Bay 12 Games Forum

I may not be well researched on this topic, and there is definitely a more complicated relationship than precious metal equals currency, but it is definitely not a "total myth".  Debasement (or adulteration as you refer to it), was necessary when the value of the coinage deviated from the value of the base medal such that coin defacing became profitable.  The fact that the this was a deviation from the norm kind of demonstrates that at some point in time prior the intrinsic and nominal values were close together.  Likewise, after debasement, the new intrinsic value of the currency matched it's nominal value again.

There is a difference between a currency being backed by something and the actually currency *being* something.  In effect by having a gold-backed currency, you make sure the currency's value cannot go below the value of the gold backing, but it can still go above that value by any amount.  The value of have a resource-backed currency is that it protects you against an uncontrollable collapse in the value of your currency, which is why people do this. 

The irony here is that the higher the nominal value of your currency goes above the value of it's component metals, the greater incentive there is to adulterate your currency; since you do not believe the nominal value of your currency is in any danger of shrinking enough that the reduced metal backing will actually matter. 

I agree it makes sense to switch on the economy in pieces.  From a game play standpoint, it makes sense to give the player a large degree of control... but from a role playing standpoint, certain pieces may make sense to automatically switch on according to the starting scenario, or world events, or the needs/demands of your home civilization.  As a matter of practical implementation though, Toady might find some pieces make sense to bundle together.   Also, from a gameplay perspective, it might be simpler for the player to understand if certain economy mechanics were bundled together.  The proposal I outlined was an attempt to divide up the pieces that most go together into a two separate steps.

In most cases sites should start off in quite strict economic relations with their 'creator site' according to their starting scenario, they are required in effect pay off the 'debt' they owe to the site or other party that created them.  For instance let us say we are a tavern site, we have to rent out of rooms initially not because we fancy doing so or because some code forces us to do so but because we have to raise money to pay in taxation/rent to our creator.  In some instances we might be able to cheat, for instance we could mine gold, turn them into coins to pay our debt/rent/taxes to our backer and give the rooms away for free.   

In return for accepting the economic restrictions, we would receive considerable support from our creator, which with surplus value toned down massively would be crucial for a new site to get off the ground quickly. 

At some point you need to reduce those values into an actual dwarf behavior, which in turn means you will probably need to combine those values into a single value somehow.  I'm think we can both agree the current value system is busted, but I still think at some point, the game needs to calculate an actual price. The price might be different for different dwarfs according to individual modifiers (indeed these differences between dwarfs should drive the barter system).

They are separate behaviors.  They might get thrown together in the final playable area but there is no need to combine the actual values, merely juggle the priority given to different behaviors in different contexts, which yes can be done according to individual factors.  In effect the following.

1. I try to get any food.
2. I try to get better food.
3. I try to get something other than food. 

The issues are really how much priority to I put on getting better food VS getting stuff like clothing/furniture and ultimately money. 

Thinking in terms of supply and demand provides a good starting point to model how economics work.  There are cases in which supply/demand can be inelastic (which changes the slopes of the curves), or when there is a monopsony or monopoly (which does other things to how the curves intersect), or unusual types of consumer preferences (which again alter the curves, but don't change the underlying concepts).  Are you taking about macroeconomics (in which money supply is a thing?).  Or are you referencing some less mainstream economics (there are critiques of the homoeconomicus conception which I think are fair).  I think microeconomics is a lot more relevant for fort mode gameplay, although a macroeconomic model of money supply might be relevant for worldgen.  Likewise, in order to model dwarfs at all, viewing them as rational agents behaving according to some utility function is necessary.

Economics is not prices.  I was talking about prices, prices sometimes correlate to supply+demand but there is no direct causative relationship UNLESS the supply we are talking about is MONEY. 

Consider the reason why simply printing $1,000,000,000,000 per person and adding it into their account will not end world poverty.  If prices were simply determined by supply and demand of the actual goods, it would do just this because neither the supply or demand went up because of your adding all that.  It does not do this because the price of an item is simply based upon the money available to the *average* buyer of the item.  Adding loads of money to everyone's account, simply raises the prices of all items to the point that you have in effect accomplished nothing at all with your 'charity'.  To put it rather cynically, money is a zero-sum game: What matters is not how rich we *all* are but how much richer I am than you.   

The only reason that demand is correlated with increases prices is due to the following process.

1. If an item is in short supply there is increased competition among the buyers.
2. The increased competition among the buyers means the richer buyers outbid the poorer buyers.
3. This drives up the average wealth of the buyers of the item.
4. As the price increases wealthy people intending to profit from speculation enter the market.
5. The drives up the average wealth of the buyers of the items still further. 
6. The increased demand from speculators causes an increase in the scarcity of the item.

As we have already discussed, we can achieve an increase in price by manipulating 3, skipping out 1. and 2 altogether.  We can also begin with 4, creating a shortage as a consequence of the speculative bubble even though there is no objective shortage of the item.  In effect we can create a shortage as a consequence of increasing prices, because the speculators buy up the item in bulk driving up 'demand' for the item. 

Prices are quite independent of Supply+Demand under the following circumstances.

