LF has three main problems:
(1) It is hard to industrialize with LF, since capitalists will build more or less random factories and not the ones that are really profitable at the time.
(2) The tendency to improve factories instead of building new ones creates an industry with low diverstiy, leading to raw material shortages unless you can secure a sphere of influence and / or enough prestige.
(3) Tarrifs are very, very important under LF. Prevent tariffs at all cost unless you have a large and well situated industry. Otherwise subside your factories to increase industrial growth.
I remember a game as Argentinia where I had -50% tariffs to hold my factories afloat, but after my capis had enough money and a few other factories were build, I could go back to -10% and still made a lot of profit from taxes.
LF can be good during the early game. If you have a few profitable factories and maybe some techs to lower the required ressource input, the throughput bonus from LF will turn your economy into an effective powerhorse.
(1) It is hard to industrialize with LF, since capitalists will build more or less random factories and not the ones that are really profitable at the time.
(2) The tendency to improve factories instead of building new ones creates an industry with low diverstiy, leading to raw material shortages unless you can secure a sphere of influence and / or enough prestige.
(3) Tarrifs are very, very important under LF. Prevent tariffs at all cost unless you have a large and well situated industry. Otherwise subside your factories to increase industrial growth.
I remember a game as Argentinia where I had -50% tariffs to hold my factories afloat, but after my capis had enough money and a few other factories were build, I could go back to -10% and still made a lot of profit from taxes.
LF can be good during the early game. If you have a few profitable factories and maybe some techs to lower the required ressource input, the throughput bonus from LF will turn your economy into an effective powerhorse.