Victoria II and Economic accuracy

[AmpsterMan]

Heh thanks. This game has so many moving parts; isolating the issues are difficult at times.

The year is 1893. Oil has just been discovered not long ago and Rubber shouldn't be far behind. I think there is a shortage of Coal because my coal dependent industries are all struggling and I am 3rd rank behind UK and NGF.

Do you have any idea what might be causing the disappearance of savings though? It's pretty massive

 

[Nordic Sage]

Throwing out the existing WM and replacing it with a system of interlocking local markets will result in an even more complex system, and another game venturing into the unknown - likely resulting in a mass of new systemic problems that will only become clear 2-3 expansions into the game's life cycle, and which are likely also too fundamental to fix prior to a sequel.

I have learnt a lot from this thread, you and other commenters seems too know a lot about the economic mechanics.

In a hypothetical Victoria 3 game, would it be possible to simulate transport costs even if there is just one world market? The base price is the same for a good everywhere but a distance modifier changes the price paid. Like you have a number of zones in the world and, e.g. if you play as an European state grain from Russia would be the base cost but grain from the US would be more expensive (and thus not imported) until new technology reduces the transport modifier.
Since money should not just disappear maybe it would be possible to have a (highly abstract) transport sector that is owned by capitalist which makes money on the transports costs.

Concerning monetary issues, as I understand you currency could, as a solution, be automatically injected in the game in relation to the growth of the world economy? E.g. every central bank "magically" recieves currency in proportion to the national economy, though the central banks would actually have to lend money to capitalists, right?

 

[KevinG]

I never noticed this thread until today, but I've made several posts about huge differences in the economy of other human/ai countries and how it affects the country you're playing as. My conclusions matched matched up almost exactly with whats been posted here.


I do have one question about the national bank though. Is it correct to assume that money thats gets put in there is taken out of circulation for all intents and purposes? I play the game without ever going into debt, and it seems like my capis just pour endless amounts of money into it and there's nothing I can do to take that money out without going into massive debt.

 

[iloathecapcha]

Would a hard code edit adding a modifier subtracting money from national banks and distributing it to the respective national treasuries work?

 

[WankoStankins]

Victoria 3 should have a system like EU4 for trading. But let shit go multiple directions ofc. Make blockades actually work etc.

 

[Sebastian Jarl]

Victoria 3 should have a system like EU4 for trading. But let **** go multiple directions ofc. Make blockades actually work etc.

I don't quite understand what you mean by this. EU4 doesn't really have a system for trading - it has a system for deciding who gets the profit of trading that is assumed to take place. If you want trade regions and for trade to flow from one region to the other, I agree.
---

I believe what Victoria needs is to make all pops buy/sell their goods to/from merchants. These merchants will have one stockpile per nation in each trade region*, with an import-export quota in place determined by the number level of ports and railroads controlled by the nation, and potentially also by technology and the number of merchants present in the region. Each tick the merchants will use their import-export quota to trade with each other in the way that brings them the most profit. (Exploiting the difference in prices between their local market and the world market to make the most money. Preferably taking tariffs into account.) Merchants in the same region can trade with each other without using the import-export quota (so that among other reasons, landlocked uncivilized nations are still able to trade).

Complexity can be added onto the system by:

• Making trading "cost" wooden/steam ship goods, at different rates depending on which regions are traded between
• If your country pays for the railroad in a foreign country, it counts toward your merchants' import-export quota in that region
• Naval blockades temporarily removes the import-export quota from ports
• If you are at war, you only get import-export from railroads in a trade region if you have unoccupied provinces that border non-hostile countries

Nations should also be able to set policies for each trade region: the ability to ban merchants in one trade region from being able to trade [raw materials/manufactured goods/both] with either [all foreign merchants/non-favoured merchants/foreign merchants in different trade regions].

