The Province and the Tax Farm

A governor auctioned the right to collect taxes from a province. Twelve collectors bid, each estimating how much they could extract.

The winner paid the highest price, confident the province was rich. But when he arrived, he found the same roads, the same merchants, the same wealth that every other bidder had seen.

He had not won because he was smarter. He had won because he was the most optimistic. And the province could not produce more wealth simply because he had bid more.

The other eleven bidders watched him struggle and understood: they had lost the auction and won the lesson.