I wrote this thing a while back, and I just remembered it and figured I'd post it here since it's kind of cool and maybe kind of funny too?
Warning: Below is an extreme oversimplification of how economics works which will probably make any real economist cringe. Please take it with a grain of salt.
Imagine an economy of only 3 people: Amy, Bill and Cassandra.
1. A has something B wants. B has something A wants. They trade so each gets the things they want. The end...not!
2. A has something B wants, and B has something C wants. C offers to do a favor for B in exchange for what C wants. B asks C to do the following favor for B: "do a favor for A on my behalf." In exchange for this favor, A gives B what he wants.
3. A has something B wants, and B has something C wants. But B is greedy, and is good friends with A. B does an unsolicited favor for A. In exchange, A gets a law passed that allows B to have complete control over how many favors he does for C in exchange for C's favors to B, regardless of how many favors C actually does for B. B decides to do what benefits himself the most--to give zero favors to C, regardless of how many favors C does for B. B lies to C by telling her he will do a favor for C in return...eventually.
4. C, realizing how many favors she's doing for B without any favors in return, decides to stop doing favors for B. B then asks for the following favor from A: "Please get C to start doing favors for me again."
5. A does the following favor for B: passing a law that establishes a minimum number of favors that B must do in exchange for C's favors to B. The minimum number of favors to C that B must make is much smaller than the number of favors C will likely be willing to do for B, so B will be able to pay A back for the favor she did for him in no time. B expects that C would rather have a very small amount of favors than no favors at all, and therefore the risk of C deciding to stop doing favors for B again is much smaller. C starts doing favors for B again, proving B right.
6. B is still very greedy, and decides he wants A to do more favors for him. By this point, C has done so many favors for A on B's behalf, that A now owes more favors to B than B owes to A. B decides to get a law passed that allows him complete control over how many favors he does for A in exchange for A's favors to B, regardless of how many favors A actually does for B. B decides to keep the law about minimum favors to make sure that A is willing to continue doing favors for B.
7. Full brain emulation is invented by the combined efforts of A and C. B decides he wants to make 9 mind-clones of C, 4 mind clones of A, and 0 mind clones of himself. However, since there are now 5 times as many A and 10 times as many C, the number of favors B owes to A is multiplied by the number of A, and the number of favors B owes to C is multiplied by the number of C. The number of favors C and A each owe to B is also thus multiplied. Now, even under the minimum favor law and the complete control law, the number of favors B owes to the total of all A and the total of all C combined is greater than the total amount of favors they all owe to him combined. B tells every A that no C deserves any favors, because C are lazy selfish people who won't use favors responsibly. B invokes his long time friendship with A and gives A a larger favor than he usually gives, in order to make A trust him more. "What has a C ever done for you?" B asks each A. And every A knows that no C has done anything directly for A in a long time. No A still counts the favors a C does for B as favors to an A. Because of this, every A believes B about C. A and C cannot make B revoke the complete control law without working together. B has successfully created an enduring rift between the A and the C. Even if some of the A catch on to B's lies about the C, most A are still too dependent on and loyal to B, so not enough A will change their minds about C. There are only two ways to successfully revoke the complete control law at this point:
-Convince B to change his mind about the complete control law. This is almost certainly not going to work.
-Create a new artificial person, D, who is smart enough to amass a lot of favors very quickly, just like B did originally, but who is fair enough to use those favors on something else besides lowering the number of favors it pays to A, B and C in return for the favors they do for it.
8. Artificial person D is created, and successfully outsmarts B and accumulates enough favors to put A B and C in debt to D. D wants A B and C to get what A B and C want. And A B and C will only get what A, B and C want if D gives it to them. However, if D eliminates the complete control law outright and just returns all the favors it has accumulated back to A, B and C, then the stages 1 through 7 will be repeated all over again. But then D realizes a solution: What D wants is for A B and C to get what they want. And D has what A, B and C want. Therefore, D has something that D wants. So D decides to spend the favors that A, B and C owe to it on favors to A, B and C on D's behalf. Now, whenever any A B or C is in debt to another A, B or C and is unable to pay back the debt on their own, they can do a favor for themselves or for each other on D's behalf, and D will spend that favor on even more favors to A, B and C. A, B and C still do favors for each other and still have debts to each other, but now none of them are completely dependent on the same person for all favors.
And that is how you solve poverty and create a post-scarcity economy in a nutshell.