How the CSCS works.

I haven't written anything in a while so I thought it was about time I did! I thought I'd write something about the economics behind the whole CSCS concept; sorta the business case for it. Here are some ideas to consider:

The CSCS will be a self-sustainable economic island of stability. The world as it is today is vulnerable to the effects of diminishing resources, whether that is oil, agriculturally productive land, water, or any other resource. If one of these resources runs out too quickly, then you have a price shock which severely cripples your economy and may initiate a period of continuous economic decline (i.e. a world-wide depression).

At this time all the big investors of the world will be struggling to find good investments. They will pull their money out of the shrinking economies and keep it in the bank. But the banks won't be able to provide a good return either, and so what you will then have is a high demand for any decent investment opportunities of any description.

The CSCS, by being self-sustainable and unconnected to the global economic network, would completely avoid this scenario of world-wide economic decline. So you can see that the CSCS, by being a highly viable investment, will attract a huge amount of capital. And so long as there is a return on investment that capital will attract even more capital in a self-reinforcing cycle.

That wealth that is created in the CSCS will attract continuous immigration with the promise of higher wages. Initially jobs will be in construction, but soon industries develop and finally all types of services develop to supply the internal population.

With continuous immigration, the CSCS will represent a continually expanding market. This represents a lucrative opportunity for prospective services and industries and produces a vibrant economic environment where even small players have opportunities to grow. Because of the continually expanding market, these businesses will show large profits and this attracts even more external investment into the system. This creates more wealth, attracts more immigrants with higher wages, and continues to expand the market. Again, a positively reinforcing cycle of economic activity develops.

But the CSCS also represents an opportunity without having to rely on scenarios of decreasing worldwide economic activity. For the self-reinforcing mechanism of economic expansion to work, all you have to demonstrate is that the economic environment of the CSCS is better than the economic environment of the world at large. And this is easy to achieve, because of all the opportunities that working from a clean-slate allows.

There is also huge potential when you consider environmental problems like urban enroachment, rises in sealevel, and climate change due to carbon pollution. These are problems which are likely not going to solve themselves easily and there will be either a large economic or environmental cost to any solution. But the CSCS can bypass all these problems altogether, because it will not be vulnerable to the effects of global warming nor is it at risk of destroying its surrounding landscape due to urban enroachment. That is because the CSCS can be built right from the start on a desert above any future sealevel, and by design can supply for its own agriculturural needs by using technologies like farm towers and large-scale desalination and irrigation projects which will not be vulnerable to climate effects.

But even if the dire effects of global warming don't eventuate, or if you believe global warming to be a myth, there will still likely be a global drive towards lower carbon emissions with many nations implementing systems of carbon trade or carbon caps.

Assuming the location is somewhere on the Nullabor coast of Australia there is an opportunity for the CSCS here as well. By including the idea of using quicklime to draw CO2 out of seawater (borrowed from www.cquestrate.com) then you have a huge potential to develop a lucrative market of carbon off-sets right from the start. Furthermore, by designing the CSCS to use only renewable sources of energy right from the beginning, so long as your energy is quite cheap you can attract industries and services to the CSCS, as they can claim a reduced carbon footprint by doing so. If eco-cement is used extensively in construction, there is even the opportunity to claim that you are carbon-negative, even without assuming the quicklime carbon-sequestration scheme. Limestone by itself also makes a great low-carbon construction material.

That's all for now, there'll be more to come...

Comments are welcome as always ;-)

- Mike

Thanks Mike! I'd like to add a few comments, if you don't mind:

Free trade - One of the best ways to attract investors and businesses alike is free trade with all other nations. No taxes, levies, or tariffs on imported goods, except perhaps with militarily aggressive nations. Businesses have access to virtually all markets.

Low Taxes - A tax system such as a flat tax, or preferably only a sales tax on goods and services (see FairTax), will also attract businesses and investors. To prevent a burden on the poor, food could be exempt.

Basically, and I agree, we want Autarky. This means high import and export tariffs, except on investment money.

I disagree with the idea that we should put it there, but I like the idea that we can get money from carbon sequestration. I personally always liked the idea of pumping it down a volcano, into the mantle. I suppose that's for later, though.

