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[MainDamage]

Hello people,

I read about the Dwarven economy, which is deactivated because of a lot of problems it brings (because of technical issues).
Then I started to wonder how the economy would be when working properly, and I started to wonder about somethings I would like to see in Dwarf Fortress that go beyond the technical issues of the problematic economy.

I would like to share an idea about how the Economy of Dwarf Fortress could be. Maybe it's just some nonsense bad thinking, but give it a try.




This ideia is based on a real economy theory, called Chartalism, or Neochartalism, or Modern Money Theory.

The idea is to introduce currency to the game in a way that makes sense and does not bring inconsistencies.

Just to summarize, the whole point of the coin is to make people work for the monarch/duke/count, applying penalties to whose who don't. The monarch will usually want to improve its quartes (forcing people to make good forniture to him), supply his army (forcing people to give armor, weapons, food, etc to his soldiers), give jewels to his wife, etc.

A side effect is the improvement of the commerce, by creating a standard unit of account and storage of value.

 

It would work like this:

 1) When a high noble (Count? Duke? Monarch?) enters the Fortress, he/she then demands the common dwarfs to pay taxes. But the noble imposes a rule: the taxes can only be paid in [his] coins, and nothing else.
    The taxes can be a monthly pay of, let's say, 100 coins per adult dwarf. Maybe there can be some imposed rule that is different from that, like taxes that are proportional to the size of the dwarf's room, or proportional to the quantity of pets, I don't know. And maybe the frequency could be different (weekly taxes? anual taxes?). The details of the taxation are very important, but it is open for debate. The way the taxation is designed will affect the level of work that each dwarf will have to supply by force to the noble.

 Observation: The only one who should be able to produce (or mandate the production of) the coins is the noble. The coins should have some kind of royal stamp that is difficult to counterfeit, to make sure that the only one who can produce the coin is the noble. It doesn't really matter the material the coin is made of (gold, silver, copper, etc). What matters is that the only one who can fabricate (or mandate the fabrication of) the coins and make then legitim is the noble.

 2) There is some penalty if the dwarfs are not able to pay the taxes. Maybe prision, maybe death, maybe some other light penalty, but it has to exist. It is imposed by force by the noble. It is meant to encourage the dwarfs of not even thinking of not paying the taxes. I guess the Monarch needs a loyal guard/army to enforce these penalties.

 3a) At the start, the only way the dwarfs can get the coins is working for the noble, bringing some goods/services he wants, and exchange it for coins. That's the whole point of the coin: to make the dwarfs work for the noble. The goods could be furniture to the noble's quarters, for example.

 3b) The noble could pay his soldiers in coins, and exempt them of taxes. The other dwarfs, who are not soldiers, should give the goods/services to the soldiers to get the coins. This is a way to supply the noble's army.

 3c) If the dwarf doesn't want to work directly to the noble, he could work for another dwarf who will work to the noble and get the coins. This creates a kind of chain: there are the dwarfs who work directly for the noble, and there are the ones who sometimes works for the dwarfs who have worked for the noble.

 3d) Observe that the way the noble spends the money he creates will define where the work of the people taxed will be directed.


That's the scheme.

Observe that some dwarfs can work a lot for the noble and keep some coins saved. Those coins could be used later, to pay future taxes. In this way, the dwarf works more today, and less tomorrow.

The noble has to first create the coins, spend it by buying things from other dwarfs, and then, later, tax the dwarfs. The taxation cannot came first, or else all the dwarfs will be arrested for not paying taxes (or will suffer the imposed penalty, whatever it is).

The noble has to create more coins than it taxes in order to make it able for dwarfs to save money.

If the noble suddenly creates too much coin, it will be easier for dwarfs to negotiate and get more coins when selling goods. Things will get more expensive. That's inflation. And it's only a problem to those dwarfs who are saving money: suddenly the stored coins are less valuable.

There should be some kind of equilibrium between the quantity of coins created and spent, and the quantity of coins wanted in taxation, to make inflation always low enough, and make it possible to save money. (Unless the Monarch is very mean, but that could make the common dwarfs that are saving coins furious... Rebellion?)

Observe that, as there will be always someone who has to pay taxes in order to not be arrested, the coin will always have value. In the ideal world, the noble would try to make inflation low, to make the coin value steady. This would encourage people to use coins to store value and make commerce. The dwarfs would then start to trade things for coins, and then coins for things, and the commerce would grow.

The main thing about the theory (the one I said is called Chartalism, or Neochartalism, or Modern Money Theory) is that the taxation imposed by force is what gives value to the coin, and everything else is subsidiary to this value.

Well, this are just insights in microeconomy that would make Dwarf Fortress Economy very fun.

Thanks,

MainDamage

[Waparius]

It's not a bad idea, but there are a few things that might complicate it a little -

1) For starters DF is aiming to replicate a feudal economic system to some degree; from what I've read, the money supply was actually fairly low in these economies; most local transactions were done on credit or similar (eg, serfs paid their taxes by labouring in their lord's fields).

2) Another point is that you're generally part of a dwarven kingdom, which presumably has its own currency and taxation issues.

3) A point that may or may not be relevant is that the the big problems with the economy in-play were that there was no supply-and-demand system regulating, say, dwarven rents, meaning it was very easy to end up with all your dwarves evicted from their rooms if you dug them out of marble; and that minting coins was a nightmare thanks to stacking issues, with coins dropping FPS to a crawl and dwarves spending all their time hauling single coins around instead of working.


Fixing part 3 might be best done if coins could be somehow abstracted rather than being tracked in detail the way they currently are - the whole point of money is that one coin is much like another, so it works in theory as well as practice to simply make coins of a given type indistinguishable from one another.

Part 2 could be dealt with by allowing merchants to buy goods with their civilisation's coins, allowing dwarves to become money-changers (or some variety of bank work that lets dwarves turn assets into coins, take out loans and swap coins of one value with another), and, when the fortress becomes a barony (or even when the expedition leader is replaced by a mayor), having a tax-collector and minter show up. Taxes could only be paid in the civilisation's own coins, and the minter should probably require a location and resources with which to make their own coins, depending on the fortress's wealth. And for that matter the wealth of its surroundings, when it becomes responsible for nearby Hill and Deep Dwarves and the feudal economy gets properly implemented.


Part 1 should be fixed at the same time, and can be dealt with as part of the increased dwarven autonomy people are often asking for. Here's how it goes down -

At first the game operates as usual - the player controls all digging, all construction and all production orders. Once the fortress has reached a certain size, though - probably when it switches to having a Mayor - the overseer can free or assign workshops, burrows, fields, stockpiles and rooms in the same way that they can free bedrooms and assign other rooms.

 In addition to individual dwarves, they can also assign places to particular organisations or offices - the mayor's office and quarters can be assigned to "the mayor" for instance.

(This is assuming that organisations like religions and guilds have been brought back in, and can make their own demands - dwarves may be members of a guild or religion and thus gain access to guild property in exchange for their loyalty.)

Rooms default to "the crown", and dwarves pay their taxes by working on them for a reasonable portion of their waking hours; the products of this go into unassigned stockpiles and are used in a more-or-less ordinary sort of way by the player (unless they elect to sell them in the Crown's markets and shops). The big difference here is that only some dwarves may freely access the Crown's stockpiles (primarily nobles); other dwarves must pay for their goods.

