Stock exchange and economic boost

[Malliki Nur Pinito]

Yeah... I've been in this hobby for about 15 years. It hasn't happened yet.

[Ambassador Moa Fino]

It will take at least another 15 years if we don't keep an open mind as to the possibilities. As people continue to mature, and as new people join the community, it stands to reason that a new, workable system will eventually be developed. That is, as long as we don't close the door on it entirely.

[Verion]

I think this could only work if you spend a ****load of time on economics, and if quite some people (I would say about 10 minimum) also spend that time. I fear that is rather unlikely but I welcome every try and am willing to support every initiative towards an economic revival so I will watch your proposals with care.

[Ambassador Moa Fino]

It's only natural that each nation would still reserve the right to choose how they adopt the model, perhaps within the framework of a treaty. You are right that this model would require a group of truly willing participants, but the same can be said for any other economic system. Economics will never work unless we have a group of people willing to work together on a consistent basis on efforts to develop and maintain a working system. This, more than the lack of scarcity, is the main problem that we've yet to overcome. It benefits no one that we simply accept our current collective failure, and do little or nothing to improve.

[Andreas the Wise]

Much the same as there was a time when recwar worked reasonably well (certainly the internal Gralan recwars worked well), because we had a number of interested people on the same page, the same things should (in principle) happen with economic systems - get a number of interested people on the same page, and you should be able to get something to work.

[Markus Doltrue]

Hi, Roberto just stopping by...nearly now recovered from the Apollo Palace incident.....

You know, reading the above comment by Jack, it is succint, and uses approximately one vulgarity, but it is largely the best summary of the problems currently faced by micronational economics seen in a while.

[Ambassador Moa Fino]

Funny. I found it hyperbolic and overly cynical. Out of curiosity, what part of what he said do you feel hits the nail on the head?

[Malliki Nur Pinito]

I think that survival mode in Minecraft is the best framework for a micronational economy ever. Unfortunately, people don't care.

[Ambassador Moa Fino]

Well I care, and I'm pretty sure that I'm not unique. Even if there are just a handful of us, I'd like to see a renewed group effort to attempt to come up with something workable and engaging. I have little doubt that there are enough of us in the community, who are smart, mature and committed enough to come up with something very good.

That said, I'm not familiar with the economics in Minecraft. I'll have to look into it!

[Malliki Nur Pinito]

People have tried for at least 15 years to create an economic system that works. All efforts have failed. An economy only works when people need to trade goods and services, which is dependent on scarcity. We have no goods (I'm not counting simulated goods) and only a few services. Coding, legal services, banking, stock exchanges etc. are not enough to pull people into the economy. Why should I sell my services, if the services I can buy do not attract me?

I think that the only way we can get an economy going is to simulate it. I don't know how or using what, but trying to involve real people is doomed to fail.

[Andreas the Wise]

Here are some extended thoughts on the above topics of discussion. For those who are interested in thinking about what might lead to a working system.

[Ambassador Moa Fino]

People have tried for at least 15 years to create an economic system that works. All efforts have failed. An economy only works when people need to trade goods and services, which is dependent on scarcity. We have no goods (I'm not counting simulated goods) and only a few services. Coding, legal services, banking, stock exchanges etc. are not enough to pull people into the economy. Why should I sell my services, if the services I can buy do not attract me?

I think that the only way we can get an economy going is to simulate it. I don't know how or using what, but trying to involve real people is doomed to fail.

Is this not a sort of self-fulfilling prophecy? It isn't surprising that there's a lack of demand for goods (simulated or not) or services, when the general outlook is that economics don't work in this hobby. While I do acknowledge that past ideas haven't worked, even when people have been interested and optimistic, I also believe that as long as we continue to espouse the idea that micronational economics are always bound to fail, we will never achieve success. Why should you sell services, if the services you cannot buy do do not attract you? I think that to answer that question, you should reflect upon why you aren't attracted by the services being offered.

If every active nation appointed just one of their citizens to manage their nation's investments, then we would have a potential market consisting of 15+ people. We don't need a simulated economy.

[Markus Doltrue]

Funny. I found it hyperbolic and overly cynical. Out of curiosity, what part of what he said do you feel hits the nail on the head?

Well Jack's statement just alluded to the crisis of not having enough people spend a lot of time in economics. And that in my opinion is the main source of the problem. Not enough people putting forth enough effort.

[Ambassador Moa Fino]

Inspired by the work done by Liam and Andreas, I've written an essay on the Hammish economic system. You may view it at this link: http://pallisica.wordpress.com/literature/

[Markus Doltrue]

The Hammish government reserves the right to impose a progressive tax on all investor’s whose stocks are worth more than a certain predetermined value. Should the government decide to impose taxes, all investors whose stocks exceed the certain predetermined value will receive a notice from the government stating that they are required to pay a specific amount in taxes

I see Liam isn't doing your proof-reading. .

