I know there's already new player threads, but...

Aqizzar said:

I've been playing Victoria 2 for a dozen hours now, but I've wound up restarting as another country every time, because it seems like there's only one or two countries in the game that start in a tenable economic position. Let me say that I get this is a game with a steep learning curve, and an interface that makes no attempt to explain itself. I'm fine with that. But if the core goal of the game is basically to be the most economically effective power in the world, or at least to maintain a functioning economy, almost all of the countries worth playing as are guaranteed to go bankrupt within a couple months of starting.

I've already looked at the Wiki, the Paradox strategy booklet, and several threads here, and all of them give completely contradictory information on how to balance a budget. They all agree that Administration and Education should be covered as much as possible until the country's development is topped out, and I know you can reduce spending on your military when you're not at war, which should be most of the time. Some guides say it's fine to leave taxes at 100% for everyone and just work with that budget, others insist on keeping taxes low on the middle and upper classes to encourage growth and maybe raise tariffs to promote native industry. But all of that seems pretty meaningless when almost every country starts off with a standing military that costs two or three times as much to maintain as 100% taxes could hope to cover.

Both England and France start off capped at 50% taxation and about 300£ over budget, but can get down to that by slashing their military way down. Russia starts with a deficit larger than its maximum tax revenue and would need to almost completely eliminate its military to make any investment in admin/education. Prussia, Spain, and the Ottomans are in the same boat. The recommended starter countries of Sweden and Brazil are laughably underfunded, especially since I already know Brazil will get dragged into a war within a few years. Only Austria can have a balanced budget and field the military it starts with, but that still requires near 100% taxes or huge tariffs.

Victoria is clearly based on a classical economic model, so I don't want to do anything that could stifle growth, but after playing EU4 and CK2, I'm sure if my military isn't larger than all of my neighbors I'll be invaded by all of them sooner or later. Clearly lots of players manage to last longer than a couple years as powers other than France and Austria, so what am I missing in how to manage the budget at the start of the game for all these underfunded countries? Or is immediately nose-diving into bankruptcy not that big a deal?

Click to expand...

I could spend all day talking about how V2 Economy works, but instead I will talk about one way to immediately start earning money. The strategy guides are right about you wanting to make education and administration 100%. That said do not bankrupt your nation by doing it. In my mind as long as you're still making a profit it's fine. Eventually you will have enough money to push it back to 100%.

Nearly always it is better to have to educations higher up the bar than admin, but for the fist couple of years you are going to want to focus on getting more bureaucrats. Doesn't matter who you are or what you want to do you will need bureaucrats. The reason for this is the number in next to the administration bar. That number represents your tax efficiency. You are going to want that to be as close to 100% as possible throughout the game. Your taxes might be x, but unless you efficiency is a 100 it's always going to be smaller than what you should get. There are some techs that help with this, but for the most part you will have to use your national focus to increase the amount of bureaucrats in every single core province you own. If you do this to the point that 1% of your culture are bureaucrats. It has to be your culture, so don't expect this to always work in provinces your capture.

This should help you balance your economy.


PS: One last thing I though of. Check what party you have running the country. Some parties such as early game liberals, can set the tax limit to only 50% of each class. Early on you want a government that can a) set taxes without restriction, b) build factories. You can check which parties do this in the politics screen.

While it's true that the starting budget of every nation in the game seems horrid at the start, there is a huge distance between that and bankruptcy. The budget for all nations can easily be fixed by putting all taxes to 100%, tariffs to 100% and lowering army and naval maintenance to 10% and 30%(minimum for naval in HoD) respectively. Most nations can than bring both the administrative and education sliders to 100% and still make a profit, many nations can keep tariffs at less than 100% and still maintain a profit. So basically this whole bankruptcy panic that you have OP is only caused by the horrid default budget settings, nothing more. Whenever you fabricate a claim to get into a war raise military maintenance to 100% a few months before you plan to declare war, just like in EU4 and CK2. As soon as you get a solid amount of bureaucrats in your nation your tax efficiency will rise and allow you to gradually lower taxes and tariffs. If you chose a particularly tough nation than you should consider getting some early economic techs, most notably those that improve your taxes, rather than the typical cultural focus at the start.

