Civ IV as the Ultimate Economics Lesson

I have played the Civilization series since the first one. This game is truly amazing in that it will change your life. It drew me to history, which drew me to economics. I credit it for being a major part of who I am.

Civilization is the ultimate economics lesson. Most people think economics as money, but thats not true - that would be finance. Economics is the science of choices in a constricted environment.

In the game, you have a fixed time limit. You have a fixed amount of land, a fixed starting position, a fixed starting traits, etc... From 4000 BC on you are now officially constrained.

The beauty of the game comes in its focus on investment. What you spend time on is investment in the game, and good players will only invest in what brings them returns.

The previous games in the series had this - but I feel Civ IV takes this to the extreme. Often when you lose in Civ IV it is because you beat yourself; you consistently invested in something that brought little return.

Economic choices are everywhere in the game; do you spread religion adding a mere +1 gold (albeit with banks, etc it can become +3 in the extreme situations), or do you simply take that same city and produce wealth instead? Both choices offer their advantages - the fixed income versus the variable. In truth there is not clear cut way to say, "Always do this!" You have to make those decisions based on the unique situation. Sometimes it is better to add great people to a city, and sometimes it is better to hold them back for a golden age.

I've noticed over the year of playing it that Civ IV is a genius when it comes to setting up these decisions. I've noticed the AI uses extensive economic analysis as well. If the human player is a position where it is gaining relative to everyone else, and will continue to do so, one of the computer players will declare war (at the higher levels). It does this by reasonsing, "with each passing turn his chances of winning are increasing, so now is better than tomorrow." This is the correct decision to make, even if it results in a loss.

Everyone who plays this game well is an amateur economist. Think about the lessons this game has to teach us. First and foremost of these is strategic management. If you declare a strategy (to yourself anyway), and you stray from it, you will suffer. Keep to your strategy for the best chance of success. This is true in life also. Don't plan on becoming a doctor by dropping out of school to joing a hippie commune - it simply won't bode well with the admissions board. Don't plan on being a conqueror by delaying that bronze working for meditation.

There are many ways to win this game, but it mainly forces you to be strict in following those rules. To win a cultural victory, for instance, usually requires much planning and a little luck. All the same, usually people don't end up successful in life without a lot of planning (and that all important luck).

nice post.

Maybe Economics should be a starting tech for every leader. A very thoughtful post, thank you for that.

You'll excuse the free association, but any discussion of economics reminds me of this joke, which I think anyone who's studied economics will understand:

A scientist, an engineer, and an economist are stranded on a deserted island. They have no food except for a box of canned baked beans that somehow washed up on the shore with them.

The question they are dealing with, of course, is how to open the cans.

The scientists says, "Let's put the cans out in the sun. The heat will make the contents of the cans expand, making the cans burst open."

The other two consider this idea but reject it; the beans will spill all over the sand, they respond, making them practically inedible.

The engineer says, "Let's find a good, large, heavy rock. We can use that to smash the cans open."

The other to dismiss this idea as well, since its results would be as problematic as the previous one.

The economist says, "Let's assume we have a can opener..."

thats why economics gives free great merchant

Nice post, but im going to have to disagree with you. Civ4 is not like an economic system at all and playing civ4 does not make you an amatuer economist.

Xanikk999 said:

Nice post, but im going to have to disagree with you. Civ4 is not like an economic system at all and playing civ4 does not make you an amatuer economist.

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I'm curious. Can you offer any argument that it's not like an economic system? I think stratozyck has made a good case that it is, and your rebuttal consists of, essentially, "no".

Of course playing civ4 doesn't make you an amateur economist. It makes you a civ4 player. But the two are not mutually exclusive, and it's probably not a bad exercise for any economist.

LucyDuke said:

I'm curious. Can you offer any argument that it's not like an economic system? I think stratozyck has made a good case that it is, and your rebuttal consists of, essentially, "no".

Of course playing civ4 doesn't make you an amateur economist. It makes you a civ4 player. But the two are not mutually exclusive, and it's probably not a bad exercise for any economist.

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Because a real economic system does not have fixed inflation like civ4.

Because there is no science rate in real life. Money does fund research but many discoveries require breakthroughs which no amount of money can force to happen.

Not to mention a communist country in real life doesnt have to maintain its cities which is just ludicrious (state property anyone?).

I think its rather naive to think that civ4 is a perfect model.

