Just quickly injecting myself in here to remind everyone that there is going to be a panel about the economy of Vicky 3 in roughly 5:30h from now:
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Marginal Theory of Value
- Thread starter halbort
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We are simply entering the discussion between the left and the right. The reduction to supply and demand, for example, does not explain the success of welfare states like Germany.
But that's not even the point. The Victoria model more or less simulates the epoch. That's enough for the game. The alternative would quickly lead to contradictions in the absence of a micro-level. There are very few professional groups and the needs are fixed. Especially since the shortage of labor is simulated anyway.
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Please Paradox, of all the people you have to ignore when making this game, economists should be at the top of the list.
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I'm yet to see much evidence of this. As a aside, for anyone interested, there is a thoroughly enjoyable skewering of mainstream economics to be found here: https://www.goodreads.com/book/show/6691186-how-markets-fail
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You just have to say, of course, that this era is much closer to our time and this type of simulation automatically becomes political. It then depends on how one explains the historical development. Either you see increasing prosperity as a result of supply and demand, in combination with technical progress. Or one takes a different point of view, which gives the labor disputes and the threat of revolution a much stronger role. The developers will have read more left historians and also come from a social democratic country. Hence the economic system is as it is. which is likely to excite economic liberals among the players less.
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The fact that history doesn't support your claims should make you at least stop and consider the "widely accepted" theories you're spouting. Marginal tehory of value is highly political idea that's very hard to empirically falsify - so much so that it's iffy to even call it a theory. Supply and demand is another matter that doesn't interact with value theory in the way you seem to think it does. Adam Smith was the first to put forth the labour theory of value, and he also describes the law of supply and demand in the very same book.
You don't have to be a Marxist (though for the sake of full disclousure, I am) to at least acknowledge the highly politicized nature of modern economic theory. Some days I feel like modern econ is the equivilant of gender studies, but for white collar little know-it-alls who don't have to contend with the realities of the shop floor. I work in a factory in a country of growing industry where the bosses and unions alike complain about labour shortage of young industrial workers. How does this labour shortage affect the wages of the young workers entering the industry? In no way. You work for low wages with little to no benefits and the bosses are toiling day and night to tear to shreds every right and protection the unions have fought for. Then they call you lazy and unmotivated if you try to fight back, and threaten to shut down the factory or bring in foreign labour they can exploit even more.
The fact that programmers are harder to replace with desperate foreign labour (the owners tend to have very little idea of what the programmers even do in a concrete sense) does indeed give them more bargaining power to set their wages in comparion to factory workers or carpenters. But this IMO has less to do with the ability of the programmer to do something unique than it has with the inability of the owners to train new programmers to do the job. I konw a coder who makes a nice wage, and you coudln't pay hiim enough to do my job. Good guy, nothing against him, but it doesn't go like you seem to think it does.
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That can certainly be falsified, even if only indirectly. According to the logic, states with a welfare state and strong trade unions must have major economic problems, as they lead to an "unnatural" distribution of work. But this is not the case. The theory simply negates bargaining power in the relationship between employer and employee. The debates about the minimum wage and the impact of unemployment insurance are fine examples of how empiricism is ignored and the same posutlate continues to be repeated.
Yes, you don't have to be a Marxist to contradict here. It is also not as if the new mainstream has prevailed against the Keynsians from a certain point in time due to better predictive power. That happened as a result of political decisions. And it is not as if in today's crisis one is not under pressure to revise a number of postulates. In practice they are now forced to use, if not madxism, at least Keynisianism.
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Look at Spain ans France. Unemployment through the roof. Also, Keynesians definitely believe in marginalism.
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I think this is very right. I am no fan of interventionist economic models but it we go ahead and retain Thomas Sowell to be head game design director, we might end up with an excessively complex game. Edit: by that I mean, we can design one AI organism, viz, "the economy", but in real life countless people think for themselves so a in-game mechanic that would translate into that would see every pop having its own adaptive AI to decide what they want in any given moment. The liberty to do it (or lack of it) would be at the core of the different game mechanjcs. I guess that is impossible from a programming point of view, the main reason whynI think the OP may be right but that is unfeasible for a game like this. So we are stuck with a collective group of economic agents being directed by one "knows-whats-best" entity: in the game it is the AI, thats why game designers go towards marxism when developing economic mechanics. The sad thing is, in real life that same dirigist entity translate into guys in uniform, in varied lenghts of moustache, who shoot and imprison ideological enemies of the state to acheive their own vision of a "perfect world".
Huh. Leave it to a game to be the only place where marxism actually works!
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I am a bit confused by the discourse over marxism, how would Victoria economic system be based on Marx's theory?
Countries with social systems would have to do worse in principle and the introduction of the minimum wage would again cost massive jobs. Which, strangely enough, did not happen in relation to Germany, despite predictions from the usual suspects. Oh wonder, the sector was forced to invest in modernization and the higher wages stimulated demand which created new jobs. Somebody has to buy the goods after all.
I think LTV is better for the time period for a couple of reasons. First of all, the main theory about international trade in the period is from David Ricardo - said theory actually justified some countries specializing in some goods (Brazil with coffee, for example). The works of Stuart Mill took some time to become relevant (he was even "accused" of being socialist). Marginal theory is even more problematic when it comes to countries that, at the time, still had slavery. It's problematic even to countries that were still agrarian (80% of the world at the time, I guess?), specially when the economic growth was a matter of how much land people were able to incorporate.
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A lot of economists believe minimum wage won't really cut jobs because there is an oligopoly among corporations. Oligopoly means wages are lower than the true free market value.
I am not really right wing. I am center left but against Marxism.
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But haven't most of Marx's predictions come false. Everyone's standard of living has risen drastically since 1850. Also, the majority of the lower class people is more interested in screwing minorities than bettering themselves. So, saying all struggle is class struggle is deifnitey false.
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Is that supposed to make neoliberal economic junk come true?
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I think they have a better hit rate. Abolishing aparteid in SA led to a ton of economic growth as did liberalization in India. Both in correspondence with theory.
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