The economics update is perfectly timed

[praftd]

I can't wait to tariff everyone or dominate markets with cheap goods. Very realistic. Very cool.

But for real, I'm excited. The lack of control over goods flow and trade really was holding the game back. Not sure why so many people are dissapointed. Geopolitics is heavily influenced by flow of goods. Without it there will never be a complex diplomatic system in V3. Currently pretty much all things are autarkic.

The new update will make things like the opium wars, port conscessions, opening Japan, etc actually important.

 

[TheFlemishDuck]

To be fair, people perhaps also havnt explored the trade system to its fullest to develop their tariff strategy's to use with certain specific nations. Even in the current version a lot can be done with competitive advantages to stimulate specialty trade and make a lot of tariff income from it, indeed some attention can be given by the player even to reduce shipping and bureaucracy cost to a large degree. You can play a trade nation, but it's a perhaps somewhat more challenging game to pull it off.

Equally, the way i interpret the changes is that many might still get a bit disappointed not because the system wont work better but because it wont necessarily be always easy to make it work for you.

What has always been hard to track and to a fair degree hasnt been done by the player base, is the amount of trade that actually does happen trough regular Vicky games and at what volumes. Having a bit of experience with it, i know plenty of fabric comes from China early on, plenty of wood comes from Russia early on, plenty of goods like coffee and dyes will flow to Austria and Germany, tonloads of opium flows from India to China as a given, i most games those are a given even for early game and offers opportunity for trade oriented nations to pick into those markets, those however further evolve and future trends can even be manipulated trough various tricks.

I doubt it will be so much different with the trade rework in that sense that "knowing how trade flows in a given timeframe" might be rather important, and that volumes and prices might hence be understandably lower than what a player might expect at the price he's paying in the location he is at. The main difference might be that if i take Dai nam's northern province to make it a sweatshop for turning Chinese fabric into clothes that i will dump on the Chinese market that likely now that thing wont cost much in terms of transport whereas if i had done this as say the Netherlands then i would still be technically importing Chinese cloth all the Way to Amsterdam and shipping clothes made in Dai Nam from Amsterdam to China, now the logistics of it is all more regional and the shipping costs are also gone atleast from a state budgetary perspective.

That is to say, any strategy that would like to optimally benifit from tariffs, specialization and trade will likely need to significantly addapt its playstyle to it and take actions on the geopolitical stage for the purpose of stimulating their trade like taking key colonies to produce large quantity's of of cheaply produced tradable goods that are also preferably closer to the larger areas of demand. One can immagine that the Suez canal will have a big effect on global trade when it comes into existance for that reason.

Many of the mechanics Paradox added to labor costs play strongly into this. The Ai doesnt always make great use of colonial exploitation, but it can be used to produce pretty much everything at greatly reduced costs even factory' goods when combined with decrees and company's. With the trade rework you can look at Northern African colonies as areas where you could produce all sorts of things dirt cheap and dump them on the European market, that one might become something of a new meme perhaps. The more goods produced trough tter cheap labor that can find itself to other markets, the more it will outcompete local industry in that category, by standard i asume that this will mainly happen for agricultural goods so good luck i guess if your Brazil so to compete against those colonies.

 

[za3tarani]

Not sure why so many people are dissapointed.

i think people are dissapointed because they feel that;
1. development is slow
2. roadmap for the rest of the year is lackluster
3. there are still bugs from previous updates that will not be fixed until next update+expansion

i would believe a very very very very very few people actually think reworking trade is a bad idea.

 

[Sietrin]

To be fair, people perhaps also havnt explored the trade system to its fullest to develop their tariff strategy's to use with certain specific nations. Even in the current version a lot can be done with competitive advantages to stimulate specialty trade and make a lot of tariff income from it, indeed some attention can be given by the player even to reduce shipping and bureaucracy cost to a large degree. You can play a trade nation, but it's a perhaps somewhat more challenging game to pull it off.

