Factories and Econ 101

[unmerged(177849)]

I've looked at the wiki, looked at stickies, etc., but while there is plenty advice on aspects of the economy, there doesn't seem to be an overall, "econ 101" type of guide to building a profitable economy. Did I miss it, and if so, can someone point me to it?

Specifically factories. Circumstances vary, but many are not profitable. How to tell which factories are profitable? At first I cimpared price of input goods with price of output goods - but that doesn't work, since you have to pay full price for goods purchased on the open market, but only get a percentage (based upon tarriff level) of goods sold.

In fact, it almost seems that while factories are of course needed, they are only a piece of the puzzle. It seems that increasing your tax base is the real key to economic success in the game. But you can't do that directly, only indirectly. How do you go about it?

 

[unmerged(9599)]

There is no simple econ 101 type guide. The first tip that would appear in econ 101 guide would be.
1. Make Vertically Integrated Chains of Production
Match RGO and factory. If you have Coal and Iron make steel if you have to import coal and iron steel will be unprofitable. Once you have Steel Steamers will be profitable

If you want more advice tell me what version you are playing 1.04 or 2.1 vanilla or VIP

 

[fbaker4]

In general, you need to think like a 'capitalist' even in a planned economy; as naic mentioned, vertical integration is the way to go; every additional piece of the chain increases all the other chain link's profitability. Infrastructure too plays a part in efficiency, as does the pop mix, size, and origin.

The basics, however are simple. You maximize income by always having open the next income producing opportunity.

So you want to have space in your RGOs to split your pops into, you want to maximize your pops health and welfare to the limit you can afford, you want to have the right mix of raw materials and finished goods to maximize your factories, and you want to make sure that your overall pop mix suits your needs.

 

[unmerged(177849)]

There is no simple econ 101 type guide. The first tip that would appear in econ 101 guide would be.
1. Make Vertically Integrated Chains of Production
Match RGO and factory. If you have Coal and Iron make steel if you have to import coal and iron steel will be unprofitable. Once you have Steel Steamers will be profitable

If you want more advice tell me what version you are playing 1.04 or 2.1 vanilla or VIP

Thanks. I'm playing 1.4. I had tentatively figured out what you advised myself, but it's nice to have confirmation. (And it's paying off as my economy is finally, belatedly, taking off. I made the mistake early on of building mainly steel factories despite producing very little Iron and no coal.) Of course, depending upon what you produce, following that advice too strictly can really limit the types of factories you can build.

Aside from any other advice, which would be appreciated, can you confirm the following:

"Expecting factories to generate a profit (in terms of your budget) by international trade is a mistake. The main budgetary benefit from factories is that they indirectly increase your tax base, by giving jobs & income to your people. You also benefit from not having to buy certain expensive goods in the international market. However, by and large, selling finished goods on the international market is always a loser in terms of your budget."

 

[unmerged(177849)]

My last statement may have been a bit dogmatic - obviously to the extent that you can process your own raw materials into finished goods, selling those finished goods on the international market can bring you a profit. But that's not the key building block of a strong economy, it seems to me.

As an aside, it does seem to me that the game doesn't do a really good job of simulating international trade. The whole idea of comparative advantage goes out the window. In the real world importing raw materials to produce finished goods is profitable, and even the key to a successful economy. In the game, it tends to be a losing proposition. Or am I missing something?

 

[unmerged(9599)]

1.4 its been years since I played that.

You are right that importing is a losing proposition, well you can get away with some importing, cotton is one example. Fabric can be profitable even if you must import cotton.

You are right regarding how importing to make finished goods being a losing proposition.

Importing regular clothes and silk to make luxury clothes is usually a loser as is importing steel to make steamers, although they do have positive externalities (supply of lux clothes for promotions and guards, steamers for shipbuilding increased employment increased income for your people which leads to increased happiness for the people).

 

[unmerged(177849)]

I think that's a lot of my problem - everyone who still plays Vicky is playing Revolutions - I guess I'll need to get that if I want to get the best advice from the community. Even most of the guides seem to be Revolutions oriented.

I am a bit surprised no one ever put together an econ 101 guide. Especially since a lot of it seems very counterintuitive, and "under the hood" (i.e., your long term economic health has a lot to do with the prosperity of your individual pops) - and variable depending upon strategy (e.g., economic strategies for a protectionist versus free trading oriented government seem very different - though I guess in revolutions you really want free trade so your capitalists will build your factories for "free").

 

[unmerged(9599)]

though I guess in revolutions you really want free trade so your capitalists will build your factories for "free").

Not exactly true. Just cause you get factories free doesn't mean that you get factories that are good for your nation.

 

[EGaffney]

Actually, in Revolutions a popular gambit for small countries is State Capitalism to allow the construction of profitable/needed factories. The Capitalist POPs in Laissez-Faire tend to leave you with lots of barely-profitable Glass Factories.

 

[unmerged(177849)]

Thanks.

So I suppose that for either 1.4 or revolutions, if you have one of the more wealthy (mostly European) nations, the key (a key?) is getting colonies to get resources so you can have a diverse economy without buying resources on the international markets? Somewhat historical, except that by the 1800s colonization was more a status (prestige) thing than economically beneficial.

Though I am getting a bit far afield - to return to my original question, is it true that the key to economic success in the game is increasing your tax base? And, if so, what are the keys to making THAT happen? Aside from building the right kind of factories.

 

[unmerged(94521)]

Concerning factories:

Early game it's best to focus on factories that you can feed from your own RGOs. You should focus on building up a chain of factories to get to the most profitable goods, like luxury items and convoys.

Late game when your economy is already rolling it can pay to close your lowest level factories, like lumber, fabric and glass, and just import those goods. The POPs can be put to work in more profitable factories.

 

[unmerged(177849)]

Thanks guys. Thanks partly to your advice, partly stuff I figured out myself, and partly the wiki, I ended up a great power as Brazil (6th) at the end of my first game (not including when I first played years ago). Not that impressive in some ways I guess, as Brazil is a nortoriously good nation for a begginner, but still a big improvement from where I was around 1900 (around 17th & lagging badly in industry). The economy just exploded in the last 20 years, especially the last 10 years when I started getting some massive immigration.

Edit - though any additional advice would still be appreciated.

 

[unmerged(94581)]

By the mid 1800s you should not need colonies as most nations (that I played ). Initially having a huge industrialization is difficult because your country only produces so much raw materials, and here colonization may come useful, but even then you'd have to take over A LOT of uncivs for it to make a big difference, since their RGOs are as ineffective as yours at that point in time. With industrial tech, though, come inventions that boost production of many important RGOs by hundreds of percent, at which point you should have enough homegrown materials to feed your factories.

As for determining which factories would be profitable, here's my very rough rule of thumb. Factories whose products are consumed by the general population should typically be profitable as there is always demand for them. Factories whose products are consumed by governments, such as arms, ammo, etc can fluctuate a lot. I've seen those be amazingly profitable, and I've seen them stagnate. I think it depends on what's going on in the world, which you obviously can't control. So I don't view those factories as profit-making, but construct them mostly so I don't have to import the goods they make. Factories that produce luxury items seem to be less profitable initially. As Japan I was shocked to see myself losing money with a luxury clothes factory, which I thought it would make sense to build since I produced clothes and had tons of silk.