Shireroth Economic Proposal

[Kaiser Hasan I]

1. Basic Concepts

The basic idea of this economic proposal is to tack the erb currency against the Landsraad vote. Thereby, 1 erb would equal 1 vote in the Landsraad. The accumulation of wealth is achieved by fulfilling contracts which correspond to work needed within the Empire. Contracts can either be posted and opened to takers or conversely, work can be done through initiative with the individual posting a notice demanding payment for the work accomplished. Where upon the value of the work completed would be decided upon by the parties involved, and if a decision cannot be met, would be resolved by the Judex.

2. How It Works In Shireroth

While all citizens of Shireroth would be allowed to earn and hold currency, Only nobles with actual voting privileges would be allowed to use them in the Landsraad. So, the Duke of a specific Duchy would be able to use the combined number of votes owned by all residents of the Duchy when voting in the Landsraad. Erbs would not be "used up" after one vote, but maintained and accumulated to be used indefinitely or until spent on contracts.

Example:

The Duke of Brookshire has 500 erb of his own. He also has 3 residents within Brookshire, who each have earned 30 erb each. This gives the Duke a total of 590 votes in the Landsraad.


By using this system, Shireroth puts a premium on cultural development, and gives influence as a reward to those who are willing to put in the effort.

Technicalities

The result also means that residents of a particular Duchy or Barony have a larger say in the internal politics of their division. For if residents do not support their Duke or Baron, they may move to another division and therefore, take their erbs with them. As a result, the Duke or Baron of a giving division have a responsibility to represent their residents, or simply put in enough personal effort to ensure that they have enough wealth to vote without relying on the support of their residents.

To ensure against any foreign influence, ultimately all currency remains the property of the crown. This means that foreign ownership of erbs is illegal and that the erb cannot be traded for foreign currency unless two criteria are met:

1. There must be agreement between Shireroth and the foreign nation to trade.

2. The foreign nation must function off of the same system so that the value and risk between both states is equal.

To ensure against fraud, any individual who resigns their citizenship or becomes inactive (for a period determined by law), has their funds returned to the crown. In this way, currency is not withheld from circulation.

To ensure a proper starting point, all current citizens of Shireroth would be issued a certain amount of erb according to their status within the Empire. From that point on, all new citizens would be issued a standard amount. Individuals who join Shireroth, leave and then return again will not be issued additional amounts of currency, this prevents fraud.

All disputes regarding transactions and business will be decided by the Arbiter. An appeal can be made which would then be decided by The Kaiser as final authority.


Banking

The banking may be managed by one of two ways:

1. Appointing an individual to manage accounts on spreadsheets. (A system which is not very efficient and will eventually fail when the appointed individual looses interest or patience)

2. A banking program where all transactions are automated. (Completely preferable for obvious reasons. An administrator would be charged with monitoring the transactions to ensure no foul play)


Remarks

While this system would be a large departure from the past in Shireroth, its value is in a new dynamic it adds to the functioning of the state. Further down the road, if warranted, it would also allow Shireroth to attempt trade with other nations who've adopted similar versions of the same economy. This would add a further dynamic and bring new purpose to international relations.

[Aurangzeb Khan]

I can affirm from experience that relying on bored civil servants to manually update a spreadsheet in their own freetime unpaid when they do little else during the working day is a recipie for disaster.

[Andreas the Wise]

Ahh, this is interesting. The exchange of currency only with similiar systems makes sense - Gralus does the same with our currency, we only exchange with other post based currencies. And, to be honest, exchange is generally only necessary when citizens are heavily involved in both countries, there are things to buy in both, and they just need to combine their funds.

However, I would advise you to 'float' the currency to the degree that foreign powers may temporarily own erbs. What if, say, another Gralan wants a picture designed, and there's a Shirithian who does really good pictures, but only for 20 erbs. If they can't own currency, and the Shirithian won't work for free, what can they do? Join the nation and work up to 20 erbs is impractical if we want to keep active citizens and not just have people 'float in' for limited transactions. But say there's another Shirithian citizen, like me, who's happy to trade some of my hard earned erbs to the the foreigner in exchange for their currency. I and the other person should be able to agree a price - it might be 70 ecu for 20 erbs, say. Then, on Gralus, they transfer 70 ecu to me, and on Shireroth, I transfer the 20 erb to a 'Foreign Account' which any foreigner can use to then transfer the erbs from the Foreign Account to the relevant Shirithian they want to buy from. Or, if it's easier, I just transfer straight to the Shirithian, but they deal directly with the Gralan (being the middleman for money is fine by me, but for the whole getting the product too it's too tedious).

