Episode 107 — The Scalability Trap

"So, what do you think? With the initial ruler factory and the planned textile mill... do you think we can operate those sustainably without putting too much strain on the territory’s finances?"

"Yes. I intend to have Argo, with his superior mathematical talent, run the detailed projections... but it seems feasible. If we accumulate the profits from the monopoly on rulers, we should be able to look into expanding with a second textile mill in a few years."

Gustav’s voice held a steady sense of confidence. As a ruler, it was a perfect answer. However, I chewed on my straw and let out a deliberate sigh.

"...But that won't generate the kind of massive profit needed to overwrite the world, will it?"

"Massive profit? My calculations show Felsen’s wealth skyrocketing with just this..."

"Gustav. Building the next factory by 'accumulating profits' from selling one ruler or one bolt of cloth at a time... how many decades do you think it’ll take to complete the massive industrial complex I’ve envisioned? By then, you’ll be at your own retirement party."

I pointed to the conceptual map on the table—a sprawling, intricate web of infrastructure.

"Taking years just to add a single factory... that 'latency' is a fatal bottleneck in business. You’re leaving a gap wide enough for competitors—namely, the other lords—to catch up and overtake you."

"But Mr. Zect. Even with maximum efficiency, capital doesn't spawn from thin air. Physical materials and labor costs must exist in reality; otherwise, expanding the factories is impossible. We can't exactly use magic to build a complex industrial plant overnight."

Gustav furrowed his brow in confusion. He was bound by a very healthy, but ultimately outdated, management philosophy: old-school bootstrapping. He only knew how to grow using existing revenue.

"That’s why we use other people’s wallets. Remember how we split the rights into three parts earlier? We’re going to shatter those rights into even smaller pieces and sell them to the people of Felsen."

"Sell the rights? Not to a few privileged investors, but to the general public?"

"Exactly. We make the entry price small enough that a baker or an adventurer can buy in with their pocket change. They provide their savings because they believe in the 'Success of the Gara-Mon Factory.' We use that massive pool of gathered capital to build the next factory right now, without waiting years. In my world, we call this an IPO—an Initial Public Offering."

Gustav was speechless. He was desperately trying to process my words, which sought to pull the "future" toward us at a speed far beyond his understanding.

"Wait. If we do that... the rights to the factory will be scattered everywhere. What if a merchant from another territory poses as a citizen and buys up the rights? Or what if a group of dissenters colludes to interfere with the factory’s management? Does this system actually protect my sovereign rights as Lord, or Garam’s techniques?"

Gustav’s concerns were valid. If governance collapses, the system becomes defenseless against external exploits.

"It’s natural to be worried. That’s why we test it in a 'Closed Alpha' environment first. We won't let any shares leak to other territories; we’ll limit sales strictly to the people of Felsen. We’re building an economic ecosystem that circulates entirely within our borders."

"Limit it... to Felsen only..."

"That way, there’s no risk of the rights leaking out. Furthermore, we’ll put a restriction on the shares: 'You get the dividends, but you don't get a say in how the factory is run.' We take their money, but we keep the administrative permissions for ourselves."

(Applying the concept of 'Non-voting Shares.' That should put him at ease, right?)

"Mrow. (The young Master is really overthinking this one.)"

Tama let out a yawn at the edge of the table, her eyes fixed on me. I waited for Gustav’s next words. After looking back and forth between the drawings and my face, he spoke in a trembling voice.

"Mr. Zect... can we use that system to... to save even more of our people?"

Instead of an answer, Gustav hit me with an unexpected question. After hearing the system specs, he hadn't looked for a way to "maximize his own profit," but rather a way to "make everyone happy."

"...Specifically?"

"Instead of selling those public rights to the citizens who can afford them... could we not distribute them equally to *every* citizen from the very beginning?"

"...Huh?"

I actually stopped mid-sip of my Cola.

"If every citizen became an 'owner' of this massive factory from the moment they were born, and continued to receive a share of its profits for their entire life... wouldn't the very word 'poverty' vanish from Felsen?"

(And there it is. The kid just leapfrogged three centuries of economic theory to implement Universal Basic Income. Is this young lord a closet socialist genius, or is he just dangerously idealistic?)

"Gustav. I need some time to see if that spec is actually implementable. Can you come back in two or three days with Argo?"

Leaving him with that, I stood up and headed for my study. I ignored Gustav’s voice behind me—"I know I’m asking for the impossible, but still...!"—and shut the door.

Now, this is my domain. A high-difficulty mission: "Wealth Distribution to All Residents," something even modern economics hasn't fully solved. I’m going to have to figure out how to patch this using this world’s specific parameters. It’s been a while, but it’s time to spin up my 'old development tools' and fire on all cylinders.

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