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Counter-Intuitive Natural Laws of Pallet Centauri
Markets in Transition

By Rick LeBlanc
Date Posted: 2/2/2004

Captain’s Log, February 2004.  High above Pallet Centauri, the Starship Enterprise banked into a soft orbit after a long, bumpy flight.

            “We’re here, Captain,” said Spock, and Capt. Kirk stared bemused into the monitor at the insignificant, self-absorbed Earth-class world that revolved below.

            “The Federation is concerned about the apparent instability of the pallet system here on Pallet Centauri,” Kirk explained.  “They want us to investigate. They believe that planetary commerce could be at peril.”

            “Romulans?”  Bones interjected.

            “Possibly,” Kirk replied. “We are only to intercede if there is evidence of alien interference.”

            “Captain, we are picking up distress signals,” Lt. Uhura announced. “They are coming from new pallet manufacturers, recyclers and customers. You name it. Hardwood prices are out of control, and pallet demand is soft. Pallet customers are shifting their manufacturing plants to Asia. There have been substantial pockets of resistance by recyclers against the rental giant, Humongous Pallet Rental Inc. Legal actions. Even lumber coming from Russia, apparently.”

            Kirk turned to Spock. “Starfleet has asked us to initiate contact with insurgent pallet companies under the guise of being offshore nail suppliers. Then we are to visit Humongous, pretending to be RFID suppliers recommended by Wal-Mart.”

            Spock stared down at Pallet Centauri.  “It just doesn’t seem logical to me,” he mused.  “On a galactic scale, the pallet business seems like it should be one of the simplest businesses known to both human and humanoid. Why are there so many problems with it?”

            Kirk sighed, “The actions of a Starship captain sometimes must be counter-intuitive to succeed against aliens that have been exhaustively drilled on how to counter-attack the every move of one of our ships. Likewise, pallet company owners must go against the grain of normal business thinking in order to succeed. The natural laws of the pallet business are different in important ways than the natural laws of other businesses. Case in point – Adam Smith, the great Earth economist, postulated in 1776 that the greatest overall good was done for the economy by individuals striving to achieve the greatest wealth for themselves.”

            “The invisible hand, of course,” Spock interjected. “It is one of the basic tenants upon which Earth’s commerce was built.”

            “But how has that worked in the pallet industry?” Kirk asked, standing up and raising his hand with a spiral flourish. “Did not the grocery industry strive valiantly to reduce pallet costs, hoping to increase their profitability, in the 1980s and early 90s, only to see the quality of the pallet pool deteriorate and other problems emerge to drain profits? Did not competitive pressures among pallet suppliers lead to similar problems, where pallet users became obsessed with purchase price more than quality?”

            “Then we come to Humongous Pallet Rental,” Kirk added with a smile. “Executives whose skills were honed in other industries were hired at Humongous. They set about protecting their property rights. That is, after all, one of the prime directives of any business, or so one would think. The interests of an enterprise, and indeed of the economy, are served if one takes steps to ensure property rights. The greater good is served normally if there are only a few challengers to property rights. But what if many come into contact with the assets in question without even wanting to, like common cold germs? And what if the profitability of the one who owns the assets is significantly impacted by whether or not the many choose to cooperate or whether they can forced to comply?”

            “But Captain,” interjected Chekov, “instead of enforcing property rights by netting all of their pallets at the customer distribution center, pallets were allowed to leak into the recycler grid. The result was the need to bring recyclers into the network.  Unfortunately, an adversarial approach resulted in substantial enforcement costs and effectively knocked down the good will of a sizeable proportion of the pallet recovery grid. Pallet return was impaired.”

            “Enforcement costs are just too high,” said Kirk, who began to swagger. “Imagine the cost to the Federation if we forced each and every planetary system to comply in totality with every whim of Federation custom and law.  The enforcement costs would simply be too severe.  That is why we, the ambassadors of the Federation, rely upon good will and the opportunity for mutual gain for all.  That is why the Federation is the Federation, and why the control-hungry Romulans, who demand complete capitulation from every asteroid and sub-planet, remain but bit-actors on the intergalactic stage. This is where the Romulan diplomatic model is wrong, and where the earlier Humongous model was wrong. Good business by traditional standards, perhaps, but bad pallet business. But now Humongous seems to have recognized the counter-intuitive natural laws of the pallet business and is beginning to embrace them.”

            “Captain, it seems there is a complication,” Uhura interrupted. “It’s the IPPC. They say the landing party is not allowed onto the planet surface unless it complies with intergalactic phytosanitary regulations. You’ll have to be sprayed. And then we need third-party certification.”

            “They can take their red tape and mulch it,” Kirk retorted. “How can we help them if we are handcuffed by bureaucracy? Warp Five, Zulu. Let’s get out of here. We are needed to intercede in the matter of a softwood lumber tariff over on SPF Seven.”

            Captain’s Log Supplement: The inhabitants of Pallet Centauri now seem to be learning to decode the counter-intuitive natural laws of the pallet business and apply them to their world for the mutual gain of industry overall, pallet companies and pallet users alike. We will check in from time to time in the future. But for now we will monitor developments on the Pallet Enterprise Pallet Board (www.palletboard.com).

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