Once upon a time there were two colonies of frogs who lived in two neighbouring ponds. The frogs all lived on pond weeds and bugs, but one pond was very wide and filled with tasty plants, and the other pond was small and contained only rather poor plants. So the frogs in the large pond lived very well and grew large on a rich diet, while the frogs in the small pond stayed much smaller due to their poorer diet.

The large frogs had another advantage. They found a great store of charcoal under the soil nearby, left by some people who had lived there long before. The frogs were of a technological kind, and so they used this charcoal for cooking and for heating their homes. The little frogs had no such store of charcoal, but they also wanted to benefit from this new idea, and so they learned to make useful things to trade with the big frogs for charcoal. So the two colonies of frogs lived in peace. And though the little frogs sometimes felt their lives were hard, they didn't suffer from envy. They felt lucky that their lives seemed to be improving, but they worried that their situation was rather insecure, and so they worked hard.

As time passed, the frogs used more and more charcoal, and so they had to dig deeper into the charcoal pile for their supplies. Some of the engineer-frogs plotted the use of charcoal over time, and the depth they had to dig to, and they made trial borings into the charcoal pile. They came to the conclusion that one day the charcoal pile would be all used up.

The frogs all discussed this idea. Many different opinions were expressed. Some frogs said that the calculations were wrong, and the pile would last forever. Some said that if it was used up they would find another charcoal pile. Others argued that there was only one pile. Sensibly, both colonies of frogs took the problem seriously. The politician-frogs agreed that some taxes should be used to establish research groups to collect more information, and consider possible solutions to the problem.

The big frogs, being very rich, established a large and impressive Institute for Cooking and Heating. Many important frogs were given well-paid jobs on the Advisory Board of the Institute, which had a very good restaurant where their politician friends liked to come and eat with them. The big frogs' politicans were very pleased with themselves. Life was very good, and they believed that it was because of their efforts. Many of the big frogs, even non-politicians, believed this.

The little frogs' couldn't afford to establish an Institute so they set up a rather small Working Group. This wasn't very attractive to politician-frogs, and so it was managed by the engineer-frogs who also ran the work-shops for making things to trade with the big frogs. Because the little frogs weren't very rich, their politicians were not so impressed with their own opinions as the big frogs' politicans. They usually listened to the engineer-frogs rather carefully, and often took their advice in order to try to improve all the little frogs' lives.

After working on the problem for a considerable time, all the scientist-frogs held a conference. They agreed that the main charcoal pile was in fact limited. But it wasn't easy to predict when it would be exhausted, because trial borings showed that there were small amounts of charcoal here and there around the main pile, and opinions differed. However it was felt that some effort should be made to find new ways of cooking and heating their homes.

Around this time, some meteorologist frogs were becoming concerned about another problem - the climate seemed to be changing. When they plotted the temperature and duration of recent winters, there seemed to be a downward trend. Because of statistical variations the trend wasn't clear, but it seemed to be real.

Meanwhile, the engineer-frogs were producing many ideas for new ways of cooking and heating their homes. They thought of many possibilities, from dynamos powered by frogs pedalling, to building mirrors to collect sunshine, to making expeditions to find more supplies of charcoal. After thinking them through carefully, one idea was chosen as the best one to study further. This was the idea of making windmills which would use the energy of the wind to generate heat.

The two colonies of frogs took rather different approaches to this idea. The big frogs' Institute drew up a plan of how to supply all the colony's needs with windmills. Furthermore, some of the engineer-frogs flew kites to measure the wind, and they found that the wind was stronger at higher altitudes. So they decided that it would be best to build very tall windmills, and they produced a most impressive plan for a complete system of windmills all round the pond. They called it the Supreme Plan, and it would take a huge effort to build, but it would supply more heat than all the charcoal that they burned today.

The little frogs worried about their future and felt that they should try to find a solution to the heating problem as soon as possible. They agreed that windmills seemed promising, and so the engineers in the Working Group decided to build a windmill and actually use it for cooking and heating a home, in order to see how practical it was, and whether they could make them cheaply enough to use on a large scale. They called it the "Build one and see" plan.

It took some effort to persuade the politician-frogs to spend tax-money on the plan. But the chief engineer of the Working Group didn't ask for a large budget. Nor did he argue that windmills would solve all their problems, because noone knew. But he argued strongly that enough money should be spent to test the idea. He was sure that windmills could be made to work technically, but it was very uncertain how much they would cost. So they had to find out from experience. In the end the politician-frogs followed the advice of the Working Group. Then the chief engineer employed several enthusiastic young engineer-frogs who worked tirelessly to design good windmills.

