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The Stationary Bandit

Why staying to rule beats plundering and leaving

Imagine a village with no government. Roving bandits periodically raid, taking everything they can. But what if one bandit decided to stay?

πŸ΄β€β˜ οΈ
Roving Bandit
Raids the village, takes everything, moves on
πŸ’° Takes 100% of wealth
πŸ”₯ Destroys infrastructure
😰 No incentive to invest
πŸ“‰ Village never recovers
πŸ‘‘
Stationary Bandit
Stays, protects the village, takes a cut
πŸ’° Takes 20-40% as "taxes"
πŸ›‘οΈ Protects from other bandits
πŸ“ˆ Wants village to prosper
πŸ—οΈ May invest in infrastructure
10-Year Simulation
Roving Bandit Village
Stationary Bandit Village
0
Total taken by roving bandit
0
Total taken by stationary bandit
The Paradox
The stationary bandit takes less each year but ends up with more overall.
By letting people keep most of what they produce, they produce more.