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Victoria 3 - Dev Diary #5 - Production Methods

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Hello again and happy Thursday! Today we will be taking a deeper look inside Buildings to explore Production Methods. These determine the functions of the building, its inputs and outputs, and what employee types it requires to operate.

Many management games let you upgrade a building to increase its efficiency or expand its functionality. In these games, after the upgrade investment has been paid the impact is permanent and nearly always superior in every way to the building's previous functionality. But in Victoria 3 there are no actions without reactions, and novel innovations don't just make buildings better with no side effects. Improving industrial processes over time is to be expected, but in some cases those improvements might require goods as input that the country has scant access to, while others permit the output of a new type of end product at the expense of the old one. As a result, buildings in Victoria 3 require more flexible upgrade paths than what's afforded by permanent, linear, “no-brainer” improvements.

All buildings have several categories of Production Methods, usually between 2 and 5. Only one is active at any given time in each category. Most categories fall into one of these types:

Base: governs the general "tech level" and efficiency of the building, produces goods typical for the building type
Refining: reduces output of typical goods in favor of output of specialized or luxury goods, sometimes adding a special input
Automation: adds industrial goods as input to reduce the building's unskilled workforce requirement
Ownership: determines who owns shares in the building; typically governed by Laws

With the right technologies Food Industries can make Groceries from both Grain (Bakeries) and Fish (Canneries). They can also refine Grain and Sugar into Liquor (Distilleries). With advanced technologies Food Industries can be partially automated, drastically reducing the need for unskilled labor. Simple Food Industries are operated by Merchant Guilds (Shopkeepers), while more advanced and profitable Food Industries are owned by Capitalists who reinvest some of their dividends.

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As one example, an Iron Mine's base Production Method determines if miners use only picks and shovels or if they also use some sort of engine-driven pumping mechanism. There are several different pumping technologies which also determine what fuel is used. The more advanced the pumping mechanism the more deposits can be accessed and the faster Iron can be mined, but the more Coal or Oil is used in the process. With higher tech pumps comes a requirement for more Engineers and Machinists to be on-site to control and oversee its operation. This creates more demand for qualified workers and also opens up a number of better paid positions to those Pops who meet the qualifications.

The revolution in chemical sciences of the era also enabled the use of explosives in mining, which is a secondary Production Method category used only in mines. Once Nitroglycerin is invented, it can be used in mines to generate even more minerals, at the expense of Explosives produced by the Chemical Industry but also with a higher rate of workplace accidents. By researching less volatile Dynamite, even more minerals are extracted at the expense of even more Explosives, with the additional benefit that far fewer workers will blow themselves up on the job.

Once invented, portable Steam Donkey engines can be deployed at mining sites to drastically reduce the amount of manual labor required just for hauling. This costs the building some money in the form of Coal and Engines, but reduces the amount of money they have to pay in wages. Perhaps more importantly it frees those Laborers up to do other work in other buildings if the state is running low on workers. But if wages are already very depressed it might not be a great idea to purchase expensive industrial goods just to increase the unqualified labor pool further, so this might not be a no-brainer decision for a player to make.

In most countries, simple mines are owned and operated by Merchant Guilds at game start. These are small-time purveyors of the goods produced represented by Shopkeepers. Once mines start to industrialize, Capitalists step in to take over ownership. In most cases these Capitalists will come from Shopkeepers promoted to these newly created positions, but some might come from other Pops in the state, even other Capitalists in buildings not quite as lucrative as these new mines. There are fewer Capitalists than Shopkeepers but they draw a higher wage, and more importantly they will reinvest some of their earnings into the country's expanding industry depending on how much profit their workplace is generating for them. As new ideas spread across your society you might be able to make the mining industry publicly traded instead of privately held, and later on in the game perhaps even nationalize them to be run by government bureaucrats or turn them into cooperatives where profit is split between workers.

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Production Methods aren't limited to consuming and producing goods. Government Administrations employ Bureaucrats and Clerks who use Paper to produce Bureaucracy, one of the game's Capacities that let you govern more people and extend more state services to them. Railways consume Engines and a fuel such as Coal to produce both Transportation and Infrastructure, the former which is sold on the market and the latter which allows the state to support more buildings without loss of Market Access. Universities employ Academics that let the state guide research and development of new technologies and ideas. Virtually any kind of currency, modifier, or effect can be produced by Production Methods in buildings and can be applied in a variety of ways to the country, state, or even the building itself.

