Low Prices and Command Economy are TERRIBLE (Advanced Tutorial)

[@Tarkusarkusar]

Whatever blud is yapping about, I agree

[@user-lz2oh9zz4y]

your pfp haunts me

[@AshishKumar-kv1jf]

​@@user-lz2oh9zz4yThat pfp made me hyper human supremacist

[@generalistgaming]

Putting my yapology degree to good use

[@vorhautzerstörer]

real

[@ynkesfan2003]

"Lock the children in the cupboard" he says. That's not where the children go, lock them in the mines.

[@generalistgaming]

#makecupboardsmineshaftsagain

[@daudiochero]

😂😂😂😂😂😂😂😂😂😂😂

[@makaramuss]

its a good law if you are stacking authority and if someone owns %30-40 of your gdp so you can yoink it back

[@MrZero628]

Yeah it's less of a law to rely on for the long-term for the lack of benefits, and instead used in transition to cooperative economy

[@generalistgaming]

I mean I think if another country owns that much of your GDP then probably another error was made somewhere previously that will end up costing you more than going CE nationalizing and then swapping to LF will benefit you.

[@makaramuss]

@@generalistgaming is it an error really? I love it when I see UK build stuff in my nation when I am playing as japan or china.those peasents aren't doing a lot anyway. Not only my economy grows but also unions get stronger which allows me to have access to one of most progressive and powerful interest groups in the game faster. Its not like UK building in my nation means my capitalists own less since they are not stealing from them they can still build their own stuff there is enough population. also there is another scenario: Conquest. When you conquer other nations might own buildings there still and that can be used to steal them without infamy or money cost again if investing to other nations when you have excess population tends to be mistake then opposite applies when you receive investment when you have excess peasents.

[@generalistgaming]

@@makaramuss the issue is that they under build construction themselves, and so their investment pools get huge (you can swap to them and check) and they aren't building in your country as much as they are buying the buildings that YOU built for like 1/3 the price you spent on construction. You'd love to have them build in your country; the problem is that most of the buildings that they own in your country they didn't build, and is just a releasing of the floodgates of their investment pool.

[@Geometrys]

Golden Victoria content

[@MANFAIC]

Can you do a breakdown of cooperative ownership? It seems bad from the spreadsheet, but it doesn't feel too bad in-game. It doesn't delete money like command economy, but it completely kills the investment pool. I probably wouldn't go for it if there are still a lot of peasants to be forced into the workhouses, but the increased SoL has some interesting effects.

[@generalistgaming]

GDP is pretty high for CO because they never delete money, if money isn't going to the treasury and GDP is high that means pops are getting it. The tradeoff is getting much higher SoL, but it doesn't give as much gov income as LF

[@marcuspmedeiros]

Oh no, not the spreadsheet

[@seffafpanter]

Very impressive and quite interesting. Yet, I think we're missing a huge factor in these calculations. Command Economy, and Cooperative Ownership especially, will increase the SoL much more efficiently than Laissez Faire, which is the main drive behind ever-increasing prices of course. Now, your spreadsheet stops the time and inspects the data in a vacuum. The thing I'm wondering is that, perhaps the SoL-product price increase loop we have in CE and CO might be mroe efficient than in LF, resulting in a higher GDP more quickly despite the spreadsheet favoring LF since it doesn't consider current SoL or price increase that well

[@KissatenYoba]

Coops will spread the dividends around, but in return you'll have to tax everyone heavily or else you will go bankrupt, while command economy can abolish all taxes. But at the same time, CE will struggle to increase SOL and will actually depress it over time, unless you provide wealth agressively through minimum wage and dependents' income There's something wrong with the spreadsheets, because CE was clearly superior to LF in my test runs. Basically, in a fully subsidized CE, your treasury is modified by all the profits of all the buildings multiplied by 75%, while capitalists will contribute 30% base multiplied up to let's say 60%, so those extra 15% is how much more efficient CE is. Capitalists would spend those 15% on luxury goods, but in CE you can spend those on construction sectors instead. In addition to that, huge amounts of wealth get erased under LF by privatizations, they pay you 50k per 200 construction points, or 250 per 1 point, and the best PM costs 515 per point + wages (and modified by construction efficiency)

[@brandonzzz9924]

