Comparative Economic Study of NS Powers

 

Central Bureau for Statistics / Centraal Bureau voor de Statistiek

Dutch Democratic Republic of Knootoss

 

Table of contents

Table of contents. 0

1. Introduction. 1

2. Gross Domestic Product 1

3. Gross Domestic Product per Capita. 3

4. Private consumption. 11

5. The trade balance. 11

6. Conclusions and policy recommendations. 11

7. (OOC) disclaimer 11

 

1. Introduction

Economic statistics are becoming increasingly important. To make effective foreign and economic policies it is extremely useful to compare the economies of different nation states. For example the ongoing cold war between the Metus alliance and the Elvish block is not primarily a battle fought by military means. Diplomatic actions are always backed up by the economies of the superpowers and their allies. Comparing spending levels can give an insight in what the other side is capable of. In this light the Knootian central bureau for statistics has made this analysis of five different powers. These nations have not been picked at random; all five can be regarded as important economic actors in some way. All run their economy in a different fashion. All are relevant to the DDR. After a study of the main macroeconomic indicators we will present conclusions and policy recommendations.

 

 

The nations studied have a roughly equal size with the notable exception of Knootoss - the only nation to rank well below 2400 million. For obvious reasons it is still included in the survey however when dealing with absolute numbers this should be taken into account.

 

 

Population in millions

SeOCC*

2460

Melkor

2576

Menelmacar

2820

Knootoss

1889

Sunset

2825

*It should be noted that the population of the SeOCC city-state is only 300 million. However in order to approach a more realistic figure for their economic network, the markets SeOCC officials directly controls though the economic planning board have been added for the purpose of these studies.

2. Gross Domestic Product

The Gross Domestic Product (GDP) has always been a prime indicator of the size of the economy. The nominal GDP simply adds up all the money that has been made in a nation. In a way, this can be seen as a direct indication of a nations economic power. While the effects of trade have been included in this figure several specific donations by foreign nations have not been accounted for. This is not expected to meaningfully change the figures in a long-term analysis.

 

The economic influence the SeOCC city-state wields is impressive in relative terms.

However, the lead nation of the IFTA remains the smallest in terms of GDP when compared to other powers. Its powerhouse economy is, in this sense, lagging behind a bit when compared to the frightening economies. The recent propaganda claims that its economic policies have failed completely must be dismissed along with warnings about the imminent economic threat their continued existence supposedly poses.

 

 

 

 

 

 

 

More striking is the inferiority of the economic size of Melkor’s Imperium when compared to their chief rival, the Eternal Noldorin Empire. The power that the Dark Lord wields from Angband is obviously based more on diplomatic and mythical grounds. From the viewpoint of smaller nations the Imperium no doubt wields an impressive economic influence. However its GDP is a shadow compared to the size of the economy controlled by the leader of the Elves.

 

Most notably the DDR of Knootoss has a bigger GDP then the Imperial Dominion despite being only 73.3% of its size in terms of population while being even smaller geographically. While the DDR cannot yet meet the world’s best economies in sheer size it has decidedly found its place amongst the major economic powers as an independent entity.

 

The earth economies are, however, all inferior to the Martian economy we surveyed. Sunset’s libertarian economic policies appear to have paid off, making the nation one of the top leading nations in the Martian market (For more information see our publication: ‘Exploring Mars: markets on the Red Planet’). The vibrant economy is strengthened by interplanetary trade and extensive exploration.

3. Gross Domestic Product per Capita

The GDP per capita is often seen as a more concrete number: it gives information on how much capital is available per citizen. This gives us the possibility to discriminate large but poor nations economically from small, rich nations. It is most often also an indicator of the well being of the nation, however this also depends on how much is available to the consumer. It should be noted that the given value is an average; there may be huge differences between the wages of individual citizens. This is particularly the case in capitalist nations such as Menelmacar, Knootoss and Sunset.

 

What is striking about the GDP per capita when it is displayed in dollars is the huge gap that exists between the two planned economies (SeOCC and Melkor) and the more economically free nations. The planned economies both have a GDP of around twenty thousand dollars while the capitalist nations all three hover around 35k-40k. This gap can also be observed in the economies of other nations, however that is beyond the scope of these studies.

 

Another striking phenomenon can be observed: the GDP of the capitalist nations is mainly dependent on their income tax levels. To a lesser extent this is also true for the planned economies. At any rate there appears to be an indirect relation between taxation and GDP even though the effects of lower taxes also appear to have a rate of diminishing returns: more tax cuts are less effective. A large-scale study should be set up however in order to make these findings more scientific.

