A Envisioning of Factories for an Expansion

Rizzmond · Dec 31, 2010

An Envisioning of Factories for an Expansion

I'd like to spread some of my ideas regarding the state of factory mechanics and the direction which would be beneficial for them to head.

The topics discussed here assume that paradox has solved the demand/desire problems (presumably in a patch). This post is not about introducing a "real" economy to V2.

Prelude

The overwhelming problems with the current factory mechanics are capitalism doesn't feel like capitalism and socialism doesn't feel like socialism. When I say capitalism I mean laissez-faire, interventionism, or state capitalism. When I say socialism I mean planned-economy.

Capitalism

There is nothing wrong with the way capitalists decide to build factories: they pick a profitable good and gather enough investors to buy all the necessary construction materials. It is the operation of the factory after it is opened that is lackluster.

Operational design problems fall into two categories:

1. Craftsmen and clerks act as shareholders in the enterprise. Their salaries are based on the profit the factory makes.

2. Factories continue to boost output until they no longer turn a profit, regardless of how much they are actually selling.

Solutions for these problems:

1. Craftsmen and clerks should get a wage from their factory. The factories should decide on their employees' wages depending on available workforce and desire for expansion (through the hiring of new employees).

This means if the factory desires to expand and there are no unemployed craftsmen in the state it should increase its wages a "tick" each day until there are either unemployed craftsmen or it does not wish to expand further. Additionally, if there are other operational factories in the same state it should only increase its wages until it has the highest paying factory wage in the state.

If there are unemployed craftsmen in a state, all factories in that state should lower their wages a "tick" each day until there are no more unemployed craftsmen or minimum wage has been hit.

2. Factories should only desire expansion (through the hiring of new employees) if more than a certain % of their goods are sold, let's say 75%, and they are currently turning a profit.

While these rules may seem a bit complex, it would require no additional micro-management from the player. All the wage information would be visible to the player but the factories are deciding on their own what to set the wages at. The player can also be informed through the tooltip whether the factory desires expansion, but he doesn't have any direct influence over the hiring process.

Socialism

Planned-economy should feel completely different from capitalism. The state assumes complete control of factories throughout the nation. This should include more micro-management for the player.

1. Wages for craftsmen and clerks should be set by a global bar at the top of the production screen which applies to all factories.

2. Capitalists are no longer shareholders and have no influence over factories whatsoever, they become a moot pop type (probably should be encouraged to change to a different pop type as well). The state earns any factory profits and makes up for any factory loses.

3. The player sets the maximum employee quota for factories with a sliding bar per factory.

Regarding the differences between laissez-faire, interventionism, and state capitalism

The current differences between the three are quite good and should be kept. Player can't do subsidies with laissez-faire and can't build factories with interventionism or laissez-faire.

With the new wage mechanics in place I think it would make sense for subsides to only apply to input materials for the factory. Additionally, I think it arguably would make more sense for subsides to be done on a good by good basis rather than a factory by factory basis. For example you could subsidize all fuel production in your nation by assisting in the purchase of oil for the fuel factories.

ow592 · Jan 6, 2011

nice ideas. there should be also factories that are owned by the nation directly and the nation sets wages. why can I build factories in state capitalism, but I can´t controll them?

and I think that there should be a possibility for the player to build factories in interventionalism in some sectors. I mean sectors which are very important for the nation (weapon industry ...)

Naselus · Jan 6, 2011

If we're looking at 'if only' changes for an expansion, then I'd like to see

I think it arguably would make more sense for subsides to be done on a good by good basis rather than a factory by factory basis

being incorporated into changing tariffs and subsidies to work good-by-good on the trade screen. I'd love to have a steel tariff to protect my industry, while subsidizing iron and coal to make easier for that steel industry to operate. But I guess that'd probably be incompatible with the current WM system.

And

Wages for craftsmen and clerks should be set by a global bar at the top of the production screen which applies to all factories.

YES. And this bar should be visible but uncontrollable under LF. And possibly available for interaction, but limited, under Int/SC.