I have been experimenting making balance mods for the economic systems for a while now, and I think what I have landed on feels pretty good for balancing LF and CE. The big changes are: *_LF gets 50% increased decree cost, 5% tax waste, and 80% private construction allocation_* (from 75%); simulating less govt involvement and favorable corporate tax (cutting dividends taxes didn't work as intended, but was the original idea) *_CE gets -25% decree cost, +100 authority, -15% pop BUR base cost, 10% construction mult, -75% nationalization cost (from 50%), and +20% innovation with -10% tech spread_* ; simulating more govt involvement in running the economy with decrees, concentration of resources for infrastructure (the current version also has a company for CE for all govt buildings that gives more infrastructure), and a lack of innovation from free markets replaced with state funded research. The idea is to make every system feel unique and optimal for certain situations (like better investment for plantations under Industry banned and agriculture under Agrarianism), with LF actually having some drawbacks. I wanted to make LF lower the minimum wage, but it is very complicated to balance so that the economy doesn't spiral.

[@JimStorrie-v3s]

what's most disappointing about command econ to me in 1.7 is that enacting it doesn't appropriate ownership anymore. you still have to go in and nationalize everything with button clicks, which is a) annoying and 2) still generates a ton of radicals even with command econ's bonus

[@azathot_369]

People become angry when you take their stuff? No way

[@generalistgaming]

Next patch they're making it so you can one click nationalize

[@morisan42]

this is a pretty realistic simulation of command economy tho, the USSR allowed and even encouraged private ownership at certain points to promote industrial development, and China today has kind of a hybrid of command economy and a market economy

[@JimStorrie-v3s]

@@morisan42 perhaps so, but in gameplay terms command econ doesn't feel notably different from interventionism to me in this patch

[@maxpont8989]

Funny thing is that your explanation is really tied into the old economic model of capital (see Juglar's cycles for instance). The reason why command economy is bad is because the state appropriates money and takes it away from circulation, even though economic growth was supposed to (and actually does in vic3) depend on capital growth, that is, the amount of money changing hands in a given cycle. Vic3 uses this model, and that is the reason why all GDP growth curves are exponential when you play well and avoid shortages unlike in real life

[@TheToastieCakes]

Hope the trade reworks help the AI play around economies optimized for high prices. Would give a reason for players to consider protectionism if there was an actual threat of cheap goods flooding your market.

[@connorvic3]

8% is around the real growth rate you can assume, thats what you got in your uk WC 1000x gdp in 90 years roughly

[@IamAWESOME3980]

Why am I learning the math behind some computer video game when I could've been learning some actual real life skills? I am such a disappointment

[@generalistgaming]

Idk but if you're reading this and have been doom scrolling/watching for some time maybe get up and stretch your legs and take a walk.

[@IamAWESOME3980]

@@assemmohamed9493 nice essay kid. did your middle school teacher taught you to write this? Because you are butchering jargons and misusing dictions left and right and that's on top of bad spelling and grammar. i have bachelor degree in computer science and i have been working as a software engineer for three years so let me ask you: have you ever done college level linear algebra kid? do you know discrete math? have you done differential calculus? integral calculus? differential equations? combinatorics and statistics? algorithms and discrete structures? you know what a binomial distribution is? do you what is induction proof? do you know what a set theory is? do you know what is a field equation? you ever work as an engineer before? Please get off your video games and finish high school or redo high school first before lecturing me my friend.

[@assemmohamed9493]

Good for you, wish you all the best. ​@@IamAWESOME3980

[@thetechnocrat6763]

I just love 90 minutes of spreadsheet yapping

[@generalistgaming]

o7

[@ProfKerridge]

That "full simulation" of Victoria 3 looks sick

[@Cuskocuint]

So, if prices are depressed, is it a good strategy to make a run with high SoL as objective?

[@generalistgaming]

What the goal should be is a meta question related to taste so I can't really answer for you. I'd try to increase prices personally

[@danieljabonski4705]

Questions: In my last run as Mexico I passed a Laissez-Faire in 1860, in end game I had 20K construction points and 2,8B GDP (still have 1M peasants and 14M unemployed souls), almost all my prices are low or very low. How to achieve a reasonable prices when 75% construction points are commanded by AI and I never really worry about nothing more then that keep price of construction goods as low as possible through entire game? Should I build more clothes/furniture buildings earlier or other services? How to depeasant my country and also keep prices on reasonable levels? Is it possible? If I have to be honest, I never achieved better GDP/capita score than 8,5. But I see numbers like 14 even, which is crazy. I love this kind of videos, greetings.

