Yes, you can make a point with using an example of a small number of people interacting in an isolated system, but you could just as easily create a thought experiment starting from our current situation that people might find easier to follow. Such a thought experiment might look something like this.
I was recently asked whether I thought intellectual property (IP) encourages or inhibits innovation. I believe the latter for several reasons, but first, let’s cover some background.
One of the first things people realize upon becoming acquainted with libertarianism is how much libertarians fight amongst themselves about questions that seem highly esoteric and about which very few normal people would care. Esoteric though they may be, understanding these questions is central to understanding why we libertarians believe what we do.