voodoo economics

altmunster · Post by **altmunster** » Jul 10 2005

so the last i read this thread there was some italian guy telling me deflation was not a negative inflation rate and the moderator was asking for specific examples of detailed items in game that were modeled contrary to their real life counterpart.

any response moderator?

p.s to my friend with the italian text (i assume it is a text book).
can you please look at the glossary and tell me what it says for deflation, in italian? also, who is the author? i am cursious what you are reading over there

molte grazie

altmunster · Post by **altmunster** » Jul 19 2005

Legend · Post by **Legend** » Jul 21 2005

altmunster wrote:... and the moderator was asking for specific examples of detailed items in game that were modeled contrary to their real life counterpart.
any response moderator?
molte grazie

I feel the need to play the role of our lead designer right now. When I joined the company over a year ago I had ideas and I questioned how things were in the gaem after being 4 years in the making. Whenever I brought up an idea I would be told that I need to also come up with how it would work. As I read through your examples I can't help but think the same way...

As for your examples, they need to be further explained. Please include how they are contrary to the real world... as in a. what we are doing and b. what should be done and c. how they could be incorporated into a game...

Kriegsspieler · Post by **Kriegsspieler** » Jul 27 2005

altmunster wrote:sorry i have not been around in awhile-
battlefield 2 is a great deal of fun

in any case
thank you for asking-
-direct production decisions in a democratic government
-taxation and other policy decisions that can be made on a whim without the involvement of a legislative branch (this isn't a medieval sim is it?)
-day to day 'consumer' and 'industrial' reactions to these knee jerk policy changes
-debt issuance would not take place in the environment you are modeling, no one would want to own debt of a state with the following charactertics:
(1) unpredictable policy changes
(2) communist tendences towards industrial decisions
(3) potential for war with neighbors

these are the few that i could think of in addition to concerns with hyper inflation and the lack of mutlinational currency exchange that i have read from other posts.

oh yeah, also the take it or leave policy decisions offered by 'advisors', there is never one answer to any policy question.

Ok, at the risk of getting into a BIG argument here, I'm going to wallow back into this thread. . . .

Let's agree that in principle there is nothing to prevent a future version of this game (you DO realize that what you are asking for is impossible in a patch, right?) from offering as full-blown a sim of a real-world economic situation as, well, real-world economists can create. In fact, that's what the entire discipline of economics appears to me, a non-economist, to be: one gigantic sim of social behavior, aggregated and reduced to a bunch of formulas. It models the social system and then asks what the effect of raising the tax on income or the sales tax, or whatever, is.

But that's a simulation, and this is a game and the choices made by most game developers, and the reception of their products by the game-playing public, seems to suggest that most people who play these games want more control over the economic aspects than the real world offers. So yes, most people sitting in the role of El Presidente/Big Brother/Chairman of the Fed want to be able to say that their new consumer goods factory should go THERE and the prices demanded of domestic customers for power should be such and such. Even Trevor Chan's Capitalism II, which is widely agreed to be the most sophisticated economic sim-cum-commercial game around, gives the player FAR more control over what happens than would be true IRL.

Now, I am not denying that certain parts of this game's economic system are faulty, and I have no doubt that an economist such as yourself could persuade George C. that the way the game handles something like inflation just doesn't work very well. But the grounds for persuading him of that would not be that a trained economist says that it's wrong but because it feels wrong in operation to players. What the trained economist can do for Geroge would be to explain why it feels wrong and perhaps offer a better solution, for example by persuading him to bring factors into the mix that he had not thought of.

Anyway, my point here is not to say that some of the things you want, such as more randomness in the economic cycle and more evidence of consumer reaction to pricing decisions, are bad in themselves, but instead to point out that the fact that the game does not thoroughly and completely model real-world economic theory (which BTW is itself a highly refined abstraction of sociey) does not make it bad.

