The Economics of War

[Ashkelon]

Ladislas Room, Bogumierz Palace
Giecz, Upper Swieczieman Federative Mezhist Republic

While it was not a grand conference hall like some royal courts preferred to use, Ladislas was a comfortable room for its size, and certainly appropriate for the kind of meeting that was taking place. In war, there were two things to keep mind of... the men, and the money. The money? A sceptic might ask. Surely, this person was jesting! But no, he was not. Yes, wars were fought with soldiers, led by commanders, and declared by sovereigns. But soldiers needed training, hardware, and supplies, commanders needed staff and a means to quickly convey their orders, and sovereigns needed a way to turn a declaration into an actual war.

And of course, all of that required money. All of that was involved in economics. And that was exactly what this discussion was about: the economics of war.

Lazaridis was a shrewd man. Lazaridis was also part of the Economy, Trade, and Industry Directorate, specifically the part that took charge of finances. This was the reason he had been selected by the equally shrewd Ofelja Kinserdal, Director of Economy, Trade, and Industry, to head the Sarmatian end of this meeting. Which was to say, it was not exactly a large meeting between a group of people, but a simple matter as a group of four having their afternoon tea.

Sarmatian tea culture was a mixed bag, understandable because of its position in the midlands. The common folk would have their tea in mugs with milk and sugar, especially the working class, to go with their afternoon snack. The more affluent would have the same concoction in dainty little teacups that looked suspiciously like the ones in Engellex. On the other hand, the more affluent also had a taste for tea without milk and sugar, "unadulterated", as some would put it. Whether black, green, or white, it didn't matter, so long as it tasted good. And each affluent Sarmatian had their own taste.

Lazaridis preferred liked white tea, and took a sip before setting down his cup. "Now then, as I was saying, we here in the Mezhist Union look forward to partnering with you for the long term. And more importantly, we understand that you will need this equipment even after the war. It's obvious that us taking them back is not a viable option. What I suggest is just taking out a loan from our financing institutions to pay for the purchase of all the equipment and supplies, the assistance we will be providing in helping Yujin industrialise, and, well, everything, really."

The financier adjusted his glasses and drew a sheet of paper detailing the programs they had available. "As you can see, our programs are very fair and reasonable." He paused, allowing the Yujiner representative time to study the available plans. With Danmark collapsing, there was no doubt that the Danish banks were unstable, and their financing of the war would inevitably run dry. But to Lazaridis, that only meant more opportunity, especially if they could buy the debt that Yujin owed to the Danes. There were many ways to go about this, and there was much time to discuss the other aspects of how to go about the economics of war.

Lazaridis mentally smirked. This was going to be a lot of fun.

 

[Khemia]

Zhu Zhaoji was as ugly as a man named after swine could possibly be. Balding, with skin pocked by liver spots and blood boils, wrinkly and old with eyes that shut so tight that any Westerner might think him to be blind; hiding the cataracts that cloud them well enough at the very least. The circular glasses that he wears, typical of Yujiners, do not help combat the stereotypes. Nor does his colorfully simple outfit. Zhu Zhaoji picks up a tea cup which had been filled for him with some fine tea brewed from leaves and smells the aroma for a moment. It is calm and soothing, the wisps of hot air rising from the scalding tea caresses his aged face and relaxes him. He quickly drinks the cup, experienced through many years of drinking near boiling liquids.

Setting the glass down back on the table, Mister Zhu attempts to clear his throat and remember what his counterpart had said. An aide sitting next to him, who himself was quite elderly and had worked beside Zhu for decades, knew that the aging finance minister was of failing memory and leaned in to remind him; "Loans," he whispered in their native tongue.

"Ah, yes, loans. The situation in Yujin is quite complicated, you see; there are rebels fighting us on three fronts: the so-called Republicans in the East, the ants in the north, and the false 'government' of Vangala. The Emperor does not see negotiations with any of these rebels as a possibility - we simply cannot compromise the integrity of our regime whenever any peasant with two sticks to rub together decides he is more suitable to sit on the throne! You have already generously provided for us, and these provisions are already paying off in dividends; the counter-attack on Liangang and Nianxu simply could not have been possible without your assistance. But, the Imperial government does not have the finances to repay Sarmatia - the cost of logistics, and of manufacturing parts and supplies to repair damaged assets - are a heavy burden on the Empire at a time when people simply refuse to pay their taxes and exports have all but stopped. These loans will be used as a temporary stop-gap, to help pay off this aid in the immediate present, and then we can repay the debt in the future..."

Zhu Zhaoji cleared his throat yet again, wondering if there would be any other stipulations that would coincide with the aid. Afterall, the Imperial Army Air Corps was using the very aircraft donated by the Sarmatians to systematically destroy the two largest port cities and second and third largest industrial cities in the Empire; perhaps these were facts that merely eluded the Sarmatians, or perhaps they were more idealistic and less practical and pragmatic about the possibilities of repayment.

 

[Ashkelon]

Lazaridis nodded as he listened to the ageing Yujiner minister go on to explain the situation the way he saw it. It was of course, a natural occurrence for such times as war, that it would not be as simple as repaying the loan in the middle of the conflict, especially when there was all manner of property destruction going on, uprooting the industry that was needed to make the money to pay for the loans. But terms were very flexible, and there was no doubt that an agreement could be reached, regardless of the challenge.

He sipped from his tea cup and adjusted his glasses, as the minister finished outlining his concerns. "We understand completely. Due to the ravages of war, your economy is pressed to focus on what is important - crushing these rebellions that are threatening the Jade Throne. Combined with the unwillingness of the citizenry to pay taxes, this adds up to a difficult situation. But that is no problem, I assure you. As you can see, our program is very reasonable, and even the interest rates are very manageable. Until the situation is resolved, the rebels crushed and the war comes to a close, the Empire does not need to pay for the debt. At least, so long as it concerns rebels, and not foreign aggressors. If the Touzenese suddenly attack, that will be a different matter. Not that they likely would, of course. So rest assured, this loan should not be a problem at all."

A moment of silence, as he thought briefly about the rebels. Three fronts, and with the Republicans close to financial collapse, would leave a lot of prisoners. Or lack thereof, if he recalled this tendency to summarily execute traitors on the spot. "By the way, what exactly do you plan to do once you recapture the rebelling areas?"