Megathread : The Economy In Victoria 2

[Lord_D]

I agree an improved and realistic economic and trade model would be a nice addition

Although I think one of the problems to make it more realistic is that even the goods and their production processes - the cornerstones of the economic model - are abstracted. It's quite hard to say precisely how much iron would be produced by a mine in province A, in what degree the mining would be improved by invention B, how much coal there would be needed to make steel, how much steel there would be made in province C and how invention D again improved that particular process.

That said, I certainly hope an equilibrium between realism and game-balancing can be struck.

[Eos]

"From that, we can now draw the following conclusion:

* The price for consumer goods in Oldhaven is higher than the one in Newhaven.
* The price of iron in Oldhaven is really low compared to Newhaven
* The price of coal is somewhat higher in Oldhaven than in Newhaven."

If the price of iron is really low in Oldhell and the price of coal is the same as in Oldhell, then couldn't you get a situation where the price of consumer goods in Oldhell might the same or even lower than in Newhell if the price of iron is low enough?


Other than that great ideas and a lot of work but i think that to run it properly you might need the computers in CERN.

P.S. I know it's haven and not heaven but i couldn't resist /devil smile here/

[kizzak]

it sounds like you are describing a basic circular flow to parts of the economy while recognizing that transport costs were a major problem during this period.

My one comment is that it appears you've assumed near-perfect information in your model. There were many panics and bubbles during this time largely because there was a lack of information that led to over-investment in markets or failed financial maneuvers.

[frpe02]

I'd love a detailed economic system with regional markets. I don't think it would necessarily make the game harder for beginnners, rather the opposite since it would be more intuitive than the system in V1.

After all that was one major reason (if not THE reason) for all the exploring and conquering, to get monopolies over local markets where the prices were lower than in Europe.

A good economic simulation would really help to make a better social and political simulation as well.

[alvaro]

it sounds like you are describing a basic circular flow to parts of the economy while recognizing that transport costs were a major problem during this period.

My one comment is that it appears you've assumed near-perfect information in your model. There were many panics and bubbles during this time largely because there was a lack of information that led to over-investment in markets or failed financial maneuvers.

that you have a point. before the telegraph information was THE element in the formation of prices in different markets precisely because of being so rare.

[Alex_brunius]

tl;dr, so sorry if you correct this further on, but:


That's not how the game works. At all. That summary actually reverses the way the Victorian economy functions. The state's budget pays for the raw materials, the factories (in many cases, state funded) create the stuff, and the proceeds of selling the produced goods go directly to the pockets of the population (divided up "semi-evenly"), only to be accessible to the state through taxation. Unless the products aren't being sold, in which case the state gets to stockpile and use them free of charge.

Agreed, why bother reading an In depth analysis if OP haven't even understood the basics of how Victoria 1 economy works.

Its correct that you don't get money for exporting goods, you only get tariffs from when the factories export goods. High tariffs means less money are left to capitalists & workers (that I assume get the rest).

[Palisadoes]

Longest post ever?

RE: Markets. I made a proposal too, but it was shuffled away into one of those damn megathreads.

[alvaro]

Longest post ever?

RE: Markets. I made a proposal too, but it was shuffled away into one of those damn megathreads.

yeah, so bloody frustrating megatrash threads

[Fire_Unionist]

But, chicken and beef are pretty similar. It would be redundant, silly, and unrealistic to have separate RGOs (since the idea of massed poultry/cow/pig/whatever production is, IIRC, a post-WW2 idea). And most of the places that produce 'cattle' also produce chicken, pork, etc. too. Thus, cattle may reasonably be taken to represent *all* meats, not just cow meat.

Maybe, but cattle itself is certainly not pork or chicken. There is quite a significant difference about the animal, especially as religions go. It probably wouldn't do to seperate them, but "cattle" is specifically cow and nothing else. How about having them as "Animal Farms", producing meat and maybe other goods like milk?

