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[Orkel]

So as I was half-asleep on my school's history class, I got the idea of a "taxes system". When the economy starts, a fixed amount of money, let's say, 100,000* is divided between all dwarves equally. Then another sum is added to the "national treasury". Maybe 10,000* for starters. Every now and then, the tax collector will come and take a certain percentage of money from each dwarf (this would be settable. For example, 10%). This tax money is then added to the national treasury. When dwarves do jobs, they get paid from the treasury. The dwarves who don't work, their money slowly gets drained because of taxes until they have nothing. If they don't have the money required to pay taxes, they get beaten up. This would be pretty interesting, as there'd be very rich and very poor people. If your treasury runs out of money, you can't pay the dwarves any salary for the work they do, and they'd get extremely unhappy thoughts. And maybe work slower, kinda like a hardcore booze-deprivation. Too high taxes will also make them have unhappy thoughs.

You could trade items/crafts for money (which is put in treasury) from specialized "money merchants". But there'd be a limit to how much money you can get at a time. So you can't just boost your treasury to 2 million* from a random adamantine artifact or something. This system would probably give a fun economy, where you must balance between taxes and treasury. And maybe, just maybe, you could use money from the treasury to buy things from normal merchants (instead of trading crafts, like now. You'd trade normally, like the system is now before the economy phase, though.)

A very graphical paint illustration:

Blue: out of treasury/stockpiles
Red: going in treasury/stockpiles



Now for the bad sides.. hmm. Well first of all, I can foresee a lot of dwarves getting beaten because they're poor. I see some kind of sadistic hilariousness in this. "You're poor! *bam* *smash*". Also, there might be some dwarves who have like half of the money in circulation in their own account.

Would this be even possible?

[Squirrelloid]

Ok, I'm not going to say this is a good idea to implement because I don't think it would be fun at all.

But lets talk about the mechanics of the proposal.  You're basically talking about instituting a money supply (which is distinct from total wealth since it only refers to hard currency).  This would require currency to be an object which is the medium of exchange, and for the value of currency to float against that of goods.  While those are not abhorrent additions in and of themselves, it would require far better AI for handling items before we really want dwarves messing around with currency (the current AI is awful).

The real problem with your proposal is you are advocating a fixed money supply.  This leads to a permanent depression scenario as the workforce expands, because there simply isn't enough currency to carry out enough transactions for the economy to grow.  If there is a money supply, the government needs to be able to expand and shrink the money supply.  Specialized money merchants don't solve the problem - minting coins creates money.  The question is whether there is too much or too little currency in the economy, and what that means for prices and exchange rates.

Of course, now we have to know something specific about the currency.  Is a gold coin worth X dwarfbucks because it contains X dwarfbucks worth of gold?  Or is it because the mayor fiats that value?  These have rather different implications for the nature of the money supply and the effect of expanding or contracting it.  Also note that if currency has value because of its content, that creates additional demand on its constituent metals beyond the demand of industry, which leads to inflated good prices and possibly industrial stagnation (if the price of a required good exceeds the value to the industry because people value it more for currency, the industry can't acquire raw materials).

I know, I've advocated an economics-related change elsewhere, but in that case it was distinct from government action and politics.  Money supply theory is quite political and requires government action.  For a reasonable money-supply theory of the time period, mercantilism, the consequences in-game would be that you couldn't normally trade for gold, silver, and possibly other metals with other civilizations (notably humans), because that's equivalent to trading away actual liquid assets.

Basically, I oppose this for 3 reasons:
1) The economic theory isn't sufficiently developed to create a good model in the game.  If you could do so, you'd put the federal reserve board out of a job.
2) There's only one model which is sufficiently in-period to even contemplate, and it leads to less fun because you can't acquire some goods.
3) It would require a minor in economics to make plausibly intelligent decisions, which doesn't sound like fun for most people.  Everybody understands how rarity and desirability relates to price at some intuitive level.  Not many people understand how money supply relates to economic growth.

