Well in the new model everyone gets money for what its doing so i imagine that the "aristos" are getting their easy-earned money gained from RGOs just like capitalist who gained money from their factories?????
Developer Diary 23 – Gold
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Well in the new model everyone gets money for what its doing so i imagine that the "aristos" are getting their easy-earned money gained from RGOs just like capitalist who gained money from their factories?????
I am a bachelors and masters graduate of economics and I totally approve of Paradox's modelling decisions. KISS.
+1
Seriously. We (economists) might annoy a bit, but game design comes first and foremost.
+1+1
Seriously. We (economists) might annoy a bit, but game design comes first and foremost.
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Sorry to come late to the point, but I just noticed this and the absurdity of it struck me forcibly.
1) If gold is a commodity dug from the ground that can be traded (like any other) and held as an "abstracted stockpile of a good" - namely gold, how does this differ from what you suggest? The fact that is called "pounds" and/or "money" is completely immaterial.
2) If thid gold is used in the game as a unit of exchange, a measure of relative worth and a store of value, if it is not "money", what is it?
It seems to me that you have some very specific, probably current-technical, meaning of the word "money" that the rest of us are not assuming. The traits you ascribe to it are linked more to the manipulation of distinct currencies and credit economies that generate the sort of illusion games played by governments and speculators to gull the credulous (to reduce real wages and prices with minimised effects on militancy, for example - the inability to do which the Greek government is apparently rueing at this very moment).
Accept for a moment a more historical definition of money - one that applies where metal and specie are closely linked - and the proposed schema for Vic2 looks like a very acceptable astraction of a "semi-real" economy, to me.
you totally misinterpreted my argument. Of course, gold plays the role of money in Vicy 2 according to the DD. What I was questioning is the decision to introduce some sort of money at all. I think we would have been fine without it. You just don't need money as a means of transaction in a computer game where every transaction is virtual anyway, just prices. The particular flaw of the concept presented would be that only nations with gold mines will be able to generate money but maybe that's not to ahistorical after all even though I believe that fiat money played an ever increasing role during the Victorian era.
Back during the gold standard, how would nations who didn't have gold increase the amount of money in the system, then?
As a player who likes games where you build a nation or empire, it makes sense to me to have money.
Are you asking why a money supply needs to be modeled as opposed to money just appearing and disappearing?
If it results in interesting economic challenges for the player to face in some way that makes vague (not accurate) economic sense, then I would say go for it. I think you're criticizing the decision too early - you haven't seen whether the game it's a part of is fun or not.
For example by lowering the material value of their coins. I cannot tell you the technical details but it was very common to add alternative materials of lower value to make more coins from the same amount of silver or gold. My basic argument is that nations always had a certain potential to raise money supply without backing it up with a proportional amount of precious metals. While this was already true in Roman times it was just the more true during the Victorian era, when fiat money (not necessarily through national banks, which were indeed established quite late) became increasingly relevant. I hope you guys can finally accept my critique of the system. However, this doesn't mean that the implemented system cannot constitute a reasonable abstraction of reality and work out rather well gameplay-wise.
And it seems that you misinterpreted my criticism of your argument; I realise that you were asking "why have 'money' at all, why not have just commodities with exchange rates between them?" My question in reply was "is not gold simply just such a commodity?". Think of the Vic2 system as having lots of commodities, including gold, being exchanged one for the other at varying exchange rates. "Reserves" are held as stockpiles of goods - generally of gold (it's convenient, and of little use for anything else). It seems to me that this is precisely the system that you were arguing for.
Now, we have a commodity, gold, that is used (together, in principle, with other goods) as a medium of exchange - and it is also used (due to the notation standards of the game) as a measure of value and also (since it is not needed for anything else, specifically) as a store of value. If there exists a commodity that is doing these things, is that not, de facto, "money"?
Granted there is no modelling of fiat money, debasement etc. - but since they are only the stuff of fiscal games that do not affect real values, are they required, or could their effect be better represented by other mechanisms? I would suggest that having financial "technologies" that can reduce the militancy caused by falling wages and defaulted repayments would represent these "economic levers" more clearly and simply than actually modelling them directly would.
