Peter Flynn had been through marketplaces on dozens of stations and worlds, but he had never seen anything like a Consortium bazaar. Organized chaos was the only thing that came to mind. Thousands of people milled about. Instead of stalls, there were pits, each one surrounded by a pressing mass of people all wanting to purchase their goods. But instead of physical goods, they bought markers, representations of those goods.
“Explain it to me again,” Flynn asked Reese as they made their way to a pit promising the sale of cloth.
“It’s actually quite simple, Captain. The Consortium has done away with the need for individual sellers to hawk their wares. Members of specific guilds set prices for the goods, and then customers make counteroffers or buy the volume they wish.”
“So can’t they decide to set the price to monopolize?”
“Oh, that’s very simplistic, Captain. The economics are much too complicated for that. Moreover, the guild members know that such fixing of prices only works in the short term as it breeds complacency. Eventually, other guilds with a more competitive nature will get the upper hand.”
“So why all the bother of having warehouses? Why not transfer items directly?”
“Oh, well, unlike you and in the Alliance, most of the goods here move between buyers. Only rarely do the goods make it to a final destination.”
“What does that mean?”
“Well, take the bolts of cloth, for instance. You intend to purchase the cloth, load up the cargo, and take it to some Reach worlds to resell, hopefully with a decent profit.”
“Well, here in the Consortium, ownership of the cloth is more important than possession of the physical product. The ancient term is called speculation, and it has more to do with the nature of how the price rises and falls. You see, if I were to buy the cloth you wanted, and then raised the price before selling it to you, I would make a profit. Laws of supply and demand are also at play because if there are more buyers than sellers, the price naturally goes up, making it more likely that I would make a profit as I would control a supply. Actual transfer of the physical goods is unnecessary when all that matters are the records of ownership, especially when goods transfer owners with the frequency as in the Consortium.”
“So, let’s say some company—”
“Guild member,” Reese corrected.
“Guild member wanted to make suits. What then?”
“Oh, for those who want to actually manufacture or put the product into the hands of consumers, they must take physical ownership, yes. But the vast majority of business done within the Consortium is done via markers.”
“So I use credits, which represent local currency and buying power, to pay for markers, then I can exchange the markers—which are virtual certificates of ownership—for the actual good?” Flynn felt a headache coming on.
“For the sake of simplicity, yes.”