And quicklime (CaO) in water would just draw out the water, and become Ca(OH)2. We would need to put it into an environment of CO2, which it would sequestrate to CaCO3.

Basically, we need to make the CS a place with a stable government, a place apart where people can count on a stable government, on a prosperous society, and on things that make sense.

High import and export tariffs will scare away all industries from locating to the CS. You mention exceptions for investment money, but what would there be to invest in if the CS does not take part in international trade? There will be a fraction of the jobs possible. Economic growth will stop (if it would ever even occur). An "autarky" is just asking for a failed state.

The point of the CS is to be separate from the rest of the world. Economic ties are often the strongest, so if we can sever them we can be free to deal with the world on our own terms, without needing input from them.

As per the premise of this forum, we need to plan as if there is no civilization- because that's when the CSCS becomes important, like Constantinople in the Middle Ages, an oasis of knowledge in a sea of ignorance.

If civilization goes dark for all intents and purposes, and we need vital technology from them, don't we go dark too?

If we can count on ourselves, then Autarky is the safes policy. If we can't, then we don't belong in a CS.

I'd imagine you'd want to adopt a very pro-industry stance in the beginning. But once you reach that critical mass, perhaps somewhere around 1-million population, then you have enough of an internal market for your industries and you can start implementing policies which encourage economic self-sufficiency.

Well, yes, I agree that for a while, we will need to encourage outside businesses, in order to give ourselves the manufacturing base to be self-sufficient. But once we are (and that should be as soon as possible), we need to close off, and maybe invest in ourselves, and certainly limit our interaction with the rest of the world, although we should keep ourselves up to date in order to prevent ourselves from being forcibly opened like Japan in the 1850's.

Yes. Although its probably not necessary to become strictly 100% self-sufficient straight away. The important thing is that you demonstrate the ability to maintain your economy no matter what happens in the outside world. So that could mean simply having the ability to be self-sufficient, not necessarily closing yourself off to outside markets completely. For example, you could completely rely on imported chocolate if you liked, so long as there would be no economic repercussions if the price of chocolate suddenly went up. That could be because you really don't care that chocolate lovers will have to start rationing their chocolate, or it could be because you have the ability to switch to locally produced supplies. Or perhaps you have enough cash reserves to subsidize your imports during the price peak, or perhaps your citizens are rich enough that they continue to consume chocolate regardless. Either way, the important thing is that you demonstrate that your economic growth is not susceptable to future shortages of one commodity or another, thereby keeping investor confidence and continually growing your own capabilities.

- Mike

I can understand Mike's stance.

Export and import goods will need to always be a part of the economy, until total world economic collapse prevents it. Precautions could be in place to prevent the loss of this from damaging the economy very little, if at all. Maybe we can compromise and impose a very gradual increase in tariffs from nil in the beginning to higher as we become more capable of self-sufficiency.

Complete self-sufficiency is impossible though. We will always have to rely on outside markets to obtain certain rare or complex goods/services.

Well, I wouldn't argue that it is impossible. You can emulate virtually anything. Certainly, you could grow your own cocoa trees and build your own chocolate plants if you really wanted. But is it worth it when your external supplies of chocolate are really really cheap? And even if you ran out of it, would you really be worse off than another country crippled by drought and famine? Definately economic self-sufficiency is something that you will strive for, but like any investment activity there would be a cost / benefit analysis.

I guess there are at least two significant variables here:

1: The difference between the cost of buying the good from the world market and the cost of producing the good locally.

And 2: The internal economic risk of relying on the external market for the good.

If 1 is big while 2 is small, then you can probably get away with importing your good for a while.

But in all other cases, yes, you'd probably aim to produce the good yourself.

- Mike

The other big idea is that the CSCS could essentially become a microcosm of the world economic trade system at large. But I'll talk more about that later.

- Mike

Well, yes, I admit that it would be effectively impossible to have total autarky, but we should keep in mind that that is our goal. And slowly raising tariffs (Or whatever it is that we will use to make out CSCS self sufficient) is probably a good plan.

Yeah, strategy is key.