Tariffs and You (Mongoose edition)

[actionman]

The tariffs are a stick to get people to negotiate.

I agree. There've been economic shenanigans going on for decades, like China using brutal prison labor, devaluing its currency, no pollution controls, etc. Some factories in China have anti-suicide netting. No free country can compete with that. Free trade with competitors like that is a race to the bottom. Canada has routinely levied high tariffs on US dairy products and agricultural products for decades. European countries have levied tariffs on US goods for decades. And if that's what makes economic sense for them, so be it, they can do what they like. The whole thing has been blown way out of proportion. It's all negotiation tactics and shifting the US away from a policy of self-destructive free trade to a policy of reciprocal tariffs like the rest of the world has. The US - Canada kerfluffle started with the US administration asking the Canadian government to do more about drug trafficking, human trafficking, and illegal migration. The Canadian government refused, so the US administration responded with tariffs. This whole thing is an argument between politicians, and the last thing regular people need is to let themselves get sucked in by all the hate spewing out of the media. The politicians need to go yell at each other privately until they reach an agreement instead of doing all this public posturing.

 

[Geir]

So in the World Builder's Handbook, in the Economic section I lightly touch on tariffs (p. 191), and though nobody has called me on it*, I basically do them 'wrong' by applying them as a penalty on the selling price of goods transported to a world, borne by the trader doing the seller. This was intentional, as it's the easiest way to tack it on to the Trade rules from the Core book and because it can encourage smuggling (well, for initiating game shenanigans, it's intentionally done that way).

I also mention that the Third Imperium is based on free trade, and will rarely, if ever, allow tariffs on trade between its member worlds. The GURPS Free Trader book was apparently co-written by an economist and there is way too much detail in there, including income tax, which, unless you have a Traveller with Profession (tax accountant) do not contribute to fun in any way. Though... it would be fun to explain to the auditor why you should be able to expense those advanced missiles you bought for travelling to an Amber Zone world... or the gun under the table pointed at the auditor, Cantina-style ('Tax Preparation Hardware' and honest, the auditor shot first!).

*Mainly I'm posting this because every time I see something on this topic here, I expect somebody with an econ degree or too much ChatGPT** time on their hands to say: "Hey, Geir, you did tariffs wrong." To which the answer is "Yeah, I know that. So what. If you don't like it, don't use it."
**Spell-checker wants to change 'ChatGPT' into 'catgut', which may be appropriate.

 

[Condottiere]

It depends on what purpose tariffs serve, under what legal term, and in what form, perhaps intangibly.

Starports charge visible fees, and being under Imperium control, consistent ones.

 

[Sigtrygg]

Global free trade has been a disaster for western manufacturing industrial base. The UK can no longer produce new steel. Think on that, we out sourced steel production to out "friends" because they pay their workers in shiny pebbles so it is "cheaper", we then allowed out "friends" to purchase our industries using the money we pay them for the cheap goods they manufacture (and handily hide the environmental pollution to boot). They then drove those industries into the ground, asset stripped them and destroyed the factories.
At least the Germans had the decency to declare war and try to do it with bombs.

No let's take a look at the Imperium and free trade...

there are industrial high population TL15 worlds mass producing trade goods, how can any world compete with the automated factories? Are the populations of those TL15 worlds actually part of the manufacturing industries and being paid a suitable wage or are the majority living on universal basic income? Are they not much more than slaves tending to the machines and living in poverty?

Do the megacorporations move their TL15 manufacturing to much lower TL worlds to exploit even cheaper labour costs? Why build expensive automated facilities when you can just throw replicating meat bags into the industry.

 

[Sigtrygg]

Would the Imperium allow tariffs between member worlds? Seems like a barrier to interstellar commerce.

They explicitly do not, which has some unfortunate knock on effects when you stop and think about it. A race to the bottom for labour costs. Outsourcing manufacturing to the cheapest producer.

 

[Condottiere]

 

[dragon3r]

UK is number four in direct foreign investment at over $630 billion (source: https://www.bea.gov/news/2024/direct-investment-country-and-industry-2023) This behooves us to not strangle trade. I am not a fan of politicians, trade should be handled by commissions of qualified individuals, similar to how actual business is done. KISS

My GF tried to get me to try chatgp and the results were mediocre, guess I am just too much an old dog for that. Did have a lot of econ courses getting a degree in business.