A basic Government Administration consumes 10 Paper and produces 50 Bureaucracy per fully-staffed level, but each additional level beyond the first adds a +2% Throughput bonus due to economy of scale. This increases both consumption of Paper and output of Bureaucracy, yielding more productivity from each of the Pops that work the building.

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This of course adds a tremendous capacity for modding in new Buildings and Production Methods! Embassies that increase your Influence, but which can also be configured to consume Wine and Meat at state expense to increase the speed at which you Improve Relations? Shantytown Temples that can only be built on coastlines, that consume Fish and create jobs for pops qualifying for the Deep Ones profession, increasing state mortality but also the weekly rate of the global cthulhu_rising counter? We can't wait to see what madness you unleash!

If tweaking multiple Production Methods across several categories on every single building in the game sounds a bit complex compared to linear building upgrades - you're right! Thankfully we've built a number of tools to help with this process. Foremost among these are the Buildings panel, where you can get an overview of all buildings in your country organized by major and minor type. For example you could get an overview of all Rural buildings, or all Furniture Manufactories, or all Ports. If you have buildings of the same type in several different states, you can break it down further to view the individual building. On each level you can see how profitable the building is and adjust its Production Methods. You can even set all Production Methods for a certain building type to a specific setting all across your country with one click.

From the Buildings panel you can get a birds-eye view of all industries in your country and see at a glance how they’re doing financially. You can change Production Methods on an individual building or on all of them at once. You can even expand buildings directly from this screen if you so choose, or click on one to get an in-depth view of its balance sheet and workforce.

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To minimize the requirement for mental math we have also created prediction tools that give you a breakdown of what to expect from choosing a certain Production Method, based on profitability predictions taking adjusted production and consumption into account, and summarizing which new job positions will be created and which will disappear. While it may on the surface seem obvious to just enable the Production Methods that make the buildings more profitable, keep in mind the societal effects as well - are there enough Pops in the state that qualify for the more advanced jobs this new process requires? Will the wage for these new jobs be sufficient to entice those Pops to switch professions? Will you inadvertently create a whole new class of well-to-do Machinists that may have pro-labor union sentiments? Or will the increased profits not lead to higher wages in the building because they're already competitive and fully employed, and will simply result in more dividends for the shareholders which will be funneled into increased luxury consumption? Which you choose might depend on your population’s social mobility, what politics you favor in your country (a socialist uprising may not be in your plans!) and whether you're able to supply luxuries yourself without benefiting your rival. More profitable domestic industries are never bad, but should be far from the only consideration when building your society.

Predictive tooltips will explain the anticipated impact on the building’s Balance as a result of changes in production, consumption, and wage requirements, as well as the changes in employment that could also impact the country’s politics over time. You will also be forewarned if there aren’t enough qualifying Pops to take on any new professions created, as this could limit your industry’s effectiveness.

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That is all for this week. We will return to discussing more economic intricacies later, but for the next little while we'll be exploring domestic politics - starting next week when Martin will be presenting Interest Groups!
 
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Scripts seem like they’d be good in this game. They can also help keep countries on a reasonably-historical path. I think Prussia could probably get pretty far with, “Try to build a strong navy, and the domestic industries you need for that. Prioritize researching things Germans historically invented, like artificial fertilizer, which you need for your armaments industry anyway. Once you have self-sufficiency in food and weapons, build factories that use the resources you have. Any pops left over can grow sugar beets and make chemical dyes.”

A player doesn’t need an AI to pick a sound long-term strategy. If I’m saying, “Automate this state,” it’s because I’m putting down my strategic buildings elsewhere, and whatever the AI builds is fine with me as long as it makes some sense.
I think you're seriously underestimating the difficulty of the task. If it was that easy, a lot of strategy games would have a decent AI. You suggestions are sort of a general plan for an intelligent human, but there are many details that needs to be addressed to make such plans work. For example, something like lack of paper or clothing could seriously derail such plans. Normally, one could expect free market to take care of such details to a reasonable degree, but here the scripts effectively represent free market too, so there is nothing to fallback on.

