Where do capitalists get money to build projects

I'm not actually sure whey they get their initial money from, but I've noticed that changing to a Laissez-Faire government greatly increases their efficiency to build stuff. Also lowering taxes for them might help, so they spend by investing, not only on top hats and cigars.

VoodooEconomist said:

I'm not actually sure whey they get their initial money from, but I've noticed that changing to a Laissez-Faire government greatly increases their efficiency to build stuff. Also lowering taxes for them might help, so they spend by investing, not only on top hats and cigars.

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The fewer capitalists there are, the more left over for investment, as the income-share is the same, but with less spent on consumption.

It seems to me there are two sources:

First, your capis need personal savings. That means that you want wealthy middle-class folks to promote, bringing with them something in the bank. Keep middle tax rates low and capis will have more money to spend.

Later, when the factories are productive and the capis have paychecks, they will indeed be able to fund just about anything. However, in the beginning they have no income. And they probably only brought a few pounds as savings ... so you will need many or need to help with govt funds (depending on politics).

Second, it helps to have a national bank balance. I'm not sure of the exact mechanic, but I often watch thousands of pounds transfer from national bank to projects. It could be that this money is capis own savings, or it could be that capis are borrowing from the national bank to help make projects. I hope it's the second but I have my doubts ... Regardless, this is again a savings mechanic, due to low taxes relative to POP income.

Capitalists get their money from trade, natch. This means two things:

First, capitalists can sort of act as miniature factories themselves, buying up goods and then transforming them into something that can be sold for a profit (look in your production window under the production tab, and you'll see any goods that capitalists are currently producing in your country). The profits from this process become income for the capitalist pop. So, this depends on the technological availability of profitable manufacturing processes and the economic availability of the input goods.

Second, capitalists in a region are the beneficiaries of the operating profits of the region's factories. So, this depends on the existence of factories, the availability of craftsmen and clerks to work in them, the economic availability of maintenance and input goods, and the profitability of the product the factory makes.

So, to get your capitalists wealthy enough that the can begin to finance your infrastructure and such, you need a significant number of capitalists, techs that give your nation access to profitable trade goods, enough prestige or spherelings to get a steady supply of input raw materials, and profitable factories with workers to staff them. Also, of course, your rich stratum taxes will affect the capitalists' take-home incomes, which will affect how much they've got left over to spend on projects.

(Also, the money already invested in the project seems to disappear because it's being spent on the goods needed to start the project; you'll see the stock of startup goods increase gradually as that happens. The capis aren't allowed to change their minds, don't worry!)

Changing to laissez-faire decreases factory owner cost and hence improves profitability. If your economic policy is at least interventionism, you can put your governments money into a project, once it has been initiated by your pops, to help industrialization start. However capitalists have to earn their own money before they can build factories and railways themselves. So they need profitable projects to make their fortune first of all. Low upper-class taxes and (whenever possible) no tariffs would help with that. Also keep in mind, that constant supply with all the ressources that are needed, is essential for factories to make them pay for themselves. Thus it is not recommendable to enforce industrialization when your country is not ready for it yet (RGOs are not fully occupied, efficiency techs are not researched, etc.). Capitalists will eventually begin to build up a strong industry on their own, as soon as all the requirements are met.

For the start, it's a bit complex and not at all what the other are describing (which is true after).

At start, capitalists aren't getting any cash.
In fact, it's the others classes that get promoted to capitalists who comes with their cash and put it into the project. Thus you need to have rich middle class and not rich upper class.
So that they get promoted to capitalists faster and with more cash.

But once you have your first working factory, your capitalists should start earning cash from it. At this point what they get from the factory is most of the time bigger than the cash coming from promoting classes.

Zarine said:

For the start, it's a bit complex and not at all what the other are describing (which is true after).

At start, capitalists aren't getting any cash.
In fact, it's the others classes that get promoted to capitalists who comes with their cash and put it into the project. Thus you need to have rich middle class and not rich upper class.
So that they get promoted to capitalists faster and with more cash.

But once you have your first working factory, your capitalists should start earning cash from it. At this point what they get from the factory is most of the time bigger than the cash coming from promoting classes.

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This.


Basically some swag Artisan thinks he is all the thing and is like "YEAH! I'll build a factory for this!". Unfortunately, he only brings with him a savings of 100$$ or so (Artisans were never very smart). Well he blows that on a failed investment, or probably just spends it getting massages and whatever personal consumption the capitalists buy, and then he's out of money. So he spends the next 3 years leeching off family members and trying to pitch his idea for some new fancy factory or whatever.

Whereas established capitalists have an advantage. They're basically stockholders/shareholders of an existing project which makes money. So they get all their needs and their disposable income goes towards new factories and things to earn them money. This tends to make them - quite frankly - everloving mad. They'll build hundreds of liquor factories in their drunken stupor, or insist of luxury chairs or something. Their new factories tend to go broke, but their income remains until they find something that works. Sometimes it takes a while, and they try to build some really stupid things. Why just last month some entrepreneur named Ford or something petitioned my government to build a factory that would drive horsemen out of business!

Hrmph, steam carriages... the absurdity.