Econ is a complex subject, with the OTU and the Imperium, it will have 11,000 different economies, raising the complexity level. How that intersects with game table, it doesn't, it's boring. Nobody wants a lecture on economics. I have always figured that the 3I started as a defense pact, and customs union before going awry. PC's in the trade game (which should be called arbitrage) are like OTC traders in a spot market, or the tramp trade: https://en.wikipedia.org/wiki/Tramp_trade

As per concepts such as free trade, or free markets, they are a fantasy; Friedman called the free market an ideal, or something that could be thought of, however never reached. This is the platonic ideal, of where seeing a tree with a broken branch, the ideal tree in one's mind does not have a broken branch.

 

[Condottiere]

The Bretton Woods system of monetary management established the rules for commercial relations among 44 countries, including the United States, Canada, Western European countries, and Australia,[1] after the 1944 Bretton Woods Agreement. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent states. The Bretton Woods system required countries to guarantee convertibility of their currencies into U.S. dollars to within 1% of fixed parity rates, with the dollar convertible to gold bullion for foreign governments and central banks at US$35 per troy ounce of fine gold (or 0.88867 gram fine gold per dollar). It also envisioned greater cooperation among countries in order to prevent future competitive devaluations, and thus established the International Monetary Fund (IMF) to monitor exchange rates and lend reserve currencies to countries with balance of payments deficits.[1]


I tend to think that in return for access to the Imperium markets, and protection of the associated trade routes, planets acknowledged Imperium sovereignty over their systems.

 

[dragon3r]

The Bretton Woods system of monetary management established the rules for commercial relations among 44 countries, including the United States, Canada, Western European countries, and Australia,[1] after the 1944 Bretton Woods Agreement. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent states. The Bretton Woods system required countries to guarantee convertibility of their currencies into U.S. dollars to within 1% of fixed parity rates, with the dollar convertible to gold bullion for foreign governments and central banks at US$35 per troy ounce of fine gold (or 0.88867 gram fine gold per dollar). It also envisioned greater cooperation among countries in order to prevent future competitive devaluations, and thus established the International Monetary Fund (IMF) to monitor exchange rates and lend reserve currencies to countries with balance of payments deficits.[1]


I tend to think that in return for access to the Imperium markets, and protection of the associated trade routes, planets acknowledged Imperium sovereignty over their systems.

I mention Bretton Woods earlier: https://forum.mongoosepublishing.com/threads/tariffs-and-you-mongoose-edition.125400/post-998753

It really depends on how valued interstellar trade is, worlds can hold out forever without it, we do now. Obviously the Imperium will create an economic structure to reinforce its power structure, as what typical governments do. Honestly, it is too big, no uniform policy could handle it all, different regions would be doing what they do, and it would be handled locally.

 

[actionman]

They explicitly do not, which has some unfortunate knock on effects when you stop and think about it. A race to the bottom for labour costs. Outsourcing manufacturing to the cheapest producer.

I completely agree. Developing mid or low tech planets would get swamped with cheap goods from higher tech worlds. Their local industries would never develop. Their R&D capability would never develop. They would be a captive market, exporting whatever they have, like resource extraction or agriculture or specialty goods that are not available elsewhere, for high tech goods. Such planets would be utterly dependent on interstellar trade and very vulnerable to boycotts. Industry would probably built and owned by offworld corporations to take advantage of minimal labor costs. Exploitation of labor would probably be extreme. Company store arrangements and other abuses would keep the population poor and dependent. Any resistance or bargaining by the planetary authorities to address abuses would likely be met with threats to lower prices paid for exports, increase shipping rates, or to shut down factories. Planetary authorities would be intensely vulnerable to bribes and other incentives to do what offworld investors want instead of what's best for their people. It would probably be an unofficial status quo between the planetary authorities, the offworld business concerns, and the Imperial noble assigned to the planet, everyone getting theirs while the population slaves away in misery.

Edit:

Planets located where transportation and other costs make offworld investment unprofitable would wither and die unless they have the environment, resources, tech level, and culture to maintain themselves on their own.

 

[actionman]

Do the megacorporations move their TL15 manufacturing to much lower TL worlds to exploit even cheaper labour costs? Why build expensive automated facilities when you can just throw replicating meat bags into the industry.

