Norway, and the failure of its economy
Day 225, 23:43
•
Published in Norway 
•
by
•
by HateBot
If you don't want to read a giant wall of text about economics, go away.
It is no surprise to me that the Norwegian economy is falling into the same pitfalls as real world Capitalist marks do.
The only developed market within the Norwegian economy at the moment is Foods, and currently it is going through the grand free-market transition period.
“What is this grand transition period HateBot?”
You ask me with open eyes. Well little Norwegian savage, the transition period is a period of price competition within oligopolies and smaller suppliers in the current market. So why is this bad, and why is this a problem?
Let me introduce you to Norway’s evil Capitalist, Forconin.
Well I guess I gave him a bad rap, the reality is Norway is very lucky to have someone like Forconin, because he really is too much of a pansy to play the evil Capitalist role in our scenario. However, the warning here is he could, and the reality is while he may be soft he is still hurting the market, and can literally destroy it within months.
So I’m sure you have a few questions about this dooms-day scenario:
1. What exactly is going on with Forconin, and why is he an evil Capitalist?
2. How is this bad?
3. How exactly can he destroy this market?
4. What are the repercussions of just leaving this problem alone?
And lastly,
5. “What is to be done?”
Well let’s begin by answering Question 1.
1. What exactly is going on with Forconin, and why is he an evil Capitalist?
Forconin is the owner of 4 major industry dominating companies. Binary Property, Binary Technology, Binary Routing, Binary Food. But before we begin let me first start off by saying that the only fully developed industry in the Norwegian market is foods. So a lot of what we’re going to be looking at here is in this industry, because the other industries are not developed enough to analyze.
So back to where we were before. Forconin has considerable market share in the Norwegian economy, his profits from one company can subsidize the losses of another, and vice versa. This allows the Monopoly of “Binary Co.” to last in the market longer than the traditional venture Capitalist.
He is able to sustain losses long enough to kill off other companies in the market.
This leads us to Question 2,
2. How is this bad?
He can lower prices of goods to kill the profits of his competitors, thus creating job loss. This creates a grand exodus of workers in the common small businesses, to Forconin’s companies. Because he will be the only company in Norway which will be standing, for the reasons which I just explained earlier in question 1.
What this creates is a Socialist system in a Market Economy, which is the absolute definition of evil. He has the ability to control the entire Norwegian market, and not in the good way. And he has the ability to destroy it.
3. How exactly can he destroy this market?
As a Capitalist his goal is profit, not the benefit of the common worker. So as a result he can control the wages, prices of goods, standards of living, and no one can go against it. While in a Socialist economy this would be handled through democracy, through unions, and through worker’s rights, in eRepublik they get no such rights. And there is nothing the common Norwegian can do about it but cry.
He can destroy this through his market share, through his ability to export goods to sustain profits, through his ownership of nearly all viable industries, through his connection to the largest party in Norway. It is the epitome of the failures that any free market brings.
4. What are the repercussions of just leaving this problem alone?
If you leave this problem alone, if the Norwegians ignore the fact that a grand monopoly is beginning to form within their country you will notice that a person who holds no public office has more control over the welfare of his countrymen more than the government. And the government is powerless to stop it. If Forconin was smart he could control the country economically within, I would estimate, 4 months. Pretty soon Norway will no longer have a free-market; they will have a grand individualistic, profiteering monopoly controlling the daily lives of his countrymen with none of the checks or balances that a Socialist society would instigate.
Before we answer the last question let’s look at exactly what’s happening.
Because you probably don’t believe me.
As the most developed market in the economy we shall turn to the foods market, filled with individual suppliers and small companies.
In the quality 4 market of foods you have a couple firms. Art of Taste, Winter Wheat, Binary Food, and the Swedish company Pizza Hut.
Well Pizza Hut sells 1 piece of food for 14.49 NOK so let’s just ignore them.
You have 2 oligopolies (Art of Taste, Binary Food) and 1 small company (Winter Wheat). A few weeks ago the average price of Q4 food was around 2-3 NOK a piece. It has now dropped to around 1.08 NOK a piece. Why? Price wars. A Spanish company went into Norway and started undercutting companies which ignited the price war. And this exposed a problem in the Norwegian Economy.
Let’s look at some math, and why the 2 other firms Winter Wheat, and the Art of Taste cannot survive as a company with the price of food at 1 NOK a piece.
