Completing this quest will make you an enemy of the goblin kingdom, so be sure to finish Cooking for Goblins before proceeding with this quest. If you don't want to fight your way past the goblins you should finish up anything you have left to do there, such as collecting the hidden Fridd rune.
In Arx, go to Gary's house. If he is out, pick the lock or use his key if you pickpocketed it from him earlier; if he is at home the door will be unlocked. Look around and grab the book The Mysteries of Finance over to the right. It's too boring for you to read, but there might be another use for it. Remember how the goblins are exploiting the trolls, getting them to mine for gems while the goblins make the real money trading them with the gem dealers? Take this book to King Pog and use it on him for 500 experience points. He is amazed by what the book teaches, and says with this book's help the trolls can cut out the goblin middlemen and trade with the gem dealers themselves.
As you would expect, this will make you an enemy of the goblin kingdom (goblins on other levels will be unaffected). They won't react immediately, but if you leave the level and come back that should be enough for the change to take place. When you next visit the goblin kingdom you will find King Alotar and a few other goblins gathered in the main hall; once they see you they will attack, and all the goblins on this level will become your enemies. You can kill the goblins if you wish. If you do so be sure to search their bodies for several useful keys (if you haven't pickpocketed them already); King Alotar has keys for the treasury and the chest of gems beside his throne. Once the goblins are your enemies the gate guard won't let you into the goblin kingdom any more, so if you ever want to go back in you will need to go to the barred window where the guard stood and use Telekinesis to operate the lever from afar.