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When the OP posted this, I had a feeling there was something to it. I played a game as Portugal, and was very surprised by just how much Minting I was generating. My country wasn't a hugely productive nation, I had a ton of capitalists working in company HQs, and owning a fair share of Russian, Chinese, and of Americas GDP. That obviously means I had a lot of dividends income, and quite a lot of investment pool generation, but that's kinda it. I was running lowest taxes, with 25 levels of Steel Building in each of my mainland states, and I was still generating a healthy profit, and didn't need any debt taking, despite being on Laissez-faire and a GP.
But now I might have a clue why. Minting comes from GDP, and GDP is, just like irl, a weird value. What drives it up is producing goods, and their prices, but when a good is used as part of a production chain, it doesn't contribute. A pair of socks that a pop wears counts, the dye that makes them bright yellow does not.
Nothing changed about the calculation. GDP numbers are just higher, because the global market helps AI and the player achieve better performance... Right?
(World Market in that game)
What I am thinking, is that the culprit might be Trade Centers. When you import something, the TC magics it into your market, and you can use it for whatever you want. When you export something it is an input into TC... well no
(from DevDiary #143)
What I am thinking... does every single good, that gets imported or exported via the World Market count towards GDP calculation? I imported a lot of clothes and luxury clothes, if I produced them domestically, then they would count, but I have them in my market, and have them used for consumption. I exported a lot of raw, plantation resources, but technically removed them from my market, but without ever being an actual input... do they count anyway?
It's just a guess, and maybe one of those is wrong, but I still I am onto something. I mean, even if it's just imports (as I suspect), then you can see, that my, Spanish and German economies were very intertwined, and each of us would generate a bunch of GDP for the others simply by moving goods through the customs.
But now I might have a clue why. Minting comes from GDP, and GDP is, just like irl, a weird value. What drives it up is producing goods, and their prices, but when a good is used as part of a production chain, it doesn't contribute. A pair of socks that a pop wears counts, the dye that makes them bright yellow does not.
Nothing changed about the calculation. GDP numbers are just higher, because the global market helps AI and the player achieve better performance... Right?
(World Market in that game)
What I am thinking, is that the culprit might be Trade Centers. When you import something, the TC magics it into your market, and you can use it for whatever you want. When you export something it is an input into TC... well no
(from DevDiary #143)
What I am thinking... does every single good, that gets imported or exported via the World Market count towards GDP calculation? I imported a lot of clothes and luxury clothes, if I produced them domestically, then they would count, but I have them in my market, and have them used for consumption. I exported a lot of raw, plantation resources, but technically removed them from my market, but without ever being an actual input... do they count anyway?
It's just a guess, and maybe one of those is wrong, but I still I am onto something. I mean, even if it's just imports (as I suspect), then you can see, that my, Spanish and German economies were very intertwined, and each of us would generate a bunch of GDP for the others simply by moving goods through the customs.
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I had extactly the same thoughts just now.
The game basing mechanics around GDP is bad design. Even today in modern economics GDP is a flawed construct.
Why not derive a value, just from total manufacture profits/value? ingredients included? That would make more sense.
At the very least, imports shouldn't be counted. And intermediaries should be counted when exporting, but only if they were manufactured and not consumed in your nation.
Okay, I watched One Proud Bavarian's Haiti Disaster Save video, and can say - imports have no impact on GDP. In this video he visited a Haiti, that was basically just Company HQs and that imported all of it's food (eventually)
And we could see this
Services make up 75% of the state's GDP, and by extension 61.425% of country GDP, which with value of 255K lands at 415K, but that's a weekly value, which we multiply by 52, and get about 21.5 mln
This makes it match what we are seeing. But remember. Nobody in this country eats homegrown food. Nobody builds with Haitian steel, it's (basically) all imports.
If Exports matter for GDP, and imports do not, then you could technically just double your GDP by exporting everything and importing it back.
And we could see this
Services make up 75% of the state's GDP, and by extension 61.425% of country GDP, which with value of 255K lands at 415K, but that's a weekly value, which we multiply by 52, and get about 21.5 mln
This makes it match what we are seeing. But remember. Nobody in this country eats homegrown food. Nobody builds with Haitian steel, it's (basically) all imports.
If Exports matter for GDP, and imports do not, then you could technically just double your GDP by exporting everything and importing it back.
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The game currently doesn't allow to both import and export from the world market.
This was pointed out very early, when the talk was about separate and asymetric markets.
Perhaps the treaties of the New DLC broke this, that why I state in my post above that exports should count only if they were produced in your nation.
In other words, the game should ignore trade, and only count manufactuure.
Isn't it the production of goods itself that generates GDP? Exports and imports will change market prices because they add buy / sell orders, but they don't actually generate production. That seems to line up with the figures in your example.
As @GnoSIS mentions, goods transfers might interfere with this in a strange way though
As @GnoSIS mentions, goods transfers might interfere with this in a strange way though
Just a heads up from the wiki, as I had a better look:
Minting – Income generated as a portion of GDP. Increased by technologies and by Gold Mines and Gold fields. Minting from GDP is calculated as 1/1000[4] of yearly GDP per week, or 5.2% of GDP, capped at a base of 200K. Multipliers and other sources of minting are not capped.
