Money and Economics

[AngleWyrm]

Suggestion for an improved economic model I've been directed to post suggested changes to alpha-17 in this forum. This is a more detailed description of what I believe to be an error in implementation that has propagated throughout our industry and generated problems. The problem is that money is conceived as a valuable asset by itself -- in our case it takes the form of silver. This game suffers the same devaluation of currency that many do: The player starts off with too little silver to buy everything they need, and soon has so much silver that cost becomes a meaningless number. The value of money is in its ability to record the merit of a transaction. If I buy ten steel from a tradesman then I have also created a balancing obligation to give them ten steel's worth of credit. Money is the promissory note declaring receipt of ten steel. As long as I keep to the promise to accept that note in exchange for ten steel (or equivalent merchandise) then the note continues to be worth its face value -- ten steel. If at any time the Rot Patrol shows up and demands that I give them less than ten steel for the note, then the coin is no longer worth ten steel. That iterates forever as a reverberating echo and the coin becomes worthless. The player experiences that problem in the form of having warehouses full of silver and nothing to spend it on. To prevent that problem requires balanced transactions: Give and get the same value for the merchandise, and the coins will retain their merit as a stable currency.

[AngleWyrm]

Yes, it's counter-intuitive. That's why so many developers have thought diminishing the value of a trade will somehow reduce the wealth of the player and thus keep the inevitable flood of money at bay. What they are really doing is diminishing the merit of their currency and thus creating that flood.

[Greep]

I honestly don't see what's being suggested.

[AngleWyrm]

To prevent that problem requires balanced transactions: Give and get the same value for the merchandise, and the coins will retain their merit as a stable currency.

[Greep]

I read that part, but what exactly do you mean by that ("value" in the context).  Taken literally, all you're asking for is to eliminate buy/sell modifiers, which I don't think you're asking for since that makes exploding currency on the player worse.

I think you're mixing up backed currency (e.g. gold standard) with fixed market prices all around, which I don't think anyone does anywhere irl for some pretty obvious reasons, although to some degree that's what rimworld is + the modifiers.

Unless you mean reactive market prices?

[AngleWyrm]

I read that part, but what exactly do you mean by that ("value" in the context).

If you sell me ten steel, then I owe you ten steel or its equivalent in other merchandise. That is the value spoken of.

The system as it currently stands fails to represent that value; what we have is a copy of previous iterations of gaming economics where a coin of the realm evaporates with every transaction, making any involvement with such transactions an undesirable action because they work against the player's prosperity.

Have you heard of a stated desire to make merchant ships important/desirable? At last report the effort was directed at forcing players to buy some materials offered exclusively from merchants. That is a side-effect of failure to maintain value, and will be defeated at every turn by modding out worthless liabilities.

It is better to create stable currency rather than inflation.

[Greep]

I'm still not seeing what you want in game.  This:

"If you sell me ten steel, then I owe you ten steel or its equivalent in other merchandise. That is the value spoken of. "

Doesn't actually mean anything.  You gave them the silver, that's what was owed, and instantly given.  The code transferred the silver, and gave you the steel.

Do you mean barter system?  Currently many people already just use smokeleaf as currency.  That changes nothing.

You might have a better discussion here if you said something that doesn't sound like "Implement economics".  You're describing the situation fine.  You're not describing what you want.

[AngleWyrm]

"If you sell me ten steel, then I owe you ten steel or its equivalent in other merchandise. That is the value spoken of. "
Doesn't actually mean anything.  You gave them the silver, that's what was owed, and instantly given.  The code transferred the silver, and gave you the steel.

It's probably better to say I don't understand it than to assert it's meaningless. It makes you look better in the long run.

• The transaction is between you and me, not some third party.
• You give me ten steel
• I give you something in return. If you are willing to take x amount of silver in trade then you can have that.
• You won't be able to buy ten steel for the silver I give you.

The x amount of silver given in exchange for the steel fails to carry the value of ten steel.