Further, tariffs should ideally be something you can set per trade region and at three different rates:

• Most-favoured nation rate [which has to be equal to or lower than the foreign rate]
• Foreign rate
• Colonial (in a trade region with at least one state, the rate your merchants pay to import from domestic merchants in a trade region without any states; in a trade region without any states, the rate your merchants pay to import from domestic merchants in a trade region with at least one state.)
• Internal (only for uncivilized nations, import tariff on trading between your own merchant in different trade regions)

Complexity can be added by:

• Making the effectiveness of a ban and the effective tariff subject to the administrative efficiency in the trade region.
• Casus belli for removing trading bans
• Casus belli for demanding most-favoured nation status
• Casus belli for demanding a trade port if trade is restricted to merchants in the region
• Most-favoured nation status is mutual between civilized nations, but can be unilateral between civilized and uncivilized countries
• Dominion merchants are considered domestic merchants

I believe the above would cover most all instances of trade policy in the 19th and 20th century. I have been especially inspired by the Opium wars, the UK restricting indian trade to nations with a presence in the sub-continent, the Perry expedition to Japan and the viability of Danish West India being a result of no import tax. In general, I also think that tariffs are one of the weakest spots of Victoria II. During this period tariffs constituted either the majority or a vast part of states' income, but in Victoria we all avoid it because of the way the internal and world market works. (And also because income tax is too readily available.) I'd like to see tariffs become a real driver in Victoria 3, both as a civilzed nation and as an uncivilized one.

* Suggested trade regions:
- North-America
- Meso-America/Caribbean
- South-America
- Northern-Europe (incl. UK, Benelux, North France and the westernmost parts of Russia)
- East-Europe (Rest of european Russia)
- West-Med (South France, Iberia, Italy, the Maghreb)
- East-Med (Egypt, Balkans, Syria+Palestine, Greece and Anatolia)
- The Gulf (Oman, Nejd, Mesopotamia, Persia)
- Central Asia (Central Asian states, Western China, Siberia)
- Far East (Japan, Korea, Far East Russia and North-East China)
- South China Sea/Indochina (Southern Chinese provinces, Vietnam, Cambodia, Siam)
- Indonesia (Malaysia, Indonesia, the Philippines, Papau New Guinea, Micronesia)
- Australasia (Australia, NZ, Melanesia, Polynesia)
- India (Incl. Burma?)
- Red Sea (The Sudan, Ethiopia, Somalia, Yemen, Hejaz)
- Great lakes region (Uganda, Kenya, Tanzania, Indian Ocean Territories, Madagascar, Northern Mozambique, Rwanda-Urundi, Eastern Congo?)
- Southern Africa
- The Congo
- Western Africa

 

[Nashetovich]

Would a hard code edit adding a modifier subtracting money from national banks and distributing it to the respective national treasuries work?

As I remember there is no enough script commands to do it.

I do have one question about the national bank though. Is it correct to assume that money thats gets put in there is taken out of circulation for all intents and purposes?

This money also could be loaned to some AI governments, without your permission.

 

[iloathecapcha]

Would a hard code edit adding a modifier subtracting money from national banks and distributing it to the respective national treasuries work?

As I remember there is no enough script commands to do it.

Would forcing money accumulated in the National Bank into circulation help the Late Game economy? I would think so...

Great to hear from you, Nashetovich! Thanks for you help in the past and now.

 

[Nashetovich]

Would forcing money accumulated in the National Bank into circulation help the Late Game economy? I would think so...

Great to hear from you, Nashetovich! Thanks for you help in the past and now.

Hey! Not sure if it would really help economy, since many governments already floated with own money. If so then more money wouldn't make more demand. Problem, as I see, is money in game is not really valuable resource because really what you need to buy stuff is country rating (prestige etc).

Ideally, National Bank money should do credit for capitalists and artisans. May be even do credit for regular guys like farmers, so they could survive hungry time. Though, IRL consumer loans is kinda outside VIC 2 time line, I believe.

Oh, you could try to edit savegame file to move money to government. But be aware of NB bankruptcy in case if POP will try to get their deposits back (though I did not check if that last one implemented), probably in that section

bank=
{
money=2705609.07257
money_lent=3767.66064
}
money=2977435.01715

 

[Nashetovich]

Hey! Not sure if it would really help economy, since many governments already floated with own money.

I assumed you will give money to governments, if you give money to POPs it could work better. But still, money don't make much influence on economy since there is price limits. Even if you have 10000000000000000 money you would not able to buy more goods if there is deficit of supply and someone with bigger rating already bought thing.

 

[KevinG]

There's also the fact that RGO employment doesn't exactly track supply/demand 100% which is extremely frustrating if you're not ranked #1. This can easily be seen when rubber becomes available. If you are say 7th or 8th GP and produce lets say 5-10% of the worlds rubber, its possible to simultaneously not get enough rubber to fuel your factories due to lack of rubber on the WM, and still have unemployment in your rubber RGOs. If employment tracked supply/demand perfectly then you wouldn't ever see the "not enough on WM" malus without also having 100% employment in your RGOs.


