《Galactic Economics》A Dark Winter

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"So it's a gift," Zikzik eyed them suspiciously. Suspicion is Zikzik's default mode of operation, but they’d decided to approach him first because some other alien merchants took their cues from him.

It wasn't some formal hierarchical structure or pecking order. They'd just consider him an astute businessbeing, which he actually was. His rapidly growing GC account was testament to that. If Sarah and Stearns could convince Zikzik to buy into something, at least some of the other alien merchants would follow.

"No, it's not a gift," Sarah frowned, not entirely sure how she would explain leasing with the option to buy to someone who had only recently been acquainted with the complicated concept of currency.

"It's more like a rental," Stearns explained, also trying to come up with a way to describe it that could possibly be relevant in the economically primitive society that the aliens lived in.

"A rental?" Zikzik's eyes narrowed further, if that was even possible. He was actually familiar with the word. He'd heard on some planets, beings would agree to be in debt to landowners in exchange for land, and the landowners could take a percentage of the fruits of their labor until they were paid off.

Generally, their debt did NOT get paid off.

With the long view of inheritance that many alien societies had, their offspring would inherit this debt. Entire generations would be trapped in this system, and the debt would continue until their descendants got tired of poor working conditions and rebelled. Or it would just continue.

Compared to the xeno serfs who worked the land, their lords lived like kings. Compared to humanity, many lived in old houses with suboptimal to non-existent plumbing, eating expired food products, and burnt twigs for warmth and light.

This is feudalism, a barbaric system from the view of any modern human, but to the rest of the broken economies of the galaxy, it was downright sophisticated. After all, the constant toil by the lowest class of society generated constant goods, and production was production. It was better than everyone going hungry, barely.

Zikzik, as a galactic trader, whose wealth puts him way above even the wealthiest landowners in a feudal system, was in no hurry to become the cattle class in such a system. He was understandably allergic to rent.

Sarah nodded. She had actually heard of this concern before from Zarko, and hastily tried to explain how this was not slavery, "it's only kind of like a rental. You can stop at any time you want, and your offspring would not inherit a Galactic Credits Terminal or any debt on it."

"Yeah, we will deduct GCs from your account directly," Stearns added, "and at the end of the year long lease, if you'd like to, you can pay the rest of the price to own it forever."

Zikzik didn't quite understand how this particular rental was different from the rent that peasants paid their masters, but he did have a backup plan in mind: his spaceship. He figured that the worst thing that could happen is he would have to fly very far away from Earth to avoid any unreasonable debt that arises, no matter that Sarah was insisting there was no debt.

For fifty GCs a month, Zikzik became the first proud owner of an Offworld Galactic Trading Terminal.

For one hundred GCs, a human electrician in the employ of Galactic Credit installed an electric charger in his spaceship hooked up to the reactor.

For another fifty GCs, they brought him a durable hard rubber protector that kept the back of the fragile electronic tablet safe even when dropped from head height, with his name custom engraved into the back. It was very pretty, he admitted.

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He couldn't resist spending another ten GCs for a hard plastic front cover to protect his screen from other damage to the front. The merchant also tried to upsell him on some device protection insurance plan, but he saw that for the scam it was from a light year away.

There was a splendid little congratulations ceremony at Livermore Spaceport, right in front of his ship. People gave speeches. One of the humans called it a great step forward for humanity and therefore the galaxy.

Zikzik had a 210 GC sized hole in his pocket. He wasn't sure whether he made the right choice.

Sure, the ceremony made him feel good, and he knew it was supposed to. The galaxy may not be familiar with money, but they knew plenty about sales psychology. Zikzik knew he was being used by the humans as an advertisement for their new scheme.

While lacking some important intuitions, the non-human residents of the galaxy were not stupid. For example, what the human traders did not know at first but had come to realize was that the Zeepils were actually top tier at fractional math.

Their cultural heritage millions of years ago included a hunting tradition where local gargantuan prey animals would be shared between the members of a massive tribe, with complex multipliers for social positions and effort of the kill, so they got very good at calculating portions of a meat pie in their heads.