1. All buyers have exactly the same disposable wealth.
2. There is only one buyer and one seller.

Quote from: GoblinCookie on December 09, 2019, 03:08:38 pm

Pretty much the only function prices have is negative, they fail to inhibit the functioning of the economy (successful economy) or they directly interfere with the functioning of the economy (failed economy).  They don't really do anything positive at all, they are basically a side effect of the demand for money and money in some strange loop feeds on it's own demand.

Okay... I think we are getting a bit off topic...

Potentially.  The issue here I was referring to is how speculative values mess up the functioning of the economy.  When speculators help themselves to the supply because they believe the price of the item is about to go up, causing a shortage of the item which in turn causing the price of the item to go up. 

I think one thing that will have to be changed, be if in Fortress Mode or Adventure Mode, is that coins have to be useful.  For example, in Adventure Mode, it is easier to carry meat from a kill to use for barter for items I need in town then using coins.   In fact gems make for better international currency.  Because if I enter a region run by a different Civilization any coins I have are now useless.  They don't care if you have gold coins...those gold coins were not minted by them and, therefore, useless.  That seems kind of weird to me.  Or has that changed?

Surely some business owners would just see the gold or silver and not the Civilization who minted them.  Towns on the border I think would be using two or three different types of gold, silver, and copper coins.  Also, towns and cities had a person or organization whose business was to exchange money.  Luckily most coins were almost standard weight between European nations but for some coins being shaved, worn, or forged.  In other words it was pretty easy to exchange one gold coin for another.

And what happen when one Civilization invaded and takes over the cities of another?  Do they replace all the coins?  Melt them down and mint their own coins?

At the moment they just stop using money altogether and return to barter.

For a lot of Western cultures, money was worth the value of the precious metals used to make it... this doesn't quite work for the current value calculations (https://dwarffortresswiki.org/index.php/DF2014:Item_value) of Dwarf Fortress, by the current value calculations, the item identity alone multiples the value of the base material, and then quality multiplies it further, so the raw materials aren't worth much.  I think this is an entire issue in and of itself that needs to be vastly reworked (I could write a wall of text and all the conceptual problems this approach causes).  Assuming it was fixed, then coins would make sense as a way of dividing up metal into smaller portions to be able to use it to buy goods.  Historically, money also worked as a way to standardize the weight/purity of the metal, so that people don't have to constantly weigh it or check that the metals haven't been debased/alloyed with cheaper metals.

The idea that money was worth the value of the precious metals used to make it is a common historical myth, but it is a total myth.  The coins were only 'backed' by the value of the metals themselves (through the simple expedient of melting them down  ), but they were always worth *more* than the metals they were made of.  This fact is witnessed to by the adulteration of the precious metal content in pretty much all currencies over time; the rulers bothered to reduce the metal content because the actual value of coins as coins was actually separate from the metal the coins were made of, that idea would not work otherwise. 

As to why the Dwarves in DF should want to use money... assuming the economy is turned on, and they are allowed to buy jewelry, clothes, and personal items  from other dwarves, visitors, merchants and the fortress itself, money can fill in the gaps of barter trading (if a dwarf's spare craft they are bartering away is worth 120 and they want something that costs 160, they fill in the gap with a few coins, with some variable amount of coins between 0-40 traded based on the bartering and appraisal skill of the dwarf they are trading with).  To incentive the player to introduce money, the dwarves could get positive thoughts from trades that are nearly even on value (thanks to coins smoothing out the difference), and negative thoughts on heavily skewed trades or trades that are stopped because they are too uneven and their is nothing to facilitate the exchange (because the player failed to make money).

The economy as I envision it is not 'switched on' or 'switched off', if we can simply switch the economy off and have everything function fine we are better off NOT wasting the development time on ever adding the economy at all.  It becomes a decision that is motivated by pure ideology and about dictating how dwarf society should run according to our sensibilities rather than furthering the actual development of the game according to the actual economic situation and ideology IN the game.  In my vision bits of 'economy' are 'switched on' piecemeal in the game *by* the player, when it makes sense for the player to do so; it should not just happen automatically because of some code in the game.

Goods in barter are not worth numerical values in the fashion you refer to; that items presently have a pseudo money value attached to them when being bartered is part of what is broken about the Status Quo.  Goods in barter are ranked by quality (X item is a better example of it's kind Y item, so I will trade X item away if it is a means to get Y item ), they are ranked by necessity (I need to eat more than I need my jewels, I can trade away my jewels) and they are ranked by need (I need one shirt, I do not need 100 shirts, so I can trade away 99 of my shirts). 

To put it numerical terms (since everything in a computer has to be), bartered items has a separate quality value (used against other items of the same type), a necessity value (used against items less essential) and a demand value (used against items that are surplus). 

I think another incentive for the player to start making and using money would be for dwarves to get positive thoughts from storing excess value/productivity they've earned as money and negative thoughts if they've done work they think should be further rewarded but have no way of receiving that reward (if the player refuses to activate the economy and/or refuses to mint/issue money).  This is sort of like what GoblinCookie is suggesting with once all their basic needs are met, dwarves start wanting to acquire money (as a safety net, as a way of getting what they've earned, etc.).

