Scarcity Economy Two Decades Later
A StinkPalm007 Creation
By: Professor Frank D. Anconia
As a professor of economics at Night City University, people frequently ask me about the past, present, and future of Night City’s economy. Over the last several years, my students have frequently asked “How can a war from before I was born still make it hard to buy what I want? There is a lot of manufacturing in Night City, why can’t we just make everything we need?” The answer to these questions starts with the founding of Night City.
The economy of Night City is unlike any that has ever existed. It is a modern city-state with very little territory and virtually no natural resources. Since its inception, Night City’s primary resources have always been a business-friendly political environment, a large centralized workforce, and the city-funded trade infrastructure. This situation is no accident, in fact, Richard Night planned this from before Night City was built.
Richard Night selected a location that could be independent from the existing local governments in order to create business-friendly policies and regulations. Additionally, he brought in major corporations to help with funding, planning, and construction of the city. The collaboration with corps meant that Night City’s design emphasized critical infrastructure needed for trade such as mass transit for the workforce, highways to move goods around the city, and a port for international trade. These strengths have helped Night City to grow in the past but now they hinder Night City’s recovery from the 4th Corporate War (4CW).
The Collapse
The current economic conditions trace their origin back to 1994; the year Richard Night broke ground on Coronado City which would become Night City. That year the world found out that the US government and the Gang of Four had been manipulating stock markets worldwide in order to prop up the value of the US dollar. The backlash was swift with most countries ending their use of the US dollar in favor of the Eurodollar (known on the streets by the vulgar moniker ‘Eurobuck’). Additionally, many countries instituted trade embargoes with the US. This sent the US economy into a major depression and kicked off The Collapse.
The Crash of ‘94 and The Collapse had a major impact on Night City. First, the federal and state governments were short on resources. Business regulations went unenforced because there was little funding for enforcement agencies. Thus businesses could do as they pleased. Night City took advantage of the power vacuum by asserting greater independence from governmental control and expanded its business-friendly policies.
Second, The Collapse resulted in mass unemployment and millions of people migrated around the country searching for work. Night City was a popular destination for those economic migrants. Average wages declined steeply with a massive labor force competing for a limited number of jobs. People were willing to work for almost any wage.
Third, The Collapse began the process of currency substitution as the Eurodollar replaced the US dollar for international and domestic trade. Unofficial adoption of the Eurodollar in Night City meant that corps could operate purely with the Eurodollar eliminating profit loss due to exchanging currency. The net result was a Night City perfectly situated for international trade. It was inexpensive to import materials and export the finished products around the world at competitive prices.
The DisUnited States
Coming out of The Collapse, the US government found itself with very little money, a humanitarian crisis, an economic crisis, and another war in Central America. This left the government unable to provide even basic security and services to the country. The aging transportation infrastructure made it difficult to move raw materials and finished goods across the country. This caused ports to become essential lifelines since maritime transportation avoided the failing US infrastructure. Night City, once again, benefitted from national conditions due to its strong manufacturing and export economy.
Many states began to question the wisdom of sending tax money to Washington D.C. when they received almost nothing from the federal government. Several states decided to secede from the union including California in 2002. Later, Northern California declared its independence from the rest of California. Night City was perfectly situated along the border of Northern and Southern California allowing Night City to assert independence from both states. Night City was now free of any outside governmental interference or regulation. On top of that, Night City’s independence allowed it to trade with everyone including the Free States, the US, and foreign countries. Again, Night City took advantage of national conditions to improve its economy.
At every step, Night City continued to position itself as a major manufacturing and export hub. Night City has achieved near-complete independence from state and federal government, adopted business-friendly policies, cultivated a large low-wage workforce, and built world-class infrastructure to support trade. Unfortunately, Night City’s greatest strengths would become liabilities after the 4CW.
The 4th Corporate War (4CW)
The war started on November 15th, 2021 as a corporate squabble over the carcass of IHAG by CINO and OTEC. 4CW quickly escalated into worldwide combat between Militech and Arasaka. It ended on August 20th, 2023 with a nuclear warhead destroying the Arasaka Towers in Night City. Those 21 months of warfare changed life forever. There were two critical features of 4CW that had massive impacts on the world economy. The war caused a collapse of international trade and devastated financial institutions across the globe.
The 4CW caused vast destruction across the globe. Both Arasaka and Militech were buying up large quantities of military equipment, medical supplies, vehicles of all types, CHOOH2, and much more. Almost everything both corps bought up was destroyed in the war. As reserves of critical resources dwindled the focus shifted to cutting off supply lines to starve each other into submission. Militech and Arasaka targeted each other’s factories and then expanded to anyone doing business with their opponent. They weren’t just targeting weapons and ammunition factories, they also attacked automotive, aeronautic, and maritime industries. The goal was to prevent equipment from reaching the battlefield.
Unfortunately, the end result was a crippled worldwide supply chain. In particular, most raw materials, parts, and finished goods are shipped overseas at least once prior to being sold on the market. But Militech and Arasaka targeted shipping vessels, commercial ports, and drydocks. When the dust settled there was a dearth of vessels, cargo containers, and crews. By 2023, international trade had completely broken down.