In addition to their time taking breaks and hanging out in the meeting hall, idle dwarves will also perform their own work, for themselves, their guild or their religion, on their private property. The products of their labour are their own, but they can sell them for money at the marketplace, and spend their money or barter there as well. Dwarves generally require coins for trades with those they don't know well, but can trade on credit with those they know (A broker may be able to facilitate trades on credit as well, in order to make larger trades with merchants without going over the weight limit - alternately, their job is to get to know the merchants well enough to trade on credit, but they can trade at a loss without knowing the merchants well).

(Another assumption: The trade depot is replaced with a Marketplace Zone. Dwarves wishing to buy and sell gather at the marketplace, as do merchants, and also a steady stream of peddlers, hilldwarves and deep dwarves from outlying settlements. Agriculture and perhaps mining is made more difficult, so it is easiest to support your fort on the produce of your settlements and sell them your industrial products. It's possible to set who can buy and sell in a given marketplace by goods, guilds, size and residency, so you can have a farmer's market, a soap market, etc.)

Dwarves working in an official capacity (rather than paying their taxes in labour) are paid a salary and can purchase goods from the Crown (more expensive) or from other dwarves or a guild.

Dwarves working for a guild have access to the guild's own stores (including such things as food and lodgings), while those non-members who transgress on a guild's area of interest may be persecuted by Guild dwarves and need to be kept apart. Guilds that are not provided with certain things may refuse to support the local fort, making life much more difficult for the overseer.

Actual digging, construction etc can stay under player control.

[sal880612m]

I wasn't around for the original economy. Sitting here thinking about it I am having trouble imagining exactly how it works and how I would attempt to program it. I think I would probably start by rearranging the current job classifications to something more like:

Stone Cutter( Mining, Engraver )
Stone Worker( Masonry, Stone Crafter, Architect )
Ranger( Woodcutter, Hunter, Trapper, Herbalist, Fisherdwarf )
Wood Worker/Carver( Carpenter, Wood Crafter, Bone Carver )
Butcher( Animal Dissector, Butcher, Fish Cleaner, Fish Dissector, Tanner )
Trainer/Rancher( Animal Trainer, Animal Caretaker, Shearer, Milker )
Farmer( Grower, Miller, Thresher )
Cook/Brewer( Cook, Brewer, Cheesemaker )
Peasant( Furnace Operator, Wood Burner, Potash Maker, Lye Maker, Soaper )
Apiarist( Bee Keeper, Presser, Wax Worker )
Armorer( Weapon smith, Armor smith, Bowyer , Leather Worker )
Smith( Metal Crafter, Metal Smith )
Crafter( Gem Cutter, Gem Setter, Potter, Glassmaker, Glazer )
Tailor( Dyer, Clothesmaker, Weaver, Spinner )
Engineer, Broker, Manager, Leader, Book Keeper, Soldier and Doctor (as they currently are)

Then I would assign each of those groups either a static value or a variable value based on % of fortress wealth the jobs from various industries have contributed towards fortress wealth between 1 and 10 (or 5 or whatever). Then every time a dwarf completed a job in that industry I would award dwarves currency based on that value I know values are much higher than that typically but whether it is 1 or 100 makes little difference. It may be an idea to multiply the gain by either quality of  the item produced or the stack size. So if a dwarf pulled up a plump helmets[5] and his industry value is 7 he would get 35/350 for having done so alternatively a wood crafter might have an industry value of 4 and produce a ☼palm amulet☼ and receive 48/480 for having done so.
They would spend their money on rooms and perhaps buying goods from the fortress for themselves. A room's value would be based on general material(SOIL/STONE-ORE/WOOD/CLAY/METAL/GLASS), size, furnishings, smoothed/engraved status. but not on the specific material itself. ie a room with gold ore walls & floors would be equal in value to one with gabbro but not equal to one with gold bar/block walls/floors.
Something like v = m * (h * w * d) * E + F₁ + F₂ + ... + F_X+P
m = material multiplier
h,w,d = room dimensions
E = smoothed/engraved multiplier
F_Y = furnishing values
P = tax on pets, equal to embark cost of pet just so you end up with ugly values like 4258 instead of 4200
This seems a little straightforward to me but you could also factor in room availability and room quality availability. Royal Quarters would be devalued by having lots of them or your only room is a Meager Quarters and could enter something akin to a bidding war each tax period as someone without a room would offer a set percent above the current rate. ie, first period Dwarf A gets the room but next period Dwarf B either is the wealthiest or the first to enter the room with last 110% of rent value, then the next period 120% and so on.
 
Broker, Manager and Leader would fit in this structure somehow probably with a fixed value, but Book Keeper, Soldier and Doctor would due to the lack of jobs or persistent lack of proper completion would need to be set up on some sort of salary they would get regardless of the work they did. This would ideally be based on last season/year's total taxes.

As your fort grows this may need to be tweaked so bring in the guilds. The idea here is that instead of tracking each dwarves individual income, anytime a Farmer does a job or a Farming job is done the Farmer's guild would get the cash and when it came time to settle accounts that total would be evenly distributed among however many dwarves share that industry title. I would suggest dwarves set up guild once a certain number of dwarves in that industry have achieved legendary status and the one with the highest skill level be appointed leader and receive two shares of the income to compensate for the possible need/desire of higher value rooms.

A final note on coins, if I were setting it up I would give every mintable metal a denomination value in the raws and have them mintable in three forms Baron, Duke, and Monarch. I would likely limit the mintable coins to copper, silver, electrum, and gold and give them the denominations 1/5/10/15 for Barony, 25/50/75/100 for Duchy, and 200/500/1000/5000 for monarchy. To keep things somewhere between realistic and abstract you would need to have enough coinage to represent the total amount of money flowing around inside your fort. You would also need enough of each denomination make the correct amount. ie, if all you have is a stack of gold monarchs all transactions would occur at that level. At this point you could generate happy thoughts for receiving a bonus at work, and negative thoughts for having to overpay taxes. Might also be an idea to attach the number of required coin stacks to the values used for setting entity visit and siege conditions. Also while the coins would need to be present their presence in a deep dark vault would be sufficient and the actual flow of wealth would be abstract. The coins would be named after the current Baron, Duke, or Monarch but all coins with named for a Baron would store internally as being a Baron and thus be equivalent in that civ. Perhaps a civ wealth could be formulated as well to allow for variations in coinage worth between different civs giving wealthier civ's coins a higher weight so aside from bartering any coin transactions between outside merchants or other travels could be stored in your vault until you have another opportunity to trade or interact with that civ. So in the end your vault would likely contain 75 stacks of coins from your civ and up to 15 stacks of coins from each other civ you interact with. This would require stack combining being implemented at least for coins though.

Any excess income could be used to purchase items in the fortress from the fortress and for adopting pets as well as possibly for meals and drinks much like as described by Waparius.

