Some comments on the economics of the series

BobfromSydney wrote:Two points:


SNIP

What really amazes me is Grayson. Their prewar workforce participation rate would have been around 15% of total population (25% are male, minus those who are too young or too old to work). Even accounting for the effect of women in homemaking, child raising (and education?) and possibly agriculture (working the family farm?) this is still a very small percentage when you consider the problems imposed by planetary conditions.

Even if you assume that one orbital farm would support 10,000 people, assuming 2/3rds of the food came from orbit and a population of 3 billion, that would require 200,000 orbital farms. I imagine something like that would show up in the night sky (or even daytime sky?) as a BELT.

Now there was even some mention of cattle in orbital farms. I imagine that those cattle would only be available to the extremely rich. This is because of the inefficiencies of raising cattle compared to the equivalent crop yield you could achieve using the same amount of 'land'.

source:
http://www.farmlandlp.com/2012/01/one-a ... -a-person/
Now assuming that year-round growing season and 24-hour sunlight both increase agricultural productivity twofold, this means that the space farm needs about 2500 acres of surface area (growing area) which is pressurised and sunlit (or lit with UV lamps internally such as a hydroponic system).
Plugging this back into the figures above this means that a population segment of 15,000 people (which may have around 2,250 working males - don't forget the low life expectancy) needs to support not only the regular planet-side economy but also a space farm of 2,500 acres growing surface AND the space transport to bring purified raw inputs up (water, air, fertilisers etc.) and food produce down.

Now you can scale the size of the orbital farms up and down if you wish, but the amount of surface area required still varies linearly with population.

Maybe this is doable, but now that I've run through the numbers this does stretch my suspension of disbelief. It certainly would not be possible at all without counter-grav technology.

But if the Graysons were able to keep this house of cards up before the Alliance then I imagine they could certainly build a modern space fleet in a couple of decades once they weren't working with both hands tied behind their backs. Don't forget a good number of their SD hulls were sold to them at scrap prices by the Highridge government.

First, your labor force numbers are low. If you've been reading the short fiction and reading between the lines of the novels, you should have realized that the number of women officially in the work force even before the Manties came along was significantly lower than the number actually in the work force.

Second, I never said the orbital farms fed the entire planetary population. I said that they were more efficient in terms of production, that operating costs were far lower than for planetary farms (because there was no need to continually fight soil contamination), and that food from them was much safer (because there was no need to continually fight soil contamination). The majority of food production, by a very large margin, continued to be produced on the planetary surface. And, BTW, most of the cattle on the orbital farms were for dairy products, not meat. Orbital farm produced milk was indeed much more expensive than planetary produced milk, but it was also heavily subsidized in most steadings for the consumption of children.

Third, they had counter-grav technology by the time they started thinking about orbital farms as a food source for anything other than their space-based industrial and population habitats. Their CG wasn't as efficient as the tech later available to them courtesy of Manticore, but it certainly existed, or else they would have required grav-spin habitats aboard their warships, which they did not.

Fourth, the orbital farms were a relatively recent development, a desperate way to increase arable land (and so allow for a larger population) before Skydomes came along and made it possible to build planetary farms --- which suddenly became more efficient in terms of both production and operating expense than the orbital farms had been.

Once Grayson acquired access to modern Manty technology, especially in terms of industrial infrastructure, productivity per manhour went through the roof . . . literally. With additional women added to the open workforce, out of the sort of "gray" workforce in which they had labored without recognition, and productivity per manhour making a shift probably comparable to that seen on Earth between about 1880 and the year 2000 for the entire planetary population, rather than just the first world, the degree to which Grayson's economy expanded becomes, I think, quite understandable.

Of course, I'm only the guy who built the place, so I could be wrong, I suppose . . .

That makes a lot of sense.

Although given the degree of unofficial inclusion in the workforce of women you would think Graysons would not have such a 'double-sided' attitude regarding gender equality.

But maybe the clergy/leadership are somewhat divorced from awareness of this unofficial 'grey' workforce. This would mean that the social 'opinion leaders' would have lagged a bit behind what was actually happening.

What is really impressive though is the willingness of Graysons to accept a low standard of living (excepting Waffles, Baseball and Flowers) and high work hours.

