Smiths aren’t the only ones who make the mistake of assuming that if some is good, more is better. It rarely is. Moderation in everything, including moderation is my motto. You’ve found the book? Good. Keep reading, and don’t interrupt a customer with your questions.”
Their next customers were a pair of minstrels, one fair-skinned as the day was bright, the other dark-skinned as the night sky. Willem and Thomen appraised them, then exchanged glances. The two men doffed their plumed hats to the sage and the apprentice, making a leg so deeply before they straightened that the feathers trailed in the dirt. The pale one wished them a good day, then, proprieties satisfied, placed a silver coin upon the table, joined by its twin from the dark one, who had paused to dust off his plume.
“We seek a decision. We have different memories of the famous quote on fornication from The Tragedy of the Rich Ievv of Malta.”
Willem’s brows knitted a moment, and he looked to the sky. Then he smiled, and quoted from memory: “But that was in another country, and besides, the wench is dead.”
The pale one smiled at his companion, somewhat lasciviously Thomen thought. But the dark one frowned, and spoke in a voice with hints of a Moorish accent. “Are you certain?”
Willem sighed, and turned to Thomen. “Fetch me the tome labeled Great Plays.” He waited patiently until the youth returned, thumbed through the book, then placed the book open to the right page upon the table. Willem rotated the book towards the minstrels. “Here you go: see for yourself.”
The dark minstrel blushed. “Nay, I need not. Your word suffices.”
Willem made the coins disappear. “Then I wish you both a good day.”
“A very good day, and mayhap a better night.” The pale minstrel kissed the dark one on the cheek as they moved off; the latter recoiled and pushed his companion to arm’s length.
The sage snorted. “Some free advice, my apprentice: whenever you’re certain you know the answer, doubt that certainty. Most bets, and all provisions of knowledge, have consequences.” No other customer waited, though a few children hovered in hope of entertainment. Willem assumed a mentorish mien and cleared his throat. His apprentice looked up from where he’d been paging reluctantly through Oikonomika. “Have you learned yet the origin of the book’s title?”
“Aye. It comes from the great Aristotle. Oikonomika is Greek, and denotes the laws that govern the management of one’s household.”
“Good. And how does it relate to the word oikologia?”
Thomen’s mouth gaped a moment. “Both begin with the prefix oiko?”
Willem aimed a mock blow at his apprentice. “Aye, they do, but that’s far too glib a response to let stand. Seek and find me the real reason.” Thomen climbed reluctantly back into the wagon, which squeaked as he moved about and shifted his weight above the springs. By the time the youth emerged, clutching a well-worn tome with Lexiko faintly visible on its spine, their next customer had arrived. He was a tall, thin man, dressed richly and accompanied by two large and thuggish-seeming men, one armed with a longsword belted at his waist, the other leaning on a staff taller than himself and thicker than Thomen’s wrist.
“I bid you a good afternoon, wise sage. I have a question of a financial nature for you.”
Willem raised an eyebrow, and the man placed a silver coin on the table. Willem’s eyebrow remained raised. For a long moment, there was silence. Then the thin man sighed, and replaced the silver with gold. The sage’s eyebrow relaxed. “How may I be of service?”
“A caravan master has asked me for a loan to fund an expedition to the far east. There’s silk, of course, and exotic spices. But he also claims to have visited an arid land, everywhere covered with sand but for where salt lies upon the ground as far as the eye can see—free for any man to take, which strains credulity. He spoke of strange animals with cloven feet and hunched backs that carry the natives across shifting sands that would kill a horse, and of winds strong enough to carve stones—indeed, strong enough to strip a man’s flesh from his bones if he should be forced to stay, unprotected, in the open. His details make a compelling story, but we both know not to trust a skilled storyteller. Nonetheless, if true, there’s much profit to be had. But no profit comes without a price, and with that much wealth waiting to be exploited, someone must surely have taken measures to protect it for their own benefit. So the risk of such a venture would seem high.”
“Indeed. Yet his safe return from a previous voyage to those lands bodes well for his prospects.”
“If he’s telling the truth, and not simply a thief repeating an overheard tavern tale and hoping to make off with my money.”
