KoL is a microcosm of the real world, and nobody really understands how the economy works IRL either. From what I remember of history most meatsinks have at best been marginally effective, when they haven't backfired like the twinkly wad trader or somebody cornering the market on torpedos for the Valhalla event. More @Wikipedia
Hover over any link to get a description of the article. Please note that search keywords are sometimes hidden within the full article and don't appear in the description or title.