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[Reelyanoob]

@Maklak: I really recommend you 'obtain' a copy of "Capitalism 2". This is a great business sim game you should check out! Graphics similar to simcity 2 or 3, lots of detail, should be a lot of fun. if you like business sims, this is the best around.

[counting]

Or Australia in 2007-2009, but this would be "capacity constraints", which affect supply, therefore prices at the importer's end.

Also, food and other items are much more expensive in remote areas here, again due to transport costs. Probably 2-3 times the cost of Sydney for a lot of things in remote (and poor) areas. I also imagine there's only single trucking companies making a lot of those runs, due to the small populations being served, so the overheads involved don't allow new competitors into the market.

After some thinking, I realized we seems to have different definition about 'capacity of a trade route'. When I meant about 'capacity' is restricted as the maximum amount of goods flow through a single cross-section of the entire route at any given time. Like the the cross-section area of water pipe.

From my perspective, the entire flow of goods from point A to point B assumed to be M, the distance between them is D, takes T units of time from start to finished. And with a capacity of 'C', and the transportation moving speed of 'S'. And the fuel consumption rate under that speed of 'G(weight=m, speed=s)'. We paid the drivers 'W' per unit of time. The costs during transportation consisted with fuels and wages. We got the formulation

it is assume that G(m, s) goes up when m increases, vice versa. And it also goes up when s increases, vice verse. And if there is a constant economical speed that drivers all need to follow in order to deliver the goods on time.G(m,s) can be simplified as Gs(m), And generally even when the truck is empty, it still consumes fuels while driving. hence: Gs(m) is a function with a minimum Gs(0) = E > 0. We assume that each unit of cargo will consumes additional A unit of fuel. Then Gs(m) can be written as Gs(m) = E+mA

1. if C > M and do not have traffic jam, T = D/S, and we consumed G(M, S)*T of fuel, Paid wages W*T.
in this case, the costs = (G(M,S)+W)*D/S, which if there is a constant economical speed that drivers all need to follow in order to deliver the goods on time. The cost will only be affect only by M, W, and D. As D been the multiplier will greatly effect the costs. and M, W affect costs separately and linearly.

Discussion 1 : if G(m,s) is also a linear function like Gs(M) = E+MA. Under these, Costs CF = (E+W+MA)*D/S = ED/S + WD/S + MAD/S = CFes(D) + CFs(W, D) + CFas(M, D). If distance remain constant CF = CFesd + CFsd(W) + CFasd(M). where CF is the linear cost functions related to costs, and CFesd is a constant = ED/S.

2. if M > C, it will create a traffic jam, sending the trucks line up into a queue with length Q = M/C, assume it cost Tj amount of time to move the queue on (or off) the road with the moving speed as S, then Tj = Q/S = (M/C)/S, if the speed of the moving queue is also S, then T = Tj+D/S [1] = (Q+D)/S. wages = W*T, fuel = G(M,S)*T, costs = (G(M,S)+W) * (Q+D) /S.  as compare to the original (G(M,S)+W) * (D) /S, it clearly the addition cost is determined by the difference of (Q+D) and D, which Q=M/C. So the factor really matters is the ratio of Q:D which determines how much additional costs is added proportionally. Other factors like W, M, D remain the same.

Discussion 2: Let's take a better look at Q and D, you may find it odd that a ratio can be added into a distance. But imagine your good is liquid with volume M, than a pipe transferring it with cross-section C, will have a length of Q. So the question becomes how long is the queue. And what's the ratio between the queue and the distance it needs to travel. Obviously under current transportation system, the length of even the most magnificent car fleet or traffic jam, rarely exceeds miles long. A traveling route are often measured in hundreds of miles, even thousands. Otherwise you don't need a transportation in the first place, or if the Q is close in scale to D, this traveling route should be considered closed. Hence, Q << D with a Q:D ratio close to 0 in ancient time and negligible, and less than 1% in modern time at best. And bring us to the conclusion that since Q+D ~= D, the overhead cost created by the 'capacity of traveling route' can be neglected or view as random overhead. which verified the assumption that the capacity of a trade route doesn't affect the transportation costs.

Also if we are talking about ocean using as route, than the capacity of a sea route will be nearly infinite. so it is always most certainly C>M. Meaning that situation 2 only happens when it's a land route. About the capacity of a port or a destination depot, which is NOT my definition of capacity will be discussed in [1].

[1] We don't need 2 Tj of time to move on and off the road, since when the tail of the truck is finally on the road, it has spend Tj amount of time, the head of the line is already traveling the distance of Q, Then when the tail traveling D miles to the destination with the amount of time = D/S, the head of the line is already at the destination. Here is what I believe that you think CLT occurs. and your definition of 'capacity of port'. Which means there are additional delays at the terminals, for every truck to offload their cargo. We assume it's Tf. And given the capacity of port is F amount of goods at any giving time, when F > C, Tf =0, since workers can clear out the cargo before they arrive. Else, if C > F, there will be extra (C-F) amount of good been queued up at any giving time. Tf = (C-F) * Q / F / S = (C-F)/F * Tj = C/F *Tj - Tj. Which means if F=0, the port is essentially, shutting down. Tf = infinite. But since T = Tj + D/S + Tf , hence T = D/S + C/F*Tj = (D + (C/F) * (M/C))/S = (D + M/F) /S, compared with the original T = (D+Q)/S = (D + M/C) / S, Hence we can say that the ratio between the capacity of the route and the capacity of the destination is the main factor to determine how long the traffic jam will increase the transportation costs from negligible to infinite. (The ratio of C:F)

They are under the circumstance that this is a land route (see the explain above), so when we take a look at what will happen when we replace M/C with M/F, we already discussed that Q = M/C is the length of queue, so M/F tells us, its like replacing the route with capacity =C to route with capacity =F. So it equals to travel with a narrower road since F < C in this condition. But effectively M/F = Q * (C/F). so if M/F denote a longer queue. we need to notice unless the ratio between C:F is significant enough like the time of traveling on the roads equals the offloading time, the cost will have significant impact. A more image representation for understanding, is that since the cost is T*(Wages+Gasoline). And the time it used is the traveling time + offloading overtime, if a truck fleet of 10 trucks running at the speed of 40 m/h in a route 1000 mile long, it will take about a day get to the destination. And a truck cares 10 tones of goods, with 100 tones total. If a box a worker can carried say weight 50 kg, the entire truck fleet can carry 2,000 boxes maximum. Unless the amount of time for unloading these boxes takes about the same amount of time. I've personally carried about 100 boxes from a truck full of products, with 3 helps. And they just take me about an afternoon to finish. Which I am not a professional or efficient bearer, and I see much faster carrying rate like 10 time efficient than me, and it's most likely with 10 bearers carry boxes from trucks to the warehouse, I'd say it cost about the same amount of time like an afternoon.