The Art of Taste is nice enough to show us their payment tables.
They have 15 employees, and the average wage per worker is around 20 NOK.
So in this new market to pay for each worker, not only must EACH Art of Taste worker produce 20 pieces of food, he/she must ALSO sell that, just to break even.
So let’s run the math, that means that the Art of Taste has to produce AND SELL 300 pieces of Q4 food A DAY. Just to break even. This gives us no profits.
Not only is the Norwegian market too small to fill this demand, it is also impossible for this company to survive this price war.
This is what will happen. 1. The company will have to lower wages to compensate for lower food costs. 2. As food prices continue to plummet the company will keep lowering wages or have to lose employees. 3. Eventually it will go out of business unless it gets outside help or some sort of subsidy. All the workers will eventually leave.
Winter Wheat on the other hand is owned by Sasha and all his workers are his friends. So he probably pays them trash, and they buy whatever cheap food they can find. He is generally isolated from the market because his workers don’t follow regular incentives.
If they did, the company will die off just like the Art of Taste will, within weeks.
So who is the winner? Binary Foods is the winner. Not only can Binary food keep enough food on the market to supply the entire demand of food for the Norwegian economy, he can also EXPORT the remaining food for profits to sustain himself. While at the same time keeping the same wages, thus picking up the workers from Art of Taste. As Forconin gets more workers to exploit, his product expands, and he can export more food, undercut the Norwegian market more and more, until he controls it completely.
Even Winter Wheat will die off eventually, as taxes slowly wither away at what little they receive. And soon they will sell no food other than what the employees themselves buy. From there taxes will do the rest of the work and destroy the company.
So now, we ask question 5,
5. “What is to be done?”
Well friends there is little you can do.
The first step would be government intervention into the Norwegian economy, period. The Free-Market is going to continue to fail as larger companies tend toward monopoly. If we simply delete Forconin from the market, you will see a power void, it’ll get filled by another company, and we will repeat this cycle all over again.
The answer is not “let the market sort itself out,” because it won’t.
The answer is Government intervention, price floors and minimum wages.
How are you going to implement these and force companies to use these minimum wages? You really can’t, it’s impossible.
The only thing we can really do to stop this is boycott monopolies continually, and buy from smaller companies which don’t have as much market share. Without a revolution eNorway is doomed.
But as much as I make Forocnin out to be evil, he is actually a pansy and sucks at being a Capitalist. The reality is he isn’t going to take it “that far” as to reduce the economy into shambles and go on a power rampage; he doesn’t have the balls to do it. But the reason I wrote this article is to remind you it can happen, and if it isn’t by Forconin it will be by someone else. It is just the way eRepublik is designed, and the way the free-market “works out.”
The admins have to do a re-design on their game to fix the system, it is really that simple. The details of how they can fix it will be left to another discussion, I’ve already spammed pages and pages of text.
Thanks for reading and feel free to leave comments, questions, or problems you have with this article.
It is no surprise to me that the Norwegian economy is falling into the same pitfalls as real world Capitalist marks do.
The only developed market within the Norwegian economy at the moment is Foods, and currently it is going through the grand free-market transition period.
“What is this grand transition period HateBot?”
You ask me with open eyes. Well little Norwegian savage, the transition period is a period of price competition within oligopolies and smaller suppliers in the current market. So why is this bad, and why is this a problem?
Let me introduce you to Norway’s evil Capitalist, Forconin.
Well I guess I gave him a bad rap, the reality is Norway is very lucky to have someone like Forconin, because he really is too much of a pansy to play the evil Capitalist role in our scenario. However, the warning here is he could, and the reality is while he may be soft he is still hurting the market, and can literally destroy it within months.
So I’m sure you have a few questions about this dooms-day scenario:
1. What exactly is going on with Forconin, and why is he an evil Capitalist?
2. How is this bad?
3. How exactly can he destroy this market?
4. What are the repercussions of just leaving this problem alone?
And lastly,
5. “What is to be done?”
Well let’s begin by answering Question 1.
1. What exactly is going on with Forconin, and why is he an evil Capitalist?
Forconin is the owner of 4 major industry dominating companies. Binary Property, Binary Technology, Binary Routing, Binary Food. But before we begin let me first start off by saying that the only fully developed industry in the Norwegian market is foods. So a lot of what we’re going to be looking at here is in this industry, because the other industries are not developed enough to analyze.