[praguepride]

This sounds like it would be really annoying. By end game you've got enough things to worry about (tantruming champions, goblin seiges, HFS, keeping up with mandates AND managing 100's of dwarves) that adding a complicated balancing act sounds hard to work.

Also, correct me if I'm wrong, but if it's a fixed currency system....

Government pays out workers. Workers pay back 10%.

1) WTF is the government even collecting taxes back? Why not just give everyone 90% and have taxes be taken out automatically

2) Government is going to have to constantly be printing money. On a map without infinite gold/silver/copper this could get old fast. Man, I wanted to use my gold for something OTHER then minting coin after coin after coin.

3) What squirrel said. Workers will spend all day hauling [1] gold coin from a pile of thousands.

[Granite26]

any currency solution involves fixing currency hauling.  Current broken system is a bad argument against future improvements.

Fixed money versus Fiat money is hugely political, but I think it could be enormously instructive (real life knowledge) to see what happens with a purely backed currency in a growing economy.

Prague:  Taxes in the economy (in this suggestion) are based on wealth, not income.  It has the interesting effect of creating a normal rate of economic behavior based on the levels of your treasury.  (An empty treasury would run at 10%, lower the more reserves you have).  If you have reserves, you could boost production briefly, at the cost of reducing reserves.  Returning to your stable state would require simply returning to your previous state of workload.  It's a self balancing system.

Since dwarves don't (yet?) have a retirement to save for, there is no need for them to store wealth (in capital investments).

Real dwarves would be smart enough to spend all their money on goods, reducing taxes.  Our dwarves AI might not be up to that task, plus, they might not value stuff at the expense of the government taking their cash. 

Note that this does not have to correspond with the existance of supply/demand value changes (1 cup could always be worth one gold coin, just nobody has the coinage to mediate the exchanges)

[Squirrelloid]

Note that this does not have to correspond with the existance of supply/demand value changes (1 cup could always be worth one gold coin, just nobody has the coinage to mediate the exchanges)

Actually, that no one has the coin to mediate the exchange (assuming they want to) will increase demand for coins, which will decrease the cost of the cup.  (The coin becomes worth more). 

Edit: This is true in both a fiat and fixed currency set up.  (Although in the fixed currency arrangement driving up the price of coins directly drives up the cost of the metals used to make the coins).

[irmo]

Taxes don't make sense in the kind of economy that exists in the fortress. The dwarves don't get paid in real money, because there's nowhere for them to spend it. They get paid in fortress credit. There is no "treasury", the bookkeeper just writes enough credit every month to pay everyone.

It really doesn't make sense to envision the fortress acting as a government with taxes and a treasury when it's also everyone's employer, landlord, and general store.

[Granite26]

Note that this does not have to correspond with the existance of supply/demand value changes (1 cup could always be worth one gold coin, just nobody has the coinage to mediate the exchanges)

Actually, that no one has the coin to mediate the exchange (assuming they want to) will increase demand for coins, which will decrease the cost of the cup.  (The coin becomes worth more). 

Edit: This is true in both a fiat and fixed currency set up.  (Although in the fixed currency arrangement driving up the price of coins directly drives up the cost of the metals used to make the coins).

I think there are examples (early American Kentucky, for instance) where there wasn't sufficient (LOCAL) coinage to cover demand.  This did not result in the coinage behaving strangely, so much as people not using it exclusively as a medium of exchange (there was more barter and I.O.U.'s being exchanged than the value of the currency skyrocketing locally)

That said, I meant more as a 'we don't have to tie realistic S/D behaviour to this as well'...  Sure S/D is realistic, but it's merits and effects and flaws can be isolated from this

It really doesn't make sense to envision the fortress acting as a government with taxes and a treasury when it's also everyone's employer, landlord, and general store.

That's what us Capitalists have been saying for YEARS...

as for the 'not real money, fortress credit' take a look at what Fiat Currency means.

[Squirrelloid]

Note that this does not have to correspond with the existance of supply/demand value changes (1 cup could always be worth one gold coin, just nobody has the coinage to mediate the exchanges)

Actually, that no one has the coin to mediate the exchange (assuming they want to) will increase demand for coins, which will decrease the cost of the cup.  (The coin becomes worth more). 