Considering the complexity that has already been revealed, I am sure there will be many more subtle ways to get into a trouble.
 
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So I had a thought today.

We know that you can now have minors working in factory jobs due to the new laws in Victoria 3. And being a soldier is a job, obviously covered by that law.

Does this mean that we can send nine year olds off to war?

THE RISE OF THE LITTLE UGANDAN WARRIORS! THEY ARE AMONG US!

LETS GOOOOOOOOOOOOOOOOOOOO!
 
So I had a thought today.

We know that you can now have minors working in factory jobs due to the new laws in Victoria 3. And being a soldier is a job, obviously covered by that law.

Does this mean that we can send nine year olds off to war?

THE RISE OF THE LITTLE UGANDAN WARRIORS! THEY ARE AMONG US!

LETS GOOOOOOOOOOOOOOOOOOOO!
Minors don’t actually work in factories, I think. Dependents just generate money if you have a) a social safety net or b) lax or non-existent child labor laws. The latter might interact with the economy in an organic way, but even if it does they aren’t actually a part of the workforce.

It would be interesting if there was a mechanic to recruit teenagers if things get desperate enough. That happened during the Paraguayan War, which should be the textbook example of death warring in the 19th century.
 
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The difference is competition. The problem that people have with bureaucracy is that there is no pressure to be efficient/penalty for being inefficient. In the private sector, if you are less efficient than the next guy/everyone else, then you are soon out of business.
But there is a pressure. Bureaucracy have a social goal/standard they must attained/maintained and limited budget to do so. So organization or specifically people who operate those organization are incentivized to choose method with the most efficiency else be replace by people who could choose better. See the armed force as an example of this.

On the other hand, competition by itself don’t promote fair play without some kind of rule and judge to prevent “cheating”. One of the best way to win is to win by default afterall.
 
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I think you're seriously underestimating the difficulty of the task. If it was that easy, a lot of strategy games would have a decent AI. You suggestions are sort of a general plan for an intelligent human, but there are many details that needs to be addressed to make such plans work. For example, something like lack of paper or clothing could seriously derail such plans. Normally, one could expect free market to take care of such details to a reasonable degree, but here the scripts effectively represent free market too, so there is nothing to fallback on.

Considering the complexity that has already been revealed, I am sure there will be many more subtle ways to get into a trouble.
You’re quite right that this is a list of priorities, not a literal script the AI can follow. I am not in any way, shape or form implying that writing an AI for a game this complex—and especially not one that produces both plausible historical outcomes and an entertaining challenge at the same time—would be simple or consist only of an outline like I gave.

That having been said, economic history gives scripters a good source of lists like that to use as a starting-point. And if Germany wants to avoid being cut off from goods that its civilian economy needs during a two-front war, it had better have a strong navy. You mention clothes, and Germany cannot possibly own enough cotton plantations that don’t need to transport goods to Germany by sea, until it’s already fought several wars without having them.
 
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The difference is competition. The problem that people have with government bureaucracy is that there is no pressure to be efficient/penalty for being inefficient. In the private sector, if you are less efficient than the next guy/everyone else, then you are soon out of business.
"Private sector is more efficient!" is a Big Lie pushed by the private sector, privatization advocates aiming for fat payouts from private sector, and private sector workers embittered public sector aren't as overworked and underpaid as them.

Please keep liberal ideology out of my dialectical materialism simulator.
 
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Excuse me but did you miss the last 50 years of the 20th century? Yes private industries are always more efficient than government industries, I don't have time to school you about history, you just have to read about it yourself.
 
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I think we are drifting into ideology, which I am not interested in debating. I am not going to convince you that government is inefficient if you have defined it as an important part of your definition of self.

However, briefly, the social goal that you describe above, who enforces it? The people? How do the people know when government bureaucracy is inefficient? People pay taxes and they get services in return, but there is no simple, widespread metric for measuring whether those taxes are efficiently turned into services.

