Economy & Economic Policy of the GCK

# Economy & Economic Policy in the GCK

### **An Economy For The People**

The command, semi-planned economy of the Greater Confederated Kingdoms is based on a system of state owned industries operating in conscious competition with the private sector with the goal of minimizing waste and cost of production while maximizing employment. This emphasizes and enhances competition between the state industries and the private sector in so far as it forces the private sector to raise the quality of life of their labor force in order to remain competitive with the state sponsored competition. With the second highest GDP of any single nation on the globe, the GCK has rapidly grown from a coalition of minor powers into a major economic player.

A key principle of the *Rosos* (an acronym for Royal Socialist) doctrine is that the state should function competitively in the domestic market with the goal of reducing unemployment and increasing the minimum wage in the free market. Accordingly most major field feature a *stattkooperative*, a state-operated non-profit cooperative enterprise limited to the domestic market and funded by the taxpayer; notable *stattkooperatives* include *Standardtauto* (automotive production), *Royal Unified Lines* (passenger and cargo maritime transport) and *Greckaero* (airline). In circumstances where a *stattkooperative* makes a profit, everything beyond a certain fixed percentage of growth (allotted to immediate re-investment into the company, as opposed to savings or bonuses) is distributed as a price-correction to the purchasers of that year's products, similar to a tax refund.

While this means that private sector industries are capable of making remarkably larger profits than the state industries, it also means that state industries are in a position to pay higher than the private sector, forcing the private sector to make more competitive compensation for their labour force in order to secure talented workers and accordingly facilitating higher quality of living among the *greckstatt's* citizenry, while also helping provide lower prices on their products via the *stattkooperative's* manufacturing.

### **0AF-16AF (1922-1938)**

The GCK historically has utilized strong protectionist  trade policies to help promote the strength of its own internal industries, beginning with the 1st National Development Plan established during Foundation Year (1922). Predominantly, these policies manifested in two forms; first, being the use of foreign currency exchange controls to help protect domestic markets, and secondly through the use of import and export tariffs. Through the bicurrency *standardtnote*/*internationalnote* system, the GCK has implemented an elegant form of foreign exchange certificates in ultimate support of these policies. Secondly, the GCK has implemented import and export tariffs with the dual purposes of discouraging import of products competing with domestically produced goods (as well as discouraging luxury goods markets, based on *Rosos* philosophical grounds) while equally discouraging the sale of domestically produced goods internationally, so as to retain a solid reserve of products available for domestic consumption at low prices by controlling demand.

Domestic consumption is strongly tooled towards economic accessibility in a manner bordering on autarky, simply as a matter of pragmatics: at time of foundation, roughly one in fifty families had an automobile in the GCK, and by 20AF this ratio had been improved to one in five, thanks to a prohibition of exports of *Standardtauto* Automs and a strong focus on rendering the ruggedized Patton vehicles as cheap and easy to acquire as possible. This has inversely, to a certain extent, hampered technological innovation in some fields, although great interest is consistently paid towards improving production methods.
With the GCK's negligible military spending during this period  allowing for the use funds other nations commonly budgeted for their navies, airfleets and armies into economic investments, the GCK's economy grew at a remarkable and steady rate through its 2nd, 3rd and 4th National Development Plans (1926, 1930 and 1934, respectively). By the mid 10sAF, the GCK had effectively developed an economic and industrial foundation which put the nation in a competitive position in rivalry with foreign powers.

### **Round-The-Clock Production & The Twenty Year Dream**

Beginning 16AF, the GCK implemented round-the-clock production policies for several key industrial fields (mining, refining, construction and manufacturing) in order to accomplish the goals of maximizing domestic production and minimizing unemployment. Accordingly, state industries took to running on triple eight hour shifts, six days a week, with one eight hour shift per day being worked; the introduction of a third shift proportionately reduced unemployment and construction times while maximizing gross domestic production. This was motivated substantially by the *Politikahaus'* finally permitting major military expansion under the 5th National Development Plan, which lay out a vision of massively expanding the navy over the course of the next eight years.

The introduction of round-the-clock (essentially wartime styled) production policies resulted in considerably more state spending within the GCK, and inflation began to increase during this period. This was compensated for through careful economic management, as the ministry tightly matched increased gross domestic production with a proportional increase in currency introduction at as close to a 1:1 ratio as was feasible. This, combined with the fixed currency exchange rate of the *standardtnote*-to-*internationalnote* has helped keep inflation in check within the country. Furthermore, the reduction in unemployment rates to record lows resulted in self-supporting increases of average minimum wages around the country, as private industries competed with the state subsidized industries for talented workers, raising the quality of life for citizens throughout the *greckstatt's* economic dominion.
The major production expansion implemented in 16AF was met with a proportionally large consumption campaign in the form of The Twenty Year Dream in 18AF, which laid out a plan for large scale infrastructure construction (in essence, wilderness-to-civilization domestication) in the continent of Nordenia over the course of the next two decades. This program further radically increased expectations for industrial production and growth, and in broad strokes anticipated to double the GCK's material consumption over the course of the two decades forecasted to accomplish this task.

### **Economic Expansionism, *De Nord und Uuest Scheme*, and Lutz's *Neuu-Plan***

The 6th National Development Plan in 20AF (1942) followed certain elements of the 5th National Development Plan and the addendum of The Twenty Year Dream, in that it continued with the policies of round-the-clock production and large scale industrial consumption being matched with large-scale-production as an effort at controlling inflation; however for the first time in the GCK's history it now turned its attention more towards international import/export of manufactured goods and raw resources, as the *greck* economy was now outproducing its domestic needs so substantially that overseas markets were needed to continue the upward arc of GDP. Furthermore, its unprecedented growth in GDP further demanded it to dramatically increase its access to raw resources to support this growth; the Nordenian Royal Territories substantially augmented these resources, but were as a whole insufficiently developed for the titanic scale of the construction projects underway.

A substantial component of this need manifested in the *Greck*-Ordanian Economic Cooperation Treaty, and the subsequent Iron Crisis when the young monarch afterwards known as Henry the Cowardly of Ordania repeatedly attempted to renege on the agreement his nation had agreed to, ultimately abdicating after implied threat of naval intervention by the *grecken*. The GCK's appetite for iron, required to support its continued rapid growth in GDP due to its domestic production, the large scale nature of the Twenty Year Dream and its continued naval expansion programs, rendered the nation increasingly economically aggressive in support of its rapid and borderline exponential growth. This essentially ended the GCK's twenty years of economic and political isolationism.
Towards these ends, the GCK elected to focus its economic attentions away from the rival *blocstatts*, and instead turned its attention more towards Cordia, the lesser federated kingdoms, and Wakoku in what was termed the *Nord-und-Uuest* strategy; icebreaking cargo and passenger ships were constructed to maintain a navigable trade-route through the Uthen Sea year-round for this purpose.
(Lutz's Neuu-Plan; tariffs fixed to foreign state's socialist policy)