The "island economy" can be an interesting thought exercise for getting a feel for economic concepts, from money and banking all the way real estate and taxes.
Imagine the first guy arriving on the island claiming the whole land to be his, and any successive arrivers have to rent space from him in perpetuity, at rates he can decide. Not great, but not immediately obvious what a minimally-invasive improvement would look like. Now add a tax that forces the first guy to pay for every acre of land he claims. This incentivizes him to give up some of the space he's not actually using. Even in the most "rational agents in a frictionless vacuum" type of free-market macroeconomic model this is going to lead to a more efficient outcome, even more so in a more Keynesian-style model.
Imagine the first guy arriving on the island claiming the whole land to be his, and any successive arrivers have to rent space from him in perpetuity, at rates he can decide. Not great, but not immediately obvious what a minimally-invasive improvement would look like. Now add a tax that forces the first guy to pay for every acre of land he claims. This incentivizes him to give up some of the space he's not actually using. Even in the most "rational agents in a frictionless vacuum" type of free-market macroeconomic model this is going to lead to a more efficient outcome, even more so in a more Keynesian-style model.