[@morisan42]

did you pass welfare? doing so gives your pops more disposable income which lets them buy more stuff, and increases your demand for consumer goods. Other than that, you can increase the size of your market or trade more to increase demand

[@danieljabonski4705]

@@morisan42 I'm not 100 hundred percent sure, but I think that I passed welfare law. My market was almost 5x greater than second biggest market in the world, ( my market score was 90-100 million). I don't know, I had different runs with different countries, with different volume of construction sectors. Unemployment is always my pain in the a** in end game. Maybe this is a feature or I just don't understand something.

[@morisan42]

@@danieljabonski4705 yeah unemployment can be a pain, maybe increasing construction could help. If you are playing a capitalist economy, opening up other markets can help because it gives your capitalists greater returns which gives them more funds to invest at home as well IMO by the VERY late game command economy is good because you can blast construction way higher

[@brandonzzz9924]

LF is great for growth, but the actual economy isn't very stable on high taxes. Much like real life, GDP is just an abstract number that doesn't reflect the health of the economy at the individual level. Low taxes (years on end) and high government wages will drive up consumption enough to balance prices more evenly in the long term, and lvl 5 welfare + minimum wage is massive as well. Without those government interventions, the pops won't be able to grow their wealth fast enough to keep up with construction flooding the market. If you do all the above, it is reasonable to see SoL hit the 20s under LF in most non conquest games (subjects are ok). The high SoL will skyrocket GDP/capita once the consumer market gets the bottom up push from lower strata pops to keep up with middle and upper strata growth. Like GG said in the video, you don't want low prices on the consumer goods because it is much better to have high prices to drive growth and high wages to sustain it while keeping SoL rising. Low prices and wages will cause pops to tick over wealth levels, then fall back down. It is almost imperceptible in the short term, but noticeable over years or decades.

[@Brat2513]

The spreadsheet has spoken!

[@christiandelesie6308]

I have learned more about real world economics via this man's videos about a video game, than I ever did in school.

[@Iawait]

Couldnt we use the lack of consumption to flood other markets? Since our goods (if we dont have worker rights are very cheap😊

[@generalistgaming]

Kind of, but I can't model that well, and you'll still be paying extra in ports/convoys to try and approach price equilibriums you can get w/ LF

[@Iawait]

I think there are some ways to compare the two. 1)You can just empricially compare a capitalist price of a good (how much it costs) to a communist one. By using cheats to switch to command economy and nationalizing all. However the cost of ports is inarguable since govt divs %100 efficiency without debt. This made up for situations where only the cost of the wages were the problem, not the program itself. This strategy may make sense if one puppets capitalist countries with high tendencies to consume.

[@BlankTemplate123]

Ah. I was wondering if you would mention that CE is pretty good for keeping military high and GDP low. Actually good insight then, huh. Keep up the good work.

[@himick1232]

Under command economy you always need to subsidize production which make cheep goods. In this case all the wages will be paid. And because of modifiers you'll have money to subsidize. But you should have 100% of the economy under state control. And because of low prices, CE is the best way to encrease standart of living in the game, IMHO

[@generalistgaming]

Council republic is way better

[@kent_hdd]

Very comprehensive video! Well done!

[@generalistgaming]

Thank you!

[@Syncronoise]

Would CE be viable if you were given 100% government dividend efficiency? What exactly would buff CE to be more comparable to the other economic systems?

[@generalistgaming]

I believe that either the dividend efficiency or throughput malus in isolation alone make it worse than LF, but getting rid of either would bring it more in line with the others

[@lazykatie42069]

​@@generalistgaming now I kinda wanna see you do the math for how command economy performs when either of these factors is changed to make it better, as well as with both changed would make for an interesting hypothetical and could make it more clear what changes would be needed to bring it more in line with the others and if changing both would just make it straight up overpowered

[@generalistgaming]

@@lazykatie42069 so you can make a copy of the spreadsheet and fiddle with these numbers pretty easily by just changing CE's gov reinvestment efficiency or getting rid of EoS throughput for the conditions you want to compare, depending on how much you want to reduce the maluses.