[truth is life]

Maybe, but cattle itself is certainly not pork or chicken. There is quite a significant difference about the animal, especially as religions go. It probably wouldn't do to seperate them, but "cattle" is specifically cow and nothing else. How about having them as "Animal Farms", producing meat and maybe other goods like milk?

Well, that is what VIP does (consolidating 'cattle' and 'wool' at least into 'livestock') and I must say it works quite well. However, I still stand by my assertion that 'cattle' also represents the production of other meats in game, for the reasons stated above. You can simply imagine that Muslim POPs consuming 'cattle' are not consuming the pork component, and thus have a higher overall consumption of the beef, chicken, etc. components, making the total consumption of meat identical. The same as Chinese POPs consuming 'grain' which is mostly rice (in the south) or wheat (in the north), but not potatoes (like in Ireland).

Anyways, having a consolidated "Animal Farms" RGO producing a meat resource (and possibly, as you say, a milk resource) sounds better than the current system; at least, it would help get rid of silly arguments!

[l3lacksheep]

It seems like a better model then vicky had. I just wish that something like foreign investment could be put in. If we include companies and shares, industry and railroad could be owned by foreign caps. Together with the proposal of merchant marine it would make it possible to model as an example GB's huge amount of invisibles earnings from investment in other countries.

[Rodrico Stak]

Read the whole thing, and, I have to say, I really like this.

[Black Guardian]

Agreed, why bother reading an In depth analysis if OP haven't even understood the basics of how Victoria 1 economy works.

Its correct that you don't get money for exporting goods, you only get tariffs from when the factories export goods. High tariffs means less money are left to capitalists & workers (that I assume get the rest).

Why posting something that has already been said when you haven´t even read the rest? At least your post seems to indicate this. If you have nothing more to share with me than this gesture of ignorance, I will thankfully dispense with your comments.

That is, because you are neglecting the fact that the economic model of Victoria is still far from a good model - it might be the dream of a socialist society (according the the principal "everyone the same") if everyone gets a share of what is sold. This is not true, and it is neither in my failed impression on the Vicky-model, nor is it the way it works in reality. Which means, there is room for improvement. And as long as this improvement is not based on the original model, which it is not as you would have noticed if you had read it at least partially, there is no problem with my wrong interpretation, is it?

And by the way - this just shows how illogical and inaccessible this model is, if even a long-time player like me didn´t get the grip of how it work without help from other players!

So, please, spare your posts as long as you do not contribute anything of worth, your time is too valuable to do so

Post like this one, however, are quite useful to shape out the basic ideas:

Originally Posted by kizzak View Post
it sounds like you are describing a basic circular flow to parts of the economy while recognizing that transport costs were a major problem during this period.

My one comment is that it appears you've assumed near-perfect information in your model. There were many panics and bubbles during this time largely because there was a lack of information that led to over-investment in markets or failed financial maneuvers.

that you have a point. before the telegraph information was THE element in the formation of prices in different markets precisely because of being so rare.

One can think of several tools to do so... maybe a dice-throw to "blur" the market-prices when checking which goods to transfer to which market? With technology that reduces the span of this variable?

This is the first method that comes up in my mind - any other ideas to simulate uncertainty (apart from the microeconomic models where uncertainty is handled with "expected profit" as a statistic variable)?

Longest post ever?

Thats why I opened a new topic - because it is too long to have it vanish in the deep vortex of a megathread

Although I think one of the problems to make it more realistic is that even the goods and their production processes - the cornerstones of the economic model - are abstracted. It's quite hard to say precisely how much iron would be produced by a mine in province A, in what degree the mining would be improved by invention B, how much coal there would be needed to make steel, how much steel there would be made in province C and how invention D again improved that particular process.

And this one puzzles me...
Everything you said was in original Victoria as well. Mines had a certain productivity, their productivity was increased by a single modifier from technology; steel factories had an input and a resulting output according to their technological efficiency - everything is fine with this!
Thus, I do not understand your problem here.
Originally, these goods have been drawn from the world-market, now they would be drawn from regional ones that are interconnected.