And with the everpresent risk of your economy collapsing just because your main clients collapse due to a civil war

 

[TheFlemishDuck]

And with the everpresent risk of your economy collapsing just because your main clients collapse due to a civil war

Yeah well what kind of trader has all his eggs in one basket? Takes a few default wisdoms to play that style right but thats just part of the fun of it. When autartic gameplay is mastered well enough to its typical predictable results, doing it the trading way has its own appeal as a challenge, you might be skeptical over having such aspects playing a factor in it while for me that would be immersive and fun heh. Though i admit its a style that lends itself to a more select few of country's that can be good at it and pull mor wealth from it from the start as opposed to them nessecarily having gone the autartic route, there are some other cheesy colonial endeavours like taking Transvaal in that same regard that are less about tariffs and more about minting obviously to which this competes though selling opium to China is quite competitive, if not more rewarding even, compared to churning out a dozen gold mines for the same construction points invested. even with good mining tech unlocked.

Still, Victorias toolbox offers the player a lot of tools. There are ways to turn around potential future market countr'ys around overnight in dramatic ways. If some high tech country like a Belgium with 35 universities and Siemens at its side is going to conquer country's to then release it with its advanced techs and laws mid game well that can create some significant boosts in the world economy too. There are synergetic relations that cna be build there than boost volumes of trades according to inherit market inbalances, one typical worthwhile endeavour in this is helping country's like Egypt and Etheopia to turn them into an agricultural powerhouse. Though from another perspective the point is also simple, the more i turn loads of little country's into hypermodern ones as Belgium the more i make the global economy and trade grow as a result, the more so when many of those country's have inbalances in resources that force them to such trade. Your little country's with 1 or 2 million pop can also get into the likes of a 50 million or more GDP if you help them a bit along. There can be a choice to have them in a common market or not to favor certain imbalances that are usefull for trade too.

 

[FranklyJustNess]

The addition of world market and competitive advantage are interesting choices, and it definitely has potential to change the feeling of the game, and unlock new playstyles, which is something Victoria3 desperately needs. It's currently essentially not possible to use trade as a more useful thing to your economy, than to just develop domestic consumption (maybe outside opium to Qing). You can take a country like Venezuela, use their potential to build some plantations, get cheap cash crops, and export them around the globe, but wait:

1. you don't have the interests to do so, best invest in a navy
2. also you need to provide convoys and ports
3. also pay bureaucracy
4. actually we can't really export with the tariffs on it
5. great, btw the owners don't actually pay any taxes on dividends

So yeah, there's essentially no way for it to ever turn a profit. Trade is really just there so a great power can get more buy orders once its already won, and secured first place.

So the rework has room for plenty of improvement, but also might not really manage it with the constraints placed on it (goods have no prices outside supply/demand balance nor quality). We actually don't know all that much about the system yet. It can be great and make it so you start a game, look at valuable good you can export, and use it to fuel your economy, or it can end up pretty meh and change very little.

Like there was an example of becoming an iron exporter as Sweden. Okay, you have good potential for it. You get yourself LKAB iron company and start exporting it. Is it that you start building a competitive advantage, which makes you sell iron for more, than its market price? Where do the profits go to? Are the trade centers getting cheap Swedish iron and sell premium Swedish iron TM, getting a price difference as pocket change? Do they then invest that money back into the economy? If you slap a small tariff on it, do you hugely crush your competitive advantage? You have a small population so maybe it's actually a total waste to build unnecessary mines, and sending your people into work in ports and trade centers, if they could just do something useful for the economy. Idk, we will see, I am somewhat optimistic, but I am not trying to set too high expectations of the system.

 

[TheFlemishDuck]

It's currently essentially not possible to use trade as a more useful thing to your economy, than to just develop domestic consumption (maybe outside opium to Qing)

Your assertion is false though, but thats also because you likely never put much efoort in developing strategies that make trade work for you.

You can take a country like Venezuela, use their potential to build some plantations, get cheap cash crops, and export them around the globe, but wait:

1. you don't have the interests to do so, best invest in a navy
2. also you need to provide convoys and ports
3. also pay bureaucracy
4. actually we can't really export with the tariffs on it
5. great, btw the owners don't actually pay any taxes on dividends

And you think the trade rework is going to solve much of that particular issue?