Fair enough, Xanikk999, but I think you might've missed the point. It would not be reasonable to consider Civ4 a perfect model of the real world. Of course cash doesn't translate to learning, and communism especially proves to work differently in real life than in theory, whether civ4 or the manifesto. A real economic system doesn't have a fixed inflation rate, true. Cities don't build archers, either. It's a game. It's not intended to be a perfect model of the real world, it's a simplified abstraction. It's for fun. Besides, models are just that. They are always simplifications. It is certainly like an economic system, as originally explained.

I don't mean to attack. I just think that you're unnecessarily raining on stratozyck's parade. He never claimed what you apparently disagree with.

stratozyck's parade is pretty much waterproof, me thinks. The post is excellent, and his point a good one.

If some literal-minded guy doesn't get it, it's no one's loss but his.

Great post stratozyck.

yes, a very good point.
Many mistake people make when playing civ is not to ask, what return they will get from investmen and if there is a way to get better return?

But there is other aspect of civ4, very related to real economics you miss, denial. Do you hurt yourself in order to hurt your opponent more? This concept and idea is hurder to promote, but it is not less effective from that.

I have to agree with Xanikk999 that the economic model in Civ IV is very poor: it does not resemble the real world in any significant way.

Nevertheless I really liked the post by stratozyck, because indeed, economic thinking (as opposed to economic modeling) is very important in this game. Not quite to the same level as in the the excellent game Imperialism (if you haven't played that one, go get it now!), but still, a point well made.

El Koeno said:

I have to agree with Xanikk999 that the economic model in Civ IV is very poor: it does not resemble the real world in any significant way.

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Though it doesn't have realistic models of the various types of economic systems (which would, I think, be impossible given the almost limitless social/political/economic variations in 6000 years of world history), it does do a fairly good job of plotting the course of economic developments through history, and their consequences for the diplomatic and political decisions that rulers have to make.

Take the mercantilism/free market choice, for example, which crops up in the pre-industrial era. If everyone else is practicing mercantilism, then it makes sense for you to do so also, since you've got no external markets to profit from. However, if you can persuade a few far-off civs to join you in adopting free markets, then you can often reap far greater profits than your trade-restricted neighbours. Not a perfect fit to real-world history, obviously; but a reasonable approximation, nonetheless.

(Adopting mercantilism simply to cut off a source of your rivals' income is another ploy that was actually used by several real-world states; an example of the 'denial' approach Mutineer mentioned).

ps. Superb article by stratozyck, btw.

Just a thought, as I have taken minor courses in economics and environmental science in university. The game does resemble one aspect of the real world which I wish it'd take more into consideration, and that is deforestation.

Early on in the game, you can cut down forest and jungle with the benefits being more hammers and more land. However, in the real world, cutting down excessive amounts of trees leads to erosion, habitat loss, water/nitrogen cycles affected and ofcourse global warming.

I think it would be rather interesting to see the game include some of these points, such as if someone is over greedy and wants to use all the forests in the area to fund their building queue, and then use the lands for cities - should feel the aftermath, where land is desertified and loss of food tiles. Further more, as more trees are cut around the world, the sea levels rise due to global warming, and more desertification happens. However, I'm not sure if this happens, but in Alpha Centarui, trees regrew next to other trees, or you could plant new trees. So take this to the next step and have works able to "plant trees" that take a couple turns to regrow and spread.

Well, that's my thoughts on part of a economic model - the environment, which many economist treat as a resource.

Winston Hughes said:

Though it doesn't have realistic models of the various types of economic systems (which would, I think, be impossible given the almost limitless social/political/economic variations in 6000 years of world history), it does do a fairly good job of plotting the course of economic developments through history, and their consequences for the diplomatic and political decisions that rulers have to make.

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I agree. Same goes for combat by the way: although the way war is fought out in the game doesn't have much to do with the way it's done in real life, the outcomes are interesting and allow the game to follow the course of human history nicely. Goes to show that realism isn't everything.

re: trees
1: Trees do regrow in empty pieces of land surrounded by other forest-tiles.
2: Early deforestation deprives you of health points and the option of building lumber mills later on. So in a way there is a trade-off there.

stratozyck said:

Think about the lessons this game has to teach us.

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good post. i know i've learned a lot about RL history (and geography) from playing, i started out (and still am to a huge extent) pathetic in that regard.

i've seen interesting abouts parents whose children watch/play along and how many different things they can learn from Civ.

SexyElf said:

Just a thought, as I have taken minor courses in economics and environmental science in university.
...
However, I'm not sure if this happens, but in Alpha Centarui, trees regrew next to other trees, or you could plant new trees.

