Economic Borders Unlimited
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Economic Borders UnLimited, also known as EBUL, is an autarkic economic system based in Club Penguin. Its stated purpose is to encourage shopping locally and to fund the games and improvements that makes CP so famous. EBUL possesses all buildings in Club Penguin except the Club Penguin Stock Exchange, the Pizza Parlor, and the Coffee Shop.
However, considering the interconnectivity of CP and the mainland, many penguins that do not buy into the system can easily import goods to put in their self-made igloos. Add also that these "non-members" can still play (some) games, and the mess that results requires a constant injection of funds at the public's expense.
EBUL is widely criticized for slowly splitting CP into an apartheid, and because it is losing so much money due to the influx of non-members, it has to keep encroaching on even the most sensitive of matters, such as entry to certain parts of the island. Non-members continue to spite EBUL by defunding it in playing games and purchasing foreign goods. The more EBUL tries to break even, the more it seems the non-members push back.
Technically speaking, EBUL is a legal pyramid scheme, in which the freshly injected money spent by new Members fund the old Members and the island as a whole.
- 1 History
- 2 Breakdown
- 2.1 The Basic Gist
- 2.2 Income and injections
- 2.3 Expenses and leakage
- 3 Pyramid scheme
- 4 Goods offered
- 5 Repossession
- 6 EBUL staff
- 7 Public opinion
- 8 Criticism
- 9 Support
- 10 Gallery
- 11 Trivia
- 12 See also
EBUL incorporated in October 24th, 2005, which many rejoice as Founders' Day. Anyone worth their salt knows that this was also the day that the Beta Hat was handed off, and was the signal that the Beta Era ended. The server system was installed on this day, signifying the transition from Penguin Chat to Club Penguin.
At first, EBUL took a backseat to the Moderators, who controlled much of the economy and allowed the buildings on Club Penguin to mostly operate themselves.
EBUL only had the power to decide what to sell and what not to sell (all catalogs only displayed EBUL merchandise, as they do to this day). Moderators were given the exclusive right to distribute and create free items at whim, while EBUL controlled membership items (catalogs). Back then, EBUL was prohibited from meddling with games, rooms, and free items. If it was free, it was the Moderators' jurisdiction, and for pay, it was EBUL's. This was a very unprofitable business, because non-Members could do anything but buy items.
EBUL slowly began to creep its power outward and expand itself subtly in late 2007. This took a step up in 2008 and shifted to turbo in 2009, and following the ratification of the DISNEY Act, EBUL permanently established itself as the prominent governance of Club Penguin, the Moderators taking the backseat.
The workings of EBUL are a complex and lengthy process, so please, bare with this article as it advances.
- To understand EBUL, one must first understand these absolute basic economic words:
- Profit: making more money than losing.
- Income: money earned, money aquired, money that one gets.
- Expense: money spent, money lost, money that one spends to get items.
- Investment: putting money into something with the hopes of getting a profit out of it.
- Imports: items in a country that come from another country. They are foreign.
- Economist: one who studies the economy.
- One must alos grasp several advanced economic terms:
- Circular flow of income: most of the money spent and saved in Club Penguin changes flippers constantly. This can be represented on a circular graph, hence the name. Members buy clothes which fund the games which fund the members which fund the clothes which fund the games which funds the members, and so on, endlessly.
- Injection: fresh money entered into the circular flow of income, money that was not there before. When new Members arrive and begin spending their money, or when retired members come back and do it again, they are injecting fresh money in. Any new money added to EBUL is an injection.
- Leakage: money formerly in the circular flow of income that falls out of it instead of changing flippers and continuing on. This happens when someone that does not use EBUL (like a non-Member or a tourist) obtains money and does not re-invest it back to EBUL. Or, it happens when a Member stores away some of his money or buys a non-EBUL product or service. Any money not going back into EBUL when the consumer gets it is a leakage.
- Pyramid scheme: a normally illegal money making idea in which one sucker invests money, and then must get another sucker to put money into it like he did, so that he can be paid. A pyramid scheme has no product or item the investment goes into, and it will always collapse when old investors can't get enough new ones to pay them.
- Tariff: a tax on imports or exports (usually the former).
