Overproduction issue, recession and its relevance
Day 683, 00:00
•
Published in Malaysia 
•
by
•
by Carr De Vaux
Introduction
While this issue is not widely written or discussed in eFRoSEA, perhaps it may be of interest to company owners, upcoming entrepreneurs or leaders of FRoSEA. Around the eWorld, there is a growing concern that the current economic module is flawed and not sustainable. The larger European nations (eHungary, eRomania, eFrance etc) have began to address this issue, and i believe to press for changes within the eRep game mechanics.
How is it a concern to us, eFRoSEA, tiny little nation in South east asia? Well, if we completely ignore the development and changes within the game, we would be left behind. As for the newer players (like myself), it is also an interesting read to see how some experienced players actually dissect the economics module thoroughly - and how little thigns such as VAT, income taxes, etc can affect the economy as a whole.
the Problem - over Production
1. Evidence of overproduction was evident at the recent peak of World-War III battles at the North America, North Korea/Russia and around Europe. There have been more stock of all products despite the huge war and battles.
3. The current economy module, without decay or depreciation of products, with upper bound of how many that can be consumed/used a day would result in overproduction problem. As players grow in experience/skills, its productivity increases. A player, technically can only use 5 weapons (5 fights) and 1 food a day. Since Q5 > Q3 > Q1 companies in productivity, high level companies would produce more efficiently, and would rely on growing lower level population to support its increase efficiency.
4. http://www.erepublik.com/en/citizen/profile/580161>Someone has calculated that "the self sustaining level is skill 9.5, where 5 land workers and 12 manufacturing workers produce enough resources that every user could get daily 5 Q1 weapons and 1 Q4 food".
5. Overproduction and huge market stock surplus forces manufacturer/producers to reduce prices in order to sell.
6. Decline of prices in general (deflation aka Japan 1990s economic problem?).
7. Decline of profits of companies. Some unprofitable sectors would be forced to collapse as well.
8. Reduction in salaries, due to lower profits/sales.
9. Reduction of comsumption as now everyone has less money to spend.
10. Further reduction in demand for goods/products >> lower prices (6), lower profits (7), lower salaries (
11. Growing insolvency of firms and general unemployment scenario.
12. A period of recession (as in real world) and dying newbies (unless the state compensates by running unprofitable businesses and welfare office (free food)).
the Opportunity - role of Government and Private businesses
A http://www.erepublik.com/en/citizen/profile/580161>good eHungarian leader has nicely summarised the problem in terms of eHungary perspective http://www.erepublik.com/en/article/gazdasag-gondok-vannak-economy-houston-we-have-a-problem-964725/1/20>here, in which i felt some of the proposed measures should be implemented for FRoSEA as well. In brief, he proposed (with some added points from me):
a. Both private companies and the state should save gold and money for the anticipated economic module changes as well as anticipated recession.
b. All eFRoSEAns (citizens and organisations) to buy local, despite higher prices. This would help sustain us over the deflation issues and generate our own demands. (might not be too relevant to us, as FRoSEA is a small nation)
c. Companies should aim to increase its quality and efficiency.
d. Higher skill workers should workin high quality companies (despite the possibily lower net income). However, for FRoSEA, there should be a strong demand/need for Q1 Food/Grain/Weapon, and emphasize should be placed/considered as well.
e. Companies should only place jobs accordding to their quality levels: Q1 - max skill 4, Q2 - max Skill 5, Q3, max Skill 6 and so forth.
f. Encourage donations and wealth transfer from experienced/older players to noobs/newbies (particularly with weapons) in order to level up faster.
g. A fiscally prudent government that is saving for anticipated recession, and possibly upshot of wellness donation or loss-making State-owned entreprises.
h. As FRoSEA is a neutral peace-loving nation, there's not so much need or demand for higher level weapons, or weapons in reality. We need some stock for possible confrontation and training wars. I believe there's a role for state to do this, and i understand the http://erepublik.forumotion.net/the-congress-and-government-f15/q1-weapons-shortage-t323.htm>congress is discussing this at the moment.
Conclusions
This article draws heavily from the original articles http://www.erepublik.com/en/article/gondolatok-thoughts-960728/1/20>(1-"thoughts") and http://www.erepublik.com/en/article/torvenyjavaslat-a-hetfoi-kongresszusi-gyulesre-law-proposals-966389/1/20>(2) published by Zilo, and http://www.erepublik.com/en/newspaper/a-farewell-to-arms-179329/1> the hungarian newspaper - A Farewell to Arms For experienced FRoSEAns, i would like to hear your thoughts and opinions. For newbies FRoSEAns, read more and you will learn that eRepublik is actually very very complicated and interesting.
