Victoria 3 - Dev Diary #110 - Building Ownership & Foreign Investment

[A Pink Duck]

Yes but if you look at how government runs anything it’s always terrible and worse than private sector ownership across history- the Soviet Union essentially starved itself by trying to collectivize farming through government ownership. It’s not very ideological to say evidence presents that government ownership is inefficient. Beyond that it’s very ahistorical to the period to say the player is better off under government ownership than private sector growth when the historical period demonstrated the opposite.

My water utility is run by the city and it is well managed. My ISP is private and it's terrible. From a consumer's perspective the efficiency gains from private ownership are often overshadowed by corporate greed and desire to extract monopoly rents.

 

[Oglesby]

Country-owned buildings come with reduced Economy of Scale bonuses and a bureaucracy cost for each level you own. But in return they can provide additional income based on the building’s dividends which partially get transferred to your treasury.

Partially? What happens to the rest?

Not all buildings can be of any ownership type of course, for example barracks or government administrations will always be country-owned.

Are the always country-owned buildings affected by the country-owned malus?

One particularly interesting law is Laissez-Faire which upon enactment forces all your country-owned buildings to be put up for sale and will automatically do so for every new building level you construct.

Except for the always country-owned, correct?

Then there are three diplomatic pacts which you can use if you have bought the expansion:

1. Mutual Investment Rights which allows both countries to invest in each other
2. One-directional Investment Rights in either direction, so you either demand to be allowed to invest in their country or offer another country to invest in yours

"there are three pacts..." and list ends at 2? Is the second item in the list covering two of the pacts or is one missing?

“We should compensate them to reduce the quarrels.”
View attachment 1103852​

So it was stated in answers that we cannot pick the levels to nationalize, but how are they currently selected? Is it a sorted list? Always foreign then local or vice versa? Is it just as they were 'created'?

May I have to piss of France if I want nationalize some of my own Furniture Manufacturies?

 

[Prob32]

Yeah you are probably right for most of the time, but I can think of two examples where you would: 1. when you need somewhere to park your abundant investments funds and you are out of peasants to draw from locally 2. When there is a good that you really need but don’t have an option to obtain locally or by subject, such as oil, rubber, or opium.

So for number 1, yes of course you would need to expand once all peasants available to you are expended but that should make you want to expand diplomatically or militarily to ensure your investment is wasted which I believe is good game design.

Number 2: if there’s a good you need you need them in your market to get all of that good anyways so you would want a strong diplo or make them a puppet. You could use a trade agreement but that’s riskier

 

[Prob32]

My water utility is run by the city and it is well managed. My ISP is private and it's terrible. From a consumer's perspective the efficiency gains from private ownership are often overshadowed by corporate greed and desire to extract monopoly rents.

Your ISP is a government granted monopoly- and I'm glad you don't live in flint Michigan. That said your anecdotal evidence doesn't outweigh a century of government mismanagement under socialists regimes: China (Under Mao), Soviet Union, North Korea, Venezuela and Cuba. Government ownership of the economy only works in the minds of tankies, and certainly not during this period.

That said I don't mind co-operative ownership being an efficient PM that actually increase the QoL of life of your pops in the game, I think that it shouldn't grow as fast as Laisse Faire. I think government ownership should net be the worst unless you don't care about happiness or growth but want the state to have all the power for larp.

 

[Prob32]

Country-owned buildings come with reduced Economy of Scale bonuses and a bureaucracy cost for each level you own. But in return they can provide additional income based on the building’s dividends which partially get transferred to your treasury.

How does this work? If I have a state with 10 buildings, 5 government 5 private sector how do you apply a malus to the 5 government levels and still calculate profits and wages? Wouldn't the government buildings be less profitable than the 5 private sector buildings due to the the economy of scale malus which would result in different profits/wages?

 

[A Pink Duck]

Your ISP is a government granted monopoly- and I'm glad you don't live in flint Michigan. That said your anecdotal evidence doesn't outweigh a century of government mismanagement under socialists regimes: China (Under Mao), Soviet Union, North Korea, Venezuela and Cuba. Government ownership of the economy only works in the minds of tankies, and certainly not during this period.

That said I don't mind co-operative ownership being an efficient PM that actually increase the QoL of life of your pops in the game, I think that it shouldn't grow as fast as Laisse Faire. I think government ownership should net be the worst unless you don't care about happiness or growth but want the state to have all the power for larp.

Without in game monopoly effects capitalism is artificially buffed. I have no issue with artificially buffing state control as well until that's addressed.

Yes, state control tends towards inefficiency. But the unrestrained free market tends towards monopoly, which can be just as bad. At the end of the day if you only have one option does it matter whether that's the government or a corporation?