Aqizzar said:

I've already looked at the Wiki, the Paradox strategy booklet, and several threads here, and all of them give completely contradictory information on how to balance a budget. They all agree that Administration and Education should be covered as much as possible until the country's development is topped out, and I know you can reduce spending on your military when you're not at war, which should be most of the time. Some guides say it's fine to leave taxes at 100% for everyone and just work with that budget, others insist on keeping taxes low on the middle and upper classes to encourage growth and maybe raise tariffs to promote native industry. But all of that seems pretty meaningless when almost every country starts off with a standing military that costs two or three times as much to maintain as 100% taxes could hope to cover.

Click to expand...

There are plenty of poor guides for Vic 2 But on a good side the game has fairly good depth making it difficult to come up with universal recipes. For example, it's not common to need (or even want) administration spending above 50-60%, especially not in the early game. So unless you know why you need to have high administrative spending, keep it at 50%, in many cases even 30% is sufficient. There are advantages in having educational spending at 100% (unless you're Sweden), but you may better use for money. So both at 50% in the early game is a fairly safe approach. Soldier salaries are also ok at ~50%.

Almost every nation can tax all strata at 100% in the early game. If you have no industry it's also safe to run tariffs as high as you can without depriving people of life needs. Most countries produce food locally, so 100% tariffs are ok for them. Unless you plan to go to war military spending can also be reduced, for navy minimum is 30% which is a good choice, for army something similar is ok too. If your government is lassez faire + free trade, the budget might be tight (since both tariffs and taxation rates will be capped), if your government allows changing the party it's better to change your ruling party in such situation. If not you may need to cut spending further, fortunately with lower taxes and tariffs, you can run on lower education and administrative spending, could be as low as 20% - this a temporary measure though, as their numbers increase you will need to increase spending, otherwise you will stop getting new ones.

101 on balancing your books:

Reduce military maintenance % for Army and Navy (the very very top 2 bars).
Max everything else (i.e. taxes and tariffs, admin, education)
If still not enough then reduce military spending (the bottom most bar that is used to encourage soldiers).

Works on most countries - unless you have free trade or capped income tax government.

Just like in CK II you don't expect to make money while at war with levies raised and mercs hired, in Vic II you cannot expect to make money with 100% on alert army maintenance.

Celmeo said:

......
Max everything else (i.e. taxes and tariffs, admin, education)
......

Click to expand...

And Alexti recommends 30%-50% for those. Is there any consensus on what should be done?

Snoopy

snoopy1710 said:

And Alexti recommends 30%-50% for those. Is there any consensus on what should be done?

Snoopy

Click to expand...

Alexti recommends 100% for taxes and tariffs (this is usually ok early on but you don't want your taxes and tariffs to be at true 100% once your admin efficiency improves). He also suggests 100% for education if you can, though he hedges on admin. So this isn't so out of line between the two of them (celmeo and alexti).

Personally, I usually push taxes pretty high early on, and initially tariffs as well. Unless my military is struggling, I leave mil spending at 50% (dropping maintenance). I then increase admin a few percentage points, education as much as I can. If I am still making a profit, I push admin up a bit more.

I don't know that there is any complete consensus on "perfect" sliders (and it varies nation-to-nation), but GENERALLY, I think everyone agrees that education is good particularly for low literacy nations(you NEED literacy) and admin efficiency is important (you WANT better taxes for fewer bureaucrats in the long run). Military spending tends to play second fiddle unless you are trying to go to war early, it's usually better to get your administration in line first.

snoopy1710 said:

And Alexti recommends 30%-50% for those. Is there any consensus on what should be done?

Snoopy

Click to expand...

Alexti recommended 30-50% admin efficiency not education, and even than it's only beneficial to do so once you have enough bureaucrats in all your provinces, so at the beginning 100% is better and than reduce it to 30-50%.

