The importance of money

[jju_57]

Regarding the scarcity of tungsten you can still see it in game without representing money but you cannot appreciate how scarce it is as there is no value attached. In your framework 1 gram of tungsten over a stockpile of 10000000000000 tons has the same value of 1 gram of tungsten over a stockpile of 1 kg. In your framework tungsten is fixed.

With money I can compare 1 unit of coal with one unit of oil and if oil is getting scarce then I can appreciate this change. For example I can see that 1 coal is worth $1 and 1 oil is worth $2. After some months my stockpile of oil is much lower so the oil price is 40$. In other terms the ratio coal to oil has moved from 1/2 to 1/40. In a fixed system I cannot see that. I can see only that I'm running out of oil.

Here is the simple and easy way to refute this whole concept.

He says that as tungsten gets scare it's cost should go way up. So under this plan the cost of the Hurricane would skyrocket.

Here is why this is silly and a complete logical fallacy. The remaining tungsten would be taken by the government and used to make those planes. The other non-military stuff would do without. This was called rationing and used by all governments during the war. It really is lunacy to think the cost of the Hurricane would go up because the supply of tungsten gets low. Same for oil. The military just TAKES it for it's use.

EDIT: Here is a scenario on why money makes no sense for war items.

It is 1938 and as UK I have $100, import 100 tungsten and make 10 Hurricanes. Each Hurricane costs $5 and uses 2 tungsten. So only 20 tungsten is consumed by the military.

It is now 1940 and for whatever reason (U-boats, supplier of tungsten is now in Axis) I can only import 50 tungsten. But I want to build 25 Hurricanes for the war. But according to Cardus the price of the Hurricane has gone up, to say $15. So I have the raw material to make the 25 planes but can no longer afford to buy them. In fact I can't even buy the 10 I did before the war started.

This is why it will never work.

 

[Secret Master]

Please note that if you have currency for trades (as far as I remember you agreed on that) than you need to asses the relative value of goods/resources otherwise you cannot decide if you are making a loss or a gain (1) or if it would be better for you to buy/sell something else (2) and you cannot decide what is best for you to produce (3). For all of those 3 things you need money to make your life EASIER.

When conducting international trade, I don't need the game to assess relative value of goods or services. There are only a few things that matter:

1) Can I actually initiate and maintain the trade? If not, prices do not matter, because no matter how much money I throw at the problem, the goods cannot be picked up and delivered to me.

2) What price is the seller charging me? This isn't dictated by the game engine in a world market way; it is dictated by what party A thinks they can get out of party B. If the UK is willing to buy my tungsten for $20 a unit, I take the offer. If the US comes along and offers me $30 a unit, I can either sell to the US or I can maintain my trade with Britain for foreign policy reasons. This might be particularly important when it comes to factions, dominions, and neutrals. Sweden might be tempted to take Germany's offer for iron even if the Brits have a better offer because Sweden fears Germany more. Canada might be willing to trade with Britain at lower prices than the US just because they are a dominion. You might end up with the UK paying above the perceived market value for Portugal's tungsten because Portugal doesn't fear Germany enough to take her offer. What matters here isn't just "the world market has determined price X based on global supply and demand, so you have to pay it" but what two parties actually to do.

3) A third consideration is that instead of paying cash for goods, bartering may also occur. In this case, the relative monetary value of two goods on the global market isn't nearly as important as what the two countries are willing to trade. In particular, I can see Germany and Italy conducting barter trades with each other that have no relation to the value of those goods on the world market because neither country can trade with most of the world.

Regarding consumption and wages, as I said, if tungsten or food is low in your system the "price"/"value" is fixed and it doesn't change in my system less the tungsten/food higher is the price. So, for example, if you currently earn 10,000 $ a month but there is a famine in your country, with your system 1kg of bread would cost always 4$ (and you need to add an extra layer which is rationing or your system is just crap) with my system the cost of bread can increase to 10,000 $ so in one month you can buy only 1 kg of bread.

Can you see as it's just way much simpler?

PS
We are discussing about a concept (money) that was created long, long time ago not to add complexity but to make things easier. I understand that many don't see the point but my feeling is that we are discussing about the utility of the wheel.

Are we talking about the real world or an HOI game? I am fully aware of the importance of currency in the history of trade and economics. I'm not an uneducated troll. But HOI3 is not the real world in all the ways I mentioned before. I don't anticipate some of these key mechanics changing in HOI4.