Venezuela does not have the competitive advantage in terms of labor cost, no'r will it want it. For the relative few demand for plantation goods that exist early on the likes of portugal can market them to European powers at far cheaper rates trough colonial exploitation so they just win out, and as the game goes on more colonies will bring in more cheap plantation goods likely at tprices to which Latin American coutnry's can't and dont want to compete.

Sure, its true that you are unjustly punished for wanting to play a trading nation now, arguably, for having to pay for transport and bureaucracy, and i think this is a critique we all get and agree upon and which we will happily see changed trough the trade rework. But the idea that latin American country's will easily be agricultural power houses selling cash crops to the Europeans over the competition offered by other players over a profitable tariff? Maybe by late game when demand has significantly increased? And even then do you want your people to work those cheap goods and be some sort of banana republic as it were? Maybe for roleplaying reasons sure, but not for the purpose of optimal play, for the purpose of optimal play you aim for as high a productivity per worker you can get and thats not going to be in agriculture.

Otoh, anyone can trade goods produced in min-max fashion at rediculous cheap costs trough colonial exploitation, from farms to sweat shops making clothes to whatever. It might take a bit of effort to set it up right, but you can typically produce profitably even at -75% market price, at that point there are plenty of goods that the AI will buy even over a 30% tariff. Though otoh your pops are even more forcefull on trade for the purpose of consumption over tariffs if they are wealthy enough and left with no choice, so even the absence of a variety of industry can create a fair amount of import volume to which a high tariff can be put.

There is 2 choices typically when it concerns tariffs, either you want to promote an industry for the labor and the productivity and wages that it offers and then you dont put a tariff on them to stimulate their trade, or you can have an army of dirt cheap labourers create a ridiculous volume of utterly cheap goods for a relative low investment that generates a fair amount of income in tariffs and perhaps dividends too. Which is to say, if you want to actually earn on tariffs too in your trade then its not nessecarily about stimulating your industry anymore, its about finding trades that will work over the margins of tariffs wherever you can find them that are profitable as they are, its either trading inbalances that translate into price difference between regions of stimulating said inbalances.

Like there was an example of becoming an iron exporter as Sweden. Okay, you have good potential for it. You get yourself LKAB iron company and start exporting it. Is it that you start building a competitive advantage, which makes you sell iron for more, than its market price? Where do the profits go to? Are the trade centers getting cheap Swedish iron and sell premium Swedish iron TM, getting a price difference as pocket change? Do they then invest that money back into the economy? If you slap a small tariff on it, do you hugely crush your competitive advantage? You have a small population so maybe it's actually a total waste to build unnecessary mines, and sending your people into work in ports and trade centers, if they could just do something useful for the economy. Idk, we will see, I am somewhat optimistic, but I am not trying to set too high expectations of the system.

Its all to be seen in what perspective you want to use this.

Tariffs CAN be a way to get a lot of money fast, but may not be the fashion in getting most money in the end. If you trade your iron for the tariffs, then its for the utility that the tariffs offer you at that moment in time typically. If you trade your iron withought tariffs to stimulate their development, then its for the utility of labor and wages and such which would often be a more long term goal. One thing to understand afcourse is that there is a fair discrepancy between the productivity per person that various industry's can offer in which mining once diesel pumps arive is a pretty good sort of industry to be specialized in, in relative terms, certainly more so that farming. And there are ways in which Sweden cane easily become a mining country withought nessecarily having much other industry when it works with synergetic vassals within a common market like Egypt for example. Within the common market tariffs arnt levied afcourse, as to what excesses the common market might produce its quite something notable that it is the market leader so to speak that typically makes the money on the tariffs for the whole market.

The real crux of it is labor costs, thats it. Would you ever want your Swedes to work cheap wages for the purpose to be more competitive in trade and collect tariffs, do you want to overproduce iron in Sweden to the point the price is going low for the purpose of export, even knowing that in fact iron takes a lot of shipping to transport which is kinda fair. Withought cheap labor, your kinda always at a disadvantage for the purpose of competitiveness so to be able to sell over a tariff, lest you specifically create market inbalances that will stimulate trade to which you can perhaps even act in between.

