Taxes, the Imperium, and You!

[MarcusIII]

Of course totally unregulated markets will allow people the freedom to seek cronyism, oligopolies, and monopolies for their own benefit

Funnily enough, there are no major examples of these where the gov't is NOT involved with maintaining them. Look at the US. Nothing like this has happened in any significant level without the US gov't doing something unconstitutional. Without the gov't protecting such entities the free market DOES take care of them.

 

[Vormaerin]

That's not my definition. I guess it's your definition.



Lawful good doesn't mean lawful stupid, and free market doesn't mean free stupid. As with most things, the key is vigorous and fair law enforcement.

Your statement was that free markets were 'what people do when left alone'. Now you are saying "with government coercion to act fairly". Not the same thing. That's just quibbling about how much government control.

When left to their own devices, "capitalists" engage in rent seeking on a massive scale. Literally as long as we have records of economic activity, cartels to restrict trade have existed. Ea-Nasir, the famously bad copper merchant from Sumerian times, has a complaint against him lodged with his merchant cartel, for instance. They already had restrictive cartels throttling competition even then.

When government does not interfere in trade, people act in anti-competitive ways. When government does, they act to manipulate government policy to favor them at the expense of their competitors. Free markets are as imaginary as enlightened central planning.

Both are subject to corruption on a massive scale. The worst examples of both are paired with totalitarian governments. But totalitarianism is not actually a feature of either type of economic organization.

 

[ottarrus]

Not relevant to the argument about a free market working or not.

The US tried to operate the economy on a laissez-faire basis from 1900-1935. The only manipulation was the Sherman Trust Act forbidding monopolies. What we got was currency speculation, the Teapot Dome Scandal and the Great Depression.
The hard cold fact is that the only thing a free market economy gets you is bitcoin.

 

[ottarrus]

Well, there's room for a quibble. The rich will get richer if they're not stupid, and some rich become non-rich, and some non-rich become rich. A lot of the world is a lot richer than it was in the time of Babylon. Of course, it helps when the powers that be aren't relentlessly driving destructive monetary and economic policies deliberately designed to impoverish the population.

This is very true. There is enough turnover for people to hope they'll be the lucky ones. It's like lotto tickets that way.

 

[MonsterX]

But that's not what I said. Your example is completely different than what I was talking about. We're not talking about the same thing.

Your statement was about a state owned business in a capitalist economy. It's not going to have the types of problems I was talking about. The Italian shipyard you mentioned is 70% owned by the state, but it is still allowed to manage itself as a private business.

I was talking about a state owned business in a command economy. It will have the types of problems I mentioned, because the problems come from the command economy, not state ownership.

The IN building its own ships, i.e. the topic of this threat, is about a state-owned business in an otherwise capitalist economy.

I do however, think that extending observations about the pathologies which result from a full-blown command economy, as you did, is appropriate. However, it is a spectrum rather than a fundamental difference of kind, so we need to reign it in a bit. All large firms, whether state-owned or private, have internal command economies, which, when poorly run, manifest a variety of pathologies. These can be self correcting through capitalist competitive dynamics - though sometimes only through the bankruptcy of the firm in question. In the former Soviet Union, these problems were general thoroughout the economy, because it was run like one giant company that didn't have to compete with anyone else, and which couldn't go bankrupt.

 

[actionman]

Using a 'granny smith apple to red delicious apple' comparison, imagine the amount of effort /number of casualties it would have taken the US and UK mount Operation Downfall, the invasion of the Japanese home islands in 1945....

Let's tighten up the example:

How about an Allied invasion of the Japanese Home Islands, except Japan is fully supplied with stockpiles to last 20 years, millions of well trained well fortified troops, and ring upon ring of air defense and coastal gun emplacements.

The Battle for Terra, it says somewhere in 50 years of Traveller canon, consumed so much of the Imperium's military resources that it could not advance any further, even though Wolfe's fleet was defeated and scattered.