The big frogs' "Supreme Plan" caused a great deal of discussion. But because the effort required to build the system of tall windmills would be so great, the politicians were reluctant to try to persuade the big frogs to pay more taxes for it. Life was so good, and it wasn't certain that the problem was serious, so they asked the Institute to study the problem further.

The little engineer-frogs realized that they couldn't build one of the great tall windmills that the big frogs said were necessary. They could only build a little windmill which would not be very efficient. But they said "we have to start with what we have" and so they began to design a real system. As they did this they kept the big frogs informed, and even invited them to join in the project. But the big frogs in the Institute weren't very interested. Their engineers could see that the windmill wouldn't be very efficient, and that it would be a very laborious way of heating a home. They said to the little frogs

"Look, little frogs, you're very silly. It's much more effort for you to build this inefficient windmill and use it for cooking and heating than it would be for you to make some more useful things to buy charcoal from us as usual."

The little frogs listened to this criticism, but they didn't agree. They said "But we're trying to learn about windmills, even if it costs some effort."

The big frogs were generous, and didn't want to see the little frogs wasting their time so they said "But don't you remember? We've done simulations, and you need to build great tall windmills."

The little frogs still didn't agree. "We don't know whether using windmills is a good idea or not, so we're going to build one and see. Simulation is very useful, but you cannot simulate operating experience."

The little frogs' windmill project was so small that the Institute wasn't really interested, but being close neighbours, the big frogs often visited the little frogs. As the little engineer-frogs progressed they received a continual stream of criticism and advice from the big frogs. For example they would say "Why are you making the windmill blades out of bark? They will be very inefficient."

The little frogs replied that it was the best material that they had.

"We've invented a new laminated material made from several thin layers of wood bonded together. You can make much more efficient blades with it."

"Oh, can we try it?"

"Well, it isn't quite ready yet. We've only made a little bit of it in a laboratory. But when we build our big system it'll be ready."

The little frogs sighed at how hard life was, and continued making their rather poor windmill blades.

When the windmill started to operate, the big frogs came to look at it, and they pointed out that it operated so slowly that it hardly made any heat at all.

"Yes, we know, but it's the best that we could do to start with" the little frogs replied.

"It should be at least five times taller, and then it would be more effective."

"But we can't make one so tall."

"Our windmills are going to be ten times taller."

"Oh? What will you make them from?" the little frogs asked.

"We recently established a Windmill Materials Research Laboratory, and we're studying that question at the moment" the big frogs said.

The little frogs thought how nice it would be to be so rich that you could create many research institutes. But the chief engineer wasn't envious. He said "Because the big frogs in the Institute never build real systems, they've forgotten what real engineering is. We know that this little windmill won't be very efficient, but to design a real system you have to start with what exists, not what might exist in the future."

One day when their windmill was working, some big trader-frogs from the charcoal pile came to visit. The little frogs made some tea and they sat around discussing the project as usual.

"You've done some good work on the windmill itself. It's a nice simple design. But it's clearly in a bad site."

The little frogs defended their decision, saying it was the only site that was available at the time, and it was quite near some frog-homes, even if it received rather little wind.

After some further discussion the big frogs concluded

"You little frogs are so silly. If you never take any of our advice, you'll never grow as rich as us."

"No. We probably won't" the little frogs sighed.

"And by the way, we want you to pay more for charcoal in future" the big frogs added.

"What?!" the little frogs cried. "But we agreed a fair price years ago. Why are you raising it now?" they asked.

"In order to finance our Institute's research" the big frogs said.

The little frogs were very upset about this. But they realized that the big frogs had a monopoly, and so they not been paying a market price. They would only find out the real price when there was an alternative to charcoal. Of course a higher price for charcoal would make their lives even harder, but they had no choice. So they went back to their work.

In fact, despite the big frogs' criticisms, the little engineer-frogs were rather pleased with the progress of their little windmill project. Although it didn't produce very much heat, they were able to measure the wind speed and the output, and they could see that it was more efficient than they had predicted. But after a few days of operation a shaft transmitting the power broke. The young engineers were upset. But the chief engineer was delighted: they had learned something new! This was one of the unexpected challenges of the system. So they learned that the transmission system was as critical as the parts up in the air. If they had started by making a huge system, it would have been useless. So they studied how to make extremely smooth wooden bearings to reduce friction as they turned.