“This will take some research. Please return tomorrow morning and I shall have your answer.” The merchant bowed and left.
“Master?”
“Yes, apprentice?”
“It sounds a fanciful tale.”
“And yet, like most fancies, it undoubtedly has some truth at its core. I have memories of such a tale. But he will want confirmation.” Willem named a dozen books, and Thomen went to fetch them.
Some time later, as the sun began to set, their last customer of the day arrived. From his garb and the gold that gleamed in his ears and on his fingers, a prosperous merchant, and he’d waited for the bystanders to disperse before approaching. He walked with the assurance of one with too much money and the firm belief that this somehow made him important. The bodyguard who accompanied him, though considerably smaller than the two who’d guarded the banker, had a quiet confidence about him and a lithe swagger that suggested he was far more dangerous. When they reached the library, the merchant looked the sage up and down, and taking in the worn and travel-stained clothing, he snorted and frowned down the length of his long nose. “My daughter loves a guardsman.” He spoke that last word as if it tasted of ashes in his mouth, and spat messily upon the ground, some of the spittle running down his chin. He wiped his chin on his sleeve, then placed a silver coin upon the table.
Willem returned a smile for the frown. “Please give her my congratulations. True love, they say, is hard to find.”
“You mistake me, sirrah. I seek a grandson to whom I can pass my business when I grow too feeble to manage it myself.” He placed a second silver coin upon the table.
“Guardsmen tend to be robust and lusty specimens. I doubt you’ll be disappointed. A guardsman’s son will do as well as a prince’s if he has native wit and you train him in the ways of your business. Consider this unpromising specimen, for instance.” He swatted the wagon, the thump surprising Thomen and making him jump. “If your daughter bears you no son, nor daughter neither, for that matter—well, then: there are many orphans. Perhaps you can adopt one who shows a particularly keen mind.”
“For a sage, you are uncommonly slow-witted.” A third coin joined the first two. “Is it not said that any answer a man could desire can be found in your books?”
Willem frowned, mirroring the merchant, and pushed back the coins, ignoring the gasp from his apprentice. “Like many of the educated, you have heard wisdom you do not understand. There is abundant truth in the library, enough to answer most questions. Though one can invent truth to suit one’s needs of the moment, that does not mean one should do so. For a merchant, you show an uncommon lack of understanding of value. Take my advice for free if you do not value it.” He pushed the coins back across the table. “Love your daughter and accept freely what she can give you.”
The merchant spat again, and turned on his heel, spurning the dirt so that some flew back upon Willem’s worn leather boots. Without further word, he stomped off down the street. His bodyguard paused a moment, rolled his eyes, then followed.
“Master? With those coins we could have bought many sunsweet. Perhaps even some bittersweet.”
Willem sighed. “Thomen, have you not yet learned the great lesson of our profession?”
“Which lesson is that, Master? There have been so many.”
“That if we are to honor our profession, we must give our customers what they need. Not what they want.”
“But Master... do we not give them what they need by giving them what they want?”
Willem sighed. “Have you found the shared meanings of oikonomika and oikologia? No? Ask me the same question once you’ve done so.”
Some time later, Thomen looked up from Lexiko. Willem had already begun the preparations for their dinner.
“Master? Both words relate to management of the house. But one is more about monetary matters, and the other, about the living world that surrounds and includes the house.”
“Precisely. And one can no more manage the house solely by the one discipline than one can manage it solely by the other, since the one exists within the other. And the answer to your question?”
“That needs are needs, that they are objective rather than subjective, and that they are not always the same as wants.”
“Bravo! And what lesson can we take from this knowledge?”
Thomen remained silent. When the silence had stretched long enough, Willem sighed and answered his own question. “That knowledge and fact are invariant, but that truth is often contextual—and every truth has consequences in a given context. Our real business is the sale of necessary truths, not knowledge alone. Any fool who can read can find knowledge, given enough time randomly paging through our library. It takes a special kind of fool to see how to use that knowledge without suffering its consequences.”
Willem laughed, and ruffled his apprentice’s hair. “There’s hope for you yet!”