So back to where we were before. Forconin has considerable market share in the Norwegian economy, his profits from one company can subsidize the losses of another, and vice versa. This allows the Monopoly of “Binary Co.” to last in the market longer than the traditional venture Capitalist.
He is able to sustain losses long enough to kill off other companies in the market.
This leads us to Question 2,
2. How is this bad?
He can lower prices of goods to kill the profits of his competitors, thus creating job loss. This creates a grand exodus of workers in the common small businesses, to Forconin’s companies. Because he will be the only company in Norway which will be standing, for the reasons which I just explained earlier in question 1.
What this creates is a Socialist system in a Market Economy, which is the absolute definition of evil. He has the ability to control the entire Norwegian market, and not in the good way. And he has the ability to destroy it.
3. How exactly can he destroy this market?
As a Capitalist his goal is profit, not the benefit of the common worker. So as a result he can control the wages, prices of goods, standards of living, and no one can go against it. While in a Socialist economy this would be handled through democracy, through unions, and through worker’s rights, in eRepublik they get no such rights. And there is nothing the common Norwegian can do about it but cry.
He can destroy this through his market share, through his ability to export goods to sustain profits, through his ownership of nearly all viable industries, through his connection to the largest party in Norway. It is the epitome of the failures that any free market brings.
4. What are the repercussions of just leaving this problem alone?
If you leave this problem alone, if the Norwegians ignore the fact that a grand monopoly is beginning to form within their country you will notice that a person who holds no public office has more control over the welfare of his countrymen more than the government. And the government is powerless to stop it. If Forconin was smart he could control the country economically within, I would estimate, 4 months. Pretty soon Norway will no longer have a free-market; they will have a grand individualistic, profiteering monopoly controlling the daily lives of his countrymen with none of the checks or balances that a Socialist society would instigate.
Before we answer the last question let’s look at exactly what’s happening.
Because you probably don’t believe me.
As the most developed market in the economy we shall turn to the foods market, filled with individual suppliers and small companies.
In the quality 4 market of foods you have a couple firms. Art of Taste, Winter Wheat, Binary Food, and the Swedish company Pizza Hut.
Well Pizza Hut sells 1 piece of food for 14.49 NOK so let’s just ignore them.
You have 2 oligopolies (Art of Taste, Binary Food) and 1 small company (Winter Wheat). A few weeks ago the average price of Q4 food was around 2-3 NOK a piece. It has now dropped to around 1.08 NOK a piece. Why? Price wars. A Spanish company went into Norway and started undercutting companies which ignited the price war. And this exposed a problem in the Norwegian Economy.
Let’s look at some math, and why the 2 other firms Winter Wheat, and the Art of Taste cannot survive as a company with the price of food at 1 NOK a piece.
The Art of Taste is nice enough to show us their payment tables.
They have 15 employees, and the average wage per worker is around 20 NOK.
So in this new market to pay for each worker, not only must EACH Art of Taste worker produce 20 pieces of food, he/she must ALSO sell that, just to break even.
So let’s run the math, that means that the Art of Taste has to produce AND SELL 300 pieces of Q4 food A DAY. Just to break even. This gives us no profits.
Not only is the Norwegian market too small to fill this demand, it is also impossible for this company to survive this price war.
This is what will happen. 1. The company will have to lower wages to compensate for lower food costs. 2. As food prices continue to plummet the company will keep lowering wages or have to lose employees. 3. Eventually it will go out of business unless it gets outside help or some sort of subsidy. All the workers will eventually leave.
Winter Wheat on the other hand is owned by Sasha and all his workers are his friends. So he probably pays them trash, and they buy whatever cheap food they can find. He is generally isolated from the market because his workers don’t follow regular incentives.
If they did, the company will die off just like the Art of Taste will, within weeks.
So who is the winner? Binary Foods is the winner. Not only can Binary food keep enough food on the market to supply the entire demand of food for the Norwegian economy, he can also EXPORT the remaining food for profits to sustain himself. While at the same time keeping the same wages, thus picking up the workers from Art of Taste. As Forconin gets more workers to exploit, his product expands, and he can export more food, undercut the Norwegian market more and more, until he controls it completely.
Even Winter Wheat will die off eventually, as taxes slowly wither away at what little they receive. And soon they will sell no food other than what the employees themselves buy. From there taxes will do the rest of the work and destroy the company.
So now, we ask question 5,
5. “What is to be done?”