Scout1 said:

Basically some swag Artisan thinks he is all the thing and is like "YEAH! I'll build a factory for this!". Unfortunately, he only brings with him a savings of 100$$ or so (Artisans were never very smart). Well he blows that on a failed investment, or probably just spends it getting massages and whatever personal consumption the capitalists buy, and then he's out of money. So he spends the next 3 years leeching off family members and trying to pitch his idea for some new fancy factory or whatever.
Hrmph, steam carriages... the absurdity.

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Which is why it is important to promote Clerks. While the initial rush of capitalists are just a bunch of Artisans who bunched up together and (usually with the help of government) decided to up the scale of their operation (and do some class exploitation) as soon as you have Clerks a sensible middle-class begins to form. Their earnings should be much more stable, since they are employed by the factories and their expenditures aren't so crazy (they don't have to buy input goods out of their pocket). At the same time those are really smart people, not only do they know how to run a factory more efficient (increasing output) but they also engage in some creative science activity, much more effective and industrious than that of state-run universities! (up to 4% in a society increase Research Point generation). Of course as soon as they get rich and famous they tend to leave the science to other people and steal their ideas (ekhm ekhm Edison ekhm) but when they enter the investment scene and lifestyle they bring much better capital with them! One has to adore those mad, liberal-leaning scientists turning into well-respected members of proper society.

And sure, there's the odd silent and faceless Bureaucrat that manages to save up on the government salary enough to buy some shares, maybe a police chief or some guy in the administration. But luckily you have tooltip to tell you how many exactly you need at any time, so if you have an over-bloated state you're to blame.

Valeondeus said:

Thus it is not recommendable to enforce industrialization when your country is not ready for it yet (RGOs are not fully occupied, efficiency techs are not researched, etc.).

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On that point, which techs are best for industrial efficiency improvements? I see lots of techs for industrial tech improvement but does that just refer to the research of technology that involves industrial improvement?

I also wonder always with clerks, apart from NF and low middle class taxed how do I get more into the factories??? I NF them a lot but I barely ever hit a 4:1 craftsmen:clerk ratio, its usually more like 10:1

robinfisichella said:

I also wonder always with clerks, apart from NF and low middle class taxed how do I get more into the factories??? I NF them a lot but I barely ever hit a 4:1 craftsmen:clerk ratio, its usually more like 10:1

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Clerks only promote from Craftsmen, Clergymen and Bureaucrats. I think high literacy might increase the chance, but aside from NF-ing you have to make sure that a Clerk-career is more profitable, so lowering the wages of Clergy and Bureaucrats should help in theory.

VoodooEconomist said:

so lowering the wages of Clergy and Bureaucrats should help in theory.

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Ah ok, I didnt try that yet (deliberately) I'll give it a go later.

Capitalists earned their money (historically) from investors initially. But after their first investment the rest of their money was generated by factories. That's what it mean to be a capitalists.

VoodooEconomist said:

Clerks only promote from Craftsmen, Clergymen and Bureaucrats. I think high literacy might increase the chance, but aside from NF-ing you have to make sure that a Clerk-career is more profitable, so lowering the wages of Clergy and Bureaucrats should help in theory.

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POPs don't compare wages. Lowering the wages of these professions only helps when you lower it below certain thresholds as promoting POPs will be less likely to target those areas. It won't make becoming a clerk more attractive, only becoming bureauclergy less attractive, so you could find yourself with a lot of soldiers instead of clerks, without regard to how well (or poorly) off the clerks are. If the clerks are doing well, however, those that do become clerks will be more likely to stay clerks.

EUnderhill said:

POPs don't compare wages. Lowering the wages of these professions only helps when you lower it below certain thresholds as promoting POPs will be less likely to target those areas.

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Yes, that's about what I meant. They don't compare wags directly, but since they will not as likely to choose a government career, they'll go into the private sector, right? Anyway, I agree, lowering wages of soldiers should be done as well.

I suggest robinfisichella You save before implementing such a large-scale social experiment just in case. And do tell us if it works out!

VoodooEconomist said:

Yes, that's about what I meant. They don't compare wags directly, but since they will not as likely to choose a government career, they'll go into the private sector, right? Anyway, I agree, lowering wages of soldiers should be done as well.

I suggest robinfisichella You save before implementing such a large-scale social experiment just in case. And do tell us if it works out!

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I like keeping my soldier POPs well-fed and unaffiliated with rebel factions. Do consider that wage cuts lower the effectiveness of your middle-class POPs, and once you have optimal numbers in a province they are less likely to be chosen for promotion targets anyways.

ShinWalks said:

First, capitalists can sort of act as miniature factories themselves, buying up goods and then transforming them into something that can be sold for a profit (look in your production window under the production tab, and you'll see any goods that capitalists are currently producing in your country).

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This is a feature of the PDM mod, not vanilla. In vanilla only artisans act as mini factories.

So....is it best to have v. high low-income taxes, lowish middle taxes and high-ish rich taxes early (in essence, taxing aristocrats to increase middle-class wealth and promotion to capitalists), and then lower the rich taxes later? It seems from the promotion charts that aristocrats are a dead-end, except perhaps for getting demoted to officers.

fenisnad said:

So....is it best to have v. high low-income taxes, lowish middle taxes and high-ish rich taxes early (in essence, taxing aristocrats to increase middle-class wealth and promotion to capitalists), and then lower the rich taxes later?

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Pretty much... But in this game so many things can happen, you have to be flexible and experiment a lot with fiscal policy.

They steal the money through wage slavery. It was never their money. Filthy capitalist pigs...