 

[ruhrbaron]

So, does that mean we now have capital markets by proxy? that's neat. Finally a well needed buff to capitalism.
I hope that technologies make access to financial services cheaper and more efficient over time, letting more and more pops participate in capital markets and banks redirecting pop savings into productive investments making the numbers go up

 

[Citizen Caen]

So for number 1, yes of course you would need to expand once all peasants available to you are expended but that should make you want to expand diplomatically or militarily to ensure your investment is wasted which I believe is good game design.

Number 2: if there’s a good you need you need them in your market to get all of that good anyways so you would want a strong diplo or make them a puppet. You could use a trade agreement but that’s riskier

Yeah obviously it will be preferable to build in something you own, but consider a situation in which you are too weak to beat a great-power bloc. Say you are Italy and you’re late to the colonial game. You need rubber but all the good colonies have already been taken. You could try and beat Great Britain in a war, or you could just invest in some rubber plantations and trade for it without the need to go full world war.

 

[MatthewP]

Your ISP is a government granted monopoly- and I'm glad you don't live in flint Michigan. That said your anecdotal evidence doesn't outweigh a century of government mismanagement under socialists regimes: China (Under Mao), Soviet Union, North Korea, Venezuela and Cuba. Government ownership of the economy only works in the minds of tankies, and certainly not during this period.

GDP per capita grew by 132% in Russia/Soviet Union between 1900 and 1950. Basically all of this growth was after the revolution, and followed centuries of stagnation in Russia with a private sector economy.

For comparison, per capita GDP grew by an almost identical 133% in the US and only 59% in Western Europe during the same period.

China and Cuba also had very high GDP per capita growth in the decades following their revolutions. The evidence that communism is bad for growth is basically nonexistent. You can point to glaring examples of government mismanagement and inefficiency of course, but you can't compare them to nothing, you have to compare them to the great depression, the recent housing/financial crisis, the dot com crash, etc. And the evidence suggests that it's basically a wash as far as long-term growth goes.

Of course, the evidence that totalitarian communism is bad for quality of life is extremely obvious, and all of these states experienced horrible atrocities. But that's a separate point.

That said I don't mind co-operative ownership being an efficient PM that actually increase the QoL of life of your pops in the game, I think that it shouldn't grow as fast as Laisse Faire. I think government ownership should net be the worst unless you don't care about happiness or growth but want the state to have all the power for larp.

I do agree the game needs penalties for state ownership though. Otherwise it would be too obvious a choice. Also, when we compare economic growth and say that state and private sector are relatively equal, that means the public sector needs some cost to balance out the money that capitalists take out for their private consumption. Administrative cost seems appropriate.

Finally, early game government ownership is not necessarily the same as any of these examples of communism. Those were relatively advanced states making a concerted effort to run the economy in a systematic way. Early game government ownership under say traditionalism seems more adhoc, like the king says "Let's open a textile mill" and puts his brother or one of his advisors in charge. You can imagine this would have significantly more issues with inefficiency and corruption.

 

[Avald]

I have tried searching for a possible mention of the question I have and haven't found it. If I missed it, please excuse me.

My question is regards to how buildings will be governed once they are country-owned. I understand that buildings which are worker-owned will see all of the money go towards the workers and from the screenshots I have seen, there is no ownership PM anymore either, which makes sense for that scenario. But how are government workers, who govern buildings on behalf of the government showcased? Or do the dividends just directly flow into the treasury, without any representation of it being handled by someone? Or is there a 3rd building, a la privately-owned?

 

[Metz]

Would you consider adding a new character type in the future? The tycoon which is the head of a company who belongs to an IG and has his own beliefs. If influential enough, they could take over the IG. They could also have the unique ability to bolster their IG as a way to represent wealthy people using their money to increase their influence in politics.

@PDX_H4n1baL

 

[Dogukan91]

This was one of the most important thing that had to be represented. So glad it is finaly coming. The implementation sounds pretty good too.

 

[DominusNovus]

Without in game monopoly effects capitalism is artificially buffed. I have no issue with artificially buffing state control as well until that's addressed.

Yes, state control tends towards inefficiency. But the unrestrained free market tends towards monopoly, which can be just as bad. At the end of the day if you only have one option does it matter whether that's the government or a corporation?

The unrestrained free market - outside of natural monopolies - tends towards perfect competition.

Consider commodity production. Pretty low margin, with loads of competitors, isn’t it? Because that is a sector in which monopolization can generally only be enforced through government fiat.

 

[agaabrieel]

This is the biggest change to the gameplay-loop since the war changes or the original introduction of Auto-investment. I like how it lays the foundation for things to come, seemingly company ownership.

