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[Lord Dakoth]

The Dwarven Economy.

When you hear those words, what do you think? Most likely, you think of "that time where you have X number of dwarves and complete X and Y and Z in one year, then you get a tax collector, and then your dwarves start flinging coins every which-where."

Now, think of the real-world economy. Stocks, loans, investment, businesses, banking, et cetera.

Dwarf Fortress is not very reminiscent of a capitalist society. Even once the economy sets in.

The discussion itself:

1) Are you happy with the dwarven economy as it is?

2) Should the dwarven economy be more like the real-world economy?

3) What changes would you like to see concerning the dwarven economy?

4) How would the rest of the game change if the changes in (3) were to take place?

[Neruz]

Following on from the discussion in the previous thread, you should be able to set the value of coins, but only the value of the coins inside your own economy. This seems most intuitive; copper coins might be worth a thousand times their weight in gold in my Fortress, but be worth less than a log of wood to the Humans over there.

You could then have increased persuasion\trader skills improving the ratios that traders will accept for your coinage.

[Scarpa]

Now, think of the real-world economy. Stocks, loans, investment, businesses, banking, et cetera.

Dwarf Fortress is not very reminiscent of a capitalist society. Even once the economy sets in.

These concepts are fairly modern, I'm not sure they are applicable to the DF world.

[Rowanas]

Ahhh. Good to see it got up here eventually.

As I've stated in the other thread, I'm not happy with the economy and it should change.

I think that all coins should be minted out of any metal and be backed by actual materials (as real world money is, technically) and so you could say that your money is worth anything you liked, but at first people would want the actual materials, to check that you have them.

As your fort trades and progresses fewer and fewer people would ask to have the goods instead of the money, and so you could reasonably put up the value of your cash, making you worth more and have more buying power.

Crashes would occur when lots of people with your money out in the world want to get the real goods (based on events within the civ) and find out that you haven't got them. If there is ever a point at which you can't hand over the things that your money is backed with,  all your money becomes worth zero, your fortress wealth decreases appropriately, you get bad thoughts (maybe even war for screwing up some other civ's economy) and a host of other bad things, not to mention that trust in any further currency you mint will be basically zero and you'll be back to trading with standard goods.

Now, the penalty of trading with standard goods would come with wildly fluctuating supply and demand. If you trade in minted coins, you'll have t pay a little extra to get what you want, but you could always boost the value of your coin for a little while to get it. trading in raw goods (the traditional way) would require closer management of supply and demand. If you've got loads of mugs, but they need tables then you're a bit stuffed. Now, if only you had those shiny platinum coins to get over the trading hiccup...

Of course, this is open to abuse by players wanting to get more for their fortress. A player could up the value of his coinage temporarily, buy out a caravan and then set the value back to normal afterwards to make sure that he isn't caught out and crashed. To prevent such underhanded tactics, I would advise one of two solutions:

A: All coins of a certain year would be fixed. A Year 226 Dwarf bronze coin is worth 20. It's got 20 worth of backing now, 20 worth in a year and 20 worth in 40 years. This way coins will be open to change every year, but once you've made your decision, it's final. This would also mean that minting too many coins could bring on a crash, because if you have 50% of your coins being turned in for goods (for example, 40 coins) at once , and each coin is worth 20, then you have to turn over 40x20=800 value of backing goods. If you've got 50%, but less coins (20) then you only need to have 400 worth of backing goods.

The benefit to having lots of coins out will be explained later.

B: Coins could only change once a season. This would mean that any coinage change would have to be upholdable for an entire season. People would come and ask for the backing goods during that season, and if you were too greedy with your trading, then that's your fault.

The various influences on coins...
+ Good influences on your currency trust
1:Every time a trade is done in your currency (lots of coins means lots of trades. Having pence won't help though, because people will just opt to trade in greater value currency where possible)

2:Every time you give an offering of coins to another civ (will lead to 1: as well, you trade short term having money for long term security)

3:Every time you win a war, or some other epic event. People put trust in your currency because you are successful and victorious (it works, honest).

4:Every time you successfully meet a demand for backing goods. Seeing that you aren't just faking will boost trust.

- Bad influences on your currency trust
1: Losing any outpost. With the army arc coming up, we may be able to lose branches without losing the fortress proper.

2:Not using your currency in trades. What, do you not trust your own money?

3:Large amounts of dwarves dying. opposite of the other 3:.

4:Failing to produce the requisite backing goods upon request (read: instant crash).

[Judas Maccabeus]

As Scarpa mentioned, backed currency and fiat currency are modern inventions and don't really fit in with a medieval-style setting.  Pre-modern coins were worth however much the materials they were made out of were worth.  One pound sterling in 1500 England was in fact worth as much as one pound (in the weight sense) of sterling silver.  That, and most people didn't even have access to coinage; they were subsistence farmers, who used a communal barter system (or simply shared necessary items and services among the people in a village) and paid their taxes in kind (objects such as the crops they grew) rather than in specie (money).

