Hub.mn

We haven't got a subforum just yet, but it is Friday in most world timezones now so let's start.

Encouraging Business Activity

Here are my ideas. None of this is set in stone, but I think it’s a good place to start. I’ll also trying to be brief (as I have a tendency to go on and on in these sorts of posts) – so if you want further clarification/detail on any point, please ask, I’m trying not to put too much detail in. I’m also starting with outlining some of the common problems and existing solutions to micronational economics – just because I know there are new people here. If you already know it, feel free to skip it.

Problems
Micronational economies have a couple instant disadvantages from their macronational counterparts, just by the nature of our size and online medium.
We have very few people – an economy within a nation is exceedingly lucky to have 20 participants, and most nations would be more likely to have 5. Even a village economy in RL would have several thousand participants, and most are much bigger.
We have no needs and limited wants – this is a hobby, we don’t need to buy an image to live. Most goods/services are produced by one person, there’s rarely a need to buy things off other people to form parts of what you’re doing – contrast this with RL, where to build a house you need to get wood, concrete, metal and other things to build it. And there aren’t too many things we want to buy.
We often have a mismatch of supply and demand – because there are few of us with different skills and interests, often one person will want to buy something but nobody will sell it (eg a picture of various Gralan characters); and another will want to sell it but nobody wants to buy it (an airline system).
Finally, people often lose interest after a month or two if nobody else seems interested in what they’re doing.

Solutions?
Recognising these problems isn’t new, and there are various common solutions we’ve tried. At the moment, I think our best solution to the first one is the SCUE – we have potentially up to a hundred micronationalists who could be involved in the economy. But just giving people a bank account doesn’t mean we have an economy. People need to actually offer stuff for sale and actually be willing to buy stuff. And they need to find each other (Problem #3). I think we can deal with #3 by all starting at the same time and working off the same page – if we’re all aware that other nations are doing similar stuff, and advertise in the same main areas (Hub.mn and Bastion) we have a good chance of matching supply and demand. But that also is not enough – we already have a company list and I bet half of you half of you don’t think to check it when you want something, and I also bet at least a third of those companies no longer exist. Certainly at least half of them have done nothing in the last six months. Which brings us to problem #4, and my idea.

The SCX – a way of keeping score
My new idea is basically to use the SCX as a way of ‘keeping score’ of how companies are doing, to keep them interested when nobody is buying things, to link different approaches to micronational economics, and to also help everyone see what other companies there are out there. I’ll be a bit longer on this point to flesh it out.

The SCX (Small Commonwealth Exchange) is currently a simulated stock exchange attached to the SCUE Bank. It was designed to give the stock exchange experience given the limitations of the micronational setting. You can buy and sell stock with ‘the exchange’ at any time – in RL you’d buy off/sell to other real people but there are nowhere near enough of us for that to work micronationally. The price of the stock goes up and down based on how active the company is, the GDP of the nation the company is in, and how people buy/sell that stock. Companies pay out dividends based on how well the company is doing. Each nation can have its own exchange on the SCX, called whatever they choose. And you can make a real profit on it (trading on behalf of Alexandria, I made them a 30% return over a few months).
The one thing it doesn’t do is give you control over a company by buying its stocks – the company doing stuff raises its price, but you buying it doesn’t affect the company. I don’t say these things to be saying how good it is; I say this so you can see how, with a little tweaking, it could be really helpful to keep people interested in their company.

Imagine this:

You’re Bob, a citizen in Examplestan, and you decide to start a company. You call it Bob’s Buildings, and you’ll design nice looking buildings in paint for people. You register your company with Examplestan, and like all new companies they add you to the ESX (Examplestani Stock Exchange). Since you’re a brand new company the price starts low, and you don’t want people to be able to control your company by buying stocks in it, so you just have the company marked as an ‘Investment’ company. You decide to buy half the stocks, because you plan to work hard on this company and so expect the price to go up. Then you get on with designing some example buildings and advertising your new company.

At the same time your friendly rival Thomas starts a train company. The Interior Minister decides that what nation really needs is a trainline, and so Thomas gets a contract straight away. His company’s stock price jumps a bit straight away, and he teases you that his company is doing better, but you don’t worry – you just keep working on your company. You keep at it for several weeks, and your stock price rises slowly but steadily. Even though you haven’t made a sale, your stocks are now worth more than Thomas’ Tank Engines, because you’ve put a lot of work in. Others have been buying in, and you decide to change your stocks from ‘Investment’ to ‘Discount’, giving stockholders a discount. It’s a success. You make several sales of buildings, and your stock price soars. Thomas hasn’t done much on his business since that first contract, and so your price is much higher than his now.