Appealing to that innate strength was how they managed to convince him to use credits in the first place.

He'd kept his cool demeanor in front of the other traders, but this whole credits business was a lot of confusion. Keeping track of hundreds of trades in his head was normally fine, but that was when it was just with concepts he understood! This whole business with rentals, fees, and the occasional IOUs that the humans still seemed to give away at a whim: it was all adding up to a mess on top of his normal accounting thoughts.

He looked at the expensive device he's renting.

The humans Sarah and Stearns had taught him how to use it, so he already knew the basics of the tablet. They'd included several apps on it, the most important of which was the Terminal Trading app. Other than that...

They'd show him how to take notes on the Notes and Calendar app, not that he'd needed them because he had a great memory.

They'd show him how to use the Calculator, which he also didn't foresee a need for because his mental math was sufficient for the types of trades he'd normally conduct.

They'd show him how to take pictures and videos on it, which was amusing. He'd known some other traders who had family traditions of taking pictures and movies, and passing them onto their descendants as a family record. That wasn't his cup of tea, though apparently a few human traders were paying GCs for good pictures and videos of the galaxy, so maybe he would keep that in mind.

Zikzik started brainstorming other ways in which he would use the camera. Whenever he'd see a new, unknown trading good, maybe he could take a picture of it and show it to other traders and have them identify and price them for him.

Maybe that's what the social media app is for, Zikzik mused as he browsed absentmindedly through the list of apps on the tablet.

Then something caught his eye.

Hmm I wonder what this spreadsheet app does.

Zarko signed on for a Galactic Trading Terminal too. After all, if Zikzik had one, then he must as well. By the end of the week, a few of the offworld traders had Terminals.

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It wasn't a very large fee for humans. Fifty dollars a month would normally be considered a rounding error for even most small businesses. Even in underdeveloped nations, it would be affordable, accepted as an annoying cost of doing business.

However, not every trader could afford one right away without cutting severely into their cargo. Most of the alien traders had the vast majority of their liquid wealth tied into their cargo hold. Reaching the end of a trade run with an empty cargo hold without any other items to trade is the end of any trader's career.

At that point, it was only a matter of time before they ran out of fuel and needed to sell off their ship and live the rest of their life, grounded. That’s at least one of the reasons why it was so uncomfortable for most of them to trade off their cargo without an immediate return other than some numbers on a screen.

Galactic Credit had also said that they didn't actually own the Terminal devices and couldn't sell them off to other traders, so this was a major barrier of entry for the poorer traders.

This was fine for GC. They weren't making a huge profit off the Terminals themselves. Their real purpose was to introduce both consumer electronics and payment systems to the galaxy.

The leasing system encouraged traders to conduct as many transactions as possible on the device. After all, the more they did it, the more money they made, and the more they could financially justify their continued rental of the device.

Essentially, they've created a small core of Terminal evangelists who would get other people accounts and extolled the virtues of a currency based economy, free from barter.

And then, well, that's how they'd start to fix the galactic economy.

Zikzik was in love.

It was not mating season (he checked).

It was this spreadsheets app. A lot of its functionalities aren't what many casual humans would call intuitive, but for someone who had been in the business trade and doing accounting in his head for decades, it was a second brain.

Dreaming was a universal trait for all alienkind; after all, no species went into the stars without quite a bit of dreaming. Zikzik's dreams started being filled with spreadsheet grids and tables.

Zikzik could almost feel like it was alive, talking dirty about finances to him, whispering about tables, charts, grid calculations, and... oh being, does sorting feel good. He could see at a glance his most profitable trade routes, which he knew all led to Earth, and he could optimize which goods he should carry on which leg of each trip.

Yes, he'd known some of this before, intuitively, but it was good that the Terminal was confirming his genius right there on the screen. That was when he started detecting some major problems in his route.

For example, the Olgix-Gakrek leg in particular.