I raise this merely for the option of individual contracts between Shirithians and Foreigners, not for any national agreements. For trading of, say, MCS resources, I've always thought the best option is to avoid currency exchange rates altogether and issue everyone with a standard 'trading currency', but that isn't relevant to this discussion so I won't go further into it.

And the way I understand it, there would be no inflation (in the sense of currency devaluation) in this system as no new currency would ever enter circulation? But, at the same time, the prices for things could of course go up ...

...


On a different tack altogether, does the Crown hold a significant amount of erbs that aren't allocated to nobles yet for the purposes of giving for contracts? I would guess the government to be the one with most interest in cultural development that this system is based on, and the one who would pay for non-contracted work done of one's own initiative.
On another different tack - should the Dukes automatically get access to their noble's erbs? Why shouldn't the nobles be able to assign their erbs to a different duchy for that vote without having to entirely move (unless you're merely trying to promote regional cooperation and solidarity). Of course, that practically suggests that barons should also have a vote (albeit smaller than the Dukes, as they would assumedly have less erbs to start with), which may defeat the purpose of the system as you're envisaging it ...

[Yvain Wintersong]

How does the government get money? Does it create it and inflate the old currency, or does it levy taxes? How much money will the government be spending?

The result also means that residents of a particular Duchy or Barony have a larger say in the internal politics of their division. For if residents do not support their Duke or Baron, they may move to another division and therefore, take their erbs with them. As a result, the Duke or Baron of a giving division have a responsibility to represent their residents, or simply put in enough personal effort to ensure that they have enough wealth to vote without relying on the support of their residents.

I don't think it's that easy. Even if I didn't like Duke Erik, I would have a very hard time leaving Brookshire because of all of the work I've put into Ynnraile. I think most other people feel the same way about their own subdivisions.

This might be too close to democracy, but maybe people could choose which Duke to support during important votes. For example, if there's a vote where Duke Erik's voting YES on something and I disagree with it, I can choose to support one of the Dukes who's voting NO instead, and they get the votes from my money, but I'll still live in Brookshire.

However, I would advise you to 'float' the currency

I like Andreas' idea, but wouldn't it be easier to just allow foreign powers to own money, but not allow them to use the money to vote in the Landsraad? I admit there are some complicated ways foreign powers could game the system (find a Duke who agrees with the foreign power's ideas and give all their money to that Duke) but those seem too inconvenient for the foreigners to really present a problem.

[Jonas]

Interesting, but I'm against using it in the Landsraad.
In the beginning it could work, but it will get too confussing.
For me is an economy not necessairy, it's a lot of work and soon or later it will all collapse and bring Shireroth into chaos!

There is a reason why we came back to the old feudal system, Your Niftiness.

[hypatias mom]

To me, using the erb in the voting process in the Landsraad is nothing more than buying votes--it's a simple invitation to fraud and influence-buying. I don't think money should be used in this way. It's too much like the bags of $100 bills that have fueled machine politics in many cities. I am totally opposed to this proposal.

[Mosignor Penisberg]

Niftyrific

[Liam conToketi]

...I have some strong feelings in both directions, so I'll remain neutral on this topic.

[Jacobus Loki]

Well, it does simulate the old saying, "He who has the gold makes the rules". It's creative. The "chaos" comment would be interesting, in a perverse way. It would be interesting to see it work - Somewhere Else.

As for Shireroth, I think its

1- Too complicated-

2- Not easy to keep track of-

3- May put power in the wrong hands-

4- Too much like Real Life (personal reason)

5- Not surreal enough.

With all due respect, I'm against it.

[Erik Mortis]

1. Corruption could be fun (To Hypatia mom)

2. I could finish the bank I was making. thus
a. Keep track of funds.
b. create an interface that adds up all the fund in a duchy so the numbers are easy to see. it just means people's accounts will have to say what Duchy they are in. The only problem there is how to keep that up to date.

3. I have played with this notion before.

4. I am concerned about 1 duchy getting all the money... What if a duchy goes bankrupt?

5. perhaps the Kaiser should levy small taxes on occasion to reduce the amount in circulation, but on an irregular basis. once again, the bank could be made to do it.

6. All this is dependent on me, or someone, finishing a bank program. Or getting one that works for Shireroth.

7. I think I like this. At least it would be worth a shot.

[Kaiser Hasan I]

Ok, I've gotten a good amount of feed back so I'll answer some questions and defend what I can:

- I am concerned about 1 duchy getting all the money... What if a duchy goes bankrupt?

