Change Log for 6.00 discussion

[Maltay]

I noticed Steve played with the Wealth and Industry Percentages for his test Aurora game for v5.70.  Has anyone ever given any thought to adjusting how Wealth and Industry Percentages work?

At the moment, they basically model the GDP per capita or industrial GDP per capita of the faction.  This allows for the idea that a country with a smaller or larger population is more or less efficient at generating wealth or industry, sort of like comparing the U.S. and PRC.

However, these values are static.  If my Aurora game lasts 50 years, I sort of expect that a PRC based faction will eventually catch up to a U.S. based faction in terms of wealth and industry generation efficiency.  Or, alternatively, that a U.S. based faction might become worse over time.  I just do not like the idea that a faction would essentially have a static GDP per capita or industrial GDP per capita for its entire existence and always be at a disadvantage against a more efficient faction.

I just have no idea what adjusting Wealth and Industry Percentages to overcome this would entail.  Ideally, something that occurs automatically based on financial and industrial performance over time, but I have not devoted enough thought to it.

[ardem]

I see a need for a scaled GDP in that way, look at Australia, our GDP against our 20 million population is more efficient then the US (not large efficient), mainly due to trade and resources. I think the higher the population there more chance efficiency is reduced as a percentage.

[chrislocke2000]

I see a need for a scaled GDP in that way, look at Australia, our GDP against our 20 million population is more efficient then the US (not large efficient), mainly due to trade and resources. I think the higher the population there more chance efficiency is reduced as a percentage.

It's definatley something that could do with a look at. In some respects you already see growth in GDP because of the effect of trade and mining operations revenues from your civilian sector. You could further link this to your wider industry and levels of employment on your planets. Ie mining could produce a relatively low GDP per population engaged whilst people engaged in research who might be on higher wages produce a higher level of GDP. This way you might see nations which move from extraction to production and research increasing GDP average across their population. For colonies this could also work quite well with lower paid people being used on all the environmental upkeep becoming more production as terraforming releases them to more proitable employment.

[Scandinavian]

A major problem with that is that the appearance of servant economies being more productive than extractive economies has more to do with the fact that extractive economies get the short end of the political stick.  When American software developers get paid a hundred times as much as Chinese assembly line workers, who in turn get paid ten times as much as Congolese miners, it is far more because of the uneven distribution of aircraft carriers than because of the uneven distribution of productivity.

So while a planet full of financial centers within a well diversified empire should be richer pro capita than a mining outpost, an empire which has nothing but financial centers should not have a ludicrously high GDP.  It should be in complete economic paralysis.  But Aurora doesn't model that, because its political, international trade and intra-empire cash flow models are fairly rudimentary.

This discussion also touches upon another fault in the handling of taxation, government budgets and generic "wealth" mechanics: Governments don't get to "save up" money for a rainy day, the way Aurora lets you do.  Most of what the government wants to buy with its money is labor, and labor dissipates immediately if it is not used.

Not-spending money today therefore does not allow the government to spend that money tomorrow without straining the economy.  In the real world there are no little gray men in suits smoking rose petal cigars and running a time savings bank where the unemployed can stash the man-hours that the government not-buys.  Conversely, spending money today does not require the government to not-spend tomorrow to avoid straining the economy.  (There might be time-lagged higher-order effects, but they all show up in the output gap, so given sufficiently alert and fast-acting fiscal authorities you can safely ignore them in your macroeconomic planning. )

A more elegant solution would be to have a series of "baseline labor force participation" techs, and simply let empires start at different levels of those techs and different levels of the GDP pro capita techs.  This might also open up possibilities of modifying labor force participation rates by governor bonus and by previous employment history (persistent labor shortage brings people out of retirement, provides better career opportunities for academic drop-outs and therefore encourage earlier labor force entry; conversely, persistent unemployment does the opposite, and also pushes people into the informal economy, from which they will take some time emerging when unemployment drops).