The Imperium would have been facing a heavily fortified system bristling with heavy meson emplacements on every stellar object able to hold them. The Solomani would've been fighting on their own territory, and would've used everything in their TL-whatever arsenal. The Imperial military would've had to absolutely pound Terra's surface, and even then it would be very difficult for Imperial forces to reach deep meson cannon emplacements. Terran planetary meson guns would've had much more power and range than Imperial ship-borne guns, and getting close enough to attack Terra's surface would've required terrible sacrifice with every attempt. Only after these terrible sacrifices had silenced enough of the Sol System's defensive emplacements could the troop carriers begin to enter the system and begin the assault. The assault armies would've suffered grievously against a well-armed, well-fortified, and absolutely determined enemy numbering the the billions, the leadership of which would've been willing to use the full range of nuclear, chemical, and biological weapons and military robotics. This is in addition to the invasions of Mars and the other worlds of the Sol System.

In the end, the Imperial Army would finally raise the Starburst over a world of radioactive ashes, slag, and bones.

IMTU, human populations across Charted Space were disgusted with the Imperial leadership's destruction of Humaniti's ancient homeworld, and many worlds within 50 parsecs of Terra exploded into violence and civil disorder for months. The rage of the Solomani throughout the former Sphere fell upon their Vilani neighbors without mercy, and the Vilani responded with desperate ferocity in order to survive. Many Solomani worlds behind Imperial lines had to be invaded and conquered again. On worlds still under Confederation control, military forces frequently joined in the violence under the pretenses of "restoring order" and "conducting anti-partisan operations". Everyone knew that Imperials and Vilani were going to be expelled, or worse. By 1100, this was largely accomplished, and many Solomani populations relocated to Confederation worlds to escape their Imperial occupiers. Millions of Solomani with Vilani heritage had their children genetically modified to remove their Vilani genes, and the Confederation government supported this practice. The Solomani Rim War left a deep and lasting hatred between the peoples of the Imperium and the Solomani Confederation, despite the interest of politicians in a stable border and practical diplomatic relations. The portion of the Solomani Confederation conquered by the Imperium is still called the Reintegration Zone, the Wedge, or Gavin's Wedgie, due to the discomfort garrisoning the Reintegration Zone still causes the Imperium. By 1105, Terra is still a battered world populated by only several hundred million people, and most of the Sol System remains a war grave of shattered wreckage. Imperial citizens travel to the Solomani Confederation at their own risk, and they're taking their lives in their hands unless they are under the aegis of the Confederation government in some way.

 

[actionman]

The IN building its own ships, i.e. the topic of this threat, is about a state-owned business in an otherwise capitalist economy.

I was responding to @mavikfelna 's post about why couldn't the Imperium be a partially planned economy.

 

[actionman]

There is enough turnover for people to hope they'll be the lucky ones.

Very little of it is luck.

 

[Vormaerin]

The main issue with state owned companies is that, in general, they have the regulatory capture and "too big to fail" status that only some private companies are able to command. They are simply more successful at rent seeking, on average, than a typical private business. But private busines absolutely attempts the same sort of rent seeking. Which is why we get corporate bailouts, regulatory capture by industry, and all manner of other anti competitive behavior.

And that's only the case because there are, theoretically, laws designed to prevent private industry from doing those things. They are often of dubious effectiveness, as you can see with all manner of examples in recent years such as Boeing, Boar's Head, and many others.

 

[Sigtrygg]

The IN doesn't build its own ships. It builds them in private corporation and megacorporation shipyards - see A:1 Kinunir and S:5 AHL

 

[actionman]

The IN doesn't build its own ships. It builds them in private corporation and megacorporation shipyards - see A:1 Kinunir and S:5 AHL

 

[ottarrus]

Very little of it is luck.

True. But from the bottom of the pile that's what it looks like.

 

[Condottiere]

The problems with markets is, that they tend to be imperfect.

Laissez-faire works best with all participants having perfect knowledge, if not quite level playing field.