I am not just speaking theoretically. I work for the state (at a college) in USA. The college has no internal metrics for efficiency (and I don't mean teachers/students - I mean staff that keep the college running). Efficiency is never even mentioned . No one determines whether the college has the right sized workforce for the job. The administration certainly does not. The main principle that the college follows is the squeeky-wheel principle. If someone complains enough, then they get more employees. The limited budget that you describe that should prevent overstaffing? It is reflected in salaries and the college makes no effort to maximize salaries. That has never been mentioned in my decade plus at the institution. There is always someone willing to work at the college regardless of the pay. As far as external metrics for efficiency? The public has absolutely no clue what is going on at the college or whether the college is run efficiently. None. The college does not produce anything by which the public could judge its efficiency.

That is my issue with the public sector. If you want to claim that the private sector is just as bad, then go ahead. There should at least theoretically be some pressure to be efficient in order to be profitable and stay in business. The market should exert some pressure. The college will never go out of business for being too inefficient. There is no pressure there.

But, as I said, this is an ideological thing. People define themselves with their political beliefs and so we are probably all just wasting our breath.


Yep. As expected.

For the record, I don't care whether government bureaucracy is efficient or inefficient in the game. However, in real life, I have a lot of personal experience that it is not efficient and does not even try to be efficient.
That's just not true. Even in relation to schools or colleges there are criteria according to which the performance of the staff is judged, including controls. Some of them can be bad, but that doesn't mean that the public sector doesn't work with them.


What actually happens only with a delay is the control of wages, because the state cannot go bankrupt. But it happens. If you get too few staff, wages will eventually be increased due to public pressure.


The pure measurement through direct costs can theoretically even be more expensive because it appears again elsewhere. In Germany, for example, the public hospitals were in the red. So they were largely privatized, or left in public hands, but subjected to the principle of cost accounting. As a result, hospitals are keen to chase as many patients through the system as possible and to settle as many examinations as possible with the insurance companies. Personnel, on the other hand, is an ongoing cost factor. The cost factor is saved.


The principle of market efficiency also applies to schools. Germany has a three-tier school system. In some cases, the schools are rated according to the grade average for the exams. Accordingly, one tries to remove weaker students from school or to give better grades.
 
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Excuse me but did you miss the last 50 years of the 20th century? Yes private industries are always more efficient than government industries, I don't have time to school you about history, you just have to read about it yourself.
At least I didn't miss the comparison between the healthcare sector in Europe and the US. At the point where the US was followed, it didn't get any cheaper, to say the least. The same applies to privatizations such as garbage collection or public transport.
 
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One more, then I am going to close this and tune back in next Thursday. If for no other reason than I expect that a moderator is going to pretty quickly nip this discussion in the bud.

Believe whatever you wish - there are no criteria, metrics, or controls. There is nothing. If you work in admissions or you are a groundskeeper or a secretary or whatever, no one is checking to make sure that you have enough to do. No one is measuring whether you spend more time web surfing than doing your job. At best, a holistic analysis is performed by the more responsible administrators, but many administrators simply don't want to cause trouble. If the work gets done, then who cares whether the work could get done with one less person.

How do I know this? I am a faculty member at the college and serve in leadership. I talk to the administrators. I serve on the planning and budget committee. I ask questions and I have pushed for some of these things. The response? Visceral pushback. Administrators do not want to be required to judge their employees workload and make judgement calls on whether those employees should continue to be employed. Staff do not want to be judged and potentially lose their job.

The system defends itself against the imposition of efficiency.

I am done. Good luck hashing all of this out. See you next week.
Just one last thing. In the German system, for example, questionnaires are now distributed to the students at the universities with which they evaluate the lecturers. There can be other forms of controls as well. Just because Gods own country is incapable of such a thing, it doesn't mean that it is the same everywhere. And I have also given examples of how a pure evaluation according to market criteria of each individual step can be more expensive in the end result. In the worst case, the performance in the elections is evaluated - also in comparison to other countries. So far I do not see that the German parties advertise the much "more efficient" lean state of the USA. This is usually brought up as a daunting example.
 
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"Some state bureaucracies are inefficient" is not the same thing as saying "all state bureaucracies are inefficient." It depends on the structure of the state and the individual bureaucracy within it. And as has been noted, private bureaucracies can also be very inefficient, sometimes deliberately so. Any American who has every tried to call the customer support line of their ISP can attest to this.
 