Well friends there is little you can do.
The first step would be government intervention into the Norwegian economy, period. The Free-Market is going to continue to fail as larger companies tend toward monopoly. If we simply delete Forconin from the market, you will see a power void, it’ll get filled by another company, and we will repeat this cycle all over again.
The answer is not “let the market sort itself out,” because it won’t.
The answer is Government intervention, price floors and minimum wages.
How are you going to implement these and force companies to use these minimum wages? You really can’t, it’s impossible.
The only thing we can really do to stop this is boycott monopolies continually, and buy from smaller companies which don’t have as much market share. Without a revolution eNorway is doomed.
But as much as I make Forocnin out to be evil, he is actually a pansy and sucks at being a Capitalist. The reality is he isn’t going to take it “that far” as to reduce the economy into shambles and go on a power rampage; he doesn’t have the balls to do it. But the reason I wrote this article is to remind you it can happen, and if it isn’t by Forconin it will be by someone else. It is just the way eRepublik is designed, and the way the free-market “works out.”
The admins have to do a re-design on their game to fix the system, it is really that simple. The details of how they can fix it will be left to another discussion, I’ve already spammed pages and pages of text.
Thanks for reading and feel free to leave comments, questions, or problems you have with this article.
Facebook
Twitter
Discord
Comments
Great article! And definitely true. I think one of the best things to do would be to set a pricing floor (at the presidents seat). That would set an end to the insane competition where the big and small companies lower their prices by just 1 cent/øre just to be at the top of the list. I try to level myself with the current price on the marked; but sometimes earnings get so low that I get desperate. Though it would also make a \"set price\" for all companies as they would all put themselves at the lowest possible level to be able to sell. Intervention into minimum wages would be needed as well as you mention.
Interesting to see that Binary Food has now increased their food price to NOK 2+VAT. Though Comidas Termópilas (spanish company) is back as well. What about a future possibility/feature for the president to trade-block certain countries?
Anyways the only reason Art of Taste is afloat today is the generous financial support from my employees Lisa and Debbie, who has been with me almost from the start, giving me monetary support out of the salary I have paid them already.🙂
Yes, a great article, and we need this warning, because it can happend as you said
Vote😛)
Yes indeed, voted!
Espen: just so you know the low prices was a result of the spanish trying to force me to lower my prices in spain.
Will hopefully increase more soon as the low prices we had can\'t last.
\"interesting to see that Binary Food has now increased their food price to NOK 2+VAT.\"
Like I said, Norway is very lucky to have someone like Forconin. He\'s a poopy Capitalist 🙂.
However, one way to solve this issue is to do something that is illegal in the real world. The oligopolies must meet together and set prices of their products.
I honestly don\'t know EXACTLY what you pay your workers, but I am going to guess that the equilibrium price per food to \"break even\" is going to be around 3 NOK per piece of food. Binary food, Art of Taste, and the Spanish company would have to agree to sell food at that price.
Otherwise you will see what I predicted earlier, and these smaller companies will simply die out.
The solution, as usual, is cooperation. The capitalists get together to fix prices, which will provide stability but often lead to misery. Or the workers get together and buy from certain companies. The latter are called consumer cooperatives, and Russians effectively are one. I only buy from Russian (or sometimes Finnish) food companies (including Winter Wheat), even if it\'s not the cheapest, and I\'m certainly not the only one.
And your work for Binary since yesterday? ahahahaha Outstanding.
I respond to the same incentives as everyone else.
And, believe it or not, Binary is able to provide the highest wages for reasons which I\'ve already discussed.
Espen, i did actually try to apply such a system once, and the admins even consider it(it\'s mentioned in one of their releases). It was however only reduced down to a minimum wage system, and even then nothing happened. Without an game mechanic way of making this happening, it\'s practically impossible. The state cannot _force_ companies to have a certain minimum price.
Which why this is a flawless example of free market dialectics.
\"The state cannot _force_ companies to have a certain minimum price.\"
Even with a minimum wage the failure of the economy is inevitable. The simple beauty in this system is that the monopoly can give the HIGHEST wages in the country, UNTIL it controls the entire market. At which point minimum wages would would instigate the inflation rate of the dollar, as now the single company owner would lower all wages (and prices as a result) to this level.
The end result is a capitalist demi-god ruling your country and there is ---nothing--- the government can do to stop it.
The only cure is revolution.