So the conclusion is that it will increase the time to reach destination, only when the extra time is used up by uploading cargo. And since when truck are off loading goods they don't consumed any fuels, it makes perfect sense why transportation companies paid the drivers by the hours, only when they are driving. So the wages and fuel costs while waiting to be unloaded can be close to 0. And the truckers will always eager to lend a hand in order to get back on the road as quickly as possible, even when they are not paid to do so. The river transportation doesn't apply this principle. Since river boat are rarely team up as a fleet, and the amount of goods in can carried are much larger. It essentially means that a batch of goods M can be carried simultaneously. M=C. Hence the costs is CF as in condition 1.The problems of cluttering at the loading duck will be discuss in [2].

[2] The analysis of sea or river transportation means we only concern the offloading time. While traveling on the sea, the fleets are essential a dot. Hence the costs while traveling are the same CFs = (G(M,S)+W) *T_bysea. And when a boat reaches it's destination. The offloading time of a ship Tf = M/Rf, Rf as the moving rate of containers in an hour, and the goods M is also measured with the unit of container. Since the amount of containers (TEUs) being carried in/out a port in a year = Ry is public, you can measure Rf = (Ry/365)/24 = Ry/8760 will be rate of a port loading/unloading amount per hour (Presumably higher, since there are holidays and at night the rate will be slightly lower, however most modern ports are 24/7 already. By the same logic if the arriving rate of cargo ships multiply with the average number of containers on a ship = ShipRf = ShipN * ContainerAverage < Rf, the problem didn't exist. Otherwise the waiting time for the next ship in line T_delay = M/Rf - M/ShipRf. And this time will be accumulated over time. If the ship arriving rate is constant trough out the year. The waiting queue will continue to grow. If the total amount of arrival is fixed, and the arrival rate varied, it means the queue will eventually dissolve. Since I don't know the number of ShipN, and ContainerAverage, I can not say either on of them is true. So if you have the numbers or doing your own field research (that's what I mean you need a field search), it can be tested. However the real interesting part should be combining the land-to-sea, and back to sea-to-land transportation. If you have the data, than I think the simulations for the costs of land-sea-land complete route, can be done. provide some extra variable like the number of trade companies using the same port, the number of ship transport companies, and land transport companies. (They can be monopoly for simplification purpose)

[counting]

Wow, You are at about the level of Nw_Kohaku, when it comes to writing walls of text. Still interesting reading, but I don't agree with some of it. For example I don't share Your general enthusiasm about economy that we have today, growth, and technological development. You also seem very found of emergent systems, and free market, and hate anything planned. I think a little planning doesn't hurt and can smoothen economic cycles.

About that game. I was thinking about borrowing it for a week-long LARP with many games. Sounds fun and different. There are still some areas, I don't understand, tough. Namely, the goods creation. Everyone can create goods (like different kinds of sweets (which the king provides)) (self employed, or company) per turn, but not actual money. Then they trade that among themselves using monopoly money. Is this correct? Why won't this create oversupply of goods over say 10 turns? If I understand correctly, any leftover money can be exchanged for chocolate at the end (or even during play), but it seems, that spending it on goods in game gives you more stuff to eat. Is this also correct? If I were ever to try and play with it, I need to understand such things. I also intend on using cheap stuff, no more than 3$ worth of food pere person during the entire game. If I don't do it, I still want to understand, how the mechanisc for that game works exactly. 

About "Money as debt". That movie did rise some good points about injustice of our monetary system. Also about impossibility of perpetual growth economy, which is simply not sustainable. And why usury is the cancer of humanity.

About jamming trade routes / ports. This can totally happen. A way to model this would be to make a cap on how much stuff can be transfered. Overflowing causes increased latency, and cost. Over time capacity of a road or port can be increased by governments using money from fees from traders using them.

Toady One said something about the supply and demand model, he was using either in one of front page posts, or DF talk. I dont remember whre exactly. Oh well, we'll wait and see.

High five with kohaku (I haven't seen his post on economy for a while)

And first I will make no further comment about the video itself. But about planned economics I am not against it, I against the way in a simulation artificially imposed a money system or default by gold, without any bases, there is no fun in that, since every goods and money in it is just numbers, and everyone just trying to get a high score by doing repeated tasks. And as I said in many previous posts, money is not wealth, the product you produces are. Money is not power either. And money along does nothing, it won't grow, and it can't be eaten (as long as the commodity money is uneatable, and most are, instead the very early ones), so the banking or money market is like a pump to drive the productions, and encourage grows and advancement to increase the efficiency of productions. And as evidence says human technologies always keeping advanced, and human populations keeps growing. If there is no advancement or growth, the society may start to shrink and die out. As many historic events tells us that the society that are isolated will disappear - like Easter island. I rather be living in a society that can travel through space, than stock on earth. The growth doesn't need to be destructive. The reason of waste, or the need for recycle has nothing to do with it. In fact recycle resources can create more materials and even make growth faster. The earth is never a closed system, we receive unimaginable amount of energy from the sun every seconds, more than enough to light up the whole world a year hundred times. We humans are far from exceeding our potential, and far from    
exhausted resources. Remember that energy can only be transformed, can not be destroyed or created. And matters equals energy. The only energy source will be exhausted is the sun itself, and we still have 5 billion years.

About usury, first. I am not a Christan, nor any Abrahamic religions. I am a Zenist. So no comments on religious aspects. But interests are one the driving force of economy, and bankers need to eat themselves, too. And the money created by the banks doesn't belong to them, but to people who own the accounts. The goods will be better used by people rather than sealing in a vault doing nothing. And in fact since the very fist commodity money is sometime living things, so if chickens are used as money, and your neighbors borrow one from you so when the chicken lay eggs, he can have some. Is it preposterous when some eggs not been eaten become chicks while been borrowed, and you neighbors decide not to give back those chicks? Isn't it legitimize for you to claim those chicks, since you own the chicken who gave birth to it. Isn't it cruel if the contract says only borrow the chicken for it's egg, but claim all of them, and let the chicken procreation stops (he only borrow the ham, not the rooster). So in the end no more next generation chickens can be born? If you replace the eggs with interests, and yourself as a loaner, and the rooster been the productions, the ham as money. You may find that it's not that ridiculous.

About jamming the port/depot I already write a short essay before this one, feel free to point out if there is anything left out or error in it. In contains my conclusions and the steps leading to possible simulations.