Thought: have you considered moving the investment pool source from the pops to these buildings? Right now we have 20% of capitalist income going to the investment pool, but when the income is paid by the building it might as well be 20% of financial district profits, no?

I feel like this has potential in regards to things like experiments with private debt/interest rates, companies / districts modeling investment banks investing in their own expansion.

Edit: it allows you to mess with having a seperate debt / investment pool per company. But it does remove the pop type determining what type of building is built. So it's an interesting tradeoff.

Please!!

There’s a lot to unpack here, sorry for all the questions, but here goes:

Do you think the changes to ownership could provide a platform for adding more financial mechanics? Ie, banking, insurance, private and public lending, and international credit?

Will capitalists buy/sell buildings from/to each other?

Are speculation and market bubbles modeled?

If a country my capitalist’s have invested in goes bankrupt or nationalizes foreign industry, will my capitalists create a lobby to invade and demand compensation?

And please!!!

We need more in depth financial systems, even if highly simplified/abstracted. The investment pool should work as a capital market/national bank, where financial centers/manor houses lend money to both other financial centers/manor houses and governments, both national and foreign. Public debt plays a very minor role in the game currently, while historically it has been extremely relevant.

 

[A Pink Duck]

The unrestrained free market - outside of natural monopolies - tends towards perfect competition.

Consider commodity production. Pretty low margin, with loads of competitors, isn’t it? Because that is a sector in which monopolization can generally only be enforced through government fiat.

Until one party starts getting big enough (economy of scale) to start buying up their rivals or driving them out of business (see Amazon for a modern example). Standard Oil certainly never had a government mandate. Modern competition amongst corporations is due to antitrust laws passed as a direct result of corporate monopolies during the Victorian period (the gilded age specifically in the US). And even then I think you'd be surprised at how concentrated many industries are. They may not be monopolies in a strict sense but a cartel (OPEC) or "gentleman's agreement" can be just as bad.

 

[monksimus]

After reading through all of the responses here, I have so many more questions/observations because it is exciting! Here are just a few that I remember:

1. If the technology to construct a building is determined by the builder, what determines the PMs available? If it is by the country where the industry is I expect a lot of low level PMs for foreign owned companies - another reason to try to split them apart by ownership (which I understand is a can of worms!)
2. As a card carrying member of the Price Based Goods Substitution Revision Lobby (PBGSRL) I can't help but think these changes will make the current goods substitution model even more problematic. I know you have looked into it and found it complex to fix, but it really seems like fixing it sooner rather than later will save you headache in balancing with every future update.
3. Is the sale price of a building based off of the base construction cost or the current one for your country? Either way it seems like there is a way to game the pricing unless it becomes market based.
4. If you haven't done it yet, it seems like a prime opportunity for moving construction capacity from a government owned building into a regular one, with sells construction capacity to the market and has buildings require maintenance. Subsistence buildings could generate a small amount as well. Construction should also be a local good to discourage massive construction sectors in just a couple of states or make it so that much of the value is in the local construction efficiency bonus. It would be more realistic and should also be easier to understand if in the budget you set the amount you wanted to spend rather than just using up everything that wasn't used by private construction. I know the wild oscillations in budget particularly in the early game can be hard to handle especially for new players.

This is my favorite update in a long time, and I think it will serve as the basis for so many new improvements.

 

[Sabreline12]

Are you really going to remove directly controlled investment completely? I remember before the game was released they're was a lot of explaining by the devs of how you're playing the 'spirit of the nation' and this how it made sense that you choose what was built and where. How the core gameplay would revolve around 'national gardening' and you could craft your nation how you wanted. Now it seems you've done an about face? And now we will just be effectively playing as the government of the nation? With a lot of decisions taken out of the players control and given to the AI?

I continued playing with direct investment since, as good as the AI may be, handing over the decisions of what buildings to construct and where felt like handing control over my game to a board of monkeys. I definitely haven't be reassured by the stories of the AI making nonsensical decisions on what to build. It really seems equivalent to being forced to have all your planets bar your capital world AI-managed in Stellaris, a game where I can't bring myself to trust the AI either. I know it's impossible to have the AI make as optimal decisions as a player, but this is why I prefer to manage that stuff myself.

I don't know if I'll still have much interest in playing Victoria 3 if it starts to feel more like I'm just along for the ride rather than actually in control of the game I want to play myself and not delegate to an AI.

 

[monksimus]

Are you really going to remove directly controlled investment completely? I remember before the game was released they're was a lot of explaining by the devs of how you're playing the 'spirit of the nation' and this how it made sense that you choose what was built and where. How the core gameplay would revolve around 'national gardening' and you could craft your nation how you wanted. Now it seems you've done an about face? And now we will just be effectively playing as the government of the nation? With a lot of decisions taken out of the players control and given to the AI?