[Lord_D]

And this one puzzles me...
Everything you said was in original Victoria as well. Mines had a certain productivity, their productivity was increased by a single modifier from technology; steel factories had an input and a resulting output according to their technological efficiency - everything is fine with this!
Thus, I do not understand your problem here.
Originally, these goods have been drawn from the world-market, now they would be drawn from regional ones that are interconnected.

Just disregard it. Re-reading it, I can safely confirm my reasoning started out straight on the road but swung swiftly from it in the first turn ending up somewhere in the bushes.

[Garek Maxwell]

Why not just call it "livestock" and be done with it?

Anyway, I don't mind some generalizations for certain goods, but more detail is always better for me. I'm weird though in that I love diversity. The more resources there are, the better. It's not like you absolutely HAVE to have diamonds to grow as a nation anyway.

As long as the resources mean something (You clearly benefit from having a particular resource than not), are simple enough to understand (Fish + Tin = Canned Fish), and don't become overly daunting (no need for giant graphs or things to show how you can finally produce a boat.) then I think it would be fine.

[Sovereign]

What I liked most about Ricky was the economic and industrial dimension. Building up your industrial base, buying goods to bootstrap your economy, the way every soldier you deployed represented a long line of industries putting a great deal of resources from all other the game-world together. The clothes they wore, the weapons they carried, the food they ate, the ships that carried them wherever, I really liked that. In Ricky unlike all other Pdox titles I've played there's never a long period of just waiting, and this mainly due to the constant attention demanded by the economy.

I liked the way every POP had daily demands and things they'd want to buy, and how their ability to do so would affect their happiness, and their militancy, and their politics. Ok all that's obvious, you're Vicky players so you know this already and agree.

But I read the book The Iron Heel by Jack Lyndon a few months ago, and I can't say I've read deeply about Marxist Theory but in the Iron Heel the 'unsustainable' need for capitalist industrial nations to constantly have new "Markets" to send their goods to was pretty well underlined. And it's true, industrialists and investors get desperate for new markets, wars are fought over access to new markets, and to make nations allow the industrial powers to send their output to these markets. New technology could make old markets new again (new train tech for instance) but in the meantime there's constant economic pressure to expand into new territory and populations, it was a driver of colonialism too. This concept is a vital source of pressure between powers, and it's unsustainability (or rather the constant falling-forwardness of it) drove the capitalist economies to expand and accelerate throughout that period until finally they fell on their faces or collided with each other in World War and Revolution.

In Ricky there was never any such tension because your Capitalists could be confident that the World Market would buy everything they made. I hope this might be changed, the world should be devided into a number of economic zones that are dominated by the Great Powers as part of their Spheres of Influence, access to markets should be part of what a Sphere of Influence is. Great Powers should be able to affect the economies in their Spheres of Influence in a similar way to how the UK could do so with Machine Parts back in Vicky. Things like the Opium War in China would make more sense like this, and the satalitte system too. I don't know to what extent the game engine might restrict possibilities here but I really hope it could model these kinds of pressures where Vicky/Ricky did not.

Those are some of my thoughts anyway, what say you?

[MannheimCouncil]

Great, there are still people who read Jack London's least popular book

But seriously, you are right about capitalism's need for new markets. Colonies and new technologies are two ways to create these markets. Trade agreements with civilized powers are also a possible way to get into new markets (and war obviously is one, too).

What I'd like to see is first and foremost realistic a realistic supply and demand model. Then transport of goods and a merchant marine have to be included to get the goods to the consumers. The spheres of influence are the final piece in the puzzle. If the goods are demanded and you can supply them, your influence in a certain market decides whether you are allowed to fulfill that demand.