[@theggfloupin4084]

i genuenly think government owned industries should get a throughput bonus when you get centralization. would make sense since a lot of minor corperations cant cordinate as much as 1 giant government run factory

[@vexmarchi4449]

how can i use mapi states under laissez-faire, my auto investment pool just builds stuff everywhere

[@trollies4847]

Omg is looks like you woke up. Good stuff good stuff

[@generalistgaming]

I recorded half of this on 3 hrs of sleep so that checks out

[@trollies4847]

@@generalistgaming Feels bad man Idk how you survived the speadsheet on that amount of sleep.

[@LeDoctorBones]

Is there a reason why Industry banned has 0 pre-price dividends in the reasonable scenario?

[@generalistgaming]

There's not; I fixed it

[@k.vrooman8569]

Kind of surprised that you didn't explore the math on the value deletion effect of high prices more... A basic tool workshop has $600 of input cost, $1200 of output value and $600 of value added or 200% of output/input value. Raising prices to +50% gives $300 of extra value added from the higher "throughout". Your workshop owners would earn more dividends in high price settings, but... Assuming the 30 wood input buy orders, 30 tool sell orders and +50% prices implies 18 wood production and 50 tools are bought. The economy earns $540 from wood and spends $900 on wood. It earns $1800 from tools and spends $3000 on tools. Your factory owners get $300 more dividends but your economy deletes $1560 in value. 5x !! Late game tech, throughput bonuses and larger value factories help this but the deletion effect is huge... The effect on money velocity when $1560/$3900 or 40% of the money that Pops spend is deleted is large. Combustion oil rigs have $3400 of net value added, $4000 from oil minus $600 of engines. +50% prices creates $1700 of factory value but deletes $4360 from the economy. 2x !! The high price value deletion effect would suggest always having prices at -50% if factories had no added value. Higher output/input multiples would push this higher. Also, a resource / agriculture sector's aggregate revenue when there are no inputs is highest when prices are at -12.75%... They earn 102.08% of the revenue at 0% price adders. 117% volume * 87.75% price = 102.08% revenue

[@generalistgaming]

You're double counting deletion here. In the net value added from high prices you're already including that you're paying more for wood. The marginal money deletion on wood is $60 ($900-$300 already counted-$540). The marginal money deletion on tools will be $200 ($3000-$1000 that will be included in PM inputs - $1800). You also have to add the marginal benefit you're getting on wood if you're going to include it in deletion. Assuming saw mills the net value is $150 on the amount of wood produced (60 [base pm output]/18 [output we want] * 1000 [base efficiency]/2 [giving us half of base so we can look at 50% increase). In all you get $450 money creation and $260 deletion. The first problem is that this result, in terms of modeling, creates a feedback loop. The deletion created by rising prices, while less than the creation modifier, would pull down prices, at least as far as I can tell, but it's getting a little abstract for me. Beyond that, the difference or ratio between deletion and creation is going to vary for every PM since the deletion is constant based on price but the efficiency of buildings changes. Saw mills care much less about money deletion than tooling workshops. This means we would have to solve for an entire economy. We'd have to know every PM, know all the gov expenses and pop consumption, and then be able to figure out the ratio of input buildings relative to each other, which wouldn't be proportional to consumption. We'd have to find the indifference threshold equilibrium price for all buildings to know the building target ratio. Then, because the deletion is different depending on efficiency, we'd have to solve adjust the price equilibrium to account for money deletion and clean up feedback loops there as well (because adjusting ratios of buildings will change price). Notably I don't know calculus, so calculating feedback loops is a bit prohibitive. So, beyond considerations inside Victoria 3, how much value is added to the video relative to time in order to explain all this? I didn't think it was much (I thought it was negative actually), so I didn't go into it in depth (beyond that it would've added a lot more effort to what was already a high effort video). This is why I didn't explore the math (in the video) more. I might look at this sort of thing later, but in a different video more focused on value creation/deletion instead of why CE is bad.

