"There are efficiency gains from infrastructure and technology, but factor costs are basically fixed globally, which makes Ricardo's valuable insights about comparative advantage much less relevant. "
thats what i meant, it is necessary to substitute the effects measured in money.
I am originally a studied economist,
Ricardo was wrong in generally and in detail (as was Keynes and the latter one knew it and wrote it in his books himself)
however the comparative advantage is a typical concept of planing in this time period, but by games interface excluded from all thinking about it!
this leads us to an algorithm with at least three variable, one of them is the normal gameplay which could be totally untouched.
time is also a excluded variable and exchange rates and purchase power parity too...
it gives us only two variables left, transaction cost and output.
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now lets also exclude asian and african colonies.
this was a matter of states (but in case of Belgiums king) and major additional cost comes from colonial problems and could only be extended by transaction cost.
this narrows it down, that is merely nonsens that i am able to get the same output, whether in form of money, or in form of goods in Brazil, like i would have 5 miles down the Potomac.
for u cannot change it piecemeal for every kind of structure in a certain ground, in a certain time frame, it narrows it down to my minds above
in the moment you can still shift production elsewhere and thereby sustain on your own economy. be autark...
@ lookslikerain...
basically you are right with the formulation of that times behavior, but i would like to add some comments... its jus 2a.m here, thus i will "shift this" somewhat
one thing, it was not only money for investors, you are too much focused of an argument called very often in the last time here, at paradox and elsewhere: shareholder value and risk especially of railroads...
this would be nearly impossible to balance in the global environment, for i.e. USA did the very same mistakes with RR int the 1870s in a total other economic environment as the europeans did in the 1840s...
just think about Dole who made in pineapples for tens of years, had huge losses some years, and then after political changes in Hawaii started to produce closer to the US market and increased his margin dramatically as a quasi-monopolist.
think about Carnegie who even produced cast iron and raw steel in Belgium and then shipped it to USA, for the reason of far better technological progress AND the excess of raw materials in few single spots.
while USA had not such highly developed places due to the destruction in war or just tremendous disinvestment in the heavy industry after the ACW
the effect of investors capital is in game, but not immediately for foreign investment, only for inflation. it sustains the margin in case of inflation in an rate of percents, while 15 additional goods of silk offered can decrease the price from 21 to 6 within one single turn...
bound it to capital only and you will have much higher excess capital than now and i lately had all important structures built and running with 3500 additional private capital each turn (end 1856)
unfortunately this kind of approach would lead to the same effect... stockpiling cash