Just to clear up a little confusion on this topic, England, as well as just about every nation, had a fractional Reserve Banking System, based on either a Gold or Silver Standard throughout this era. For the Gold Standard, Deflation was the main problem, not inflation. In the US, a long battle took place between the advocates of the Gold Standard, which was deflationary and favoured the Capitalists, and the Silver Standard, which was slightly inflationary at the time and favoured entrepreneurs. This struggle was settled by an increase in the Gold Supply which temporarily ended its deflationary spiral.
This seems like it should be obvious, but to point it out anyhow, Gold is not consumed, except insignificantly, when turned into gold reserves. It still exists the next year and the year after that. Gold production is only necesary to expand the gold reserve, not to maintain it.
To answer the other question. The way countries without Gold production increase their stock of Gold is through trade. They make something and sell it to a country which has, or can get, gold, while not buying from other countries. In overly simple terms, a lack of gold reserves lowers the money supply in the country, which enters a deflationary slump. Since gold can purchase more and more in this country, other nations buy things from the first at relatively, to them, cheap prices. At the same time, the first country finds imports to be relatively expensive and doesn't import (as many) things. The effect is that the net exports bring gold into the country, which reverses the deflationary effects until relative prices approaches relative equilibrium.
This seems like it should be obvious, but to point it out anyhow, Gold is not consumed, except insignificantly, when turned into gold reserves. It still exists the next year and the year after that. Gold production is only necesary to expand the gold reserve, not to maintain it.
To answer the other question. The way countries without Gold production increase their stock of Gold is through trade. They make something and sell it to a country which has, or can get, gold, while not buying from other countries. In overly simple terms, a lack of gold reserves lowers the money supply in the country, which enters a deflationary slump. Since gold can purchase more and more in this country, other nations buy things from the first at relatively, to them, cheap prices. At the same time, the first country finds imports to be relatively expensive and doesn't import (as many) things. The effect is that the net exports bring gold into the country, which reverses the deflationary effects until relative prices approaches relative equilibrium.
Thanks, morganja, for a clear, concise explanation. It would seem to me, though, that the transient, balacing processes that you describe arise more due to the existence of local markets than to local currencies, if all currencies adhere to a precious metal standard, is that not so? In which case King's preference to include local markets before local currencies is vindicated?
I don't know if the comment has been made, but does it seem like money is going to have less utility in Vicky 2 over Vicky? Or rather, you won't need nearly as much, because you aren't using it in the creation of factories, railroads, units, et cetera?
Is the only purpose of treasury money going to be paying wages?
Is the only purpose of treasury money going to be paying wages?
and buying goods, and propping up industry and paying things like unemployment benefits. However, you are right we are making have a load of money of bank not as useful as it used to be.
This got me thinking. Is bureaucracy efficiency linked to tax efficiency?
I'd imagine it would be, and tech/inventions then modifying the tax efficiency (as tax assessing bureaucrats etc. get more tools to their disposal)
In roman times it caused previously unheard of inflation (and it was terrible inflation when we look at gold based currencies). It also had the same effect later on in different countries. When you start "coin-shaving" people just loose confidence in the government (that way we can explain it for both sides of money argument, the precious metals side and credit theory side). And I must say I quite don't understand you point.
For the part of fractional reserves I was at first also disappointed, but when I started to think about it, I realized how much more aspects you'd have to add to the game just to make it somehow work. And I don't mean realistic function.
The part of not needing money is for me total misinterpretation of all. I grant that you can have barter economy with prices just showing relative exchange rate between goods, but to what end? How to make savings? In goods? How to get credit? In goods? Repaying later with goods? How would you pay salary to the soldiers or teachers? In goods? And which goods? If you would select one specific type you would just introduce another type of money. Not gold, but f.e. salt. The result is just the same. You get money. The next logical step is that state would require steady supply of salt to be able to pay the army/teachers. So it would be easier to demand taxes paid in salt and that will just make salt universally accepted currency, since everyone would like to have it to pay taxes. I see your system as much more complicated to design and balance and in the end with the same effects as the current one.
From DD#5 (my bolding):
So the amount of bureaucrats (up to a point) is what matters for tax collection. Presumably tech will once again also have an effect, though.