The reason I told the future prospects of growth, and chicken story are not randoms. If you think about it, the one employed themselves in the simulation LARP kind game are in fact equal to gold miner rather than farmers. Since they are one of the sources of producing commodity money goods other than those issued by the king. And unlike gold, these commodity money can be eaten, just like I said early they are a form of very early money. Also similar to the chicken and eggs. And seems all the other goods are eatable, most likely they are actually be eaten by the students, or carried out of the simulated game system. The game doesn't forbid what you did with the commodity, you can eat it, throw it out, giving it to your gf/bf, kids, your pets. hauling, as long as it doesn't violet the rules inside the game. Which in tern not much. The commodity that is important is the kisses and hugs, since they are as commodity themselves as money. So the landlords and counsels sometimes would like physical rents and taxes than paper dollars. Also, the bankers will hauling the commodity money for possible exchanged during play. Remember the paper dollars are just as effective or perhaps more than the commodity money - kisses and hugs. Since everyone has some form of wages that are paid not by physical goods, so in order for anyone to get the real commodities, someone need to actually own a land to produce goods yourselves, so the merchants and hugs farmers, are the real suppliers. The rest of them are pure consumers. The bankers although has blank notes, he can't just write a number and loan them out, people won't accepted them. But if there are productions started to create supply, and the merchants need to paid the wages for more workers, it's not easy to accumulate commodity money, or by trading with others and gain much benefit from it. since people are not that easy to fool. If someone has a snicker and you have Dove factories, 1:1 fair trade won't give you any surplus of money, just more goods only. The only way to gain access of commodity money at the beginning is by trading with self employed farmers.  And if you want the product of your own factory you even have to paid for that, or it belong to the property of the company, not the owners (lessons for corporations).

Let see about the pure farmers, who can not hire anyone. So you are stock with the kisses and hugs, so in order for you to get other commodity, (the one in the poor land can't even own his product, if he somehow lost his first $10 paper due to theft or else.) He can choose to buy the hugs he produce from his own farm, give $10 to the farm. deposit in a bank. get another 10$ paper for himself. and that's it. He will have to wait till next tern. and just repeating.

The farmers in other lands are a little better. But since he only has $10 at beginning, so he can just buy 1 hugs as well, the rest hugs are the properties of the farm. So he now owns a hugs and a farm worth a little more, with 10$ and the rest hugs (1 or 2). But he don't have to wait till next tern, and he can go to the bank (king's or otherwise, but king's bank at very first), deposit the hugs and get another $10, buy another hugs in his farm, or not. He can choose to own paper dollars or physical hugs, if so choose people born in modern society tend to like paper money. Hence he will buy another hugs out of the farm, go to bank, until run out of the products. Then the farmer has become a capitalist. He now own a farm with the vale of $20 or $30 paper money in asset, and he personally own $10 paper as cash, and as they said owns a property, doesn't mean you have wealth. And the excessive hugs and kisses are now all sitting pretty in king's vault. You think bankers are evil XD? Kings

In order for someone to have more cash. You can one way pull resource with others, and open a business, or even a bank. Or you can be lazy, doesn't want to do anything and just be hired. But someone has to open a factory to produce goods other than hugs. So you may want to find some rich farmer friends, or even the lucky landlords. So you can produce not just hugs. First you need to close your farm, and get the paper or hugs out of the farm, but remember once you do that there is no coming back. Or if you are lucky someday someone may want to sell their farm instead of just closing it. But be prepared that it will be expensive than it originally are. I don't know if the game has a system of reclaim your identity as a farmer, or its opened for king to determine, or the right of the counsel. Maybe it needs to be agreed by the landlords of that land, and get permits from the counsel or the king. Or it can be free to convert your role at anytime you want, as long as you have only 1 job, but possible a lot of chaos will ensure, so the counsel maybe can make law to regulate it or for complete freedoms.

The unfortunate or power hungry ones may want to be counsel, And define tax rate, tax laws, setting high wages for oneself. But they are more like public servants, since elections are not guaranteed, and people may not want a elected government at all. Still it's not a easy jobs, and you can be powerful, or become just leg-runners for the king and people.

The fortunate landlords are the happiest kind. It's like winning the lottery. (And they are generated that way). So you may want to hold that thought. But not enough money and too much are both troubles. You can be evil lords and collect rents as private taxes, while still own your own business. And since they are probably the most richest in the beginning, everyone will want to form partnership and start a bank or profitable factories. Be ware of who you are be friend with. And the money you carried will make you good target for theft, so beware of your wallet too. You are not as powerful as king, and you don't have a safe vault.

The bankers' jobs requires the most knowledge about economics, and math. If you are friend with the landlords who are willing to open a bank with you. It maybe a good idea to set a interest rate high enough for people to deposit their money in your bank. And when people put their money in your bank, they will receive the bank notes. They are not the same as king's paper money. And they are only a receipt for the deposit. And since king's money can only be obtained by either exchanging hugs with the king's bank (which is it's sole purpose, and no other functions, or deposit, or interest, so in a way it's more like a mint than bank). So if you are planning to expend your loans and issuing bank notes without full reserves. You need to be aware about the one who you loan money to. people may not want to get a loan due to your lack of reserves. And people may want to withdraw more often than real life. It's better to find someone who understand the background and precipice of banking as the partners, rather than a money hungry landlord.

The role of the king is in fact very simple. The number of goods you need to prepared is easy to calculate. First if you need a lot of hugs and kisses, or anything that is small enough and plenty enough to be commodity money. Food is good because it make some lazy people want to be farmer and just eat the simple food, and relax. But they need to be endurable, and not easily broken, nor drinks either. the quality of it must be mostly the same from 1 to 1. Than you need to count the people who are joining the game, and a good advice is that you need at least 10 people for the game to work (excluded the king himself). In this case, anyone who has a opponent about the counsel (10% of the 10 people is 1), can called a re-election. And petition questions and demand to the king. If the number of players is more than 10, will require at least 2 people to agree with the petition(every division will add to the next). And since 2 players are automatically government employees chosen by the king to do the book keeping. The rest (n-2) players will generate average 2*(n-2) hugs in the first run if they all choose to be farmers. And after than the requirement of supplying ("growing products") hugs will drop, and some of them will be recycle back to the king's bank, when paper dollars are exchanged. As long as players keeps exchange commodity money into paper money, the reserves of hugs doesn't need to be very much. (But a lot of paper money may be required, depend on how long your tend to run.) At least 10 times of the paper money is advised. But in fact, if the private bank is setup early enough, the bank notes can quickly replace the paper money issued by the king. (If the banker are smart and resourceful). At the end players may not have much king's money at hands, but more goods produced by factories instead. They will be tired of eating the same chocolate. And the one who end up with the most king's money will be the bankers. So beware of if the bankers love chocolate. Also, the numbers of other goods, need to be complementary and some to be substitute, for the chocolate money. The amount of goods need to be prepared is varies buy the number of people want to be merchants. And it's best to have each kind with the numbers more than 2*n, so each players will have the opportunity to obtain at least 1 of each kind.

