EARLY ECONOMY AND POLITICS
APPROVAL
Early on in the game there is effectively little to no economy. The society is egalitarian, meaning you ask the population to do things for the good of the nation, and they do it. You can tell them to build things, you can tell them to research, you can tell them to enlist, you can tell them to explore and settle. The people work just to live and be happy.
If you tell them to do enough things they do not want to do, your approval will drop. So, essentially, your “approval” as a leader is your currency when you do not yet have a strong economy you can tax.
The level of Egalitarianism in your society greatly determines to what extent you can tell people what to do, and they will comply for the good of the nation(approval playing the 2nd largest role, you could have an non-egalitarian society with huge approval). Tribalism and Confederation have much higher levels of Egalitarianism than other forms of society/economies. This makes them remain competitive in pursuing goals, regardless of not having large cities with robust economies. Later on, nationalism can also be leveraged in this way (although strong nationalism has a variety of effects, some possibly negative).
Throughout the game approval remains a form of currency, with the player being able to leverage it to make citizens do what the player wants, although taxation and payment for services will become more powerful later (you take money from the economy, and pay people money so they do not cause dissent when you direct them).
Dissent is distinctly different from approval, and the difference will be explained farther down.
Conscripting people past a certain % of the population (also dependent on aggression level and current conflicts, potential or actual) lowers approval.
Taxing people too much lowers approval(once you have a currency).
When you have a very small civilization you can basically tell them what you want to do, and they will do it. This would partly be due to the much smaller amount of possible orders. As your population grows more and more, you will find yourself not being able to direct people so well, without ample compensation, and/or strong nationalist sentiments.
Another way to go around the dissent issue is segregation of society. A section of the population can be segregated as being in a lower class, and then that portion of the population (say 10%), can be made to do a ton of work with only very minor disapproval (since the other 90% don't care). Prisoners from other countries could also be marked as being in this lower caste, resulting in lower tolerance, but a larger pool of an exploitable caste.
ECONOMY AND GENERATION OF WEALTH
Economy is not generated by some sort of "commerce", or by "villages". Economy is automatically generated mainly by:
1. Higher population
2. A higher variety of goods and services (services are more common later, early on goods are the dominant form of exchange).
EXAMPLE(with rough figures):
You have 1 town. When it is population 1, it generates 1 wealth per turn. When it is population 2,
2 wealth. When it starts trading with another town nearby of size 2, wealth increases to
4, but also there is salt in one town, and pepper in the other town. There is now more supply and demand and exchange of goods, so wealth is amplified to
6. The economy would would also be stimulated in many other ways, as the game goes on.
With domestic trade, obviously you do not benefit less or more when one of your own town imports uneven amounts of goods. "however", when you get into international trade, a civilization with unique resources may benefit greatly, because they receive more wealth from the other population than they give.
So Town A of CIV A, and Town B of CIV B, trade. B has many spices, which are scarce in A, so CIV B's economy generates 10 more wealth per turn(while civ A may only generate 2 more wealth per turn, it does benefit from receiving spices as they are then traded domestically).
There are many, many ways to stimulate the economy, including attractions like theaters and bathhouses, which add services which contribute to the exchange of wealth, and in the case of the theater, also develop culture(larger impact on culture than economy).
Now, Civ A with 10 total population, 3 cities, and foreign trade with one city is generating a total wealth of 20. The player does NOT automatically get all that wealth. All the wealth initially belongs to the people, and the stronger your economy is, the higher happiness and rate of growth is (and perhaps other things). The player then must set a tax rate, so if they set a tax rate of 40%, they get 8 of the 20 national wealth generated. Although, this has repercussions, the government gets more money to use, but less total national wealth will be generated by some degree because high taxes de-stimulate the economy, and people will disapprove of the leader/government more.
Now, the player can then use that wealth they tax to order citizens around without causing any disapproval (pay a fee, uplifting a large town would not cause disapproval, so on). So, while taxing does cause disapproval, it is necessary for redistributing wealth to placate the people when you direct them, causing less overall disapproval.
Taxing is relatively inefficient until you develop currency, as initially you are taking barter goods (pots, foodstuff, trinkets, etc.) into government control. So you will get a smaller % of wealth for higher dissent. However, once you develop currency, you will be able to tax much more efficiently, causing lower dissent and having less waste when you tax.
