This is a refined version of a post I made 6 months ago, taking suggestions from users.
One of the most requested demands for Victoria 3 is implementing a better system of trade, and I am going to outline how this can be done. First though, several things must be redefined.
Regions and Provinces
All regions are to be of equal physical size, with some exceptions for regions that have to be very small for historical reasons. To ensure that this is possible without the resulting map being awful, they will have a much more highly variable number of provinces. In Siberia, regions could be single-province. In Germany, it could be as many as a dozen. The purpose of this is to allow the assumption that travel time between any two adjacent regions is roughly identical, so that the rate of transfer of goods doesn't need to be adjusted by region size.
All provinces have both a farming good and a labouring good, instead of just a single RGO. This allows each individual region to have greater variety of goods available within them.
The Regional Marketplace
The single biggest mechanical change should be this: Places can store goods. Specifically, every single region-country (All of a region within the borders of a single country) has it's own storage of goods. At the game's start, every single region contains 60 days of the Life needs for the people living there. Every region aims to have 60 days worth of goods that are affordable (as calculated by how much people brought on average in the past 3 days in the region). When the amount stockpiled is below 60 days, the price of goods increases a little (more for bigger shortages), and when it's above 60 days, the price decreases a little.
Factories and Labourers immediately sell all goods to the region they are in at that regions current market price. Yes, this does create money out of nothing. People buy goods from the region market place at that region's current market price, and armies must supply themselves from the regional marketplace. Yes, this also destroys money. This economy isn't as good at keeping a balanced book as Victoria 2, but honestly the fact that money had to be created in provinces in Vic2 was never particularly meaningful.
Whenever a good stays in a stockpile without being consumed or traded, 0.1% is removed as spoilage. This is to prevent huge piles of random goods from building up if the world produces more than it consumes.
Trade Between Regions
All adjacent regions almost always have goods of every single type flowing between them, both ways. What changes is the rate of transfer of goods. At it's most general level, goods will overall flow towards provinces where they are more expensive, which are also provinces with shortages.
To give an example of how this permits long trade routes to exist, consider a scenario with 3 regions in a line, west, centre and east. You have iron mines in the west, and a steel factory in the east.
1. Iron mine causes a large dump of iron into that region's economy, causing the price to drop.
2. Central region may not have any real demand for iron, but as iron is still more expensive there, it begins to be transferred from West to Centre.
3. Steel factory in East consumes the stockpile such that there is a shortage, and price of iron there rises.
4. Price of iron in East increases, so it begins to get transferred from centre to west.
5. There is now a long trade route though 3 provinces with iron flowing from West, through centre and to east.
6. Price of iron in the West now increases up to near baseline (as it's getting exported) and in the East, down to near baseline (as it's being imported). There is still a small enough difference, however, for enough goods to flow to match demand.
Basically, a gradient is created where producers are areas of lower prices, consumers are areas of higher prices, and goods want to flow from low to high. A bunch of map modes can be added for every good, which produce a gradient indicating the price in each regional marketplace.
Factors affecting trade between regions
Increased rate of transfer between two regions is caused by the following, in descending order of how powerful the effect is.
1. Greater difference in price of good
2. Higher population (otherwise high populations would consume goods faster than they can import)
3. Presence of Infrastructure (Railroads will only increase good transfer rate, not give an arbitary +16% to throughput)
4. Within a nation's own borders
5. Between nations within the same SOI
A higher rate of transfer is generally beneficial as it reduces the price gradient. Factories will be able to sell goods for more and pops able to purchase goods for less.
The last factor will be tariffs. When you set a tariff, it either blocks trade across borders (if the gradient is lower than the tarrif %, as in this circumstance trade companies lose money by transporting it) or slows trade (if the gradient is higher than the tariff %). The benefit of the tariff is that any goods which are transferred across borders contribute directly to your funds based on what tariff rate you set.
Shipping Lines
To allow goods to be carried over oceans, Shipping Lines need to be set up. These can either be set up by the Country, AI capitalists, or both depending on economic policy. They transfer goods in much the same way as trade between regions, and are set up between any two coastal regions. The rate of transfer is based upon the number of trade ships (either clippers or steamers) assigned to them, and the length of the journey. Depending on who set it up, either the Country or the Capitalists take profit equal to the difference in price between the goods transferred.
