Note: “A parable is a short tale that illustrates a universal truth; it is a simple narrative. It sketches a setting, describes an action, and shows the results.”
Once upon a time, in a world very much like ours, maple trees and their sweet, delicious syrup were globally prohibited just like cannabis. During the century of Maple Prohibition, a few people around the world risked prison to develop dwarfed maple trees that produced sap while young, when grown under lights in small, secret “maple grows.” Maple Prohibition made maple prices high enough to justify growers’ investment in expensive structures, insulation, lighting, etc.. Maple growers competed to produce the sweetest, most delicious syrup (to earn higher prices) from the youngest, shortest trees (to reduce costs). Around the world, illegal maple growers made a good living…illegally.
Then, out of nowhere, Thailand was the first nation to re-legalize maple. Because Thailand is tropical, it couldn’t grow maple trees outdoors, so its newly-legal maple industry scaled up its production of young dwarf maple trees inside vast insulated warehouses. These warehouses were refrigerated year-round to keep out Thailand’s tropical heat. They also required electric lighting, because Thailand’s tropical sun shines 12 hours per day year-round, but maple trees need long summer days and short winter days.
Despite these high production costs, Thailand’s first legal maple growers made a fortune, because the global supply of legal maple products was much lower than the demand, leading to high prices. “Thai Maple” became the first maple-focused stock listed on the Stock Exchange of Thailand, with the ticker symbol MAPL. Its profits weren’t very high, because it spent most of its earnings to expand its refrigerated warehouses to grow more dwarf maples. However, everyone loved maple, and Thai Maple had “first mover advantages,” so its future prospects were HUGE!
Investors rushed in. The price of Thai Maple shares went through the roof. Other Thai companies rushed into maple-growing, too. Thailand’s entrepreneurs developed new automated tree-planting machines, new sap-tapping systems, and new sap-processing technology. Accountants, lawyers, business consultants, and “analysts” all across Thailand started new services specifically focused on the newly-legal maple industry. They charted the new industry’s rapid growth, and projected that growth into the future. Maple would soon be in everything, they predicted. Maple Coca-cola. Maple beer. Maple gummy bears. Maple donuts. Maple skin creams. Maple shampoo. Maple, maple, maple, maple. These projections attracted even more investment and entrepreneurship, driving the price of Thai Maple shares even higher.
Other nations saw the taxes being paid to Thailand’s government by its legal maple growers. They wanted to get more tax revenue, too, so nations across the globe started re-legalizing maple.
Then, Canada re-legalized maple.
Thailand’s pundits, analysts, and journalists wrote stories that said “Canada’s 37 million people would be a huge new market for Thailand’s legal maple products.” They added Canada’s projected demand for maple products to the projected sales of Thailand’s leading maple producers. The price of Thai Maple shares shot up even higher.
The next Spring, Canada celebrated its first maple harvest in years, tapping formerly-illegal maple orchards — many of them surprisingly large — that Canada’s government had secretly protected from eradication during Maple Prohibition. The world’s maple consumers were stunned at how sweet, delicious, and inexpensive Canada’s maple syrup was. For generations, their only “maple experience” was from young maple trees that were hybridized, stunted, and dwarfed to produce high volumes of sap when grown indoors under artificial lights — like Thai Maple’s. Canada’s mature maple trees, grown outdoors in the arms of Mother Nature for decades or even centuries, produced higher-quality, better-tasting maple syrup at a tiny fraction of the price charged by Thai Maple.
It soon became obvious — even to pundits and analysts! — that future demand for maple products would be supplied by Canada, not Thailand. Thai Maple tried to use its bubble-inflated share price to buy Canada’s maple orchards, but was rebuffed by Canadian laws. Canada had no interest in seeing its maple industry be colonized by Thailand.
Soon, Thailand’s Maple Bubble burst spectacularly. Thai Maple went bankrupt amid accusations of self-dealing and other shenanigans that had been overlooked while its share price was rising. Investors lost everything. The refrigerated warehouses that Thai Maple had built at such great expense were abandoned, because nothing else could be grown profitably in them. Thailand’s makers of maple-farming equipment, optimized for indoor grows, went broke, because their equipment was useless in Canada’s outdoor maple orchards. Thailand’s maple-specialist accountants, lawyers, marketers, etc., all had to find new specialties.
For Thailand’s citizens, however, Canada’s re-entry into the global maple market was sweet and delicious. Every Thai citizen could finally enjoy high-quality maple flavoring in everything, at a low price.
The Thai people told themselves, “We just learned a hard lesson: Adam Smith was right. Each nation should produce only those products that it produces best, and at lowest cost. For Canada, that means maple syrup. So: what product can Thailand produce better than anyone else, and at lower cost?”
After discussing this for a while, Thailand re-legalized ganja.
The moral of this parable:
The natural advantages which one country has over another in producing particular commodities are sometimes so great that it is acknowledged by all the world to be in vain to struggle with them. By means of glasses, hotbeds, and hot walls, very good grapes can be raised in Scotland, and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. … [T]here would be a manifest absurdity in turning towards any employment thirty times more of the capital and industry of the country than would be necessary to purchase from foreign countries an equal quantity of the commodities wanted… As long as the one country has those advantages, and the other wants them, it will always be more advantageous for the latter rather to buy of the former than to make. — Adam Smith, The Wealth of Nations, IV.2.15, 1776