[Duck Slayer]

1) When a high noble (Count? Duke? Monarch?) enters the Fortress, he/she then demands the common dwarfs to pay taxes. But the noble imposes a rule: the taxes can only be paid in [his] coins, and nothing else.
    The taxes can be a monthly pay of, let's say, 100 coins per adult dwarf. Maybe there can be some imposed rule that is different from that, like taxes that are proportional to the size of the dwarf's room, or proportional to the quantity of pets, I don't know. And maybe the frequency could be different (weekly taxes? anual taxes?). The details of the taxation are very important, but it is open for debate. The way the taxation is designed will affect the level of work that each dwarf will have to supply by force to the noble.

I feel like how cruel or corrupt they may be should reflect the dwarf in the positions personality, granted most of this is discussed as planned. I sure would love to see Urist McPatriot throwing the exported teas of the new dwarven colonies into the river and revolting against his mother country. NOW THAT would be an interesting addition to the economy and the way dwarven nobles handle their business with the mountain home. Such could be based on whether a dwarf gives a care about tradition and duty. Not too mention the personality of the king should shape the initial state of your civilizations economy in regards to taxation and desired exports. It brings back memories of a more favored fort of mine "The Gilded Fist" where its baron was obsessed with crafting gauntlets and was constantly demanding them crafted in the finest materials. It's military composed of wrestlers and fist fighters clad in gaudy jewel encrusted armors knew no enemy...well until the bronze colossus came. When the time comes to become a mountain home  one could usurp the king maybe? Or become an outright new Civilization...although that makes trade rather tricky. Maybe a failed revolution results in the previous revolutionary leader being imprisoned by the mountain home? Or Mountain home appointed leaders arriving if the state of your economy/government is genned as a dictatorship by a particularly stringent monarch.

[MDFification]

Think this was brought up in the thread, but money being abstracted instead of treated like an in-game unit makes a lot of sense to me. Physical coins don't seem to make sense except as a loose-your-pocket-change simulator (which basically happened during the last economy implementation) and turning them into a floating number associated with a particular dwarf would speed reimplementation until stacked objects have been fixed.

It'd also make sense to acquire coins/value largely from caravans by selling rather than trading or gifting an item. This would give players a reason to care about value creation to acquire more wealth, and a way to get money to craftsmen who otherwise wouldn't be seeing a lot of money flow their way since the player isn't using their services.

[Waparius]

Think this was brought up in the thread, but money being abstracted instead of treated like an in-game unit makes a lot of sense to me. Physical coins don't seem to make sense except as a loose-your-pocket-change simulator (which basically happened during the last economy implementation) and turning them into a floating number associated with a particular dwarf would speed reimplementation until stacked objects have been fixed.

Money-as-abstraction was already in use in earlier versions of the game unless you minted coins, so it has a precedent at least.

I'm not sure how practical this would be but I'd like to have a mixed setup, where coins are a thing and do take up space and need to be moved and stored, but aren't individually important beyond perhaps their denomination and nation of origin. Having money-changers/dwarven bankers around to keep accounts for individual dwarves and consolidate coins would also save on framerate, since instead of the game tracking umpteen stacks of physical coins it's only tracking the ones in the money-changers' vaults, merchants etc.

But then I'm not a programmer and I'm not sure how much easier this would be to do as a placeholder; it's unlikely we'll get physical coins until stacking issues have been dealt with once and for all given Toady's M.O.

It'd also make sense to acquire coins/value largely from caravans by selling rather than trading or gifting an item. This would give players a reason to care about value creation to acquire more wealth, and a way to get money to craftsmen who otherwise wouldn't be seeing a lot of money flow their way since the player isn't using their services.

Possibly have caravans carry coins and offer to both buy with them and accept them separately from the usual item-trading? That would be a reasonable way to up your coin supply, at least until a full rework of trading comes in.

In addition to my mention of marketplace zones replacing trade depots and dwarves trading on their own, I think that overseer-controlled trade needs a complete overhaul as well. Instead of going through a buy-sell list (at least after the fortress is no longer an isolated outpost) players should negotiate trade deals with the various merchants who come through, and have the rest of the trading done by their broker. Trade deals should be more, "I'll give you this much X for that much Y on an ongoing basis", and depending on their priority, traders who want X but don't have enough Y could try to make up for their shortfall in cash, or other goods designated for general-purpose trade (including stuff like gems, crafts and bullion) that the merchants may be interested in.

 Merchants should be able to take an interest in goods obtained from the general-trade stockpile and try to make deals for them according to the supply and demand along their trade routes, since it would be amusing to be able to undercut rival locations to the point that they stop selling you certain items or otherwise cause FUN.

[Scruiser]

The thread shudders and begins to move... Some of the posts in this thread had ideas similar to my own so necroing.

One of the major issues with the old 40d system from what I understand (never played 40d but read stories and wiki entries out of curiosity) is that the player could have an over abundance of rooms yet dwarfs would be kicked out because the rents were fixed based on the rooms value. 

A room's value would be based on general material(SOIL/STONE-ORE/WOOD/CLAY/METAL/GLASS), size, furnishings, smoothed/engraved status. but not on the specific material itself. ie a room with gold ore walls & floors would be equal in value to one with gabbro but not equal to one with gold bar/block walls/floors.
Something like v = m * (h * w * d) * E + F₁ + F₂ + ... + F_X+P
m = material multiplier
h,w,d = room dimensions
E = smoothed/engraved multiplier
F_Y = furnishing values
P = tax on pets, equal to embark cost of pet just so you end up with ugly values like 4258 instead of 4200
This seems a little straightforward to me but you could also factor in room availability and room quality availability. Royal Quarters would be devalued by having lots of them or your only room is a Meager Quarters and could enter something akin to a bidding war each tax period as someone without a room would offer a set percent above the current rate. ie, first period Dwarf A gets the room but next period Dwarf B either is the wealthiest or the first to enter the room with last 110% of rent value, then the next period 120% and so on.

I don't think simply changing the formula for how room value is calculated will fix this. Your bidding war idea seems like a natural solution in that it implements a supply and demand system.  The periodic bidding could get pretty messy though.  As an alternative, the game could create a list of all available rooms, prioritize them by value, then list out all groups of dwarfs that want rooms (i.e. not including nobles that already have rooms, counting married couples as one group, etc.), and then estimates the income of all dwarfs lacking rooms (the game will need a mechanism to track this for other economy purposes also).  It then prices the rooms such that the total rents add up to something all the dwarves can pay (and still have money left over for other purposes).  It then looks at the proportional value of each room to calculate cost, thus:
individual room value/total room value * total rent payable by dwarves wanting rooms = rent for given individual room
Given an excess of room, rent will be cheap, because the cost will be divided by rooms.  Given a shortage of rooms, rent will be high, but dwarves that pay more can still get rooms.  More expensive rooms will cost more rent, but will still be theoretically affordable by a population of dwarves with diverse incomes and willingness to pay.
Of course, for real procedural variety, both systems could be options that are selectable at the players or dwarves discretion.  The bidding war would take in-game time and result in both happy and unhappy thoughts.  My system would be straightforward, top down, but would have other tradeoffs.

On a side note, I think a general system of
individual item value/total value available * estimated amount payable by fortress population = individual item cost
could be used as a top down manner to set in-fort prices quickly.  No matter how in-fort payment is setup , different play styles will result in radically different money supplies available, thus the prices of good must adjust with the money supply.  Relative difference of in-fort costs and economy versus world costs economy then serve as a motive for individual dwarves and the player to trade with caravans.