Rothbardian · Post by **Rothbardian** » Aug 04 2005

-direct production decisions in a democratic government
-taxation and other policy decisions that can be made on a whim without the involvement of a legislative branch (this isn't a medieval sim is it?)
-day to day 'consumer' and 'industrial' reactions to these knee jerk policy changes
-debt issuance would not take place in the environment you are modeling, no one would want to own debt of a state with the following charactertics:
(1) unpredictable policy changes
(2) communist tendences towards industrial decisions
(3) potential for war with neighbors

This game isn't modelling 'real life', it's modelling life after a cataclysmic financial collapse from credit default. We've been there before.
Spend much time reading about the Great Depression? FDR could do all of the above and worse, and it was still a 'democracy'. The National Recovery Administration could tell everyone what they were allowed to produce and set prices. They slaughtered livestock in the millions to try and drive up prices as the credit crunch snowballed into deflation. The Wickard v. Filburn decision is the fulcrum of the current Federal government's scope of power under the interstate commerce clause, and it stemmed from FDR's administration cracking down on a man who dared to grow food for his own consumption on his own property - he might affect prices! - and those were considered the purview of FDR's leviathan.
FDR sought to get into war with Germany, shooting at their vessels on the high seas and providing military equipment to belligerents in exchange for the right to staff that belligerents military installations. The 'democracy' aspect of this game model's FDR's reign very well.
FDR used the 'Trading with the Enemy Act' to close the banks and he took the U.S. off the gold standard so he could pursue his inflationist policies. He had the Congress, controlled overwhelmingly by his political party, rubberstamp these orders after the fact.
The Federal Reserve happily exchanged his Treasury bonds for reserve notes, and the people in the economy still trying to save were willing to accept Uncle Sam's interest rates when businesses were failing right and left, and their future profitibility was to be dictated by FDR's brain trust.

these are the few that i could think of in addition to concerns with hyper inflation and the lack of mutlinational currency exchange that i have read from other posts.

I agree that the inflation and currency mechanisms might use some work. With Central Banks in each country willing to purchase debt and issue fiat currency you could model the inflation. You could even use their monetary debasement as the metric for currency exchange, with a nod toward demand for goods from that respective country increasing the demand for their money. With individual currencies you could even have multiple interest rates, whatever your own central bank sets with it's accompanying impact on inflation, and borrowing from abroad at whatever interest rate the respective currency holder's demanded with the concurrent effects on international money supply. You could for example play China and buy U.S. debt with your trade surplus, confident that Uncle Same will collect taxes and pay you back with interest. Or, you could even have something happen like what the Japanese did from 2003-2004, over 15 months monetary authorities in Japan created Â¥35 trillion. To put that into perspective, Â¥35 trillion is approximately 1% of the world's annual economic output. They used that printed money to buy up ~$320 billion in U.S. treasuries. They printed money to offset the U.S. tax cuts so American consumption could stay high and continue importing their products. The repercussions of that particular monetary debasement are still on the horizon.

I have a feeling the devs, and fans, would prefer to spend more time on the warfare side of things, but what's outlined above could be modelled.

oh yeah, also the take it or leave policy decisions offered by 'advisors', there is never one answer to any policy question.

I don't really get this. Your advisors are expected to use their own initiative to try and follow your orders. If they complain to you of deficits and you say 'fix it' they will then in turn decide which tax rates to adjust, or spending to cut. Consider it a policy directive, not direct implementation, when you give them 'one answer' to any policy question.

Fordson · Post by **Fordson** » Aug 04 2005

Rothbardian,

Given your considerable and, from what I can see, accurate understanding of macroeconomics, what is your opinion of the mechanics of this game? I know it doesn't model the real world we live in, but does the things presented in it make sense to you? What are the areas of concern? What seems to be working well?

Chef Pepin · Post by **Chef Pepin** » Aug 04 2005

I'm not going to give an economics lesson but would like to comment.

What makes this game so fun is that is extremely complex and difficult to understand all of the interactions going on behind the scene.

One of the biggest challenges lies with inflation and employment. The game appears to heavily weigh low unemployment with inflation. However it seems pretty difficult to control the employment. I know you can raise taxes, raise domestic pricing, close factories, etc. However you don't really have a good idea as the effect these are having.

Maybe better availability of data would be helpful. Example, if I have 5% unemployment in a population of 20 million, I know I have 1 million unemployed people. If an industrial complex employs 500,000 directly and indirectly then I know the effects it would have if I open a new one (drops to 2.5%) or close one currently open (raises to 7.5%).

I believe that having more data on how many people an industry employs. My concern is that I wouldn't want the extra information to make the game too easy.

If I know exactly what to do, then I would just do those things and not "tinker" with anything else.

BigStone · Post by **BigStone** » Aug 04 2005

There is only one currency in the game..