That would be a great economic system, but unfortunately it would also mean a huge drain on hardware resources. Maybe some kind of monthly check, instead of daily might make it possible, but I'm not sure about the difficulties involved. Could even be easier than my pessimist outlook makes it look like

[Steevo]

Whether or not goods would be best condensed, increased in number, or left in the status quo has emerged as a matter of some debate already. Here's my two cents:

Regarding Generalization and Simplification of Manufactured Products in Victoria and its Relation to Historical Reality and the Player's Economic Advantages Within the Game: an Argument Based upon Historical Trends in International Relations, Domestic Micro-and Macroeconomic Policy, Commercial Demographics of Colonization, and the Experiment of Simplification of VIP:R 0.3

I would have to say I'm opposed to this development in general but not without exception. Although it may seem like an advantage to the player not to have to deal with multiple factories and inputs for the sake of simplicity, the disadvantageous aspects of this simplification make it into a greater setback as well as presenting a historical inaccuracy. The most rational solution to this question of Generalization/Simplification is that gameplay will allow for greater economic options while satisfying the criteria of historical accuracy and economic reality is that raw materials and manufactured products alike should remain separate unless the relevant circumstances of production including environment/geography, historical point of widespread production(if relevant to technology), and raw materials of input of multiple goods belonging to a single category are either identical or extremely similar.

To illustrate this I'd like to draw on the latest release of the Victoria Improvement Project, where consumer goods were lumped together. Don't get me wrong, I think VIP is a fantastic improvement upon the vanilla model, but this particular feature has come to represent my sole criticism of it.

For those of you not yet familiar with it, here's the breakdown:

How Consumer Goods Were Changed in VIP:R 0.3
1)Luxury furniture and luxury clothing were merged into a single product called Luxury Goods. The luxury goods factory requires silk, tropical wood, and a small amount of gold as inputs.

2)Regular furniture and regular clothes were just renamed furniture and clothing

3)Telephones and Radios were merged into the new product of technological goods.

The third item doesn't really bother me as the original products had essentially the same inputs, but the first item makes it more difficult and less profitable to produce luxuries. How? Well, if the player takes on the role of a major power then with the exception of Austria the historical path includes overseas expansion and the establishment of a colonial empire to a larger or smaller degree, and the primary economic benefit of doing so is raw materials which aren't available domestically (silk, rubber, and tropical wood).

In more detail, let's look at...

Economic Theory, International Relations, and Colonial Expansion Relating to Important Rare or Monopolized Goods
Total free trade was not a feature of national policy for any colonial power and so protectionist measures were a permanent feature of the global market in this regard (the UK notably favored a free-trade argument much of the time but never removed tariff barriers entirely) and so totally open markets weren't a reality even though the Mercantilist system of market control that Adam Smith strove to prove was counterproductive and harmful (did you know that Smith actually invented that word to characterize the policy he was trying to undermine? I learned this just a few days ago from reading an intellectual history on capitalism in western thought- apparently Mercantilism wasn't really referred to as anything in particular by its advocates when it was widespread earlier) was long absent. As such there was greater development force behind the manufacturing of consumer goods within a single European colonial power for those goods for which the inputs could be obtained domestically or from colonial imports and no further expense would be incurred. This was primarily intended to discourage foreign competition in the sale of identical goods but extended to goods which were unavailable except through trade as well.

In corporate strategy and understanding of business on microeconomic level there is also an inherit advantage in control of the entire process of manufacturing called vertical expansion or vertical integration. In the present outsourcing, the logical opposite has become popular in western firms but this reversal is the result of the decline of manufacturing sector's importance and profitability relative to that of the service sector, a purely contemporary phenomenon.

In both the 19th as well as the early 20th century the genuine economic benefit received by nations engaged in colonialism was overplayed but should not be underplayed in the present.