[@k.vrooman8569]

​​​​​​@@generalistgaming Easiest to think of the 3 groups, Society / Rest of Market: Buys 50 tools @ $60 = - $3000 Tool Workshop: Sells 30 tools @ $60 = +$1800 Buys 30 wood @ $30 = -$900 Pays wages & dividends... Wood Cutter: Sells 18 wood @ $30 = +540 Pays wages & dividends... Money is deleted and global wealth goes down whenever prices are +%. Created by the 66% difference in buy-sell volumes ( for the +50% price case ). This is offset by factory value added, but the deletion can be very large ( 66 % of the revenue & 40% of the input cost )

[@generalistgaming]

The way you're looking at it here includes the deletion effect on the tools without including the assumed benefit from the industries using those tools as inputs having higher sell prices as well. If those industries were for example sawmills (a very efficient industry that overcomes the deletion effect strongly) they would be using 3k w/ of tools inputs in 10x logging camps - it would be producing 18k value in outputs. You're talking about how +50% price means 66% more buy orders than sell orders meaning that .66/1.66 (40%) of value gets deleted. Every single PM in the game creates value by transmuting one good into another. High prices increase this in a multiplicative way. If you look at the spreadsheet at price flexibility in the spreadsheet, that's outputs divided by inputs. Anything over 166% will be able to survive 40% deletion and still be net positive. The money deletion is going to be smaller than the money creation unless the PM is very inefficient (steel can't cover, for example), before considering price equilibriums and indifference thresholds. In the aggregate (which I can't pin down for sure w/o solving for a specific economy) price flexibility for a total economy will be considerably higher than 166%.

[@aaronhpa]

(On Victoria 3)

[@sureee_kidsure9180]

1:20 and me 😻😻😻😻😻

[@juanma9511]

"command economy is bad" just like in real life

[@pieroe1]

Not in China

[@meatharbor]

Intriguing... I suppose there's not really an effective method to reasonably model how a command economy would actually function in a game like this 'cause there's definitely some things that don't make a whole lot of sense to me regarding how command economy is represented in-game. For one, if I'm understanding correctly, wages remain the same under CE as they are under LF, which shouldn't be the case. The surplus value extracted by the owning class would simply not be extracted and end up passing through to the workers. I guess the "government dividends" is supposed to be the surplus value in this case...? And, if I'm understanding _that_ correctly, it's just paid straight into the treasury but with "inefficiencies" PDX doesn't care to cite, I guess, represented by some magical money hole malus...? Why not just print more money to replace the currency blinked out of existence through magic? It's not like any use value was lost. And, for that matter, why for we can't fix prices? It's supposed to be a command economy. If we own the industries then why can't we control our own prices? I mean, besides this being a video game and sounding wildly unfun if we have to set the price of every good in every state manually. That's beside the point and I have no meaningful solution so we'll ignore that part. It still makes it feel like some market socialism garbage and I disapprove.

[@fish5671]

I dont understand what you said but i agree

[@whoisjoe5610]

>Paradox doesn't cite why money dissapears in command economy Limitations of party control: The government bureaucracy in the USSR, by David Lane and Cameron Ross "This paper demonstrates that the communist party, in terms of personnel, only partially penetrated the government bureaucracy in the USSR. Detailed biographies of 212 members of the Soviet government of ministerial status were analysed into four groups depending on their degree of party work experience, and further analysed in terms of their participation by type of ministry, including the military industrial complex, and by the time and tenure of appointment....... The research indicates that the government had a relative institutional autonomy and great powers of self-recruitment and renewal, that the attempts by party leaders to control the bureaucracy failed, and that the relative autonomy of the government apparatus was an important contributing factor in the collapse of the communist state."

[@meatharbor]

@@whoisjoe5610 I'm not sure how that relates to what I was discussing.

[@fish5671]

@@meatharbor He is saying that the burocrats that managed the command economy had way to much power (caused corruption = 'money vanishing') and the soviet government attempts at cracking down on it failed

[@whoisjoe5610]

@@meatharbor You talked about how a portion of the money would "disappear" instead of being put into your treasury as dividends under command economy. You then asked why exactly this happens, and asked Paradox for a citation. The reason this happens, is because of the innate deficiency of the non-market based, bureaucratic nature of command economies, which coding in a new system to micro-manage each and every good would be too tedious for, was therefore resolved by Paradox by handing out a modifier to the income (which can be interpreted as a mixture of corruption and overburdening of bureaucracy compared to market based systems) to simulate command economies.

