eUSA Economic Analysis
Day 1,484, 09:05
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Published in USA 
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by
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by Saphire109
eUSA Economic Analysis
Game article for eRepublik game by Saphire109
Here's my economic forecasts of the eUSA economy with the current
tax and geopolitical pattern.
Food Raw Material price floor: .25
Weapon Raw Material Price floor: .28
Q5 Tank price floor: 30
Q5 food price floor: 2.60
Here's my long term price prediction
Food RM price floor: .27
Weapon RM price floor: .29
Q5 tank price floor: 30.25
Q5 food price floor: 2.85
The current economic taxation analysis
25% income tax reduces the interest of young players therefore decreases our retention rate.
15% VAT in any resource decreases the will for the few businessmen we have in the game to produce more and give the consumers competitive prices
Ideally we should have 10% income tax and 0% Vat tax
Overall the rest should be subsidized through private enterprise donation groups.
What happens if you keep the taxes at the current level?
The following:
Overall potential GDP decreases
Low player retention rate
Inability of the eState to give incentives the economy
The fallacy that the state "reinvests" which is a complete fallacy because if businessmen were not taxed there would be way more production and hence way more stock in the market of q5 defense and food. In essence the eState does not reinvest anything it just takes money from businessmen who are productive and pours it into subsidies which have proven inefficient time and time again instead of concentrating in high income produces. 310 dollars gained from a q5 factory per day per person would be the equivalent of 2,800 dollars for all RM's you could buy in one day. In essence you become noncompetitive.
But what about the in game damage?
Many players that are not real economists think that this game has no relevance towards real economics. Such is a fallacy, in fact it is such deeply rooted into the thinking of the current council that they haven't realized the following.
Look at the numbers.
A factory costs 300 gold, let's say it's 300,000 dollars.
Per factory one person can only make 310 dollars a day supposing he also has 2 raw material farms. Under this format it would take 3 years of work just to pay off the factory. Does this show how inefficient communes really are?
Yes, you see if instead 300,000 dollars were invested in raw material companies you'd have 35 of them each producing a revenue of around 80 dollars a day per farm. This is a total of 2,800 dollars (90 tanks) versus the 310 dollars or 10 tanks in the game that the commune makes. Remember this is per person productivy. So we can therefore say that the free market makes people 9 times more efficient and productive. Suppose 5 workers worked in a commune without even taking wages. In the free market format of 0 taxes they would specialize in profit oriented industries making 14,000 dollars a day. In the state run industry they would be making only 1,550 dollars a day. In the game this translates to 451 tanks in the free market vs 50 tanks in the commune system.
As you can see the so called "council" is wrong in the aspect that it doesn't understand the relevance of free market policies in order to apply them in the game. Hence why I have an alternate group called the business coalition which dictates prices on free market policy and is far more powerful than the economic council in the game (not politically but we have a buying power of around 70,000 usd per day). Politically we will be more powerful however once we take office running for the federalist party in the game as of next year Feb 2012.
Now as far as damage goes, if ten people make 10,000 dollars a day that equates into 100,000 dollars a day.
Wanna know how much eUS makes per day? 100,000 dollars
In my term this would instead be subsidized by my business friends and hence this would result in huge economic growth. So much for numbers.
So I say to you "no more taxes" they hinder economic growth.
Game article for eRepublik game by Saphire109
Here's my economic forecasts of the eUSA economy with the current
tax and geopolitical pattern.
Food Raw Material price floor: .25
Weapon Raw Material Price floor: .28
Q5 Tank price floor: 30
Q5 food price floor: 2.60
Here's my long term price prediction
Food RM price floor: .27
Weapon RM price floor: .29
Q5 tank price floor: 30.25
Q5 food price floor: 2.85
The current economic taxation analysis
25% income tax reduces the interest of young players therefore decreases our retention rate.
15% VAT in any resource decreases the will for the few businessmen we have in the game to produce more and give the consumers competitive prices
Ideally we should have 10% income tax and 0% Vat tax
Overall the rest should be subsidized through private enterprise donation groups.
What happens if you keep the taxes at the current level?
The following:
Overall potential GDP decreases
Low player retention rate
Inability of the eState to give incentives the economy
The fallacy that the state "reinvests" which is a complete fallacy because if businessmen were not taxed there would be way more production and hence way more stock in the market of q5 defense and food. In essence the eState does not reinvest anything it just takes money from businessmen who are productive and pours it into subsidies which have proven inefficient time and time again instead of concentrating in high income produces. 310 dollars gained from a q5 factory per day per person would be the equivalent of 2,800 dollars for all RM's you could buy in one day. In essence you become noncompetitive.