[thgntlmnfrmtrlfmdr]

LONG POST INCOMING. PLEASE READ.

TLDR: The commerce and taxes and stuff is all well and good but it seems like no one is talking about where value should actually come from in dwarf fortress. I fear that many of you may be content with the current system whereby everything has an intrinsic exchange value. and when people do propose a supply and demand system instead, like sal880612m I think it isn't good enough, because he is only applying supply and demand to big things like rented rooms and not to little things like the things in the rooms. I say we should model market forces for little and subtle things, too. For everything, really. See the summary section.

Toady if you're reading this please please please please please for the love of armok read the first book of Wealth of Nations before you code the new economy. It explains a lot of really basic and critical classical economic concepts and it is not that hard to read.

I wasn't around for the original economy but from what I've read it seems that it failed because (besides the coin stack issue) it was trying to simulate the symptoms of market forces without actually modelling market forces.
 
sal880612m has the right idea with making rents based on supply and demand but I really really think it's a fatal error to try to assign intrinsic values to things like materials, furniture, etc, which is what the value of rooms would be based on in his system. All values, not just of the rooms, but of the things in the rooms, should be based on supply and demand. This is a big problem that I see a lot both in threads like this and in the game currently.

I will summarize a few basic economic ideas that I think are critical to implementing economics properly If I leave certain aspects of this unexplained it's because I don't think it's relevant enough, I'm just summarizing:

VALUE IS AN EXPRESSION OF SUBJECTIVE DESIRES. IT IS NOT INTRINSIC. There are essentially 2 types of "value" to consider, which tie into each other a lot.

1) USE VALUE = the "usefulness" or "utility" of a thing. Subjective. Different for each person. Look up "marginal utility theory of value" (MTV).

2) EXCHANGE VALUE = what other people are willing to give you in exchange for a thing. Objective. Is the same for everyone in an entire market. It's based on supply and demand. Demand and supply can be graphed with y=price and x= amount supplied or demanded. When graphed in this way, demand slopes down and supply slopes up, where they intersect is the exchange value.It's basically synonymous with "price". (Note that "demand" is essentially an expression of the use value (to the people in the market) talked about above.) (Also note that for money, exchange value basically = use value, because that's how money works.) Look up "supply demand graph" and stuff like that to see the graphs I'm talking about.

Furthermore there is the "labor theory of value" (LTV) which essentially states that all costs can be rephrased in terms of labor (ie the amount of work it takes to acquire something, directly or indirectly (if indirect, then this obviously therefore depends on the exchange value of the produce of your efforts)). Just as "demand" is essentially a representation of use value, "supply" is essentially a representation of labor value. (ie how easy or hard is it to acquire this thing? What is the availability of it?) (It is a common misconception that you might have seen on the Internet that the LTV and MTV contradict each other, and that one or the other is true while the other is wrong. This is FALSE. They are both true. They are about different things.)

There's also the idea of opportunity cost, but honestly I don't think it would be worth it to model that, it requires really abstract reasoning and real intelligence to determine opportunity cost and it wouldn't be worth it to code dwarves to be so smart, not to mention it would slow things down. Enough calculations as it is...anyway...

Finally, what exactly is money? Money is anything that is used as

a) A medium of exchange
b) a store of value
c) a measure of value

The degree to which a thing is "money" is the degree to which it fulfills the above. Keep that in mind.

What this means for the game:


Currently, everything (materials, quality levels, items, currency) has an intrinsic value. It isn't stated explicitly in the game, but the value that we see currently, denominated in the * symbols (are they called urists?), is exchange value. http://dwarffortresswiki.org/index.php/Value

In my opinion, if Toady keeps it this way, then it won't be worth it to attempt to model markets at all. How can you model market forces if the exchange value of a thing always stays the same? People in this thread are talking about modelling rents of rooms with supply and demand, but why stop there? Why not make everything based on supply and demand, including the value of each item, and of particular quality levels, and every different material and every different service? Because that's what it's like IRL. And that is what I propose.

Even if we don't model use-value/demand at all and assume that every sentient creature has the same desire for each thing as every other sentient creature, which I don't think would be fun, it still wouldn't work because supply would fluctuate.

Thus I think an intrinsic-exchange-value based "market" is doomed to failure because the prices of things will stay the same regardless of how their supply changes. Think about this. Eventually caravans from different civs are going to be going around trading with each other during world gen and during play. If the price (exchange value) of things stays the same, then what will happen when the only site that produced a certain resource is taken over by a megabeast? If it's modelled realistically the price will increase and the remaining civs will consequently look for alternative sources of the resource. Some sites that weren't producing it before but can might start to. There might be rationing in some sites. A wave of robberies of the resource in others as people panic about its scarcity. The division of labor will change a little. Sites will shift focus between various industries. The economy would adapt. It would be dynamic. But with a fixed-exchange-value system, the price would stay exactly the same, the caravans would keep trading the resource and sites would keep using it up at the same rate until it's all gone, and then for the rest of history that resource wouldn't exist anymore unless the player reintroduced it. And I'm not saying the player shouldn't have the opportunity to heroically reintroduce resources, I'm saying that it shouldn't be the only possible way for it to be reintroduced, and if the player is idle the world should try to adapt on its own and at least try to find new sources of the resource, and if it doesn't succeed that's fine, that's great, it's a simulation! And if the player does produce a scarce resource the player should be rewarded for it with a price that is consistent with its low supply.

Again, the basic problem is that people are thinking supply and demand in terms of big things. But I say we should model it for little and subtle things too. The closer we are to having everything based on supply and demand, the more dynamic and realistic the game's economics will be. The more "little things" are tied down with intrinsic values, the clumsier, less interesting, more broken the game's economics will be.

What I Propose

All sentient creatures should have a range of agreeable prices which apply to them selling or buying. This range is determined by combining their "demand value" (by value in this case I mean number) for the thing with the relevant "supply value" in some semi-arbitrary mathematical way that Toady will decide. In other words, IRL demand and supply have inverse effects on price and the price of something is ultimately where they intersect (as seen on those graphs I pointed you to earlier). Thus Toady will need to decide how much weight creatures should give to their "supply value" vs how much weight they should give to their "demand value". Transactions should only occur if the buyer(s) and seller(s) involved have overlapping acceptable price ranges (basically it should be the average between them, but it would be cool if it factored in power differentials as well. Anyway...)

Supply

Now, should each sentient creature be aware of the exact global supply of every resource? Of course not. This is why I said "relevant supply value". The only thing that matters is the resource's availability to the creature in question. That is the "supply" of the resource as far as that particular creature is concerned. Keep in mind the LTV here. I think sentient creatures should be roughly aware of how much work they would need to do to get something (and realize when it is infinitely high), and remember how much work they did in the past to get something, and these two types of knowledge will together constitute their "supply value" which will be combined with their "demand value" for transactions as described above. Obviously this can't be modelled explicitly or in detail for every single sentient creature, but this is what Toady should aim to simulate.