One of the most requested demands for Victoria 3 is implementing a better system of trade, and I am going to outline how this can be done. First though, several things must be redefined.
Regions and Provinces
All regions are to be of equal physical size, with some exceptions for regions that have to be very small for historical reasons. To ensure that this is possible without the resulting map being awful, they will have a much more highly variable number of provinces. In Siberia, regions could be single-province. In Germany, it could be as many as a dozen. The purpose of this is to allow the assumption that travel time between any two adjacent regions is roughly identical, so that the rate of transfer of goods doesn't need to be adjusted by region size.
All provinces have both a farming good and a labouring good, instead of just a single RGO. This allows each individual region to have greater variety of goods available within them.
The Regional Marketplace
The single biggest mechanical change should be this: Places can store goods. Specifically, every single region-country (All of a region within the borders of a single country) has it's own storage of goods. At the game's start, every single region contains 60 days of the Life needs for the people living there. Every region aims to have 60 days worth of goods that are affordable (as calculated by how much people brought on average in the past 3 days in the region). When the amount stockpiled is below 60 days, the price of goods increases a little (more for bigger shortages), and when it's above 60 days, the price decreases a little.
Factories and Labourers immediately sell all goods to the region they are in at that regions current market price. Yes, this does create money out of nothing. People buy goods from the region market place at that region's current market price, and armies must supply themselves from the regional marketplace. Yes, this also destroys money. This economy isn't as good at keeping a balanced book as Victoria 2, but honestly the fact that money had to be created in provinces in Vic2 was never particularly meaningful.
Whenever a good stays in a stockpile without being consumed or traded, 0.1% is removed as spoilage. This is to prevent huge piles of random goods from building up if the world produces more than it consumes.
Trade Between Regions
All adjacent regions almost always have goods of every single type flowing between them, both ways. What changes is the rate of transfer of goods. At it's most general level, goods will overall flow towards provinces where they are more expensive, which are also provinces with shortages.
To give an example of how this permits long trade routes to exist, consider a scenario with 3 regions in a line, west, centre and east. You have iron mines in the west, and a steel factory in the east.
1. Iron mine causes a large dump of iron into that region's economy, causing the price to drop.
2. Central region may not have any real demand for iron, but as iron is still more expensive there, it begins to be transferred from West to Centre.
3. Steel factory in East consumes the stockpile such that there is a shortage, and price of iron there rises.
4. Price of iron in East increases, so it begins to get transferred from centre to west.
5. There is now a long trade route though 3 provinces with iron flowing from West, through centre and to east.
6. Price of iron in the West now increases up to near baseline (as it's getting exported) and in the East, down to near baseline (as it's being imported). There is still a small enough difference, however, for enough goods to flow to match demand.
Basically, a gradient is created where producers are areas of lower prices, consumers are areas of higher prices, and goods want to flow from low to high. A bunch of map modes can be added for every good, which produce a gradient indicating the price in each regional marketplace.
Factors affecting trade between regions
Increased rate of transfer between two regions is caused by the following, in descending order of how powerful the effect is.
1. Greater difference in price of good
2. Higher population (otherwise high populations would consume goods faster than they can import)
3. Presence of Infrastructure (Railroads will only increase good transfer rate, not give an arbitary +16% to throughput)
4. Within a nation's own borders
5. Between nations within the same SOI
A higher rate of transfer is generally beneficial as it reduces the price gradient. Factories will be able to sell goods for more and pops able to purchase goods for less.
The last factor will be tariffs. When you set a tariff, it either blocks trade across borders (if the gradient is lower than the tarrif %, as in this circumstance trade companies lose money by transporting it) or slows trade (if the gradient is higher than the tariff %). The benefit of the tariff is that any goods which are transferred across borders contribute directly to your funds based on what tariff rate you set.
Shipping Lines
To allow goods to be carried over oceans, Shipping Lines need to be set up. These can either be set up by the Country, AI capitalists, or both depending on economic policy. They transfer goods in much the same way as trade between regions, and are set up between any two coastal regions. The rate of transfer is based upon the number of trade ships (either clippers or steamers) assigned to them, and the length of the journey. Depending on who set it up, either the Country or the Capitalists take profit equal to the difference in price between the goods transferred.