Meanmanturbo · Jan 7, 2011

I would LOVE to see increasing labour costs as the wealth of the nation increases. Also, a normalized income level, leading to unprofitable factories being unable to hire would also stop the insane demand slump that comes from craftsmen lumping together in huge factories filling up until break even meaning craftsmen do not get payed and cannot buy their needs. And it would also decrease rebel spawn.

Edit

Hmmm, would it be possible to create events that check something like income/population or ind score/population and then forced min wage reforms to simulate this?

Phalanxia · Jan 7, 2011

I always thought the micro' of workers and capitalists sharing the profits earned from factories to be a rather odd way to model the economics of a firm, since that it wasn't happen. Your ideas are really good, but I wonder how simple it would be to implement them for the devs, especially once you get to really large factories with tens of thousands of workers. Putting up wages a tick may lead to 2000 workers becoming unemployed, wherein it would tick back down again, meaning they would become employed, so wages would tick up again, and so on tick tick tick tick tick ad infinitum. That said, looking at your model a bit closer, that would only seem to be a problem if you have one or two factories in your state, as opposed to eight rather big ones, where the cap of highest paying factory in the state would come into effect. Would craftsmen actively prefer to work for a company with higher wages, or are they ambivalent? I also like your second proposal for capitalist firms, whilst your proposals for socialist firms and subsidies seem spot on.

Sujit · Jan 7, 2011

I like all the ideas "One Gamer Approve"

Patton509 · Jan 7, 2011

Two things.

1. You would need an exception for when all factors in a province at capacity. You don't want wages dropping simply because factories can not hire any more people. This is something that often happens when I play Sardina Piedmont. I am at capacity for periods of time and promoting craftsmen is causing U/E until I can expand. There is really no reason wages should drop during that time. In fact if the code was not written correctly wages would go down to 0! I do like about the idea that subsidizing factories is also equivalent to subsidizing imports of consumer goods since that will pay wages as well. I am not sure this is the whole problem though. Like the devs seemed to misunderstood demand I think they misunderstood the zero profit condition. Firms should make 0 economic profits meaning profit = profit given up by not pursuing the next best alternative that is not $0. It seems the game uses 0 profit as 0 dollars. Perhaps factories should have a hard cap minimum profit that they will cut production, maybe close, at if they do need meet it or not subsidized.

2. In a socialist/planned economy system the state owns everything so all profits should go to treasury. Pops would be paid out of state treasury. So one solution is that craftsmen are paid like beaureaucrats and clergy. They become state supported and wages are determined by admin expense. So govts get all profits, absorb all loses, and pay the people from treasury. Capitalist would ultimately become beaureaucrats. We will gloss over how that happens and just say beaureaucrats do the job of capitalist in a socialist command economy. So the game would include craftsmen, farmers, and laborers in admin budget if you go planned economy and are communist. You get all the profits from factories though. This could bust a treasury if done wrong. The state would then control all wages not just some through admin expenses. Since the state owns everything and reaps all profits and pays all cost then tax could be greyed out and go away. Tarriffs would still be possible though.

I think with state capitialist you have planned markets. The situation is like WWII Germany. They decide a Buna plant needs to put online so they contact IG Farben who builds the plant on govt. determined sights but they own the plant.

Phalanxia · Jan 7, 2011

Patton509 said:
Two things.

1. You would need an exception for when all factors in a province at capacity. You don't want wages dropping simply because factories can not hire any more people. This is something that often happens when I play Sardina Piedmont. I am at capacity for periods of time and promoting craftsmen is causing U/E until I can expand. There is really no reason wages should drop during that time.

Why not? There is excess supply of labour, surely the cost of it should drop.

Patton509 said:
Like the devs seemed to misunderstood demand I think they misunderstood the zero profit condition. Firms should make 0 economic profits meaning profit = profit given up by not pursuing the next best alternative that is not $0. It seems the game uses 0 profit as 0 dollars. Perhaps factories should have a hard cap minimum profit that they will cut production, maybe close, at if they do need meet it or not subsidized

I think that would be too complicated for capitalists to model what they could be doing better at every point in the game, as as well as being ugly to code, it would cause some players' CPUs to scream and melt. Besides, Capis already make a choice about what to build based on something kind of like that (As opposed to random chance in Vicky), although it NEEDS to be based off demand rather than desire.

