First of all, I would like to offer my compliments to Charles I, Prime Minister Meehan, Deputy Chair Massarde, and last but not least Mr. Lethler, for the argumentations presented in this debate, which has indeed proved most instructive to me – since I am not quite a member of the community of my own right.

The reason for this reply, which I unfortunately must keep brief due to academic constraints, is to reply to a single point raised by Charles: economics in micronationalism. I must admit I initially didn’t wish to write anything on the subject, but Mr. Lethler’s essay, which I commend for its loquacity and insights, has prompted me to action.

To commence, I would like to thank Mr. Lethler, both on my part and on behalf of Minister Strauss, for including our names in his list of influential micronational economists alongside important and established figures such as Ms. Kai Roosevelt and Tsar Jacob Tierney. While I disagree with some of the points raised by Mr. Lethler, especially regarding the allocative efficiency and the successfulness of the socialist economic model macronationally, I must concur with one observation: micronationally-speaking, the socialist model is the predominant one and for a good reason.

As Mr. Lethler has pointed out, market forces are almost totally extraneous to the micronational panorama, because of the limited amounts of consumption and thus demand-driven supply. In a scenario were private companies are hard to establish without macronational tax evasion, the market model finds it extremely hard to operate, even in conjunction with state spending – the most used model in macronational economies. Furthermore, in a completely capitalistic society the government’s only revenue would be through taxation and as that is relatively unheard of in the micronational world, although I myself would seem to disprove this statement, the possibilities of such a model existing in our community would be near impossible.

Mr. Lethler correctly noted that the policies I pursued when Secretary of the St.Charlian Treasury were, quite bluntly, socialist. As he also suggests, me and my party would have preferred an economy and a development fuelled, at least in part, by free markets. In an environment like that of micronationalism, for the afore-mentioned reasons, economic socialism seems to be the most logical and productive model for a sustained growth, although it may be able to revert to a more capitalist structure once the nation has progressed to a certain stage of internal development.

Similarly to Mr. Lethler, I am surprised that Charles I did not take the time to investigate the economies of the DPRE and our Federal Republic, which are the most advanced and burgeoning in the community. I must admit, somewhat to my ideological discomfort, that the elimination of our public deficit and the incredible growth experienced in 2009, could not have come about without central planning. It is also through the Secretary of Treasury that we have founded our first profit-oriented SOE and are in the final stages of developing a Federal Bank – making it possible to have easy access to credit and thus stimulate growth.

I am however forced to remark that this is not all due to the socialist economic model itself, but rather to the structure of the micronational community and the fashion in which that particular model applies to it. The very base of micronationalism is government, and it is thus logical that most economic activity would stem from it, whether private enterprise is encouraged or not. The economics behind socialism therefore seems to be the model for micronationalism, much to the contrary of Charles’ argument.

To conclude, I find Charles’ argument flawed and not well-enough researched. From my experience, socialism has proved to be the most successful economic model for micronations, and I personally am not aware of a micronation that relies on another model entirely and is at the same time successful. It seems rather obvious to me that the exact opposite of what Charles I claims seems to be true. Having reached the end of this response without having being able to find a quotation from the likes of Friedman to match Mr. Lethler’s I will conclude with my sincere opinion and an appeal to Charles I:

My dear Charles, while your essay was indeed well-written and has achieved the goal of stimulating intellectual debate, it would have been wiser to research our community further rather than rushing to conclusions. Indeed, the socialist economic model, or the communist utopian ideal for that matter, are quite possibly only going to be able to be achieved in micronationalism. I therefore thank you for the essay and your opinion and I doubt there is any need to tell you that the next controversial essay should be well-researched, lest the “big guns” of communism aim at you point blank with no escape!

Heinrich Schneider OBS - Deputy Prime Minister of the Federal Republic of St.Charlie, Minister of Home Affairs, former Secretary of the Treasury

Headquarters of the NPSC, Revolution Square 1, District, Federal Republic of St.Charlie
6th June 2010

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