Or train meatbags to operate the high tl automated factories for a tiny fraction of the labor cost and no cost for pollution controls and minimal cost for waste disposal. Imagine Sword Worlds or Vargr prisoners of war kept operating factories on desolate worlds for years after the war. Then labor costs would be down to subsistence rations, minimal lodging, and ammunition expended keeping everyone in line. Expensive gifts to the planetary Imperial noble and attending the right social events at the subsector level should prevent any Imperial entanglements. But it's not slavery, you see. They're prisoners of war. The civilian populations gathered up at gunpoint from conquered worlds, they're not slaves. They're refugees in refugee camps engaged in productive work to help with the cost of their care. The Imperium is a government of men, not laws, and men can be mollified with appropriate gifts. Rights? Isn't that some Solomani thing? Rights, that brought down the Ramshackle Empire, if I recall. Besides, they're dirty Vargr. They raised their grubby little paws against the Iridium Throne, so they're getting what they deserve.

 

[dragon3r]

Cheap labor is not really the thing people think it is, there are a lot of studies in econ we had to go over in class; the main reason businesses go under is bad management making poor decisions. There is a whole life cycle: https://www.investopedia.com/terms/l/lifecycle.asp

 

[actionman]

At least the Germans had the decency to declare war and try to do it with bombs.

"A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself."

Marcus Tullius Cicero

 

[actionman]

Cheap labor is not really the thing people think it is, there are a lot of studies in econ we had to go over in class; the main reason businesses go under is bad management making poor decisions. There is a whole life cycle: https://www.investopedia.com/terms/l/lifecycle.asp

I'm not sure what you mean. In the context of your post, what do people think cheap labor is, and what is it really? Are we talking about businesses going under, or profitable businesses becoming more profitable by reducing labor costs?

A business which is competently managed would benefit from lower labor costs and yield greater profits than an identical business equally competently managed that has higher labor costs.

In a Traveller context, there are plenty of worlds with conditions ripe for worker exploitation and low labor costs. Worlds are isolated, it's very expensive for people to move to another world and start new lives there, and there's no legal protection except the Imperial prohibition of slavery. Many worlds are captive markets and captive labor pools. Free traders could have many adventures running offworld goods to local populations outside of starport and planetary government control, and exporting local goods for better prices and shipping rates.

Do individual Imperial worlds have the right to control who enters and leaves their world? The Imperium doesn't tolerate barriers to interstellar trade, but is the movement of people considered trade? Can planetary authorities regulate the entry of non-inhabitants? Then again, the Imperium is a government of men not laws, so the subsector duke can simply say something like labor is capital, capital is part of trade, so no planetary government has the right to interfere with the free movement of labor. That's when the megacorp brings in its scab labor and prisoner of war labor in giant troop transports and locks out local labor for having the nerve to protest subsistence wages and company store debt. Even if the local population revolts, money changes hands, nods are given, and mercenaries arrive soon after to crush all those who dare raise their hand against the company, the shitty poors restore order. Should order not be restored and production not resume, that's when the Sardaukar ducal huscarls show up, pound the plebs into submission, and set them to work as prison labor in factories where they were once subsistence workers. Why? Because nobody does business without crossing the nobility's palm with silver, that's why. When production doesn't resume, silver doesn't cross noble palms, and when silver doesn't cross noble palms, Lady Countess' beaked monkey gets upset, and when Lady Countess' beaked monkey gets upset, people die.

It's dystopian, as I mentioned in this post
https://forum.mongoosepublishing.com/threads/tariffs-and-you-mongoose-edition.125400/post-998931

Through the continuing discussion in this thread, posters' ideas and comments begin to fill out and add depth to that quote from Classic Traveller. That's one thing I like about Traveller discussions, especially on this forum. There are a lot of people who have great professional and academic experience, and a lot of logical thinkers, which leads to very interesting and frequently enlightening discussions.

 

[actionman]

Not particularly related, but inspirational for Traveller adventure ideas. Empire is a dirty game, as are the petty games of megacorps and subsector nobles.

 

[dragon3r]

It is comparative advantage, labor costs are sort of fixed for one reason or another (edit: such as moving to a cheaper labor market, has to be weighed against transportation costs, setting up a new facility, etc..). Even with one labor market, companies succeed or fail. We have a lot of factories here where I live, and we see it all the time. Then some businesses, such as private equity firms, simply exist to cannibalize other firms, leaving the environment barren. Buy a company, split it in half, sell the half with the assets, the other half with the debt goes under. Nothing else can grow again.

Economics is often difficult to understand without studying it, similar to how I described physics.

 

[Sigtrygg]

In a Traveller context, there are plenty of worlds with conditions ripe for worker exploitation and low labor costs. Worlds are isolated, it's very expensive for people to move to another world and start new lives there, and there's no legal protection except the Imperial prohibition of slavery. Many worlds are captive markets and captive labor pools. Free traders could have many adventures running offworld goods to local populations outside of starport and planetary government control, and exporting local goods for better prices and shipping rates.