Edit: This is true in both a fiat and fixed currency set up.  (Although in the fixed currency arrangement driving up the price of coins directly drives up the cost of the metals used to make the coins).

I think there are examples (early American Kentucky, for instance) where there wasn't sufficient (LOCAL) coinage to cover demand.  This did not result in the coinage behaving strangely, so much as people not using it exclusively as a medium of exchange (there was more barter and I.O.U.'s being exchanged than the value of the currency skyrocketing locally)

I could write a lengthy response to this, which you'd probably just agree with.  So I'll just merely state that I meant, more generally, 'mutually agreeable exchangeable value' than currency.  In many cases, this means barter and IOUs can cover shortages in money supply, but there are conditions for each of those without which they fail to function.  (If absolutely anyone would accept something, its effectively currency, like salt was for much of the middle ages).

That said, I meant more as a 'we don't have to tie realistic S/D behaviour to this as well'...  Sure S/D is realistic, but it's merits and effects and flaws can be isolated from this

Agree entirely.  I think this gets back to my earlier comment 'require a minor in economics to make plausibly intelligent decisions'.  Money supply is *complicated*.

[Orkel]

Mkay, guess it'd be way too complicated to implent ingame then.

Or well, probably not that complicated to implent, but ridiculously hard to get working properly.

[Granite26]

Not if you don't make all the broader scale assumptions Squirrel made.  (I.E. Modelling the economy at large as being realistic).  Value of currency can be based entirely on the worldwide metals market, meaning that the value isn't strongly tied to local currency availability, etc.

Personally, as long as the markets are at least somewhat self-regulating, the models can be simplified enough that there's a reasonable default value that doesn't screw things up long term (so you can optimize to get a better return than the default, or just not play that mini-game at all)

[Silverionmox]

I think the economy should start with logical individual actions of individual dwarves (or families units) and test that. Problems that arise should be corrected not by changing the individual behaviour of dwarves, but by compensating or mediating them through the policies of the settlement authorities. That would fit the rather local autarchic economies, without trying to devise a perfectly rational individual.

In a second stage, the same can be done for individual fortresses at the world level, the civilization authority (or a religious one, like the medieval papacy) would be a candidate for the mediating role there, and conflicts between civilizations ought to be decided by diplomacy and warfare. Alternatively, there could be city-states approach in which the individual settlements do the negotiating and the warfare. Those two should be able to flow over in each other, but there it starts to be more of a political structure than economical. The two are inevitably linked of course, but a political model should have its own dynamics as well: this is just where they touch.

[praguepride]

So now nobles not even in your fort will start messing with your economy? Sounds like boatloads of fun 

[Squirrelloid]

So now nobles not even in your fort will start messing with your economy? Sounds like boatloads of fun 

Someone seems to have forgotten losing is fun.

[praguepride]

Losing is fun when it happens from pit spawn, gobbos, skeletal giant eagles, or even your own batshit crazy dwarves going on a rampage.

Losing is fun when you accidentally breach a magma pipe/underground river.

Losing is fun when you intended to lose in the first place and make one big death trap.


Losing is NOT fun when the human town next door undercuts your prices to the point where you can't buy anything from merchants. It would be fun if I can convert my starving dwarves to a militia to curbstomp said town, but then as I mentioned in the other economy thread, that would be yet one more thing thats higher priority then establish a tithe/taxation system.

[Silverionmox]

So now nobles not even in your fort will start messing with your economy? Sounds like boatloads of fun 

What do you expect? Your feudal overlord isn't giving away his land for free, after all. You have obligations. That won't take the form of mandates or price controls like the nobles do. He'll probably request soldiers or tribute, leaving you a choice who or what to send exactly. He might forbid you to export weapons or so to other civs. You in turn may then try to get away with it, etc. That may end in countermeasures, you could rebel.
Also, the settlements that are dependent on you will have to fulfill your demands, since you are their liege.