"Don't you think that your increasing isolationism could set off a protectionism spiral?"

"No, and I don't care about that either. The world is dependent on us. Not the other way around. They need our exports. The medicinal plants for many medicines only grow here. Many of our weapons only work with our ammunition. That is negotiating power. That is the result of reasonable politics. Delxawe has just lowered tariffs for us and Jena has suspended its import quota for agricultural products indefinitely. I have not offered anything in return. But even if all countries seal themselves off. We don't need them. It is a one-sided dependency. You are a follower of a contradicted school of thought. We practice protectionism, but we are world market leaders. We don't have a cartel office, but we still have a competitive market. We have full employment, but no inflation. If we want, we can produce twice as much tomorrow and nothing the day afte. It's all very easy. Let me tell you something else that might shock you. You were an asset manager for a long time. The high incomes at our state-owned companies are also possible because they don't have to pay dividends to investors. They are all 100% state-owned. They don't need private capital. If they don't have any money, they just go to the state bank and get some, because as it turns out, I don't even need a private bank to tell the state bank how creditworthy a domestic company is, let alone a state company, because no matter what the bank decides, if they go bankrupt, they come to me, then I go to the state bank. I'll save myself the walk."

"I know that. I've been thinking the whole time about whether I should bring it up. Last year, your state bank recorded a default rate of 5.4% for consumer loans and 3.4% for corporate loans. The independent banks have less than 1.5% for both. Are you sure you know what you're doing? It doesn't seem that way to me."

"I've already noticed that quite a few things don't seem to you as they are. At this point, however, I admit that when it comes to the wishes of my citizens, my money is rather loose. Depending on the purpose of a loan, the state bank does not have to look very closely. Loans are therefore also granted to risky companies if there is a chance that it will benefit the country. In a nutshell, these are subsidies for science and research. If 99 out of 100 projects fail, the last one can still be a win that makes up for all the losses for the country, as long as even one very strong patent comes out of it. This may not be a profit at the bottom line of the state bank, but it is a profit in the budget in the long term. The goal is similar for consumer loans. There is a list of goods that are easier to get a loan for. I would like certain goods to sell quickly to make it easier for new industries to grow. It's a bit of an indirect subsidy, if you like. Lending is subject to more lax conditions. A default rate of up to 7% was originally calculated. The fact that it is always below 6% is pleasing. If one of all the loans defaults here and there, I take a rather relaxed view of it. The money is not gone. It always comes back and if it doesn't, I have the means to get it. But I don't want to start with what the difference is between my position and that of the free banks, because then we'll be sitting here all day."

"There is a list for these goods? How is it determined?"

"Through surveys of citizens and entrepreneurs by selected magazines and also at trade fairs. The results are then evaluated further by a parliamentary committee with advice from representatives of the finance court, the state bank, the metalworkers' guild and the farenes religion. Finally, the list will be made public by the magazines."

"Yes, that sounds terrible. You shouldn't call it a subsidy. The effect is massively reduced and only depends on the yield. If this supposed subsidy is only granted through sales, the companies have to make advance payments. However, the need for a modern product, as you say, must first be created and it is not easy to catch the eye of the public. Initial investments have to be borne by the company itself. The production of small quantities is expensive. New production processes are probably also required. A place at a trade fair is not free either. You first have to manage to make it available in order to receive this subsidy at all. However, the profits may not even be enough to increase production enough to make a profit. Modern goods are nipped in the bud. In the end, the subsidy will only benefit large companies with huge advertising budgets, such as your public companies. Overall, however, it sounds more like a social benefit. So your state bank is making billions in losses so that private individuals can buy the latest stove? In my eyes, that's a waste of taxpayers' money."

This text was taken from Royal Road. Help the author by reading the original version there.

"It's so that someone can buy a stove in the first place."

"What's the difference?"

"What the difference is?"

Marah's question sounded somewhat emotionless, but there was an angry undertone to it. As a precaution, Reyji took a step to the side.

"I know that other countries prefer to give subsidies directly to FUCKING COMPANIES! But I think that has huge disadvantages. Let's say a company has developed a new potato cutter. Company representatives meet with politicians. The potato slicer is surprisingly subsidized. Trade with the potato cutter is going very well. The company is employing more and more people to work on the potato cutter. Now they want to slowly stop the subsidies again, but as it turns out the business with the potato cutter is not a lucrative business without subsidies. It never was. They knew from the beginning that they would receive subsidies, it was advertised that way, otherwise they would never have brought the garbage onto the market. The government wants to avoid redundancies, which is why the subsidies will run forever from now on. Giving subsidies directly to companies distorts supply, encourages mismanagement and hinders development. The government decides what is worth subsidizing. You said that a free market is determined by supply and demand, not by the government. Baele is the freest market in the world. If you want to survive here, you have to manage on your own. There is no supervisor to ensure that everyone enjoys the competition. There are no gifts. There are no lobby laws. Those who do not comply with labour or nature protection laws pay the prescribed penalties without compromise, even if it breaks their neck. Nobody cares that you have 50,000 employees. They will just have to put out a few benches at the social court. If you can't manage, you go bankrupt. That's why nobody dares to enter our market. That's why companies from Baele are the leaders in their sectors. Some large foreign companies have a profitability of less than 5%. I would shut down somehting that pathetic. It's not worth the space on my bank statement. Companies always want mommy to let them run on their own because they are already grown up, but then when things go badly, they come running back after all. But I want to have strong companies that don't have to suck on mommy's titties to survive, GOD DAMMIT!"

Silence reigned after the monologue. The boy had squeezed back in his chair as far as he could and did not move. His hands gripped the backrest tightly. The position looked very uncomfortable. It was as if he was hoping not to attract attention this way. His gaze jumped back and forth between the faces, as if he was trying to find out how he should behave. Mr. Jens was less impressed by the emotional outburst. He turned away and casually crossed his legs. In the same movement, he picked up his cup again.

It might have just sounded as if there were no subsidies at all in Baele, but that was not true. Proportionally, there were certainly fewer than in other countries, but what was missing were mostly things that were achieved through protectionism or other means or were simply not necessary in Baele.

Meanwhile, Marah gazed wordlessly at the sky. She did that sometimes. She was probably thinking. Or maybe it was just an acting. With her, you never really knew.

Reyji briefly followed Marahs gaze. Clouds passed by slowly. A flock of birds glided over the gardens.

"Money gives freedom." With these words, Marah broke the silence. "Would you agree with that statement?"

"Yes, I would."

"That's why there are birds on your coins."

"A bird is the symbol of freedom. Each coin of the free currency is a piece of freedom."

"A bird is the symbol of freedom for many people, because freedom, like the bird, high in the sky, is unreachable for them. My father once said that if freedom is in the clouds, then a fool builds a pyramid and climbs to the top, but a ruler, he raises the ground. I'm not building a pyramid. I don't need your money."

Mr. Jens breathed in deeply through his nose and then out again. "I understand that. I'm not disappointed. We weren't expecting anything else and, to be honest, the conversation so far hasn't necessarily pointed in any other direction." Now he pulled his sleeve up a little and looked at a fine watch with a brown leather strap. "My next appointment isn't for another two hours. I'm sure you don't mind if I finish my coffee?" he asked, letting the file slip into his bag.

"No, as I said, I'm on vacation. Feel free to stay a while longer. We can still argue some more."

Marah finished her sentence with a smile.

.../ End Part