By 1914 after the rush was over and only a few independent non-Western states remained on the globe there was an argument (one that became far more popular from 1916 onwards) put forth by socialist thinkers that claimed European colonial imperialism was driven strongly by the search for new markets by European capitalists who were reluctant to invest domestically because the rate of return was too low and overproduction of manufactured consumer goods had made competition in domestic sales less enviable. Capitalist greed, it went on, was causing a massive problem in trade relations and the domestic social realm because rather than compete further to drive down prices for the urban working poor or lose a competitive edge by increasing their salaries to allow them to purchase more consumer goods capitalists were instead focusing on new consumer markets within colonies until the same situation happened there and newer frontiers were needed. Lenin put forth this exact argument in 1916 after disillusionment with the results and perplexity at the causes of the Great War had replaced much of the initial nationalist ferver in all participating powers and explained the Great War as the inevitable result of imperialism.

At the time this rhetoric helped bring about a resurgence in popularity of socialist and communist ideas, but the statistical evidence of the decade immediately prior actually refutes the argument entirely. From 1900-1910 there was no absence or any significant decline of domestic investment in Europe compared to the five preceding decades and although investment geared towards exploiting untapped markets abroad was a reality, European powers didn't invest very much in their own colonies for the same reason that European territorial expansion had been so rapid and relatively easy: these areas of the world were undeveloped and poor. Most foreign investment from countries like France and the UK went into already partially developed economies which gave a concrete indication of further improvement such as the Balkan nations, and Turkey and Iraq in the Ottoman empire.

Also, a it's well-known that a great many colonies produced net expense not because of any mismanagement or economic exhaustion but because the purpose of acquiring it in the first place was strategic and not economic and the cost of maintaining a military presence was an accepted reality. British Sudan is a perfect example as is the technically "independent" semi-autonomous administration of Egypt. Since India was an extremely profitable colonial possession there were obvious British interests in maintaining a secure sea route to it and the advent of the Suez Canal made this shorter and potentially much more simple. Of course the Suez Canal itself provided revenue from tolls to a set of European investors and hence represented a direct gain, the economic activity of the rest of Egypt was relatively inconsequential as was any potential for contributing to the European market for luxury goods. Deciding against direct control, British political interests were satisfied with a subservient and friendly regime and neglect for Egypt past that point. Eventually that regime became notoriously neglectful as well and corruption, poverty, and crime reached astonishing levels as society suffered under the burden of these issues.

Interestingly social and economic conditions in India experienced a sharply contrasted history under the rule of both the East India Company and later the British government and both paid close attention to the state of its colony, resulting in an extensive railway network being created relatively early on. This developed in parallel with an extremely effective and cost-efficient network of administrative government. The personnel required to maintain effective administration over an entire province would often be limited to a handful of educated and capable officials and a single company of soldiers (the Brits were famous for this sort of achievement everywhere in their overseas possessions and it was acknowledged universally even by staunch opponents of colonial imperialism- even Gandhi was willing to openly give them recognition for good management in this regard and once stated something along the lines of "good government is still no substitute for self-government".

A variation of this trend existed in the Congo Free State, a colony owned personally by Leopold II and operated entirely independent of the Belgian government, with the marked difference being the absence of long-term economic development. Short-term development in the form of an extensive railway line and the maintainence of the Force Publique were present and significant in size, even if the latter's only purpose was large-scale intimidation and extortion of native populations to force them to procure rubber. Eventually it became the tool by which one of the largest humanitarian disasters in recorded history was carried out in the name of one man's personal gain, but this paramilitary organization represented the same high level of commitment in terms of operating expense as a national army.


So economic investment in colonies was only ever a significant feature of regions posing extremely viable opportunities for contribution to the larger market, with the primary advantage of colonial possession being the establishment of control over all the materials and factors required for vertically integrated production of goods all within the political control of a single national market.


What Exactly Went Wrong the Experiment of Condensation in VIP:R 3 and What we Can Learn From it
In Victoria, the manufacture of luxuries as a high return-generating industry and the exploitation of advantageous resource control was realistic in its separation; if the player's empire included silk RGO's then the obvious path of greatest profit was luxury clothes, which required silk as an input. If tropical wood RGO's, luxury furniture became a viable option.


