Real effects of Lacoon II

Let's say a huge corporation based on one of the Core worlds but operating for the most part on worlds out in the Shell and Verge depends on those operations for its fiscal viability. In other words, its profits are generated on the worlds where it operates and those funds are transfered to its head office via the wormhole network by way of fast ships. Now, any fees and levies that corporation needs to pay to the Federal government are paid by the head office, as well as authorisations for and actual payments of any capital outlays. However, since its capital flow has dried up, the corporation can no longer do any of that, nor can it pay its employees or pay taxes to its homeworld's government. Those employees no longer have money to pay for necessities or luxuries, which lead to a cascading ripple effect on those companies that produce and supply those necessities and luxuries. Moreover, as the tax flow dries up, and unemployment rises, the local government lacks the funds to implement policies to mitigate the impact, and its credit rating drops which makes it that much more expensive to borrow the necessary funds.

Even if each world only hosts a relatively small number of really huge corporations, the ripple effect will be disastrous.

But if it's really huge it can't. Money is made by dealing with areas densely populated with rich people, not sparsely populated with poor people. And if you are a huge corporation, you will cleverly arrange things such that the main corporation has little to tax, it's all shell games with subordinate corps and interlocking banks and such.

Not that they won't have problems, but they won't be as simple as you suggest.

I call bull. Samsung makes by far most of its profits by selling its products to ordinary working people in Europe, North America and elsewhere in Asia - not in Korea. The same is true of just about every major corporation out there. The exceptions are those that deal exclusively with other corporations or with governments, or a miniscule handful that deals in real luxury goods, such as jewellery, high fashion etc.

Very few corporations will make a profit, never mind compete in the top rankings of their fields, if their market consisted mainly of the wealthy. The wealthy section of the population in any society ranges from small to miniscule, and wealthy people can consume only so much electronics or food or everyday clothes.

The thing is, yes, many Shell and most Verge worlds in the Honorverse might be sparsely populated, but most transstellars will not conduct their cash generating business on only a single planet - they'll operate on numerous worlds - so their customer base, while poor and sparse on any one world, will actually add up.

Also, to answer your second objection, any government tax collection agency (except maybe America's) focuses a great deal of its energy on finding hidden revenues to tax. That is certainly true down here, which is one reason why the SARS is consistently ranked as the best performing and most efficient government agency/department in South Africa.

But I wasn't talking exclusively about taxes. I also mentioned the levies and fees payble to the League's federal government, which while small do add up.

Also, the head office of a galaxy-spanning business empire is going to employ tens of thousands of workers. Now multiply that by tens or scores of such head offices on a single planet, all of which are suddenly experiencing cash flow problems at the same time. Even one such corporation experiencing cash flow problems will have a devastating impact. Ten of them? A score? A hundred? The ripple effect as businesses lay off employers and people no longer have the money to support local suppliers of food and other consumer goods will be catastrophic, to say the least.

Nico wrote:I call bull. Samsung makes by far most of its profits by selling its products to ordinary working people in Europe, North America and elsewhere in Asia - not in Korea. The same is true of just about every major corporation out there. The exceptions are those that deal exclusively with other corporations or with governments, or a miniscule handful that deals in real luxury goods, such as jewellery, high fashion etc.

Very few corporations will make a profit, never mind compete in the top rankings of their fields, if their market consisted mainly of the wealthy. The wealthy section of the population in any society ranges from small to miniscule, and wealthy people can consume only so much electronics or food or everyday clothes.

Ordinary working people in North America and Europe ARE the wealthy people on earth.

Here are the top 10 countries in the by percentage of the Earths total wealth their people posses:

United States — 41.6%
China — 10.5%
Japan — 8.9%
U.K. — 5.6%
Germany — 3.9%
France — 3.5%
Canada — 3.0%
Italy — 2.9%
Australia — 2.0%
South Korea — 1.6%

You want a list by average wage?
https://en.wikipedia.org/wiki/List_of_c ... erage_wage

Manticore is either Switzerland or Luxembourg on that chart. But every one of those nations on the OECD statistics list, even the ones at the bottom, are the wealthy nations on earth.

Instead, lets look at the poor.

How much money do you think Samsung makes selling their products to Malawi? You know what the per capita GDP is there? $226.50. How many Samsung 60-Inch 4K Ultra HD Smart LED TVs ($1798 on Amazon) do you think get sold there? Do you think they buy a lot of Galaxy S7's, list price 300% of the per capita GDP, along with a monthly data plan and a Netflix subscription?

No, they are a black hole to Samsung and pretty much every multinational that doesn't deal in tobacco, tea or cotton. That's the difference between a core world and the verge.

No, because you're comparing apples and oranges. The ordinary working people of the industrialized, developed countries are wealthy in comparison with those of societies such as Malawi, but not when compared to their own societies' wealthy people. It's a ridiculous comparison to make, because of things like, oh, cost of living.

If you make the average salary of a US worker you are make more than 99.5% of the world. And yes, I am saying that having the average kind of income that an average worker in an industrialized country is wealthy. That's who large multinational corps sell their products, or to the the companies that provide services to them.

The poorest people in the industrialized countries has more income (or equivalent from the government) than prosperous people in the poorest nations.

Really poor people are not great customers for huge corporations, mostly because they don't have much money and what they purchase is focused on day to day survival.