For example this is what I'm imagining happening: A jeweller encrusts someone's cabinet. How much should he charge for this service? He bought the gems from a miner. He should remember how much the gems cost him in that original transaction. Then he should think about how much he just exerted himself, and calculate a "supply value" (or "cost" if you will) based on those things. Then he should combine this "supply value" with a "demand value" (ie "how much do I like the gems? Maybe I would be better off keeping them for myself instead of putting them in this guy's cabinet") to determine an "acceptable price range". His customer also calculates an acceptable price range in the same way, except his supply value won't be based on what the jeweller paid for the gems, but rather, "how hard would it be to decorate this cabinet myself?" and stuff like that, and likewise the customer's demand value would be his preference for a cabinet encrusted with the relevant gems. The game sees if the buyer's price range and the seller's price range overlap, and if they do the transaction occurs with the middle price of the overlapping region. If they don't overlap, there is no transaction.

Furthermore, the "cost" or "supply value" of a thing should be weighted differently by different dwarves. For example lazy dwarves won't want to do work, so the "supply value" or "cost" of everything will be relatively high for them and they will charge high prices because they'll want to minimize how much they're going to have to work later to earn more money. Unlike demand weights, which are explained below, these supply-weights will represent how much effort a certain dwarf is willing to exert or how much work they are willing to do (ie the labor cost).

Demand

We are already mostly there with demand. They already have personality traits that show desire for various things. These should be expanded, but in addition to the specific idiosyncratic desires that they currently have, dwarves should have general desires and preferences that vary by dwarf, and that are consistent with the rest of the dwarf's personality. For example a dwarf that "doesn't think craftspeople really contribute anything" should have relatively low demand for crafts.

For these general desires and preferences, the current intrinsic values for items can stay, but their role and function needs to change. Instead of dictating exchange value, as they currently do, http://dwarffortresswiki.org/index.php/Value these values should be weighted differently by different dwarves, just like how costs are weighted differently, and rather than representing price, they should represent that particular dwarf's demand for the thing. Like I've said this should apply to everything, not just items, but also to services and materials and even quality-levels. If we do that for everything, then we will basically be simulating the varying desires of the dwarves and their demands will all be similar because we weighted the same base values, and that's fine because it's realistic, and they will vary a little by personality which is also realistic. To make the weights accurate and sensible, Toady will really need to think long and hard while figuring out what the weights should be and how they should tie in to personality. He's really going to have to think hard about "what do dwarves want".

All dwarves should have their demand for certain things affected by various special conditions, definitely including bodily circumstances such as being dehydrated increasing their "acceptable price range" for water and booze. For example a vampire should have significantly less, if any, demand for beds, bedrooms, booze, food, etc.

Outside of Dwarf Fortress Mode

This might seem hard to do for an entire world but I honestly don't think this will be too difficult to expand outside the player's fortress. It will work the same way for all sentient creatures. Outside of the player's dwarf fortress in dwarf fortress mode, and for NPC's during adventure mode, and for people in world gen, the demand values and supply values will simply be generalized to whole populations. "Whole populations" shouldn't necessarily be limited to people who are in the same site or civ though. Maybe the game can keep track of "what percentage of people in each site have certain demand-value-weights, and therefore how does the aggregate demand of this site determine what they will try to buy from other sites?"

Sites should also be affected by conditions similarly to individuals. A town that is by the sea should have lower fish prices because the town as a whole should have a lower "weighted supply value" because the supply is so high locally. Hinterland towns should have high fish prices because the supply values are higher.

Ideally, though, your adventurer should be able to find out about the personality traits of NPC's, and when this happens the answer should depend on that NPC's actual preferences. In other words there needs to be consistency between conversations and actual economic activity and actual supply and demand values. Toady will have to figure that part out on his own though, lol.

Ideally, immigration and emigration should also be dependent on market forces. Sentient creatures should tend to emigrate to areas where the exchange value of the produce of their profession is higher. For example miners should tend to emigrate to places where the price of rocks is relatively high, and/or simply to places where the price of the mining labor itself is relatively high if there is a new fortress being built or something.

Summary

Basically, what Toady needs to do is program it so that the demand values are randomly generated for each dwarf (composed of base values which are the same for all, and the weights which are specific to the individual), and that at the same time these demand values are consistent with the dwarf's personality. When transactions occur, the demand values for the thing being exchanged are considered for each dwarf (representing how much each dwarf wants the thing), along with the supply value of the thing for each dwarf (representing the cost of not doing the transaction, or in other words, the availability of the thing from other sources). Each dwarf combines the supply value and demand value to determine an acceptable price range, and if their price ranges overlap the transaction occurs using some price in the middle of the overlapping region.

I don't think the game will need to constantly be thinking about each dwarf's respective supply and demand values for every single thing, the information from which to calculate those values simply needs to be stored somewhere, so the game can come back to it at the relevant time (when the relevant transactions occur) and determine what the price will be according to what each dwarf is willing to accept.

Thus the information that will need to be generated and stored for each world will be:
a) The base demand values for all items, quality levels, materials, and services. These will probably be the same in all worlds.
b) In dwarf fortress mode, when migrants arrive or children are born, random weights need to be assigned to the values in part a, exclusive to that particular dwarf, and corresponding to the dwarf's personality.
c) for supply, when transactions occur, the availability of the thing being transacted needs to be assessed somehow by the game, for both buyer and seller individually. 

With the weights and values, obviously there could be some grouping by type.

The main idea is that intrinsic values should be weighted by each dwarf to represent their desire for it (demand) and its availability to them (supply). Economic relationships should be the emergent result of creature psychology, not fixed in the code explicitly.

TLDR: See the summary section.

[Scruiser]

Wow wall of texts... I think the key point I agree with is:

For these general desires and preferences, the current intrinsic values for items can stay, but their role and function needs to change.

I agree with your point here.  The current intrinsic value should only act as the basis for how dwarfs relatively value items all other things being equal.  Rarity, utility, need, and dwarf's personal taste should factor on top of it, and finally how much currency is actually available to spend.  I don't think it is absolutely necessary to factor in every single dwarf current economic state and personal valuation.  Estimating the total demand by number of dwarf's that need an item versus liquid currency available to those dwarf's could act a rough overall heuristic as I mention in my previous post.  For unexpected shifts, excess supply triggers a price drop, shortages trigger a price increase. Although individual dwarfs' preferences and economic status will change how much they pay, the overall price of good could be handled as a single calculation.
Also, I think there needs to be a few other value tokens like maybe
[VALUE:WEAPON_EDGED:insert value here]
[VALUE:ARMOR:insert value here]
so that dwarf's won't pay for a gold sword like they would for a steel sword if they are actually trying to buy a useful weapon.  Again, these should be relative values.

[GoblinCookie]

All these ideas are overly complicated and really miss the point.  Why do we need an economy at all?  As they are depicted at the moment, the economic system of pure 'Communism' that they operate under fits their apparant nature of dwarves as depicted in-game rather nicely.  All dwarves are happy to work for it's intrinsic value, so therefore there is no need to pay any dwarves, thus 'economics' (really Capitalism/Feudalism) is rather redundant and simply creates the same problems that it does in real life with no actual value added.  That was why it was abolished and the original system was really an artificial development implemented arbiterily by you advancing to baron level. 

Before we implement a system of non-communist economics, we need to change the basic motivation of dwarves so that there is any drawbacks to the present communist system. 