The little frogs weren't quite so happy when all the blades flew off the windmill rotor in a gust one day! But of course they learned something else unexpected - that gusty weather put very large loads on the top of the windmill. And so they designed a stronger system.

The little frogs also made a big effort to make the design easy to manufacture. It had lots of similar parts, so that it would be simple to make many windmills using repeated processes. And on the basis of their experience they were already designing a set of slightly larger windmills. These would be a little more efficient, a little quicker to make, a little easier to maintain, and would produce several times more heat in total.

The big frogs' Institute had now expanded to employ a large number of frog-engineers and scientists, and they had produced many ingenious ideas for advanced windmills - new configurations, new materials, new ways of turning them to face the wind. Some of these projects were now in the "test-phase" in laboratories that had been built for the purpose, and they showed twice the efficiency of the little frogs' windmill. Social scientist frogs were also involved, and they wrote reports with names like "The symbolism of windmills in frog literature" and "Windmills versus charcoal: a survey of childrens' imagery". The little frogs were amazed that the big frogs were so rich that they could afford to study everything in such a relaxed way.

The big frogs also drew up an "Extra-Supreme Plan" for building an enormous system of many advanced windmills. The politician frogs who liked to eat at the Institute wanted to help their friends get a larger budget and began to speak in favour of it. However, the trader-frogs who operated the charcoal pit kept giving optimistic reports of "Major new charcoal finds" (though in fact they were only little additions to the main pile). So the politician frogs couldn't persuade the taxpayer frogs that it was necessary.

Now, as the number of windmills increased, the little engineer-frogs found that the frogs who were receiving the power from the windmills found it difficult to use. Their stoves behaved differently from charcoal stoves, and they often let heat run to waste. One family even set fire to their kitchen! So the engineer-frogs realized that they also needed to make the windmill system easier and safer to use. The windmill transmission shafts turned stones that rubbed together to make heat, so the frogs learned to make the stones much smoother. They also designed a simple lever that switched the drive from the little high-geared stones used for cooking to the big home-heating stones. This was much easier to use.

All these problems made more work for the little engineer-frogs, but the chief engineer of the project was quite happy. "That's exactly what the project is for" he said "discovering and solving unexpected problems. Some problems can only be discovered by experience. None of them was predicted, but they must all be solved before windmills can be a useful source of heat."

Some time passed, and then one fine afternoon in late summer a blackbird who was a friend of the frogs dropped in to gossip. It told them that some other birds had recently come back from the lands far to the North from where their winter weather came, and this year's weather was much colder than usual. They were saying that the coming winter was going to be very cold and would last much longer than usual.

The frogs all discussed this news very seriously. Since the big frogs had raised the price of their charcoal, the little frogs were having to work harder to produce more things to trade for the same amount of charcoal. They had long conversations with several birds to be sure the story was true. They decided that if the weather became colder, the big frogs would need more charcoal, and would probably raise the price even higher. Also, if the charcoal started to run out, it would get too expensive for the little frogs to buy at all, and so they would freeze before the big frogs. There was no choice. They would have to make a big effort and build lots of windmills, as well as continuing to buy charcoal. It was going to be very hard.

However, the little engineer-frogs had now reached their third generation of windmills, based on many windmill-months of operating experience, which were still not very tall, but were quite easy to make and to maintain, and were very reliable and easy to use. Of course the little politician-frogs were reluctant to agree to the plan, but eventually they decided that it was the best course. So they persuaded all the little frogs that taxes should be used to pay for many windmills to be installed to heat every home.

Of course the engineer-frogs were secretly rather pleased about the bad winter coming. Starting trials early allows you to design a reliable system. So the chief engineer was confident as the little frogs started mass-producing components. Other frogs were taught to assemble them and connect the shafts bringing the power to frogs' homes, and others installed the cooking and heating stones.

Each day the output of little windmills and heating systems increased. And as the little frogs made more and more windmills, of course they began to need less charcoal. So they began to make fewer useful things for the big frogs, and to buy less charcoal each week. After a while the big frogs came to see the little frogs to ask why they were trading fewer things with them. The little frogs showed them their network of little windmills, and explained that they were gradually making more and more of their own heat. The big frogs could hardly believe it. And they laughed at all the little frogs' efforts.

"You're so silly, little frogs. Can't you see that it's harder for you to make windmills than to trade with us? It would be cheaper for you to buy charcoal from us as usual instead of using these windmills."

"But recently you raised the price of charcoal, and so now we don't know if it will stay the same. Maybe you'll raise it again."

"Oh that won't happen again" the big frogs said.