In order for one Duchy to get all the money, they would have to somehow be able to hold a monopoly over all service contracts. Basically if there was work that needed to be done, the inhabitants of that duchy would have to be the only ones working on anything. It just wouldn't happen, simply because enough people would likely be interested in working on something sooner or later. Also, if a Duchy were to gain all the currency in circulation, it would eventually have to spend it if it wanted to achieve anything. Also since the Crown technically owns the currency (as in macro economics) it would be the crowns responsibility to ensure that it doesn't spend itself into bankruptcy. If it did, that would allow for a lot of political intrigue and rather interesting to deal with: "Who would be the true executive? The Crown or the very wealthy Duchy?)

A Duchy itself cannot go bankrupt. If all of its residents spend ALL of their erbs including the Duke, it's the responsibility of its residents to go and attempt to earn more. No problem there, because there will always be something to do.

- Bank?

The bank simplifies and automates the economy making it much more easy to run, without an automated bank, there is little purpose in pursuing the idea in my opinion.

- Taxes

Taxes would be a part of the system. It would ensure first, that no single Duchy owned all the money, it would also ensure that misers don't sit on their earnings. Duchies would pay a tithe and it would be the responsibility of the Duchy to collect from its residents. If a resident cannot pay, then its settled in court.

- Corruption

Corruption isn't too much of a problem. The entire system is very transparent so there isn't much someone could get away with. Also consider that under this system Work=Erbs=Votes, which means that the more you do for the country, the more influence you receive. Anyone trying to corrupt the system wouldn't last long. But it would be very interesting to see.

- Too Complicated

How is it complicated? Works fine elsewhere

- No tracking

There is total accountability in this. All transactions would be completed in the Ministry of Trade for everyone to see.

- Not Surreal Enough

Contemplate the lotus, and while you do that, I will be going through your wallet.

- Buying votes

It isn't buying votes, its earning them. If anything, you're buying work with votes.

- Stability

it's stable. But nothing lasts forever. Ari resigned as Minister of Exterior Affairs, does that mean that the Ministry is unstable? And if it weren't stable what would that mean? That we don't have an economy? Well, we know what that looks like.

- Feudalism

This IS Feudalism. The economic system puts the feudal concept of the payment of tribute by vassals to their lords through the payment of tithes in exchange for protection, residence and representation before the throne.

- How does government get money?

The government gains money by the collection of tithes.

- How much will the gov spend?

The government spends according to need by contracts. There are two types of contract: Push and Pull.

1. A Pull contract is where the government needs something done (like a wiki entry) and puts up a notice of what needs to be done and how much it's willing to pay someone to do it.

2. A Push contract is where an individual does something on their own (like a wiki entry) and feels they deserve payment for the work they've put into it.

- Leaving divisions to change vote

This is understandable. What I can see as an alternative is that individuals simply make a statement as to whether they wish their erbs to be counted toward their Duke, or not on a specific vote.

- Foreign questions

This can be worked out once the economy is up and running for Shireroth. Trade negotiations would be a big part of the Ministry of the exterior and it would be the job of diplomats to determine whether we should trade with an ally or not. And if so, what the specifications are (ie can they own erbs? can we own their currency? what limitations etc...)

- See it work somewhere else

Babkha has this system already. It works to a degree, but is largely dependent on a number of issues:

- National activity
- Is the Bank automated or not?
- Is the legislative active or not?

In Babkhas case, when it is active, the economy works, when there isn't much activity it doesn't. Just like the usual way things go on forum based micronations. Babkha's legislature works the same way. And finally, their bank is not automated which means it was left up to a single person to manage all accounts. Which turned out to be a very loathsome task. Which is why I think we need an automated bank to make it work.


Overall, this sounds more complicated than it actually is. When its up and running its rather interesting. It shows who the ambitious people are and makes for an interesting rivalry. The corruption aspect is interesting as well since it keeps the judicial nice and active. I think people are generally skeptical because they can't see how it works. To change this, I'm going to write a simple short tutorial which uses examples to explain things.

[Erik Mortis]

I may have misunderstood a point. But it almost sounded like people could go "no.. I don't want my "votes" going to my duke today." and withhold them without leaving the duchy. I believe as long as you reside in a duchy your erb count for that duke, no matter what.

Perhaps we can make moving Duchies a process, so that there will be time to change the bank records to let it know of the change.

Does anyone know PHP enough that they could take over the bank I started? (even if they start over that's ok). Otherwise, I have no idea what I could get something working to specs. To bad the old bank died, then again, it wouldn't have worked for this. But it was so easy.