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This is already kind of a dead horse, but: what I think would help me understand this point of view is if someone who holds it could give me a few examples of what they would consider a real-world “laissez-faire” economy from the time period. Then we could meaningfully discuss how a “laissez-faire” economy historically worked.
An early example is France (the name obviously comes from there) liberalization of "grains" (in EU4 trade good terms :p) trade. Other examples, during the Revolution, is the abolition of the guilds that controlled certain trades. I think it is probably very close to classic liberalism (state enforces the law, private actors run the economy).
 
I am looking at the screenshot with balance predictions on production method change and... I don't get it.
  • -20 basic clothes at a price of 40.4
  • +40 luxury ones at a price of 51.7
  • with additional consumption of 20 silk at 57.8
and that results in estimated income of +71.8, but how?
40*51.7 -20*40.4 -20*57.8 = 104... so that's not it

Are there more numbers to it that aren't displayed or how does it work?
 
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I am looking at the screenshot with balance predictions on production method change and... I don't get it.
  • -20 basic clothes at a price of 40.4
  • +40 luxury ones at a price of 51.7
  • with additional consumption of 20 silk at 57.8
and that results in estimated income of +71.8, but how?
40*51.7 -20*40.4 -20*57.8 = 104... so that's not it

Are there more numbers to it that aren't displayed or how does it work?
The tooltip probably isn't showing the wage difference between 400 shopkeepers and 400 laborers.
 
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Frankly, this answer is a bit confusing (edit - As in I understand the potential mechanics, I don't understand how they are a good simulation) to me. Of course you have yet to talk about your infrastructure mechanics, but infrastructure seems like exactly the sort of thing that would incentivize centralization, because it is hard and expensive to develop good infrastructure everywhere, so industry and population will tend to gather where it is already available, making it even more effective to improve the infrastructure where people already are. So how infrastructure would be a incentive to decentralize seems puzzling to me.

This is not to say that economies of scale should not also be a factor. I think for a lot of reason they make total sense. I think it was mainly in the context of bureaucracy that it felt wrong that it was the sort of thing that was good to centralize. To me that feels exactly like the sort of thing that it should be "easiest" to centralize, because that is where you have people with the right qualifications etc. but to be efficient you have to make the effort to spread the administration to the developing parts of your nation. Of course that struggle can be modelled in many ways, and hopefully producing Bureaucracy Capacity is just one component of a well functioning administation, but it was one of the things I felt was done fairly well in Vic2, with each state needing to supports its own administrative class etc.
Of course infrastructure mechanics should incentivize decentralization. Imagine a country with poor infrastructure. You want to make everything as local as possible, aka as decentralized as possible. Otherwise, remote areas would get poor access to services. Before the railroad, butchers killed their own animals. After the railroad, they buy pre-butchered meat from the Chicago slaughterhouses. Poor infrastructure will encourage decentralization. Good infrastructure, combined with economics of scale, will encourage centralization. Economics of scale is essential to incentivizing centralization, good infrastructure is not enough on its own.

Also, bureaucracy can not be centralized if you do not have the infrastructure necessary to communicate with the hinterlands. I mean you can try, but it's not going to be very effective or useful.
 
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Regarding Economy of Scale and the realistic benefits of centralization v. decentralization: generally we want to encourage centralization through the mechanics because decentralization is already indirectly incentivized through the Infrastructure mechanics (which we haven't talked about in detail yet) and EoS makes for a good strategic counterbalance to that. Since we have no hard caps on the number of different building types you can have in each state you're free to decide if you want to build 1 level 10 Textile Mill in one state or 10 level 1 Textile Mills in 10 states. Without a solid reason to centralize, states don't tend to develop the same kinds of distinct identities which also causes the political gameplay to suffer. So we assume that many (not all) buildings benefit from building tall.
So the throughput bonus acquired through economies of scale applies to all/most buildings, not just administration buildings employing bureaucrats?