As the night was clear and starry, and still warm from the summer’s day, they ate outside and watched the sky, Willem drilling his apprentice on the names of the constellations. When both were yawning and groping for names, they curled up and slept outside the wagon on piled blankets.
In the morning, the banker returned. Willem had retained nearly a dozen of the books he’d consulted, which lay open upon his table. He had half-known the answer to the man’s question before he began, but had learned that customers showed a willingness to pay that was proportional to the apparent effort devoted to finding a solution—more willing, certainly, than to pay for the correct answer gained too easily. Jewelers, silversmiths, and the prosperous—including the banker—paid well for accurate and relevant knowledge, but left satisfied with their price in large part because of the time spent in search of the solution.
“I have your answer: you should invest your money in the man’s expedition, but ensure that he goes well guarded into those distant lands. There are many who would take their toll, or even the whole profit. Also warn him to travel towards the end of the summer, when salt is most abundant, and to see that he always carries more water than he thinks he’ll need. Enough for weeks, not days. And one last bit of advice I offer freely: send one of your men with him, his allegiance concealed, to watch over your interests.”
The banker licked his lips. “And your proof?”
“Here.” The sage opened the first book. “This map shows the arid lands of which he spoke.” He opened a second book. “This traveler’s tale speaks of the abundant salt deposits to be found in these lands.” Then a third. “And here is a drawing of the ‘kamuhls’ the natives use to cross the sands.” More books were opened, more details provided. By the end, the banker’s head was nodding at each new fact, and he was so pleased, he threw several silver coins to join the gold on the table as he left.
As the sun continued its relentless rise, the merchant returned, accompanied by a young woman and a member of the town watch—a willowy, dark-skinned woman with a broad nose and tightly curled hair. The young woman’s long nose made it clear she was the merchant’s daughter. The sage looked warily at the guard, who maintained an impassive expression and carefully failed to meet his gaze. The merchant touched a forefinger to the tip of his nose, winked at the sage, and deposited a gold coin upon the table. “Please tell my daughter, sir, what you told me yesterday.”
The daughter turned defiant eyes upon the sage, who calmly made the coin disappear. “I told your father that true love is rare and to be cherished. If you love someone, may your love be a blessing to you and your family both.”
The daughter had been prepared for a fight, and was flustered. But after a moment, she relaxed and offered a shy smile. But the watchwoman smiled broadly, laughed, and clapped a hand possessively on the daughter’s shoulder. The sage blinked, then mastered himself.
The merchant sputtered, then reached to his belt and withdrew an ornate dagger better suited to opening letters than throats. “Sirrah, that is not the wisdom I paid you for. Return my coin, or I shall give you different metal in payment.”
The guardsman cleared her throat, and when the merchant turned, placed a large and callused hand on the hilt of her sword. “It is the judgment of the Watch that you have received fair value for your money. Now put away your weapon, or there will be consequences.” She exchanged glances with the bodyguard, whose hand had gone to his swordhilt. Their eyes locked a moment, then the bodyguard slowly and carefully removed his hand from the hilt.
The merchant paled, but put away his dagger, and the watchwoman took the daughter’s hand and walked away with her, pausing only long enough for the couple to cast radiant smiles at the sage. The merchant, face red and swollen, glared a moment at the sage, then stomped away. After a distinct pause, his bodyguard followed.
“Do you know what we call those smiles, my apprentice?”
Thomen blushed. “Sir, I do not.”
“In oikonomika, there is the priced value of a transaction. That is the gold coin the merchant gave us so he could learn a hard lesson. But the more important point is often the consequences, expected or otherwise, that accompany the transaction. That is what we call an externality. Some are good, some are bad, and some are neither. But every last one must be considered before we can know the true value of knowledge and what constitutes the truth of a situation.”
Willem rooted in his pouch, then handed his apprentice a handful of coins and a long list of supplies. “Go buy what’s necessary, and with what remains, buy yourself a sunsweet... and me, some bittersweet, if there’s any to be had. If there’s an externality to such treats, I intend to internalize it as soon as can be managed.”
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