 

 

 

 


The neo-liberal argument that lowering taxes attracts additional capital investment appears to be functional, within bounds, in NS. However there are certain limits to the amount in which investments move. This can probably be attributed to other external factors such as the required of corporations, the existence of unique strategic resources and the inflexibility of the market. All three nations only have extremely limited protectionist measures.

 



4. Private consumption

Even though there may be certain similarities in GDP, the differences in the amount of private consumption are vastly different. We were unable to determine private consumption in SeOCC as there are no conventional wages we could compare to. In order to make ‘private consumption’ more practical this report uses private consumption per capita as a measurement. It compares how much the average person can spend for himself after deduction of taxes etc. If the pie represents the total consumption of 4 citizens of the surveyed nations, this is how it would be divided.

The most obvious difference is that between the citizens of Melkor’s Imperium and the others: barely visible on the chart, the subjects of the Dark Lord have significantly less to spend then the citizens of the capitalist nations.

 

The relation between tax-rates and private consumption is again obvious: if the public sector is small the private sector of the economy grows.

 

5. The trade balance

The trade balance shows a different picture, independent of economic system. Trade surpluses and deficits vary wildly amongst nations. SeoCC, as a densely-populated city has to import more then it exports in terms of value, as it has a huge defecit. Their defecit pales however when compared to the Menelmacari trade losses. The Menelmacari imports stongly exceed their exports. This dependability on other nations could pose a long-term risk to Menelmacari sovereignty. The gap falls short by a whopping 600 milliard. Coincidently, this is about the same size as the Melkorian trade surplus. As a leading Ardan nation it manages to get its goods into the Ardan markets.

 

 

 

Both Knootoss and Sunset appear to have struck a balance, the DDR trades with a moderate account surplus of about 200 mrd while the Sunset ecnomy runs with a negligble defecit.

6. Conclusions and policy recommendations

 

Melkor-Menelmacar standoff

It appears that there will be no diplomatic resolution to the Melkor-Menelmacar standoff in the foreseeable future. Both nations have economic strengths and weaknesses they will have to account for.

 

The Menelmacari have the upper hand, economically, with a much larger market and a more viable climate for sustained growth. Their interdependency is their strength as well as their weakness. Diplomatic isolation and a withdrawal of investments could hurt the economy. Losing a long-time close trade partner such as Lavenrunz would actually cut deficits but would disturb the economy greatly.

 

The Imperium of the Dark Lord has bigger problems. For Melkor maintaining a competing economy and the associated military spending is a big problem as his nation suffers from the systematically slower growth associated with planned economies. If reforms are not undertaken the existing gap with the Elves will only increase.

 

Are the superpowers really superior?

While certain nations command a great deal of fear and respect in the international arena their economic power does not always correspond to this. Both the DDR and the Libertarian Paradise of Sunset have economies superior to that of Melkor yet their international profile remains much lower. The concept of ‘soft power’ does not appear to impress many governments in the war-town NS world. Mythical powers and military spending are more influential in the international arena as indicators of superpower-status.

 

Many nations have roughly the same size, yet are perceived as being of a whole different class.

 

Deregulation works!

The Sunset example shows that deregulation and pro-market policies can improve economic performance a great deal. The historic development of the Knootian economy points in the same direction. In terms of relative wealth the European nation has already overtaken the more state-centred Menelmacari economy even if it is still behind in absolute terms.

 

The figures also seem to indicate that structural tax cuts are more effective long-term policy tool for growth then economic protectionism in the long term. Market deregulation and privatisation are also effective measures to promote economic growth. The Libertarian paradise of Sunset is a good example of effective economic policy combined with military strength.

 

7. (OOC) disclaimer

Many, many thanks go to Commerce Heights who produced the fantastic calculator that made all of this possible.

 

This document has been produced without consulting with the surveyed nations. Everyone has stories about why their nation is different and why certain parts of the factbook don’t apply. SeOCC does population capping, I RP a MUCH more open economy then these figures show, there are aid funds and tributes to both Menelmacar and Melkor. (Also to Knootoss, btw) Siri has an automated economy, etc etc. I still think that this calculator is pretty good, in that it provides a great level of detail and realism. Making no exceptions was the only way for me to make it a fair comparison. Everyone also came out with its own distinct strengths and weaknesses.

 

I hope you enjoyed it, comments, compliments and criticisms are always welcome.

~The Knootoss player.