The best way to do this is to have dwarves work according to need rather than greed.  As your stronghold gets richer in material good relative to population, the motivation of your dwarves to work rather than drink and play goes down.  This means that the game essentially caps the wealth of Communist dwarf strongholds (what we have at the moment) because nobody can be bothered to produce 'unneccesery' wealth. 

By paying your dwarves to work you break through this ceiling so that they will produce your stronghold more wealth than it immediately needs, which can then be traded away or stored for later use.  The value of the coins is determined by the total number of things that are for sale, things are 'bought' from your dwarves (moneterising said labour) and things can be sold or given away whether they were produced for free or not.  If you give people coins that cannot buy anything, then dwarves are no more motivated by it than they are by default.

Dwarves are unhappy obviously if there are things they want that they cannot afford to buy, especially if those things are basic food and bedding.  Different races could work according to a different logic. 

Dwarves- No idleness by default, acquire idleness due to stronghold wealth.  Can be motivated by being paid.
Elves- Fairly idle by default, acquire additional idleness due to stronghold wealth.  Cannot be motivated by being paid.
Humans- Fairly idle by default.  Can be motivated by being paid. 
Goblins- Fairly idle by default.  Cannot be motivated by being paid.  Can be motivated by goblin taskmasters. 
Kobolds- Fairly idle by default.  Cannot be motivated to work harder in any way by anything.

[NomeQueEuLembro]

There's my interpretation of how economy should be:

Civilization's Scope:

Spoiler (click to show/hide)

-- Every civilization would have it's own currency. The exchange rate would be defined in world gen: A civilization that experienced a long, stable period of peace would be wealthier than a 10-years-old almost-destructed-by-a-megabeast civilization, and thus it's currency would be worth far more.

-- In the pratical sense, this only means currency could be used to trade with caravans, and your civilization's currency would be different than the ones than the caravan uses (unless for the dwarven caravan), until the Caravan System gets more complicated.

Fortress Scope:

Spoiler (click to show/hide)

-- The economy wouldn't work until the three of those things happen: There's a certain noble in the fortress, a bank is built and some coins are minted.

-- Since your civilization uses one currency, let's say it's worth 1 dwarfbuck. Then, if you ask to "mint materialA coins" and let's say "materialA" is worth 100 dwarfbucks, you should have 100 coins distributed at your fortress. Let's say you then mint materialB coins and let's say material B is worth 500 dwarfbucks. You would then have now a total of 600 Currency. That way there's only one currency in the fortress, and it's managed in abstract (but try to simulate a physical system).

Dwarf Scope:

Spoiler (click to show/hide)

-- Dwarves should work to get money. The amount of money a dwarf gain is at least partially-defined by the player.

-- Dwarves get money at the bank. If they need money for something and they have it at the bank, then they go to the bank. I know the money is abstract, but it simulates physical.

-- Dwarves can buy food and finished goods from the fortress if they like it. That means if a certain dwarf likes silver and there's a silver toy hammer it can buy it. If there's no food the dwarf like he just eat anything. If the dwarf buy a finished good, then it becomes "owned" by the dwarf.

-- You can't trade owned itens. The owner is the only one who can. You also can't melt/forbid/dump them.

-- Dwarves can buy things from caravans. If they have 20 of your currency, and this is worth 1 dwarfbuck, while the caravan's currency is worth 0.5 dwarbucks, then the dwarf can buy 40 dwarfbucks of Currency. If the dwarf have 20 of your currency, and the caravan's currency is worth 2 dwarbucks, the dwarf can buy 10 dwarfbucks in products.

-- Traders can buy owned things from dwarfs in caravan. Would work with the same conversion-principle as above.

-- Dwarves get a happy tought when they buy or sell something. "Urist McWorker is pleased by making a purchase recently" or "Urist McJulius is happy for a good sell."

-- I'm not sure how a dwarf would trade with another. They could get bored and sell it cheapier than he bought, for example. The dwarf that would buy it wouldn't sell it even cheaper, however, so we wouldn't have a *<<*golden crown*>>* worth 1 currency.

-- If a dwarf want something, but doesn't have the money for it he won't have any bad thought, since it's not your fault, unless he is self-counscient or anything like that.

-- The dwarves can't have more money than it's minted. For example, if you minted a total of 600 currency (like that previous example), and the dwarves already got 600 money they can't get more at the bank, even if they worked and deserve it. You'll need to mint more. Also, that will lead to very bad toughts (usually about the player's mom).

-- Dwarves pay taxes! They pay it in the products they buy. Taxes are player-defined so you can have some control on what your dwarfs buy. You can, for example, raise the price of mugs so you can keep 'em to the caravans. Or raise the price on Imports so you don't need to keep minting coins.

-- Dwarves are honest and hard-working creatures. They're just so awesome that money won't corrupt they in any manner. They will work before going to shop.

Pros and Cons

Spoiler (click to show/hide)

-- Money is like a happiness industry: The dwarves keep working, you keep making the stuff they like, and they keep buying it and getting happy. Just like real life.

-- Money have risks; If you don't mint enough coins you're gonna make every dwarf in your fortress unhappy

-- Awesome, lots of possible uses for dwarven personality. A self-conscious dwarf may get upset by not working enough to buy that mug he wants, while a shy child can get more sociable after trading figurines with they friends. That short-tempered dwarf can feel less inclined for a tantrum if he buys that awesome toy (And it's called "Action Figure"!).

I don't have a clue on how it could be implemented or whatever, so I'm sorry.

[Scruiser]

Spoiler (click to show/hide)

-- Money is like a happiness industry: The dwarves keep working, you keep making the stuff they like, and they keep buying it and getting happy. Just like real life.

-- Money have risks; If you don't mint enough coins you're gonna make every dwarf in your fortress unhappy

-- Awesome, lots of possible uses for dwarven personality. A self-conscious dwarf may get upset by not working enough to buy that mug he wants, while a shy child can get more sociable after trading figurines with they friends. That short-tempered dwarf can feel less inclined for a tantrum if he buys that awesome toy (And it's called "Action Figure"!).

I don't have a clue on how it could be implemented or whatever, so I'm sorry.

Yeah I see the two main reason for having economy is the simulation/realism and the game play element of yet another risk/reward trade off.  Economy goes good, dwarf's happy to buy items that match their personal preference.  Economy goes bad and legendary dwarfs refuse to work and enjoy stockpiled food and wealth while hauler dwarfs starve.  For added fun and FUN variable economic systems would be nice.   Maybe triggered by a combination of civilization history, individual dwarf personalities, and player decision.  I.e. the player leaves the economy and the default communist everything is shared and individualistic dwarfs get angry thoughts at not having personal property.  Or the player sets all items to buy/sell at cost and the dwarf that like the free stuff get sad.   Or a key noble demands that some items be sold at a fixed cost.