 

[phavoc]

Something that I think bears mentioning in economic model comparisons is/are laws - companies will scream bloody murder about regulations of any sort that they don't like. At the same time they'll spend millions buying lobbyists and politicians to pass laws that favor them and can be used against competitors.

No company can survive without laws in the marketplace that regulate things like IP protections, false advertising, etc. Every company in the world will use these laws to the fullest extent (and beyond) to stifle competition and gain market share. At least in any sort of economic model where there a competitive market exists. In non-competitive markets you still see the same sort of activities, though it's different since they don't have to compete for consumers - they still compete though for a seat at the table and a bigger slice of the pie. Greed and the desire for power cross all forms of economic models since it's inherent in the human condition.

One only need to look back in history to see prime examples of such things. The US saw this during its industrialization phase and the culmination of industrial power being ultimately smacked down by regulations when the public became so angry with the actions of the trusts (and other forms of impetus like Sinclair's popular The Jungle that highlighted some odorous actions by big companies). For a time corporations were reigned in, though in the modern world we see a lot of these limitations and boundaries being removed as a result of continued business lobbying and apathy among voters who don't seem to care. Whether or not we'll see another trust-busting phase remains to be seen.

In Traveller we see the naked aspect of these things when corps utilize active measures, such as hiring mercenaries to do the dirty deeds they want done in order to punish competitors or else to otherwise open up a market by getting rid of the competition or dissuade others from direct competition. The Imperium tolerates this, to an extent - though from what I've read to date the amount of tolerance is not defined. Which, in a game like this with such a large area is probably for the best. It allows referees to interpret things and players the ability to easily move around nebulous boundaries. Whether or not punishment is forthcoming is kind of the point of some of these RPG scenarios.

 

[actionman]

True. But from the bottom of the pile that's what it looks like.

Agreed. But, not being flippant, everything looks like fortune or fate when the observer does not see the process.

Spoiler: Off topic tangent

I have had the opportunity to see the process in action over many years. Besides obvious cases of good fortune like winning the lottery or being born to parents who either create or have generational wealth (and feel like sharing it), luck, as it were, comes from things like being given an assignment by chance that leads to further opportunities, like if some lazy manager said, hey actionman, you're now the guy in charge of writing AI prompts for the department because no one else wants to bother. So I'd figure it out (hopefully), but after doing that for a year, the hypothetical actionman would have a year of experience in writing AI prompts, and that could turn into lucrative career opportunities, which in turn could provide a firm foundation for strong financial success over decades.

Other examples of luck include being born with above average intelligence and having life experiences that promote self-discipline and productivity. I guess luck could also take the form of the usual bouncing around through the pinball machine of life, getting one job, then another, trying to make good decisions with the information a person has at the time. If this leads to a person becoming rich it could be called luck, but it is always paired with the person working hard or being highly productive and financially responsible. I guess another example of luck is the absence of bad luck, like being surrounded by idiots who keep dragging an individual down, or sustaining illnesses or injuries that impair productivity.

This is not financial advice and is meant for entertainment purposes only. Generational wealth can be built by a high productivity person with average intelligence, by working hard and saving money, then putting that money in an index fund that mirrors the S&P 500 which grows at an average of 11% per year, despite all fluctuations, disasters, and nonsense, and leaving it there for 45 years. $10,000USD for 40 years will provide the foundational generational wealth for the person's children to be rich. It's hard to get rich quick, but its not all that hard to get rich slowly.

 

[Condottiere]

What is the actual worth of Tesla, and what degree does government intervention, stock manipulation, and public perception, figure into that?

I tend to think the vast majority of tech stocks were running on empty, towards the Twenty First Century, and when the tide went out, were swimming naked, hoping that a larger corporation would buy them out, before they burned through their venture capital.

Venture capital depends a lot on interest rates, which one assumes are somewhat influenced by government policy.

 

[actionman]

Great Depression.

The Great Depression had absolutely nothing to do with the Federal Reserve constricting the money supply, or with the FDR administration's disastrous handling of the consequences. Nope, nothing to see here.