BobfromSydney wrote:What is really impressive though is the willingness of Graysons to accept a low standard of living (excepting Waffles, Baseball and Flowers) and high work hours.

It's not that impressive. It's the perpetuation of their existing status. Convincing people to sacrifice what they already have is hard; convincing people to sacrifice what they could but don't already have is much easier.

Crown Loyalist wrote:It's not that impressive. It's the perpetuation of their existing status. Convincing people to sacrifice what they already have is hard; convincing people to sacrifice what they could but don't already have is much easier.

I suppose I am just expressing admiration for the Grayson culture. The exact opposite of Peep dolist culture I suppose.

On the question of exchange rates between currencies, I would imagine it is handled the same as it presently is: the exchange rate is exactly what buyers and sellers of the currencies say it is. Most of the buyers and sellers are the large banks and other financial businesses, at least in volumn terms. So the Bank of Manticore agrees to sell Manticorian Credits and the Banco de Madrid agrees to buy them at the rate of two Solarian Credits per Manticorian Credit. Now the exchange rate is set.

BobfromSydney wrote:Two points:

1. Regarding withdrawals from two locations 'simultaneously' by a depositor of a particular bank: Although I'm not certain that the Star Kingdom still uses physical money (coins, notes, holocubes etc.) wouldn't the withdrawer need to be physically present to make a physical withdrawal?

I was thinking of something like a joint account; where for example one spouse is working at the junction, or a remote asteroid mining post, while the other is back on the planet. Two authorized users could happen to make withdrawals withing the light-speed lag window. (But I guess that joint account wording didn't make the final edit of my post )

BobfromSydney wrote:I can imagine a system where a business at a particular location (vendor, supplier, retail shop, merchant ship purser) will only accept electronic funds transfers from the local bank branches (e.g. MWJ Branch of Bank of Manticore, or Banco Madrid etc.)

So a depositor would have an account with the bank's central location (clearinghouse) and would then need to transfer funds to 'spending' or 'chequing' accounts at specific locations of the bank (e.g. Sphinx Branch, MWJ Branch, Medusa Branch).

But yes, that's one workaround, require people to pre-move funds to a sufficiently local branch and only allow spending out of what's currently available at that branch.

So for the joint account scenario before the funds would need to be moved before hand and then each authorized user could only withdraw up to the percentage of funds available at their location.


Although for relatively small amounts, for good customers, I expect the banks would automatically extend provisional credit to cover it.

We actually see some of that today. For example if I deposit a check in my account today it won't be cleared instantly, my bank has to run it through the clearinghouse and get the funds from the issuing bank. But my bank is willing to assume it will clear and will allow me to withdraw funds against it instantly (I want to say up to 500 or 1000 bucks) essentially floating me a short 0% loan for the hours or day it takes for them to actually receive the money they just gave me.

Also happens with merchants who for whatever reason don't have, or can't currently use, live connected credit card terminals. They assume the credit card is good and isn't maxed out, and let the sale go through despite not being able to confirm that with the credit card network until some later point (end of the day batch; network connecting back up; what have you)


So in the Honorverse if you took a day flight out to a location more than a few light-minutes away, and for some reason needed to withdraw money from a bank or ATM (without having previously arranged to send funds to the local branch) I assume most people would be allowed to do so up to some reasonable limit. The bank would essentially float you that free loan for the minutes to hours it takes them to request and receive the real funds from your home bank network.

One could have really cool and expensive frauds going on. Talk about writing bad cheques.

What happens when the league says the Manty dollar is only worth 10 cents?

Lord Skimper wrote:Add in the trade saving Silesia and the broke Peeps. Perhaps the only money in trade now will come from the Andie's but even they willn't be able to keep the money rolling into Manticore.

Talbot, Silesia are going to cost money. The peeps will be building ships in offset towards reparations, but they are totally broke. As for the US Germany Japan economic example that is after 50 years of relative peace. And the USA has as much debt and ceiling raises, as it does GDP. Best to look at post WWII US Germany and Japan economic levels. Not so rosy.

The destruction of the Manty infrastructure is costing so much and with zero money coming from Sollie space and no one having money in Silesia, Talbot, or Haven, let alone how broke Manticore is or soon will be.

As for Grayson, that has also bothered me. If they can afford so much military naval power the panicking Sollies will be able to raise a 1000 Graysons.

