"When beggars die there are no comets seen;
The heavens themselves blaze forth the death of princes."
- Shakespeare, Julius Caesar
Over at Jester's Trek, Ripard has been looking at the post-Odyssey Technetium market findings written up in Lockfox's recent TMC article. The long and short of Ripard's post is that, owing to Odyssey changes, the price of Technetium has crashed. Thus, he writes, Goonswarm is in dire financial straits straits that mere R64 moons cannot remedy, which in turn means that Goonswarm's existence is threatened; their current dominance of nullsec being utterly dependent on an unbroken flood of Technetium-based ISK. This, Ripard says, has driven Goonswarm to announce they will be renting nullsec systems to pubbie scrublords; an act of apostasy in Goon culture that has turned its leadership into philosophical contortionists as they attempt to reconcile their present financial plans with past moral preaching.
For reasons beyond my understanding, Ripard has gotten the impression that I am given to gloating and that this news will provide an occasion for me to indulge. While I'm not above the odd victory dance when the occasion warrants it, schadenfreude is not my drug of choice. Gloating is a leading indicator of sloppy thinking. Further, gloating tends to pre-suppose that all the chips have fallen where they may; that all the shoes have dropped.
In this case nothing could be further from the truth.
Ripard may be referring to a post I wrote in July of 2011 called The Wealth of Nullec, in which I pointed out evident flaws in the reasoning behind what I call CCP's "One Percent Solution" (1%) design paradigm for nullsec and called for the elimination of nullsecs large-bore ISK faucets.
Assuming the Technetium numbers are correct, CCP has taken an important first step in turning nullsec toward their long-held vision of a larger number of entities in possession of smaller patches of nullsec real estate. This would mark the defeat within CCP of the 1% paradigm, which assumed the presence of a limited number of exceedingly high value resources would provoke running sov wars as nullsec alliances battled for ownership of them. In fact, as many bloggers and members of the player base predicted at the time, what happened was quite the opposite.
It turned out that the large-bore ISK faucets, Technetium in particular, merely bestowed upon their posessors an overwhelming strategic advantage which they then leveraged to ensure their hold on those income streams was unbreakable except through internal upheaval. Entities incapable of internal stability or prone to sov aggression were quickly weeded out of the Technetium-holding population. The result was the Technetium cartel and the so-called Blue Doughnut that actively suppressed sov warfare in the majority of nullsec.
At the end of the day, the cascade of ISK pouring down on selected bits of nullsec real estate proved so valuable they provided a strong incentive against the very sov warfare and power diffusion CCP's designers expected them to promote.
Unlike Ripard, I don't believe the Technetium nerf or its impact caught Goonswarm's leadership flat footed. Nor do I find the idea that The Mittani® was completely in the dark as to the income generating potential of system renting remotely credible.
The Technetium nerf has been in the works for some time as evidenced by last December's CSM minutes. The Mittani® has long been an advocate of the Farms and Fields (F&F) paradigm for nullsec and, last Autumn, Goonswarm's financial team published a series of articles in support of that paradigm on TMC. Nullsec's CSM7 reps lobbied aggressively for industrial buffs to nullsec infrastructure and minerals as a replacement for the anticipated loss of Technetium income, which CCP largely obliged in the Odyssey release.
Now, in order to develop a robust industrial economy capable of replacing a substantial portion of the income lost through the Technetium nerf, nullsec must have a key asset that is beyond CCP's power to bestow: F&F requires that a large industrial workforce migrate to nullsec and ply their trade in that space.
While Goonswarm's membership includes a healthy number of industrialists relative to its peer nullsec alliances, they are in no wise sufficient to generate the industrial activity needed to jump-start F&F to the degree needed to offset lost Technetium income. Further, in order to sell the presence of a large industrial population in nullsec to its rank and file, the Goonswarm financial team is on record as casting this population primarily as a nullsec underclass: peasants or cattle to be used for financial gain and slaughtered for the amusement of the PvP elite. For obvious reasons, standing members of Goonswarm cannot be asked to lower themselves to fill that role. Thus, this underclass must be recruited and, in the minds of Goonswarm's leadership, the role of renter could have been tailor made for that purpose. Renters are being hawked to the Goonswarm's membership as a lower life form whose presence, while undesirable, is financially necessary.
Of course I would not be the first to point out that calling your intended clientele cattle, sheep and pubbie scrublords while talking enthusiastically about the vast swarms of enemies that will come and try to blow up that intended clientele's stuff once they arrive is, quite possibly, the worst rental ad campaign ever devised. Switching gears from the virulent pubbie hatred Goonswarm's leadership has cultivated over the years to promoting and providing competitive services for said pubbies will not be an easy cultural transition. It will, however, be a necessary one if Goonswarm expects to command the rents it needs to maintain its present life-style and develop itself as an industrial power-house.
For F&F to be successful, Goonswarm will need to attract the industrial subset of the carebear community. While ratting renters' money spends as well as an industrial renters' money, the former do not generate the secondary income streams and market activity that the latter do. Further, Goonswarm's desire to become independent of highsec markets cannot be accomplished without a critical mass of industrial players.
Industrialists tend to be a pragmatic lot and don't place a high value on their landlord's affections. They do, however, expect efficient management, services at favorable prices, limited restrictions on their activities and a reasonably safe environment in which to ply their trades in exchange for their coin. And they will respond positively to targeted production incentives should Goonswarm choose to offer them. But, that pragmatism swings both ways. Unlike technetium moons, industrialists are mobile. If Goonswarm cannot provide these essentials the industrialists will go elsewhere.
Goonswarm has foreseen this, of course, and will game CCP, the renter community and competing landlords aggressively in order to make alternatives to renting from Goonswarm less desirable. The next war in Nullsec has already begin and will have a heavy economic component, whether Goonswarm's competition realizes it or not. Those competing renter alliances unschooled in business, lacking accomplished spreadsheet warriors and without skilled diplomats would do well to shore up those skill gaps in a hurry. This war will be fought as much from the boardroom as on the battlefield.
Many large-bore ISK faucets remain in nullsec, and the loss of Technetium should have no-one crying poverty. However, in order to maintain spending habits acquired during the Technetium bubble, renters have become a necessity. Now Goonswarm intends to build their empire into an economic powerhouse independent of New Eden's empire markets. And for that, the industrialization of nullsec is a prerequisite. In such a game, well organized and efficient lords of industry are no beggars, but princes in their own right.
And their fortunes shall be writ 'pon nullsec's very heavens.