So the OP, just reached the CAP of 200k.
Minting – Income generated as a portion of GDP. Increased by technologies and by Gold Mines and Gold fields. Minting from GDP is calculated as 1/1000[4] of yearly GDP per week, or 5.2% of GDP, capped at a base of 200K. Multipliers and other sources of minting are not capped.
So the OP, just reached the CAP of 200k.
Yeah exports dont directly generate GDP, the GDP comes at the point of production. So by exporting you keep the price of your produced goods high and thus have higher GDP than without exports, but any profits made by the trade centre itself would not appear to be counted.
Maybe it disallows it in the same trade center, but you can definitely have imports and exports of the same good between trade centers/market regions.
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I think GDP should only come from value created or added:
base mining or farms: total price = GDP price, regardless of number sold, or where did they go.
manufacturing: total price - price of input materials = GDP, regardless of number sold, or where did they do.
But I guess that Paradox settled on what we have now due to performance reasons? Never neglect performance.
I guess the main question is - if you import a good, and it's used by a building, does the price of it get subtracted from GDP. We can see, that for pop consumption there is no issue, there is also no issue for construction sectors or government administrations.
If you import fabric from the world market, it made someone's GDP go up, because their building exported it. You then use it to make clothes at home, that generates GDP for you, the only question is - does the price of fabric get subtracted from your GDP like it "should", the way it would happen if you produced the fabric yourself.
In 1841, I looked around the world to see what percentage of government revenue is coming from minting:
Quite frankly, I think the results speak for themselves. For insignificant powers, minting is the biggest item in their government revenue, especially since they don't need taxes since they get so much construction relative to their actual population. Quite honestly, a country should not be getting *97%* of its revenue out of thin air.
For great powers it's not as prominent, but there it's also underestimated because of how much of their subject's minting they're getting on top. Even so: given the game's issue of running out of peasants, I don't think we need to supercharge the public sector so much.
And thematically, I don't think it fits with the game: for one, it means insignificant powers basically aren't engaging with taxes or public-private balancing. But this was also an era of deflation and rigid gold/silver standards, so such generous minting feels ahistorical.
Quite frankly, I think the results speak for themselves. For insignificant powers, minting is the biggest item in their government revenue, especially since they don't need taxes since they get so much construction relative to their actual population. Quite honestly, a country should not be getting *97%* of its revenue out of thin air.
For great powers it's not as prominent, but there it's also underestimated because of how much of their subject's minting they're getting on top. Even so: given the game's issue of running out of peasants, I don't think we need to supercharge the public sector so much.
And thematically, I don't think it fits with the game: for one, it means insignificant powers basically aren't engaging with taxes or public-private balancing. But this was also an era of deflation and rigid gold/silver standards, so such generous minting feels ahistorical.
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That is how it works, but trade centers are obviously a little different to regular buildings so they aren't getting included by default. They definitely ought to include their gross profit as GDP.
Pretty sure it will be subtracted yes, the building doesn't care or know where it's inputs came from, it just subtracts it's input costs from it's output value to determine it's GDP contribution. The cotton only ever adds gdp at the plantation, wherever that is.
Or it means that in the early game, AI countries are terrible at getting their governments funded properly from taxes of various types.
Load up Qing at game start. Don't even advance the clock, and just look at how much tax waste there is. Of course 29% of their revenue is from minting. Where else are they going to get it? And how quickly can you get that government revenue increased? Not by spamming government buildings, I assure you. And the AI sure as Hell isn't going to turn things around any time soon.
Look at how much tax waste is in those other countries at game start. You see it everywhere in the world.
I'm not saying that governments should be getting tons of revenue from thin air. But let's not kid ourselves here. Those numbers in your chart would look very different if those countries had no tax waste and implemented better tax set ups (the right kinds of taxes for the right amount of authority and so on).
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And some countries should get 97% of their revenue from minting. Gold mines are a thing, and some countries have access to quite a few at some points.
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I read through some of the posts in this thread. I just dont get this whole thread about minting. Minting is completely fine. The last thing I ever wanna touch for Victoria 3.
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Strongly disagree.
Just checked another 1.9.7 Observer game, in 1888.
42% of Qing revenue comes from minting, ie printing money out of thin air. It's 44% for the US, and >50% for the split-state minors, and 20-25% for the other GPs I looked at.
In a game about 19th century economics and societal development, that means that your main source of revenue is the one that was most reluctantly deployed and economically disastrous (look at the CSA to see how 'printing money' works out).
I understand that minting helps to avoid govt revenue spirals in-game, even if it's not realistic. But there's a couple of issues:
- Minting was originally balanced when economies performed much poorer. The world market boosted GDP which in turn supercharged minting.
- This removes a big chunk of strategy around taxes and government expense by making it much easier.
- This in turn supercharges the economy by leading to massive government investment in the economy, leading to late-game worker shortages
- Minting is thematically inappropriate for the era where countries rigidly adhered to the gold/silver standard.
Let me look at this a different way: what's the point of adding tax waste for Qing if they're just going to mint it? It's like saying "we're going to give Prussia -50% naval offense." Sure, that's not great, but it's not really affecting gameplay where it matters.
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