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Global economic system
Topic Started: Jan 5 2014, 03:29 AM (158 Views)
Nentsia
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Politically incorrect history student
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Okay so here's the thing: I see a lot of people talking of trade interests, economic growth and downturn, setting up one mega-multinational after another - which is cool, but I think we could make it cooler.

We could expand the economic system a bit to add some more realism to it, after all economics determine a good deal of international politics. I know from experience how hard it is to set up an international economic system that actually functions, so I believe things should not get too complex. I'm not exactly a briliant economist, so if I've made some huge errors, please say so.

First of all: Money. Money is oil for the machine that we call the economy and money should flow (to the top!). So I was thinking, we could begin by setting up a financial system that basically controls the international flow of money/credits etc.

We could make a list of all Central monetary institutions (like we did by making a list for registered companies) which lists by country the central monetary bank, the currency it uses (and conversion rate?) and what discount rate it uses.

Then we could make a second list, listing all the major banks. Each bank that is registered will have to register its name, country of origin, type of bank (investment, commercial or public) and the owner (?) (certain groups, an individual, other banks, the major shareholders... the state).
To make these banks a lil connected with each other, we could add information on for example (depending on type) the three largest investments or loans (investment banks), or in which three countries they have the largest saving deposits (commercial banks). The distinction doesn't have to be that sharp btw, since large commercial banks often have an investment part as well.

So lets assume we all roughly sketched the international financial system, having black on white which major banks there are and where their credit/money goes to. This wouldn't lead to any direct changes in roleplay, but when someone of us for some dark reason experiences a financial/debt crisis, then others could go to this list and see if it affects their banks.

Example: Lanlania is a nice and rich country now, but the Lanlanian Kommerzbank! collapses because Lines says it, then everyone of course rushes to our financial list and what do they see: Lanlanian Kommerzbank!, owned by Kommerzbank! Group, has given its three largest loans to the Lomarran Multo Buono Banca (MBB) and the Kubanizan Krasnyy Bank and the Whatever Bank. For as far as I know, these banks are in the safe zone. But those who had given one of their three largest loans to the Lanlanian Kommerzbank! are screwed.

The Carpathian Tepes Bank (CTB) for example, had given its three largest loans to the Lanlanian Kommerzbank!, the MBB and the Krasnyy Bank. The loan for Kommerzbank! is now gone forever. CTB is maybe not directly in trouble, but it could for example ask other banks (other players) to give them a loan to refill that empty gap. If they can't manage to get one, because nobody trusts CTB (or the pplayer who controls it) and nobody likes to see their bank go down the drain, CTB might have to request government aid - or if it has shares it could even risk a hostile takeover by another bank (player). We could set up an OOC rule that when a bank loses 2 of the 3 major loans, it must be rescued: either by nationalizing it, or by money injections from others (central monetary bank for example) or by restructuring its debt (which would mean that everyone who gave a major loan to this bank would lose it & might bring others into trouble). And you wanna rescue your bank of course because either it drags your whole national banking system down the drain, or all your people lost their lifetime savings (especially if youre a small country).

Of course the whole OOC system of giving loans would have to be done between the players themselves, like a roleplay. First ask someone if his bank would want/need a loan from your bank. And if you're planning a hostile takeover of someone else's bank, communicate it with them like you would do with a war roleplay.

We could also abbandon the limit of 3 on major loans, so that some banks could grow really big. Like there is some Goldman Sachs here who has given major loans to maybe 6, 7, 8 or 10 other major banks. Or players who decide to merge banks, or simply take over other banks, could this way grow bigger. We could maintain as a rule/code that when a bank loses half of its outstanding major loans, it needs a rescue operation or else it faces bankruptcy Lehman-style. So for example, instead of Lanlanian Kommerzbank! collapsing, it is taken over by 4 other major banks from the CoN who now form the epic sounding ''Commonwealth of Banks'' CoB, which then becomes instantly the largest bank of Oracia!

For keeping stuff as simple as possible, I'm ignoring the relation between given loans and received loans in this model.

I solemnly hope that any of this actually makes sense... Because if we can make it work, we'd have something of an international financial system without any need for numbers (yay!).

Then the last part: trade.

This won't have to be complex at all. We could make yet another list, including all nations and register the following:

- Export commodities (manufactured goods, machines, chemicals, steel, textiles, agrarian products etc etc etc)
- Exports partners (list the biggest ones only: Lanlania (22%), Batavia (14%), Falsea (9%)) [it doesn't need to be 100%, assuming you trade with many many countries, these are just the very biggest export partners]
- Import commodities (uranium, foodstuffs, petroleum, electronic products etc)
- Imports partners (biggest ones only: Medo-Kubaniza (17%), Ritterschield (11%), Lanlania (8%)

These percentages are all random, based on what you will usually find in the CIA world factbook. I know that this is technically wrong, because theoretically a large nation could claim to be your imports/exports partner for 90%, while you gave that nation only 5% or something. That would seem a bit weird and is technically impossible.