Rizzmond · Jan 7, 2011

there should be also factories that are owned by the nation directly and the nation sets wages.

That was implied under the socialism section, the state absorbs all profits/losses from the factories which includes wage cost. It becomes the only shareholder.

and I think that there should be a possibility for the player to build factories in interventionalism in some sectors. I mean sectors which are very important for the nation (weapon industry ...)

I'm not sure its a good idea to deviate from global rules between the various policies. However, the national foci should be better at encouraging capitalists to invest in a certain way.

being incorporated into changing tariffs and subsidies to work good-by-good on the trade screen. I'd love to have a steel tariff to protect my industry, while subsidizing iron and coal to make easier for that steel industry to operate. But I guess that'd probably be incompatible with the current WM system.

I think that is a great idea and I don't see how it would be incompatible with the WM system. I assume by "subsidizing iron and coal" you mean negative tariffs.

YES. And this bar should be visible but uncontrollable under LF. And possibly available for interaction, but limited, under Int/SC.

I don't think the player should have direct control over wages in anything but planned-economy. Dynamic wages as I described would probably work better along with the existing lower cap by minimum wage social reform. Factories in different states producing different goods should have different wages based on market conditions and available workforce.

I would LOVE to see increasing labour costs as the wealth of the nation increases.

The system I described would model that. With increased factory profits comes increased demand for expansion meaning demand for new employees. A shortage of employees and a demand for new ones leads to a wage increase.

Putting up wages a tick may lead to 2000 workers becoming unemployed, wherein it would tick back down again, meaning they would become employed, so wages would tick up again, and so on tick tick tick tick tick ad infinitum. That said, looking at your model a bit closer, that would only seem to be a problem if you have one or two factories in your state, as opposed to eight rather big ones, where the cap of highest paying factory in the state would come into effect. Would craftsmen actively prefer to work for a company with higher wages, or are they ambivalent?

I believe craftsmen should actively prefer to work for a company with higher wages. Two factories in the same state both desiring expansion should compete with wage increases for each others workers (of course assuming there are no unemployed employees in the state). Factories desiring expansion and providing decent wages should also induce other classes (farmers etc) to promote/demote to factory employees (again assuming no unemployed workers).

I don't understand the scenario you described. Wages can only "tick" up when a factory desires employee expansion, so they would never shed workers when doing so. Could you elaborate?

"1. You would need an exception for when all factors in a province at capacity. You don't want wages dropping simply because factories can not hire any more people. This is something that often happens when I play Sardina Piedmont. I am at capacity for periods of time and promoting craftsmen is causing U/E until I can expand. There is really no reason wages should drop during that time."

Why not? There is excess supply of labour, surely the cost of it should drop.

precisely.

In a socialist/planned economy system the state owns everything so all profits should go to treasury.

That is exactly what I said in the first post.

Naselus · Jan 7, 2011

Rizzmond said:
I think that is a great idea and I don't see how it would be incompatible with the WM system. I assume by "subsidizing iron and coal" you mean negative tariffs.

Yes, subsidizing in this regard would be subsidized imports.

But the reason is wouldn't work with current WM system is that demostic buying and selling always happens first anyway, so you'd achieve nothing by tariffing specific goods - it's not making your own produce more competitive internally, since your goods don't bother competing internally unless you're in an SOI. And if you're in an SOI, the common market makes no attempt to distinguish your own goods for everyone else in the sphere, so it woudn't tariff. It's a lovely idea, and one I desperately hoped for when V2 was announced, but it's just incompatible for the market design that's been used.