The Olgs and Gaks had always bought food, because they never grew enough themselves, and because both had large populations that could work the smiths and workshops they had. They also had a lot of other traders, which meant that their infrastructure supporting them was very well developed.

There were even rumors that a human entrepreneur from Italy, Earth was building a structure of unknown purpose next to Gakrek's Prime spaceport exchange. Most traders had heard of credits and the humans by now, and some were excitedly speculating about the purpose of this new construction.

On Zikzik's Olgix-Gakrek route, thus far, what he would do after he left Earth was to bring the fruits and vegetables to the Olgs first...

… sell half of the food to the Olgs...

... fill his cargo back to full with various metallic ores that the Olgs produced...

… then take off to Gakrek.

At Gakrek, he could then sell off both the ore and the remainder of the food, and fill his hold up with "better steel" and other construction supplies. Which he would then use to buy trinkets and widgets at various other planetary stops before he returned to Earth to dump them all back for Earth food.

Most human truckers looking at this route would notice the immediate red flag here, as they would for any case where a route includes trucking multiple types of goods on a single leg of a route. Unless the market for certain goods was too small, or there were regulations that limited the bulk sale of items, trucking multiple goods on a single leg just screams inefficiency.

Why was he selling only half of his food at Olgix? They had plenty of mouths to feed and plenty of ore to give him.

At some point in the past, his intuition had caught onto this issue, so this wasn't the first time he contemplated this problem. Before, he estimated that the cost of fuel for hauling fruit was less than ore, so the inefficiency was likely to be covered by what he'd save on fuel costs between Olgix and Gakrek.

He entered the fuel costs at each planet, the profits of ore vs fruits vs vegetables vs trinkets ...et cetera into his spreadsheet...

... and he discovered to his horror that he was losing out on a substantial 40% of his profits on this leg because of splitting the food between the Olgs and the Gaks!

Because most of his profits were off of the Earth foods, this added up to almost one third of his entire profit!

From now on, Zikzik determined, I should offload all of my food at Olgix, load up with ore, and offload all of them at Gakrek.

"Pro Tip: do the math! Selling food to the Gaks is a mistake!" Zikzik posted on "Traders Only", the social media app that all the other Terminal traders were signing up to use to communicate.

Famine refers to what happens when not enough food is being produced and distributed into an entire area. It is distinguished from isolated incidences of starvation by scale.

In ages past on Earth, when subsistence agriculture was the norm, people died from hunger and starvation due to bad harvest or failing crops all the time. Famine was used to describe the worst periods of widespread hunger.

On modern Earth, even with improved production and distribution systems, famines were still an ever present problem in underdeveloped areas. When they occurred, tax deductible food aid from rich areas would be sent. Famous people would go on social media to extol the virtues of charity and ask for donations.

Ancient famines were mostly caused by natural events. Locusts, diseases, bad weather. With better agro technology and distribution, that became less of an issue to humanity in modern times. Modern famines were mostly caused by mismanagement compounding adverse natural events.

One example of this was the Great Famine in China. As the authorities later put it, the fault was attributed to: 30% natural events and 70% artificial causes. In 1958, when government officials saw that sparrows were eating up seeds from farmers, which decreased production, they started a mass eradication campaign of sparrows. As sparrows died, vermin thrived. Vermin ate all the crops.

Then, various local authorities covered up their low production with inflated numbers and staged pictures. People wasted away in droves. No aid was ever requested internationally. Most ridiculously of all, China continued food exports. The situation went from bad to worse to critical when droughts and floods further devastated large swathes of farmland.

Each of the factors would have starved some, but combined together, it became the deadliest famine in human history.

And something worse was about to happen on Gakrek.

Saying that it was having a bad harvest year was like saying that Chernobyl was an industrial workplace safety incident.

The increase in industrial activity and pollution in the past few millenium have finally caught up to Gakrek. Climate change had been creating local extreme weather events for years, but new this year to the Gaks were these new superstorms.