[Greep]

I'm done here.  You're just describing situations.  You're not actually suggesting anything concrete.  A solution to your described situation might be reactive market prices, where if you buy steel the price goes up maintaining a more accurate value of silver, you then cannot sell the 10 steel for the silver you bought it with.  But you don't actually seem to be suggesting anything at all.

[AngleWyrm]

Don't fret, connecting the dots is beyond most mortals.

[minimurgle]

Gotta say I'm with Greep here. The only point you seem to be making is that you don't like the way economy is set up right now. I don't really either. It's too easy to stockpile silver and just be rich. I do hope you understand though that it isn't really that easy of a thing to do. Greep seems to be on to something though.

[Edixo]

A way to fix the economy would be to have a fixed amount of silver on each planet,  say one million spread out among villages.

The price for items depends on the amount of silver that each trader has. Low silver amount, high price buying low price selling,  and vice versa.

If you spend a bucket load of silver at one place, it would slowly dissipate throughout the planet until a balance is found. This would open up a lot of trade possibilities for buying low and selling high through caravans.

Mined silver and silver from trade ships would add to the pool.

Edit: To give some examples

You just started a new colony. Your silver is low. A caravan shows up with thousands of silver. In this case your goods sell for a high price and the caravans prices are low.

You've hoarded silver for a long time. Maybe 100k. You send out a caravan to a village nearby. Their amount of silver is lower than usual and their prices are higher. At the same time your goods sell for less money.

This would entice the player to spend the silver instead of just keeping it,  and to produce high quality goods for trade. At the same time you can flood the market with silver, driving the prices of goods down,  and then buy components/steel/whatever for a low price. Or flood a village with silver and buy their goods for a low price,  then head to another village with a lot of money and sell the goods for a high price there.

Of course you can then just hoard silver and make statues of it,  killing the economy entirely.

Problem with this would be to simulate trade between the villages outside of player interaction.

[minimurgle]

I can definitely see one big pool of money working. I'm sure it has it's own issues though.

[S1lverhair]

Goood grief you numpties.

Silver is irrelevent.

The real issue is the nature of prices and scarcity of goods. In RL this is what drives the prices of goods and maintains the economy. gold or silver or even fiat currency is completely irrelevant except as a medium of transaction.

For instance My colonies don't use silver, not really. My currency is Simple Meals and, in a pinch, Crates of booze.

Simple meals can be kept in the freezer indefinitely each one is worth 15-20 silver But I can make them more or less infinitely and indefinitely, I've got two 15+ growers and one 15+ cook and as such I keep stocks of 600+ on hand at all times in order to pay for just about anything.

Because they aren't truly fungible (to combat traders for instance) I trade the meals for silver to build up a stockpile for whenever someone comes around with a pile of high tech bionics.

Conversely I never take the time to go hunting, my colony is definitely too big to handle the paltry amount of critters which come onto my land, I've harvested the majority of the underground resources and all of the scrap is long long gone.

As such steel and plasteel is extremely valuable to me.

The problem in the economy isn't that silver as a unit of value is more or less intangible and fungible. it always will be, that's why it's currency. it's that the prices of goods never fluctuate with supply and demand. tribes don't come to you with shopping lists of what they want to buy for which you can charge a premium and they don't have good which they can make in great amounts which they give discounts for.

Everything is always the same price for everyone all the time (speech bonus pending of course) save the location you're making the trade at and that is what's killing the economy and making trade less real.

If at any time the Rot Patrol shows up and demands that I give them less than ten steel for the note, then the coin is no longer worth ten steel. That iterates forever as a reverberating echo and the coin becomes worthless. The player experiences that problem in the form of having warehouses full of silver and nothing to spend it on.

when they demand that you give them more than ten silver for the iron it either means that iron is more valuable to them or silver is less. it's the sort of the thing you get when there's a glut of silver in the market or a shortage of Iron.

not rocket science, also not a diminishing returns spiral.

it just means that the "Relative Value of goods" has changed due to "Comparative advantage".

who knows they might have just built a greenhouse and are selling off all of their excess meals now that they don't have to save for winter and that caused a glut of silver, devaluing it's value as currency. or perhaps they are investing in a neato Geothermal generator and need every lump of ore they can get.

anything's possible with a functional economy.