Following the passage of the Second Economic Memorandum, all companies are required to list their prices in terms of numbers of shares. That is to say that Company A might offer 5 Kg of its product, X, at the price of 1 company share, which sell for 1.25 obols each. In order to obtain 25 Kg of X, the consumer, Consumer B, would invest in 5 of the company’s shares, at a total cost of around 6.25 obols. Having now invested 6.25 obols in Company A, Consumer B becomes the proud owner of 25 Kg of product X. Meanwhile Company B also enjoys an increase in the value of its stock.

In the above example, Company A is a simulated company. This is clear because it is offering a a quantity of a product which would not be offered by a real company, which would offer an individual tangible good with a price which varies according to quality, as opposed to quantity. A company which produces oil, for instance, would offer different quantities of oil at different price levels, whereas a company which produces maps would offer different qualities of maps at different price levels. In addition, the consumer who invests in a simulated company would receive a continuous supply of the quantity of the product they obtained upon investing, whereas the consumer who invests in a real company would receive no such continuous supply. In other words, upon investing 6.25 obols in Company A, Consumer B would receive a continuous supply of 25 Kg of X, until they decided to sell their shares, while Consumer C, who invests the same amount in the real company, Company D, would receive one product, Y, only once, upon investing. That said, real companies may, if they so desire, choose to provide continuous supplies of their product to their investors, while simulated companies may not choose to not provide a continuous supply.

It is important to note that the system of commerce described above effectively addresses the issue of the lack of scarcity in regards to simulated goods such as oil. If Company A, a company which offers 25,000 shares on the Hammish Stock Market, offers 5 Kg of Product X at the price of 1 share, then it can be said that Company A has a production capacity of 125,000 Kg. By gaining the permission of the Market Administrator to expand the number of shares it offers on the market, or by offering more of its product per share, Company A could increase its production capacity. That said, the production capacity of any given company is limited by the number of shares which it originally places on the market. In this case, production capacity is equivalent to the scarcity of any given resource. This element of scarcity, if expanded upon and developed further, has the potential to drive international commerce.

The Second Economic Memorandum creates an interesting concept. I have never seen that concept before. Andreas has never developed anything like it. Shireroth is looking for new models right now. Perhaps you could communicate your ideas to the next Economic Minister of Shireroth, whoever that is. Also, I am curious, what person devised the concept which was set forth by the Second Economic Memorandum? Liam? No, he's just an editorial writer and newsman. It must have been someone else, mustn't it have? Was this the concept that won the FNORD for economics, or was that award prior to this concept?

[Ambassador Moa Fino]

The Second Economic Memorandum creates an interesting concept. I have never seen that concept before. Andreas has never developed anything like it. Shireroth is looking for new models right now. Perhaps you could communicate your ideas to the next Economic Minister of Shireroth, whoever that is. Also, I am curious, what person devised the concept which was set forth by the Second Economic Memorandum? Liam? No, he's just an editorial writer and newsman. It must have been someone else, mustn't it have? Was this the concept that won the FNORD for economics, or was that award prior to this concept?

The Second Economic Memorandum was devised by Opyeme Time, who is my current Hammish character. I can assure you, however, that it is a culmination of the combined efforts of all of the Hammish people.

The ideas outlined by the Second Economic Memorandum, and this essay, are the ones which formed the basis for the economic model which won the FNORD. That said, it is not the same system.

If Shireroth is interested in adopting a similar system, Hamland would be happy to send advisers to aid in the process.

[Thadeus Laing]

I would be interested in seeing The Brettish Isles implement such as system.

[Ambassador Moa Fino]

I'm sure that Hamland would be happy to help the Brettish Isles on efforts to develop their economy.

[Thadeus Laing]

Well then, Hamland's diplomatic corps may be expecting a phone call from Westminster, depending upon our Lord Protector's wishes.

[Harvey]

Is this not a sort of self-fulfilling prophecy? It isn't surprising that there's a lack of demand for goods (simulated or not) or services, when the general outlook is that economics don't work in this hobby.

Its really not. There was a multiyear period where I was the only vocal person about not wanting economies because they don't work, and even I was mostly willing to hush up about it as long as I wasn't required to do economic stuff to remain in the political sim. Everyone else that I knew of was either actively trying to make the system work or neutral enough to not complain about it. And it still didn't function.

The only semi-successful economy I've seen has been pure simulation - people trading around numbers of fictional goods that have no bearing to anything actually going on in the hobby, like stocks that have no actual value. Actual goods-based systems ("I'll make you a piece of art if you give me X moneybucks") have proven to be completely unsustainable for even the shortest amounts of time.

By all means, do try again. Not learning from the past and making the same mistakes is kind of how this hobby perpetuates itself, so it'll probably be good for a few months.