It seems that many confuse admin efficiency with admin spending. They are separate and not even strongly related. It's important to have Admin efficiency is percentage of bureaucrats in your nation (the required percentage starts at 1% and increases with social reforms). It's important to have it at 100% (or close enough) when you have natural promotion (if you don't - which is the case for countries with very low literacy - it's much less important). To raise it you need to increase percentage of bureaucrats via promotion (or in the early game more likely demotions). Admin spending is how much you pay to the bureaucrats. Spending level somewhat effects the choice of target to promote/demote, but NF is a stronger factor and the target choice is often not that relevant since it's often a choice between clergy and bureaucrats and in the early game you usually need both anyway.

When you have very bureaucrats (or clergy), 30, 50 or 100% makes little difference since it costs very little and difference is small. But as you grow their numbers it becomes more expensive. Admin spending is good to cut since it doesn't do much useful. The primary reason to run high admin spendings is to achieve 1% of primary cultured diplomats in colonies (you need fairly high modifier to get non-accepted cultures to promote into your bureaucrats), but this is not likely to apply before 1870 or so. There are also marginal advantages in creating certain luxury goods demands and to get some money into the national bank so that you can get free repay debt CB, but it's not something one needs to be worrying about until the budget is comfortably balanced. Educational spending is more tricky, because high spending also increase literacy gain, however if you start with a small nation with the intention to conquer, the early increase is largely pointless since it will only apply to a small portion of your future population. In this case all you need is to prevent clergy from demoting in large numbers - for this purpose ~30% is sufficient.

Victoria is clearly based on a classical economic model, so I don't want to do anything that could stifle growth, but after playing EU4 and CK2, I'm sure if my military isn't larger than all of my neighbors I'll be invaded by all of them sooner or later. Clearly lots of players manage to last longer than a couple years as powers other than France and Austria, so what am I missing in how to manage the budget at the start of the game for all these underfunded countries? Or is immediately nose-diving into bankruptcy not that big a deal?

Click to expand...

This is inaccurate; one of the wonderful parts of Victoria's economic system is that there are multiple paths to success - every economic system has its advantages and disadvantages.

I'm fairly new too, but a brief summary of what I've learned throughout the course of my Ottoman Empire game (which I had to restart because I screwed up initially).

First of all, governments. In terms of which economic system is most efficient in terms of money, it's laissez faire without a doubt. Laissez faire is a really good economic policy for heavily industrialized great powers - it means a minimum of micromanagement on your part, means you don't have to worry about paying for factories or infrastructure out of your budget, and means that factory costs (building/expanding them) are drastically reduced. However, it is also risky and recession prone, and the capitalist AI is horrendously dumb when it comes to building factories in the right places (i.e. where you get bonuses from having input resources in-state). Moreover, it is an absolutely terrible system if you're a low-tech unindustrialized society trying to industrialize, especially if you're not a great power, as your factories simply won't be able to compete with the established powers early on due to their superior technology, will have trouble getting input resources when great powers are hogging them all, and if your society doesn't have many factories to begin with your capitalists won't have much money available to invest, if you have any capitalists at all.

State capitalism rectifies many of these above problems, with the penalty of drastically increased factory costs and much more micromanagement. Unless you're a great power with technology equivalent to the U.K., U.S., and Prussia, you'll want to use state capitalist when starting out, to get some industry going.

As for planned economy, I've never used it (since you only get it if you have a communist government, obviously). But essentially it's a more extreme version of state capitalism where private investment is banned and you'll have to manage your entire economy single-handedly. The biggest problem with this system is micromanagement hell, and once you have hundreds of factories going at once and have to manually build all the railroads yourself, you'll miss capitalism if you're not playing a small nation. That said, it gives you maximum control, allowing to perfectly plan your factory placement for maximum profit, if you don't mind investing massive amounts of time.

Interventionism falls in between these systems, letting you interfere with the free market insofar as subsidising businesses and building railroads, but prohibiting you from actually building factories; the factory cost falls somewhere in between.

