The haves and the haves not. Economic strategy 101.

[vortex79]

In my observations of the economic system of this game I have concluded there are two potential means of economic warfare in this game for which one economic design can be utilized to wage both effectively.

The type of economic warfare you want to use depends on whether the nation you are targeting is resource rich or resource poor.. and depending upon their reliance on the world market models, will have varying degrees of effectiveness.

The first strategy I will discuss is for the "Haves". These are the resource rich exporter states. It is important for the player to understand that these nations will not be harmed by scarcity as the ai can just add production facilities. The way to undermine the haves is through the world market which many of them rely on and by undercutting their economy. The only way this can be done is through deflating your own economy and maximizing your own efficiency to supersede them production volume and undercut them in production costs. When this is done you can seize their world market from them.. which could in the long run have a devastating effect.. especially if this country has ballooned their military on economic surpluses for many years. It's a good late game strategy, for when the map is overloaded with units from AI constant production. It is important to note that using this strategy can help other states which are resource scarce.. the "have nots" will benefit from you undercutting their traditional suppliers. THe only other way to undermine exporters is by destroying production facilities in such a way as they cannot be recovered by the AI. This can prove to be both difficult, and expensive, but potentially worthwhile and an interesting game approach to take. The way this is done is by destroying periphery production facilities and then destroying the hub they were built around. This eventually turns your target state into a have-not.. and then your economic strategy needs to reverse to a scarcity plan to do any further damage.. otherwise they just start buying the resources from you to replace what they lost.

The "Have Nots" strategy. To fully damage a have-not you must isolate them from their sources of supply. The ways to do this are by provoking them into a war, causing their allies to abandon them.. conquering their allies.. and by minimizing your own domestic production to what you and your people need.. not providing a glut on the world market.

Neither strategy is simple.. neither can be properly achieved without controlling very large and resource important areas. However, once control has been achieved and the more control that is achieved.. the more feasible these options become.

There is a basic economic layout that maximizes your states personal efficiency and can allow for either strategy to be utilized. The key is to maintain self sufficiency while moving all external facilities of production to within areas that are 100% loyal to yourself and under 100% supply. From play testing I have discovered that loyalty is a critical factor in production and can provide as much as 10-50% if not more bonus to the normal production levels of a similar facility in the exact same conditions external to loyal territory. This means if I eliminate 3 coal power plants outside of my loyal territory, relocate them into my territory, I only need to build 2 plants.. will maintain the same production.. and can reduce my production of coal. The increased efficiency results in the same product production, lower employment levels, and thus deflation while maintaining or improving GDP. It is a total net gain to treasury and competitiveness of your state.

In terms of competing on the world market, production prices are everything. I have discovered that the key to bringing these prices down is deflation through unemployment. The only way to do so successfully without bankrupting your state is by increasing the sales margins on your products while maintaining the same production levels. It is only able to be done by the method mentioned above. I have also discovered that any facility that can produce power without the use of other resources such as petrol, coal, or uranium.. is better than any other facility which consumes them for maintaining this efficiency. The reason being is that if you shut down one plant you may be able to shut down one or more related mining facilities and thus sustain the same level of energy production while reducing the labor required.

As deflation is achieved, the cost of producing the raw resources and energy falls.. making the prices of refined goods fall even more. It is easily possible that you will be able to achieve a level of profitability on margins using this method that you could replace major foreign exporters as the source of their goods on the WMA.. severely impairing their economic activity.

Deflation will cause internal tax revenues to fall and it is notable that your deflation goals and your income goals need to be balanced, so sometimes you must stall the deflationary processes in order to keep your state's budget in order. However, the larger your conquest areas area.. the larger your population is.. the more deflation you will be able to obtain without harming your budget, because not all expenses scale.

If you are fighting a have, then you will be able to undercut them with this strategy and out produce them while controlling expenses.. if you are fighting a have not, then you need merely produce a domestic supply only to cut them off if you have sufficient control of their resource sources and allies.

You can weaponize your economy in useful ways, but it is not a simple or easy task, and while you may not be able to fully bankrupt a state, you may leave their military paralyzed through isolation and starvation.