Having reached the end of 1872 (ie I only have 48 years left to play) and managed a decent expansion it seems to be a good time to stop and look at four aspects of my progress in detail. Thus the next four posts will review the economy; the population; my colonial progress; and, the army.
In doing this, I think it will also make it plain why I need a lengthy period of relative peace as I absorb my gains, rebuild the army and ensure the economy is keeping up with my population needs.
[CENTER]Introduction[/CENTER]
Since this is very much an economic game, I’ll start with the economy. Equally I’ll review some of the PoN mechanisms in this respect and the understanding I have come to on the basis of my own game play and the information in other AARs and on the PoN page here and over on the AGEOD forums. You don’t really need to read this post to follow the AAR, the key message is that I need to fund quite a lot of development in the next few years.
There are two key items to hold in mind when considering the interaction of state and private finance, of international and domestic trade and of the impact of economic activity on your domestic population. In effect Private Capital is generated and lost in international trade, is lost as a major input into production and gained by selling that production in the domestic market. State Funds come mostly from taxes and is mostly spent on colonial activities, the army and funding the speeding up of key research fields. The game model presents lots of nice dilemnas in terms of how you structure your choices.
Anyway, here are the usual tables that you have seen before. I’ll draw on this in the discussions.
The table below shows my understanding of the financial flows (I’ve illustrated it with real numbers taken as a snapshot – the precise details fluctuate turn by turn).
[CENTER]Financial flows[/CENTER]
Fiscal Model
Now it may well be that table is more confusing than helpful. So lets look at four key aspects in more detail.
Production and Consumption
The main complication is there are a number of overlapping interactions. So your goods to sell come from two sources (domestic production, imports) and go to satisfy two competing sets of demand (population or exports). The balance, positive or negative, goes into stockpiles. Also meeting population demand improves their contentment (+0.47 in this case).
If we look at one item from the main reports, it will indicate how this works. I started with 164 fish (I’ve been running the stocks down so as to free private capital for investment), from my current open capacity, I will produce 55 fish, it is estimated I will sell 25 as exports and another 20 to the domestic population. If the exports happen then my stocks will increase by 10 to 174.
Private Capital and State Funds
Domestic production uses Private Capital and a range of goods (we’ll look at this in detail below). Private Capital is also used to create new farms, mines or industrial capacity, as well as for some colonial actions. State Funds goes on buying replacements, new units, investments such as telecommunications, Universities and sewers as well as being a major requirement for colonial actions.
The table below shows the various flows around Private Capital and State Funds (this obviously does not capture the voluntary expenditure I may make during a turn).
What is left, is then what I can spend by choice, on new factories, on domestic and colonial development etc.
The value of Colonies
To me, PoN takes a view on colonies based on the economic theory of Thomas Hobbes. Hobbes was on the first British economists to seek to evaluate the value of colonisation and came up with some uncomfortable (for the British establishment) ideas.
At first glance, the main table indicates that each turn, I make a nice profit, paying out £3 for upkeep and grabbing £47 in taxes (and £31 in private capital).
Equally Colonies impact on the goods you have available in two ways. One is if you build the appropriate agricultural, mine or industrial centre then that works as normal (remember you can also build in your allies colonies). Secondly, once you place a merchant, you can build a trading post. This sends one of the available goods every now and then. Not a lot in any given turn but they are relatively cheap to establish and this helps with a small baseline supply of some valuable goods (and more fish!).
It also indicates where I could usefully build farms (coffee and opium, there is enough fish around Italy) so as to develop these resources.
There is then the geo-political game of grabbing and holding strategic locations. This I’ll come back to in the post about my Empire.
So what is the catch? Quite simply to develop a colony is horrendous cost. Even sending merchants costs the state £50, the real costs to creating political control are around £250-£500 (per action) and you need to then boost development. Add to this, a fair chunk of my army (and replacement costs) are in the colonies.
So for that net £44 per turn I have invested (at a rough guess) some £5-6,000 in colonial developments. Thus we can only see Empire as a vanity project, but one that PoN quite rightly forces you to engage in. Since the game is about gathering prestige and your economy is only the means by which you can sustain this key activity.