Note that it is inevitable that different wealth classes emerge in the society, so if you make a typical robust, city based civilization, you will have wealth aggregate with a smaller amount of people. This also means that a robust economy will have a gradually decreasing effect on happiness/approval, as the benefits of the economy will not be spread as evenly, to promote happiness.
Tax levels can be adjusted to effect the wealthy or poor more, which then may balance the distribution of wealth somewhat.
Now we get to how science is generated by the government. The government hires citizens to work as researchers. Early on in the game, or in a society that stays egalitarian, people will join the "council" with little/no protest. Later on when you have a less egalitarian society, you must pay citizens to be researchers, or suffer disapproval if you conscript them for research. So in a way it is like you are only using specialists.
DISSENT VERSUS APPROVAL
Approval is, basically, how popular you are in a society. How you direct your civ/population can bring it up or down... if you make them take actions that conflict with their culture, enlist them, don't pay them for their work, tax them too much, etc., it goes down.
Dissent, on the other hand, is the amount of influence in your civilization that is directed against you. The wealthy have more clout and influence in your society. So while taxing the rich more may make you quite popular (as compared to putting the burden on the poor), it could potentially cause a higher jump in dissent than taxing the poor would.
Controlling dissent can also be a powerful tool of the player. The player could be VERY unpopular, but take measures to make dissent very low, despite the bad sentiments. Some of the many ways to do this are:
Stricter police force, instilling fear
Feudalism: This is a method of society where the wealthy become your serfs, and help tax the poor, bringing more wealth to you(and them) while keeping dissent low. It also would cause somewhat of a smaller drop in approval, as the people take out their anger on the serfs.
Feudalism would often be the midpoint of the most natural evolution of a standard economy with a government with strict aims. It makes it possible to squeeze great amounts of wealth and production out of the vast majority of the population, while not causing dissent and eventual rebellion. If you run the correct system, you can have miserable people yet still prosper as a nation, but you will need ways to placate them.
SOME INFO ON LATER ECONOMICS
Later on in the game, economics would become much more vibrant.
One aspect, would be
EXCHANGE RATES.
It emerges in international trade that the value of countries' currencies differs. Having a better exchange rate leads to more benefit from international trade to your economy. Low exchange rate means less benefit from Int. Trade. The value of a countries' currencies would change in the following ways:
1. Level of dissent, if it gets too high, the currency of a country becomes suspect.
2. Strong fluctuations in the economy: If an economy keeps getting reducing then growing again, trust in the countries currency goes down and exchange rate goes up.
Many things could cause this, for example, disruption of the production of trade resources, erratic taxation changes by the player, war, disasters, so on.
3. Amount of international trade a country has done, both in length and bulk.
4. Leaders could have economic traits on a sliding scale. Either one slider, ranging from "Domestic economy", to "International economy", or two sliders, indicating a leaders prowess in the Domestic realm, and in the international realm.
Prowess in international trade increases the profit of international trade routes, as well as making the exchange rate of the currency more stable and more beneficial.
Domestic prowess increases the raw output of the nation's economy by reducing costs of transportation, taxation, etc.. It would be most similar to civ 4s "financial" trait.
So the domestic expert would do better for a contained nation, and also likely do better in the early game, when a larger portion of profits comes from domestic trade.
The international trader would be able to overcome the benefits of the domestic expert, if it traded with enough countries, especially later in the game, where international trade could account for 3/5th or more of more of a nation's economy.
Trade Deals: Two countries could make special trade pacts between each other. This would simply cause those two nations to prioritize trading between each other, regardless of other countries offering more profit. This could simply be done on a scale(chosen mutually), "slightly prefer" to "highly prefer", with the calculations basically being done automatically, shifting more trading to the two countries. The technical info would be available, although the player would be able to clearly see how much it effected the two countries GDPs, very shortly (established trade routes could give more profit, so it could take 10, 15 turns or whatever to fully realize the effects, and then perhaps gradual increases thereafter.).
Recessions could also be caused if an economy changes too drastically, for too long. The recession would reduce the amount of wealth output, make citizens less productive. If an economy stays stable and strong for a very long time, it could get a temporary boom.