Remember for the most part you only need to kick someone in the pants once or twice before they take notice. Add in a political house cleaning, an enemy going into hiding and economic fortunes so huge that Hauptman looks like Kevin O'Leary pretending to be rich when he barely has two pennies to rub together. Economically the GA is broke. The Manties superiority will only last as long as they can hold the money situation together. Before suddenly the house of cards comes tumbling down. Especially when the populace starts hurting and the enemy isn't the enemy, but that enemy just has to go into hiding while the house of cards falls into place.

Manticore might hold on, the peeps might rebel, Silesia may or may not evolve. Talbot will be happy to keep it together. While the SL falls apart. Think Silesia was bad? 15 Silesia's with Twice the Pirates twice the problems and all the, albeit corrupt, law enforcement disappearing. A shattered league is going to kill Manty trade now and into the future.

A smaller better stronger rich league with the 500-700 best worlds only is going to make it better. Tie up the GA in policing the 1000-1200 new Silesian confederacy pirate hot spots. Albeit Silesia will look and be remembered as being so much better than this cluster ....

Albeit Silesia now that is a cool name!

Actually I think the destruction of the Manty industrial infrastructure coupled with the virtual closure of the Junction and the recall of the Merchant fleet is an explosive cocktail for utter economic meltdown of the Manticorian economy on an epic scale.

Essentially, Manticorian wealth was based firmly on the wormhole, specifically the transit fees charged for transit. This has had a lot of secondary impacts on the economy which Manticore has skillfully leveraged into even more wealth such as becoming a trade nexus and transshipment point for so many of those cargos, to building the largest merchant fleet in known space and the real and tax revenue that has brought to the simply wealth created by exceptionally vibrant trade which comes with all of the former.

The closure of the Junction to deprives the Star Empire of their most abundant resource and further stifles all the other factors which are the source of Manticorian wealth and the destruction of their industrial infrastructure reduces them to the economic potential of a typical verge or rim world which is to say, not much of an economy at all.

Now if you take this and factor in the idea that the value of the money supply is based on the perceived value of the issuer's economy (and in this case it doesn't have to be paper bills or currency you can hold in your hand) then the total value of the entire Manticorian money supply today has to be valued at pennies on the dollar and this leads to a reduction in overall wealth and financial resources that may Earth's Great Depression look like an economic boom.

I'd be surprised if all of this didn't have an impact on the economies of Haven and the Andermani. They, however aren't as dependent for their wealth on the Junction or on interstellar trade throughout known space but it's highly probably that a great deal of their trade was also with the League worlds and disruptions there probably signal economic distress for those nations as well.

Where do you get the idea that the Junction has been virtually closed? Only one terminus of the Junction leads into Solarian space; all the rest of the termini are open for business. And business is picking up on many of those routes. The Merchant Marine has only been recalled from Solarian space. Manticoran merchants are still plying the spaceways to the Talbott cluster, the Anderman Empire, the Phoenix Cluster, Matapan, Basilisk and the Silesian quadrant, and now into Trevor's Star and Haven space.

Also, by now Manticore has some of its manufacturing capacity rebuilt. If White Haven was correct about his predictions, some of the smaller shipyards have to be in service building the first new ships by the end of Cauldron of Ghosts. If shipyards have been built already, I think we can assume that some factories have also been rebuilt by now.

Manticore is doing fine. They've lost trade within the Solarian League, but they still have plenty of trade with other areas, and manufacturing is coming back online.

Jonathan_S:

I think what you say is right about retail banking and banks extending credit to customers in good standing. There are probably some common-sense limitations on this as well. If a person with 'salary-man' deposit/spending patterns suddenly turned up at the Wormhole branch and wanted to pull their entire life savings out the bank might ask that person to wait an hour.

Something similar would apply to Megacorps and shipping Cartels and other big galaxy wide organisations. Because of their degree of collateral, size etc. etc. authorised representatives would be able to turn up anywhere there is a bank branch they have a relationship with and get funds extended on credit there. The bank branch would then just send the record of the transactions to the central clearinghouse with the next dispatch boat etc. where the account would be adjusted accordingly.

Now considering how the MWJ significantly shortens the information loop, it is no wonder that Manticoran banks and financial entities have a huge competitive advantage in their sectors.

Last point I think Manticore's currency is denominated in dollars.