Merchant Fleets
One thing to note, is the complex chain around merchant fleets. Not only do they allow you to buy, they allow other countries to buy from you. So for example, there are no Chinese ships in the Med, but they can buy my fish using the fleet I have in the Far East. Equally, you can tax usage of your fleets but if you keep the tax low then the usage of your fleets will improve, which in turn boosts private capital via the transport fees. So you can trade off between these two options.
Taxation
So you can base your taxes on up to six areas (but can only raise Income Tax in time of war). As above, it is clear that I am relying on Excise Taxes for most of my income (my logic is that if the upper classes want an Empire they can pay for it).
To me, you can split your tax base into two broad blocks. Taxes on activities and taxes on existence. I am only raising one of the latter – the Census Tax, and this has the effect of reducing contentment once every quarter when it is raised.
The Tariff Tax you need to be careful with. Over 50% and it will start to harm your relations with your neighbours, so it is attractive to use but has consequences. It also (and there are techs that influence this as well) changes the chance that your population will buy locally produced goods over those offered for sale by another country (so this is another part to the import/domestic production trade off).
Maritime Tax, as above, is another that looks consequence free but has potentially negative implications. It makes it less likely that foreign countries will use your ships which in turn reduces the fees earnt by your businessmen. In truth, given how little I am raising by it, I ought to reset it to 0%.
[CENTER]Industrial Sectors[/CENTER]
Finally let’s look at my economy in more detail.
I’ve selected these by output, it doesn’t cover everything but gives a useful overview of some key sectors within my economy as well as showing the impact of upgrading structures as the various techs fire.
First, the Italian wine industry (hic):
I have two left to upgrade, well as I am now over-producing (ie stocks are rising and I am trying to sell more than the world can buy), I’ll leave them. Key is that upgraded they produce much more but demand additional inputs (coal and chemicals), so slowly we see the mechanisation and industrialisation of agriculture.
These, in different ways all produce prestige as well as actual goods. So upgrade your steel mills when the chance comes your way.
I have one steel mill still to upgrade which is something of a priority and this will be done in January 1873.
My military-industrial complex.
Not hugely profitable but I can always sell the results.
My large cereal industry, almost all closed as I have far too much (most of this was built by the other states pre-unification), but I am upgrading the most profitable and can always restart the others once I need them.
My equally large fishing industry, more of this is open and has been upgraded (note it then needs coal, I guess reflecting the type of ship in use). The reason for this is the Chinese in particular can’t get enough of my fishes …
The mainstay of my export trade is my luxuries. I have built all the luxury goods factories I can (6) and can sell them with ease. One thing I need to do is to develop my Opium fields to satisfy domestic demand and hopefully start selling it (… yeah, I know).
This also shows something that is confusing. A structure being built (ie the plantation at Mogadishu) shows as if it was closed, you have to remember which is closed and which is not yet ready. Handily, once it is completed it is automatically opened so you do not need to intervene to achieve that.
Other bits and pieces. My Scottish goldfield is a real cash cow. I need to upgrade one of my coffee plantations, and the tea field. Note I am leaving my oilfield closed for the moment, I have a decent stockpile and there is no real demand for it. But that, plus the capacity to exploit my new colony in the Persian Gulf at least will ensure I have some supply of oil when it becomes important.
My mining sector. Again some upgraded, some waiting for their turn.
The main gaps (apart from luxuries) are in terms of chemicals (as you can see upgrading your agriculture increases demand) and manufactured goods. Both are easily available by trade, especially with the USA. So I feel no need to prioritise creating domestic production. I am, quite deliberately, not playing this with a mercantilist mindset, indeed some of my trade is to buy so as to sell, rather than just buying for my own good.
[CENTER]Summary[/CENTER]
So that is probably far too much information (the original of this post also included information on population) but hopefully it shows my understanding of how the PoN economy fits together. I’ve not shown it but it is worth remembering that PoN does not use Victoria’s world market concept so all the trades are 1-1. If the good is well supplied this is of little importance, but where it is rare then additional factors such as some techs (that improve your purchase chance), good relations (= a commercial agreement) and the volume of shipping you have in the region all influence your purchase chances.
You actually don’t need to read this update to follow the AAR, but hopefully it gives some idea to my logic for the next 2-4 years. I need to complete upgrading of a number of industrial and agricultural sites. I need to spend on colonial development (this will become more clear in another post). I need to boost my domestic chemical industry (not least if my demand is increasing then so will that of the other advanced economies).