In short, the ideal economic policy for a non-industrialized, relatively low-tech nation (in my experience, but there are many alternate paths to success) is to use state capitalism to get their economy going, then use some combination of interventionism/state capitalism as necessary until you're industry is competitive with the industrialized Great Powers. At that point, feel free to use laissez faire and just focus on other parts of the game, and your economy should continue booming. (just be careful; a global recession tends to happen in the 1880s or so when the global economy gets oversupplied as everyone industrializes at the same time)

Now, beyond that, other points:
Education is the most important part of your economy, especially if you aren't starting as a pre-industrialized Great Power. An industrial boom is impossible if your entire population is made up of illiterate peasants. Thus, your priority in the early game is to get the Darwinism invention from culture techs, which boosts your educational efficiency by a whopping 50%, max out your education budget, and NF clergy until they're close to 4% of your nation's population. Doing that I was able to take Ottomans from having less than 10% literacy at game start, to around 90% literacy by 1900.

Resources are key however, as well. If you want to industrialize, you need access to sufficient resources; coal and iron are critically important, and in short supply, in the 1800s (in the 1900s oil and rubber start becoming more important, though). If you don't have some, get some if at all possible - either from your neighbors or from a colony (i.e. by the demand concession or acquire state cbs). Or alternatively, get sphered by a great power so you can access their internal market. Reliably getting stuff from the world market is difficult even as a lower-ranked great power like the Ottomans - doing so as a less powerful nation is even harder. Also, a few years before you start building factories, stockpile machine parts - they can be in really short supply in the early game, where the U.K. is practically the only producer, and all factories require them.

If you're having trouble surviving long enough to do all this, try to get in good with a high-ranked great power like Britain - they will generally defend their spheres of influence well and protect you from all but the strongest foreign threats.

If you have sufficient resources and literacy over 20% and rising rapidly, you should be able to safely start the slow and painful process of industrializing. Switch your NFs from clergy to capitalists and start building. Good luck, and hope I helped!

Hethran basically explained it all ok.

The only thin i want to add that there are more then one road to success.
Me for example why playing Ottomans did thinks differently.

Initially I put education to 100, bureaucracy and army leave at 50%. Used national focus to get clergy first to about 2.5% starting form most populous regions down to about 1/2 smaller, then used foucus to raise clergy to 4% again starting from most populous.

Taxes I put low and med classes to 0, ritch to 100 and tariffs on 100%. Basically that taxed rich to max, why making low classes easier to promote to clergy.
Research vise I went different way, by research RGO improving tech in commerce and industry first, medicine in industry, then military prepare tech to colonization rush. That used military/industrial complex ottomans start with. Then i restore academia and reseach navy first 2 to L 3 to have naval power and competitive navy in time of colonization rush.

Only in 1970 I starting to research my first culture tech and that was imperialism line to get all tech needed for colonization.

That way give me stronger army and navy in critical time of colonization.


That why guides contradict each other because there are more then 1 way to skinn the cat and how good it work depends on your global plan. Each of ways have time of weekness in different areas and your success depends on how well you exploit you strength and cover your weakness.

Researching a few techs will also help you out; depending on what you where you want to go early game. The Commerce tech Market Structure will give you a solid boost to RGOs which should alleviate some fiscal pain. If you have low literacy you'll want to research Ideological Thought and then the Education techs down to Biologism (for the invention Darwinism, which massively boosts your literacy performance). Be careful with low spending on Admin, it'll drop your crime fighting efficiency.

A few more things;
-Never build factories until your average literacy is 40%, and you should probably wait until it's higher than that because POPs can't become craftsmen until they reach that level.
-Don't bother building factories until you have a solid chunk of the commerce techs researched (the second column can be ignored entirely, tax efficiency isn't important at all) as well as a few tiers into the industry techs
-YOUR FACTORIES WILL FAIL IF YOU DON'T RESEARCH COMMERCE! THIS IS IMPORTANT
-Scrap your navy if you start as a power that doesn't need it (Russia, I'm looking at you). Clipper convoys and artillery are insanely expensive early game.
-Boost clergy to 3% in all your states using NFs. Start at the most populous and work your way down. This will both boost immediate RP production and increase literacy gain, which boosts it down the line and will also industrialize you
-I personally don't waste time with Bureau NFs, I just leave the slider on at 85% and you'll get the 1% bureaucrats needed in no time (this number goes up as you pass social reforms, btw)
-Medicine is a GREAT early tech. If you don't have it, don't even think about offensive war or you'll get killed by attrition. It also boosts population growth. The key to a successful Vicky game is having a large population

There's more, but that should suffice for the early game.