Note that I'm talking about not enough on the WM which is different than factories not being able to afford a good. The latter can be fixed by lowering tariffs while the former can only be fixed by increasing rank or conquering more rubber.

 

[PGrob]

I'm coming to this a bit late, but I think the game does a good job with the economy. Concerning the LGEM, in some ways it doesn't bother me. If I recall starting with WWI through 1935 the world suffered from significant economic dislocation.

I am surprised that no one thinks that part of the problem is stemming from a lack of structural deflation, especially in the RGOs. The major feature of the 1870's-1900 is deflation led growth through all those productivity gains. That isn't happening in game. I think the culprit in HOD is that the DEVs went too far in shifting global RGO to fire pops when RGO supply exceeds demand. Prices do float, but they need time to do so. When RGO production exceeds demand something like 40% of the excess RGO workforce is fired per day until demand meets supply. The equilibrium is re-established in 2-3 game days which is not enough for there to be a price shift. In effect it is fixing RGO prices, and with it global demand.

However if you nerf RGO firing rates, an interesting thing happens. Supply decreases much slower than prices, and it gets low enough the lower price increases demand and the price stabilizes at the lower price (and before it hit the .22 limit imposed by the game).

It seems to me that a lot of demand problems are coming from the fact that a good chunk of pop income gets eaten up by life needs, whose prices remain fixed throughout the game, and they lack funds to buy other more advanced goods. Letting RGOs overproduce lets pops buy more stuff and better support the economy. (Not to mention that if the money supply is fixed, increased productivity should lead to deflation).

I also think there is space to play with the AI defines in the ULA. The AI strikes me as a bit too warlike (I'm looking at you France and Germany). I've been experimenting with lowering AI aggression values, upping AI agression to Uncivs (to get them out colonizing), and increasing values for the AI to spend on production, pop_projects, and foreign investments which I'm hoping will yield interesting results in getting the AI to develop its part of the economy.

As for migration, I recently added factors to the internal and colonial migration calculations to get large states to produce more migration (think of it as a sort of overcrowding push) and it really helps getting people to move around.

 

[iloathecapcha]

I'm coming to this a bit late, but I think the game does a good job with the economy. Concerning the LGEM, in some ways it doesn't bother me. If I recall starting with WWI through 1935 the world suffered from significant economic dislocation.

I am surprised that no one thinks that part of the problem is stemming from a lack of structural deflation, especially in the RGOs. The major feature of the 1870's-1900 is deflation led growth through all those productivity gains. That isn't happening in game. I think the culprit in HOD is that the DEVs went too far in shifting global RGO to fire pops when RGO supply exceeds demand. Prices do float, but they need time to do so. When RGO production exceeds demand something like 40% of the excess RGO workforce is fired per day until demand meets supply. The equilibrium is re-established in 2-3 game days which is not enough for there to be a price shift. In effect it is fixing RGO prices, and with it global demand.

However if you nerf RGO firing rates, an interesting thing happens. Supply decreases much slower than prices, and it gets low enough the lower price increases demand and the price stabilizes at the lower price (and before it hit the .22 limit imposed by the game).

It seems to me that a lot of demand problems are coming from the fact that a good chunk of pop income gets eaten up by life needs, whose prices remain fixed throughout the game, and they lack funds to buy other more advanced goods. Letting RGOs overproduce lets pops buy more stuff and better support the economy. (Not to mention that if the money supply is fixed, increased productivity should lead to deflation).

I also think there is space to play with the AI defines in the ULA. The AI strikes me as a bit too warlike (I'm looking at you France and Germany). I've been experimenting with lowering AI aggression values, upping AI agression to Uncivs (to get them out colonizing), and increasing values for the AI to spend on production, pop_projects, and foreign investments which I'm hoping will yield interesting results in getting the AI to develop its part of the economy.

As for migration, I recently added factors to the internal and colonial migration calculations to get large states to produce more migration (think of it as a sort of overcrowding push) and it really helps getting people to move around.

Very interesting. Could you upload your edits sometime? I am working on a timeline extension and the economy needs all the help it can get...

 

[PGrob]

Very interesting. Could you upload your edits sometime? I am working on a timeline extension and the economy needs all the help it can get...

Im still playing with it but i imagine ill get it posted at some point.

A more general question, does anyone else miss the ability to let pops buy from the national stockpile ? I remember before HoD being able to run high tarrifs without problems for factories because i bought key raw materals into the national stockpile and my producers supplied themselves from the stock. I miss the flexability.