I continued playing with direct investment since, as good as the AI may be, handing over the decisions of what buildings to construct and where felt like handing control over my game to a board of monkeys. I definitely haven't be reassured by the stories of the AI making nonsensical decisions on what to build. It really seems equivalent to being forced to have all your planets bar your capital world AI-managed in Stellaris, a game where I can't bring myself to trust the AI either. I know it's impossible to have the AI make as optimal decisions as a player, but this is why I prefer to manage that stuff myself.

I don't know if I'll still have much interest in playing Victoria 3 if it starts to feel more like I'm just along for the ride rather than actually in control of the game I want to play myself and not delegate to an AI.

I think what they mean by taking away direct investment is that you won't get to decide for investors what they buy. You can still build anything you want using government funds and sell it to investors. My intuition is that you will end up having significantly more control over what is getting built than in the normal rules, though obviously not total.

And I would be shocked if someone didn't mod this back in immediately.

 

[guiskj]

Are you really going to remove directly controlled investment completely? I remember before the game was released they're was a lot of explaining by the devs of how you're playing the 'spirit of the nation' and this how it made sense that you choose what was built and where. How the core gameplay would revolve around 'national gardening' and you could craft your nation how you wanted. Now it seems you've done an about face? And now we will just be effectively playing as the government of the nation? With a lot of decisions taken out of the players control and given to the AI?

I continued playing with direct investment since, as good as the AI may be, handing over the decisions of what buildings to construct and where felt like handing control over my game to a board of monkeys. I definitely haven't be reassured by the stories of the AI making nonsensical decisions on what to build. It really seems equivalent to being forced to have all your planets bar your capital world AI-managed in Stellaris, a game where I can't bring myself to trust the AI either. I know it's impossible to have the AI make as optimal decisions as a player, but this is why I prefer to manage that stuff myself.

I don't know if I'll still have much interest in playing Victoria 3 if it starts to feel more like I'm just along for the ride rather than actually in control of the game I want to play myself and not delegate to an AI.

In practice, I don't expect things to feel that different for the players that are used to play with direct control. Apart from the first couple decades at most, your capacity to use your construction points quicker than the AI can fill up its investment fund is almost guaranteed. If you use the loop of:

1. Build new building level
2. Set it for privatization
3. AI investment fund spends its money on buying the building you just built
4. AI investment fund slowly replenishes
5. You queue more buildings and set those for privatization
6. AI investment fund fills up and buys the next building level available for privatization
7. Rinse and repeat

Basically, you will end up with more building levels set for privatization than the AI investment fund can buy after a little while, which in practice will give you the same experience as having direct control of what gets built where.

In a sense, this change of building ownership and privatization will likely get us ALL to play far more closely to how Vic3 1.0 played than 1.6, unless you actively don't max your construction point utilization at all times.

We'll see how this plays in practice, but I wouldn't start saying "Vic3 is dead to me now" just yet.

 

[LeSingeAffame]

Are you really going to remove directly controlled investment completely? I remember before the game was released they're was a lot of explaining by the devs of how you're playing the 'spirit of the nation' and this how it made sense that you choose what was built and where. How the core gameplay would revolve around 'national gardening' and you could craft your nation how you wanted. Now it seems you've done an about face? And now we will just be effectively playing as the government of the nation? With a lot of decisions taken out of the players control and given to the AI?

Yeah you've been playing as the state at least since 1.2, they kinda shot themselves in the foot here. There isn't really a way to fix it without massively overhauling core aspects of the game, which is a shame

I think it's also why nationalized buildings "need" artificial limitations, since you're playing as the state there is no reason to not have the state as strong as possible and as invested in things as possible. It'll always be more effective to reap all the dividens out of a building instead of having to get some via taxes, and get some via reinvestments into the private construction cash pool

There also isn't a lot of friction with non-state agents, you can still directly act against powerful IG and they won't lift a finger unless you get *really* greedy and do something really stupid. Peaceful transitions to capitalism/democracy/socialism or any other big shift in your country's governance happen far too easily

I'll still say that I like nationalized buildings having a bureaucracy cost, I think it's fairly smart, but there also needs to be pressure from your IG and other non-state interests (maybe even from your neighbours/power bloc ?? *looks at the EU*) to privatize stuff that can be privatized. Having a powerful industrialist IG with a liberatarian-esque president should lead to massive privitazation, but the player would never do it because *that would be stupid since you'd make yourself weakier*

The two issues are linked in my opinion, and as long as non-state agents are toothless and push-overs, the state will "need" to be artificially nerfed