The interesting thing about Victoria, I believe, is that in this instance its extensive realism in reflecting history is so marvelously designed to account for so many potential variables that the introduction of that isn't right, an inaccurate representation historically and economically in the game mechanics causes a poorly-functioning final result that differs from the desired effect of the change... yes, you could claim historical inaccuracy and gameplay mechanics difficulty in this instance just coincidentally happen to be present at the same time and the same place, but I can't help but feel that the masterful simulation of Vicky is reinforced in its awe-inspiring achievement in this particular instance. Even if its purely a coincidence, I can't see how (proper, not botched out of technical errors) modification of details this intricate could produce these two effects in- well, any other strategy game that's ever been made. As a strategic simulation of so many different aspects of recorded history as Vicky1 is I feel strongly optimistic about what the sequel will bring.
Hurray for Paradox!


Producing luxury goods in VIP:R 0.3 requires either national control of three rare and expensive resources, two of which can be found only in limited geographical areas or importation of foreign goods.
The former is extremely specific in its direction of economy-driven colonial expansion (either get ready to grab land in places potentially very far apart or make war on China) instead of the original model which allowed economic capitalization on key strengths and motivated economic specialization, another important development championed by Adam Smith.
The latter isn't necessarily out of the question but keep in mind that unless the ruling party supports free trade and only free trade, imports are 2x as expensive. Though it varies from nation to nation, the option of adopting a free trade policy is often present only with laissez-faire government regulation policy, in which case you'd better hope that your capitalists maximize the growth of luxury goods manufacturing on their own because the player sacrifices the ability to create the incentive of capitalizing on it in order to make capitalizing on it profitable. Catch 22. Two separate products



Besides which, when you think of individual goods which would involve combining silk, gold, and tropical wood as well as the necessary processes of textile production, metalworking, and woodworking directed by a single firm taking place under one roof in one single factory, isn't it a bit of a stretch to assume the existence of more than one possible finished good resulting from all three of these? Even if you want to go ahead and assume that multiple products are emerging as the final result, how frequently is anything made of silk, anything made of gold, and anything made of tropical wood going to be marketed together? The circumstances of jewelers, department store operators, and furniture/other wood items providers seem very far removed from each other. What retail store sells all three of those things at one place? (I know what the obvious answer that comes to mind is, but of course Wal-Mart had a long time to go before becoming a reality)


What does this entail in practice?
Well, thankfully the author of this post (me) has a total inability to stop thinking intently about everything all the time so here's what I came up with:

Proposal for Systematized and Methodological Determining Appropriateness of Simplification- A Template to allow Any Good to be Addressed

As outlined at the start, condensing goods should require an affirmative answer to all or at least almost all of the following criteria:


Non-Specific Criteria of goods
-Do the goods fall into the same category as either manufactured or non-manufactured products?
-Do the goods fall into the same category as either consumer goods or capital goods?
-Are there similar or at least traditional cultural associations with the goods, or is there an absence of cultural conflict between them? (for example, alcohol doesn't traditionally go well with Islam for obvious reasons)
-Does one of the goods represent a much less significant constituent part in the effort, scale, environmental concern, and organization of the production process of all combined goods needed for one pursuit or complementary in nature(paper, pens, and stationary as mentioned above) which can legitimately be marginalized?
-If the goods are alternative goods of one another, does reasonable speculation suggest that no significant factors would separate their prices and availability nor create strong consumer incentive for one over the other?
-Are the goods typically marketed together or offered at the same type of retail or wholesale sales establishment by a single firm?
-Are the goods typically priced on the same level?


If the goods in question aren't manufactured products
-Do they share the same production requirements of geography and climate, and other environmental factors?
-Do the goods require similar methods of extraction? -or- similar levels of labor and organization to grow and harvest?