 

[FranklyJustNess]

Venezuela does not have the competitive advantage in terms of labor cost, no'r will it want it.

And that's an interesting issue. Will the input and labor costs have any impact on Trade Advantage? That wasn't stated in the DevDiary. In real life you can charge lower prices on goods made with cheap labor. If you play as CSA you might want to protect slavery, so you get a lot of cheap workforce for your cotton plantations, so you have a good trade advantage in exporting it, or maybe you produce a lot of clothes with it, and since cotton is so plentiful, the textile mills have very cheap input goods, but in Vic3 there is no such mechanic - the price of good simply relies on balance of buy and sell orders, you can't get a good to be cheaper, because the inputs are cheaper, it only makes this specific building more profitable.

So will Trade Advantage look at profits of those buildings and try to artificially add such a mechanic on top? Like "Your textile mills are operating cheaper than an average one by 16%, so you get a direct bonus to Trade Advantage"? Probably not, probably it only cares about how much you export.

And so you are basing your argument on a mechanic, that just doesn't exist.

 

[TheFlemishDuck]

And that's an interesting issue. Will the input and labor costs have any impact on Trade Advantage? That wasn't stated in the DevDiary. In real life you can charge lower prices on goods made with cheap labor. If you play as CSA you might want to protect slavery, so you get a lot of cheap workforce for your cotton plantations, so you have a good trade advantage in exporting it, or maybe you produce a lot of clothes with it, and since cotton is so plentiful, the textile mills have very cheap input goods, but in Vic3 there is no such mechanic - the price of good simply relies on balance of buy and sell orders

Are we playing the same game even,? You what now???

Seriously, yes protect those slaves perhaps, in fact make them work even cheaper by making all their input goods dirt cheap.You still think slaves are a bad thing after the reworks on labor and discrimination??

But it must be said, its hilarious that slave production is more expensive early in the game than production trough colonial exploitation. Like a level 1 cotton plantation in Europe will possibly have 1000£ and more in labor cost at basic PM, a slave plantation in the US rather will have something like 500£ per level whereas with colonial exploitation you can get something a cheap as 200£ per level, and this for a trade good that would generate at least 250£ in revenue for the output of a level 1 plantation when sold at -75% market price. With other words the European coton planation is barely profitable when selling at market price and goes into a loss soon if price drops low, a American slave plantation can be profitable still at say -30% market price, and in colonial exploitation you can be profitable at -75% market price.

Is it too hard to see then what the consequences and choices are? farms that sell at -75% market price are not going to be contribution much to your GDP, but it doesnt take a lot of construction points to have them pump out loads of goods that can sell profitably at -75% market price, that makes it often easy for those to beat a 30% tariff as afcourse the cheaper the better for that purpose. But thats a choice to have dirt cheap low GDP and wage contributing industry over the alternative simply to generate large trade flows to make a lot of tariffs on, and tariffs at high rates do generate proportionally a lot of revenue for the state, far more so perhaps than it would generate from the taxes on wages earned within an industry for the price it would cost to set that one up.

So yeah, if you want to do trading extremely low wages are great, and then either colonial exploitation is your friend or very heavy levels of discrimination are. But that has also its onw caveats versus slavery, in that often you will want/need to educate those cheap workers with degrees and that from another perspective labor competition can affect even their wages to the point that they dont outcompete cheap slaves anymore. Slaves have no wage that can rise in time, only a fixed upkeep, they also btw have a disproportionate amount of "active laborpool", so that gives certains stabillety for having low wages notably for further industrial processing. There are arguments that you woudnt want slaves throughout the game, rather than using them for purposes in early and mid game, thats another thing, atleast its kinda easy to create an army of slaves with debt slavery and heavy taxation so thats kinda cool in the oppressive way.

I think you really have to re-analyse the matter of labor costs in this game, especially with recent changes in mind. It matters a lot to "competitive advantage", purely trough abillety to produce at rediculously cheap rates.

 

[Sietrin]

Yeah well what kind of trader has all his eggs in one basket?

