Inflation for EB 2 economies

[Subotan]

Government revenue is not the economy. What is being proposed for methods to model inflation is entirely the opposite to what has been observed in practice. Inflation is generally caused when demand for goods outstrips supply, leading to suppliers upping their prices, which in turn leads to a decline in the value of currency.

I think we would all agree that higher taxes lead to more government revenue, and are the primary instrument of increasing government revenue in R:TW. However, Higher taxes leads to lower demand (As people have less money to spend on togas, olive oil etc.), which would lower inflation. In the simulation proposed, inflation would be weakened by lowering taxes and increasing government spending; the exact opposite of what happens in reality!

[ARCHIPPOS]

The RTW machine however adds a realistic aspect of tax-raising. If you increase taxes you decrease economy's growth (population growth). Which makes sense. Lots of free people (traders, medium scale manifacurers etc) would move their business elsewhere...

[Andy1984]

Government revenue is not the economy. What is being proposed for methods to model inflation is entirely the opposite to what has been observed in practice. Inflation is generally caused when demand for goods outstrips supply, leading to suppliers upping their prices, which in turn leads to a decline in the value of currency.

I think we would all agree that higher taxes lead to more government revenue, and are the primary instrument of increasing government revenue in R:TW. However, Higher taxes leads to lower demand (As people have less money to spend on togas, olive oil etc.), which would lower inflation. In the simulation proposed, inflation would be weakened by lowering taxes and increasing government spending; the exact opposite of what happens in reality!

The underlined part seems to be too modern an approach on economics, based on the idea that you need to tax your entire population. This doesn't seem to be true in Rome or in the Hellenistic states, where the upper social strata basicly delivered funds, arms and armies to the king (or proclaimed their own kings). Taxes transfer wealth within a population (i.e. enable large-scale undertakings in agriculture, mining or fleetconstruction where otherwise more private undertakings would be used to enable the same effect). If they have any effect at all on government funds (which seems doubtful to me), it lies in their economies of scale, i.e. in real economics rather than in the equivalent of todays budgettary politics.

Furthermore your approach neglects the aspect of economy of the gift/plunder which was almost certainly present in more barbarian regions (and probably in more civilized areas as well), where people weren't taxed by their respective governments or kings, but rather robbed by a hostile one. Redistribution in these economies didn't happen by means of taxes (as I described above) nor by real economies, but rather by something that resembles feudalism and conspicuous consumption. French economic historians have extensively studied this 'economy of the gift' in the early middle ages. If traditional economics don't hold for the middle ages (and they don't, trust me), why would they do so for the classical era? Essential economic assumptions regarding the mechanisms of markets are simply not valid for many products that would make up the larger part of government expenditures (e.g. weaponindustry, the building of ships, all kind of luxury goods, marble,...). Sometimes these products were given to the state in an act of patriottism (or as an act of buying political or social goodwill), other items were simply stolen (like loot on a battlefield, gold that could be remelted into coins, statues,...). I don't think Caesar, Crassus nor any barbarian warlord became wealthy because of the taxes their subjects paid. I believe Tacitus even states the lack of taxes in today Germany as a reason why some German tribes didn't want to become a Roman subject. Taxes as we know them are a rather recent invention of mankind.

Aspects of inflation not or hardly influenced by the amount of taxes are in my opinion these: (1) Certain factions like Pahlava would have a steady inflow of gold and silver, not because the lack of taxes, but at least partly due to trade and gold- and silvermines. (2) Other sources of inflation that did exist were clipping and the habit of states to mint coins with too small amounts of gold in it.

kind regards,

A graduated socio-economic historian and economics-student to be

[Subotan]

The underlined part seems to be too modern an approach on economics, based on the idea that you need to tax your entire population. This doesn't seem to be true in Rome or in the Hellenistic states, where the upper social strata basicly delivered funds, arms and armies to the king (or proclaimed their own kings). Taxes transfer wealth within a population (i.e. enable large-scale undertakings in agriculture, mining or fleetconstruction where otherwise more private undertakings would be used to enable the same effect). If they have any effect at all on government funds (which seems doubtful to me), it lies in their economies of scale, i.e. in real economics rather than in the equivalent of todays budgettary politics.

That's true, but does the R:TW engine represent that? Judging from the effects on population growth, it appears that a modern tax system has been applied to Antiquity. So, if we want to model inflation properly, we have to take into account the guidelines set by the engine, regardless of Ancient Economics (Blame CA, not me)

Furthermore your approach neglects the aspect of economy of the gift/plunder which was almost certainly present in more barbarian regions (and probably in more civilized areas as well), where people weren't taxed by their respective governments or kings, but rather robbed by a hostile one. Redistribution in these economies didn't happen by means of taxes (as I described above) nor by real economies, but rather by something that resembles feudalism and conspicuous consumption. French economic historians have extensively studied this 'economy of the gift' in the early middle ages.

Again, that's very true. However, the engine treats barbarian society in a very similar way to that of "civilised" societies. It would be very hard to implement an econ simulator that did X for barbarians and Y for Med civilisations.

Aspects of inflation not or hardly influenced by the amount of taxes are in my opinion these: (1) Certain factions like Pahlava would have a steady inflow of gold and silver, not because the lack of taxes, but at least partly due to trade and gold- and silvermines.

