8.0 KiB
Wave Amplitude (short fiction)
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Author: u/VanPeer The shard made me do it*
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Score: 43
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Created: 2017-01-17T03:47:45
Post:
Comments:
u/EliezerYudkowsky [+16] Godric Gryffindor (a day later)
It's sad to think that through most of human civilization, most of the countries would have fallen for this. Maybe that's still true. It feels like anyone ought to be able to work out the problems in their head, but of course, you can't really unless you're part of a civilization old enough and wise enough to have the right concepts cached.
u/VanPeer [+15] The shard made me do it (a day later)
I wondered about this very thing when I was writing this, if the plot was too obvious to be plausible. Then I told myself that economic growth and debt cycles are a relatively modern concept, and for most of history GDP was probably pegged to population.
BTW, your HPMOR Gringotts chapter on uncoupled economies was what got me interested in economics based fantasy stories. So, thank you!
EDIT: debt cycles
u/CouteauBleu [+2] We are the Empire. (2 months later)
Late feedback: I didn't identify anything as obviously stupid or implausible; (though I didn't know about debt cycles; I've watched the video in your linked). I did find a few things kinda weird about the coalition's reasoning:
That they would accept a loan from an enemy that surrendered to them; even if he couldn't pay the money they needed, couldn't they just get him to pay a lesser amount, pay in low-liquidity goods (like land or paintings or whatever) or just pay the reconstruction over a long period of time, Versailles-style?
That they would build stuff like palaces and military fortifications with that money. If you can't afford them now, you won't be able to afford them years from now, so they'll crumble. Unhealthy inflating of the economy aside, why would you spend your one time occasion to be ridiculously rich building palaces that are doomed to disappear twenty years later?
That they would accept any magically-enforced kingdom-spanning contract with a Dark Wizard without spending at least a few weeks thinking it over. Even without unintuitive economic effects, there are hundreds of way he could screw them over with that contract. They're basically telling him "All you have to do is keep us unable to pay for one day (for instance, by hiring mercenaries to steal or destroy the money the Alliance intends to send to the Dark Wizard) and you'll destroy the entire infrastructures we've been building for the last few decades".
u/eaglejarl [+13] (3 hours later)
Rats. I was sorry to see this end so soon; the minute I heard "ten times the amount of coinage" I knew where it was going and was looking forward to seeing it happen. Any chance you'll continue it?
u/narfanator [+9] (18 hours later)
This is actually already a continuation, poke around on the website for the other short stories. It's a gradual progression of a world, through small moments.
u/VanPeer [+6] The shard made me do it (9 hours later)
Ha ha, thanks for the encouragement. Economics isn't my area of expertise, so I need to do a fair bit of reading to keep it plausible. That being said, I have ordered a copy of a popular-economics book by Charles Wheelan which looks promising. That should give me some ideas to continue this plot line.
u/Brain_Blasted [+1] (4 days later)
popular-economics book by Charles Wheelan
What's the name of the book? I'd like to gather a better understanding of economics.
u/VanPeer [+2] The shard made me do it (4 days later)
Naked Economics by Charles Wheelan
Also check out Ray Dalio's video that I linked at the end of the story. That gave me a lot of insight into the basic cause behind a recession.
u/CeruleanTresses [+9] (16 hours later)
I really like Vasilisa. She's more humanized than the protagonists of rational works often are, while still impressing me as someone with the intellect and determination to stand up to Koschei. She feels like a person rather than an allegorical device, which can be hard to achieve in an allegorical story! I'd love to see a continuation of her struggle against Koschei's machinations.
u/VanPeer [+5] The shard made me do it (17 hours later)
Thanks for the feedback. That's high praise indeed considering that I am not good at writing realistic characters. I do plan to add stories featuring her, set in her teen years (inspired by Russian folk tales), and in her future against Koschei.
u/Dragonheart91 [+7] (3 hours later)
I assumed the crux would be in forcing the money to be spent on military and the ruling class. Watching the rich get richer and the poor be asked to pay for it sounds like a recipe for revolt.
u/wnoise [+10] (a day later)
It's this, but not just this. Ruling class luxuries are consumption goods, and can't pay back the investment. Plows and other "peasant tools" are capital goods which increase output, so can pay back the investments. Military spending only pays back if you can either pay wages for labor battalions, or invade somewhere else and take their stuff -- which is also good for Koschei as it increases the likelihood of the coalition splintering and destructively warring.
u/VanPeer [+6] The shard made me do it (a day later)
Thanks for summarizing it compactly. That is precisely what I was trying to convey (based on Ray Dalio's video referenced at the end). The other thing I forgot to mention in the story is the massive amount of inflation such a huge injection of credit would cause.
u/dimata [+5] (2 days later)
Two saving options, assuming sufficient organisation:
Money is fungible. To a certain extent, the Koschei-gold can be used to fund consumables and construction, and in doing so allow all current resources to be funnelled towards capital investment.
"Below market interest rate": fixed or variable? This much foreign investment being dumped on the Alliance should push interest rates towards zero, and possibly even into the negative (see: Switzerland). Failing that, the Alliance almost certainly has tighter control over their financial markets than Koschei does, and can probably manipulate them to the same end. A massive negative-interest loan could be used to generate no-strings-attached income until eventually repaid in full.
u/VanPeer [+4] The shard made me do it (2 days later)
I completely agree with item-1. That's a plot hole I chose to ignore. Regarding item-2, I didn't know negative interest loans were a thing.
u/None [+2] (2 days later)
[deleted]
u/VanPeer [+4] The shard made me do it (2 days later)
It was supposed to be a conditional surrender from a stalemate, with a negotiated settlement supposedly benefiting both sides . The winners avoid maintaining an expensive siege, and the loser avoids enforced isolation of his kingdom. The loser is supposed to be powerful enough that defeating him on home turf is impossible. Sorry for not conveying that convincingly.
u/BT_Uytya [+3] The Laundry (3 days later)
Also, I think that Koschei is able to manipulate the Alliance during the negotiations. For example, by giving them two options: 1) loan of X gold, 5 years, use it however you want or 2) loan of 10X, 10 years, no capital investments. They might be naive enough to go for the latter.
Additional speculation:
For Koschei as the creditor, luxuries are more convenient investment. I imagine it is far more easier to locate 10 palaces and crumble them to dust than locate ten million brand new hoes and destroy them. So it makes sense for him to say "either you build palaces or I request all your mages and virgins as hostages/collaterial". (The possibility of military spending doesn't quite fit, however)