AI most of the times does a form of autarchy as well and there will be at best 1-2 trade partners willing to buy your goods and due to how the trade works you hane no guarantees that those few trade partners won't trade with someone else tanking your trade revenue. I did pull off an export based economy as Russia by focusing all the effort on wood and selling it to everyone thus nobody saw a need to build their own logging and I succesfully had lots of revenue from export tariffs but that's kind of an edge case of being a succesful monopoly, as a lesser nation doing anything like that is impossible.
Another example, Moldova. I built a prosperous little nation in the Ottoman market. Once I got my independence the entire economy collapses because literally nodoby in the entire world needs my goods in the quantities I produce as well as I couldn't get the imports I needed. Thus my entire economy couldn't exist without entering another market because of trade being whatever it is

 

[TheFlemishDuck]

AI most of the times does a form of autarchy as well and there will be at best 1-2 trade partners willing to buy your goods and due to how the trade works you hane no guarantees that those few trade partners won't trade with someone else tanking your trade revenue. I did pull off an export based economy as Russia by focusing all the effort on wood and selling it to everyone thus nobody saw a need to build their own logging and I succesfully had lots of revenue from export tariffs but that's kind of an edge case of being a succesful monopoly

Not really, you did well in that game by using a very notable competitive advantage that Russia has and because you did so you saw the global economy transform to rely far more on you for its wood at a constant and substantial rate than it would have developed its own industry. Yes Rusia can do that, the obvious advantages are in place to be used for that purpsoe and to make a gain on it if you desire so. Besides, it can simmilarly be pretty good in making furniture for the same reason that its great at wood.

Heck, Russia can pretty much pass colonial exploitation from day one, and it does have plenty of regions that arnt integrated. it might be not the most explored strat but its very stronk for Russia to enact colonial explotation day one and they have specialized provinces from which they can produce loads of resources cheap with it aswell that you can turn Poland into a Sweatshop manufacturing hub for Central Europe. Given that Russia is a bit impaired by tax loss early game to which tariffs arnt affected by you can actually make some sweat money early on dividends and trough tariffs by exploiting that.

I think you just havnt explored more games along those lines, but also because it can be a bit tricky to set up if you are not sure what kind of goods you can and cant sell in great volume when you might have achieved a competitive advantage in it. But there are many cases, As if clever colonial play for one couldnt make a country a powerhouse on the export of say rubber or Oil or many basic goods like even cloth. like i'm playign a Belgian game where i'm just selling thousands of engines and dominate the market in that regard even in Europe but because i have vassals like Ehteopia and Dahomey being pretty much purely agriculture focussed and released with pumpjacks tech they also buy thousands of engines from me and dump huge volumes of agricultural goods in my market that because of their oversupply are sold in the thousands of units to country's like France and Germany. I think Germany alone was buying 7000 units of fabric or so from me at like rediculius profitabillety rates and i wasnt even trying for that. No its not an edge case, its really a matter of specialization if not hyperspecialization combied with cheap labor to get such rediculous advantages that the Ai also just gives up on that industry and simply buys your stuff, often coupled afcourse with perhaps you stimulating their other industry's by buying into it.

Moldova. I built a prosperous little nation in the Ottoman market. Once I got my independence the entire economy collapses because literally nodoby in the entire world needs my goods in the quantities I produce as well as I couldn't get the imports I needed. Thus my entire economy couldn't exist without entering another market because of trade being whatever it is

Its funny because you dont seem to contemplate the mechanics of why and when it works and it doesnt, whereas this case has its obviosu reasons.

Obviously, when you are within a common market you sell to a larger market, you can have various competitive advantages versus other players in that marker if even purely in availability of raw materials or trough having company's or having invested to a high degree in high yield manufacturing that mainly fills in gaps to that market. Like sure, factory's make more money than farms and often also more than mines, so when you are in a common market one of the easiest tricks is be small and advanced in a market that is somewhat lagging behind to its demand and specializes in manufacturing while buying cheap agricultural goods, yeah sure that will boost that GDP per capita. And your then surprised that it collapses when you loose your market, because the same competitive advantages you had in that market couldnt be retained when trading to other country's either over a tariff or at the cost they produce in a significant volume. Now if you only had conquered yourself a bunch of vassals that have pretty much no factory's and mostly do agriculture to push them in your common market that could have been a solution, as that would have placed you as the specialty producer you had become in a market with imbalances in which that specialization can work.Or maybe you joined Russia's market seeing as the situation would most likely be most similar there to the one you had in the Ottoman market. i do believe Moldovia starts landlocked? Were you still landlocked so to have a very limited choice in trade partners and expansion opportunity's?