A couple months later, every Examplestani citizen who wants a house has one designed by you and there doesn’t seem much more interest in buildings. You keep developing your business – you’ve now got a whole simulated supply chain – and though you aren’t making any sales, the way your stock price keeps going up whenever you work on your company keeps you interested. Then one day you get an enquiry from Sampletania, another nation on the other side of the world. They noticed you on the ESX and would like some new government buildings. The exciting life of a micronational businessman continues.

This story is a good example of how I see the SCX interacting with normal micronational economics to encourage and spur it on. First off, any nation that can field 4+ companies and wants one can have their own stock exchange. You get to name it, design a banner – it’s yours. Companies in your nation then each get a place on their national stock exchange. For smaller nations/companies that span several nations, I’ll create a ‘Micras Central Stock Exchange’ (MCSX – or a better name if you can think of one) that they can get a place on.

As a change from currently, owning these stocks will actually mean something; but what they mean will depend on the company. Every stock represents an investment opportunity – essentially a bet that that company will be active, because if they are their price will go up – and if the stock price goes up, you can sell at a profit. But company’s can also choose to give their stockholders further privileges, and the privilege will be displayed next to the stocks when you buy them so you know what you’re buying. Companies will be able to change the privileges whenever they want. Here (in acronym form, such as would show up next to a stock on the SCX) is a list of all the privileges I can think of that companies might want to offer, though I can easily add more if people want them:
Own [Ownership] – Each stock you own in this company entitles part ownership of the company itself.
Ctrl [Control] – This company will give you some influence/control over what the company does based on how much stock you own. This does not entail ownership of the company.
PftS [Profit Share] – The company will give you a share of their profits based on how much stock you own.
UseR [Use Rights] – This company will give you special access to their services/facilities based on how much stock you own.
Disc [Discount] – This company will give you discounts on their products based on how much stock you own.
RP [Role Play rights] – This company will give you RP control/ownership of the company based on how much stock you own. RP companies normally exist only IC, and have no OOC role.
Inv [Investment] – This company only trades as an investment option, and grants no other privileges.
Oth [Other] – This company provides some other type of privilege based on stock ownership – see this link to find out more.

There are a number of benefits to having every company on an exchange. First, it encourages economic activity - it rewards developing the company and selling goods, it’s a way of ‘keeping score’ on how well you’re doing economically, and it is a source of potential profit. The company’s stock will change in price as the company does stuff, both making actual sales and developing the company. This has the advantage that both companies who just want to make a sale and companies who don’t care about sales but want to simulate a company well (and anything inbetween) can be rewarded for what they do. Not only does it keep you interested in company development when you aren’t getting much response from others (because you can see your stock price improving from it), it also gives you an objective way to compare your company’s achievements with your friends/rivals. How your company’s stock price has changed gives you a good indication of how well your company has been doing, and you can compare this with other companies. Also, buying your own company’s stock and developing the company is an easy way to make a good profit. So basically, the first benefit is that this gives people an added reason to stay active economically.

Second, it adds economic depth by giving us an active stock exchange. While the SCX is fun, there aren’t too many proper companies on it at the moment and almost none of them are currently doing anything. By having every company on the SCX, it helps the SCX be more interesting to trade on. You’ll have a lot of active companies to invest in (so you can productively do market research), and added privileges for purchasing stocks than are currently available. It adds depth to simulation because we’ll have a stock exchange that has a lot of companies and is regularly changing prices reflecting the real world. Like the world economic revival, if everyone gets involved at the same time it’ll make it more fun (as you’ll be competing against lots of other traders and not just one or two people). And there is a large potential for profit, which give scope for developing financial companies who invest on behalf of other people, something which is otherwise fairly hard to do. So the second benefit of having everyone on the SCX and tying it in with the world economy is that we get a working stock exchange.

Third, having every company on the stock exchange means people know what companies are around and active. If everyone’s on it that gives us a clear list of all companies (and each stock links back to a page for that company, whatever they want that to be). That’s good for the companies – it gives them free advertising, and if people see you prices going up, they’ll know your active and look into your company more. It’s also good for consumers – by knowing what companies are around, if you want to buy something you can see where to go. So the third benefit is it makes people more aware of what companies are around and active.

So in summary, my cool idea for revitalising the world economy is for all our nations to push starting companies at the same time, and all new companies to get put on the SCX, which encourages economic activity, gives us economic depth with an active stock exchange and helps people know what companies are around and active. Of the problems I discussed at the start, that addresses #3 and #4 quite nicely – and #4 is addressed in a uniquely new way.