On top of that, DataKrash corrupted most computers, databases, and programs in the world. At the time everything was on the NET from personal photos to bank accounts to corporate inventories. Ships lost communications, GPS, and in some cases they lost complete control over the vessel. Transportation companies had no idea how many vessels they had, what was on each ship, and where they were. Corps could not pay for goods because DataKrash corrupted bank accounts and communication systems. The few remaining cargo ships were stuck in port because they wouldn’t hand over the cargo without payment but nobody could pay.
4CW crippled the world economy but Night City was hit particularly hard because its reliance on a manufacturing and export. Raw materials could not get into the city and finished goods could not get out. Furthermore, Night City was still reeling from a nuclear explosion in the city center and collateral damage across the entire city from the fighting.
The Financial Recovery
With an end to the war, the slow recovery process could begin. Rebuilding wasn’t as simple as buying materials and paying people to rebuild. DataKrash had wiped out the financial industry including all types of bank accounts. People, governments, and corps alike had no idea how much money they had. Cash became king and instantly increased in value since there wasn’t enough to go around. Those without cash had to resort to barter which we all know can be highly inefficient. Additionally, many goods, especially construction materials were not available at any price.
Governments and corps knew that something had to be done about all of the wealth that simply disappeared with DataKrash. Unfortunately, the data corruption brought down communications and grounded AVs. It took months for world leaders to convene and discuss solutions to the financial situation. In January 2024, world leaders began meeting in Brussels and two months later they revealed the now infamous WARP plan. The World Asset Recovery Panel (WARP) created a panel composed of economists, politicians, and business executives. They were tasked with deciding how much money was lost and who would be compensated for their loss. They reinvented the Eurodollar by declaring that worldwide there would now be 100 trillion Eurodollars in total. Then they divided that amount among countries based on their Gross Domestic Product (GDP). Each country had a pot of money to distribute to everyone that lost money in their country.
Of course, the WARP members reserved 10 trillion Eurodollars to directly distribute themselves. Individuals could appeal the amount given by their home country directly to WARP. Panel members were extremely corrupt and all of the members walked away very wealthy. Obviously, the poor received very little while those with power took the lion’s share of the new economy.
WARP did not distribute any money to countries until nearly 18 months after the nuke detonated in Night City. Another year passed as countries decided who would receive money from WARP. The US government and WARP largely ignored Night City. Night City was independent in spirit and behavior but still technically part of Northern California so the state received Night City’s portion of recovery funds. In usual fashion, Night City would not submit to the state’s authority and therefore received only a pittance.
Rebuilding International Trade
For nearly two and half years international trade was forced to either barter or use the limited supplies of cash available. This would have impeded trade much more if it weren’t for the fact that most shipping vessels were damaged, destroyed, or lost due to the war. The small number of shipping vessels created a massive bottleneck in the supply chain.
At the time China produced the majority of all cargo ships in the world. Also, China produced more steel than any other country. Unfortunately, China imported 80% of the iron ore used in steel mills; mostly from Australia. China couldn’t build ships without steel and couldn’t make steel without iron ore. Australia had few vessels left that were suitable for transporting iron ore. Additionally, China had to barter for Australian ore since the monetary system was still in shambles. It took China three and a half years to rebuild a sufficiently large fleet to get their steel mills running at full capacity.
With steel flowing again, China turned to rebuilding cargo ships and cargo containers. When 4CW started, more than 90% of all cargo containers in the world were produced in China and nearly all of them needed to be replaced. The war destroyed most cargo containers. The remaining cargo containers became makeshift housing since the ships sat empty with no goods. Over the next several years, international trading slowly began to build greater and greater capacity.
The Aftermath
The high seas were more dangerous than ever before. Corps lost control of many very dangerous nautical ordinances due to corrupted computer systems. Portions of the oceans had become the domain of AI controlled subs, EVPAs (underwater power armor), and even mobile torpedo platforms. Only the nomads really know which trade routes are safe. This both slowed the return of international trade and increased the cost, though after a decade maritime trade was back in full swing.
The high price of shipping meant that corps were extremely strategic in their rebuilding efforts. They only invested in reconstruction projects when it was profitable. Night City’s manufacturing and export economy meant that corps were willing to repair the port, some roads, and portions of the mass transit system. Helping the masses was not profitable. On top of that, Night City had always asserted its independence from outside control. This became a liability when Night City needed help. Neither Northern California nor Southern California were willing to step in and help. So Night City was left to recover on its own.
By this point manufacturing had returned to Night City but few products were left for residents to buy. The low wages that made manufacturing so profitable also meant that few could afford the products made in Night City. Instead, most products were shipped overseas to markets that could pay much higher prices. The large workforce that powered the economy of Night City for so long now was a liability. There was no need to provide livable wages, a safe workplace, or decent housing because there were always more people willing to work for next to nothing. With so many living in abject poverty it was not even profitable to bring many goods into Night City. Corps kept just enough fine goods coming in to make their execs happy but no more.
At this point, you can see that Night City’s manufacturing and export economy was built on a business-friendly political environment, a large centralized workforce, and the city-funded trade infrastructure. In the end these strengths became liabilities. When international trade halted, Night City’s economy was decimated since it was based on exporting manufactured goods. Night City’s independence helped it to build a strong economy but it meant that nobody was willing to help the city recover from the war. Additionally, 4CW destroyed large swaths of the city and corps only rebuilt infrastructure that was critical to their business needs. In the end, the masses were left to fend for themselves while corps made billions in profits.