[@Alpha_Digamma]

What do you think of the strategy of building one level of factory for all the basic goods in every province to increase SoL? I find it rather useful to get poor provinces out of starvation levels of SoL, making them baby factories for my rainbow states from mid- to late game if nothing else.

[@Drakonak]

So in general, we don't want to be importing too much, and preferring to export in order to keep prices high?

[@generalistgaming]

This is something I'm less confident about because I haven't done the math for it, but I believe that you want to generally be net exporting, yes, but also that will get harder as you manage to increase prices. I think you should also look to import goods that specifically have less efficient PMs to decrease the price so that your economy is less proportionately the inefficient building, but I'm less confident that this is the case

[@lazykatie42069]

what's your opinion on declaring bankruptcy now that it doesn't give a construction malus anymore? Obviously it's got enough bad effects still that it's not ideal to go bankrupt but it's not a total momentum killer anymore either so I feel like it's not as punishing to accidentally dept spend too much and end up going into default now.

[@generalistgaming]

I thought about it a couple weeks ago and there’s a reasonable chance that it’s meta, to just bankrupt then reduce taxes so you don’t generate radicals. I mean if you’re assuming you’re not rev resetting bankruptcy

[@generalistgaming]

Iirc the offense/defense penalty as additive with other bonuses, so it’s not as bad as it looks and fighting super hard wars is generally not too good anyway

[@lazykatie42069]

@@generalistgaming tbh I could see it being meta yeah especially since the forced privatization of all your government owned buildings is actually a good thing given how government ownership is currently just straight up bad.

[@zioming]

If taxes are a way of extracting money from your pops which you can then reinvest into the economy, and no money gets deleted during this process, then you can think of this as a way of guiding the funds to where they can profit the GDP more, as in, instead of having people buy a bit more grain, we make them pool this money and build a factory that will increase our GDP much more than the grain buy orders ever would (especially on subsistence farming), meaning more free money from minting, and will let us get more Capitalists, meaning more free money from contribution efficiency. All that said, I am right in assuming that I should go high taxes in the early game, even if they hurt my average SoL, because at that level of SoL the buy orders from the lower strata pops wouldn't stimulate the economy as much anyway, and only once I kickstart my industry and get the laws to tax the richer pops letting the lower strata pops' SoL increase to the point where they can actually buy a decently economy-stimulating basket of goods should I start building consumer goods production chains and decrease the taxes to aid them in creating buy order for those?

[@generalistgaming]

More or less - the most important factor making higher taxes worse is probably hitting enough radicals to cause turmoil maluses, which effectively delete construction.

[@zioming]

@@generalistgaming Then, following this logic, when playing as Qing or another country with a lot of subsistence farms, don't I actually benefit from having the Manor Houses around, since, by building over the sub farms, even if it's with regular farms, they contribute to de-peasant-ing pops, letting me tax more people through Land Tax and creating more buy orders for basic goods compared to when they got all their stuff from sub farms? (Not that Financial Districts aren't preferable, but still)

[@randomplayer8957]

Hmm I tried to watch this spreadsheet video during the night but you have no dark mode :(

[@niofalpha]

Super random and tell me if I’m wrong but is it just me or are prices literally just based on supply relative to demand? Like aren’t the prices just kind of flat over the course of history when realistically manufactured goods costs should be dropping as demand remains high?

[@generalistgaming]

So it is based on supply/demand w/ buy and sell orders, but prices will drop over time as new tech is more efficient and this pulls the equilibrium down as it goes - I probably should've included this thought more in the video, but I really wanted to emphasize that reducing prices in a vacuum (ie, not because a better pm or stackign throughput) is a bad thing

[@Poppleop]

If you transition from free trade to protectionism you keep the capitalists trade centre PM. Given that, wouldnt you then be theoretically able to better control a higher than base-price cost for goods (by manipulating tarrifs and therefore raising the minimum price for profitable trades), and still keep those giga-investors

[@Poppleop]

My bad, seems like you just always have access to the capitalist PM, so long as you aren't on mercantilism. TIL. I genuinely thought it was 'exclusive' to free trade, but you could 'bring it over' to protectionism 😅

[@theblitz6794]

What does Generalist think about cooperative ownership?