If thats the case, I dont like the economies of scale bonus for administration, as hsitorically decentralized administration in multi ethnic states such as Austria-Hungary was usually better, but I do like it for general industry, as it will allow one to create for example a historical Ruhr valley where most of Germanys heavy industry is located. In Vicky2 you had RGO throughput bonuses and population nunbers to take into account but generally there would not be a bonus to stacking industry in one place in of itself.
 
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At least I didn't miss the comparison between the healthcare sector in Europe and the US. At the point where the US was followed, it didn't get any cheaper, to say the least. The same applies to privatizations such as garbage collection or public transport.
Healthcare in america is a weird combination of private and public that meshes like water and oil. For a worser whole lol.

Anyways, I can't wait for the next dev diary since even with the fear i have that the game can't possibly meet expectations, my hype is at max levels.
 
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So, brainstorming here, maybe the script says they don’t invest a lot i n wooden ships but do build all the prerequisites for dreadnoughts and go all-in on those. Or maybe they’ll do it sooner if they get the chance.

Germany actually got their navy on in the pre-dreadnought era (but well after the broadside ironclad/central-battery-ship period) and then carried it through to dreadnoughts, but agree that scripting will probably be important here :) What would be cool would be to make sure the scripting doesn't necessarily always do the same thing every time (ie, isn't predictable for players) - so a British player may need to counter a somewhat irrational German naval build-up (Germany building a navy makes sense, Germany trying to match the RN in most situations was a bit silly), or Germany might decided to focus a bit more on its army (creating headaches for its continental neighbours, and Britain if it wants to help them contain Germany).

"Private sector is more efficient!" is a Big Lie pushed by the private sector, privatization advocates aiming for fat payouts from private sector, and private sector workers embittered public sector aren't as overworked and underpaid as them.

I think we are drifting into ideology, which I am not interested in debating. I am not going to convince you that government is inefficient if you have defined it as an important part of your definition of self.

But, as I said, this is an ideological thing. People define themselves with their political beliefs and so we are probably all just wasting our breath.

Excuse me but did you miss the last 50 years of the 20th century? Yes private industries are always more efficient than government industries, I don't have time to school you about history, you just have to read about it yourself.

The system defends itself against the imposition of efficiency.

Efficiency in the private and public sector can be (and are often) measured - it's not about ideology (although there are plenty of people on both sides of the fence that confuse the issue and suggest it is) - there is plenty of data, but sadly many people that get caught up in the ideological debate are too busy arguing to actually study the available evidence (or, prefer to ignore the evidence that doesn't match their point of view). Note that it's also far bigger than one's personal experiences within a particular institution - there are numerous anecdotal examples of inefficiency in both public and private sectors.

For economic efficiency, the key is some kind of motivation to be more efficient over time. The public sector, somewhat ironically, is often hamstrung by decisions by politicians rather than any inherent inefficiency (as long as their management arrangements include some kind of efficiency motivator), while the private sector if market power is allowed to grow unchecked into oligarchy and monopoly (for example, market concentration in many countries, including the US, is higher now than it has been for a long time, which many economists link to the stagnation in productivity growth in the private sector). The idea that "private is good and public is bad" is as simple and inaccurate as "public is good and private is bad".

In many cases, what's important is less whether something is publicly or privately owned, but that there's a market or some other mechanism for ensuring the pressure that creates efficiency. For the sale of goods and products that don't need large economies of scale, and are rationally purchased by individuals at an optimal level for the economy, a competitive market arrangement works very well. But competition is only one of a range of possible 'efficiency-generating pressures', and is not always feasible. For things that can't be easily produced by multiple producers and competed against each other (for example, government administration, or railway infrastructure), the privatisation of services doesn't necessarily lead to a competitive market, and thus can be just as (and sometimes more) inefficient than even a government-run organisation even without sensible 'efficiency motivators'.

The failure of the Soviet Union (and other 'Communist' countries) was arguably due more to a failure to have representative politics, such economic activity was subverted to political horse-trading and so on. It is perfectly feasible in a democratic country with political checks and balances to have efficiently-run publicly-owned businesses - just like it's not uncommon at all in a non-democratic country to have horrendously inefficiently-run private sector monopolies (usually owned by, or by friends of, the ruling class).