The options then seem to be being realistic (which would result in 90-95% of the population being poor farmers), or doing whatever is the most fun (or Fun, as the case may be).

[Rowanas]

I had assumed that since the dwarven economy exists, it should work by the principles as we now understand them. I think that would be best, honestly. Which is why I wrote the WoT. I care quite deeply about it being done in a way that would be fun, challenging and rewarding. My suggestion offers multiple ways to work it, ideas for balance and such. I just happen to think it's perfect for DF

[Kulantan]

Now, think of the real-world economy. Stocks, loans, investment, businesses, banking, et cetera.

"Whoa, that is the most giant cave spider silk and goblin bone I've ever seen on a sock!"
"Yeah, Urist McFancypants over there made his money on the adamant futures market."
"Didn't I hear about a crash in that market?"
"Aparently there were unforeseen problems, fortunately for him he diversified into the coffin market."
"Smart bugger."

     -Two "dwarves" in an alternate reality where Elves rule the world and rich nobles aren't persecuted with magma.

[personofshadow]

The dwarven economy needs a stimulus package, after that we can worry about the healthcare reform.

My problem with dwarven economy is all the time wasted hauling coins all over the place, takes forever and they don't get anything done! I generally don't even mint coins. I assume in the absence of coins dwarves just invent a credit system which puts them in indefinite debt which then requires the aforementioned stimulus package

[DeathOfRats]

Just to be a pain, I'd like to point out that most modern currency isn't really backed by material goods (i.e., gold, classically) any more.

[Rowanas]

That's exactly why I suggested what I did. Basically it gives you a good reason to have real backing (more like medieval times) but still brings it up to date with something we can understand. Technically everyone with a British note can go to a bank and demand his 5 quid worth of gold.

[Rakonas]

I doubt there could be much better of an idea than Rowanas'. I do think, though, that it should simply be a credit system unless performing trades (otherwise there'll probably be coins everywhere an what not.)

[Duke 2.0]

 You know, I think the real-world economy should be more like the DF economy. Workers make the goods, the state sets prices but the citizens sell the products. And the most skilled workers are exempt from it all.

 It's like a communism that Kim Jong Il had a personal role in founding.

[Elliott_Thinas]

Haha I like the dwarven communism but there are some things I would like to see. I would like to be able to put workshops up for sale, and workers can buy them, work in them on their breaks, and sell their own products. Things like metal they obviously would need to buy from either the state or another dwarf who produced them in his smelter (after purchasing the ore from the state). The dwarves will produce items there is a demand for and they can sell. I would also like to see dwarves request items and offer to pay; things they couldn't normally do. Example, a richer dwarf requests a room made for him of an excellent quality and with a bronze door, and from there they would request furniture for their room they do not already have, obviously paying the state a premium. A free capitalistic system obviously could not work but I would like to see my dwarfs participating in free enterprise other than shops. I also dislike my legendaries being exempt; it seems ridiculous they can take as they please. Nobles obviously deserve to split up their taxes, and of course will not need to pay for their rooms, and legendary soldiers should be paid plenty and not have to buy their own food, but a legendary bonecarver should only be able to be rich by carving good items for the state and maybe carving his own crafts that he sells to Urist's Craft store on the side. I believe this would be the best economy for the dwarves.

[Murphy]

Two main problems of dwarven economy are:

1) Prices not corresponding to number of avaliable goods. I.e. if you have lots of nice bedrooms, they should be relatively cheap to rent. Same with buying goods. The easiest solution is to make all worker wages be proportional to your fortress' wealth divided by number of citizens.

2) Dwarves taking too much time hauling little piles of coins everywhere. To fix it, just have every dwarf carry his coins on him or, is sufficiently wealthy, carry up to what amount doesn't encumber him too much (to minimize the number of trips to his chest and back, he should refill the purse only when it's emptied). So you'd just need to produce purses.

[Malsqueek]

Admittedly, I only just got good enough at the game to actually GET to the economics phase without doing something dumb, or having too much Fun too fast...

However, the current economy really seems pointless. It fills up my message screen with crap that doesn't matter, it strews things all over my fortress which I cannot move, and the Dwarves spend all day stealing things from me, which they then strew all over the place, making it difficult to plan for caravans, and for general production.

I would like to see the economy have a "Status" screen with some subsistence requests (x number of clothing articles, x number of instruments, etc) so that there are goals in mind, and have the prices based upon the prevalence of said items. More socks makes them cheaper... Also, I would like there to be a specific stockpile for "fortress goods" which would be sold to dwarves, who would then NOT steal my masterwork obsidian earrings that I was planning on selling next autumn to those silly humans next door.