Many agricultural heavy areas had been turning drier and losing productivity for decades. To save water, farmers started dry farming crops on the topsoil. This year, the severe droughts from weather events turned soil into dust.

Then a storm came. The wind blew up the dust, and they blew them everywhere. The sky was black for months.

Gordorker was one of the farmers hit by the dust storms. His wife had died in it, hit by a broken tile that fell off the roof when the big winds came. She was a beautiful Gak, and he missed her a lot.

In a good harvest year, he could help his young neighbors, Gyuotin and Gyuovin, tend to their farms, in exchange for some of their spare food.

In a bad harvest year, he still helped them, but the spare food would be less. Because Gordorker was a smart Gak, he kept all the extras he got in his family's prized food stasis box, which had helped his great-great-great-grandfather survive a famine over a century ago.

This year, there wasn't a bad harvest.

There was no harvest. The dust had destroyed his entire crop.

He went to the local market exchange with some of his prized cutlery and pottery he'd inherited from generations past, but they were all out of food.

Then, he trekked all the way to the offworld trader market, where he found that none of them were willing to trade food for cutlery, no matter how much he tried to haggle with them. The security guards eventually had to ask him to leave.

He saw that some were offloading raw ore in exchange for items from the local workshops. He heard from the guards that there was a large food shipment earlier that day, but the trader had only brought in a quarter load, and all his wares were traded for expensive gadgets in minutes.

Gordorker had 18 children, and not enough food for all of them in his stasis food box. He needed to pick which ones of them were to die.

For a parent, an impossible task.

Zikzik's Traders Only post went viral.

Several other traders confirmed his estimates. Some of them had started playing around with spreadsheets too, and all their estimates confirmed the same thing.

Because the Olgs and Gaks both had massive shortages of food and were close to each other, traders would often go to both, sell their food and fill their cargo with goods from both. This was now revealed to be a massive mistake.

Under a human market economy system, whichever of the Olgs or the Gaks needed food more would be willing to pay more. If they had this economy, they would discover that the Gaks needed more food because they would be willing to pay more money for food, until they didn't need as much food and prices would drop.

Unfortunately, what they had was mere barter.

The Olgs and Gaks could only offer to fill the cargo with the most precious items they had in exchange for food from traders. With food at a premium, they actually became more valuable per pound than trinkets and workshop gadgets.

In plain terms, most traders were getting paid less than they would, if they didn’t have the limitations of cargo space. Food from both planets should theoretically net far more profit for traders than they were getting regularly.

However, physical exchange barter meant that traders literally could not be paid more in trinkets. If they could be, the Earth-Olgix and Earth-Gakrek routes would be the only trades that traders would run for a while because of the insane profit margins, until the food shortages on both planets were resolved. People would still be hungry, but fewer would starve.

This unnatural cap on price for food in both systems is known as a price ceiling. In a human economy, it is well known that the practical and most obvious effects of a price ceiling are shortages, long lines, and the creation of black markets.

In some cases on Earth, their effects weren’t even that harmful. For example, some sports leagues would cap the maximum amount of salaries you could pay to superstars to ensure fairness in the game. In small emergency situations, like in the immediate aftermath of a disaster, they would sometimes be temporarily instituted to prevent skyrocketing prices. In other cases, their effects were often deleterious.

Unfortunately for the Gaks, this was the latter. And they had been "underpaying" for food for centuries.

Because of the price ceiling, galactic traders were beginning to realize that running food to both Gakrek and Olgix was inefficient. Olgix became the black market, and Gakrek was the very long line of people waiting outside, trying to get in to buy food at a capped price.

Simple, cold logic and the laws of mathematics told traders that they should be dumping all their food on the Olgix and take ore to Gakrek instead. Or even better for some, skip Gakrek entirely.

That was exactly what they all started doing.

Gordorker slaughtered the family pet, Grunger. This brought his family a month of food and was one less mouth to feed, but it also meant that his next harvest would be much smaller without the beast helping tend to the fields.

He wasn't sure he would even survive until the next harvest. His neighbors were not faring any better. In fact, he hasn't seen either of them in a week. He suspected that they were both too weak to even move.