- Macroeconomy: the big picture, the economy as a whole. The entire flow of money in Club Penguin is macroeconomy.
- Microeconomy: small parts of the economy that seem insignificant alone. The coins in a penguin's inventory and how they are earned and spent is microeconomy.
- One must further understand these miscellaneous terms:
- Member: a penguin subscribed to EBUL.
- Non-Member: everyone else. This phrase is interchangable with the kinder name, "Free Penguin", which is used by more benevolent EBUL workers. Either way, anyone not in EBUL is a Non-Member. Non-members make up the bulk of Club Penguin and the rest of the Antarctic world.
- Moocher: a derogetory and privately used colliquism for a Non-Member, used by the unseen top executives of EBUL. No right-minded EBUL worker would ever call the Masses "moochers" in public.
- Tangible: an item that can literally be touched.
- Intangible: an item that can not be touched. It is often an idea or concept, or symbol (one ca not touch happiness or hold a timeslot), but it can also be a real item (one can not touch a ghost or air).
The Basic Gist
EBUL's complex and sophisticated system can be watered down to the following.
In Club Penguin, penguins are financed by playing minigames, instead of getting jobs and having salaries. This gives Club Penguin its famous high standard of living; citizens of the island live a cozy and comfortable lifestyle. However, the minigames require financing; otherwise they would dry up and the citizenry would need to establish a job system.
That's where EBUL comes in. EBUL is a strange hybrid between government policy and state-owned enterprise that manages Club Penguin's economy. Its main purpose is to finance island minigames. EBUL pours tons of government money into funding the games. However, that money has to come from somewhere.
Hence, the Membership Plan. EBUL has a monopoly over almost all products or services sold in Club Penguin. If one wants to buy an EBUL product or a service provided by EBUL, they must pay a membership fee to EBUL. A membership fee gives one all the rights of a Member, such as buying and keeping EBUL products, buying EBUL services, going into certain EBUL buildings, and attending certain EBUL activities. However, the rights eventually expire, and the membership must be renewed. In order to keep membership rights, members have to continually pay their membership fees, and EBUL rakes in money from that. (If the fee fails to come in, EBUL's repossession workers come in and take all your EBUL stuff.)
Of course, much of the money members spend on purchasing goes straight to the shops. EBUL needs that money, so shops that sell EBUL products (which is basically everything) are required to have a license to sell and pay monthly fees to EBUL.
Overall, the entire system is circular: games finances members, who pay EBUL for membership and purchase goods from shops, who also pay EBUL, which finances games. Things would be dandy if that circle worked, but sadly, money sometimes gets ejected from the circle (leakage). Thus, higher powers (like the government) have to inject money straight into EBUL's circle of money, in order to keep things up.
Now for the more complicated stuff.
Income and injections
To maintain any form of income, EBUL snatches up money on multiple fronts. While the biggest is Membership dues, there are many methods used.
The most prominent method of income is Membership dues. Members pay a monthly, semi-annual, or annual fee to purchase EBUL goods, use EBUL items, enter EBUL rooms, and play EBUL games.
All furniture found in Better Igloos Magazine, any upgrade in Igloo Upgrades, all clothes in Penguin Style, and anything else purchasable in CP are not truly purchased, but rather, stand on rent. That is to say, the purchaser of the clothes does not actually own them. They pay Membership dues for the right to use an EBUL item. As any Member can tell you, failure to pay the dues results in repossession of the item, even literally off the renter's back.
EBUL forbids any foreign item from being sold on Club Penguin soil without their permission. Only EBUL-made or licensed goods may be purchased in Club Penguin, and the few non-EBUL stores must comply by selling only EBUL made or licensed items, because they are on CP land.
Club Penguin is a massive port city and a major hub on the Sub-Antarctic Bypass Route. Tourists and merchants from all over must stop at Club Penguin to refuel and get their stuff shipped to marketable places. EBUL forbids them from selling their goods on Club Penguin soil without expressed, licensed permission, so there is little market there, outside of the grandfathered stock exchange.