Why is it that we would expect that trade should so easily work at that point? Well with free trade it actually should have worked out fine too as far as i know, but did you have free trade at that moment? Because yes tariffs would likely have been a barrier at that stage, given that the competitive advantage was likely slight and you are also limited by land trade limits notably and you have to spend bureaucracy and do a lot more trades to get your imports too?

Nobody denies though that the prospect of leaving a common market is ... daunting, especially if you have a significant economy of your own. Thats a Challenge the Romanian principality's face i guess, along with other obvious ones but the can all be overcome. Now Wallachia certainly can build some competitive advantages in its very pretty province with a good combo of companies in heavy industry, what also ould you want it to be good in for the purpose of trade other than maybe not having much agriculture of your own either? As "potential trading natiosn go", its not like its a country that starts with plenty of coast and expansion options for improving global trade opportunity, like just being able to early on take a bung of small bits of land that gives you land borders with large markets can be usefull to work down the need of convoy's.

 

[bbad89]

I think this new update looks great, but they desperately need to reintroduce the importance of military good manufacturing and its effects on your military. This is a good update to do it; a country relying on shipping in guns and ammo should have its military capabilities drastically reduced on the frontlines if it gets blockaded and has no domestic manufacturing.

 

[yurcick]

> The economics update is perfectly timed
Every economics update is only not perfect in timing when it didn't come sooner.

I think the devs should embrace it, and apart from very pressing issues (like fixing front teleporting already) should focus on economy and mostly develop other aspects when they intersect with economy.
E.g. diplomacy could use loans as elements of leverage and more specific investment-seeking behaviour
Pops could be improved by decoupling accumulated wealth from consumption etc

I think that the two best updates of the game are both economy-related, 1.2 (autonomous investment) and 1.7 (ownership rework and foreign investment). We need more of those.

 

[Desseabar]

> The economics update is perfectly timed
Every economics update is only not perfect in timing when it didn't come sooner.

I think the devs should embrace it, and apart from very pressing issues (like fixing front teleporting already) should focus on economy and mostly develop other aspects when they intersect with economy.
E.g. diplomacy could use loans as elements of leverage and more specific investment-seeking behaviour
Pops could be improved by decoupling accumulated wealth from consumption etc

I think that the two best updates of the game are both economy-related, 1.2 (autonomous investment) and 1.7 (ownership rework and foreign investment). We need more of those.

Yeah, the economic updates are the most fun parts here, but it seems like each one is an enormous investment from the devs. The economy is such an interconnected system that it requires a big invest to get it working.

I think there's probably 3.5 missing points for an excellent economic system:

• International debt that financial centers, pops or governments can buy (like your point on diplomatic loans)
• Some form of cost for switching PMs (either construction or throughput malus or something else)
• 'Investor confidence' emphasized, building on the foreign ownership concept so that you have to make your market an appealing place to invest
• and 0.5, Private construction, so we can better simulate recessions. Construction is the 'most gamey' part of the economy right now.

 

[yurcick]

Yeah, the economic updates are the most fun parts here, but it seems like each one is an enormous investment from the devs. The economy is such an interconnected system that it requires a big invest to get it working.

I think there's probably 3.5 missing points for an excellent economic system:

• International debt that financial centers, pops or governments can buy (like your point on diplomatic loans)
• Some form of cost for switching PMs (either construction or throughput malus or something else)
• 'Investor confidence' emphasized, building on the foreign ownership concept so that you have to make your market an appealing place to invest
• and 0.5, Private construction, so we can better simulate recessions. Construction is the 'most gamey' part of the economy right now.