Great Myths of the Great Depression

 

[ottarrus]

No, it was all about speculation on credit without backing assets.

 

[phavoc]

The Great Depression had absolutely nothing to do with the Federal Reserve constricting the money supply, or with the FDR administration's disastrous handling of the consequences. Nope, nothing to see here.

Great Myths of the Great Depression

You are partially right there. The linked article posits some things correctly, and puts a significant right-wing spin on others. Blaming the Fed for incentivizing people to recklessly invest in the stock market boom of the mid 1920s is like blaming candy manufactures for making things that taste good and people consume them till they are fat - and then blame the candy industry rather than themselves for making poor choices.

The Fed probably didn't make smart decisions leading up to about 1929, but then they started contracting the money supply (and people, of course, complained about higher borrowing rates... something that has happened since then during some of our lesser depressions). The article mentions nothing of the difficulties that being on the gold standard caused our monetary supply, nor does it talk of the Fed's failure to be the lender of last resort to banks who were experiencing runs. It wasn't till that bad Roosevelt administration created the FDIC in '33 that people (the majority who were small depositors at least) could be assured their money would be safe in the event of a bank collapse.

The funny thing about papers like the one shared is that they are often partisan, leaning either to the left or the right. The author is of the Austrian school of economics. And, like pretty much all the models of economics, it encompasses only a few portions of the reality that makes up an economy. None of the schools of Economic theory does not take into account the myriad forces that actually make up economies. People tend to fall into two camps - pro-government activity within the economy and anti-government activity. I think the proper role of government is somewhere in the middle - act as a brake on the economy when thing heat up too much and as a pump primer when things start to slow too much. Economists never factor in greed and corruption in their models - and often economies fail due to one or both. That and general human stupidity and short-sightedness.

 

[collins355]

Let's tighten up the example:

How about an Allied invasion of the Japanese Home Islands, except Japan is fully supplied with stockpiles to last 20 years, millions of well trained well fortified troops, and ring upon ring of air defense and coastal gun emplacements.

The Battle for Terra, it says somewhere in 50 years of Traveller canon, consumed so much of the Imperium's military resources that it could not advance any further, even though Wolfe's fleet was defeated and scattered.

The Imperium would have been facing a heavily fortified system bristling with heavy meson emplacements on every stellar object able to hold them. The Solomani would've been fighting on their own territory, and would've used everything in their TL-whatever arsenal. The Imperial military would've had to absolutely pound Terra's surface, and even then it would be very difficult for Imperial forces to reach deep meson cannon emplacements. Terran planetary meson guns would've had much more power and range than Imperial ship-borne guns, and getting close enough to attack Terra's surface would've required terrible sacrifice with every attempt. Only after these terrible sacrifices had silenced enough of the Sol System's defensive emplacements could the troop carriers begin to enter the system and begin the assault. The assault armies would've suffered grievously against a well-armed, well-fortified, and absolutely determined enemy numbering the the billions, the leadership of which would've been willing to use the full range of nuclear, chemical, and biological weapons and military robotics. This is in addition to the invasions of Mars and the other worlds of the Sol System.

In the end, the Imperial Army would finally raise the Starburst over a world of radioactive ashes, slag, and bones.

Hmm, except this apocalyptic scenario of desolation isn't what generally happens in the boardgame of that action produced by GDW (Invasion: Earth). The Imperial player usually takes Luna to use as a forward base, then deals with Terra's SDB squadrons (or at least suppresses them by causing them to hide outsystem or in the ocean), then suppresses the planetary defence batteries (I agree here is where collateral damage may well occur, depending on where they are deployed by the Terran command and on the tactics used to suppress them). Then you land through meteoric assault and seek a lodgement in an out-of-the-way location, make the Terrans come to you to try to evict your foothold, and defeat them in detail on the ground.
Yes, this takes a huge invasion force, and time, which certainly means the Imperium isn't able to use those resources chasing Wolfe's fleet to ground.