If the goods in question are manufactured products
-Are the manufacturing inputs of the goods similar? -or- are the manufacturing inputs a common combination?
-Is there a strong connection in the historical tradition of manufacturing by which the goods in their present state are based upon in their development? (for example, the chemistry behind explosive powder with its origins associated with China may have led to all weapons and tools using it, but artillery became a standard feature of armies in Europe quickly because prior to its proliferation there was a pre-existing manufacturing tradition of heavy metal casting widespread in Europe to produce church bells and so small arms, explosives, and artillery would not be condensed into a single "armament" product-in relations between western and non-western peoples in the 19th century the lower production cost, lower difficulty to operate and maintain, and smaller size of small arms meant that they could find their way via trade to essentially anyone, but the presence or absence of artillery pieces and the resources required to operate and maintain them effectively meant a vast difference in relations if Westerners weren't the sole possessors of this advantage)
-Do the goods represent a fairly short technological difference chronologically in history?(50 years and you're really stretching this one thin)


So ultimately pencil factories as well as the potential over-abundance as a future problem- are out of the question

There are other criteria that could be applied but I'll just leave it at that. My goal is to provide a template for differences in products not only for the goods that exist in the current Vicky, but more widely for any items which might be added. If two goods fall short of the requirements, they should remain separate. Hopefully this will help for a balance in which diversity of products can exist but in a manner which prevents needless additional goods

[Alex_brunius]

Where to start? Many things can be said about how this worked in Victoria, But Id like to start with saying I love the Idea to have world supply and demand rule over the prices of goods.

But at the same time the system had many weaknesses, So ill start with pointing out which ones I though were the major ones:

# Price is the same all over the world.
# Impossible to "blockade" enemy nations from imports. This was a very powerful tool in gunboat diplomacy.
# Not everyone could buy rare goods in Victoria (even if they were ready to pay more £ for the goods).
# Exports and Imports are free and don't require any steamer convoys unlike transporting stuff home from your colonies.
# Important trading posts or canals have no strategic economic value.

So I'm going to suggest a few changes based on overcoming these weaknesses and making the world market a more powerful tool in Victoria2.

1.) 3 Markets
Lets introduce one world market for each graphic area, since most of the trade was done overseas I think be best way would be one "world market stockpile" per major ocean:
# The Atlantic world market (The major one where all western traders interact)
# The Indian ocean world market (Where British India and some middle east or African colonies sell & buy their stuff)
# The Pacific ocean. (For Japan, China and eastern colonies)
Each province/area is connected to one of these 3 world markets that's located in the middle of the ocean for blockade and route purposes. Even if the goods in reality would be spread out on ships and ports its easier to have them abstracted at a few single places.

2.) Sailors
Introduce a new pop type "Sailor" or "Merchants". These can only appear in ports and work with your nation convoys. Every time someone buy or sell from the world market the goods will be transported and sailor pops take a certain % of £ for the shipping. If your nation don't have a port of its own you will use the neighbouring country with the lowest tariffs port and his sailors will get the £ instead.

3.) Control of the Oceans
The 3 Markets are connected. There are 6 possible connections:
# South Africa route connecting Atlantic with Indian Ocean (very long route)
# Suez Canal (decision to build) shorter route but % £ taxation payed to the controller.
# Australian route connecting Indian ocean with Pacific (long route)
# Singapore route (decision to build*) connecting Indian ocean with Pacific, taxation payed to controller of Singapore.
# Falkland island route connecting Atlantic with Pacific (very long route)
# Panama Canal (decision to build) fewer convoys needed but % £ taxation payed to the controller.
Since the sailors charge a certain amount for each convoy used the trade AI will always use the cheapest route unless when at war with the controller when they will always choose the safe (long) route.

* "Building" cost for the Singapore route is to represent building a large naval base & port there, developing the trading post and chasing away pirates from the area.