If there are more than 20 people, than the difficulty of organizing may start to be troublesome. In theory it's possible to have as many people as you want, but you will probably need a chocolate factory in order to do that. 

[counting]

I studied economics as a minor in undergrad and still try to read up on it (I follow Greg Mankiw's blog for example).

Anyway, one of the courses I took was about the history of economics---and probably the most interesting thing we studied was feudalism.  Essentially the popular modern theory goes that feudalism developed because labor was in short supply, that is in a farming community land was very plentiful and labor was relatively scarce compared to it. Therefore, when a need arose to defend themselves people offered their labor as payment to those who would defend them--village strong men who would spend their time training, making weapons etc.

Now it was to expensive to monitor people to insure that they worked x number of hours. In addition villagers/surfs were not willing to pay for protection in crops because that laid all the risk on their heads if there was a bad season. So a system of labor payments was developed where most of the week the surfs labored on a plot of land for their own use and then one or two days a week they labored on a plot of land for the local strong man.  This divided the risk between both parties and limited monitoring costs (you can tell pretty easily if someone has tilled the land, planted, etc).

Ofcourse strong men started to call the land theirs (in that they controlled it, they had the weapons) and thus surfs became bound to the land and limited land ownership emerged--though not in the sense of property rights today.

You can guess how this continued to eventually form the vassal state.


I think it would be interesting if dwarf fortress worked like this, where the  barons instead of being useless kings (like the royalty of England today, no offense intended--I just mean they don't have a governing function) they instead are barons because they are the best fighters and thus they are owed something by the peasants. And further they use their power over peasants to demand things.

This would mean you could give your nobles orders, but only military.  Perhaps your squadron leaders would be nobles instead of being appointed by you (or when they are appointed by you, they become nobles).

Now when a higher noble comes (like the king) he could demand stuff from the local nobles, who in turn (if they don't have it already) have to demand it from the dwarves under them. Thus the nobles can be punished by stronger nobles and the dwarves by any noble really.

Perhaps when the king comes (or other higher noble) he even brings soldiers (his squadron) and to make sure his orders are followed--not to say that he needs an army to take over the place but a few as a token of his power.

You could even have, from time to time (don't make it happen often), infighting between different nobles and their squadrons and dwarves under them. Perhaps each dwarf tends to separate himself from the dwarves of other barons. Nobles could even demand their own burrows where they demand their subjects to stay (and are punished if they leave).


The quasi property sharing community of a dwarf fortress lends itself really well to the baron--surf hiarchy.

I think you could make a new thread of your own, about the subject of feudalism. Although I am more familiar with the history of economics and the monetary system of the rising of capitalism from 14th century toward 16th century. Can't give much advice on this I am afraid.

Still, since I am Chinese, I do know about the origin of feudalism in ancient China. They are called the 'Well farm" or "Well field" (depend on the translation of "井田", perhaps you know about it, but I'll explained it for the others). They the exact translate of its meaning is "Farm lands shape like the word Well", since the word "Well" in Chinese is like a 3 by 3 grids with 9 blocks minus the outer 4 edges

Hence is what it looks like this

And the idea is exactly like you said, 8 people grow their crops on the outer 8 blocks, the middle one is owned by the landlord. So the 8 ones are called the "private farms", and the middle one "public farms". And the meaning of public is NOT the same as what we think today, it's more like the meaning of property of the community and it's manager. And they don't need to time shared the public farms, but more as a voluntary job.  The products of the public farms are collected by the manager, and used as taxes for the feudal lords. In addition, 1/10 of the products in private farms are also required by the lords as rents for the land. And this system is supposed developed at the the 21th century BC. And discarded at 361 BC by the power kingdom of "Qin" which later unified China in 221 BC, and build the first empire and dynasty, which essentially ended the feudalism in China (As a fact it ended earlier since powerful kingdoms arise for hundreds of years.) Still as reference, it is the true recode to backup the rising of feudalism. Although historians in China do argued about the effective date that this system actual worked, and the way it worked. Since no hard evidence other than records survived that long. And it is believed that the usage of iron tools and animals for farmings, made it less effective, also the serfs who works in the private farms started to running away, and join the new powerful kingdoms as small farmers like Yeomen, and new kingdoms often doesn't collect physical products as taxes, instead require farmers to provide service to the kingdom, like constructed public buildings - the great wall, served in the military, and landlords are mostly gone. The nobles now owns vest lands, working by slaves. And only those directly blood related to the royal families can be called nobles. (In a sense all the kings have the same family names)

P.S, isn't it that all the European monarchy and East Asia monarchy are now constitutional monarchy. Which means they are only the face of the nation, not the brain nor fist of the nation anymore. Actual power is given to elected officials.

[Reelyanoob]

Wow, counting, your chinese "well farm" is identical to the basic economic building block in "Capitalism II", which, incidentally was developed in Hong Kong. So I'm guessing Capitalism's developers based it's structure on the "well farm". I started getting suspicious when you said "3x3 grid"

[jseah]

I do agree about centralization in some way, the reason we were shocked about the simulation result is due to the fact that it actually happening without our predetermination in any way. <...> It's like measuring the height of a group of people and finding only super giants, and a lot of dwarfs. But it may actually be valid result actually, and I do mentioned it in my essay.

Do you mind showing me that essay?  I don't mind if it's in Chinese, I can read Chinese (although it's been some years so I might need a dictionary).  I can't play that MUD you reference though, since I've long since lost the ability to type Chinese and I have zero experience with MUDs at all. (much less one written in my second language!)

Economic essays are always interesting and there was a period of time where I tried to build an economic simulator for one single town (it was actually for a game and I wanted to simplify my workload so I did not have to write up the reports by hand). 
And I was consequently surprised that various industries had boom and bust cycles over the period of 200+ months or so. 

[counting]

Wow, counting, your chinese "well farm" is identical to the basic economic building block in "Capitalism II", which, incidentally was developed in Hong Kong. So I'm guessing Capitalism's developers based it's structure on the "well farm". I started getting suspicious when you said "3x3 grid"

Although it started some 4000 thousand years ago, the memory lived on in the culture and people remembered it well. Although it was discarded in 361 BC, a later dynasty ("Xin" 9 AD to 23 AD), try to revived it, and gave it a new name - "王田", means "king's farm". (Although the emperor's last name is "king" as well, so, maybe he meant HIS farm , JK). But the result was quite clear, as you can see the dynasty last no more than 15 years, and the first and only emperor died in the chaos from the revolts of farmers. (He was beheaded, and the head became royal collection of the following dynasty, until it was burned in 295 AD). Although his failure not only because of this system alone, it still means  once a system is gone, the society will not easily go back to a more primitive form of economy.

[counting]

I do agree about centralization in some way, the reason we were shocked about the simulation result is due to the fact that it actually happening without our predetermination in any way. <...> It's like measuring the height of a group of people and finding only super giants, and a lot of dwarfs. But it may actually be valid result actually, and I do mentioned it in my essay.