A boom could also occur if the nation suddenly became super productive, for example, a modern nation very hyped about a war could become so approving of the leadership that wealth and production jump greatly(i.e. WWII).
However, the pre-existing mechanics may be enough to deal with a war boom. A jump in approval rating will always mean that the economy runs more smoothly and is more productive, as there is less waste/dissent. But an additional boom for an additional benefit, an "after-effect", could be a good mechanic.
Both of these mechanisms would typically favor the peaceful, diplomatic player, who sustains a stable empire and strong economy. However, there'd have to be a pretty subtle strategy towards getting them, as they don't become simply the "Icing on the cake" for strong economies. Right now I'm not sure what the strategy should be, it may just be a matter of game balancing.
CONTROLLED ECONOMY VERSUS FREE ECONOMY
A dynamic that would be important throughout the game, and emerge more later in the game, is the extent to which the player directs the activities and production of the people. The basic assumptions that would line the gameplay would be:
1. People are most productive when they are left to decide on their own
2. Higher levels of control incurs costs in production and money, although greater technology, organization, and leadership can reduce this.
3. Directing the economy is generally the quickest method of leveraging resources and population towards specific goals, but will not create as much economic growth as a free economy.
So, in essence, there would be no "state property"(controlled economy) and "free market" civic. Your civilization would be any degree between the former and the latter. Having a controlled economy is easy in the beginning of the game, and could even be easy in the modern age, if you have a small nation. The larger a nation gets, the larger the repercussions are, for not leaving the market to its own devices.
This would have a gameplay balancing effect of causing huge economies to not be able to easily maximize force against other nations, or towards research. Unlike In Civ4, where you can easily put 100% of your production towards missiles, or 100% of your economy towards rocketry, with no penalty, regardless of the size of your nation.
However, due to the rate of growth, Free Markets would typically end up much stronger than a constantly controlled economy. They could therefore be capable of more directed production and research than a controlled economy, even if a smaller % of the total output is directed. And, when the citizens feel threatened, like in times of war, the military production could become monstrously high compared to the controlled economies (although, the controlled economy may have ended up in a better initial military position).
There would also be controlled versus free mechanisms for social programs. Social assistance would generally increase a population's education, health, happiness, etc., wherever you put the money into.
However, if you have an inefficient/corrupt government, this could incur a high cost to relegate the welfare of the people to the government. If you don't take measures to improve the economy so people can obtain resources on their own, you will end up with a "welfare state", of sorts. So government social programs would be a temporary fix most of the time, although a certain level of them could always be beneficial in certain economies. Further technologies, (refinement of government, computers, etc.) could assist in making social programs more efficient also.
The balance between controlled and free economies would have to be subtle, as to make both have advantages and disadvantages, but neither overpowering. Left and Right politics should generally be left aside, and both systems should be made feasible and strategically beneficial, regardless of opinions on the matter in real life.
Civ politics, however could play a role in your ability to choose your economy. Nations, due to their history, cultural values, etc., would end up more communitarian or libertarian. Some people clamor for the government to step in, some clamor for the government to stay away. This is true to life, as there have even been democratically elected dictators.
So there would be a slider indicating the degree of Libertarianism ------- Socialism, and you would suffer disapproval if you ran your economy in a way that opposed the peoples' values. This would have the effect of making so you cannot switch from one economy to another very quickly, and also make so you have to monitor how you manage your civ not only economic-wise, but overall.
Things that lead to Libertarian sentiments:
1. Abuse by government, a long history of disapproval of the government
2. High disparity of wealth
3. High cultural strife.... Meaning, heterogeneous culture, combined with low tolerance (people want to keep to themselves)
4. Low Egalitarianism
5. Geographical distance, especially with low transportation availabilty
6. Dense population centers
Things that can lead to Socialism sentiments:
1. A history of high Egalitarianism (think, a tribal nation which recently modernized)
2. More equal distribution of wealth
3. Homogeneous culture, or, heterogeneous, with high levels of tolerance and curiosity. For example, a nation that is 99% one religion will be more tolerant of government social programs, because everyone is their "brother", even if they think they are the cause of their own problems.
4. Less dense population centers
4. Less Geographic distance (less important than density, so a nation with low density, but high distance, would lean towards communitarian. Medium density and high distance could break even).