Today I’d like to talk about one of the central elements of Lords of Infinity‘s plot: the Budget Crisis.
As the war with Antar ends and the Unified Kingdom of Tierra becomes reacquainted with a peace it hasn’t seen in more than a decade, the crown finds itself in an exceedingly precarious financial situation. Historically, the Rendower monarchs (with the exception of Edmund II) have been very thrifty rulers and their governments have followed suit, maintaining a carefully hoarded surplus to ensure that there is always cash on hand in the case of an emergency. This was the case in 601, when the League of Antar declared war. Unfortunately, three factors meant that this accumulated reserve quickly disappeared.
First of all, there was the fact that Tierra has trouble feeding itself, even at the best of times. This meant that traditionally, Tierra imported grain from Antar. Since this was no longer an option, grain had to be imported from Kian and Takaran merchants, who took advantage by raising their prices. To keep the population fed, the crown issued grain subsidies to keep the cost of bread affordable, which rapidly became a major expense.
Secondly, there was the simple fact that the war was ruinously expensive (as wars tend to be). Weapons, uniforms, supplies, and those needed to make, transport, and fight with them were all paid for at the expense of the crown. Every battle meant enormous sums of money had to be spent to replace lost equipment and fighting men. While individual soldiers of the King’s army could get rich off plundering Southern Antar, the King’s government got nothing.
Lastly, there was the matter of the debt that Tierra began to accumulate when its currency reserves ran out. To keep the war going, Tierra needed to borrow. A lot of this money came from Tierran banks, but a vast portion of it came from overseas. Only Kian and Takaran banks could lend the amount of money the crown needed, and neither the Kian nor the Takarans had any confidence that Tierra would survive a war with its larger, more populous neighbour. That meant the interest rates these overseas banking houses offered were far higher than normal, under the expectation that Unified Kingdom might not even exist to pay them before long. While this prediction was proven wrong, the debt, and the need to service it, remains.
With the war over, one of those expenses is gone: the King’s army has been reduced to its peacetime strength, with officers placed on half-pay and houseguard regiments being released from royal service. However, the crown still has to bear the cost of servicing the war debt and the grain subsidies (Antar isn’t going to be exporting much grain to Tierra any time soon), something which it can only really do with the help of war taxes which are only growing more and more unpopular by the day, especially now that the war they were purportedly paying for is over.
The upshot of this is that the Crown is in between a rock and a hard place. To service the debt and keep the people fed, the Exchequer needs to keep enough money coming in by maintaining war taxes. However, maintaining these taxes will invariably increase discontent, drive more Tierrans into poverty or personal bankruptcy, and possibly damage the Unified Kingdom’s economy in the long run. Alternatively, if the Crown scraps the war taxes, Tierra will be forced to declare state bankruptcy, not only destabilising the Tierran economy, but also giving the Kian and Takarans very good reasons to intervene diplomatically, economically, or militarily.
Next month, I’ll be talking about the political factions currently dominating the Cortes, and what (if anything) they plan to do to dig Tierra out of the hole it’s gotten itself into.
This month’s installments of A Soldier’s Guide to the Infinite Sea and An Adventurer’s Guide to the Fledgling Realms are now up. These worldbuilding articles are funded by my Patreon, so If you’d like to see more of this sort of content, then please feel free to contribute. Backers also get benefits like early access, and the ability to vote on the topics of future articles.
October 14th, 2018 at 10:36 am
They didn’t make Antar pay repararions?
October 14th, 2018 at 2:19 pm
They did, but they can’t force them to follow through.
The League Congress is more or less eternally telling them that the cheque’s in the mail.
October 14th, 2018 at 3:45 pm
Is debt selling an option. Could Tierra sell their reparations from Antar to their own creditors?
October 16th, 2018 at 3:48 pm
I mean, the traditional response to that is “Alrighty, you don’t owe me… you owe my debtors. Have fun.”
November 23rd, 2018 at 6:34 am
I think it could be a great subplot to use your relation with Holt to make the Takarans buy the war debt for 50 cent on the dollar.
October 14th, 2018 at 3:02 pm
This get more and more interesting with every post, cant wait.
Will the clubs that we can join have a specific political opinion that the club advocates for or will even they have political discussions?
October 15th, 2018 at 6:27 am
So, in other words, the officer plays a critical role in deciding whether Tierra thrives, survives or is eaten alive?
October 17th, 2018 at 12:14 am
Paul, how about the land in antar that we conquered? Did we just give them back to them? Because if tierra have those land we can grow our own corps right.
October 17th, 2018 at 1:47 am
Honestly I doubt Tierra has the manpower to maintain that land, as well as the money to hire the occupation forces and suppress dissidents. No, it’d be cheaper to ask for war reparations or a ‘prize’ in exchange for ceding territorial gains back to Antar.
November 8th, 2018 at 7:37 am
In the old days of nobility one would appoint a lord let him manage and protect the land and tax him.
Problem was you get ambitious people like duke of burgundy who’ll try to become independant.
Could go dutch voc way find investors develop and bribe native chiefs
So economy wise the fast way is demand reperations and get next to nothing. Occupy and risk feudal barons to try to become independant. Hand out monopoly area by letting merchants risk their funds but who might gain a lot lend money to state and make crisis bigger.
Last option is what we tend to do now, but started with dutch east india company etc. ( now shell, excon etc)
November 11th, 2018 at 11:14 pm
At the end of Guns you mention yourself as one of the last soldiers leaving Antar which you wouldn’t withdraw all your troops from a recent conquest.
November 23rd, 2018 at 6:36 am
I dont think its feasible for them to “occupy” Antar, Antar is like 10 times bigger than Teirra, that would be like Prussia trying to occupy imperial Russia.
December 25th, 2018 at 5:43 am
The option for a Free Market will be an option, I hope?
December 25th, 2018 at 2:14 pm
The decentralised power of the Tierran monarchy means there’s little way to control the nature of the Tierran “economy” one way or the other. Anything resembling a regulatory scheme is controlled either by non-government organisations (like city guilds), individual noble houses, or foreign powers.
January 2nd, 2019 at 12:51 am
would there be an option to negotiate trade treaty with Antar, like the one Washington got with Britain right after the war of independence?
also when i play the games i can’t help but feel that Tierran had a decent manufacturing base supplied with its own mineral reserve in its northern provinces. sounds like if Tierranians have the opportunities to expand their production, they should be able pull them self out of debt with relative ease.
however i have yet to play choice of broadside so i don’t know how technologically advanced Tierran is compare to the other four major power, so i can’t said how much market the Tierran goods will enjoy outside of their country.