Do you mind showing me that essay?  I don't mind if it's in Chinese, I can read Chinese (although it's been some years so I might need a dictionary).  I can't play that MUD you reference though, since I've long since lost the ability to type Chinese and I have zero experience with MUDs at all. (much less one written in my second language!)

Economic essays are always interesting and there was a period of time where I tried to build an economic simulator for one single town (it was actually for a game and I wanted to simplify my workload so I did not have to write up the reports by hand). 
And I was consequently surprised that various industries had boom and bust cycles over the period of 200+ months or so.

The thesis are not finished yet, it will affect my graduation, so sorry for that @@. I can not be public until pending and being accepted. After that it will be in the database of sort for the graduated students. Subscribe some journals about Artificial Life, and many experimental economics ones, I am not the only one who are trying to simulate economic system from micro level to macro level. There are proceeding of conferences, even books. But you will find that it's not that interesting to read a thesis, and paper, since they are not for the purpose of teaching how to built something, but rather convincing others that some hypothesis and assumptions you made are indeed valid backup some experiment(simulation) results. (the detailed are not included rather than the parameters about it.) It will be much like the one I posted earlier about the 'capacity' problem of trade routes over sea or land.

I can give you references about them, but your might need some access for the journal database, (Mostly likely you need to be in school library in order to find and read them).

[jseah]

I'm on the cambridge university network.  I can access papers if I want to.  XD

Only until summer break starts though, so perhaps I shall go do some reading after exams. 

[counting]

I'm on the cambridge university network.  I can access papers if I want to.  XD

Only until summer break starts though, so perhaps I shall go do some reading after exams.

WARNING! containing words will make you headache!

I am sure you can find tones of stuff to read. A book I am reading "Schumpeterian Perspectives on Innovation, Competition and Growth", it essentially is a collection of papers, and the part in modeling can give you an idea about the presentation of simulation models in a economics paper, and in this - "A micro-meso-macro perspective on the methodology of evolutionary economics: Integrating history, simulation and econometrics", gives some insight about why modeling and a way to analysis models built from micro to macro scale. And I think in a way it even justified the effort of this ground up approach to be accepted by "classical"(mainstream study) economic theory. Since this kind of work was generally seems work in the field of computer-science, however the bridge of evolutionary economics and artificial life, especially ABM (Agent-Based Model), giving the ground for this approach, and not to be seems as chaotic in nature or lack of real world basis. ("History friendly modeling" approach is a very interesting idea, not the history as ours but in the artificial modeling world sense), I believed that the approach from DF as a game doesn't quality as a microeconomics model, but rather enforce meso rules in order to create an equilibrium in macroscale. In fact, I am also too afraid that my approach of modeling such as I described will be less "academic acceptable" (ironic isn't it as I was called too academic XD) for economics-related field, even barely belong to evolutionary economics.

Some questions though, do you recognized traditional character chinese, or simplify? It's easy to read simplify with whom can read traditional, but not the other way around. I am Taiwanese, and we don't use simplify (much ). And how is your 200 month of town simulation provide the basis of demand? By human users or agents? I know most critics about modeling often attack the over focus on production and neglect demand, or a monetary structure equilibrium system. Hence it is easy to setup a lot of "industries" like the one in DF, they are essentially the skill-tree or tech-tree adopted from Civilization game. (The famous of all tech-tree game). So no innovations involved any way and it's a static system. So mostly it's just as good as constant values in economic models. (In fact most models don't specify the type of industry or even the real function of the production, only their production function like Max - Max/capital^ScaleFactor + Marginal(Wages), and it's a simple one. And they are only factories, but not a "enterprise" or supply in any sense. So agent based approach will detailed the production process, and view the production function as emerged effect rather basis. (The idea of function although used in microeconomics, but in my opinion, more of a statistic observation of the real world event sums, not the nature of costs, and bargaining(auctions)). And it makes wonder how you implemented that aspect of production? And a town as a whole, viewing as a closed economic system is actually a good start, and yield better results for experimentation. 

[jseah]

I didn't use firms actually.  Since the simulation did not have capital goods (it's pre-industrial) other than the plow, there was only a cap on the maximum number of farmers. 

Workers then allocate themselves based on what they considered would pay the best for the work they do.  (skill has a factor in productivity as well as the cost of the inputs for stuff like carpentry)  They then consume goods with the money they earn from selling goods to other people.  Expected return of a specific job was calculated based on last month's price of the output and expected productivity. 
Elasticity of demand is modeled by their preference of what they will buy when they have money. 

Money supply is fixed since the town used gold coins and it didn't have gold to mine.  Time scales were too short to have population growth. 

Loans did not exist since the barrier to entry for a new market is simply competition.  It approached a free market in most respects. 

Funny how in my first few runs, everyone starved since the price of plows were too low for anyone to want to build more.  Until I tweaked the way price carried over to middle goods from the final demands (in particular price of food meant that farmers are wanted but that didn't translate into a higher price for plows...)

[counting]

ANNOUNCEMENT : I am posting this as adding something "educational" for people who are interested in economics but only just began, and hopefully telling a more complete story about the economic events and what's behind the curtains

Many people who first heard the idea of using debts and interests difference in money creation, may feel shocked and unable to understand, or thinking it's evil, or consider it a good story for conspiracy theory.

However I want you to picture it as buying a stock from stock market, which seems most people are very interested and participate.

When you buy a stock (make a deposit), the company (bank) gives you - the investor (depositor) - dividends (interests). The company (bank) runs a business of selling retail-products/services (loans) which yield net profits (loan interests), and pays the salaries of the CEO (banker) and its employees. Hence the supplier's (central banks') goods (fiat money) can be distributed more easily to customers (loaners, debtors, business owners, or general populations like you and me) who need the products (cash).

You can write it down (copy it to a txt file), and remove the blue words, or red words. Then read it separately, then think about what's the differences between them, or are they essential the same principle? Viewing the money as a commodity first, is the best way to understand the way of banking. Then digging more into it, to distinguish the difference. And it works because money is a product evolved from commodity, not designed by Deities.

Think about why even today we still don't use pure credit system, since 1 out 10 is probably pure numbers? Think about why in daily transactions credit card can NOT fully replace cash? Think about the natural of commodity and why anonymity is important? Like any $1 can be used the same (anonymous), whether you earned it or pick up on the ground, but you can't rename your debts to someone else (easily), and we always want an anonymous credit card. 

[counting]

I didn't use firms actually.  Since the simulation did not have capital goods (it's pre-industrial) other than the plow, there was only a cap on the maximum number of farmers. 