[Shazbot]

( Pre-Script: Initially when I wrote this I placed the terms 'communist' and 'capitalist' into small quotes to highlight that these were not terms being accurately used, but represented two poles on a spectrum of ideas. This implication was too subtle, and I apologize for the confusion. The specific ideas I had in mind are player-focused fortresses of public goods and player direction as we initially saw them in early versions, and a yet-unrealized notion of dwarf-focused fortresses of private goods and dwarf direction. The overall notion of this post is to build upon THDR's system of value, and then allow dwarves to act on their market perception to an extent that the player will determine. )

Before we launch into 'communist' or 'capitalist' dwarf debates, I'd like to pre-empt it all by saying we are merely imprinting our own perceptions onto a sandbox game. Any economy system should reflect that sandbox style as well. That said, it would be wrong to claim that the dwarves are communist simply because the economy is presently disabled, just as it is wrong to assume they are capitalist because all dwarves base their happiness on the monetary value of the objects they interact with. However, it is clear that the game is heavily geared towards public works and public resources, as private ownership extends no further than clothes and the occasional craft. I feel all of this can, and should, change.

Dwarves, to put it simply, need to have more control over their own economic activity.

"th;dr" makes excellent points about the importance of dwarves acting on their perceived value of objects rather than the intrinsic value of objects as defined strictly in the raws. To some degree this already exists so far as I know, as dwarves who like oak will be happier with a oak door to their bedroom than a maple door. Yet consider the dwarf who is assigned a bedroom with a maple door. Presently this dwarf will go about his entire life merely content to have a door at all, even if dozens of masterpiece oak doors sit unused in stockpiles. A player has satisfied the needs of one dwarf to some small extent and can focus on other concerns than searching each dwarf's preferences and matching them to bedrooms. Our current, top-down, 'communist' fortress.

However, consider what could be. The dwarf could weigh his own preferences and dislikes against his personal possessions and determine once every time interval, by the worst mismatch on the grid, some item to acquire or replace or improve. If our dwarf sees his maple door and determines there are oak doors in the fortress, he could, of his own volition, get an oak door from a stockpile and replace his maple door. Likewise he could replace his bed, his cabinet; any placed furniture, the dwarf could replace in the same spot. He could also create a job for a craftsdwarf to come to his door and engrave it with an animal he likes or a picture of himself. The player merely ensures the needed infrastructure and resources are on hand for the dwarves. A future, bottom-up, 'capitalist' fortress.

Of course, what enables 'capitalist' activities is a point to consider. There is presently a mechanism by which we assign workshops to individual dwarves or particular skill levels. This screen can be adjusted to make workshops 'private shops' as well, in which an assigned dwarf or a dwarf which claims the shop begins generating his own work orders. Our homeowner might not be able to find any oak doors in the workshop, but knows there are oak logs in a public stockpile. He can request a work order of a carpenter who owns a shop. The carpenter will then produce the door, store it in his shop, and the homeowner will later drop by to cash-and-carry his purchase. Greedy, law-breaking dwarves might even try to steal money or goods from the shops. 'Capitalist' fortress.

Or we can leave things as they are, with idle shiftless masses of laborers adrift in an alcohol-induced torpor, occasionally receiving direction from an unfeeling overlord to create thirty wooden doors, quality be damned, to meet a quota for a plan never revealed to the underlings. 'Communist' fortress.

Another interesting concept is that of dwarves personally using the caravan to make purchases from their own coin piles, storing favorite foods and drinks in their rooms or buying various trinkets. Dwarves with private shops may even try making things specifically to trade based on the trade agreements with the mountainhomes. Things that the player might never consider buying from a caravan (reindeer leather mittens?) could be top on a dwarf's personal wish-list, and allowing dwarves to access the depot directly will improve dwarven happiness.

Naturally public (our current stockpiles), private (stockpiles of goods 'for sale'), and reserved (stockpiles exclusively for player use) goods need to be sorted out. All goods can start public as a matter of course, then as economic activity begins the player may flag stockpiles for private or reserved status. This change can take place after the appointment of an officer or some event, such as the mayor replacing the expedition leader. The appropriate noble could also have a setting as the book-keeper does determining the economy's on-off switch, or any gradients between. Various classes of goods and economic activity could be flagged for private practice; a player wishing to control the food supply in a crisis may disable economics for foodstuffs.

Should a player elect to open private industry, he may find himself needing to pay soldiers and resources gatherers. Money can enter the 'fortress coffers' by directly minting coins or through the sale of raw materials into shops. The tax collector can also extract a 'sales tax' on shops, making legendary craftsdwarves very lucrative for the fortress coffer.

The net result is that dwarves in a thriving 'capitalist' fortress will keep themselves busy producing goods to make other dwarves happy without direct player involvement, freeing the player to focus on higher goals (consider the clothes industry. Do you really enjoy managing that?). The trade-off, of course, is that those resources and dwarf-hours cannot be expended by the player, reducing the player's ability to reach those higher goals.

And of course, how 'capitalist' or 'communist' you want your fortress to be can be configured by your actions in game. If you want to let dwarves manage their own clothing, establish a few private clothier's shops and looms and a steady crop of cotton. If you think no dwarf should ever go thirsty for lack of booze, keep the still public, drawing from public food and giving to a public booze pile.

I think it would be a stellar game mechanic. Consider a dwarf hunter who realizes his bank account is low and heads out to the woods, hauls in a deer, and sells it to a butcher. The butcher then slices and dices the carcass, selling the bones to a craftsdwarf who is visited by the hunter who buys more crossbow bolts. Meanwhile cooks, tanners and leatherworkers all whirl into motion producing food and clothes for the fortress as a whole. In a truly robust economic model, all of this activity can take place without player intervention.

[GoblinCookie]

Before we launch into 'communist' or 'capitalist' dwarf debates, I'd like to pre-empt it all by saying we are merely imprinting our own perceptions onto a sandbox game. Any economy system should reflect that sandbox style as well. That said, it would be wrong to claim that the dwarves are communist simply because the economy is presently disabled, just as it is wrong to assume they are capitalist because all dwarves base their happiness on the monetary value of the objects they interact with. However, it is clear that the game is heavily geared towards public works and public resources, as private ownership extends no further than clothes and the occasional craft. I feel all of this can, and should, change.

The problem with that statement is that there really is no parity here between the two camps.  The dwarves economy is not disabled, it is merely Communist to a degree that has never actually been achieved in real-life even in the most hard-line of such regimes. 

We have an economy, we have central planned production and consumption. All dwarves are happy to work (very) hard for nothing in order to produce collective possesions that are consumed for nothing without wasting anything.  The original game started off with ideal Communism and then upon reaching a quite arbitary point shifted to a kind of actual Communism with everything publicly owned but individuals being paid and buying stuff. 

Dwarves, to put it simply, need to have more control over their own economic activity.

Rather than the total control over their economic economy that they have at the moment.  Nobody forces them to work at all, ever for any reason.  That is the fundermental question we have to work on if we want to organically implement an economic system.   

The question is what motivates our dwarves to work in the original communist state?  If the answer is that they work for the good of the fortress, then the limitations of their system would then be how much the fortress needs them to work at a particular labour.  If you already have a decent stockpile of say wood, the wood collecting dwarves get complacent while in a less communist system you can pay dwarves for how much wood they collect and allow them to buy certain valuable goods in return.