Non-Members' most famous method of circumvention is to import items from overseas to put in their igloos. EBUL can not control anything that is not made by them. For example: one Member lives in a Deluxe Pink Igloo and has fifteen Piles o' Candy and one lamp imported from HunEmpire. This Member stops paying his dues, so the EBUL Repoes come to get his stuff. They tear down his igloo and remove his candy, and leave him in the Basic Igloo... with the lamp. Since the lamp is not EBUL-made, EBUL can not take it.
Therefore, Non-Members can fill their little igloos with all the furniture they can afford, provided it is foreign. EBUL became aware of this back in 2007, when the large Non-Member populace began to get crafty.
They slapped tariffs on all foreign goods, colossal tariffs, tariffs that could double, triple, or even quadruple their prices. A notable example is the Large Cactus]. The EBUL cactus sold for a mere four hundred coins. The imitation foreign cactus, though, could sell for up to one thousand two hundred coins. Not only that, but the EBUL cactus is almost always better made than the foreign cactus.
These tariffs help recover a portion of the money leaked AT WORST. At best, they shut off importing entirely. (They're not called "prohibitive tariffs" for nothing.)
The Exact Formula
EBUL is infamous for strictly adhering to its Tariff Formula, notorious within the economics world for being ridiculously high. It is one of the only known prohibitive tariffs levied in Antarctica -- that is, instead of injuring trade, it attempts to shut it off entirely. The exact formula, paraphrased from EBUL policies, is as follows:
- The tariff is a combination of three taxes, labeled A, B, and C.
- Tax A is a flat tax amounting to 50,000 F (that is, 50,000 coins, or USA fish). This tax is levied on ALL imports (including imports being sold to EBUL itself), though it is reduced to 20,000 F on imports sold to EBUL for usage in the Membership Plan.
- Tax B is an ad valorem duty, which means it's based upon the price or value of the import. Tax B is currently defined by EBUL as 200% of the import's price, or twice the value of the import.
- Tax C is a specific tax, which means it's based upon the quantity of the import (the number of units being imported). Tax C is currently defined by EBUL as 150 F for every unit of the product being imported, or 150 times the quantity of the import. (If the product is a substance, such as salt or helium, EBUL charges 200 F for every kilogram or liter, depending on whether the mass of the import is larger than the volume, and vice versa. Tanks of helium would be charged by their volume, for example, because helium is very light.)
Example: ACME, Inc. wants to ship 5,000 Jo Mommas from Dorkugal into Club Penguin, at 450 coins each. The total price of the import will be 2,250,000 F. Under the Exact Formula, Tax A is 50,000 F, Tax B is 4,500,000 F, and Tax C is 750,000 F. The total tariff levied will amount to 5,300,000 F.
If ACME, Inc. wants to cut even and regain their losses, they will have to increase the price of their Jo Mommas. While EBUL could sell Jo Mommas for 500 coins, an ACME Jo Momma would cost 1,510 coins. However, since no one in their right mind would buy a Jo Momma for over fifteen hundred coins, ACME makes little revenue. The tariff has done its job.
Fountains and party rooms
No, really, this is not being made up.
Penguins seem to love to toss their hard-earned money into water and onto roofs from high places, or into that bubbling cauldron last Halloween. Tourists and non-Members do this just as much as Members, if not much more, and it also makes up a good bit of the losses, and even serves as a little bit of injection! (Wishing wells are the greatest scam ever.)
Be it a fountain or a party room, if it has liquid or an odd shape, or if it is looked down on, there WILL be money thrown into and onto it. For this, EBUL could not be any more grateful.
Anything bought and sold in the Club Penguin Stock Exchange has a seven percent sales tax tacked to it. If a one hundred per-share stock is purchased, an additional seven coins is added per share as the tax. This tax does not only affect stocks in the exchange. Eastshieldian courts have interpreted EBUL's definition of the CPSE to include anything sold in the building period, which led to the trinkets and knick-knacks sold in the CPSE's gift shop to be taxed the same.
When Rockhopper docks in Club Penguin, he is under the jurisdiction of EBUL, and is forced to withold some goods from the Masses against his will. He works around this by keeping most of the money and by selling his wares at other ports after CP. EBUL struck an agreement with him, in that all items he sells have a five percent sales tax on them, and five coins per one hundred are withheld from the Treasure Sandbox game in his quarters.
