Realm Management

[whswhs]

Originally Posted by maximara

What I mean (and admittedly poorly explained) is that this falls apart when you get past the city state level.

For example, you have Detroit in the Realm of Wayne County which is in the Realm of Michigan which is in the Realm of the United States. Detroit has been an economic basket case even when some of those realm it was in weren't.

The various State Realms have to balance their budgets while the United States can spend like a drunken sailor racking up debt as long as the world has confidence in its currency.

Detroit didn't get there by going to war with a budget exceeding a certain fraction of its productive output.

[Michele]

Originally Posted by maximara

What I mean (and admittedly poorly explained) is that this falls apart when you get past the city state level.

For example, you have Detroit in the Realm of Wayne County which is in the Realm of Michigan which is in the Realm of the United States. Detroit has been an economic basket case even when some of those realm it was in weren't.

The various State Realms have to balance their budgets while the United States can spend like a drunken sailor racking up debt as long as the world has confidence in its currency.

I'm out of my depth here, but my impression is that what you are advocating is that realms can purchase, say, old destroyers in exchange of basing rights, or for a promise to pay for them some time in the future. They can even buy natural resource points from other realms, in order to spend them for improving their IR, against a promise to pay those points back in 36 turns.

All of that is advocating for free trade among realms - which is already allowed by the book as written. If the realm of the USA really believes that the realms of Great Britain and France will eventually win WWI, and that they will eventually pay their loans back, then it can lend the latter whatever resource or cash the US government is willing to offer, and the latter are free to borrow.

The MBF, as written, on the contrary, is based solely on how much you can and want to tax your citizens.

Admittedly, a government can also ask for loans from its own citizens; and, abroad, one could ask money not just from other governments, but also from those governments' citizens. I don't think that is covered in the book as of now. I suppose a Bluff (propaganda) would have to be successful, and the amount of credit gathered and the repayment terms would depend on Loyalty or Conformity (probably, whichever is lower) on the internal market, and on Resonance when it comes to foreign private citizens.

[maximara]

Originally Posted by whswhs

Detroit didn't get there by going to war with a budget exceeding a certain fraction of its productive output.

How about the United States in the 1940s? Despite all the Public Works projects it wasn't until the US formally got into WWII and military spending in relation to the budget went through the roof that the economy took off.

More over Military Spending in the US is half of discretionary spending. There are many areas where if anything happened to their military base they would be up financial cripple creak without paddle.

I personally saw the effects of a base temporally closing when my parents were looking for a place in New Mexico to retire - the town was barely functional.

[ericthered]

Tax rate is not the same thing as the revenue factor. Tax money that goes to pay for an existing school system isn't part of the revenue factor: its just part of the realm's economy. Conversely, printing new money can add to the realm's revenue factor, without it being a tax.

When I say a realm is overburdened, I mean that the resources directed to what the realm says are reducing the realm's economic output. It might mean that so much food has been taken that people are begining to starve. It might mean that the state is spending so much money that everyone else's money is devalued and they can't buy anything. It might mean that all of your smiths have been conscripted to build a wall by carrying around buckets of dirt. It might mean more and more of your people live a subsistence lifestyle. It might mean that you have chronic shortages of basic goods. All of these things have happened in history, quite often because a realm is pushing to do something really hard. Of course, that push may or may not be justified, and it has occasionally paid off.

The higher Tech a society, the more of a revenue burden it can bear. That's part of what makes total war so scary. But just as TL1 farmers who all go to war during harvest must either conquer or starve, TL8 societies still have limits.

All of this is not to claim that a reasonable, or even "high" tax rate can't be used to stimulate an economy. But there are limits, and governments that are not desperate and actually care about living in a country in 10 years don't tend to push them hard.

[maximara]

Originally Posted by Michele

I'm out of my depth here, but my impression is that what you are advocating is that realms can purchase, say, old destroyers in exchange of basing rights, or for a promise to pay for them some time in the future. They can even buy natural resource points from other realms, in order to spend them for improving their IR, against a promise to pay those points back in 36 turns.

Actually it is more the top most realm builds a base with in another smaller realm. That base employees people (in addition to the soldiers) who earn money which makes the that realm wealthier then it would be otherwise. This is why base closings within the US are so hard to do - in some cases they are all that is really keeping the town/county solvent.

Similarly US bases overseas results in those realms they are in themselves spending far less in Military Resources than they would otherwise have to spend.

Also its not just military spending but over inflated assets be it South Sea stock in England in the 1700's, 1920s US stock, 2009 US property or the shoe everyone is afraid will drop in China.

