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Philip Locke
Priest of Hel
(7/30/02 2:45 am)
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The Failure of Micronational Economies
The Failure of Micronational Economies
Philip Locke
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A glaring economic problem that confronts many micronations is that of government spending exceeding capital generation by the private sector. Many young governments predict a vibrant private sector full of active businesses will generate enough capital to compensate for the massive amount of money dolled out every fiscal period. Of course, any person whose been around micronations enough realizes that lack of motivation and almost no incentive makes micronational economies a place where only the die-hard, the really economically interested, or the naïve hang about.
A government usually looks at its starting one million dollars (we’ll call currency dollars just to simplify) with a wide grin and imagines what it can do with it. Micronational budgets usually consist of a list of government organs and individuals to whom the government will be allotting money. Many times the nation will keep a bit of money held back for ‘safe-keeping’ or some such thing. Things progress and they then come to realize that most citizens have little if any involvement with the private sector. This is because most citizens have a source of income: the government. In a typical micronation most citizens are employed by the government and therefore have no other time for finding and keeping another job, or they do not feel the need to be privately employed.
This creates an economic nightmare. The government pays almost all of its citizens and then collects a portion of it back in taxes. In the real world government taxes take money from citizens who have collected it in the private sector. However, in a micronation the government is just taking back less then or equal too (well, usually not equal to) what it already gave out. Of course, often this cycle of ‘bringing in less than was given out’ takes a while to bring a nation into debt. Often, by the time a nation should be in debt it has dissolved or been merged with another micronation, so it matter little. But the principle of the matter remains: most micronations are doomed to be thrust into debt because the government spends much more then it can ever dream of bringing in.
The only way to combat this looming economic quagmire is to have a population that is so large that most citizens cannot be employed by the government. However, there is still no gaurentee that these unemployed citizens will find employment in the private sector since quite a few people find fake money far less attractive and far harder to earn than fake power. And, even if many citizens were involved with the microeconomy of a largish nation, substantial capital generation is unlikely (especially in a service based economy).
This cycle may only exist in service economies for in commodity economies it is possible for money to be produced via mining, I suppose. I will probably be corrected for this by someone wiser at a later date.
The situation also raises a Catch-22 of sorts. We must accept that fact that most people are uninterested in being employed in a micronational business. Most micronationalists turn to the government for employment, for, as Mr. Siskind pointed out in ‘On the Psychology of Micronationalists’, any position of power is an ego boost. At this point a government must make a decision: Opt for a healthy economy and attempt to push citizens into the private sector where they may become bored and leave the nation or let most citizens have a government job and watch the nation gradually slide into debt.
Economics is one of the most complicated parts of micronationalism, for it provides constant challenges and presents and endless list of problems. In the end, most (if not all) microeconomies are a failure. Perhaps in the future a discovery will be made that allows microeconomies to thrive without constant spam attacks from the head of the economics department urging people to get involved.
Philip Locke
Dpty. Chairman of Pacarian Idealist Party
Chief Editor of the Pacarian Post
Knight Who Says Oi |
Philip Locke
Priest of Hel
(7/30/02 1:04 pm)
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Re: The Failure of Micronational Economies
Is being a 'Priest of Hel' the same as being a 'Priest of Hel l'?
Philip Locke
Dpty. Chairman of Pacarian Idealist Party
Chief Editor of the Pacarian Post
Knight Who Says Oi |
Eoin Dornan
Priest of Odin
(7/30/02 4:01 pm)
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Re: The Failure of Micronational Economies
If my knowledge of Norse Mythology is correct, Hel was Loki's daughter. She did rule the dead, though.
Sun bless, Earth keep
Ard-Baron Aedh-Eoin I of the United Baronies
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SaiKar LumEth
Tourist
(7/30/02 7:59 pm)
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Re: The Failure of Micronational Economies
The big problem with micronational economies is that they are the exact opposite of the rest of micronationalism. While most aspects of a nation (government, military, diplomacy, culture, ect) are widely open to creativity and individualism with minimal possible rules, an economy can function only if there is a long list of rules. Otherwise there is anarchy and the system is meaningless.
So what? Well, I don't know about you, but I don't like following rules if I can help it. I would much rather partisipate in a system that allows me to be creative and make stuff up then one that is very strict. Economies treat everyone the same... the only difference is how involved the person is (and thus, how much "wealth" they've acumulated.)
Another big BIG problem with economies is the fact that the wealth is meaningless. With a culture you can be part of a group, a well-designed government is something to be proud of, and a trained military can easily inspire others to stay out of your way. But being a multimillionare? So what? Economies usually are structured only around GAINING wealth, and have no real ways to SPEND this wealth. I have a quarter of a billion dollars and I own half the stock market. So what can I do with this money? Buy more stocks... or bonds... gamble perhaps. that's about it. There's no real incentive there.
Micronational economies can ONLY work if it gets big, and this usually involves nations being linked. This would result in "rich" and "poor" nations, but hey, at least it's something. And as for incentive... service-based economies offer some things. If they would all agree to take NOTHING but micronational currency, then there is your incentive right there. Fake wealth for real goods.
The matter is clear, however. Unless people get serious with these economies and can get past the phase of salaries and stock markets, it will never be popular. I sure know I'm not going to waste MY time in something like that.
Sai'Kar Lum'Eth
Holy Light mage
Last remaining Micron princess
Really just Jason Steffke |
Trevon Andarosel 
Priest of Bragi
(8/6/02 8:47 am)
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Re: The Failure of Micronational Economies
The reason behind the reasons mentioned in the posts above, is that nobody really wants to have an economy. It's fun to set it up, but once you have set it up and it's kindof running, it has become boring and uninteresting, and consists mainly of routine actions.
The only solution to this, making an economic system so harsh that you really have to gain money to be able to survive in the community, will cause the economical loosers to drop out, which leads to the downfall of the micronation.
Trevon.
The storyteller of Ex, Umbagollah
Ilotim ilo arelisin il parduvile arelis te arelisin
The truth is just too true to be true for everyone |
Satrap Malkom Khan 
Tourist
(8/9/02 11:03 am)
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Re: The Failure of Micronational Economies
What can Bill Gates do more then us, with his money?
Mirza Malkom Khan
Satrap of Kapitalia
Arteshbad of the Imperial Army
Vizier of War
Co-founder of the Azadegan
WaCo Chairman and founder
www.babkha.org |
Eoin Dornan
Priest of Odin
(8/9/02 3:50 pm)
Reply
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Re: The Failure of Micronational Economies
Get a better godsbedamned haircut, for a start.
Then he could think up expensive and interesting ways of killing himself.
Sun bless, Earth keep
Ard-Baron Aedh-Eoin I of the United Baronies
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