Taxpayer money (DISNEY Act)
When precious member funds started to fall, and no other form of income could keep the income from outweighing the expenses, they turned to the government.
After days of debate, the DISNEY Act was crafted. Essentially, the law states that any debt in EBUL is to be fully covered and reimbursed by taxpayer money. In other words, taxpayers pay off any money EBUL can not.
Specifically, EBUL was locked itno conservatorship and was now subject to government regulation. An unseen committee of creatures in the Ministry of the Treasury, independent from Barrick Abanana (and technically any other part of the government) regulate EBUL and works with the executives of EBUL to keep them afloat.
Club Penguin Island Airport Improvement Fee
The Club Penguin Airports Network imposed an unavoidable Airport Improvement Fee on Club Penguin Island Airport, to simply eject money into EBUL. This law was passed by a committee of EBUL executives, along with the National Airports Authority.The current fees must be paid at the airport, and may only be paid by cash. In the instance if a passenger does not pay his or her tariff, they are barred from boarding their flight. This Airport Improvement Fee has been criticized as well, as the airport's facilities or administrative officers have no plans to upgrade the facility in any way what so ever. This has led to lower passenger numbers since 2009,and has also decreased the number of incoming flights.Currently, the fees are locked in for one year, at 250 coins for regional and domestic flights and 350 coins for international and longer domestic flights.
Basically, any money that goes to a non-Member (be he tourist or resident of CP) is leaked money. A non-Member is not permitted to buy EBUL products or EBUL goods, and therefore, can not reinvest into EBUL's flow of income.
The stock market of Club Penguin is a grandfathered building to the north of the Port (NOT the Dock) on each of the special Club Penguin Business Servers. It is not seen on the Map in the residential, traditional, or industrial districts, and would stand where the Ski Village is in normal servers.
Penguins from the world over come to buy and sell stocks. Any money that goes into the stock market goes out of EBUL's reach, except for the small 7% sales tax levied on them.
With the exception of police-like duties, dicipline, and the reporting system, Moderators do not have as much power in Club Penguin as one may think. Despite losing most of their non-moral authority when The Club died (EBUL had gained it), the independent Council of Moderators managed to find a loophole to command EBUL to engage in "significant acts of annual holiday benevolence", back in 2008. They didn't like it, but everyone else did.
The loophole used by the Moderators was an old Club letter treated as supreme law. Among other things, it ordered moderators to "increase and further efforts of benovelence for the greater good". This was an extremely broad order that was never really used until CFC was founded as a part-kindness, part-revenge move against EBUL.
Each year, EBUL watches in agony as the benovelent population of Club Penguin, Members and Non-Members alike, literally dump billions out of their flow of income to help creatures in Antarctica that need it. CFC operates hundreds of soup kitchens, shelters, and unemployment offices all over the continent, and thanks to them, many a poor creature has had a hand-up in their darkest hour.
That doesn't remove the fact that EBUL has lost money with no way to get it back. Unlike any other leakage, there is absolutely no means to get it back. CFC donations can not be taxed or diverted. The punishment for stealing CFC money is so harsh that it is classified.
Rockhopper, that beloved pirate that won the hearts of millions, is an unique expample of both leakage and the flow of income. Rockhopper, despite being forbidden from selling most items to non-Members, still works around EBUL.
Unlike any other shop in Club Penguin, Rockhopper either finds or makes his own goods with his own two flippers, and sells them- in comparison to EBUL goods -dirt cheap. The only item better made than an EBUL item is a Rockhopper item. However, anyone can sadly note that he only sells certain things to Members. This is because he is forced to by EBUL.
Rockhopper has stated several times over the years that he would gladly sell his items to everyone. He claims that "everyone is part of his crew", and that "maties do not need to pay to be me maties". Or, in other words, Rockhopper's friends are not bought and can not be segregated by a simple badge. RH is a dying breed, though. Rockhopper, the Penguin Band, and Gary are the only penguins that directly cater to non-Members. Even Gary and the Band have taken the EBUL bait in past years, not making public appearences except in Member-only rooms. (Gary still helps non-Members save the island and the band plays for all without cost, though, so that counts.) Cadence and Sensei have declined to walk amongst the Masses, because they're not too fond of even bigger crowds than they get.