Gordorker had 16 children, and not enough food for all of them in his stasis food box. He needed to pick which ones of them were to survive.

For a parent, an impossible task.

Traders Only Bulletin: GAKREK TRADING STASIS BOXES AND GADGETS FOR FOOD

CNN: BREAKING: FAMINE ON GAKREK, MILLIONS DYING

GalacticNews Opinion Column: Are Humans to Blame for Gak Famine?

Gordorker had to sell his stasis box. It was empty.

This was his last play. His backup plan.

It had been in his family for many generations, but his blood line was about to end here if he did not get some food for his offspring.

When he got to the market, he was told that no shipments of food were coming in at all.

In fact, no food had come in for days. All the traders were bringing in was ore for the workshops.

Everyone else at the market had an empty stasis box or some other valuable family heirloom they wanted to sell.

Nobody had any food. Even the robbers that would sometimes ambush travelers on the roads were gone. Nobody on the roads had any food. Unfortunately for the criminals, they couldn’t eat expensive junk either.

There were rumors that many domestic pets had become so hungry that they were eating the dead body of their starved owners. Everyone at the market knew that those rumors were false.

Those pets were all eaten weeks ago.

He must get food. His ten remaining children must survive.

For a parent, an impossible task.

"Did you hear the news about what happened on Traders Only?" Jen asked the GC board room, concerned.

"Yeah, they're saying that they're selling stasis boxes and expensive gadgets on the market for food in Gakrek. That's a real bad sign," Stearns said. He was disturbed too, and had reached out to a representative of the Gakrek planetary authorities, but a huffy Gak had blown him off.

He continued, "some of the traders have diverted their food there and filled up their holds with the best stuff the Gaks could offer, but our internal models showed that it was still not as profitable as simply selling their food at Olgix. Most traders have been doing the same math. The Gak government isn't admitting it, but I suspect that they've literally run out of food, planetwide, and not nearly enough is getting in."

They came to a consensus. Gakrek was in a massive crisis.

In a way, it had partially been their fault, and they admitted that freely. The optimization of the trading routes was directly linked to the availability of GC Terminals.

Their introduction was well intentioned. Allowing business traders to buy consumer electronics should not be a bad thing. In markets, however, small changes may often have large consequences. The results here were catastrophic.

Gakrek did not yet have the credits that humanity was slowly rolling out. It wasn't anyone's fault that the Gak foods import supply chain was so fragile to start with, and it was likely that something like this was going to happen to the Gaks sooner or later. Their bad harvest was not the fault of the traders nor Galactic Credit.

But they could help.

And so they must.

It was time for an intervention.

After a week, Gordorker finally managed to sell his stasis box to a sympathetic Bhak trader that was running food between Earth and Gakrek. The Bhak were really good people. Her ship had almost gotten swarmed the second her cargo was opened.

There was a stampede. Security at the spaceport had to shoot many Gaks before they could re-establish order.

He briefly contemplated cannibalism of the dead, as some in the crowd had done, but the rotting corpses of those who were already starving to death were not very nutritious nor appetizing, and he chose to keep his sanity.

After a while, the guards allowed Gaks to get in line for the trader. Gordorker did and finally sold his stasis box along with all the family heirloom he could carry, and he got a small baggie of pears, apples, and carrots. There was no haggling or bartering. Everyone gave all they had, and carried home as much as would last them before the produce expired.

The trader's cargo emptied, and she tearfully promised Gakrek she would be back with more. Some of them knew they would not be alive when she did.

When Gordorker finally got home, many of his children had starved to death. He found two still breathing and nursed them back to life with carrot soup.

His fruits and vegetables could normally last them maybe a month if rationed, but without a stasis box, they would perish if not consumed.

Gordorker had two children, and from the label, it says his food would last two weeks, three at most before they shriveled up and lost all nutritional value.

He had nothing more to trade. The stasis box was it.

That was the last timeout he had, and he just used it.

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