Cheers

Rothbardian · Post by **Rothbardian** » Aug 04 2005

I've only begun playing in the last few days after work.
I've played the Florida scenario a few times to start learning the game mechanics, and haven't messed with the consumer side of production at all yet. Just made military units and played with that part of it. Winning in 11 months didn't leave me a lot of time to see how things play out.
I'm going to run it a few times tonight concentrating on just the economic side and playing defense if the Central or South attacks.
Only thing I can comment on is the observation made earlier that the tutorial indicates a strong relation between employment and inflation. I personally don't subscribe to that Keynesian doctrine, and believe that inflation is purely a monetary phenomena with price changes merely the evident symptom.
I have no idea what other factors the devs have included in determining inflation (such as debt issuance), but I look forward to finding out. I hope to spend most of the weekend kicking the tires on this game.

Fordson · Post by **Fordson** » Aug 05 2005

Quote "I believe that having more data on how many people an industry employs. My concern is that I wouldn't want the extra information to make the game too easy. "

I personally am not either, but without any historical graphing, its frustrating to try and figure out what the results of your actions are when you do not see an immediate effect. For example, what effects does the property tax setting have on the game. I have moved it, but never noted any change. It MAY have an effect, but without charting, who really knows.

Another is the transfer payments. Do they really effect both supply and demand? As an avid student of economics, I just want to know how well the model is done. Maybe understanding economics in depth is actually a disadvantage when playing the game!

Usually with some historical feedback, you can look back on the data and see a jog on the graph around the time you implemented the change and be able to conclude what does what.

Rothbardian · Post by **Rothbardian** » Aug 05 2005

I personally am not either, but without any historical graphing, its frustrating to try and figure out what the results of your actions are when you do not see an immediate effect.

Count another vote for graphing the indicators in the game (bond interest rate, GDP/c, approval rating, employment, inflation, etc.) The trend indicators are great, but it'd be nice to try and correlate them with policies and events. I can lock my ministers from too much fiddling and then try to see how things play out. Perhaps beyond the scope of a patch to this game, but worth thinking of for future iterations.

ozmono2005 · Post by **ozmono2005** » Aug 05 2005

Yep I'm all for historical graphing as well and EVEN more for extra statistics ESP, workforce statistics, when I increase the efficiency or build a factory I'd like to know how many positions will be available in the factory, and get not only a percentage of employment/unemployment but also a percentage of "available" work for the "total working population" the list can go on.

Rothbardian · Post by **Rothbardian** » Aug 06 2005

Yep I'm all for historical graphing as well and EVEN more for extra statistics ESP, workforce statistics, when I increase the efficiency or build a factory I'd like to know how many positions will be available in the factory, and get not only a percentage of employment/unemployment but also a percentage of "available" work for the "total working population" the list can go on.

Workforce participation is certainly something the government tracks. http://www.bea.doc.gov/
The BEA tracks all kinds of things.
I could see workforce participation being a factor of GDP/c, unemployment, whatever that family icon is under the social welfare screen, etc.

BigStone · Post by **BigStone** » Aug 06 2005

ozmono2005 wrote:Yep I'm all for historical graphing

Bad news... the engine doesn't store historical data...

http://www.bgforums.com/viewtopic.php?t=3238

Cheers

ozmono2005 · Post by **ozmono2005** » Aug 06 2005

well I knew there was no plan for it and Daxon probably mentioned it when he told me that. That was fairly recently

But what about the save logs?

Couldn't the game somehow save that kind of info(the relevant stuff) plus any extra stuff it could and present it as historical data.

I don't understand, the game can save/recognise that kind of data and does so in he game log, a syntax script can convet the way that data is presented . That may sound like a bit and for all I know could be the equivelent of having autosave everyday just for historical data but you know, every 3- 6months, or so of stats like the regional stats and the Balance sheets including income, expesnes already current would be good. EDIT: and both Chris and Daxon were talking about GRAPHING, maybe you could just have sheets of stats that could be opened like and old email somewere in the statistics department.

I don't understand.

They say ignorance is bliss but i'd like it if someone could (if possiable briefly) explain it to me.

And George did say in a post today that he thinks the biggest challange for the game after update 3 will be widening the accessability.

Whilst extra stats and historic graphs aren't really going to help people who want to instantly feel comfortable (probably best if it wasn't that easilly accessiable which is ironic) it will help the player who feels comfortable with the basics and wants to play the game on a slightly more complex level understand the economy.

But thats something that will maybe be considered in or for the future