 

[Ghaldring]

As for migration, I recently added factors to the internal and colonial migration calculations to get large states to produce more migration (think of it as a sort of overcrowding push) and it really helps getting people to move around.

I'm never convinced migration really needs fixing. Historically, people just didn't move around that much - urbanisation was largely a result of faster population growth, as I understand it. They greatly preferred switching jobs while staying in the same area, if at all possible, so they could be close to family and their community and so forth.

 

[Tartan Spartan]

I'm coming to this a bit late, but I think the game does a good job with the economy. Concerning the LGEM, in some ways it doesn't bother me. If I recall starting with WWI through 1935 the world suffered from significant economic dislocation.

I am surprised that no one thinks that part of the problem is stemming from a lack of structural deflation, especially in the RGOs. The major feature of the 1870's-1900 is deflation led growth through all those productivity gains. That isn't happening in game. I think the culprit in HOD is that the DEVs went too far in shifting global RGO to fire pops when RGO supply exceeds demand. Prices do float, but they need time to do so. When RGO production exceeds demand something like 40% of the excess RGO workforce is fired per day until demand meets supply. The equilibrium is re-established in 2-3 game days which is not enough for there to be a price shift. In effect it is fixing RGO prices, and with it global demand.

However if you nerf RGO firing rates, an interesting thing happens. Supply decreases much slower than prices, and it gets low enough the lower price increases demand and the price stabilizes at the lower price (and before it hit the .22 limit imposed by the game).

It seems to me that a lot of demand problems are coming from the fact that a good chunk of pop income gets eaten up by life needs, whose prices remain fixed throughout the game, and they lack funds to buy other more advanced goods. Letting RGOs overproduce lets pops buy more stuff and better support the economy. (Not to mention that if the money supply is fixed, increased productivity should lead to deflation

One great thing is that the Vic 2 economy is so engrossing that you can easily overlook even obvious issues like this one...

How have your adjustments worked out?

J

 

[rob_mtl]

I'm coming to this thread late obviously, but one thing has always stood out for me in terms of economic realism is the relationship between the taxation system and POPs. The tax system that pushes the player towards a regressive taxation scheme that would not have functioned during this period. Most governments didn't tax poor populations at a higher rate than middle class and rich brackets, although there were countries (especially in the early 19th century and 20th centuries) that opted for a fairly flat taxation scheme. The reason for this was that there was little to gain by fleecing the poorest classes. Effective taxation would have been easier in the higher strata, because their professions were more regularized and stable, and most importantly, they owned property (property taxes and taxes on trade were more prevalent than income taxes until PAYE (pay as you earn) and similar tools were developed in the second half of the 20th century.

Certainly, governments offered incentives to the wealthy for certain types of investment, although tax credits are a much more recent financial tool.

The way this links in to the promotion system is problematic as well. People who have their needs met don't always "upgrade" to other professions. The notion that a factory floor worker in 1890 would "upgrade" to, for example, clerical work, is a little bit simplistic.. People didn't move from employee to management in this time period like people do now. While social benefits and wages increased over the time period, most workers at the time probably couldn't imagine changing from manual labor to clerical work. The cultural differences between these two types of labour would make that shift very unlikely until the end of this period, and it was mostly generational (ie. parents are factory workers—wages and social benefits increase—children get better education and move on to clerical professions).

Social mobility was very limited (even in the New World—sorry America, but rags to riches is mostly a myth), and there were far more lateral moves and "demotions" than vertical moves.

These types of promotions make sense:
Farmer/labourer/artisan to craftsman, (very often this was a reduction in quality of life—the industrial revolution made life worse before it made life better).
Aristocrat to capitalist (in the unregulated capitalism of the 19th century this was extremely volatile—fortunes were made and lost overnight).
Famer/labourer/craftsman to soldier and vice versa.
Aristocrat to clerk/bureaucrat (in Europe, the disowned landed population gradually took up government positions as their estates were liquidated).

Another thing that stands out is that farms and mines are not owned by capitalists in the game. Historically, capitalists bought up small farms and consolidated them into the huge corporate farms we know today (ruining the environment, the food system and the prospects of a whole class of small land-owning farmers in the process, but greatly increasing the food supply in the short term). The same goes for mines.

Also it's weird how grain is not a useful resource in the game. In Canada, for example, the government paid for people to come from places like Ukraine and Poland to live in the Prairies and farm grain and corn during the late 19th and early 20th century. Grain elevators and giant silos are as much a feature of early industrialisation as smokestacks, and industrial mills were a huge deal (look up photos of old General Mills buildings in Minnesota for example).