I should close by saying that I see my idea here as just one of multiple to come out of this discussion. Yes, we’ve advertised it and kicked it off as my and Einhorn’s ideas (some of the suggestions above are his, particularly making stocks on the SCX actually mean something as opposed to their current role), but those ideas are only meant to be part of the whole. I’m open to change and improvement of my idea, or ditching it entirely if nobody likes it, and I’, very excited to hear your ideas. I’ve just dealt with the basic idea ‘We want people to be buying and selling stuff, let’s encourage that with the SCX’ but there are lots more areas of economic activity we can discuss here – including governments, resource trading, specific company ideas and other stuff. So please, discuss

Definitely a lot of thought went into this. I think it's a great idea!

It is possible that you have covered this, but I wish to hear a more percise response:

Let us say I want to run a nice little company, I'll give Pontus's Mount Esperance Railway as an example. The railway is a small company, runs on narrow gauge, and is completely surrounded by giant competition. The only thing keeping it afloat is the fact it runs the only route between two cities and no one else is really interrested. So therefore, it is a solid entity, but not much of an expansion proposition.

Now that is the background for my side of the story. My questions are as follows:

1-How will I actually do anthing with the railway as a company?
-I would want to role play a railroad, since I am a fanatic on trains and always wanted one. So how do I "run" the Mt Esperance RW? Do I make pretty photos of the train cars? Do I compose a time table of routes so everyone can see what is done? I mean, I claim to be the RPing owner of this, but then all I can do is detail the whole operation to a T. What is there I can actually do for the MERW? There isn't any buildings for us to design or flags for us to make, considering our area of operations. It is almost a question on "what is life?" for the company aspect of the railway, I could find plenty "to be" as a documented service in Pontus.

2-How will I make the shares of this railroad worth more (what do I do to be a better company) OR how do I make my company more wanted?
-If I understand how to run this railway in the first place, I need to find some increased worth in the existance of it, beyond proving some travel across Pontus. Expansion and increased size are not much of options, since the rest of the possible routes are not desired by anyone and would be worthless, and those that are have been taken. Unless the company expands beyond its roots into another sector (ie adding bus services and becoming like the Mount Esperance Transit Service), which would be undesirable (but not impossible), I see no way for an improvement off the current situation. Unlike your example, we couldn't exactly be given a contract by Victoria to do anything if we provide a few trains across a minor route some 1000km away.

Thanks. That is my "How do I actually do something" Q & A session.

Some excellent questions James, which I think go the heart of one of the common approaches to economics (simulating a company) which currently can't do too much.

1-How will I actually do anthing with the railway as a company?
Your answers sound pretty good as is. If you're keen on trains then that's a great reason to flesh out the company - images of the cars, timetables for the routes. Depending on how other people are interested, trains could also form part of wider roleplaying (though that's likely to be characters using trains to get around etc, but too much for you personally to do). There's one other cool thing that's an option in the SCUE that isn't an option when you're just in one country - expanding your railroad business to other countries. Trains is one of those 'specialist areas' (other examples being airlines, sports comps, heraldry etc), in my mind, that a few people have a keen interest in, and most people don't notice too much but would be happy to have in their country. So after you've fleshed out routes in Pontus, why not see if other nations are interested? I know Novatainia was looking for someone to build a train line and since the person who said they would hasn't done anything, I'd be delighted if you want to have a go.
Summary - to do stuff with a transport company (rail, air, shipping), start by working out routes but then you can flesh it out as much as you like - timetables, engine designs, freight etc. You can also expand to other countries who don't have railway lines and do the same sort of thing for them.

2-How will I make the shares of this railroad worth more (what do I do to be a better company) OR how do I make my company more wanted?
All of the above things would make the company's stocks worth more, because you're developing it further (and sounds like you plan to/have developed it at a very high standard). And expanding to other nations (build up a rail empire).

Does that help answer that? Others are of course welcome to add more answers, especially if you know specific details about trains (which I don't).

If other people are thinking about specific businesses, I did sit down a couple months ago and write up the in character implications and the out-of-character 'What do I actually do?' for as many businesses as I could think of. You can find it here. Might give you some more thoughts.

Andreas the Wise wrote:Some excellent questions James, which I think go the heart of one of the common approaches to economics (simulating a company) which currently can't do too much.

