Economics, Trade, Diplomacy, and Production per The Law of Association

Splinterguitar

Chieftain
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I bring to you my fellow CivFanatics a recently learned lesson from the book "Human Action: A Treatise on Economics" by Ludwig von Mises. Some of you may know of him, others do not. Google him if interested, but that is not exactly the subject of this lesson. This is a lesson inspired by a section of the book entitled "Human Society". On Part 4 of this section, The Ricardian Law of Association, the law of association is discussed. My aim here is to help players apply this law of economics; not only to help them improve their incomes, but their diplomacy, trades, tech rate, and overall efficiency.

The law essentially states "Mutual cooperation between individuals, groups, and nations will benefit all parties, regardless of how unequal they are."

If A is in such a way more efficient than B that he needs for the production of 1 unit of the commodity p 3 hours compared with B's 5 hours, and for the production of 1 unit of q 2 hours compared with B's 4, then both will gain if A confines himself to producing q and leaves B to produce p.

Confused? Then here's the run down: Let's say you have a tight Iron Triangle happening (There is a great article here on triangle diplomacy), but those outside the triangle aren't necessarily your enemies, i.e. you can trade fairly with them. If Civ A in the triangle is a hard, fast techer, Civ B is a large producer of food, and Civ C has a powerful economy, cash/gpt on hand to trade, this is a good situation. Civ A could exchange techs to B and C in exchange for :food: and a :commerce: respectively. This especially works in multiplayer games, your friends vs a bunch of AI's, but single player this has a lot of capability to become effective. The idea is for everyone in the triangle to concentrate much moreso on their strengths, and catch up with your friends through trade. Ultimately, this will optimize your prosperity.

Before I continue, a couple things. First, the Iron Triangle is NOT required and I will use another example below to demonstrate that. I just used it for simplicity. Second the roles A, B, and C play can differ dramatically. Again, that example was for easy teaching. Ultimately this strategy will lead to the maximum prosperity for you and your closest Civs. One last thing that is obvious, but may still need to be said, is this strategy of optimizing your resources will always lead into the directions of free trade, free markets (For corporations, and I'll use them in another example), good diplomacy, and peace. Just as in the real world. Each civilization should concentrate more on it's known strengths, while using tactical and deliberate diplomacy to trade in where it lags behind.

A real life example from one of my last games will show how how this can work outside the Diplomatic Iron Triangle. I had began the game as Lincoln, who is IMO the best leader for this strategy. Lincoln's +100% great people rate and extra happiness are great for Specialist Economies, which in turn generate lots and lots of extra money as well as intense teching if done properly. This put me quite easily in the position of civilization A. Later on, Hammurabi (Founder of Hinduism and neighbor) sent me, and the most rest of my continent missionaries. Only 2 civs on our continent and Wag Kong on an island by himself did not have Hinduism. In no time Hammurabi began to swell a military, in which I did the same for fear of being attacked. At the very time our militaries peaked, he asked me to begin a holy war against the Kmher, to which I gladly agreed. Since the Khmer were my neighbors on the OTHER side, I quickly absorbed his four cities to bring ym city total to 7. After meeting the Khmer neighbor Ghandi, who also shared Hammurabi and I's religion. I checked his stats to see he had the highest :hammers: and tied me roughly for :food:. We then proceeded to annihilate Isabella, as she isn't a trustworthy ally through most games. So then the stage was set, an entire continent of same-religion Civs just in time for the Apostolic Palace to further my edge.

I will take a moment to state that in an early game using this strategy, although the overall message is long term peace, it is okay to eliminate rivals who would interfere with your group's prosperity. But as you can see so far, having a few civs with a couple better stats will help BOTH of you. Let's fast forward to later in the game...

By the time I had discovered free market, I was well on my way to prosperity, as my opponents were at least a row or two on the tree behind me. I was using free trade across the board while using the AP to keep the peace between neighbors. As the United Nations approaches, this strategy makes it's final evolution: the ability to Single Currency, and Open Trade Routes; which if you in in the right position in this strategy, helps you a lot. Once these civics were brought out en masse, I had a choice. I could have sent everyone to war with Wang Kon overseas, or I could impose Free Speech on everyone to eliminate their negative diplomatic bonuses because of religion. I chose the latter and proceeded to win a diplomatic victory.

This all happened on Prince difficulty level, so I'm not sure of how this will work in higher difficulties but HERE is the overall principle:

If you wish to lead in money intake and techs (Which de facto gives you the best military assuming you're actually building units), you must create a community of civilizations as large as possible with as high relations to you and one another as possible and use your good stance with them to prosper your own civilization while giving the AI's the illusion of progress by freely trading with them and being aligned with you. When all is set and done, global teching, production, food, and commerce will reach their optimum which, again because of your good stance with the other big players, will benefit you by trading with them, asking them for favors, and sending them to war.