And yes, that is exactly the difference between the industrialized long established and stable core worlds and the verge. It certainly doesn't help that you have OFS raking in a percentage from the top, but they are generally not wealthy industrialized worlds with a a prosperous standard of living.

kzt wrote:If you make the average salary of a US worker you are make more than 99.5% of the world. And yes, I am saying that having the average kind of income that an average worker in an industrialized country is wealthy. That's who large multinational corps sell their products, or to the the companies that provide services to them.

The poorest people in the industrialized countries has more income (or equivalent from the government) than prosperous people in the poorest nations.

Really poor people are not great customers for huge corporations, mostly because they don't have much money and what they purchase is focused on day to day survival.

And yes, that is exactly the difference between the industrialized long established and stable core worlds and the verge. It certainly doesn't help that you have OFS raking in a percentage from the top, but they are generally not wealthy industrialized worlds with a a prosperous standard of living.

The development and deployment of mass production methods made it possible for people like you and I to be on this blog and have other luxuries. We are not more capable, we just have a better infrastructure.

Some groups working to solve poverty in nations without a stable production and distribution system find the best first step is enabling people to have good self-help groups. The members of these groups are trained to help each other set up micro businesses. For some, this is as small as applying modern gardening methods, buying a pregnant nanny goat, setting up a small cooking stall, or other such.

Worth Reading:

Hernando de Soto, the controversial Peruvian economist. Read also the articles showing that providing legal title to property squatted on by many of the poor often does not produce the results wanted. The situation reminds me of lottery winners - when the persons involved do not have adequate training in using the boost, they often either lose it or have it taken away from them. The lack of secure property rights, while important, is not the whole problem.

Just as with responsible gun ownership, good training is critically important, but often neglected


FWIR, at least one corporation is arranging for stall holders selling their products in poor countries to be able to buy very small solar light systems using a lease-purchase method. It is a win-win situation in many cases as a stall holder able to be open later can sell more. Of course, the corporation makes a profit, it just spreads it out over a longer time span.

One method is a solar system designed like cell phones, as bought cards enable the system for another month until the system is completely paid. Properly planned, this is less expensive than kerosene lanterns, and accidental fires and pollution are reduced

kzt wrote:If you make the average salary of a US worker you are make more than 99.5% of the world. And yes, I am saying that having the average kind of income that an average worker in an industrialized country is wealthy. That's who large multinational corps sell their products, or to the the companies that provide services to them.

The poorest people in the industrialized countries has more income (or equivalent from the government) than prosperous people in the poorest nations.

Really poor people are not great customers for huge corporations, mostly because they don't have much money and what they purchase is focused on day to day survival.

And yes, that is exactly the difference between the industrialized long established and stable core worlds and the verge. It certainly doesn't help that you have OFS raking in a percentage from the top, but they are generally not wealthy industrialized worlds with a a prosperous standard of living.

Poor people eat, you know. They clothe themselves. They buy cellphones, because landlines are expensive. They pay service fees. They brush their teeth. They even, God forbid!, drive cars and access the internet. They take regular baths, with soap! They rent flats and houses! They sacrifice much to send their kids to school. They pay utility bills.

There are many, many more examples of services and goods that poor people consume on a regular basis.

If, in the Honorverse, a transstellar operates on say, twenty worlds in the Verge with an average population of 2 billion, of whom 95% are impoverished, that transstellar will still be making a tremendous amount of money from selling just one single product or service to a total population of 40 billion customers.

Now, since most transstellars will probably offer numerous products or services - related or not, necessities or not - I imagine that their profits will be that much higher.

In the end, the end results of Laocoon II will be the same. Wormholes blocked=cash flow dried up=corporate collapse=ripple effect=economic crisis.

Duckk wrote:ART:

"Better than two thirds of our total interstellar commerce — the percentage is higher for freight; lower for passengers and information — travels in Manticore-registered bottoms at some point in the transport cycle, Innokentiy. Almost thirty percent of it travels in Manty ships all the way from point of origin to final destination; another twenty-seven percent travels in Manty bottoms for between thirty and fifty percent of the total voyage. And another ten or fifteen percent of it travels in Manty bottoms for up to a quarter of the total transit." Her expression was that of someone smelling something which had been dead for several days. "As you can see, simply pulling their own shipping out of the loop will reduce our available interstellar lift by better than half."

Which just goes to show that the Mandarins are not that bright. They should have been intervening in the Haven-Manti war from the get go if they relied that much on Manti Freighters for their commerce. That conflict had the potential to disrupt their freight network if the Manti’s lost and Haven took control of the freighters. Instead they sat it out and hoped for the best. They and the SLN did not even pay attention as to why their freight network did not get disrupted.

Thunder Child Actual wrote:
Which just goes to show that the Mandarins are not that bright. They should have been intervening in the Haven-Manti war from the get go if they relied that much on Manti Freighters for their commerce. That conflict had the potential to disrupt their freight network if the Manti’s lost and Haven took control of the freighters. Instead they sat it out and hoped for the best. They and the SLN did not even pay attention as to why their freight network did not get disrupted.

You are right, the Mandarins are not that bright.

Unfortunately they do things like spend all their time trying to get elected and reelected. They go heavily into things like borrowing endlessly to have more money to give away. Listen to what God told them about the evils of abortion (as if that's anyone's business except the woman's). Gun control, probably because of fear that they will get un-elected in a messy way. Destroy the educational system. Ignore global warming, pollution, and ... Oh Well, why go on.