But here's the decision tree for your example:

Option A: No prices for domestic goods.

"Glorious Leader, there is a famine in the country."

"What's the problem?"

"Bread is in short supply. The people are starving. Dissent is increasing 0.05 a day. If we do not act, the People's Republic of Secret Masterland will collapse into anarchy!"

"Okay, increase consumer goods production to cover the loss. Send more people to work in the fields, or change our rationing to solve the problem."

"Yes, Glorious Leader."

Option B: With prices for domestic goods

"Glorious Leader, there is a famine in the country."

"What's the problem?"

"Bread is in short supply. The cost has risen to $10,000 per kilogram. The people are starving. Dissent is increasing 0.05 a day. If we do not act, the People's Republic of Secret Masterland will collapse into anarchy!"

"Okay, increase consumer goods production to cover the loss. Send more people to work in the fields, or change our rationing to solve the problem. Move some money around if necessary."

"Yes, Glorious Leader."

Alright, so which was easier? I submit to you that option B provided no added benefit to the game experience. It literally took longer to write because additional characters were involved. I submit that instead of making things simpler, it actually required more effort to wrestle with.

Edit:
I think you are going about it the wrong way.
The WW2 leaders ( and the player ) will ask: I want to build 1000 sherman tanks, show me what resources I need to aquire.
You instead ask: How can I most effectivly use the resources I have to produce products that are demanded on the "world market" and of high value and will net me profit. That is an interesting question, but it has little to do with a world war 2 game and more fitting in a logistics/industry simulation game where the goal is to build a profitable bussiness.

That's basically what I said earlier. It's not Vic2 where I'm trying to maximize profitability across 30 industries on a volatile world market. If I have determined that I need lots of Shermans to win the war, then I will find a way to build them or I am really screwed because those resources do not exist at all, in which the game is probably lost.

 

[Cardus]

When conducting international trade, I don't need the game to assess relative value of goods or services. There are only a few things that matter:

1) Can I actually initiate and maintain the trade? If not, prices do not matter, because no matter how much money I throw at the problem, the goods cannot be picked up and delivered to me.

2) What price is the seller charging me? This isn't dictated by the game engine in a world market way; it is dictated by what party A thinks they can get out of party B. If the UK is willing to buy my tungsten for $20 a unit, I take the offer. If the US comes along and offers me $30 a unit, I can either sell to the US or I can maintain my trade with Britain for foreign policy reasons. This might be particularly important when it comes to factions, dominions, and neutrals. Sweden might be tempted to take Germany's offer for iron even if the Brits have a better offer because Sweden fears Germany more. Canada might be willing to trade with Britain at lower prices than the US just because they are a dominion. You might end up with the UK paying above the perceived market value for Portugal's tungsten because Portugal doesn't fear Germany enough to take her offer. What matters here isn't just "the world market has determined price X based on global supply and demand, so you have to pay it" but what two parties actually to do.

Sure but
A) You don't know if you are making a profit or a loss. Maybe you want to subsidize your partner but there is a particular reason to hide that to yourself?
B) Maybe if you know the relative price of goods you can choose a different trade because that decision is way better for you

3) A third consideration is that instead of paying cash for goods, bartering may also occur. In this case, the relative monetary value of two goods on the global market isn't nearly as important as what the two countries are willing to trade. In particular, I can see Germany and Italy conducting barter trades with each other that have no relation to the value of those goods on the world market because neither country can trade with most of the world.

Yes, barter can be still an option.

Are we talking about the real world or an HOI game? I am fully aware of the importance of currency in the history of trade and economics. I'm not an uneducated troll. But HOI3 is not the real world in all the ways I mentioned before. I don't anticipate some of these key mechanics changing in HOI4.

But here's the decision tree for your example:

Option A: No prices for domestic goods.

Option B: With prices for domestic goods

Alright, so which was easier? I submit to you that option B provided no added benefit to the game experience. It literally took longer to write because additional characters were involved. I submit that instead of making things simpler, it actually required more effort to wrestle with.

I would say, instead,
Option A: No prices for domestic goods
"Glorious Leader, there is a famine in the country."
How serious it is?
"I don't know, it's a famine".

Option B: Prices for domestic goods
"Glorious Leader, there is a famine in the country."
How serious it is?
"A lot: the price of bread from 4$ is now 10,000$".