Workers then allocate themselves based on what they considered would pay the best for the work they do.  (skill has a factor in productivity as well as the cost of the inputs for stuff like carpentry)  They then consume goods with the money they earn from selling goods to other people.  Expected return of a specific job was calculated based on last month's price of the output and expected productivity. 
Elasticity of demand is modeled by their preference of what they will buy when they have money. 

Money supply is fixed since the town used gold coins and it didn't have gold to mine.  Time scales were too short to have population growth. 

Loans did not exist since the barrier to entry for a new market is simply competition.  It approached a free market in most respects. 

Funny how in my first few runs, everyone starved since the price of plows were too low for anyone to want to build more.  Until I tweaked the way price carried over to middle goods from the final demands (in particular price of food meant that farmers are wanted but that didn't translate into a higher price for plows...)

First of all, if there is no gold mine, and the agents/players can not barters, and gold coins are the only fiat money. Where is the money supply comes from? You don't have a banking system do you? I imagine that the 'company'(location) are paying these plowers both salaries in coins and the goods they plowed. (They got paid twice!). Or there are NPC's who owns money making machine are functions as money supplier and goods consumers so the goods can be remove from the systems and generated coins (which still means these NPC's get's paid only with coins from system, without laboring), Or is there other money supply mechanism?

Next, about the coins, if the money supply is positive and fixed (what ever it comes from), how does the coins be removed from the system? If not, the nature inflation will be high, since goods are been consumed, but the coins are not eatable. Or it is the surplus of goods, not being eaten, but stored by agents, are relatively equal, so the ratio/price stay constant?, Or because the price of the goods are generated from the equilibrium of demand and supply functions, so it didn't really reflect the real price(ratio), hence the coins keeps piling up in the wallets have nowhere to go? Or is it something else? like the growth of the player's number can keep up the inflation so it didn't happen at first?

It did have the property of market in exchange goods, but lack the prospect of market's function of setting price. It's generated from buyers/sellers bargaining of the values of the products they produced. The money is not just only a medium of exchange, so if some coins are generated artificially, and agents will be forced to exchange his/her products to coins, then back to another products with extra costs, then it should be. (It's really happens in commodity money system), it will be no better than pure bartering. (actually worth, if the bartering costs are less than the lost of trading in coins).

The invention of metallic money are actually trying to deal this problems in commodity money, and achieve minimum exchange cost in indirect goods exchange goods->money->goods vs goods->goods. If the costs of the former is not less than the later, the monetary system will not happen. And what I mean money is a necessary is when goods->goods are not just 1 for 1, it's 1 to many, you may need goods1->goods2->...->goodsN, to eventually get what you want. So goods1->goods_money->goodsN are better in mostly better with less transactions. But only when the information of finding goods1->goodsN are hard, and goodsi->goodsj (i,j <> money) costs are high enough. This may not be the case in computer simulated world. Like in a world players can sorting the goods, finding the amount he need and instantly find the buyers. In that case, "coins" in such system are just a special kind of goods, with no overhead, stackable, and exchange are just goods_money->goodsi (i=1~N). You may think it likes real money(we know today), but it's not. They are however easy to reach equilibrium, if designed properly. (much simpler in complexity)

[counting]

I make some replies on another thread, and provide a link here, its about exchange in medieval era, and soft and hard currency.

[counting]

Story "Goddess, drunk, kids, and old fisherman" : The necessity of currency as in commodity money, from bargaining to commodity money

In my signature, I have a sentence : Currency is not excessive, but a necessity. It's an idea I deeply felt when building a simulation economic system. At the beginning, I was also struggled to fit the role of currency in the flow of goods and productions in the system. It just doesn't fit in, and it doesn't feel right. After reading many other complex models about currency, I find the epiphany not in modern theory, but in ancient wisdom. There is a basic function of currency that is embedded into money that is :

It reduces the costs of trading, and forms double coincidence of wants.

They seems logical, and we never thought much about it when reading it in textbook, If A produce product 'a', and want food 'b', but B who produce 'b', want some shiny shell 'c', and you will need someone 'C' to produce 'c' and ALSO want 'a', so A can trade 'a' to C, and getting 'c' to trade with B, so A can get the 'b' he wants. And everybody is happy. It looks like this

A : sell 'a'; buy 'b'
B : sell 'b'; buy 'c'
C : sell 'c'; buy 'a'

So A =>a=> C =>c=> B =>b=> A, (=>?=> means give, sell something)
Or A <=b<= B <=c<= C <=a<= A, (<=?<= means give, buy something)

However, it also means if there are more and more products can be made, there is possibility that this chain will grow longer and longer, and there are more and more people too, so it will be harder and harder to check what everybody sell, and buy, and how many they are willing to exchange. Imagine you will have to trade 5 buckets of ales with 1 spear, trade 1 spear with 10 fish, trade 10 fish with 30 shells, and finally trade 30 shells with 2 roast meat. And with each trade, others may NOT trade evenly, and try to make a profit out of it. And you may think your ales are worth more than 2 roast meats, but 3. These trader maybe:

You : a farmer who can make ales from your crops, but want to eat something tasty.
Guy A : a woodworker who makes spear, and wants some good drinks.
Guy B : a fisherman who catches fish, and wants a new fishing spear.
Guy C : a gatherer who lived at the beach and collecting shells, but can't swim and want to eat fish
Guy D : a most beautiful ever seen huntress warrior, who can hunt beasts and is a good cook (for your taste), and lives next to you, but always want to make fine jeweleries with sea shells.

Also, there is chance, during the exchange, some goods like the fish may go bad, and you get only 4 left, so they can only be traded with 12 shells. But the huntress who sell roast meats give you a price with 15 shells for a roast, hence you won't even able to eat a roast for dinner. And the longer the chain of trade, the higher the risk (cost) will be.

But what if this chain of system keeps going. the woodworkers may drink all the ales you trade in a week, so he enjoys trading with you, as long as you can. But the fisherman only needs 1 new spear a month on average, depending on how often he forgets where he puts it. So he may willing to trade a spear for more fishes or less, but not every week. The gatherer who can eat 10 fish each day, however he want to eat something else too, also he can gather more shells than he is willing to trade. The huntress who can fight beasts, also wants to eat some fish, even a spear for her hunting, and she can't resist the temptation of nice shining new shell bracelets, and she always want to trade for more shells, as long as someone wants her roasts (it sounds wrong, idk why ). Unfortunately, you are the only one seems to like her cooking.

This kind of trade can only happen so often in the beginning of a month when the fisherman needs a new spear,. Hence most of the days the woodworker doesn't have ales to drink. Although the fisherman is happy because he can get a spear when the trading happens, so long as he doesn't lose the previous spear before end of the month, so he keeps trading/buying every time, even when he didn't lose it, and stockpile some as backups. And sometimes when the stockpile is low, he will buy 2 spears instead of one.