[SpaceDorf]

It is and thank the gods above and below there is no Banking or Governments involved that devalue the currency even more

First of. AngleWyrm is Right.
What he describes and wants is completely different from what you describe and think is in the game.
An economy based on the value and need of the goods.

WARNING : Wall of Text incoming, load the star wars soundtrack and scroll slowly ..

It is a time of struggle on the Rimworlds.
Stockpiles are overflowing with silver and Stuff nobody wants to buy.
A small group of players came together in this thread to discuss a solution ..

Economy 101 : the umpteenth reiteration.

================================================
for : TL;DR skip to the next break

Let's start this of with Namecalling. ( of financial concepts )

Currency : A common denominator or measurement produced by a government
and backed by the banking system. Used to compare value of goods and as standin for a Equal value of goods.

Goods : Stuff available to buy, trade, use, ..

Market : People who want to trade commodities and use money as a basic.

So the Idea with the money pool hits the spot quite right :
There are two pools in the market : Currency and Goods.
In a perfect world these two pools have a 1-1 connection. There is exactly enough money around to match the pool of goods available.
The world is not perfect ..
Thats where the following concepts come from :

Inflation : The decrease of value for currency. The pool of currency is bigger than the pool of stuff.

Deflation : The decrease of value for stuff. The pool of stuff to buy is bigger than the pool of money .. ( yeah right .. )

Money lending with Interest : the true reason for inflation, and a cheatcode for Banks to create Currency from nothing.

Stock Market : People who want Money and use an imaginary value of other peoples work as currency. The second way to create Currency out of thin air.


Lets countercheck which of those concepts are in the game :

Currency - yup .. Silver. It's what prices are measured in.
Goods - yup ..
Market - well .. not really .. you want stuff and produce stuff .. everyone else
just creates stuff out of thin air and needs nothing.

Governments - not really
Banking and Stuff - thank god no

Deflation - nope
Inflation - Hell yeah .. the problem we are talking about.

==================================================

You see the problem is that there is no real market or economy in the game.
All your real world explanations and comparisons don't apply.

The only player in the ingame economy is you. The player.
The inflation of silver is caused by you.
Producing goods from nearly nothing by growing and looting.
Creating Silver by selling this goods to traders who show up without their own needs and selling you stuff they themselves created out of thin air for silver created from nothing.

The pricing augmentation by the game itself is what AngleWyrm wants to remove, because it is nothing more than a imposed restriction to slow down the process described above.

The problem is that it backfires completely and causes some of the mentioned problems. It works like this :

Player goods are worth nearly nothing.
Trader goods are expensive as hell.
Player needs lots of silver or goods.

Solution : MOAR GOODS.
Players overproduce certain goods that give the most moneys for the least amount of work.
Players then sell their goods, buy everything they need and hoard every scrap of silver the can get.
Gameplay gets tailored to support this process.

Question : Players are swimming in Silver and overproduced Goods nobody needs anymore .. Storytellers think that those player need to be punished by MOAR RAIDAS .. now What ?
==================================================
( TL;DR my Ass .. I hope you read the last bit .. )

Part of the Solution : Remove the enforced Trade Sanctions.

Change from the Top :

Player Goods are Equal in Value as Trader Goods.
Player needs less Silver and an amount of goods Equal to the Goods wanted/needed.
--Edit I --
Value Modifiers are Calculated by Trader vs. Trader -> Traits and Skills become more usefull. Also Faction and Personal relations.
--I--

Player produced Goods needed by the colony and a bit more.
Player can Trade a crappy Rifle and a Pistol for a better Rifle.
-- Edit II --
Player actually cares about Goldfish, the Tribal Bulk Trader, because he is a friend of the colony and gives better prices.
--II--
Story Tellers send smaller Raids, because the colony grows slower.

The player has actually time to think about and follow a goal instead of min/maxing The Profit !

Players may actually think about destroying Silver by throwing stuff away they don't need instead of hoarding for silver.
..

@AngleWyrm .. correct me if I explained something wrong