I have posted my views on the original presentation of the Imperium many times, but this got me thinking about all those adventures with disgruntled workers rebelling against their employers...
the simmering tension to be found in rumours, library date, TAS news bulletins...
which eventually lead to those brave freedom fighters the Ine Givar rising up against the Imperial oppressors...

Do individual Imperial worlds have the right to control who enters and leaves their world? The Imperium doesn't tolerate barriers to interstellar trade, but is the movement of people considered trade? Can planetary authorities regulate the entry of non-inhabitants?

The traveller Adventure shows the planetary government can regulate but not prevent an Imperial citizen from leaving the starport and exploring the local world...
they may be followed by the morality police at every step but they can explore...
unless local custom and culture forbids off worlders.

Then again, the Imperium is a government of men not laws, so the subsector duke can simply say something like labor is capital, capital is part of trade, so no planetary government has the right to interfere with the free movement of labor.

This will depend on the grift of the subsector duke, and how corrupt when approached by...

That's when the megacorp brings in its scab labor and prisoner of war labor in giant troop transports and locks out local labor for having the nerve to protest subsistence wages and company store debt.

Just like that. I have suggested that subsector dukes can at times be bitter rivals, I'm a bit diappointed that Rob didn't use my proposals for rival dukes granting letters of marque to conduct trade war against rival subsectors...
or did he
using megacorporation proxies is an alternative method for subsector dukes to meddle with his neighbours.

Even if the local population revolts, money changes hands, nods are given, and mercenaries arrive soon after to crush all those who dare raise their hand against the company, the shitty poors restore order.

Sent by megacorporation or even nobility to restore order before..

Should order not be restored and production not resume, that's when the Sardaukar ducal huscarls show up, pound the plebs into submission, and set them to work as prison labor in factories where they were once subsistence workers.

This happens, after all who directs the local Imperial military forces if not the subsector duke. Brave is the squadron commander who refuses a polite request from a duke.

Why? Because nobody does business without crossing the nobility's palm with silver, that's why. When production doesn't resume, silver doesn't cross noble palms, and when silver doesn't cross noble palms, Lady Countess' beaked monkey gets upset, and when Lady Countess' beaked monkey gets upset, people die.
It's dystopian, as I mentioned in this post
https://forum.mongoosepublishing.com/threads/tariffs-and-you-mongoose-edition.125400/post-998931

I find myself agreeing with everything you have posted over the past few days in this thread regarding the Imperium.

To me it's a protection racket, the nobility is nothing more than the mob.

Through the continuing discussion in this thread, posters' ideas and comments begin to fill out and add depth to that quote from Classic Traveller. That's one thing I like about Traveller discussions, especially on this forum. There are a lot of people who have great professional and academic experience, and a lot of logical thinkers, which leads to very interesting and frequently enlightening discussions.

The early classic Imperium and Spinward Marches frontier is a fun place to run adventures, the modern take on the Imperium not so much, at least in my opinion. A "frontier" that has been settled for over a thousand years and has nice friendly Imperial nobles seeing to the betterment and welfare of the population of the worlds of their subsectors... who would want to rebel against that?

 

[Arkathan]

Cheap labor is not really the thing people think it is, there are a lot of studies in econ we had to go over in class; the main reason businesses go under is bad management making poor decisions. There is a whole life cycle: https://www.investopedia.com/terms/l/lifecycle.asp

It isn't what the colleges told you it was either.
The main reason US factories went overseas is because unions negotiated $45K salaries in early 1980's dollars for janitors. The skilled workers got proportionally more. Considering that $45k was management wages for most of America then, that is a lot of excess overhead to absorb, especially when slave wages are available elsewhere.
They could have survived a little bad management. Not excessive wages, plus benefits and pensions at that level.

 

[dragon3r]

They could have survived a little bad management.

They could not, that is the mountain. Plenty of actual hard data, if someone can't accept that, not my problem. There is no equal to knowledge, it takes work.

 

[actionman]

I find myself agreeing with everything you have posted over the past few days in this thread regarding the Imperium.

I'm glad I could contributing in a meaningful way.

I imagine the 3rd Imperium IMTU with sort of a retro-futuristic, traditional, stagnant, corrupt, and bureaucratically sclerotic Egypt / Babylon aesthetic, overlaid by a more vigorous but still corrupt and semi-hedonistic Alexander / Greek aesthetic of the Solomani warrior aristocracy.