Sitting in a meeting
Posted: Fri Feb 21, 2014 9:14 pm
For what seems like hours now Daniel, Kathryn, Edrick, Anya and Gunner (and maybe a few others?) have been talking at a corner table.
In a voice that seems to have become frustrated enough that it is likely that all in the inn could over hear it Danial stands up and says, "This is by far the most ridiculous thing I have ever heard. First, the market falls out and the value of my Grand Master potions and others Grand Master Crafted items become worth the exact same amount as the work being performed by some initiate! Second, we loose our ability to sell to the big cities. Third, as a result of both of these market failures taxes obviously decrease. Fourth, your solution is to raise taxes to increase profitability and commerce? Are you kidding me. Seriously?
It is basic mathematical and economical rules. In the entire history of Phantara, a market based economy such as we have, one which is sustained only being able to sell our supply to meet a demand and pay a tax upon that amount, that has the market gutted by a change in demand will never correct itself by increasing the taxes!
Let me give you a example and the reason why our current town is running into economic shambles. When you gut demand by cutting the price of a potion from 12 pemb per amount of effort (pp) to 4 pemb per amount of effort (pp) you will suffer an overall decrease in the amount of revenues gained and in the taxes raised.
But it doesn't stop there. People begin to reevaluate their entire line of work. It is no longer profitable to be a craftsman or a alchemist for the purpose of selling those goods. Now that they only make 1/3 of their former earnings they consider doing something else, like giving up crafting or only using their potions on themselves and friends instead of selling them for what amounts in some cases barely enough to cover the costs of their labs and their materials!
But even if the economy of the town were able to survive this gutting, clearly the inability to find outside buyers willing to take general goods put a nail in the coffin. At least at scrap prices you use to be able to find someone willing to buy whatever left overs we had. Now you can't even do that. It's all special orders. It's all sporadic. I may have someone come in once per moon looking for a specific potion, and light help me if it's on Saturday night when I'm tired and most of my efforts are long since used up.
Short version. If you cut the value of our goods and then you cut off the demand of our goods, how do you expect to make the same amount off us to continue to bring in the same expected taxes? People are simply NOT selling anything. This entire conversation is a waste of time. Acting on behalf of my house there is no way I'll agree to increase what I am spending while getting lower and lower income. And if your superiors don't understand math I will be happy to explain it to them. People are not selling stuff because THERE IS NO ONE TO SELL TO and EVEN WHEN THERE ARE PEOPLE TO SELL TO THEY ARE NOT PAYING ANYMORE!
I'm getting a drink."
Daniel leaves the counsel meeting and heads to the bar.
In a voice that seems to have become frustrated enough that it is likely that all in the inn could over hear it Danial stands up and says, "This is by far the most ridiculous thing I have ever heard. First, the market falls out and the value of my Grand Master potions and others Grand Master Crafted items become worth the exact same amount as the work being performed by some initiate! Second, we loose our ability to sell to the big cities. Third, as a result of both of these market failures taxes obviously decrease. Fourth, your solution is to raise taxes to increase profitability and commerce? Are you kidding me. Seriously?
It is basic mathematical and economical rules. In the entire history of Phantara, a market based economy such as we have, one which is sustained only being able to sell our supply to meet a demand and pay a tax upon that amount, that has the market gutted by a change in demand will never correct itself by increasing the taxes!
Let me give you a example and the reason why our current town is running into economic shambles. When you gut demand by cutting the price of a potion from 12 pemb per amount of effort (pp) to 4 pemb per amount of effort (pp) you will suffer an overall decrease in the amount of revenues gained and in the taxes raised.
But it doesn't stop there. People begin to reevaluate their entire line of work. It is no longer profitable to be a craftsman or a alchemist for the purpose of selling those goods. Now that they only make 1/3 of their former earnings they consider doing something else, like giving up crafting or only using their potions on themselves and friends instead of selling them for what amounts in some cases barely enough to cover the costs of their labs and their materials!
But even if the economy of the town were able to survive this gutting, clearly the inability to find outside buyers willing to take general goods put a nail in the coffin. At least at scrap prices you use to be able to find someone willing to buy whatever left overs we had. Now you can't even do that. It's all special orders. It's all sporadic. I may have someone come in once per moon looking for a specific potion, and light help me if it's on Saturday night when I'm tired and most of my efforts are long since used up.
Short version. If you cut the value of our goods and then you cut off the demand of our goods, how do you expect to make the same amount off us to continue to bring in the same expected taxes? People are simply NOT selling anything. This entire conversation is a waste of time. Acting on behalf of my house there is no way I'll agree to increase what I am spending while getting lower and lower income. And if your superiors don't understand math I will be happy to explain it to them. People are not selling stuff because THERE IS NO ONE TO SELL TO and EVEN WHEN THERE ARE PEOPLE TO SELL TO THEY ARE NOT PAYING ANYMORE!
I'm getting a drink."
Daniel leaves the counsel meeting and heads to the bar.