4.) Blockades
You can only blockade a Port by posting ships in the adjacent seazone (like EU3). You need one ship per port level and you also need to be at war or at colonial war. Once successfully blockaded all trades using that port are either rerouted to another port or if all ports are blockaded halted. It is also possible to station ships at the special sea zones connecting the different world markets to make it more expensive for all your enemies using them (they need to go the long route).

5.) Pricing
Prices should of course depend primary on the Supply and Demand in that area. But they should also not jump around as much, changes should be slow and stable. Prices are also supposed to be much higher in the markets far from where the goods are produced. For example the price of silk needs to be at least twice as high In the Atlantic market due to all the cost of shipping to get it there. At the same time Machine parts is almost impossible to get hold of in the Pacific or Indian markets unless your ready to pay many more then the price in Atlantic. This pricing difference start out as very high in 1836 but is lowered throughout the game as more efficient steamer convoys are developed and more routes are opened (see point 3). The nations that invest in these ventures can gain a good edge and reap the economic benefits from it.
When setting up how much goods you want to import you can now also set a maximum price, you will still buy as cheap as possible but only if the price is lower then your desired max.

6.) Shipping
The priority of your shipping assets is as follows (highest first):
# Deliver ammo and canned food to troops (if implemented)
# Transporting goods home from your colonies (if your industry or population need them)
# Transport goods to your colonies (if industry or population needs it)
# Sell goods produced at home
# Sell goods produced at colonies
# Earn money by buying from cheap markets and selling to expensive ones. (This enables even small nations to invest in an alternative income source by getting more shipping then they need, trading was very lucrative. If the total available shipping exceeds demand all nations use the same % of their free convoys for this task for fairness)

7.) Land trade?
Perhaps it should also be possible to use land trade with neighbours? If so Id suggest a diplomatic interface for it and also a certain % transport costs. Not sure if its needed or a good idea though, what do you think?

Disadvantages: The only major problem I can think of is that large empires would be connected to many different markets. This would provide additional complexity as such large nations either need several national stockpiles to manage, or get the ability to instantly teleport goods across the world (which of course would ruin the whole point of the Idea to begin with). Another possible solution would be to only have the national stockpile at the capital and like in HoI3 have all goods that's not instantly shipped from colonies be lost. This would also be a complex solution since It would be hard to manage Industries overseas.

Note: It would be possible to also include a 4:th Mediterranean world market to raise the strategic value of Gibraltar. This market would have no safe longer route to access it and only be connected to the Atlantic before Suez is built. This would make the system a little more complex and realistic.

[Fobical]

Gosh, i hope to god that this thread gets some much needed attention from Devs

On the point of economy and free trade, how will the new Vicky trade system work as opposed to the old? with the new spheres, and with an inclusion of regional markets (which VickyII really needs to make an great improvement of the Vicky series) one thing that one should not overlook are tariffs,

a great improvement to the tariff system should be individual tariffs, tariffs was arguably the hottest topic of the early democracy in England, its use and missuse of tariffs with for example the Corn-laws actually caused much of the strife and famine in ireland and Great Brittain in the 19th century. And the Corn laws ofcourse being a protective tariff on grain lobbied by English producers (ie aristocrats) So to simulate such a situation best, i think a separate tariff system which several different categories of taxable goods should be included.

A simple breakdown would probably be (especially seeing from the historical context of who wanted protective tariffs and when)

foodstuffs (say, grain, beef and whatever consumer goods will specifically be included in Vicky2)

manufactured goods (the hot new stuff of the modern industry, early in the timeframe much debate about tariffs in this supposed category should be represented by textile industries for example)

Industrial goods (bad name, but includes industrial goods, steel/cement and lumber)

These three should be considered cornerstones of the modern civilian industry, and historically should favor different policies. The stolper-Samuelson Theorem explains it pretty damn spot on. http://en.wikipedia.org/wiki/Stolper-Samuelson_theorem

Now without knowing how these different factors influence eachother, and how or if regional markets will be included, in the finished product it's hard to know how it could be implemented. But in my opinion, it really should be