In a special deal between himself and EBUL, all of Rockhopper's goods are taxed on a five percent run. Rockhopper keeps the rest, and it's sort of obvious where that goes. When it's not going to CFC, it's practically being given away for other charitable means for Members and non-Members alike. (Rockhopper once bought a whole server a pizza each.)
Main article: Santa's Got a Brand New Bag
In December of 2010, facing rapid declination of membership renewals and fees, EBUL launched their strangest gimmick yet. It was like a rebate, except that it would take forty years to be worth the shot, at 296.7 coins a year. For every new member between the days of December 9th, to December 21st, EBUL would give twelve thousand coins as a thanks. The idea was proposed by Machu- the lazy, Old money executive that helps parties -and passed by one vote, even though all of the EBUL executives and accountants were slapping their flippers upon their heads.
Most economists agree that EBUL's Membership system is pyramid scheme. Due to all of the huge leakages from Non-Members, tourists, and most everything else, each year must have more members than the last to keep the money in the flow above the money leaking out. This is the most basic definition of a pyramid scheme.
As time has gone by, becoming a Member of EBUL has become less popular and even less necessary. While 2007 saw a huge increase and 2008 saw even bigger growth, 2009 leveled out at an all-time high, and 2010 has slowly seen more penguins letting their Membership expire. This has brought to light the unavoidable elephant in the room. It was always known that the flow of income in EBUL had gaping holes of serious leaking action. In fact, the decline in Membership was forseen for years. It would never last, because the Non-Members would invent workarounds.
Is it really?
However, there are a small number of economists- laughed at by the majority -that argue that EBUL isn't a genuine pyramid scheme, or even a Ponzi scheme. Pyramid schemers invest into the scheme knowing that there are no actual items or systems to invest in: the income is the money put in. The only income of a true pyramid scheme, the minority asserts, is the members' investments. A member invests and then tries to get another member to invest to fund the first member's investment, and each must do so to avoid being left holding the bag (and not making money). EBUL actually gives real, tangible items, like clothes, shelter, and privelages. A pyramid scheme, they argue, does not.
However, and despite, the majority argues that it's a doomed cycle that must be funded identically to a pyramid scheme. Since it must be funded like one and because it is falling like one, EBUL is, without a doubt, a pyramid scheme. To spite the minority, those who agree with the pyramid scheme theory label them "EBUL deniers".
CP residents' opinion
Several polls have been conducted by various organizations and they revealed that out of a sample size of 10,110 members, 45% are completely in favor of EBUL, 20% believe it's fair enough, 4% believe it's a totally unfair system, and as many as 31% don't care at all. Among non-members, with sample size 8,640, 76% believe it severely disadvantages non-members, 20% believe it's fair enough and only 4% believe it's completely fair.
Various world leaders have commended the EBUL system before, such as Simon McClark, who calls the system "genius". Spike Hike said he admires the system and believe it increased economic growth and reduced unemployment. On the other hand, Frederick Mueller criticised the EBUL system as anti-free market and inefficient.
Libertarian, CREAM SODA, and Bennywatchers opposition
They greatly criticize the current segregationalist and fierce government expanding acts of EBUL and state that The Club never intended for CP to work in the way that it now does. The Club, they argue, were not in for profit (and the last member of The Club died in December 2007, right when EBUL began its tarriffs).
While all agree that EBUL is wrong, the schools of thought differ on their reasoning to disband EBUL.
Libertarian Club Penguinites believe that The Club originally intended for Club Penguin to be extremely minimalist in government: a night watchman state. This means that the purpose of government in Club Penguin is solely to "protect the citizenry from aggression, theft, breach of contract, fraud, and immorality".
This school of thought seeks for a disbandenment of EBUL and a return to The Club's method of membership, a minimalist and humble flat fee that was paid voluntarily. They think that non-Members have little freedom, and deserve a lot more.
These arguments are disputed, though, because The Club never spoke out against EBUL. Historically, The Club never said much on EBUL, and indeed, the last surviving Club member gave all copyrights and royalty fees to the CP name to EBUL, a fact the libertarians never speak of. Of course, the support has a point in saying that The Club never lived to see the modern operations of EBUL.