That seems like it could be feasibly represented in-game, although it would screw over factions such as Baktria, Makedonia etc.

Other sources of inflation that did exist were clipping and the habit of states to mint coins with too small amounts of gold in it.

I suppose certain buildings could represent that.

All your points make perfect sense, but the constraints of the engine mean that we have to work with what we've got. I was just pointing out that lowering taxes to curb inflation was a bit silly.

kind regards,

A graduated socio-economic historian and economics-student to be

Kind regards,

A-Level economics student and soon to be Oxford economics student

[Megas Methuselah]

Hey guys, I aced my economics classes, but you don't see me walking all over people for it.

[Ibrahim]

Government revenue is not the economy. What is being proposed for methods to model inflation is entirely the opposite to what has been observed in practice. Inflation is generally caused when demand for goods outstrips supply, leading to suppliers upping their prices, which in turn leads to a decline in the value of currency.

I think we would all agree that higher taxes lead to more government revenue, and are the primary instrument of increasing government revenue in R:TW. However, Higher taxes leads to lower demand (As people have less money to spend on togas, olive oil etc.), which would lower inflation. In the simulation proposed, inflation would be weakened by lowering taxes and increasing government spending; the exact opposite of what happens in reality!

true..very true.

which actually gives me an idea: can inflation caused by the government (namely by debasing the currency), be implemented in M2:TW? I do know that in ancient times-particularly Rome, debasement of Gold currency led to a hyperinflation in the 3rd century AD. if this can be done, I'm all happy.

EDIT: Keynes or Austrian?

[Subotan]

Hey guys, I aced my economics classes, but you don't see me walking all over people for it.

I only mention it when it's relevant.

true..very true.

which actually gives me an idea: can inflation caused by the government (namely by debasing the currency), be implemented in M2:TW? I do know that in ancient times-particularly Rome, debasement of Gold currency led to a hyperinflation in the 3rd century AD. if this can be done, I'm all happy.

That'd satisfy me. It's impossible to create a realistic econ sim using the R:TW engine, but just one measurement of inflation would be ok.

Keynes or Austrian?

Keynes.

[Ibrahim]

That'd satisfy me. It's impossible to create a realistic econ sim using the R:TW engine, but just one measurement of inflation would be ok.

that would indeed do.
perhaps gold could be set against a certain unit, like the mnae currently used; that way, currency starts with 1 mnai currency = mnai gold. then, as government mints debased coins the mnae currency's value drops, so that say by the time we debase the coinage value by 50%, it'd be 2 mnai currency= 1 mnai gold (pardon me if there is a mistake in the inflation calculating). However, This relies on having the player control economic policy. perhaps a special code typed in with the ~ key?

Keynes.

I see. I suggest that in the future, to avoid any channel on YT with the name shanedk. he's hardcore Austrian.

[TancredTheNorman]

Constant warfare was the job description of some of these factions.

Romani obviously had endless warfare in Italy at first then against Carthage constant warfare with Celts in the North, with all of the Greek factions, ultimately a war without end in the Iberian Penninsula, after they defeated the Selucids they recieved wars in Asia Minor, there were also Getai raids to deal with.

Carthage had constant warfare in Sicily before the Romans gave them the boot, much warfare in Corsica and Sardinia, after losing the First Punic War the Barcids brought Carthage into war with very large numbers of Spanish tribes, and when Carthage was disarmed by treaty the Numidians made a lot of trouble for them. Unlike Rome the secret of Carthage was the mercenary.

The Diodachi were constantly at each others throat, I think everyone here knows about how merciless the Ancient Greeks would be to each other.

[Ibrahim]

Constant warfare was the job description of some of these factions.

Romani obviously had endless warfare in Italy at first then against Carthage constant warfare with Celts in the North, with all of the Greek factions, ultimately a war without end in the Iberian Penninsula, after they defeated the Selucids they recieved wars in Asia Minor, there were also Getai raids to deal with.

Carthage had constant warfare in Sicily before the Romans gave them the boot, much warfare in Corsica and Sardinia, after losing the First Punic War the Barcids brought Carthage into war with very large numbers of Spanish tribes, and when Carthage was disarmed by treaty the Numidians made a lot of trouble for them. Unlike Rome the secret of Carthage was the mercenary.

The Diodachi were constantly at each others throat, I think everyone here knows about how merciless the Ancient Greeks would be to each other.

ok..now care to link it with the discussion of inflation or economics?

[TancredTheNorman]

ok..now care to link it with the discussion of inflation or economics?

I should have been clearer about what I was answering, this is what it has to do with it.

Someone said this

That prevents you from recruiting only elites but it doesn't prevent you from recruiting endlessly. In this game you can constantly be at war. Constantly. That is not realistic. When an empire loses a big amount of men in war the are willing to offer terms to the enemy because their population isn't suficcient for endless warfare. Little boys need to grow up in order to be recruited as soldiers. Unless the romans had cloning facilities

It isn't just the Romans who prospered under constant warfare, Carthage did to, war was actually just another marketplace tool for Carthage, Hannibal just made a bad high risk investment.

[vartan]

Keynes or Austrian?

Austrian.