"But the cost of our windmills gets less each week as we make more" the little frogs replied.

"Well, if you want to work harder than you need, carry on" the big frogs said, and went back to their big pond.

As the windmill plan continued, the engineer-frogs were able to keep improving their designs, which had now reached mark 5. This design was the best yet, and was much more efficient than their first one.

They also bought less and less charcoal, and the big frogs began to miss the things that the little frogs made, and their price began to rise.

One day some of the trader-frogs from the charcoal pile came round to the little frogs' pond and said they had decided to reduce the price of charcoal back to its old level.

"So you'll be bringing more things to trade for charcoal then?" the big frogs asked.

The little frogs thought about it. "Er, maybe" they said.

"What do you mean "maybe"? It's supply and demand. If the price goes down, surely you'll buy more?"

"Er, maybe" the little frogs said again. "You see, the cost of heating from our windmills keeps on falling. It's probably less than the old price of charcoal by now".

The big frogs were rather annoyed at this. They hadn't realised that the little frogs' windmill system had progressed so much.

The little frogs added "The price of our windmills is a simple commercial cost which we can rely on. But you control the price of charcoal and so we can't rely on it. Business is more reliable than politics for making economic decisions."

So the trader-frogs went to discuss the situation with the big frogs in the Institute who were experts in every aspect of windmills.

"We have nothing to learn from the little frogs" the Director of the Institute said to the big trader-frogs. "They're good with their hands, but scientifically they're quite primitive. Our windmill designs are far better than theirs. Come and see."

And the Director took them to look round the laboratories where tests were being done on some designs which were approaching the theoretical maximum efficiency. The Director was very proud of them.

"Ah! These look interesting" the trader-frogs said. "Maybe we can sell these to the little frogs in exchange for their goods? Where's your factory?"

"There isn't a factory. Each of these is hand-built by skilled crafts-frogs" the Director replied.

"So how much do they cost to make?" the trader-frogs asked.

"How much do they cost? I've no idea. The cost is of no interest. This is a research establishment, not a business."

The trader-frogs from the charcoal pile were shocked.

"But this doesn't help us at all" they said. "We need things to sell to the little frogs."

"Sell more charcoal then" said the Director.

"But they don't need more charcoal"

"Then reduce your price" the Director said. "Supply and demand. If you lower it far enough, they'll buy more."

The trader frogs looked grim.

"Anyway, when we reach the end of the charcoal pile, we'll have to make some of your windmills, so you better start making them easy to build."

"The end of the charcoal pile?!" the Director said. "What are you talking about? Only last week your Director said that there was no end in sight."

"Only because he never goes down into the pile and looks" the trader-frogs muttered, and went back to consider what to do next.

The next week the first cold wind arrived. The frogs shivered at the thought of the coming winter, but the hundreds of little windmills whirred merrily in the breeze, and the homes that they supplied became warmer as the wind blew harder. And the number of windmills continued to increase. The little engineer-frogs were pleased with the success of their work. They were particularly pleased that they had obtained operating experience so long ago, and had been able to improve the windmills and make them so reliable. Trying to maintain unreliable windmills in this cold weather would be terrible.

By now the idea of windmills was no longer strange to the little frogs, and had become popular among young frogs, who made up songs about them. Windmill engineering was fashionable, and there was even a problem of young frogs climbing up the windmill towers to try to fly. One of the big frogs from the Institute who was visiting commented on this. But the chief engineer said he liked to see that the project was making the young frogs optimistic about their future.

"We always have to work so hard, but our lives still depend on others. Windmills will make us more independent and able to control our own future, but only if the young frogs continue our work."

"We don't let young frogs near our Institute. It's much too important to be concerned with their silly ideas" said the big frog.

"Oh? I feel it's good to give the young an exciting challenge" the chief engineer said.

By now the big frogs were getting ready to build some operational windmills. The important frogs from the Institute were confident that their windmill designs were the best possible, and now that the powerful charcoal-pile frogs seemed to have become less hostile to windmills, the politician-frogs were able to agree to build a trial system. Being rich, the big frogs' trial system was to be very large and expensive. However, when the politician frogs explained their proposal, the taxpayers complained about the cost. Only recently there had been a big rise in the price of charcoal for them, even though the price to the little frogs was only half what it had been before. And the prices of the little frogs' products had also risen.

"We don't want to pay more taxes for this scheme. Let's just go on using charcoal" they said.

The politicians discussed the plan again with the big engineer-frogs.