The Leader and USECP
The Leader has spoken against this. He claims that:
“It is causing an extremely complicated class system. For the 'members', they basically rule the island. For the 'nonmembers' they sit at the bottom. The 'members' tend to waste a lot of money for this EBUL tax system which is totally not needed. Most payers to the EBUL system tend to be the island's Elite such as TurtleShroom while the 'nonmembes' suffer. You effective end up with two castes; EBUL Class and Nonmember Class. The EBUL class spend their earned money on power and items which is only EBUL approved while the Nonmembers are wiser and choose not to. Mmebers can spend their money on things 'made in Club Penguin' while Nonmembers must get it from abroad. Sadly, the abroad items are often taxed and many become EBUL items. The Nonmembers are treated like hobos, homeless penguins and essentially as the unemployed even though many went to a reputable school and graduated from University. They thought CP would be a utopia, and partly, it was, under the eye of the Moderators; then EBUL took over and turned it into a minority rule. As of now, Nonmembers tend to be richer but can't spend the money. Thankfully there are many social enterprises who recieve the label 'Social Enterprise' and go for the extra taxation to bring items to a majority. Then the price is increased by EBUL and the nonmembers have to invest more, even though it isn't an EBUL item. The good, kind, charitable Moderators feel sorry for them and offer them free items but this, once again, makes them look like hobos. Also the free items can be picked up by members so therefore, it's a 'failed charity'. Some free items are put in 'Member only' rooms by EBUL and so the clothes for nonmembers are for members. Get it? In other words, Nonmembers get non-EBUL items either free or higher then the price it'll usually be and Members get whatever they want. It's a totally undignified situation - and it needs to end.”
~ The Leader
CREAM SODA and Bennywatchers
Bennywatchers, the famous debt watchdog, objects to the existance of EBUL because they claim a company in perpetual debt should never exist. It violates the free market principles. Without the endless taxpayer payments to sustain it, EBUL would be bankrupt and forced to shut down. They mainly object because "if you keep feeding EBUL, it won't go away". Eliminating EBUL would significantly diminish the government deficit, they argue, and point out that EBUL is the second-largest contributor to debt, slightly behind Director Benny himself. They are more concerned that EBUL is expanding the deficit, and are not bothered that CP is a severe case of a command economy.
The CREAM SODA Party, meanwhile, also condemn EBUL because of their severe interventions in the free market, but also because they intervene so harshly in the freedoms of non-Members, especially their right to roam and entitlement to free items. The tarriffs are also harshly opposed and the import restrictions are despised. CREAM SODA diffrentiates from Bennywatchers in that they think that the private sector should control the Club Penguin economy, not the government, while Bennywatchers are okay with a command econmy if it doesn't cost the coerced masses. The market should judge what is and is not sold, and EBUL should have no say. Some CREAM SODA goons side with the generic libertarians in that CP's founders would not support the current governing tactics of CP.
Other economists, especially the ones based in Club Penguin itself and neighboring islands, take different positions. Some claim that EBUL is the only thing in CP standing between the high standard of life enjoyed in Club Penguin and a more rigorous job system, with no minigames and no money-devouring activities such as parties. EBUL's purpose, they say, is to fund the minigames and community activities of CP, and thus they need to gobble up as much money as they can.
EBUL supporters also tend to blame the lack of public education on Club Penguin's economy, saying that it causes penguins to become misinformed. Indeed, the economical system by which Club Penguin runs has only been described once in the Penguin Times.
More coming soon!
- The last surviving member of The Club, right before her death, chose EBUL to have the licensing rights to the name "Club Penguin®". Every time a business used "Club Penguin" or mentioned "Club Penguin" in official means, EBUL got ten coins in royalty, because they held the rights to it.
- That was until the decision in USECP v. United States of Antarctica, that is, where the restriction was deemed "unnecessary" because "there is absolutely no possible way that any knowledgable penguin, in any way, in any manner, for any possible reason, could ever mistake [anything baring the name of Club Penguin in it] for EBUL or CP's governance, whatsoever".