[UnLimiTeD]

So how would that be modeled in the game?
In a doable way?
Also, what about inflation?
I'm pretty certain a stock broker pays more for his banana than the farmer that grows them.

[symon]

All very true!

Of course the Organism CAN bank such things, mostly by decommissioning excess workforce when they aren't required and decanting many new ones when they are needed. (grin)

[Scandinavian]

Depends on how much detail one wants to go into.

The simplest way to model it would be to have a "maximum deficit" figure (which should depend on GDP, maybe on civilization options, probably on government type), beyond which you will get unrest due to excessive inflation.  It would then be assumed that if you run less than that deficit, your ministry of finance will find some worthwhile civilian projects to spend the remaining budget on.

You can add complications from there in arbitrary amounts, such as having the player juggle the civilian government expenditures as well, adding stochastic noise and business cycles, all the way up to a full-blown flow-of-funds model, with Unrest modifiers from unemployment and sudden changes in the provision of government-sponsored civilian goods.  But my general feel is that Aurora is more about managing the military-industrial complex than the civilian macroeconomy, so that will probably not be merited.

(All this is assuming that the ambition is to model a (more or less) democratic, (more or less) capitalist monetary economy.  Command economies, target economies and non-monetary economies have different rules.  As do Soylent Green economies, and civilizations similar uses of "human resources" ;-P)

[Bremen]

The wealth in Aurora works kind of odd since empires are a mix of communist and capitalist economies.

For instance, if you want to build a factory, you pay for it, and provide the minerals for it, and build it with your own factories. Which would seem to indicate a communist economy. But then you have to pay for production by that factory as well, which would seem to be a capitalist economy.

By comparison, the shipping lines and civilian mining colonies are more clearly free market capitalism, as the respective corporations purchase their own mines and ships, and then you can hire the services with tax money. In theory, it might be possible for the entire economy to be modeled this way, with civilian construction factories on populated worlds, and you could hire them to produce shipyards/etc; wealth percentage/GDP would be more accurately modeled by the total production of an empire than a % set at start, since one assumes all those fantastically production TNE factories would increase GDP. However, while maybe not completely based in reality, Aurora's economy works and is (reasonably) easy to manage, which is possibly more important than a hyper-realistic economy simulator.

[Scandinavian]

I imagine the construction factories you build to be the ones devoted to the armaments industries, and the player being a sort of abstraction for the collective technostructure of the military-industrial complex.  Likewise, I imagine financial centers to be (subsidies for) civilian manufacturing industries which are necessary subcontractors for the armaments industry, but which are abstracted to generic civilian manufacturing in the game.  The armaments industry is substantially a government-funded target economy, whatever the nominal ownership of the relevant factories.  So under those assumptions and at Aurora's level of abstraction, all industrial economies look more or less the same, whether Communist, Fascist, Social Democratic or Corporatist.

The wealth variable is the odd duck out, because it operates as if you are running a small open economy (essentially, the "empire wealth" corresponds to the strategic foreign currency reserves of the empire), when in fact you are running a large closed economy (inter-empire trade is peanuts compared to the typical "empire wealth," and the sum of empire surpluses fails to sum to zero, as foreign balances must).

Eliminating the "empire wealth" and replacing it with a "maximum deficit," above which you get unrest due to loss of social acceptance of the government's currency, would be a simple solution which would make the budget work plausibly at the present level of abstraction.

[Nathan_]

Wealth is(or should be) a nifty approximation for energy, and in that vein I'd replace financial center with solar farms/energy storage or some such thing. Obviously in light of the current financial troubles it looks kinda bad to have what we traditionally call finance generate wealth. Also getting away from wealth as we define it takes the human element out of the equation which really throws a monkey wrench into everything.

"However, these values are static.  If my Aurora game lasts 50 years, I sort of expect that a PRC based faction will eventually catch up to a U.S. based faction in terms of wealth and industry generation efficiency.  Or, alternatively, that a U.S. based faction might become worse over time.  I just do not like the idea that a faction would essentially have a static GDP per capita or industrial GDP per capita for its entire existence and always be at a disadvantage against a more efficient faction." - The economic expansion techs apparently model this, China in his scenarios gets a much bigger boost from their greater starting pop than NATO would get for each level.