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i majored in environmental engineering, which leads to biases/thinking in this game that aren't always in my favor.

trees (and jungle) to have a chance to spread on unimproved tiles in civ4. a road half-way counts as an improvement, it lessens but does not eliminate the chance that it will happen. i do road next to jungle i don't want to spread, particularly on resources i can't improve yet (it can spread onto bananas for example).

planting new trees was an option in civ2 or 3, i forget. lumberjacking was the ultimate way to get "free" shields, assign multiple engineers and you get new trees/chop 'em for hammers in just one turn if you lined it up right. this was considered overpowered and patched out (altho before i ever learned about the game-patching concept, so i played it that way forever).

I could use the same arguement made to demonstrate that the game is a feat of engineering. Engineering is the discipline of efficiency. It is the engineers goal to make something as efficient as possible. Quite often in doing so, engineering trade-offs have to be made. Such as in designing a car: Do I go for the stronger steel, or the lighter aluminum?

It's no different in civilization. I want to win, and to do so I must make effective choices. All of these choices come with an opportunity cost (that being, the opportunities not taken). This is the heart of engineering. The rest of engineering is just an understanding of the science that goes into your decision making process. In Civ, this is achieved through an understanding of the game mechanics and how to manipulate said mechanics.

Heffling, Conquering the world since Civilization 1 asked me what techs I needed to research railroad (Bridge Building and Steam Engine, I think)

This was a great post. However, I think economics here is being confused with long term strategy. Any strategy game involves one choice over another and benefits and consequences based on the route you take. Strategy is not just which units to use and how. That is tactics... a smaller scale of strategy.

The following describes strategic analysis.

... - the fixed income versus the variable. In truth there is not clear cut way to say, "Always do this!" You have to make those decisions based on the unique situation. Sometimes it is better to add great people to a city, and sometimes it is better to hold them back for a golden age.

Click to expand...

I've noticed over the year of playing it that Civ IV is a genius when it comes to setting up these decisions. I've noticed the AI uses extensive economic analysis as well. If the human player is a position where it is gaining relative to everyone else, and will continue to do so, one of the computer players will declare war (at the higher levels). It does this by reasonsing, "with each passing turn his chances of winning are increasing, so now is better than tomorrow." This is the correct decision to make, even if it results in a loss.

Click to expand...

I think this is more of a strategic analysis than an economic one. An economic one would involve the AI looking at your resources and gold and techs and making a decision based on that to begin gaining on the player to ensure that the time will never come for the player to have a better advantage.

Everyone who plays this game well is an amateur economist.

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I can agree with that as 'well' is the key word. I would rank well as on Emporer and up.(Mostly though from Immortal and Diety) As at that point you must be squeezing the best possible results from every turn. That requires economic choices based on tile yeilds and best possible results from slavery and so on.

If you declare a strategy (to yourself anyway), and you stray from it, you will suffer. Keep to your strategy for the best chance of success. This is true in life also. Don't plan on becoming a doctor by dropping out of school to joing a hippie commune - it simply won't bode well with the admissions board. Don't plan on being a conqueror by delaying that bronze working for meditation.

There are many ways to win this game, but it mainly forces you to be strict in following those rules. To win a cultural victory, for instance, usually requires much planning and a little luck. All the same, usually people don't end up successful in life without a lot of planning (and that all important luck).

Click to expand...

On this one I somewhat disagree on unless we are talking about a diplomatic victory. I usually start every game out by finding 3 city sites I plan to work on my Cultural Victory on and the rest I go full out domination/conqest. There have been times I have hit Legendary status before I could finish out my domination and vice versa for cultural victory. Other times, I realised the computer was possibly going to get to space before I could win so I changed course to the space race victory and pulled it off.
Now, these were on Monarch games and isn't such a good idea at the higher levels but Cultural is a victory that really only requires 3 of your cities and can always be running in the background. I have yet to play a game where I couldn't shift my focus easily but I haven't played on Immortal or Diety yet. I have a Diety game on pause right now but I am gunning for a cultural victory on it. I do not recall if I have beaten it on Emporer or yet though. Usually I play somewhere between Monarch and Prince with an occasional Emporer game. But I have to be in the mood to give the computer huge boosts.

Anyways, the beginning post was good. But I think it is discussing more about strategy direction than economics. The economics of the game has almost no relation to the player or is done poorly. The best idea that would resemble economics in the game is tile yield and which tiles to work. Past that, it is all downhill as far as economics are concerned. Not trying to be a gloomy Guss but, just saying.