[@generalistgaming]

I think the latest patch making it so you lose all overseas investment hurts a lot, but it is the best for SoL maxing

[@abhishekchaudhari913]

Good stuff👍

[@generalistgaming]

Thanks 👍

[@pelayla]

more anti CE propaganda.... i thought you were better than this

[@cyrusol]

Honestly, I think you're getting at the prices issue the wrong way here. When prices are high and investments are efficient (even though some money gets deleted) that doesn't mean you have a buzzing economy, quite the contrary. It means that your economy is so terribad that even the worst investment is still super awesome. For a real world analogy: this is why developing economies grow much faster. Meanwhile when prices are low - not because of command economy, that's an entirely different issue, just in general - then that means the investments are worth less, yes, because all the good investments have been built already. It exactly means - all else being equal - that your economy is already fully developed and thus, buzzing. I've made the observation in-game that late into any run prices tend to all fall below the 0% threshold due to late-game PMs being very efficient. Meanwhile I could stay on low taxes with no consumption taxes for basically the entire rest of the game and still swim in money with which to afford a huge high tech military because there are just no other good uses of money left. Still a great video, must have been a lot of effort

[@generalistgaming]

So there's some teeth to this but I think you're overlooking how players generally get low prices and are looking at the game. In the lategame if you're playing well prices will still drop as PMs get better and you get more throughput, yeah, and I could have qualified my statement that generally prices will drop. But if you read a ton of comments players make about the game, you'd see that generally players advocate for reducing prices and say stuff like "don't build more construction until the goods are cheap." Beyond that, in the context of CE specifically, a lot of players argue it's good BECAUSE it drops prices, and that was what I was primarily thinking about throughout the video. Generally players are dropping prices because they're underspending, or because they're dropping the price of a particular good past its equilibrium threshold because they think it's good to have that particular good cheap and this depresses the overall economy. Also when you drop taxes you will have proportionately less money and can overspend by less and this will drop taxes. There are reasons to do this, but it does slow down the economy. Beyond that, let's say my lategame PMs and throughput would give me -15% price naturally. Given the choice it's still better for me to be on -10% than it is -20%.

[@alexandererhard2516]

Once you observe prices going generally below 0%, do you also see the investment pool and/or your government treasury being unable to be emptied? Because that is money that just gets deposited into a vault to never be used, which could instead be being used by Pops to get more SoL and therefore increase demand of consumption/luxury goods again.

[@Patriot3791]

I want to learn this game but damn, none of these words mean anything.

[@generalistgaming]

I mean I think I preface this video by saying it's literally the most complicated tutorial I have? I'd recommend one of my beginner tutorials first

[@ferretman6790]

“Command economy is terrible” art imitating life

[@zioming]

Wasn't Command Economy a way to cash in on your GDP to begin with? A way to leverage your economic growth for a short-term SoL boost and some disposable income for when you know the game is about to end in 10 years, so you don't care about what happens to the country after that.

[@Ragatokk]

Low construction prices are good so you can pump up the economy as a whole faster, no?

[@generalistgaming]

It's a bit more complicated than that, but kind of. The effect is a lot weaker than you'd think. Let's say 50% of your economy is construction goods. If we drop the price of construction goods by 10% say, it will reduce our expenses, but it will also reduce our income because we've shrunk our economy (which in dropping prices we've made more proportionately construction goods as that's how you drop prices). The portion of the economy that's construction goods will actually shrink by more than 10% because, even if we assume we don't increase the price of input goods, the existence of inputs means that a 10% decrease in outputs prices will decrease the profitability of the building by more than 10%. So there is a threshold proportion of the economy where reducing construction goods prices will actually make it so you can afford LESS construction because when you reduce price you shrink your income by a larger percent than your costs. I think usually you don't hit this proportion, but it does mean that reducing prices is less valuable than it looks. Beyond that when I reduce construction good prices this means that I'm going to shrink other prices too - capitalists are getting less money, so that's less buy orders for luxury goods.

[@duncanmuir5717]

[@connorvic3]

i thought wages are based on the cost of a certain sol so wouldnt it scale aswell?

[@ingni123456]

No, pops use wages to increase SOL by having excess money

[@connorvic3]

I remember hearing that the cost of the states sol was the thing that determiner of wages but I can't find a source for it now though my argument does hold once you get to the point where buildings are competing for employs by raising prices

[@theggfloupin4084]

@@connorvic3 wages increase from demand from the jobs in question. so if the local state needs 1000 engineers, but you only have 500 the companies will increase their wages to make them work for them. at least this is how it used to work.