"It depends on how much charcoal is really left" they said. But they couldn't get a simple answer from the trader-frogs from the charcoal pile.

"The charcoal will never run out, because at higher prices the amount of charcoal available increases" the trader-frogs' economist explained.

"But how much higher does the price of charcoal have to go in order to avoid running out? The current price is already causing trouble."

The economist-frog wouldn't say precisely. All he would say was "higher". The big frogs from the Institute realised that the economist-frog was just a theoretician and had no practical knowledge at all, and they argued again that the politician-frogs should pay to build some windmills.

"But how can we pay for them if we can't raise taxes?"

"Like anyone else - borrow" the Director of the Institute said.

"The government has never borrowed before. It's against our constitution" the politician-frogs said.

"But this is investment in productive assets. It's perfectly safe, and it will be good for all big frogs. I'm sure the public will agree for you to change the constitution to fund the Institute's work further."

And indeed the big frogs agreed straight away. They were finding it hard to pay to keep their homes warm, and they didn't want to pay for the new trial system themselves. So they would borrow. The politician frogs were surprised how easy it was to negotiate a large loan from the toads living in a nearby stream, secured against the charcoal pile, and to be repaid from the profits from the windmills.

The big frogs' Institute started its "Advanced Extra-Supreme Plan", and they invited the little engineer-frogs to attend the grand opening ceremony for the first group of high-efficiency windmills produced in an enormous factory that they had built. These were much taller than any of the little frogs' windmills, and when the prime minister frog officially turned them on they each produced as much power as five of the little frogs' mills. Everyone was very impressed, including the little frogs. But their chief engineer feared that the big frogs' design would have problems that they had not predicted. As they were shown around he looked closely at everything, and asked many questions about what tests they had done.

All the guests were then served a delicious meal from the Institute's famous kitchen. At the end of the meal, the prime minister made a speech about how clever they were. While he was speaking, a flock of birds flew low overhead. The leading birds saw the new windmills which reached up to a convenient height, and came down to perch on them. All the frogs watched in horror as the birds settled on the windmills, which bent and snapped under their weight! In a few moments the entire system was destroyed.

One of the politician-frogs who had opposed giving tax money to the Institute from the start, immediately began to criticize the Director for incompetence. But the Director said smoothly that such an event was impossible to predict, and he accepted no blame. But his critic said that a demonstration programme could have discovered the problem. "And now how will we repay our debt to the toads?" he asked.

"Obviously we will make some more, shorter windmills" the Director said.

"But those are likely to have other problems that you don't know about" the critic replied. "And the weather is starting to freeze."

Then one of the trader-frogs asked the little frogs' the price of their windmills. They discovered that the mark 5 windmill cost one tenth of the cost of the Institute's windmills. The critic was crosser than ever. "Early trials also teach about costs. And how are we going to pay to buy them?" he asked.

"Until we design some cheaper ones, borrow some more from the toads, of course" said the Director.

When the politician-frogs went and asked the toads for another loan, the toads asked what security the frogs were offering. They said that the trader-frogs had told them that recent finds of charcoal made the charcoal pile more valuable than they had estimated before. But the Toads insisted on verifying the "new finds" for themselves. When they carried out their own survey they found that the real reserves were below the level of the previous loan agreement. So the toads took control of the pile, put guard-toads at the entrance, and doubled the price of charcoal!

The big trader-frogs were horrified. And the politician-frogs realized that the charcoal-pile frogs had benefitted from telling them that there was no charcoal problem, because it kept all the big frogs dependent on charcoal, at any price. And when all the ordinary big frogs had to pay double the price for charcoal and buy windmills from the little frogs, they realized that the politician-frogs and their friends in the Institute had wasted their budget. Although their designs were theoretically good, the technology was much too sophisticated, and was commercially useless. So they sacked the leaders and appointed new ones.

Some of the little frogs worried that the big frogs might blame them, but the chief engineer said "Oh, they'll be all right - after a while. But the big frogs from the Institute will have to learn again that real engineering has a commercial objective. After living in an unreal world for so long, using up their capital, and then playing around using taxpayers' money, that will be hard."

The chief engineer was right, and for a while the little frogs became richer. Some big frogs turned their big houses into luxury hotels for little frogs, and some little frogs even bought back their old products as antiques!

But once the big frogs swallowed their pride, they learned to copy the little frogs' windmill designs, though they got very cold installing them in the terrible winter! And then once again their life was easier than the little frogs'. But the little frogs' life was also better. They were now independent of the owners of the charcoal pile, and their future was in their own hands.