There is a very poor quaint little town where everyone is in a huge debt with someone but with no money to pay for it. There is hotel which is hardly seeing any business anymore. They are to soon shut it down.
One day a very wealthy American guest shows up and he wants to spend a night there. However before he confirms he asks for a tour of the hotel. The receptionist asks for a security deposit which the american can take back in case he doesn’t like the rooms. The guest obliges.
It turns out by matter of luck this is the exact amount that the hotel owed to the chef as salary for three months which they hadn’t been able to pay. They gave the cash to the chef. The chef saw that this was the exact amount of cash he owed the grocer for months of groceries he hadn’t been able to pay for. He paid the grocer. The grocer realized it was the exact amount he owed the doctor for treating his wife’s arthritis. The doctor paid the money to the nurse for two months of service he couldn’t pay for. The nurse was new to the town so she had been staying in the hotel for a few days before she found a house to rent. She too was poor and couldn’t pay the hotel at that time. The money she received from the doctor was exactly what she owed the hotel so she paid.
Now the hotel had got back the exact amount it had paid the chef. Now the guest has finished his tour of the rooms. Turns out he doesn’t like it. He takes back his security deposit from the hotel and leaves, never to be seen again.
So everyone’s debt has been paid, but nothing is different from before, except everyone is now happy.
3 responses to “The Rich Guest Paradox”
An exercise that may/may not work in the real world, but for me, it’s perfectly valid. It smacks a little of the paradox concerning the Ship of Theseus.
It’s not an impossible scenario, and I think that is all that matters here.
I agree Tim. The paradox may be a simple method of explaining to students how the Capitalist system works. Someone has to have produced a value of some type to allow the wealthy American to trade.