Obviously, the Law of Association is not a proven-every-time win strategy, but it is the ultimate in mostly-peacemongering games. Your Civ will prosper because that is what free markets are about; not just in Civ games but in real life; Free Trade, Diplomacy, division of labor, and peace.

Any additions or comments, feel free. I'm sorry if I did a bad job of explaining, but this is a real-life way to economically optimize our countries and it translates into Civ games VERY well. On a final note, even if you are a war monger, it is never a bad idea to have an Iron Triangle to trade and catch up on your resource and science needs.
 
I'm sry, but I either don't understand what you're writing about, or, you are thinking things into the game, that aren't there: If you wish to lead in money intake and techs, you have to have Cottages, Specialists, and a Burocratic Capital that has an Academy. This doesn't give you the best military, because military is created by Hammers. You also don't have to create a community of Civs as large as possible and you cannot give the AI any feeling it is progressing by tech-trading with them, AIs don't feel, all you can get is +4 through fair-trade but that is basically reached through giving them a single tech. As an experienced diplomat in Civ, playing mostly against 17 opponents on Huge maps, I have to say that I find the article on triangle diplomacy not great at all, as far as I know, there is actually no article that describes how diplomacy is handled in Civ. One can get that from Installing the BUG / BULL mod and see the modifiers, one can get it from reading the XML's that were compiled by DanF, but the article on Triangle Diplomacy didn't help me one bit, just tbh.

Sera

P.S.: Maybe I'm just not understanding what you are writing about.
 
So specialize your empire and let your allies fill in the deficiencies.

What if your ally is bigger than you at everything, and he's going to win before you?
 
So specialize your empire and let your allies fill in the deficiencies.

What if your ally is bigger than you at everything, and he's going to win before you?
 
There's also the dubious situation of letting an empire that's geared entirely for production catch up to a tech empire, because once it's caught up it's clearly the superior civ in every way.

Or just giving large empires anything in general.
 
In my opinion this only works for MP games because the real-life theory was designed for humans, and AIs (Absolute Idiots) will sacrifice their greatest ally. They have no principle, that is all, and so this theory is unusable for single player, as your AI "buddies" will take your money but give you nothing, due to the annoying-as-hell red options. Why can't we demand stuff the AI will never give us? Does Firaxis understand the point that sometimes we just want to piss them off?

</Rant>
 
Firstly, thanks for this. Economics is near and dear to my heart and is the main draw of playing this game for me. Here is what I've thought about on this topic. I hope that I don't offend you or put you off from thinking about this.

Economics, especially Mises, made certain assumptions that don't apply here.

1. Your welfare is not dependent on your neighbors'. This is why you don't trade your military secrets to your militaristic neighbor. The flip side is that it sometimes makes sense to "encourage" the AI to go to war with someone else or change out of their current religion.
2. All parties to the transaction are rational actors. Unfortunately, the AI is programmed to make certain trades and not others in ways that aren't necessarily in their best interests. This is why it makes sense on Deity mode to research Aesthetics and other techs that the AI doesn't usually research for itself.
3. Either all goods are public or all goods are private. When you trade away a technology, you are actually allowing your trade partner access to both the technology and the ability to trade away the tech. Normally, that just means that you'd charge a higher price to compensate, but see points one and two.
4. Specialization is limited in this game; you cannot exchange production freely with your trade partners (a small amount is allowed by giving cities, but you cannot use them as bargaining chips for most purposes) nor can you exchange food. You can exchange resources, but you can only indirectly exchange them for more science or for a civic change.
5. You have to prepare goods that are not wholly liquid and the value of which is set from the beginning of the game based on what it cost to research (for technologies; the AI considers 1:science: to always be worth 1:gold: no matter how much benefit they could derive from the tech)

On the whole, though, it looks like you have the right idea on how to conduct diplomacy. You research techs that others haven't thought of yet or ask for things that others don't appreciate as much as you do. You manipulate the environment to your favor. And you tend to specialize your cities toward production since the AI tends to get a higher comparative advantage in science.

Keep in mind that food is always a capital good: it's always a means to an end (allowing you to increase your production and/or commerce) and not an end in itself. This is true even in slavery, though to a less visible extent.
 
Another term for "The Ricardian Law of Association" is comparative advantage. You'd think more multiplayer games would play out accordingly. Eg. the Imperialistic civ with a PH capital could gift his teammates settlers, the financial civ settled on riverside would focus on research multipliers while the Aggressive or protective teammate gifts everyone level 2 units, etc.
 
Oh yeah, forgot about mp. That's what I try to do in my coop civ 4 games. It's pretty effective. Keep in mind that if you are on the same team, your welfare is linked to your partner's, so the exchange rates don't apply here either.
 
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