Business Subsidy Idea
•
by Archibald
This isn't really a campaign article. This is an idea that I've been kicking around in my head that I think has merit.
Let me start with a disclaimer: This policy would not be in effect in times of war or during times when our markets are in a state of flux, as they are currently.
The idea is simple. I propose that the government pay every domestic company a small amount of money per item they have in stock. This would be done on a weekly basis.
What is the point of this? Wouldn't this just make the wealthy business owners richer? Isn't this a waste of government funds?
The way I see it, this program would offer 3 major advantages:
1) This would help ensure that we have a large domestic surplus prepared in the event of war. We all have seen how quickly our markets can empty in the span of a few days during war. Wars that last a week or longer often boil down to wars of attrition based on the supply of goods available. It certainly wouldn't hurt to have some extra stock socked away for a rainy day.
2) This would combat the chronic deflation that is seen all too often in Erepublik's stable economies. An active government has to spend money to regulate the exchange rates anyway. This basically just shifts that spending from the exchange market to our companies.
3) This would help to eliminate the heavy competition and price-slashing seen from time to time in our markets, especially at the Q1 level. The subsidy wouldn't be nearly enough to prevent a poorly-managed company from going out of business, but it would be enough to allow forward-thinking owners a little wiggle room to wait for conditions to improve.
So, how to implement? First, we should weight the industries based on their importance during war. I would rank weapons highest at Tier 3, followed by gifts at Tier 2, with the other 3 industries (food, moving, housing) at Tier 1. Hospitals would not be included in this. The weekly payments would factor in the industry Tier, quality level, and production points. Since the idea is to build up stocks, products for sale in the marketplace would not be included in these totals. Records would be taken on an unannounced day, and then the companies would be paid accordingly.
The result of this would be that companies would sell product when prices are reasonable, while holding some back when they are not. There should also be a requirement that a company must make a certain amount of sales in the weekly period to be eligible.
I would like for this to be a dialogue, so post your thoughts and criticisms.
Facebook
Twitter
Discord
Comments
Sounds like an interesting idea. Though, it seems that there should be consideration regarding company size as well. Smaller companies and start-ups would require greater subsidies (further, it seems to be the less established companies that really feel the pinch with price wars and limits to cash-flow). That said, it\'s a good idea and it seems like it should be fairly easy to implement.
sounds like a good idea, and like a larger scale version of what Dish has done with Benn with Guns and Stuff.
hopefully people notice the disclamer 😉
I would just be a little concerned about what this would do to market prices, perhaps making them out of reach for the consumer. It\'s also in some ways an administrative burden. You would have to ensure that the item stayed on the market for at least X number of days, or perhaps just do spot checks.
Not trying to poo-poo the idea, the desire to maintain a surplus of goods is definitely a good goal. I\'m just worried about consequences.
I agree with your concerns pthread, and i feel this could only be executed as it has in the past on a very small level. A need to have basis, is what i believe.
Just to outline what we already do, to apply this to:
1. The US UEO operates two companies (Q1 Gifts and Food) to keep surplus in those two industries, train new citizens (should they need it, and they are fired at three skill), and keep pricing down for consumers. Stock is never released unless ordered to do so by the President.
2. I subsidize Guns N Stuff at 25% of salary to stockpile for our military, and Benn keeps 25% of what he makes for use when we say to release them.
3. My companies keep stock (as a rule of thumb, I try to keep 10-20% stock at all times, and only the rest will be put up for sale unless the market is short. Archibald also does this with his companies.
im a sort of noob and i feel a bit out of place between these great men opinions, really , no irony.
My personal view, noob one maybe, is that i woul dliek state intervention at MINIMUM in erepublik economy.
I think president is doing a good job, his explanation here convinced me 100% !
i dont want it to be changed...
just my humble ideas tough
@pthrea😛 Agreed, the concern here would be to make sure this doesn\'t raise prices for the consumer. The subsidy would have to be small enough to not really affect pricing, while large enough to actually matter.
Thanks for the feedback, everyone.
Sounds like you need data collected on a periodic basis to fairly distribute funds?
Muahahahaha
I just might have a use for your talents.