I was not talking about individual dwarves, I was talking about large abstract sites.  While you could make individual dwarves work that way, it would depend upon demands being modeled in a certain way (so I feed them, *then* they want clothes) rather than (they want food *and* clothes at the same times). 

The player wants to get money because they want to pay people that demand money and the want to buy things from people who demand money in return; the player's dwarves want money for the exact same reason the player wants money.  The value of the money is not based upon the player's own dwarves, it is based upon the wider worlds demand for money; you do not rent rooms to your dwarves as you used to because the ECONOMY SAYS YOU MUST, you rent out rooms only if your dwarves for whatever reason are sitting on a pile of money and you want to get it off them because money has some value to your fortress.

The AI on the other hand stacks up money as the lowest item in terms of necessity value (refer back to previous quote) and keeps creating new demands for money every time the previous stack's total demand is met.  So in effect we have an ultimately worthless item that they will trade for everything else but also that they demand in infinite quantities.  If a site has a surplus of everything it needs but still does not have any needs at present, that site will put it's effort to obtaining money and trade away all it's *surplus* items for money.

That means that they will trade all their surplus items away to get money; so money is valuable for the player (and his dwarves) to possess.  Yet if there are any items lower in the list than money (all the non-money items have a finite demand) they will trade ultimately all their money away to get those items.  This by the way means inflation can be modeled, if a lot of parties are sitting on a lot of money then this drives up the prices of anything they actually want other than more money. 

Note a lot of the problems of the old system from 40d version: https://dwarffortresswiki.org/index.php/40d:Dwarven_economy

Among other problems: food and rooms were not adjusted according to supply and demand, but rather set on a fixed rate based on value (and as I mentioned earlier in this post, the current Value calculation gives a big multiplier based on quality), which in turn led to dwarves being priced out of good food and rooms and sending them into massive debt.  I think both the value calculation needs a rework, and it needs to act as only the first step in a supply/demand calculation (which can be done emergently be allowing dwarves to recursively bid, or done via global checks on supply).

I think the steps I propose could encompass multiple types of player fortresses (communist fortresses with a high UBI and workshops not put up for sale/rent or the economy kept only at partial activation.  Capitalistic Fortresses with all of the rooms and workshops going on sale.  Feudalistic fortresses (by editing the raws to grant nobles rights over workshops and farm plots), where the means of production are owned by nobles who rent them out and make money from an underclass that way).  The key from a play standpoint is making sure the player is rewarded/incentived and that basic supply/demand rules are used to keep prices and costs in a reasonable range for the dwarves.

No, the old economy was a bad idea inherently; I am not interested in better versions of said bad idea.  Even the best implemented version of the old economy still works on the assumption of having some magical transformation overhaul the whole society to the worse for no discernible purpose and more importantly with no conflict involved in the process. 

Also prices are not set by supply+demand in reality and do not really have much role in the actual functioning of the economy either (the only exception here is the supply OF money).  Pretty much the only function prices have is negative, they fail to inhibit the functioning of the economy (successful economy) or they directly interfere with the functioning of the economy (failed economy).  They don't really do anything positive at all, they are basically a side effect of the demand for money and money in some strange loop feeds on it's own demand. 

In other words, the AI needs improving.

Or exchange would be originally based on using barter and then, once they exchange with further partners, they use coins as this is a neutral medium.

Well obviously they are using barter, the problem here is why and when do they stop using barter for everything, switching to the use of money for anything.  Money has to be in effect invented because it's irreducibly complex nature means that whoever invents money has to also arbitrarily sell things *in* money to begin with or else their money does not have any value to anyone else.  Money is only valuable because other people want money and those other people themselves only want money because other people want money (and so on). 

Yet if you think about it, in barter we are deliberately making some things for our own needs and other things to meet the needs of other factions.  There is also a hierarchy of needs here, people will barter jewelry for furniture and furniture for food.  What happens when we presently have all our needs met and yet other parties have needs that we can meet?  It is at this point that money is invented, the site issues a demand for money and tries to get suitable money (respecting political/cultural factors), if no suitable money exists the site invents money.  Then the less wealthy site produces the money and trades it to the money demanding site for the surplus *useful* items it needs.  If the previously wealthy site falls into hard times it will trade away it's money for useful items just at would trade away it's jewelry for food. 

By treating money as the eternally least useful item in the hierarchy, we can bypass the fundamental problem that exists in reality about the origin of money. 

Currently the only way to have viable aboveground crops is to gamely channel a wide portion of ground or use a pump to spray the ground (natural irrigation the real world way doesn't work in DF). Irrigation where you channel away from a running river should fertilze the ground a couple tiles near it and clear out all the troublesome rocks for farming. This will definitely help if you play civs that are most aboveground based.

No, you just put down a farm plot aboveground on soil and plants the seeds.

That is an idea that depends upon the economy rather and also does not necceserily make sense even then.  Why have bounty hunters when you can just send your regular guards you are supporting anyway to catch the criminal?

With a lot of things, mugs, being raining on or drinking without a well for instance the first few instances should simply be ignored.  Maybe it should add the really adjective whenever the emotion is actually causing stress.