Regards,
Carr De Vaux
Subscribe my newspaper today: http://www.erepublik.com/en/newspaper/chron-of-democracy-viva-201160/1
FRoSEA forum: http://erepublik.forumotion.net/forum.htm
Lastly, some personal note: Vote DAP candidate Badlands17 for Presidency. I believe DAP (Badlands, Nagyzee, Thingol and others) stand for a prudent, fiscally-responsible leadership that would lead FRoSEA to greater heights.
While this issue is not widely written or discussed in eFRoSEA, perhaps it may be of interest to company owners, upcoming entrepreneurs or leaders of FRoSEA. Around the eWorld, there is a growing concern that the current economic module is flawed and not sustainable. The larger European nations (eHungary, eRomania, eFrance etc) have began to address this issue, and i believe to press for changes within the eRep game mechanics.
How is it a concern to us, eFRoSEA, tiny little nation in South east asia? Well, if we completely ignore the development and changes within the game, we would be left behind. As for the newer players (like myself), it is also an interesting read to see how some experienced players actually dissect the economics module thoroughly - and how little thigns such as VAT, income taxes, etc can affect the economy as a whole.
the Problem - over Production
1. Evidence of overproduction was evident at the recent peak of World-War III battles at the North America, North Korea/Russia and around Europe. There have been more stock of all products despite the huge war and battles.
3. The current economy module, without decay or depreciation of products, with upper bound of how many that can be consumed/used a day would result in overproduction problem. As players grow in experience/skills, its productivity increases. A player, technically can only use 5 weapons (5 fights) and 1 food a day. Since Q5 > Q3 > Q1 companies in productivity, high level companies would produce more efficiently, and would rely on growing lower level population to support its increase efficiency.
4. http://www.erepublik.com/en/citizen/profile/580161>Someone has calculated that "the self sustaining level is skill 9.5, where 5 land workers and 12 manufacturing workers produce enough resources that every user could get daily 5 Q1 weapons and 1 Q4 food".
5. Overproduction and huge market stock surplus forces manufacturer/producers to reduce prices in order to sell.
6. Decline of prices in general (deflation aka Japan 1990s economic problem?).
7. Decline of profits of companies. Some unprofitable sectors would be forced to collapse as well.
8. Reduction in salaries, due to lower profits/sales.
9. Reduction of comsumption as now everyone has less money to spend.
10. Further reduction in demand for goods/products >> lower prices (6), lower profits (7), lower salaries (
😎, and reduced consumptions (9).
11. Growing insolvency of firms and general unemployment scenario.
12. A period of recession (as in real world) and dying newbies (unless the state compensates by running unprofitable businesses and welfare office (free food)).
the Opportunity - role of Government and Private businesses
A http://www.erepublik.com/en/citizen/profile/580161>good eHungarian leader has nicely summarised the problem in terms of eHungary perspective http://www.erepublik.com/en/article/gazdasag-gondok-vannak-economy-houston-we-have-a-problem-964725/1/20>here, in which i felt some of the proposed measures should be implemented for FRoSEA as well. In brief, he proposed (with some added points from me):
a. Both private companies and the state should save gold and money for the anticipated economic module changes as well as anticipated recession.
b. All eFRoSEAns (citizens and organisations) to buy local, despite higher prices. This would help sustain us over the deflation issues and generate our own demands. (might not be too relevant to us, as FRoSEA is a small nation)
c. Companies should aim to increase its quality and efficiency.
d. Higher skill workers should workin high quality companies (despite the possibily lower net income). However, for FRoSEA, there should be a strong demand/need for Q1 Food/Grain/Weapon, and emphasize should be placed/considered as well.
e. Companies should only place jobs accordding to their quality levels: Q1 - max skill 4, Q2 - max Skill 5, Q3, max Skill 6 and so forth.
f. Encourage donations and wealth transfer from experienced/older players to noobs/newbies (particularly with weapons) in order to level up faster.
g. A fiscally prudent government that is saving for anticipated recession, and possibly upshot of wellness donation or loss-making State-owned entreprises.
h. As FRoSEA is a neutral peace-loving nation, there's not so much need or demand for higher level weapons, or weapons in reality. We need some stock for possible confrontation and training wars. I believe there's a role for state to do this, and i understand the http://erepublik.forumotion.net/the-congress-and-government-f15/q1-weapons-shortage-t323.htm>congress is discussing this at the moment.