"When American software developers get paid a hundred times as much as Chinese assembly line workers, who in turn get paid ten times as much as Congolese miners, it is far more because of the uneven distribution of aircraft carriers than because of the uneven distribution of productivity." - I'd say that uneven distribution of carriers is an indicator of uneven distribution of production.

[Scandinavian]

Wealth is(or should be) a nifty approximation for energy, and in that vein I'd replace financial center with solar farms/energy storage or some such thing. 

Doesn't really matter to the argument, because energy dissipates relatively rapidly once you've harvested it, unless you sacrifice about an order of magnitude to store it.   So in practice, your budget constraint is still instantaneous rather than intertemporal. 

You also don't get to run up an "energy debt" which must be "paid off. " If you exhaust your strategic stockpile, you'll have to confiscate supplies from the civilian sector, but once you stop confiscating (i. e.  stop running an energy deficit) you don't need to (and indeed cannot) replace the kWh you confiscated.

I'd say that uneven distribution of carriers is an indicator of uneven distribution of production. 

Not unless the countries in question practice autarky, or you count the ability to extract colonial tribute as a form of productivity (which you shouldn't - bad things happen to empires which make that mistake). 

[TheDeadlyShoe]

Eliminating the "empire wealth" and replacing it with a "maximum deficit," above which you get unrest due to loss of social acceptance of the government's currency, would be a simple solution which would make the budget work plausibly at the present level of abstraction.

Wealth sounds a lot better than max deficit.  Really, would there be a difference between Deficit and some sort of hard or soft wealth storage cap?

Wealth is(or should be) a nifty approximation for energy, and in that vein I'd replace financial center with solar farms/energy storage or some such thing. Obviously in light of the current financial troubles it looks kinda bad to have what we traditionally call finance generate wealth. Also getting away from wealth as we define it takes the human element out of the equation which really throws a monkey wrench into everything.

It kind of is already, IMO.  I view civilian wealth tech as a general upgrade in commercial and residential technologies of all sorts, certainly including power generation and the like.

Though an orbital wealth/energy generating infrastructure seems like a cool thing to have.

[Nathan_]

Not unless the countries in question practice autarky  

Our ability to build carriers basically preceded any serious trade with China so lets go with option A here. The west did industrialize first, and did conquer infant mortality first, and so on, and it will be some time before the rest of the world catches up.

because energy dissipates relatively rapidly once you've harvested it, unless you sacrifice about an order of magnitude to store it.

True, but we can trans-newtonian away such problems. Good point about deficits, but how often does anyone run anything but a minor deficit? The biggest reason for debt spending(pushing the can down the road to the next politician) doesn't exist for us.

[Scandinavian]

Really, would there be a difference between Deficit and some sort of hard or soft wealth storage cap?

Yes, that's the difference between an instantaneous and an intertemporal budget constraint.  That is a non-trivial difference to your budgeting.

Swapping out wealth for energy supply and energy demand would solve the aesthetic issue, no?

Our ability to build carriers basically preceded any serious trade with China

Eh, no.

The European rise from peripheral to central power in the international trade system is a consequence of first the Iberian, then the Anglo-Dutch maritime dominance, and related colonial activities in South America, permitting gold-silver arbitrage with China as well as buy-in to the Far East carry trade.  All of which happened at at time when Europe was, by any reasonable measure, far less productive than any other sedentary Northern-hemisphere culture.

And American hegemony is, economically and culturally, the epilogue of the European colonial system, not the prologue of a different world-system.

[Nathan_]

All of which happened at at time when Europe was, by any reasonable measure, far less productive than any other sedentary Northern-hemisphere culture.

Are you sure about that? European GDP per capita from that time period may be higher than originally thought.
http://www.sciencedaily.com/releases/2010/12/101205234308.htm