My late mother called it prosperity on a credit card and eventually the bubble bursts. In fact, for much of the 1800s the US seemed to have a major economic down turn brought on by either something internal outside its control.

[Willy]

Originally Posted by maximara

My late mother called it prosperity on a credit card and eventually the bubble bursts. In fact, for much of the 1800s the US seemed to have a major economic down turn brought on by either something internal outside its control.

Your mother was quite right, the main problem is as long as everyone believes it will go allright it does, until the first little problem comes up. That is why during Covid and the last finance crisis government worldwide did everything the could to drown the crisis in money, actually it works.

Another reason which is also a error is that governments of any size, from the small town up, can´t be insolvent. In fact since they own a large infrastructure and have other securities also they have steady income through taxes and the like, they are searched debtors. This works for both sides the government gets money with a low interest rate, and the money lender is quite sure he get´s it back. Of course this works only until a certain gearing is reached, and most western societies are far beyond that.


The reason for such shortsighted behavior is that the people who make the decissions and benefit from it will not be in offfice or even alive when the bottom of the barrel is reached. Typical terms I western society in politics are around 4 or 5 years, and it´s a common political advice to spend all the money now so that your successor is fairly crippled. A german minister of defense once said to his successor" Everything is ordered, you only have to pay for it!"

[Michele]

Originally Posted by maximara

Actually it is more the top most realm builds a base with in another smaller realm. That base employees people (in addition to the soldiers) who earn money which makes the that realm wealthier then it would be otherwise.

That's in-built in GURPS Realm Management. If in Zarthus there are citizens who are of Average, Comfortable etc. Wealth it's because the state is, as usual, the main employer, investor, buyer etc.

Indeed, note that a realm that has Traditional economy will find it hard to carry out a significant Improve maneuver over a short time. That's because half of its revenue is frozen in luxury goods. But a realm having most other types of economy can very well Improve the realm's Infrastructure or Education. That represents the state being the biggest investor, with positive effects on all aspects of its citizens' lives.

Also its not just military spending but over inflated assets be it South Sea stock in England in the 1700's, 1920s US stock, 2009 US property or the shoe everyone is afraid will drop in China.

That's the drawback of a Capitalist economy, per p. 20.

[Michele]

Originally Posted by Willy

Another reason which is also a error is that governments of any size, from the small town up, can´t be insolvent. In fact since they own a large infrastructure and have other securities also they have steady income through taxes and the like, they are searched debtors. This works for both sides the government gets money with a low interest rate, and the money lender is quite sure he get´s it back. Of course this works only until a certain gearing is reached, and most western societies are far beyond that.

Sorry to disagree. Realms can entirely well become insolvent. And being big and having plenty of gold mines in South America is no guarantee against that, as Philip II demonstrated.
It's true that generally, the debtors accept a restructuring of the debt, the latest big example being Argentina. But sometimes realms just default and the debtors lose everything, like in the Mississippi case in the 1840s.

[Christopher R. Rice]

Originally Posted by Michele

Sorry to disagree. Realms can entirely well become insolvent. And being big and having plenty of gold mines in South America is no guarantee against that, as Philip II demonstrated.
It's true that generally, the debtors accept a restructuring of the debt, the latest big example being Argentina. But sometimes realms just default and the debtors lose everything, like in the Mississippi case in the 1840s.

This is also reflected in the rules via Dissolution.

[Willy]

Originally Posted by Michele

Sorry to disagree. Realms can entirely well become insolvent. And being big and having plenty of gold mines in South America is no guarantee against that, as Philip II demonstrated.
It's true that generally, the debtors accept a restructuring of the debt, the latest big example being Argentina. But sometimes realms just default and the debtors lose everything, like in the Mississippi case in the 1840s.

Seems we have a misunderstanding. Of course they can! I wrote " Another reason which is also a ERROR is that governments of any size, from the small town up, can´t be insolvent" , not that they can´t get insovent. I have 2 dozen years of local politics under my belt, and I know from experience how short even, on the paper rich towns, are to this case, especially during the last finance crisis.


And yes it happens today, to quote myself "Of course this works only until a certain gearing is reached, and most western societies are far beyond that." the higher you are in debt, the more interest you normaly pay, which strangles even a healthy society after a certain time. Some western nation pay actually a reasonable part of their income only for the interest. By the way the overflow of gold and slver from themines crippled the main lands economy and triggered a inflation.


The spanish king you mention is a special case. This one fought long and costly wars during the whole time, and achieved not much. Even plenty of gold and silver from the colonies couldn´t rescue him, because of that.