I vacate the lecturn to make make for my learned research Prof. Murphy, this evening. Murph, as most of you know, works for me as a researcher on the books, mostly on military matters, but not exclusively. He's also been of invaluable help blocking out combat scenes and even trying his hand at drafting the first pass of a couple of bits and pieces.
He sent me an email the other day which I reproduce with his permission, pondering the economic landscape of a Post Wave America:
I've been reading up on economic history over the last four months, partly because I need to for my classes but also for the third book in the series. It seems to me that the book will be as much as economic power as it is about anything else.
Again and again I've tried to picture what a post Wave economy would look like and I keep coming back to the same conclusion. Granted, this is not my area of strength but I think I'm on track here.
In Eric Flint's series, the folks in Grantville frequently discuss downgrading their technology level to something they can easily produce. Rather than produce M-16s, they produce rifled flintlock muskets, transition to steam technology, etc.
It seems to me that the economy of the remaining United States of America will need to do the same thing. The massive Federal Regulatory Structure that exists today would need to be stripped down, simplified. In doing so, it would probably be best to turn to a national bank.
We have something like that with the Federal Reserve system now (not a system I fully understand). That said, the Federal Reserve system is designed to service an economy powered by 300 million plus people as opposed to 15 million.
I think what is needed, therefore, is a National Bank.
I probably sent a write up on this a few months back but you could model a national bank on the Hamiltonian model. This would mean changes in the third novel. Right now the US is not paying any of its' debts as I understand it. It would have to set up a means to do so in order to obtain credit.
Hamilton argued that all foreign debt should be repaid. I suspect US foreign debt circa 2003 is going to be too large for the remnant to service efficiently. Given that China is in the middle of a Civil War, I think the US can be chosey about who it pays back.
Thus I'd set up a bank that serviced the debts of the most powerful remaining national economies.
If I reckon correctly, these are the biggest remaining players.
I'd make it pretty clear as a matter of US economic policy that debts held by these countries will be serviced.
Some of this debt can probably be serviced, at least initially, by salvage of some sort or another. We've already indicated some of this in After America with stocks of US military surplus going to places like Great Britain. My concern is that there might eventually be a glut of this stuff on the market and as such, the US will not be able to obtain the windfall which is hoped for.
There is also the fact that Russia probably isn't all that interested in most US equipment, carriers being the exception and it is unlikely the US would sell such to Russia.
The rest of this debt, however, is going to have to be serviced by investment of some sort. Hamilton solved this problem by offering shares of the First National Bank up for purchase. They did relatively well partly (as I understand it) because people believed the economy was going to grow. It also served to tie the rich to the success or failure of the Federal Government.
Kipper needs something similar. He needs a way to tie folks like Cesky (the nasty construction magnate Jules left behind in Acapulco) to him for more than just revenge and short term gain. Otherwise I can see folks like Cesky running off to Texas.
As for staples of the new US economy (because salvage can't last forever), I've got some thoughts.
Tobacco. We produce a lot of it obviously and Missouri plays a role in that industry. I suspect tobacco will become a very valuable commodity in the post wave economy. Given that we have established Kansas City as a center of restoration, tobacco could become KC's big crop.
Pharmaceuticals. I think we've covered this previously as well. Puerto Rico has a pharma industry and given the post-wave situation, viable medicines are going to be a hot commodity. I could see a situation where someone tries to make some sort of grab for Puerto Rico. You probably can't work it into the third novel but it is something to consider.
Alcohol. Especially bourbon, but also medical grade alcohol.
Corn in general, people have to eat.
Wheat, same thing.
Ironically, as I ponder here, you could see a Hamiltonian based financial system supporting a return to Jefferson's vision of an agrarian republic. Our first strength was agriculture and I suspect that is the nation would restore itself.
That said, I think ground work should be laid for a return to some industrial capacity. As such, Seattle would probably be the center of such activity. With corporations such as Microsoft and Boeing headquartered there, they could provide the seeds for a rebirth.
There could also be a salvage tariff. I think we've discussed this before. Of course that could be fueling the fighting on the East Coast since the losers don't want to pay the tariff and there is a shortage of people to collect it anyway. That said, on the West Coast, which is accessible to Australia, Korea and Japan, the salvage tariff might be extremely profitable for the US government.
I have one additional thought.
Many see the US economy as one solid, unified block. It is worth pointing out that it is a collection of regional economies. It was this way in Hamilton's day and it will most likely be this way in the post-Wave economy. As such, there will be tension between the various sections of the United States.
I keep thinking about Blackstone's Texas. (Yes, that is a little peek at what's coming up. - JB) He is able to get credit in the second novel and I suspect part of that is due to resources he has at his disposal, mainly salvage of weapons, technology, etc, and a willingness to help maintain the militaries of places like Israel and Saudi Arabia.
That said, it could possibly be that Blackstone has set up a Republic of Texas bank which is servicing the outstanding debts of the State of Texas. He could be servicing those debts quicker than the US government is able to and as such is able to get credit quicker. He may have investors who are growing increasingly tied to the success of Blackstone's government.
He, of course, also has Texas' own oil resources to draw upon. That could also help fuel his economy.
Some random thoughts as I close out finals.