Unified Currency treaty discussion.

[Erik Mortis]

This is to discuss the idea of making a treaty that would create a unified currency between signatory nation, with a unique name. This would also require a central banking program, and the allowance of monetary movement between member states.

[Harvey Steffke]

All right, let's discuss.

A unified bank would take more than just signing treaties. It would need to be an actual branch of the commonwealth that would require upkeep and watching. Who would oversee the program's operation? Who would make sure nothing fishy is going on? What country's laws would be in effect regarding control, tampering, and fraud-based crimes?

Would there be any sort of IECO-esque change rate calculation involved, or does every country simply get a 1:1 ratio to eachother?

Nelaga currently lacks any sort of economy at the moment, and to be perfectly honest, I'm not sure that's a bad thing. Having spent a little time looking at Shireroth's economic system, I've determined it's a very weird thing. I have lots of objections to imploying such a system in Nelaga or even using it in Shireroth that I'd be willing to elaborate on if questioned but am not sure they're entirely relevant to the treaty discussion.

[Jonas]

Wait! If MyBanco with the xbank works, we will not need seperated banks!

[Andreas the Wise]

The other problem (there are two actually, but one is easily solvable) is different economic systems. Specifically (now Toki/Nova and Shire have changed over from "money=" to "money buys") in the income. Shireroth earns money entirely from bounties. Toketi earns money from land holdings. Tokians don't have to do anything (though if they continue to not do anything for a couple weeks someone else will conquer their land), unlike Shirithians. And Novatainians have the government confiscate the income from their land, and then pay them back for posting and bounties, but since there are three citizens trying to do the work of 15, they earn a bit more in bounties than Shirerithians do. And while with SCIRA there's something quite similar to spend money on between the two economies, there still stands the fact that people end up with quite different amounts of money for different reasons. Oh, and Bayen has programmed a python bank which is absolutely perfect for our needs now, as it handles all the buying of units etc, and though I didn't like it at first, I'd be loathe to not use it now.

The other problem is that foreigners can't use erb, but that can easily be solved by the Landsraad.

Of course, if you didn't mean "all use the same currency for everything" and rather meant "have a currency we can all use for exchange" then that's easy. One already exists. It's called Trade Credits, issued by MITO (which it would be nice for the Commonwealth to support) and currency exchange is handled in a similar manner to ICEO (though updated for current economic contexts) by MICEO.

[Erik Mortis]

I meant.... 1 bank, one currency. Start it evenly distributed, then let fortunes move as they will. If a government gives out more of its money then another, then that is up to them.

The treaty signers would proly need to create an economic council..etc..etc... It would be a bit of an organization yes.

No Exchange rates, or conversion rates. No ICEO calculations. Once set up, there wouldn't be much in the way of maintenance. Just have some rules in the Treaty to govern the bank and how to hand new members.

[Andreas the Wise]

Well, Shireroth might be able to do it, but Novatainia won't.

[Nathan of Natopia]

Natopia encourages the other members in this economic endeavor and will look on with interest.

But only looking with our eyes, not our hands.

We have no economy.

[Harvey Steffke]

Nor does Nelaga, but this seems like a halfway decent excuse to develop one, if we can integrate it flawlessly into other countries.

I'd ask my minister of greed (teehee title) what he thinks about it, but he's already here as a rep of another country. Yay dual citizenship!

[Andreas the Wise]

I'd want to see what we were connecting it with and how we plan to use our economy first before I started one in Nelaga. I'm already trying to keep two different economies going ... (though I think CITRA will basically run itself now, brilliant idea of Bayens ...)

[Erik Mortis]

Well, the economies don't need to function the same really. Just the ability to use a single bank, with a single currency. Shireroth could still use it's money for votes if it wanted to. (though I think we ditched that system)

The current Shireroth software COULD handle this.. but I'm not sure we would want to use it. It's really simple, and I'm not maintaining it anymore.

Also, this could lead to a unified stock exchange.

One of the core problems with Micronational economies is the lack of people to make it work. one nation doesn't have the people to maintain an economy, multiple nations could do it.

Maybe my goal is something like the Euro. In our case, as I don't know that system well, each country could have its own laws on how things work, but the treaty would dictate the name of the currency, that it's always a 1:1 ratio from one nation to the other and that money can move freely, ie no "import" tax.