That being said, how the devs want to manage this in-game is another thing entirely. The two keys are accountability and 'efficiency motivation'. As long as monopolies aren't allowed to grow, for most freely tradeable and not geographically-fixed products, a 'free' market arrangement tends to work best (regardless of whether companies are privately or publicly owned - as long as the public companies are not propped up by the state when they have a rough time of it, and are allowed to fail - which they often aren't for political reasons). For other, less freely-tradeable goods, or products that aren't efficiently determined by individuals (think armies and navies, for example), other arrangements do a better job.
 
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Efficiency in the private and public sector can be (and are often) measured - it's not about ideology (although there are plenty of people on both sides of the fence that confuse the issue and suggest it is). However, it's also far bigger than one's personal experiences within a particular institution - there are numerous anecdotal examples of inefficiency in both public and private sectors. The key is some kind of motivation to be more efficient over time. The public sector, somewhat ironically, is often hamstrung by decisions by politicians rather than any inherent inefficiency, while the private sector if market power is allowed to grow unchecked into oligarchy and monopoly (for example, market concentration in many countries, including the US, is higher now than it has been for a long time, which many economists link to the stagnation in productivity growth in the private sector).

In many cases, what's important is less whether something is publicly or privately owned, but that there's a market or some other mechanism for ensuring the pressure that creates efficiency. For the sale of goods and products that don't need large economies of scale, and are rationally purchased by individuals at an optimal level for the economy, a competitive market arrangement works very well. However, for things that can't be easily produced by multiple producers and competed against each other (for example, government administration, or railway infrastructure), the privatisation of services doesn't necessarily lead to a competitive market, and thus can be just as (and sometimes more) inefficient than even a government-run organisation even without sensible 'efficiency motivators'.

The failure of the Soviet Union (and other 'Communist' countries) was arguably due more to a failure to have representative politics, such economic activity was subverted to political horse-trading and so on. It is perfectly feasible in a democratic country with political checks and balances to have efficiently-run publicly-owned businesses - just like it's not uncommon at all in a non-democratic country to have horrendously inefficiently-run private sector monopolies (usually owned by, or by friends of, the ruling class).

That being said, how the devs want to manage this in-game is another thing entirely. The two keys are accountability and 'efficiency motivation'. As long as monopolies aren't allowed to grow, for most freely tradeable and not geographically-fixed products, a 'free' market arrangement tends to work best (regardless of whether companies are privately or publicly owned - as long as the public companies are not propped up by the state when they have a rough time of it, and are allowed to fail - which they often aren't for political reasons). For other, less freely-tradeable goods, or products that aren't efficiently determined by individuals (think armies and navies, for example), other arrangements do a better job.

The problem with the public sector is that many areas can only be assessed at the long-term level of the economy, but only to a limited extent at the micro-level. I can keep the youth welfare service pretty cheap. But then later I have higher costs in terms of prisons. Dead people in a non-existent health system do not pay taxes later.

The private sector works in a more fragmented way. But even there, some areas are always in deficit. No matter what I do, the security of my super market will not give me any black numbers. It will always only generate costs.

I can only assess the public sector by comparing it with the public sector of another country. Or when I make the comparison with several private sectors with reference to the societal impact. The great idea of dumping garbage in the river might be great from the numbers of privately operated garbage disposal and the people who buy this service might not mind this practice, but the overall effects are not that great.

I can also do without the building regulations. The collapse of buildings will not be readable from the statistics of the construction companies. On the contrary, I will have lower costs than a country with such regulation.
 
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The problem with the public sector is that many areas can only be assessed at the long-term level of the economy, but only to a limited extent at the micro-level. I can keep the youth welfare service pretty cheap. But then later I have higher costs in terms of prisons. Dead people in a non-existent health system do not pay taxes later.
I can also do without the building regulations. The collapse of buildings will not be readable from the statistics of the construction companies. On the contrary, I will have lower costs than a country with such regulation.

Exactly - this is what I was getting at in terms of goods that aren't purchased effectively by individuals in a competitive and 'free' market. It takes serious effort to understand the complexities involved (one of the reasons they're not purchased effectively by said individuals, although there are usually big free rider issues as well) and thus many people in said societies see the costs without understanding the benefits, and because they can't link those costs clearly to the benefits label them as 'inefficient'.
 
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