[Kaiser Hasan I]

Well the issue of how Erb/Votes are accounted for the Duchy can be worked out. If people aren't comfortable with withholding support from their Dukes, thats completely understandable. I was just trying to offer solutions to the problem of people not wanting to move to a different Duchy if they don't support their Dukes vote. An alternative could be that an individual removes their balance from their account and holds it in a foreign country where the system also is in place? Sort of like offshore banking..

[Erik Mortis]

That smells of democracy to me, just indirect.

As it stands people can't really influence their duke's vote. Why should we put it into the new system?

[Kaiser Hasan I]

True. Shall we go with the "If you don't like my vote, move somewhere else" proposal then? If you think about it, not supporting your Duke would be a very serious issue to begin with, so if someone is that serious they had better be willing to show it. So moving to a different division would make a clear statement that the individual isn't just playing around. It also doesn't change anything, since if you don't like how the Duke runs things, you can move even now.

[Erik Mortis]

I am for that course.

[Jonas]

I stay against it. It would deliver muich work.

It works good, as it is now. Why would we change our feudal system in something more complicated?

[Erik Mortis]

Because we can. And if I succeed in getting the bank working as I desire, it won't make for much more work than there is now...

[hypatias mom]

I still feel that the erb would be better used almost anywhere else than in the legislature. Erik may think a little corruption is okay, but I still feel it's a bad start to a worse end, and can do no good for Shireroth ultimately. But, the Kaiser's word stands, so I will, of course, comply if it is put into effect. I can only respectfully request that it will not.

[Erik Mortis]

Well, I honestly don't hear anyone else suggesting anything better.

Anyway, this is a micronation, experimentation is what we do, even when we know it's a bad idea. And, I don't see how this could have such a destabilizing effect as to be permanently a problem. If we don't like it we can fix it.

[Andreas the Wise]

I repeat - Guido can do banks if you want him to.

And Hasan, I'd support the 'withholding' of votes. That way you don't get actually democracy, as you can't send your erbs to the other side of voting, but you can still not vote for something you really don't believe in.
On the flip side, if your duke gets your votes no matter what, it does promote ducal unity, and having to talk through these things and keep people happy. My one question - if everyone in the Duchy is really unhappy with the Duke, may we attempt a coup?

[Erik Mortis]

It has happened in the past. And I'm sure could happen again.

Yes, but would he be interested in making a bank to our specs?

[Andreas the Wise]

Ahh ... possibly not ...

[Jonas]

Well, I honestly don't hear anyone else suggesting anything better.

Anyway, this is a micronation, experimentation is what we do, even when we know it's a bad idea. And, I don't see how this could have such a destabilizing effect as to be permanently a problem. If we don't like it we can fix it.

I have a suggestion: don't mess with the system!

But like Hypathias Mom said, the Kaiser's word stands and I always listen to my kaiser.

[Yvain Wintersong]

I must admit I don't feel very motivated by this system right now.

See, I really like the idea of linking currency to votes. It makes the currency worth something. Only, since I can't vote, the currency ends up not being worth anything after all. I like my Duke, but I don't think I agree with him any more often than I agree with anyone else. If he gets extra votes because of my money, I'm sure that would make him happy, but what do I get out of the deal?

[Erik Mortis]

What system. The non-existent economic one? or the voting one.

We have no economic system, and the 1 vote per Duke was just so we could get the show on the road. What's the point of being a micronation if we can't build on the system. We aren't throwing out one system for another, we are taking the system we have, and adding to it. And if it doesn't work can revert back.

[Kaiser Hasan I]

Alright, Ladies and gents,

Let's try it this way. Since its mostly Erik and I doing the work, how about we give this a shot and if we don't like it, we end it. That's the nature of my reign, I'm not going to force anything on anyone, but I'm of the opinion that people will like it. If it turns to all hell we simply stop the use of the system but let's try it first and see.

The major contention I can see right now is how the votes work within the Duchies. Andreas proposes the withholding of votes, Erik proposes that if you don't like the policy of the Duke, you can leave. Aside from people's opinions on the entire system, let's resolve this bit first and move on to other grievances.

[hypatias mom]

I like Andreas' proposal. If we don't like our duke's vote we can move, or we can attempt a coup. I trust this won't happen a lot, but it's nice to have as a fall-back position in really seriously contested proposals. Normally, I feel we can discuss and come up with a duchy-wide consensus, but not always.

I'm also ready to see how the Kaiser's erb-based system works. It is an interesting proposition. As His Niftiness said, if it doesn't work, we can always cancel it.

[Kaiser Hasan I]

Thanks for the support. As I said, I take everyones objections seriously and there is no need to worry if it doesn't work. Remember, ultimately, this has no effect on the Kaiser, so if things don't work out, our executive is safe.

[Erik Mortis]

And that's all that matters.