The Real World, System One
We have seen how our Island of 1000 Castaways developed an economy that, within the potential of their technology and resources, maximizes their wellbeing.
Our real-world economies are not organized so efficiently, and create countries where wellbeing is, given some set of resources and technology, less than it could be.
There are two primary reasons:
1) The Islanders efficiently manage System One, allowing it to grow to its maximum useful size but no more. In the real world we allow the finance sector to be much larger than is efficient, with everything beyond its maximum size reducing rather than raising wellbeing.
2) The Islanders understand how to use System Two. In the real world, quite simply, we do not.
The primary reason for (1) above is simply that…