The gatherer are happy that you bring him fish every month, and although sometime the fish smells funny, he always honor the deal to trade 1 fish with 3 shells. Sometimes you feel bad that he has to eat rotten fish, so you bring some ales to accommodate that, but he doesn't like to drink. However when there are shortage of shellfish which he ate everyday, he will willing to try the famous roasts. As long as you don't force him to eat. Something is better than nothing.

And once a month, you can see your the huntress, and you always eager the day of trading to come, and you want to make her happy, so you will have more chance to taste her roasts. But your the huntress doesn't like your ales, just like the gatherer. So even you can make many ales, you do feel the need to brew more. Although you can make many more. Hence, one day when you were peeping overhead her, and knows she complaining about wanting more shells for her bracelets and necklace, the spear woodworker made, and the fish fisherman catches, but none of them since to like the cooking. So a brilliant idea spinning out of your head.

Why don't I make more ales and open the trading party every week. Gathering as many goods as possible, so I can see the goddess huntress every week, and possibly give her whatever she want, so she will be happy, and ..., you feel excitement running through your blood.

The idea is like this, you can make 5 ales a week, so you work hard and make ales every week in that month. Than you bring 20 ales and trade with the woodworkers for 4 spears, and he tells you he can make a spear per week, and he can give you 3 spears out of 4 now, because he couldn't trade them out the previous month. And he will give you 1 spear next week for free. And later every 5 ales you bring him, he will deliver the amount you ordered as quickly as he can make them.

You go to see the fisherman next, and make a deal with him that you will supply him 1 spear per month and guarantee one backup one anytime he needed in that month, two backups if possible, as long as he supplies you 4 fresh fish every week. You also shows him the 3 spears you possessed as an insurance. And he gladly agrees the deal.

You are shocked by the fisherman's decision, since 4 fish per week (more than 17 a month) is a lot more than 10 fish a month. But the fishermen let you know a little secret, since fresh fish only last a week or so, depending on weather. And he can catch 2 fish a day, but eat at least 1 fish himself. so previously he actually trade the last week's 7 extra fish, and 3 older ones. And he eats 2 fish at the weekend (9 fish total a week) during none trading weeks, if the there are fish left and gone bad, he just throws them out. And you suddenly realized why the fish sometimes smells funny. So 4 fish a week still means he has 3 extra, and he will still be able to eat 2 fish for the weekend in the last week. He is even willing to trade 5 fish a week, if you promise he bring something else every week. And you ponder about this thought. So you give the fisherman 1 spears for that month, and carried the other 2 spears, with 4 fish from the new deal and leave.

And when you bring those fish to the gatherer's cave and give him 3 fish, he is not happy about that at firs. But after you explain you will bring him 3 fresh fish every week now, instead of 10 fish a month, and told him the extra fish he can get every month through calculate (more than 12 a month), and fresh fish without the smell and he can eat them every week. And he won't have to eat 10 of them as fast as he can only in one week. He now becomes more pleased than ever. So you make an exchange as before with 9 shells, and never have to feel guilty about selling bad fish to your friend.

On your way back, you calculate the goods on your hands. You have 2 spears, 1 extra fish, 9 shells, and you felt confident that your the huntress will be pleased with all the trouble you went through, and give you what you craving the most - the goddess's cloth her finest roast, and possibly more. So you go back to your house, store 1 spear as the promising backup for the fisherman, and brings a spear, a fish, and 12 shells from that previously going bad deal (the huntress won't accept the deal less than 15 shells) plus 3 of the new shells, store the rest 6 shells. Heading to her house.

And the meeting indeed goes well. With 1 spear, 1 fish that you shared with her, and 15 shells, she is more than happy to make 3 of her roasts with the craftsmanship in finest quality to share with you. And you realized that you make the right called, and all the effort and time spending on brewing that 20 ales is worth it. When you come home the next morning with 1 extra roast left behind, you even find there are some ales left in your still to drink with, 1 spear in backup, and 6 shells sitting pretty in your stockpiles. Although because you are saving the ales the previously whole month for 20 ales, so you haven't drink 1 bucket since. But from today on, you know something will be different, and something new emerged from this.

Summary :
 Month 0 :
  You: make 21 ales and some, start the plan, 12 sea shells from a previous bad deal.
Month 1 Week 1 :
  You: take 20 ales and take to the woodworkers asking for 4 spears
  A: woodworker give you 3 spears in his stock, deliver the reset next week, and a 5 ales/spears deal
  B: fisherman give you a 4 fish/week deal, you deliver 1 spear/month with a backup at anytime
  C: gatherer give you a 3 shells/fish deal, you sold 3 fish and get 9 shells.
  D: huntress give you 3 roasts; you eat 2, you deliver 1 spear, 15 shells, and 1 fish as gift
  Stock: 1+ ale, 1 spear, 0 fish, 6 shells, 1 meat (you eat that in next day, along with the ales)
Month 1 Week 2 :
  You: make 5 new ales.
  A: woodworker give you 1 spear he owed you last week.
  B: collect 5 fish this week, you give the fisherman extra 1 of your ales.
  C: exchange 5 fish with 15 shells.
  D: exchange 15 shells for 1 meat. (you ate 1 at beginning already, feel only want 1)
  Stock: 4 ale, 2 spear, 0 fish, 6 shells, 0 meat
Month 1 Week 3 :
  You: make 5 new ales.
  A: woodworker give you 1 spear with 5 ales.
  B: collect 5 fish this week, you give the fisherman extra 1 of your ales.
  C: exchange 5 fish with 15 shells.
  D: huntress exchange 1 spear as her backup for 2 meat. (you ate 2)
  Stock: 3 ale, 2 spear, 0 fish, 21 shells, 0 meat
Month 1 Week 4 :
  You: make 5 new ales.
  A: woodworker give you 1 spear with 5 ales.
  B: collect 4 fish this week, fisherman lost his spear, want an extra spear.
  C: exchange 4 fish with 12 shells.
  D: exchange 15 shell for 1 meat. (you ate 1, this will be your 7th roast this month)
  Stock: 3 ale, 2 spear, 0 fish, 18 shells, 0 meat
Month 1~2 Week 5 :
  You: make 5 new ales.
  A: woodworker give you 1 spear with 5 ales.
  B: collect 4 fish this week.
  C: exchange 4 fish with 12 shells.
  D: exchange 15 shells for 1 meat. (you ate 1, you feel like you need to lose some weight)
  Stock: 3 ale, 3 spear, 0 fish, 15 shells, 0 meat
Month 2 Week 6 :
  You: make 5 new ales.
  A: woodworker give you 1 spear with 5 ales.
  B: collect 4 fish this week, you give the fisherman the spear he requested this month.
  C: exchange 4 fish with 12 shells.
  D: exchange 15 shells for 1 meat. (you ate 1)
  Stock: 3 ale, 3 spear, 0 fish, 12 shells, 0 meat
Month 2 Week 7 :
  You: make 5 new ales.
  A: woodworker give you 1 spear with 5 ales.
  B: collect 4 fish this week.
  C: exchange 4 fish with 12 shells.
  D: exchange 1 spear (she also lost the spear per month) for 2 meat. (you ate 1)
  Stock: 1 ale, 3 spear, 0 fish, 24 shells, 1 meat
Month 2 Week 8 :
  You: make 5 new ales.
  A: woodworker give you 1 spear with 5 ales.
  B: collect 5 fish this week, you give the fisherman extra 1 meat, and he like it.
  C: exchange 5 fish with 15 shells.
  D: exchange 15 shells for 1 meat. (You are no eating it, since you already ate 3)
  Stock: 3 ale, 4 spear, 0 fish, 24 shells, 1 meat
Month 2~3 Week 9 :
  You: make 5 new ales.
  A: You are not exchanging this week, since you wan to store some ales
  B: collect 5 fish this week, you give the fisherman extra 1 meat.
  C: exchange 5 fish with 15 shells.
  D: exchange 15 shells for 1 meat. (you eat 1)
  Stock: 8 ale, 4 spear, 0 fish, 24 shells, 0 meat
Month 3 Week 10 :
  You: make 5 new ales.
  A: woodworker give you 1 spear with 5 ales.
  B: collect 5 fish this week, you give the fisherman extra 1 ale and the spear of month.
  C: exchange 3 fish with 9 shells.
  D: exchange 15 shells for 1 meat. (you eat 1)
  Stock: 7 ale, 4 spear, 2 fish, 18 shells, 0 meat
Month 3 Week 11 :
  You: make 5 new ales.
  A: woodworker give you 1 spear with 5 ales.
  B: collect 5 fish this week, you give the fisherman extra 1 ales.
  C: exchange 5 fish with 15 shells.
  D: exchange 1 spear of the month for 2 meat. (you eat 1)
  Stock: 6 ale, 4 spear, 2 fish (1 of the fish is smelling now), 33 shells, 1 meat