That's basically what I said earlier. It's not Vic2 where I'm trying to maximize profitability across 30 industries on a volatile world market. If I have determined that I need lots of Shermans to win the war, then I will find a way to build them or I am really screwed because those resources do not exist at all, in which the game is probably lost.

Exactly you would try to get the number of Shermans you need given the constraints you have.
For example you can decide to stop subsidizing your partners and/or to agree a better trade and/or to sell some aeroplanes (a production in which you are more efficient) and with the proceeds to buy the Shermans.

 

[jju_57]

Option B: Prices for domestic goods
"Glorious Leader, there is a famine in the country."
How serious it is?
"A lot: the price of bread from 4$ is now 10,000$".

Glorious Leader: How can that be? We have price controls so the price will always be $4 with or without bread being on the shelves.

Subordinate: "Oh right money is useless in this case."

 

[Secret Master]

I would say, instead,
Option A: No prices for domestic goods
"Glorious Leader, there is a famine in the country."
How serious it is?
"I don't know, it's a famine".

But you do know how serious it is. It generates 0.05 dissent a day. Every full point of dissent you have accumulated results in a 1% loss in IC and resource production efficiency, along with a 1% loss in combat fighting efficiency. Dissent can also increase revolt risk and cause a loss of support in the ruling party.

If you take out existing mechanics, then it becomes more mysterious. But HOI3 has all the mechanics you need to know this stuff. Adding money wouldn't help.

Option B: Prices for domestic goods
"Glorious Leader, there is a famine in the country."
How serious it is?
"A lot: the price of bread from 4$ is now 10,000$".

"But how much dissent does that price cause?"

"0.05 dissent added per day."

"Then why didn't you just say that in the first place? You're fired!"

 

[Cardus]

But you do know how serious it is. It generates 0.05 dissent a day. Every full point of dissent you have accumulated results in a 1% loss in IC and resource production efficiency, along with a 1% loss in combat fighting efficiency. Dissent can also increase revolt risk and cause a loss of support in the ruling party.

If you take out existing mechanics, then it becomes more mysterious. But HOI3 has all the mechanics you need to know this stuff. Adding money wouldn't help.

True but if you have a budget then you can asses the loss e.g. you are losing $1m (=50 Shermans) a day.

 

[Secret Master]

True but if you have a budget then you can asses the loss e.g. you are loosing $1m (=50 Shermans) a day.

Which I should be able to assess using tooltips on production lines.

Unless podcat has suddenly become a moron and has decided production lines won't have tooltips telling you their current rate of production and all modifiers on it.

 

[jju_57]

True but if you have a budget

See it's Excel the WW2 spreadsheet game for accountants. :rofl:

 

[Cardus]

Which I should be able to assess using tooltips on production lines.

Unless podcat has suddenly become a moron and has decided production lines won't have tooltips telling you their current rate of production and all modifiers on it.

Sure but then you need to do the math by yourself. As I said money can't replace goods but tells you immediately with a single figure what you need to know.

 

[Porkman]

True but if you have a budget then you can asses the loss e.g. you are loosing $1m (=50 Shermans) a day.

"losing," not "loosing." You have an English flag for an avatar, represent!

 

[Cardus]

"losing," not "loosing." You have an English flag for an avatar, represent!

Amended. Thank you for the correction

PS
The avatar is the flag of the Republic of Genoa which England asked to borrow to get the immunity vs Muslim pirates.

 

[keynes2.0]

True but if you have a budget then you can asses the loss e.g. you are losing $1m (=50 Shermans) a day.

Which is a horribly ahistorical way of looking at things.

 

[Cardus]

Which is a horribly ahistorical way of looking at things.

That is the WAY to look at things as what you get from the Government is a budget. The final report is how about much money was spent not the amount of resources used (e.g. 4000 IC, 70M energy and so on). One figure e.g. 4 trillion tells you everything. Then, if you will, you can drill down into the data and see the equivalence (e.g. 70M energy = 10 billion, 30k Shermans=20 billion, etc.)

 

[Olfert Fischer]

See it's Excel the WW2 spreadsheet game for accountants. :rofl:

Sounds like a cool game - where/when can I get it ?

 

[Dark Jakkaru]

Sounds like a cool game - where/when can I get it ?

Spreadsheet Hero
Available on all Excel Programs

 

[Poh]

As above the concept is ok (with some refinement) but please note that with your proposal you have money that you call IC. Why you don't want to have money that you call money?