Rizzmond · Jan 7, 2011

that is correct, tariffs don't make your goods more competitive. However, being able to set negative tariffs on specific goods will allow you to reduce input costs for specific inputs (coal and iron for steel for example) when bought from the WM.

sckallst · Jan 7, 2011

I like the idea of imposing tariffs on specific goods. I wonder if the biggest problem with allowing that is whether the AI would be able to handle that aspect of the economy in any kind of intelligent manner.

On another note, there was a different thread earlier about the idea of product quality. The proposal there was a bit convoluted, but I think the general idea of a quality component to manufactured goods (and possibly even resources) is a good one. Much as higher prestige nations now are able to buy first on the world market, what if a similar mechanism was set so that high quality goods were also the first ones off the shelf? In a situation where demand outstrips supply this isn't a big deal - all goods sell. But in a market that is glutted with supply, quality producers will make money, others will go broke.

Manufacturing quality could be determined based on a number of factors: longevity of the factory operation, proper clerk/craftsman ratio, new inventions that are sparked by tech advances, size of teh factory, maybe even certain decisions.

In thoery, you could also set quality values on raw materials. In a market glutted with supply, as raw materials markets often are, quality becomes very important. If you wanted to get really fancy, you could tie in the quality of these inputs to the quality score of manufactured outputs. You wouldn't have to get overly granular with raw materials gradations: high, medium and low would suffice. Then make the manufactured good qualities numerical in scale to provide real differentiation between products (and a reasson to push for every incremental quality gain possible in those goods where it matters.)

Patton509 · Jan 8, 2011

Phalanxia said:
Why not? There is excess supply of labour, surely the cost of it should drop.

I think that would be too complicated for capitalists to model what they could be doing better at every point in the game, as as well as being ugly to code, it would cause some players' CPUs to scream and melt. Besides, Capis already make a choice about what to build based on something kind of like that (As opposed to random chance in Vicky), although it NEEDS to be based off demand rather than desire.

Wages would drop some as labor supply expands but the problem is under the proposal they go to zero if there are unemployed craftsmen and no capacity. In theory as wages drop after the labor supply shift it should cause less quantity of labor supplied to balance things out and get back to quantity supplied equals quantity demanded. That will not happen if pops supply of labor does not respond properly to wages. I am not sure it does. I would have to know more about the game mechanic. Either way just pointing out there is a possibility of zero wages.

As for caps I agree to an extent but there could be a profit floor above zero where caps close down the factory. That is the way it should work. Caps who can not get their needs met because they make no money should shut down and open up something else or devolve. I don't think the devolve system actually shutdown factories is part of the problem. I think the game gives the bonus if there are enough capitialist to be owners but under LF or interventionism factories will operate with no capitalist. Unless subsidized to a profit factories should shutdown before profit is 0 instead of when it is negative. Not even the most hardcore enterprenneur will work for free forever. A simple profit margin less than X% for a period of time should shut down the factory. I think that is part of what VRRP did. I could be wrong though.

Rather than changing caps to bureaucrats under planned economies they could move to the admin budget and get paid by the stat eventhough in places like the USSR the capitalist fuction was fulfilled by essentially bureaucrats.

Patton509 · Jan 8, 2011

Rizzmond said:
That is exactly what I said in the first post.

Yes. I was just using that to set up the argument that under planned economies rather than having a specific wage setting all pops move to being paid from the admin budget. I think you had this idea but I was also pointing RGOs should act the same way not just factory workers. So RGO workers would also get paid according to set wages or from the admin budget. Again the state would be the shareholder in the RGO. Not sure which is the easier code introduce wages or move everyone to the admin budget. Capis and arists would probably work better under admin, essentially bureaucrats in planned economies. So rather than setting wages, wages would be determined by your admin spending like they are with bureaucrats and clergy.

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A Envisioning of Factories for an Expansion

Rizzmond

It's good to be king.

ow592

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Naselus

PDM's Benevolent Dictator for Life

Meanmanturbo

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Phalanxia

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Sujit

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Patton509

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Phalanxia

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Rizzmond

It's good to be king.

Naselus

PDM's Benevolent Dictator for Life

Rizzmond

It's good to be king.

sckallst

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Patton509

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Patton509

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