[Andreas the Wise]

I completely understand the idea and goal. I'm just saying that if Nov/Tok and Shireroth went for a unified economy now, one of us would have to change how we do things. Either Shireroth would stop taxing, earn money via land and change SCIRA to CITRA. Or Nov/Tok would start taxing, stop earning money via land, and change CITRA to SCIRA. I designed the Nov/Tok economy to be comparable to Shireroth on the citizen level (similiar amount of money per person), but at the foundation level, they function in different ways. Personally, I'd prefer changing SCIRA to CITRA because SCIRA was always a rip-off of CITRA. Bayen and I talked about it recently - it wouldn't be too hard to do (and wouldn't affect Shirithian ability to spend money on votes). The only major differences would be Shireroth would stop taxing; we'd have to give out more bounties (as we'd probably be earning ... oh, 12000 a week); and there'd be no more SCIRA shops. [In CITRA, you buy all units from non-player-industry, but in return get money for the land you hold. So Shireroth could opt to take all the money from land income and just distribute via bounties as we normally do, but more generously. Money would go back into voting or CITRA units. It's kinda the direction we're going in anyway, the 'earning from land' is the major difference.] That's probably a completely bizarre explanation for anyone who's not used to CITRA .... if I were to explain it in full the post would be much longer.

http://docs.google.com/View?docid=dn8fhbc_80c5hxnghb The CITRA charter, for reference.

[Erik Mortis]

I don't see why would have to change anything? If Shireroth wants to tax it's citizens, I don't see how that effects other nations. Nor do I see why we would have to switch recwar systems...

[Andreas the Wise]

Hmm ...

I guess it could work if we put Novatainia's "starting distribution" in NPI ... depending on how much that was. I'd have to talk with Bayen. But that would remove the autonomy of CITRA adding in non-commonwealth nations (actually, so would the other way).

And it wouldn't be change the system as such. The system is exactly the same. It's just changing how you buy units and where the money goes to/comes from.

[Erik Mortis]

I figure this treaty would create a pool of money and distribute it to the governments to do as they please with. Some might stay in the hands of a central bank to help control inflation and stuff. And we have to deal with the money already in the economies right now, and if a nation joins, get money then just hands it all to another nation and leaves. ie. we need some protection against abuse.

Micronational Credit? Credit. Micronational Economic Credit MEC!... shrug. I figured each nation will keep calling it what they want internally, but externally there needs to be some generic name for it.

Starting the draft process

Small Commonwealth Unified Currency Treaty

1. All signatory nations to this treaty have signed the General Membership Treaty.

2. This treaty establishes a currency known as the <insert name>

3. This treaty establishes a central banking system to regulate and facilitate the use, dispersion, creation, and destruction of this currency.

4. The Central Commonwealth Bank shall be managed by the representatives of the signatory nations to this treaty.

5. All nations signed to this treaty shall allow the free flow of money between member nations at a one to one ratio.

6. Member nations may tax their own citizens, and transactions within their nation as they see fit.

7. Member nations may disperse money to their citizens, and non-citizen business associates as they see fit.

8. All member nations' governments shall have an account in the bank, and all member nations' citizens may have an account in the bank.

9. <Something about interactions with non-member nations and trade and exchange rates>

10. <something about what to do with nations that already have money in their own currency when they join>

[Andreas the Wise]

Until I can talk to Bayen, it's unlikely that Novatainia will join this.

Moving to a purely Shirithian perspective - 9 would be handled by MICEO. The way I currently do multi-member economies is to combine their businesses, transactions, institutions etc; and average their trade score. So essentially I treat all the "economy" parts as the one thing, and the only separate one I need to average is their MITO trading. That does mean if nations join with dodgy trading they weaken our money, but oh well.

10. You'd need to have a certain amount of money spare. And decide what happens with distributions. Do you give every nation 100 000 to deal with, say? If that's the case, a new nation just gets that much money. They can work out how much money they currently have, work out the percentage share of each account, and give them that percent of the new 100 000. Apart from Nov/Tok, Shireroth and Ocia, there aren't many existing economies in the sector. (oh, the Hamland economic system, forgot them). Of course, if you try and weight people's initial share of money by citizens, it gets more difficult.

[Harvey Steffke]

I'm afraid that this treaty doesn't look right for Nelaga right now. With the recent passing of Shireroth's credit based voting system, money has real polical power here. Were Nelaga enter this system, it would be small doubt that money would flow from Nelaga (where it would be essentiall worthless) to Shireroth (where it can buy votes) in a hurry.