Conclusions
This article draws heavily from the original articles http://www.erepublik.com/en/article/gondolatok-thoughts-960728/1/20>(1-"thoughts") and http://www.erepublik.com/en/article/torvenyjavaslat-a-hetfoi-kongresszusi-gyulesre-law-proposals-966389/1/20>(2) published by Zilo, and http://www.erepublik.com/en/newspaper/a-farewell-to-arms-179329/1> the hungarian newspaper - A Farewell to Arms For experienced FRoSEAns, i would like to hear your thoughts and opinions. For newbies FRoSEAns, read more and you will learn that eRepublik is actually very very complicated and interesting.
Regards,
Carr De Vaux
Subscribe my newspaper today: http://www.erepublik.com/en/newspaper/chron-of-democracy-viva-201160/1
FRoSEA forum: http://erepublik.forumotion.net/forum.htm
Lastly, some personal note: Vote DAP candidate Badlands17 for Presidency. I believe DAP (Badlands, Nagyzee, Thingol and others) stand for a prudent, fiscally-responsible leadership that would lead FRoSEA to greater heights.
Facebook
Twitter
Discord
Comments
Nice article... thumb up!
Thanks sean. By the way, why did you 'un-friend' me? sad face.
The economic module was developed by the admins with the idea that the range of possible products would be expanded, and I think this is what they will eventually do. Interestingly, sometime around the introduction of version 1 very early this year, there were no land companies; they were introduced because of similar overproduction woes. As I have said in the past, eRep is hardly a finished product and we are a long way from seeing the end of what this concept can do.
the real problem are the newer companies which choose to open in markets which are already producing to much product and then under cut everyone and run their companies into the ground.
Good article again!
Everybody forget, if you use 10 gift you can fight one more times. So correctly 1 food, 10 gift, and 6 weapon (+2MT if i must move to fight, but its isnt ordinary).
thingol, as usual- excellent comments - thank you. I should add that this article was inspired by the tax on grain iron that you posted in the congress forum. I will respond a little later when I hear back from vikta and nagyzee..
arch- I agree on the newer business running the prices down. I know a few owners who have yet to break even. it's a rather hard business if you have limited cash flow.
shb- I know of the moving ticket and the gift- but it's rather rare for frosea to do so.
Not only does fighting 6 times a day increase consumption, as SHB says, but so does using higher quality finished goods. One Q2 weapon uses more raw materials (ie RM labour) and more manufacturing labour than one Q1.
Governments can use this, and other methods mentioned in the articles: they take some of your income as taxes, and spend it in a way that benefits the country as a whole.
Good article! I have also noticed that erepublik has too many companies and not enuf consumers, so they have overproduction problems. And Zoli often rights propaganda, so dont always listen to him.
Jeff, i know Zoli is the propaganda minister for Hungary. 🙂 I am also following the eUSA, eRomania, eIndonesia, eUK (lame), eFrance, etc news/development. I sort of verified its claim by checking with other economics stats and discussion.
Gertrude, i do imagine the government would need to anticipate the recession and save money for that. This is one reason why i am all for Badlands and Nagyzee's administration.
Vikta/Jeff is obviously too busy to reply to this petty article, or perhaps they don't like economics. Anyway, Thingol, back to your points (which you disagree):
1. Buy Local: I agree - encouraging domestic consumption would only work for big nations like eHungary and eUSA. For us little small nation, it would be better to be efficient, as you suggest - and export. Business that can export profitably is win-win, despite the possible recession/overproduction. But then, it requires companies owner to be calculative and smart about production. We cannot lower the salaries too much in the name of 'competitive'.
2. Quality upgrade - yes, true only for land companies and perhaps construction. I should have mentioned that. 🙂 We won't want to have too many Q2-3-5 weapons, since they re mostly useless. As for food companies, we are not too competitive in >Q3 production, considering the medium resource.
3. +e. matters. By employing higher skills at higher quality companies, you open up lower skills level employment. In addition, we would reduce the production at Q1-2, and enhance the production of higher quality products (since these higher skills people can afford them).
4. It works too. By encourag