Don't be afraid of running the tariff slider to 100% early game. It may seem conterintuitive, but you want your POPs to be poor and discontented in the early game. That way you can pass important social reforms, like Education and Health Care.

PM me if you have any more questions, I'd be glad to help out.

How early should one begin to industrialize? I was China, managed to westernize by 1847, and I immediately built a lot of factories where input RGOs were available. After completion it took less than two years to fill them all with craftsmen (no clerks, because my literacy was less than 10%), and yet they all seemed to have profits without any subsidies.

Besides what constitues a profitable industry? As Brazil, I built a luxury clothes factory early in the game and once it had enough workers, it was earning profit.

Does profit of factories add any money to the treasury? Or are those rich factories just making my POPs rich, who now pay slightly more taxes to add to the treasury?

only make pop richer. As very populated region, like 2-5 mil/region some china and india have can full up a few factories rather fast.
In addition, if there are unemployed RGO workers they can fill factories even on low literacy.

Will Steel said:

How early should one begin to industrialize? I was China, managed to westernize by 1847, and I immediately built a lot of factories where input RGOs were available. After completion it took less than two years to fill them all with craftsmen (no clerks, because my literacy was less than 10%), and yet they all seemed to have profits without any subsidies.

Click to expand...

As early as possible. Generally you want to start building factory right away (if you're civilized). The main limitation is what you've researched and what inputs you have. If you have access to coal Glass/Wine/Liquor is a good one - easily profitable and grain and fruit are not usually a problem. Without coal it's harder - furniture can work with a bit of clerks or efficiency tech. If you don't have access to anything you might want to build a cheap cement factory to start accumulating craftsmen while you're acquiring coal. Textile line is usually hopeless unless you have access dye which only few nations do. Dye seems to be in a chronic short supply, so you won't get any from the world market.

Will Steel said:

Besides what constitues a profitable industry? As Brazil, I built a luxury clothes factory early in the game and once it had enough workers, it was earning profit.

Click to expand...

If craftsmen are getting reasonable paid (70% of life needs is ok)

Will Steel said:

Does profit of factories add any money to the treasury? Or are those rich factories just making my POPs rich, who now pay slightly more taxes to add to the treasury?

Click to expand...

Not directly, only through taxation of pops

Thanks.

It seems, that to start an industrial base, one would also have to construct a steel mill together with a cement and machine parts factory...so as to provide cheaper goods for building and maintaining every other factory. Once the nations start to industrialize, that becomes a profitable export as well.

I just spotted, some of my craftsmen in a steamer shipyard were now earning luxury goods, even though the factory was in loss. Perhaps subsidies paid all their wages while lower taxes allowed them to improve theri conditions. Although after purchasing luxury goods some of them have instead went on to join the bureaucracy rather than work in factories, costing me precious workforce.

Still, they are only 10% litrate, which makes me wonder how they became government officials. 4% clergy in all my industrial provinces, yet only a small increase in literacy every month despite having all education reforms.

Most nations don't generate consistent high demand on steel, cement, machine parts or steamers and as result demand on those goods is usually very unstable, so those factories often oscillate between high profits and big losses (the lower you are in the rank the more is the downside). Besides, steel is hard to make profitable in the early game even if you have steady demand. So my preference is to import those goods and focus on drinks industry early on and then on other consumer goods. Though cement is a good starter factory - cheap and quick to build. As your industry grows it becomes worth it to build small steel and machine factories to meet your internal demand, if you can't get those goods from the world market you might have to do it sooner, it's more common situation with machine parts than with other goods.

What you see with steamer craftsmen, there was probably a boom and they've made a lot of money and then it went bust. I wouldn't worry about craftsmen promotion into other pop types, for the most of the games farmers and labourers are by far the biggest group, so it's much more important to maximize inflow to craftsmen rather then minimize the outflow. And there are no requirements to be literate for the bureaucrats