Exactly because of that. Why would I want money for the sake of money? I have just posted an example of how it may be possible to calculate debt based on the already existing "valuta" in the game. Why do i need another which essential doesnt add anything to the game?
HoI is about industrial output and ressource constraints on industrial output and how this effect the war. Germany choose to built the Tiger I instead of the Tiger(P) because the chassis of the Tiger(P) used too much cobber that was also needed in other productions, not because cobber was expensive, but because they had a limited supply of cobber. Its a matter of how much ressource do i have, how much industrial capacity do i have, how do i optimise my production best. Money just doesnt exist in the equation.
From what i gather i agree with SM

 

[frolix42]

1) Can I actually initiate and maintain the trade? If not, prices do not matter, because no matter how much money I throw at the problem, the goods cannot be picked up and delivered to me.

This should be reflected in the price. Practically any resource can be obtained for a cost (for example cargo submarines importing rubber from Japan).

A prerequisite to having prices set for resources would be each nation has it's own prices for every resource. Victoria 2 didn't do that, or at least didn't do it rationally. Perhaps it will happen in future Paradox games, but obviously not HoI4.

 

[Poh]

This should be reflected in the price. Practically any resource can be obtained for a cost (for example cargo submarines importing rubber from Japan).

That cost of transports/subtransports can be seen as IC + Ressources, there is no need to include money here. Its a matter of: Is the trade for Ressource Z worth the cost in ICdays and X+Y Ressources needed to produce the required equipment to sustain the trade.

 

[Axe99]

The concept is ok (with some refinement) but please note that with your proposal you have money that you call IC. Why you don't want to have money that you call money?

Don't get me wrong, I agree with everything you're saying, and appreciate the impact it has from a grand strategy perspective. One of the things behind my proposal is that if you actually reflect the circular flow of resources using IC instead of money, it would become clear (in gameplay, not in forum posts) why the distinction between the two matters. At the moment (well, in HoI3), as far as I can see it, because of the variable naming of two resources (money for trade, IC for domestic production, unless it's traded) it obscures the issues with the model.

I'm fairly relaxed that we'll have a reasonably enough abstracted model for a short period of time for it to be a very enjoyable and 'close enough that only a handful of people will notice it' historically plausible game without something explicitly called 'money'. It will be a less strategic game for it, but the 'pro money' camp are in a minority even in this thread, and I have no doubt that the broader community is more interested in the panzers than juggling the resources and economy to make sure they show up on the battlefield, so I'll stop my rabbiting on here. Big props to Frolix42 and you for your arguments though, am a fan. Totally understand the interest in people not wanting it to get overly complex on that front as well - I think it would be possible to have a system that was nearly as straightforward as that in HoI but did a better job of modelling the actual flow of resources, but that's by no means guaranteed, and once people call something 'money', everyone seems to get excited .

 

[Secret Master]

This should be reflected in the price. Practically any resource can be obtained for a cost (for example cargo submarines importing rubber from Japan).

A prerequisite to having prices set for resources would be each nation has it's own prices for every resource. Victoria 2 didn't do that, or at least didn't do it rationally. Perhaps it will happen in future Paradox games, but obviously not HoI4.

I'm sorry, but I don't agree. Under your scheme, Britain could get around having its merchant marine sunk by spending extra pounds sterling. That's just not acceptable.

In broad economic terms, I understand where you are coming from. But this is an HOI game. What you propose could literally open up a floodgate of abuse.

"Aha, my evil plan is working. We've sunk most of Britain's merchant fleet. Soon, we will take over the world!"

"But Glorious Leader, Britain is paying extra for resources."

"So?"

"So they are getting some even though there are no merchant ships left."

"I thought you said her shipyards were already too busy to build any more ships."

"I did. But because Britain is paying $1 million per unit of tungsten, she still gets some from Portugal."

"Where is this money coming from?"

"They get $1 million wired to them per day from US banks. But since its a wire transaction and not cash, we can't sink any ships carrying it."

"Rats! Foiled again!"

In this case I know I'm right; it's simpler and more balanced to just say, "No land connection? No convoys? No service." Otherwise, we either end up with horrible abuse, or spend hours managing Submarine FedEx Store.

Note that podcat already said something about production slowing and not stopping if you lack certain rarer goods. So I'm assuming that these smaller amounts you could get by either sending a submarine or spending extra money are covered by this mechanic.