 

[sdrasmu12]

The way this links in to the promotion system is problematic as well. People who have their needs met don't always "upgrade" to other professions. The notion that a factory floor worker in 1890 would "upgrade" to, for example, clerical work, is a little bit simplistic.. People didn't move from employee to management in this time period like people do now. While social benefits and wages increased over the time period, most workers at the time probably couldn't imagine changing from manual labor to clerical work. The cultural differences between these two types of labour would make that shift very unlikely until the end of this period, and it was mostly generational (ie. parents are factory workers—wages and social benefits increase—children get better education and move on to clerical professions).

Pops in Victoria II are understood to represent not a single worker but the entire family, so I don't think it's difficult to imagine that promotion represents both generational class mobility and individual workers switching between agricultural and industrial sectors. You could argue that the rates of generational promotion are too fast, but I don't think there is anything intrinsically 'historically inaccurate' about allowing lower class pops who are able to consistently accumulate human capital (literacy and needs met) to have some level of class mobility.

 

[Nashetovich]

property taxes and taxes on trade were more prevalent than income taxes until PAYE (pay as you earn) and similar tools were developed in the second half of the 20th century.

Interesting, might be helpful for a game I making

 

[Sebastian Jarl]

I'm coming to this thread late obviously, but one thing has always stood out for me in terms of economic realism is the relationship between the taxation system and POPs. The tax system that pushes the player towards a regressive taxation scheme that would not have functioned during this period. Most governments didn't tax poor populations at a higher rate than middle class and rich brackets, although there were countries (especially in the early 19th century and 20th centuries) that opted for a fairly flat taxation scheme. The reason for this was that there was little to gain by fleecing the poorest classes. Effective taxation would have been easier in the higher strata, because their professions were more regularized and stable, and most importantly, they owned property (property taxes and taxes on trade were more prevalent than income taxes until PAYE (pay as you earn) and similar tools were developed in the second half of the 20th century.

Certainly, governments offered incentives to the wealthy for certain types of investment, although tax credits are a much more recent financial tool.

While I agree that the mechanically the income tax is anachronistic (and indeed state in a post above that I want to see more emphasis on raising money through tariffs), I have always rationalised regressive taxation through the sliders as a representation of several different modes of taxation, including poll taxes and levying fees on, say, gin and salt. Additionally, I believe several countries would still have tax exemptions for aristocratic and ecclesiastical landholdings in place.

Do you know if the overall tax burden (all taxes considered) was mainly progressive or flat in this time period? If not, I am not necessarily convinced much would be gained by a more sophisticated taxation model.

The way this links in to the promotion system is problematic as well. People who have their needs met don't always "upgrade" to other professions. The notion that a factory floor worker in 1890 would "upgrade" to, for example, clerical work, is a little bit simplistic.. People didn't move from employee to management in this time period like people do now. While social benefits and wages increased over the time period, most workers at the time probably couldn't imagine changing from manual labor to clerical work. The cultural differences between these two types of labour would make that shift very unlikely until the end of this period, and it was mostly generational (ie. parents are factory workers—wages and social benefits increase—children get better education and move on to clerical professions).

Social mobility was very limited (even in the New World—sorry America, but rags to riches is mostly a myth), and there were far more lateral moves and "demotions" than vertical moves.

Practically speaking, do you think POP "promotion" should be (roughly) limited to population growth, or do you have more severe reform of the system in mind?

Another thing that stands out is that farms and mines are not owned by capitalists in the game. Historically, capitalists bought up small farms and consolidated them into the huge corporate farms we know today (ruining the environment, the food system and the prospects of a whole class of small land-owning farmers in the process, but greatly increasing the food supply in the short term). The same goes for mines.

Also it's weird how grain is not a useful resource in the game. In Canada, for example, the government paid for people to come from places like Ukraine and Poland to live in the Prairies and farm grain and corn during the late 19th and early 20th century. Grain elevators and giant silos are as much a feature of early industrialisation as smokestacks, and industrial mills were a huge deal (look up photos of old General Mills buildings in Minnesota for example).

Completely agree that grain is oddly under-appreciated.

When it comes to ownership of farmland, I think a perhaps more glaring omission is the lack of any separation between farmers, peasants and serfs. Economically speaking, that's a range from essentially middle class to nigh slavery.