Economy in microcosm
- From: DarkProtoman <Protoman2050@xxxxxxxxx>
- Date: Mon, 23 Jul 2007 01:28:05 -0000
OK, let's say this corporation colonizes this area, and is given
government and military fuunctions by it's home state --can anyone say
"British East India Company 2.0"?-- over the area. Now, the locals are
still using barter, and the corporation says to the locals "that's a
very inefficient way to buy things. This is why you're so poor, your
economy is terrible, in fact, you don't have an economy. Let us show
you a better way to trade for goods and services". So it issues fiat
banknotes --let's call it the tribal dollar-- w/ the image of the
tribal chief and his identifying mark on the obverse, w/ the image of
the corporation's chairman and CEO and his signature on the reverse.
The tribesmen accept this, and soon their economy becomes the
wealthiest in the area, and they have a liberal democracy w/ the
tribal chief as president, and the corporation's chairman and CEO as
vice president. But soon people are spending their money too quickly,
and it's becoming inflated. So the government sells bonds and sells
it's currency on the forex market, as well as directing the central
bank to raise interest rates, remove some currency from circulation
and making it harder to secure loans.
Would this economy work? What else should the government do to improve
it's economy?
.
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