"th;dr" makes excellent points about the importance of dwarves acting on their perceived value of objects rather than the intrinsic value of objects as defined strictly in the raws. To some degree this already exists so far as I know, as dwarves who like oak will be happier with a oak door to their bedroom than a maple door. Yet consider the dwarf who is assigned a bedroom with a maple door. Presently this dwarf will go about his entire life merely content to have a door at all, even if dozens of masterpiece oak doors sit unused in stockpiles. A player has satisfied the needs of one dwarf to some small extent and can focus on other concerns than searching each dwarf's preferences and matching them to bedrooms. Our current, top-down, 'communist' fortress.

However, consider what could be. The dwarf could weigh his own preferences and dislikes against his personal possessions and determine once every time interval, by the worst mismatch on the grid, some item to acquire or replace or improve. If our dwarf sees his maple door and determines there are oak doors in the fortress, he could, of his own volition, get an oak door from a stockpile and replace his maple door. Likewise he could replace his bed, his cabinet; any placed furniture, the dwarf could replace in the same spot. He could also create a job for a craftsdwarf to come to his door and engrave it with an animal he likes or a picture of himself. The player merely ensures the needed infrastructure and resources are on hand for the dwarves. A future, bottom-up, 'capitalist' fortress.

Except that the presence of maple doors is completely the product of central planning, the dwarves are doing nothing but exchanging one collectively owned good for another collectively owned good.  Since noone is getting is getting paid and nobody is paying anything, nothing capitalist about this economy, it is just an economic extension of what happens at partytime at the moment when one dwarf delivers food to the other dwarves.

Of course, what enables 'capitalist' activities is a point to consider. There is presently a mechanism by which we assign workshops to individual dwarves or particular skill levels. This screen can be adjusted to make workshops 'private shops' as well, in which an assigned dwarf or a dwarf which claims the shop begins generating his own work orders. Our homeowner might not be able to find any oak doors in the workshop, but knows there are oak logs in a public stockpile. He can request a work order of a carpenter who owns a shop. The carpenter will then produce the door, store it in his shop, and the homeowner will later drop by to cash-and-carry his purchase. Greedy, law-breaking dwarves might even try to steal money or goods from the shops. 'Capitalist' fortress.

The problem is that the private ownership bit is completely redundant.  They could do that in the present economic system, without having to actually privately own the shops.  You would simply assign the workshops as one does bedrooms and then set them to autonomous production.  The central planners set you to serve individual dwarves for free rather than waiting for direct instructions, not exactly capitalism is it?

Or we can leave things as they are, with idle shiftless masses of laborers adrift in an alcohol-induced torpor, occasionally receiving direction from an unfeeling overlord to create thirty wooden doors, quality be damned, to meet a quota for a plan never revealed to the underlings. 'Communist' fortress.

As I have pointed out, the problem is that these idle shiftless masses of laborers do not presently exist.  If they get told to produce 30 doors they will all engage in a race to get to the work bench and everyone tries to produce the best 30 doors they can.

It is rather a case of it's not broke so why fix it? 

Another interesting concept is that of dwarves personally using the caravan to make purchases from their own coin piles, storing favorite foods and drinks in their rooms or buying various trinkets. Dwarves with private shops may even try making things specifically to trade based on the trade agreements with the mountainhomes. Things that the player might never consider buying from a caravan (reindeer leather mittens?) could be top on a dwarf's personal wish-list, and allowing dwarves to access the depot directly will improve dwarven happiness.

We could give still have the government centrally give each dwarf a personal coin allowance around caravan arrival time.  So I give each dwarf 10 coins to spend each Spring/Summer/Autumn depending upon what races are trading with me.  Still no reason here for an internal cash based economy. 

Naturally public (our current stockpiles), private (stockpiles of goods 'for sale'), and reserved (stockpiles exclusively for player use) goods need to be sorted out. All goods can start public as a matter of course, then as economic activity begins the player may flag stockpiles for private or reserved status. This change can take place after the appointment of an officer or some event, such as the mayor replacing the expedition leader. The appropriate noble could also have a setting as the book-keeper does determining the economy's on-off switch, or any gradients between. Various classes of goods and economic activity could be flagged for private practice; a player wishing to control the food supply in a crisis may disable economics for foodstuffs.

As I have already pointed out, there is no reason to have private shops at all given the present model of dwarf motivation.  The basic utility to to reduce the presently high burden on the player of having to single-handedly manage a whole economy.  However all we need is the mechanism for economic automation, we do not need to have the private property and wages 'baggage' at all. 

Should a player elect to open private industry, he may find himself needing to pay soldiers and resources gatherers. Money can enter the 'fortress coffers' by directly minting coins or through the sale of raw materials into shops. The tax collector can also extract a 'sales tax' on shops, making legendary craftsdwarves very lucrative for the fortress coffer.

It will always be more lucrative to hoard every since damn coin your dwarves produce and use them to buy stuff of other settlements.  If you run out of stuff to buy, it will be more lucrative to switch coin producers to things that are actually practically useful. 

And of course, how 'capitalist' or 'communist' you want your fortress to be can be configured by your actions in game. If you want to let dwarves manage their own clothing, establish a few private clothier's shops and looms and a steady crop of cotton. If you think no dwarf should ever go thirsty for lack of booze, keep the still public, drawing from public food and giving to a public booze pile.

That is something we can agree on, we should not be forced to adopt a economic model by some arbitery.  We should be able to keep a communist system, modify it to a mixed economy, implement a fully capitalist model or whatever at whatever point we wish even if our material conditions may make it more or less advisable. 

I think it would be a stellar game mechanic. Consider a dwarf hunter who realizes his bank account is low and heads out to the woods, hauls in a deer, and sells it to a butcher. The butcher then slices and dices the carcass, selling the bones to a craftsdwarf who is visited by the hunter who buys more crossbow bolts. Meanwhile cooks, tanners and leatherworkers all whirl into motion producing food and clothes for the fortress as a whole. In a truly robust economic model, all of this activity can take place without player intervention.

It will not be a steller game mechanic.  It will work as badly as it does in real life and because the player does not control it, when it inevitably breaks down into mayhem people will simply pull their hair out and throw a real-life tantrum.  The flaws of the present system has at least the advantage that it all begins and ends at the player, if we make a mistake we can track down what we did wrong because we did it.  Having to spend hours and hours trawling through hundreds of dwarves economic dealing and trying to guess which part has to be 'nationalised' to sort out the mess, that is not fun. 

[sal880612m]

The thread shudders and begins to move... Some of the posts in this thread had ideas similar to my own so necroing.

One of the major issues with the old 40d system from what I understand (never played 40d but read stories and wiki entries out of curiosity) is that the player could have an over abundance of rooms yet dwarfs would be kicked out because the rents were fixed based on the rooms value. 

A room's value would be based on general material(SOIL/STONE-ORE/WOOD/CLAY/METAL/GLASS)

I don't think simply changing the formula for how room value is calculated will fix this.

The change in a rooms value multiplier was suggested specifically to moderate this so it isnt just changing the formula for how room value is calculated. The idea was that it wouldn't matter if a room was dug out of gabbro or adamantine ore they would have the same value multiplier. So there would only be two material multipliers available for rooms that were dug and the rest would require construction.

Alternatively you could split STONE-ORE into STONE and ORE-GEM. So a room dug out of gabbro have a lower multipler than one dug out of hematite but one dug out of raw adamantine would share a value multiplier with one dug out of hematite.