1-How will I actually do anthing with the railway as a company?
Your answers sound pretty good as is. If you're keen on trains then that's a great reason to flesh out the company - images of the cars, timetables for the routes. Depending on how other people are interested, trains could also form part of wider roleplaying (though that's likely to be characters using trains to get around etc, but too much for you personally to do). There's one other cool thing that's an option in the SCUE that isn't an option when you're just in one country - expanding your railroad business to other countries. Trains is one of those 'specialist areas' (other examples being airlines, sports comps, heraldry etc), in my mind, that a few people have a keen interest in, and most people don't notice too much but would be happy to have in their country. So after you've fleshed out routes in Pontus, why not see if other nations are interested? I know Novatainia was looking for someone to build a train line and since the person who said they would hasn't done anything, I'd be delighted if you want to have a go.
Summary - to do stuff with a transport company (rail, air, shipping), start by working out routes but then you can flesh it out as much as you like - timetables, engine designs, freight etc. You can also expand to other countries who don't have railway lines and do the same sort of thing for them.

2-How will I make the shares of this railroad worth more (what do I do to be a better company) OR how do I make my company more wanted?
All of the above things would make the company's stocks worth more, because you're developing it further (and sounds like you plan to/have developed it at a very high standard). And expanding to other nations (build up a rail empire).

Does that help answer that? Others are of course welcome to add more answers, especially if you know specific details about trains (which I don't).

If other people are thinking about specific businesses, I did sit down a couple months ago and write up the in character implications and the out-of-character 'What do I actually do?' for as many businesses as I could think of. You can find it here. Might give you some more thoughts.

Yes, I remember reading that myself. Thank you for that explanation however, it was quite nice to see that addressed. I believe you can find my response here: http://www.fra1.net/forum/showthread.php?tid=656. Now, be it that that is my conception of the ideas laid before, I however need to figure out how to actualize it into a functioning entity. I also see for this to be sort of a guinea pig for your new ideas or as to be kind of a stable existing entity that the new plan can have an example for, not knowing the participation rates of other Micras corporations. Don't be afriad to try the whole system with this included.
As for the entire plan in general, I personally see it as a great idea of much merit, and it includes many concepts of which would have many good applications to form a functioning economy. There are many advantages for people to use this if they have an interest. All of the ideas revolving around the use of the stock exchange as a tally board would have a great boost of spirit in competition of people to do better, if there be people to do so. The aspect I see as having the most issues with is plain and simple the activity and effort put into it. The plots to support activity also address the problem, but I still think there may be a resistance still from a large participation. I believe there still needs to be another level of something to do, but I can't think of any off the top of my head. That would be best for in the future when there would need to be new ideas conjured up.
The main things I see as just needing to be done, are to find some people to do this and get into the fun of the exchange and economy, and get a coherent allocation of actuall and functioning companies together and figure out exactly what is and is not going on. Then we could put the plan into place. Until then, there isn't much of a place to even get it to be put into to start the revival.

Good to see at least one new company starting! Yeah - in the end, we can assemble various exciting edifices around it but a functioning economy needs people interested in running a company and actually doing stuff. I'm hoping this discussion can drum up more interest.

I think that the propositions by Andreas should be regarded as a rulebook for Micras economics. I think I will start a company soon (maybe as soon as my website is back up).

Great to see so much support

At this point I should note that I haven't posted here for a couple weeks because I've moved and been without internet except at uni (where I currently am). See Bastion for more of that saga. Just wanted to say that I shall definitely go ahead with the upgrade to the SCX after internet returns and exams are over (so mid-November). In the meantime, there’s no need to wait for me to continue the discussion – go ahead and share ideas on how the government might get involved in the economy, or discuss international resource trade, or any other area of economic interaction that would benefit from common international standards or discussion. I look forward to reading all your thoughts when my internet returns!

So people know, the updates for this have just about finished. I just want to update the Help to take account of this, and add in Company Pages (a separate thing from the SCX but still helpful in ecouraging business activity, see here for more info). I'll do that before I officially ask for new companies etc.

But why wait? You guys are more than welcome to start companies registering in your nations (if you haven't already) and even to prepare for the SCX by working out your 3 letter stock code and making a logo (60 pixels wide, 30 pixels high).

I hope you've all had a happy and blessed Christmas and New Year. Now we're getting back into micronational things, I've finished off the last things needed for this plan. The help page is up and running so this is ready to go. Use this form to register companies. You can also get your own exchange, and if you register by the end of January, I'll waive the fees for that. Registering companies is free!

And now company pages are up, which was the last thing we said we wanted to do in this topic before starting companies etc. I'll post a new topic and contact people again now this is all ready, to make sure people notice it.