All good points. For me, the 2 and 3 are more important.
I would add two things myself:
1) labour quality and innovations as factors of production
2) logistics rework to stop Australia to London shipping being as cheap as Dublin to London (the 1.9 rework will likely be one-sided, as what we really need is intermarket trade improved and intramarket trade nerfed, and we will only get the former)

 

[Desseabar]

All good points. For me, the 2 and 3 are more important.
I would add two things myself:
1) labour quality and innovations as factors of production
2) logistics rework to stop Australia to London shipping being as cheap as Dublin to London (the 1.9 rework will likely be one-sided, as what we really need is intermarket trade improved and intramarket trade nerfed, and we will only get the former)

Yeah - I had thoughts on how labor quality+PM shifts can be combined. I think labor quality is partially represented with qualifications, but it would be nice to have more experienced tradesmen be worth more.

Logistics rework would be nice. It sounds like devs have an idea, but it sounds like another major change to the simulation on par with the trade rework.

 

[FranklyJustNess]

I think you really have to re-analyse the matter of labor costs in this game, especially with recent changes in mind. It matters a lot to "competitive advantage", purely trough abillety to produce at rediculously cheap rates.

I mean, yeah, you can put in the effort to lower the price of inputs, so that your goods can be produced in a stable way despite being at well below the default price. The question however is... is there a point? You generally are looking at quite a lot of effort being put into keeping the wages down, inputs cheap, and your market protected, for relatively not a really useful thing. You just can't really convert an overproduced, cheap good into a healthier economy, or at least not in a way that feels worth the effort.

 

[TheFlemishDuck]

I mean, yeah, you can put in the effort to lower the price of inputs, so that your goods can be produced in a stable way despite being at well below the default price. The question however is... is there a point?

There absolutly is, you simply have to run the numbers my dear man. i mean, i wouldnt be a trader if i didnt know my margins!

Lets take a simply plantation good like tobacco, one that will sell fairly easily in quantity at a cheap price because its an intoxicant afterall, intoxicant demands get pretty large fast on the markets.

Your basic tobacco plantation will produce 25 tobacco. Rookie numbers afcourse for colonial exploitation which already gives a base 20% throughput to bring it to 30, but with economies of scale and perhaps a decree and a company those things can easily be brought over 100%. There is no input cost to a plantation that is not using engines, only labor cost and in this case dirt cheap labor cost that will allow us to make profit for a level 1 even at -75% price, it will afcourse make a lot more profit at 100% throughput but thats more a consideration for some dividend but also some mighty reinvestment rate pumping. The reinvestment pool is kinda very profit rate dependant so having such highly profitable plantations adds a lot to being able to support a lot more construction sectors, butt hats even besides the story of what i want to point to.

Because if we take that we manage to produce 50 tobacco out of a 100% throughput plantation, then we can also calculate what our potential profit is for the state at a given tariff for a single tobacco plantation build. Your tariff afterall is levied on the base price of the good, not the reduced price at which you sell it. So tobacco has a base price of 40£, if i then produce 50 per plantation level it then produces 2000£ of goods for the purpose of calculating tariffs on, which means that if we levie 30% on the export of tariffs we get 600£ of tariff income per 50 tobacco sold at 30% tariff. Thats 600£ per plantation level, thats a lot of money in proportional terms that will go to the state for constructing just one plantation and for each plantation constructed. Though there is a bit more nuance to this.

lets say i sell the tobacco at -75% market price. It's a base good of 40£, i will be selling it for a price of 10£ on my market, but since the 30% tariff is calculated on the base price of the good the tariff per unit of tobacco will be 12£, so together i will be selling the tobacco at 22£ which is about 45% under the base price of 40£. The trade will however grow to an equilibrium market price, so in principle to sell it all to one trade partner it would be best if he would have a market price of +45% and a roughly equal volume in demand as i have in supply, your factors can vary here, more typically because ill be selling to markets that are more trading with prices around say +10% average its more likely that i will only be able to sell say 70% of the tobacco which i want to sell after some trade equilibrium, which will then perhaps reduce my trade revenue per plantation here to 420£. But in any case, at such prices its often easy to establish such trades and sell in a fair quantity and hence rack proportionally a quite large income for relative few investment. Your not going to get 420£ per plantation in your state coffers by practically any other means and certainly not trough tax so when employed well it can be a fashion in which the state can notably build up a lot of government income fast with tariffs + dividends and besides that also as a side effect seriously pump the reinvestment pool with it too. Its quite competitive in the pure printing of money if fact to gold, seeing as you get something like 1000£ even with improved Pm's in minting in gold mines and thats a building taking 2 times more construction points.