[@connorvic3]

Yea they compete for labour if there's less labour than jobs but the question here is abt if there's more jobs than labour

[@ingni123456]

@@connorvic3 that drives up wages

[@godkunnn_]

How crazy is it that we could probably better plan an economy using vic 3 than any central planners in the soviet union could?

[@5508Vanderdekken]

Central planning happens in all economies; the only difference is that in the Soviet Union it was a part of the government bureaucracy that did it and not a part of the corporate bureaucracy. Both of which are making equally dumb decisions on future demand

[@messeuravril540]

@@5508Vanderdekken Where can one read more about that idea? Is that Hilferding?

[@godkunnn_]

@@5508Vanderdekken dont get me wrong i agree. just had the thought while i was watching the video about how far we have come. i bet soviet economists could unironically learn a thing or two from playing vic 3 if you could time travel and pop a pc in front of em lol.

[@pieroe1]

Lack of thecnology

[@KissatenYoba]

@@godkunnn_ nah, vic3 economy is based on price equilibrium and real world economy is based on goods production and consumption. In vic3, if you don't have enough motors, you just pay more and still get motors. In real world there's no phantoms like that There was a video on a funny Japan run where the player erased every food building while in isolationism and have managed to increase SOL to respectable levels regardless. This kind of thing won't work in real life

[@connorvic3]

34:50 its actually the opposite command eco is better with more dividends compared to wages since if 100% of buildings profit is dividends then the gov gets a higher fraction of the economy which is the main important thing in an economic system wheras on lf if you assume the buildings are owned by capitalists only abt 70% goes to gov but ofc in reality most of the time wages are either higher than dividends or close

[@generalistgaming]

If you look at the reasonable scenario and take CE and triple gov dividends (because they have 35% balance) you get roughly 240. If you take LF and add IPT, Reinvestment (which reasonably LF wouldn't have 10% gov ownership, but we can ignore), tax collected and then double it (because they have 54% balance vs wages) then you get roughly 246, which makes it look like CE is catching up. But if you then triple the money deleting in price consideration, and double the free money specifically from IPT (you're not increasing debt spending) you get something that looks more like 263 for LF and 176 for CE, which is a nominally larger margin than 136 vs 87.

[@connorvic3]

Fractions are what matter though

[@markjerue9734]

​@@generalistgaming But dont low prices improve the SoL, political power of pops, and more $ in reinvestment? Or am I crazy? Can pops still invest internationally?

[@generalistgaming]

@@connorvic3 man the fractions aren't going to offset a difference 87 vs 49 done with quickmaths.

[@theggfloupin4084]

the main reason its "bad" is because the money under capitalist ownership doesn't disappear. it gets spent on luxury goods. under command economy 30% of the dividends just straight up gets deleted.

[@thebestdamager7400]

Wow

[@Sviatoslav_The_Brave]

Bad in the real world. Bad in the game. Perfectly balanced as all things should be.

[@Grothgerek]

With the development of computers and AI, planned economy might actually be the superior version. Because we can now calculate supply and demand in real time, which wasn't even close to possible decades ago. The main argument for market economy was always the fact that it regulates itself, while planned economy is bound to over- and underproduction.

[@theggfloupin4084]

i dont think it would make sense to delete money though. if you really want to argue for it, you could say corruption makes the money not go to the government. but that dosnt make the money disappear outright. like it dose in the game.

[@Cuskocuint]

I guess you are not talking about the URSS or Korea, 2 cattle and grass nations that make it to atomic and the moon with planned economy.

[@himick1232]

Right now all big corporations have a planned economy inside themseves. I've worked for NVIDIA for a while and we had 1-year plans that were accurate up to a week(!).

[@5508Vanderdekken]

@@himick1232yeah, op has never worked in the demand forecasting or production planning areas of a corporation. Everyone plans production based on what they think will sell. “The market “ isn’t even a real thing for most companies, who make contracts with other companies for those forecasted amounts of units

[@rasmus4042]

First

[@Szajgicism]

Guys we missed one child to lock up in the cupboard

[@rasmus4042]

@@Szajgicism the children yearn for the m̶i̶n̶e̶s̶ cupboard