When the 12th week comes you suddenly realize you get every kind of goods in this island, and the goods keep piling up, and you know you can supply everyone whatever they want, and you don't have to follow the trading order anymore. And you setup a trading rules to memorize it.

  5 ales produced every week
  The fisherman asked 4 spears in past 12 weeks, each week gives 4 fish
  WHOBUY: WHOSELL
  1 spear : 2 meat (huntress)
  5 ales : 1 spear (woodworker)
  1 spear : 12 fish, extra 1 meat : 1 fish, extra 2 ales : 1 fish (fisherman)
  1 fish : 3 shells (gatherer)
  15 shells : 1 meat (huntress)

And you feel there is something more in the exchange so you combine the names and replace it with

  5 ales = 1 spear = 12 fish extra 1 meat : 1 fish, extra 2 ales : 1 fish (woodworker, fisherman)
  1 spear = 30 shells = 2 meat (huntress), 10 fish = 30 shells (gatherer)

Finally you seem to find a common answers for everyone

  5 ales = 1 spear = 10 fish = 30 shells = 2 meat, except for fisherman 1 spear = 12 fish and extra

And since shells are the most abundant and the numbers is the largest. So you rewrite is again.

  1 ale = 6 shells
  1 fish = 3 shells
  1 meat = 15 shells
  1 spear  = 12 fish = 36 shells

This time it's much easier to remember, ale, fish, meat, spear, with 6, 3, 15, 36 shells, but after some though, you realize there are something you've missed.

  5 ale => 1 spears => 12 fish => 36 shells => 2 meat and 6 more shells!

Hey! you can get extra 6 shells and even get 2 roasts every week. but if go this trade sequence

  5 ale => 1 spears => 2 meats from huntress.

Minus the shells, but it's ok, consider a discount for your goddess the huntress. And you realize the huntress lived close by, so it's reasonable for the fisherman to paid extra shells for your trouble carrying it all the way to the sea. So you think you got a greater plan in your head. You pack all your stockpiles and head the road.

You visit the huntress first, say you now accept new exchanges with 1 spear for 35 shells, 1 fish for 10 shells, and 15 shells for meats as always, and you always buy at least 3 meats from her every month, and this amount guaranteed her a spear and 1 fish every week, without losing any shells, and you might buy more than 3 roasts a month anyway. Also you have fresh fish stock right now. So you settle your first new deal with her : buy 1 meat from her, and sell 1 fish to her, and give her extra 5 shells. She is more than happy now.

Next you visit the fisherman and also tells him you will exchange 1 spear for 35 shells, 1 meat for 15 shells, 1 ales for 10 shells. and 3 shells for 1 fish. If he eat 1 meat or 2 ale a month, and replacing the spear once, sells 5 fish a week, he can have more than 60 shells in a month. he will have extra shells to buy more meats or ales. Otherwise he can save up the shells for buying a backup spear, if he has an emergency, he can also borrow a spear, and paid you with shells later. So you make a new deal as well: buying 5 fish, and selling 1 meat. You are happy, and as you honor your old deal, you tell him the backup spear is converted to shells in half price, and you give extra 20 shells to him. Both you and him are happy now.

You quickly visit the gatherer and exchange 3 fresh fish with 2 extra fish in your bag, for 15 shells. You also tells him your new policy about 1 spear for 35 shells, and 1 meat for 15 shells, and 1 ale for 10 shells, and the long tern deal 1 fish for 3 shells. Your friend seems not too be interested other than fish, but he realized the potential of his shells. So he guards the beach more carefully than before, and collects shells more often.

The last stop is your big supplier and seller, the woodworker, you tells him that you have set a price tag for every thing on this island now, and offer him a discount of ales with 1 buckets for 5 shells, as long as he sells you the spear for 30 shells. and he is excited about this new arrangement, since he now able to buy 6 ales for selling 1 spear. And you make a new deal too. You buy a spear this weak, and selling 6 ales to him.

At the end of this week, you exam your bag and find, 5 ales, 5 spears, 2 fish, 23 shells, 1 meat. And your shops has already setup a standard for selling and buying

EXCHANGE
1 fish : 3 shells
1 meat : 15 shells
BUYING
1 spear : 30 shells
SELLING
1 ale : inland 5 shells, beach 10 shells
1 spear : 35 shells

YOU start to wonder, what is shells means to you now, why would everybody seems more happy than ever, and earning something in the process. And with each exchange/buy/sell, you also seems to earn some shells in the process. And you wonder how will it be if you change the price. How many shells will you make a week, if there any limitation about how to exchange, And what should you do with all the shells you make in the process of exchange? Was shells the only commodity you can use to be exchange medium? Was it destine to exist?