The Numbers

The Math

Every equation from the book, on one page. No narrative, no hand-holding. Just the formulas, the variables, and what happens when you plug in your own numbers.

Grab a calculator. Run these on your town.

Quick Reference

All Six Equations

Extraction RateE = 1 - (L / G)Coordination PremiumV = n(n-1) / 2Community ValueMV = P x H x R x MTime CurrencyT = 1hr = 1hrFederation ThresholdN_eff = k x ~100Local VelocityImpact = D x V
01Extraction Rate

The Extraction Equation

E = 1 - (L / G)
Where:
EExtraction rate (what you're losing)
LDollars spent that stay local
GGross dollars earned in the community
Worked Example

If your town earns $10M/year and $1.8M stays local, your extraction rate is 82%. That means for every dollar earned, eighty-two cents leaves before it can do anything useful.

Most small towns run extraction rates between 75-90%. That's not an economy. That's a drain.

02Coordination Premium

The Coordination Multiplier

V = n(n-1) / 2
Where:
VValue connections (Metcalfe's Law)
nNumber of coordinated people
Worked Example

5 people = 10 connections. 10 people = 45. 50 people = 1,225. The value doesn't add — it compounds. A plumber alone bills one rate. That same plumber in a coordinated crew bills renovations. Same person, different context, different value.

Coordination is the only free multiplier. It costs nothing except knowing who does what.

03Community Value

Community Is the Currency

MV = P x H x R x M
Where:
MVMonthly value generated
PPeople in your community
HHours contributed per month
RAverage skill rate at market
MCoordination multiplier
Worked Example

Plug in your own numbers. Count the people. Estimate the hours. Look up what those skills cost on the open market. Multiply by the coordination factor. The number will surprise you — it always does.

Your town isn't resource-poor. It's coordination-poor. The value was there the whole time.

04Time Currency

Time-Dollar Equivalence

T = 1hr = 1hr
Where:
TOne hour of labor = one time credit
1hr plumbing= 1hr bookkeeping = 1hr carpentry
Worked Example

An hour of welding and an hour of tax prep are worth the same in a time bank. Sounds unfair until you realize: the welder needs his taxes done, the accountant needs a gate welded, and neither of them has to involve a bank, a fee, or a dollar that leaves town.

Time can't be inflated. Can't be shorted. Can't be wired to a hedge fund. It stays local by definition.

05Federation Threshold

Dunbar's Limit & Federation

N_eff = k x ~100
Where:
N_effEffective network size
kNumber of federated pods
~100Dunbar-adjacent stable group size
Worked Example

One group of 100 can coordinate internally with low overhead. Two groups of 100, federated, give you 200 people with each pod staying human-sized. Ten pods = 1,000 people, zero bureaucracy, because each pod governs itself.

Scale kills coordination. Federation preserves it. Think Visa, not Walmart.

06Local Velocity

The Velocity Multiplier

Impact = D x V
Where:
ImpactEffective economic impact
DDollar amount
VNumber of local circulations before exit
Worked Example

A dollar spent at the chain store circulates zero times locally — it's gone by lunch. That same dollar spent at a local shop, who pays a local supplier, who eats at a local restaurant? Three circulations. $1 x 3 = $3 of local impact.

You don't need more money. You need the same money to circulate more times before it leaves.

Your Turn

Run the Numbers on Your Town

Pick the extraction equation. Track your spending for a week. Divide local spend by total spend. Whatever number you get — that's how much of your labor is actually working for your community. The rest is working for someone else's shareholders.

Then pick the community value formula. Count the people you know with real skills. Plug them in. See what happens.