The town of Forrest has been around for centuries. It’s the kind of place where sons inherit their father’s businesses and nobody can remember when things were too different. The town has always been so small that it supported only a single shopkeeper; the current proprietor of this humble store is a tall and stable fellow named Woody, the descendant of a long line of tall and stable men just like himself who have worked hard to build and maintain what’s always been a social focus of Forrest.
Small towns like Forrest might seem peaceful to visitors, but internally there are the inevitable gripes, grievances, and grudges. For example, a recent family feud over the inheritance of their grandfather’s property has split Woody from his cousin Trey. As a consequence, Trey has recently opened a competing store directly across the street from Woody thus ending Forrest’s long-established one-shop monopoly. This, as you’d suspect, has been terrible for Woody.
Forrest is not entirely full of hard working capable souls – for example, consider Vinnie the thief. Vinnie, like Woody, is descended from an ancient line of Forrest inhabitants. Vinnie, like Woody, pursues the same occupation as his father and his father’s father. But Vinnie, unlike Woody, isn’t exactly a clone of his ancestors.
Vinnie’s father was a notorious scoundrel. An aggressive thief and burglar, he was nevertheless as dimwitted as he was ruthlessness. It doesn’t take a genius to know that if you continue to steal from the same store over and over that there might eventually be nothing left to steal. This concept seemed totally lost on Vinnie’s father and as a result he almost caused Woody’s father to close the only store in town.
But, as suggested, Vinnie was not cut out of the same aggressive yet witless stock as his father. Indeed, Vinnie is more bargainer than terrorist -- a theme established early in his life. When Vinnie’s father began to push him into the family business, his father told him: “Go into Woody’s store, show him who you are, break a few things then take what you want and stroll out like you own the place. That’s how it works for guys like us. That’s how it has always worked.”
Young Vinnie tried. He walked into Woody’s store and looked around. He picked up a few items that looked breakable and considered tossing them to the ground. But, soon he became aware of Woody’s suspicious gaze following him around and found himself placing the stock back on the shelf and adverting his eyes. Finally, Vinnie decided just to come clean.
“Do you know whose son I am?” Vinnie asked Woody naively.
“Of course.”
“Then how about you just give me a hundred bucks?”
Woody thought about this. A hundred dollars was actually quite a small price to pay compared to the usual cost in damage and theft. But, a hundred dollars for what exactly? A hundred dollars just to make some kid walk away? All things being equal, Woody would just assume he didn’t have Vinnie’s small-time extortions nor his father’s grand theft, but that really wasn’t one of the available options and therefore the proposed agreement would be the lesser of two evils.
“I’ll tell you what”, said Woody pulling out the cash, “I’ll give you one hundred dollars a week for doing absolutely nothing as long as you don’t make the same deal with my cousin Trey across the street. This will be your territory, but the store across the street stays your father’s territory. Deal?”
“Deal.” Vinnie said, shaking Woody’s hand three times.
And with that simple verbal contract, an arrangement was made. Each week Vinnie would come in, shake Woody’s hand three times, and earn a hundred dollars.
Over time, their relationship became, if not exactly friendly, at least routine. Little by little they forgot about the initial circumstances of the arrangement and found themselves acting like civil gentlemen considering the issues of the day.
One day, a small force of bandits from a nearby town attempted to invade, seeking to steal supplies and animals. Obviously, both Woody and Vinnie were desperate to repel this invasion and during the crisis all past discord was forgotten. Not surprisingly, between the two of them, Vinnie was the better fighter owing to the weapons and viciousness inherited from his violent family. That’s not to say that Woody didn’t engage the enemy, but violence is clearly Vinnie's comparative advantage.
A few months later, a fire broke out. As before, both Vinnie and Woody had a mutual interest in stopping this mortal threat. While Vinnie pitched in to fight the fire, this time it was Woody – with his access to buckets and hoses – who played the comparatively larger role in extinguishing this mutual threat.
And so it went. As the relationship normalized, they found that their common needs were greater than their distrust and consequently they found more and more ways that it was profitable to depend on each other’s specializations. Vinnie became not only the defender of the neighborhood but also the store’s out-of-town sales representative and Woody paid him a commission on his sales. Meanwhile, Woody’s freed resources meant that he was able to invest more in a nicer shop with more stock to the profitable benefit of both.
Generation after generation inherited the agreement and the benefit of specializing and working together turned out to be great. The paltry hundred dollars became not so much an extortion as just one part of a complex set of mutual exchanges of goods and services. In fact, Vinnie and Woody’s sons didn’t even know why they engaged in this weekly routine of thrice handshakes and an exchange of cash -- maybe it was some sort of ritual of friendship; maybe it had to do with some old debt now long since irrelevant; whatever, it seemed a quaint part of their past. To outsiders, it was hard to imagine the shop running without two employees, and most assumed that it had always been that way and always would.