Perhaps at some point in the future when money in Nelaga has meaning we will reconsider.

[Mateo Mattiassen]

Batavia is in the process of (further) integrating its economy with the other economies in the Dutch Sector and we would like to evaluate those efforts first. Thus, at the time being, we will opt-out of a unified currency treaty.

[Jess]

Amokolia will discuss this.

[Kaiser Agni I]

It was worth a shot.

[Andreas the Wise]

Now we've removed VCs, unifying our currency with other nations is more realistic (though, really, it would be them joining our economy, not a 'Small Commonwealth' economy ... but that's largely because few others *have* an economy)

[Jonas]

With the voting system gone, Nelaga could discuss this matter again. We don't have a currency or bank, so I wouldn't really know why not...

[Andreas the Wise]

I was thinking Nelaga. Bounty system would work fine for Nelaga. We could share things like Uni degrees and style, set up similar businesses etc. Though there are a couple dual citizens, it adds four or five others to the Shirithian economy that otherwise wouldn't be involved.

The difficulty stems from taxes and the like ... but if Harvey and Erik were both still interested, I'd be happy to give that more thought and work out a reasonable solution.

[Kaiser Agni I]

Well we could give give people accounts in the bank. Make the Nelaga government an account, give them a large dash of cash, and let them do with it as they please. We deal with our accounts, they deal with theirs.

[Andreas the Wise]

That's certainly one option, but its not much good if I have 500 in a Nelaga account and 2000 in a Shireroth account and aren't allowed to combine them to buy something worth 2500.

EDIT: Of course, we could have a unified tax system. And then merely divide the money proportionally. If you're a dual cit, you count twice in that proportion. Then let them do what they want with the money. But that implies a higher level of bi-or-multilateral negotiation.

[Kaiser Agni I]

1, Who says you have to have 2 accounts. 2. Who says you can't move the money? If both account are in the same bank, and the currency is the same, transfer the money.

[Andreas the Wise]

If we deal with our accounts, and them theirs, and people can have two and move money around ... what do you think happens near tax time?

Either I move all my money into the account with lower tax, or, better, they tax on different days and I have no money in the taxable account either day. Alternatively, I get taxed twice.

The simplest solution is, I think, a unified tax system, with proportional tax allocation.

Example: 5 Shirithians have bank accounts - Erik, Ari, Andreas, Jonas and Mike.
4 Nelagans have bank accounts - Andreas, Jonas, Harvey and Bill.
Note that Andreas and Jonas are dual-cits and have one account that works for both nations, since we have a dual currency. They function as one economic individual.

On tax day, every account is taxed at the same rate (for simplicities sake say 10%, though I'd prefer a progressive tax rate as proposed currently in the Landsraad). Andreas and Jonas are NOT taxed twice, they're taxed once each. Then the total tax take is put together ... say it's 900.
The tax is then divided by the total number of citizens (not accounts) - 9. So 100 each. It's then allocated by each country's share of citizenry. Shireroth gets 500 and Nelaga 400. Both of them get 100 for Jonas and 100 for Andreas, as both Andreas and Jonas can earn bounties in both countries. Or perhaps Nelaga pays citizens differently - it doesn't matter. The money still filters through to the citizens eventually.

With that system, it would be easy to add further nations in - all nations just have to agree to share currency and have a central taxation agency.

[Harvey Steffke]

While all this is very good discussion gentlemen, my original concerns about who would actually run the banking system remain unanswered. Do we even have someone willing to create and maintain an international bank? What nation would it exist under? What laws?

[Andreas the Wise]

We'd use Shireroth's bank (since it has all the codes already). It's name and coordinator could be changed but would probably remain me whatever position I'm doing so under.

[Kaiser Agni I]

Most of the names and stuff can be changed in the config file.

But we would need to implement a County field into the account entries. So you can specify both subdivision AND county.

See, Andreas, you are now talking about unified economies, not just a unified currency. This treaty was just to unify the currency.

[Andreas the Wise]

Erik, what's the good of having the same currency if you don't have at least a quite similar economic system? One problem with micronational economies is the sheer lack of participants. By combining several countries with the same currency and basic economic system, we have more people participating.

An alternative to forcing the same tax laws would be to have a base tax law in the treaty, distributed as above, and leave nations to add further taxes if they want.