foreignpolicyhack wrote:Hello all, i've been a long time fan of the series (actually i've read most of the books that the author has written, along with many of his contemporaries in the genre such as Eric Flint etc) and i'm just wondering as to some of the economic details of the series.
I'm in foreign policy, but i've read the series since before i started my current role and its interesting to see the role that trade and economics play in the series. I can see clear distinctions that Manticore is akin to the former British Empire, whereby trade is the lifeblood of the economy and where the home country is always strapped for manpower.
But it's always bothered me something that major combatants (Manticore, Haven, Grayson etc) always seemed to have fantastic sources of capital to spend on the wars and the military.
To give a clearer description, we have;
(1) Grayson that seems to be struggling to lift itself out of what can only be described as a technologically challenged society and into a more modern age. At the beginning of the series, they struggled to defeat their arch-enemy, Masada and yet by the latest books, their economy is so developed that they've managed to produce the third largest fleet in the Grand Alliance. Does any readers want to comment on where they are possibly getting the money to fund the fleet given that they're a single system polity?
(2) Haven had been literally bankrupt for most of the series and yet seemed to be able to fund a larger fleet than Manticore. Where are they getting this money from? I think they're squeezing their own population dry for the funds (read dolists) but surely there's a limit to the amount of money that can be found in such a moribound and inefficient economy? Not to mention the vast amount of tax dodging and the vast funds internal policing takes that must be going on from the forcibly annexed planets in the Republic?
It seems that in the latest books, Haven is trying to reform its economy but at the same time further expanding its military to compete vis-a-vis Manticore...is the government literally printing money?
(3) Manticore seems to have an inexhaustible pool of reserves, which seems fantastic but it could be explained by control of the largest and probably most profitable wormhole junction in known space. The amount of taxation that can be levied on it and the associated industries probably play a part. As mentioned in the series, Manticoran merchants carry most of the trade within known space due mostly to the government's control of the Junction. (By the way wouldn't this mean that the junction is a major conduit between the core world and the "outer polities" where most trade goes to?)
The amount of wholesale destruction of fleets, infrastructure etc that goes on in the series seemed to me to be so wanton that huge sums must be needed to rebuild said infrastructure and fleets. Physical infrastructure in our current millennium is mostly the product of more a year's GDP, in fact it is more or less the sum of accumulated GDPs of the history of the nation.
So tldr; where is all the money coming from?
Some really interesting questions which actually not only have relevance in understanding what has happened but also what is probably going to happen (i.e. the fall of the Solarian League).
To begin with I suspect as in with all modern societies "money" isn't actually backed by any tangible thing such as gold or silver. It was discovered that "backing" the currency in this fashion restricted the money supply and therefor the potential growth and size of the economy by the amount of the supply of the "backing" material.
As such, "money" can be created simply by making more of it.
That of course has it's downside. While the money in circulation isn't exactly "backed" the money supply is. Essentially the value of any unit of "money" is the perceived value of the issuers total economy divided by the number of units. Hence printing more money doesn't create more "wealth", it just devalues the value of each unit of money. For those of you who haven't figured this out yet, this is called inflation.
Now, there is usually a short span of time between the increase in the money supply and the devaluation of the currency where there's more money and the value hasn't completely adjusted yet that governments in inflationary economies sometimes try to take advantage of but this can backfire if people perceive that this is going to happen and treat the currency as less valuable even before new currency is printed.
It can, however, create a situation where the Government agrees to pay X for a service, let's say the materials to build an SD and then after the price is set, they print more money and devalue the currency which means they end up paying far less in real value for whatever it is that they are buying than they would otherwise. Of course taking actions like this will force those working for the government to hyperinflate their bids to account for this in advance which of course simply drives the inflationary spiral.
Essentially, unless there is real value generated by the economy which supports the currency, just printing more may create a short term gain for some deep long term tragedies.
You can also try to directly control the economy, prices and production in what is called a Demand economy. Think the old USSR and you have a pretty good model of how that works. People work and live in increasingly distressed economic conditions where there is never enough or anything except for propaganda of how great things are. This is close to being an almost perfect model for the People's Republic of Haven.
You're other choice is to attempt to "borrow" funds which sort of allows you to recycle your money supply by having people buy bonds and give their money back to the government in return for future payments.
Chances are the Manticorian economy is based on a combination of rapid economic growth which increases the value of the money supply and successful borrowing, probably from all over known space (thereby using other nations money supplies to build your own).
Of course all this borrowing eventually has to be paid back but that's more of a future concern since actually redemption dates tend to be decades in the future so bonds issued at the beginning of the first Havenite War probably aren't going to come due yet for another few years.
One item I would like to point out in your question is that that vast majority of trade isn't going to occur between the outer worlds and the core of the League. Most of the valuable trade will take place between the worlds of the League's Core as well as the worlds of the Shell. The Manticorian Wormhole Junction is extremely important but it would be a huge mistake to assume that most of the League's trade moves through it from where it originates to where it's end destination is. However, even a modest fraction of that trade moving through the Junction represents an almost unheard of concentration of trade and wealth in a single place. This is by far the most important factor in the wealth of Manticore.
Greyson is one of those economies which almost defies explanation. As best as I can determine, what their success is being chalked up to is intense innovation and figuring out how to do just about everything more efficiently than anyone else. If you can figure out how to make things an enormously reduced costs that other people want then you can grab huge amounts of existing markets and this creates wealth which, if efficiently invested to make even more things more efficiently multiplies itself over time.
Somehow and for reasons I can't fully explain, the Greysons seem to have latched on to this form of wealth generation and used their relative proximity to the Junction and their alliance with Manticore to propel themselves to an economic position which most would find incredible. In this, they sort of resemble the United States in say, the Civil War Period of the rise from the Depression to World War II.
Anyway that's how I see it. Hope you found it useful.
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