re: Starship Economics

Simon Anderson writes:

> The same thing goes for small starships - Ok, so  It's  cheaper  to  have
> someone  else  move the cargo on their starship, but they aren't going to
> have a starship in the first place unless they're  intending  to  make  a
> profit on it themselves by moving speculative cargo's.

> This  means  there  can be lots of smaller free and far-traders shuttling
> back and forth, only taking regular freight when they can't  find  enough
> speculative  cargo.  The  free  traders  are  there because the planetary
> governments want people who haven't got access to their own  starship  to
> have a chance to make some money too - then they can tax them :-)

No, that is the niche filled by the Subsidized Merchant (the ones the
Government pays for and runs).  They provide the grunt service for all those
investors without a starship of their own.

The free/far trader guys are the ones who go to the bank to ask for a loan:

Capt Helsson (free trader captain wannabe):  "Sir, I would like to borrow
MCr30 to buy a starship."

Mr. Carcharias (vice president in charge of the Loan Dept):  "Well, that's
fine.  We like to see young people go into business for themselves.  Can you
show me your business plan, please?"

Capt Helsson:  "Well, sir, I was planning on gambling on my inherent genius to
come out ahead in this operation."

Mr Carcharias:  "Hmmm...  Why don't we talk about this AFTER you can show me a
detailed plan to make enough money to pay us back.  We don't normally
subsidize trips to Vegas to play roulette."

<  later  >

Mr Carcharias:  "well, sir, it is good to see you again!  What can I do for
you today?"

< capt Helsson hands Mr Carcharias business plan.  Mr Carcharias studies it
while Helsson talks. >

Capt Helsson:  "Sir, you asked me for a business plan.  I have one here.  I
have information that the new source of pharmaceuticals in District 268 will
produce a large, steady demand for starship transportation to markets.  As you
can see, my plan is built around the idea of purchasing the drugs on site, and
transporting them to markets to exchange them for goods the producers need
<blah, blah, blah............>

< Mr Carcharias sets down plans and smiles broadly >

Mr Carcharias:  " well, that is good news.  This is just the kind of plan we
like to see before we release our money into a long term loan.  And, if your
estimates are correct, you should be able to pay the loan back within 15
years.  That really is well thought out, sir.  we shall, of course, have to
process the paperwork, which should take no more than a few weeks, but I can
assure you that your loan will be approved as written."

Capt Helsson: < rising >  "thank you, sir.  I really appreciate that.  I'll be
back to sign the paperwork as soon as it is completed."

Mr Carcharias : < also rising > "Sir, it is a pleasure.  My secretary will
call you within two weeks to finalize the agreements."

< Helsson leaves >

Mr Carcharias:  < to secretary > "Doris, can you ring up Thor Tukera for me,
please?"

< phone rings, Carcharias answers.>

Mr Carcharias:  "Thor, I just heard a reliable rumor that there is a lot of
money to be had in a new route down in District 268.  If you could release a
few long-liners to duty there, we could make a bundle.  And, as a bonus, there
should be several nearly new merchant ships, all quite well designed,
available there in the next few months.  Quite reasonable prices, too, I
should think...  Of course I'll send the details to your office, this very
afternoon.  Good talking to you, Thor.  BTW, what is my dividend on my
personal Tukera stock expected to be this quarter?  That high?  EXCELLENT.
Good day, Thor."

Mr Carcharias:  < to Doris >  "Please expedite that young man's application,
Doris.  We wouldn't want to disappoint him.  Or Tukera."


Notes:

	1) If a good spec trade route already exists, a major corporation will
have it tied up solidly.

	2) Ownership of the major mega-corporations is so interlocked (source:
MegaTraveller) is so interlocked, they might as well be considered to have
identical interests.  This includes Hortalez et Cie, THE major banking
interest and source of starship loans in the Imperium, as well as most lesser
banks.

	3) Purely local banks are unlikely to finance a purchase involving
removal of the borrower and the collateral some months travel beyond their
reach, which is why Hortalez is the main source of starship loans.

	4) Assuming your business plan is based on speculative trade, it will
mostly likely be a newly profitable route.  If the route continues to be
profitable, in the long run Tukera or a similar large shipping firm will
undoubtably move in and take it over.

	5) Given: you have to explain your route to the lending agency.  Given:
the lending agency is a part-owner or is owned by Tukera or other major
shipping firm, it is not unreasonable that the lending agency might inform its
parent of any potentially profitable leads that it acquires.  A secret shared
is no longer a secret.

	6) It is also not unreasonable that the lending agency will make a loan
in spite of the fact that it knows that no profit will be made and the
starship will be repossessed.  This is because they can then sell the starship
to Tukera or whoever at a breakeven price for the bank, and at a considerable
profit for Tukera.  The only loser is the poor schmuck who got the loan.

	7) This happens in the real world.  In the U.S., we have Anti-Trust Laws
and insider trading regulations, etc to prevent this sort of thing.  However,
indications are that the Imperium does not interfere in business to that
extent, especially since the imperial family and the high nobility are
significant stockholders in said megacorporations.  Expect such scenarios to
be even more common in Margaret's Imperium.

	Again, the upshot is that, given the *present* pricing scheme, in the
Imperium, most commercial starships will be owned by the government in the
form of subsidized merchants, or government-protected in the form of
megacorporate ships.  Is this the picture of the Imperium that you want?


					--- Steve & Cynthia