I think not much more would be required, since such a list would tell us key information:
- What the economic interests of other countries are and which countries are economically important for them
- Reveals economic relations between countries, which in turn determines for a great deal international political relations
- It shows what commodities countries are specialized in and what they lack (and in turn, your country could specialize in a commodity if there is a market for it)

And again, here also counts that when one nation experiences a severe economic contraction, this could affect especially the countries that are its main import partners (less imports means less exports=less income for the exporting country). And... we could hurt each other badly with boycotts and protectionist meassures etc, increasing the need for economic diplomacy.

Finally, this is not how we should do things.. this is just an idea how we could organize trade and economics a bit - and I hope that others find this system simple enough. I can't think of any other way to keep such a system simple. And with simple I also mean that it doesn't become too determinist and leaves enough roleplay freedom.

Im curious what others think of it, and if people here want any more organized system at all :P
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Oertha
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Ultra Power
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I think it could be fun, but my biggest concern is who's going to manage all this? And if they get busy/tired of it, who'll take over? For in bygone days, I'd gladly manage any number of these spreadsheets, lists and such... but I'm already behind on RP and have a life/career to work on; most of us are getting up to that age where we have to deal with such things. Even our GLORIOUS LEADER LONG MAY HE REIGN Lines is swamped in work both on and off the boards, and those who usually come to his aid to lend a hand in running things around here will be moving into upper-level undergrad or even grad school, or maybe starting their own careers, within the next couple years.

Not trying to be a naysayer. I like the idea of having a system where we can easily see the effects of actions on the international market, and would fully support all of this stuff, if it was implemented. Having the opportunity to roleplay scenarios that were caused by circumstances entirely out of your own control is probably the best thing ever.

It's just that, in addition to suggestions regarding what Nent asked above, we should also ask who here is both willing and able to maintain such a system?
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RC159570
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Regional Power
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Maybe we should look into getting help for the RP ministers, may they live forever. Lines and Ikar both do a great job, but like you said Oertha, they are getting swamped. Maybe we should start looking into getting assistants for them, I remember that Blac is an "assistant" RP minister. They can help take some of the workload off of Lines and Ikar and the assistant RP ministers will have the know how and access if something happens to either of the RP ministers, may they reign forever.

Oh, and I do think that Nents idea is awesome, but again like Oertha said, we have to have people help it get started, making the sheets and answering questions. It seems to me something like this would have to be integrated into part of creating a nation, if it's optional I foresee it becoming popular for a while and dying off.
Edited by RC159570, Jan 5 2014, 06:41 AM.
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Raz
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Titans falling, Sons rising?
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Seems to complex even without all the numbers imo. Most players understand economics about as well as they understand how a nuclear reaction occurs to create a nuclear weapon, that is to say not at all really. The issues I primarily see is accessibility and how you will quantify all of it, as without numbers, stating that my bank is really big will have no real basis but we'd have to take it for truth regardless. I'd say that Glorious RP leaders decide and move on from there.
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Lines
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Senior nation
I can't say it's a horrible idea, though some people do have points in that it'd need ample maintenance and that we're low on personnel for that. However, can you set up a small example of it? Focused on a region or totally fictional, I'd like to see in it action. I think we may be able to incorporate something similar at the least--though it's something to consider as the thing evolves.

Ideally, we'd keep necessary input in minimum as possible, to not overwhelm either players or maintainers.
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Jamzor the Jaxxor
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There's nothing a drone strike won't fix.
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Aye, I think it's definitely something to look into.
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Kingborough
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The Monarchist
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I'd be happy to try and maintain it. With a bit of spreadsheet experimenting, I could possibly make it largely automated ... actually I'll do some experimenting tonight and see what I can work out. If I get any results I'll come back to you.
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Flo
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Shrek is Love. Shrek is Life.
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an interesting idea! for sure! I'd like to see this get fleshed out into something we can really use!
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Nentsia
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Politically incorrect history student
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Sorry this waited so long, Ive been very busy, Ill be working on this though.
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Oertha
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Ultra Power
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Nentsia
Jan 22 2014, 01:13 AM
Sorry this waited so long, Ive been very busy, Ill be working on this though.
I believe Lines (or King?) started a spreadsheet sheet regarding international trade and stuff. It's...somewhere. You could poke someone into giving you the link to it, because I don't have it. :P
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Alvino Castillon
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The Badass
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Oertha
Jan 22 2014, 07:13 AM
Nentsia
Jan 22 2014, 01:13 AM
Sorry this waited so long, Ive been very busy, Ill be working on this though.
I believe Lines (or King?) started a spreadsheet sheet regarding international trade and stuff. It's...somewhere. You could poke someone into giving you the link to it, because I don't have it. :P
I have it. Here's a link.
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