However, makes a difference if you can trade over land as compared to trading with convoys. Standard convoy cost for a normal nation is about 6£ per convoy, and 40 units of tobacco sold would take 30 convoys at their "shipping rate", which isnt the most efficient compared to other goods like say cotton, it's still profitable and besides that you can also bring convoy prices down trough various measures to say half the price but when your calculating your margins afcourse you have to consider that, and even bureaucracy cost too. But overall most trades even using convoys will make a profit at high tariffs providing they can work, and there is a benefit to having the infrastructure through ports rather than railroad if the convoys are going to make a profit for the state after port costs and if the railroads would cost subsidies to maintain while not giving that benefit. however it mus also be noted that ports also take a fair bit of time to build too, so if you need to expand ports so to have more trade volume the equations per construction points invested are different if you wouldn't need that infrastructure in that province right away anyway.

And thats plantations, it gets even crazier with factory's. it takes more effort though, colonial exploitation gives -20% throughput to manufacturing but with a decree and with a company in that province and with economies of scale you can still bring manufacturing there to +100% throughput, albeit that it will work with very very cheap labor and as a result can sell extremely cheap too. However some of the output values of certain industries are pretty crazy per level for the purpose of putting tariffs on, like your groceries and liquor factory at their better Pm's can easily churn out more than 9000£ of trade goods per level with high throughput (even exceed like 13.000) at which you get near 3000£ of tariff income for the sale of their goods. You have various industries that can just outcompete gold at its better Pm's for the pure income it gives to the state per construction point invested, should say enough really.

 

[Bisonmask]

> The economics update is perfectly timed
Every economics update is only not perfect in timing when it didn't come sooner.

I think the devs should embrace it, and apart from very pressing issues (like fixing front teleporting already) should focus on economy and mostly develop other aspects when they intersect with economy.
E.g. diplomacy could use loans as elements of leverage and more specific investment-seeking behaviour
Pops could be improved by decoupling accumulated wealth from consumption etc

I think that the two best updates of the game are both economy-related, 1.2 (autonomous investment) and 1.7 (ownership rework and foreign investment). We need more of those.

The game needs a number of dedicated diplomacy changes that don't relate directly to the economy: intervention, peace treaties, and the scramble for Africa all come to mind. I'd rather see all of those expanded before a more in-depth loan system

 

[yurcick]

The game needs a number of dedicated diplomacy changes that don't relate directly to the economy: intervention, peace treaties, and the scramble for Africa all come to mind. I'd rather see all of those expanded before a more in-depth loan system

Well, agree to disagree.
I don’t care much for interventions (unless I misunderstood what you mean by the word, is this interfering in the ongoing war?) While it certainly would be realistic, it requires breaking core game principles and IMO isn’t worth it.

Other points do resonate with me, that’s true. Still, I prioritise them less.

My argument wasn’t that international loans are that important. It’s that if there is an economic problem that can be solved with them (e.g. countries struggling to dump their late-game money effectively, which is admittedly not very realistic, but will do as an example), then they are worth being prioritised higher.
A better argument goes for techs: they are not terrible per se and do the job. However, we desperately need more differentiation in labour efficiency, and doing this through a sort of V2-like invention system sounds logical, and that’s why I would support a tech rework, although it’s only tangentially related to economy.

I support that some things are so unfinished even in 2025, that they should take priority regardless, like land fronts. But apart from that, I think there’s a good track record on economy-first updates that have these tangent improvements to all other aspects, and not-as-stellar track record on other types of updates (movements are passable, power blocs suck outright, agitators are gamey etc).