But what about the in game damage?
Many players that are not real economists think that this game has no relevance towards real economics. Such is a fallacy, in fact it is such deeply rooted into the thinking of the current council that they haven't realized the following.
Look at the numbers.
A factory costs 300 gold, let's say it's 300,000 dollars.
Per factory one person can only make 310 dollars a day supposing he also has 2 raw material farms. Under this format it would take 3 years of work just to pay off the factory. Does this show how inefficient communes really are?
Yes, you see if instead 300,000 dollars were invested in raw material companies you'd have 35 of them each producing a revenue of around 80 dollars a day per farm. This is a total of 2,800 dollars (90 tanks) versus the 310 dollars or 10 tanks in the game that the commune makes. Remember this is per person productivy. So we can therefore say that the free market makes people 9 times more efficient and productive. Suppose 5 workers worked in a commune without even taking wages. In the free market format of 0 taxes they would specialize in profit oriented industries making 14,000 dollars a day. In the state run industry they would be making only 1,550 dollars a day. In the game this translates to 451 tanks in the free market vs 50 tanks in the commune system.
As you can see the so called "council" is wrong in the aspect that it doesn't understand the relevance of free market policies in order to apply them in the game. Hence why I have an alternate group called the business coalition which dictates prices on free market policy and is far more powerful than the economic council in the game (not politically but we have a buying power of around 70,000 usd per day). Politically we will be more powerful however once we take office running for the federalist party in the game as of next year Feb 2012.
Now as far as damage goes, if ten people make 10,000 dollars a day that equates into 100,000 dollars a day.
Wanna know how much eUS makes per day? 100,000 dollars
In my term this would instead be subsidized by my business friends and hence this would result in huge economic growth. So much for numbers.
So I say to you "no more taxes" they hinder economic growth.
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eRepublik's markets don't work exactly like real-world markets because the admin is heavily involved in aspects of it.
I adjusted my economic predictions to eRepublik's markets.
Go over the mathematics if you like.
But you didn't provide any math D :
Please address the following question, Saphire, if taxes are cut.
Where are we going to get the addition funds to support our budget? Please show me where you will get the damage our country is putting out now with government funded militaries like the Special Forces.
Saphire supports private donations funding the military based on RM sales.
Instead, try to find the maximum price at which the buyer-bot buys the offers.
@Kell: EZC too. The OMS money we get from the government translates directly in to tanks and food in the hands of our members, many of whom are young players. Would we be able to keep up the same level of support?
As stated we could get even more funds for them.
1. The cost to acquire a q5 weapons company is about 180 gold, not 300.
2. The cost to acquire the 17 raw companies to keep the six workers fully supplied with material is about 144 gold.
3. Total required capital investment is therefore about 330 gold.
4. Paying a reasonable wage, you can make (after present tax) about 2.5 gold/day.
5. Payback for the entire investment is therefore something like 132 days or a bit more than 4 months. Not bad, since after that time its all gravy.
6. Paying slave labour in the communes may be more/less beneficial depending on the real compensation.
7. A high VAT brings in a lot of money from the bot.
8. A high Income tax may have negligeable effect as employers/employees arrange to avoid income tax altogether through private arrangements.
9. High bot consumption injects currency into the economy and affects the value of gold to currency.
10. “Free market” is a very elastic concept. As I am unclear precisely what you mean by the term, I don’t comment except to say that game mechanics do not give competitive advantage to a nation with 60 percent production bonus compared to one which has a 100 percent bonus.
kind regards
Oliver your numbers are wrong. Upgrading a q1 food company to q5 costs 370 gold if anything i underestimated potential gains. Payback is less than 132 in the RM format too. And the comparison for q5 tank is 10 tanks versus you working in your RM which allows you to buy 92 tanks in the game. It is 9 times more productive and pays off in around 100 days.
Many players can tell you how to upgrade a q1 company to q5 for about 180 gold.
You state conclusions. I like seeing the actual calculations: anal retentive and all that. It does seem apparent to me, however, that your main point was about the effect of taxes and, on that score, you have failed to take into account a number of issues. This may be a result of philosophic attachment to real world paradigms which don't operate in the new world. The market here is not free: it has its bot. Moreover, the usual RL definition of "free market" is NOT one which requires zero taxation. It is one which abhors state ownership of the means of production or the engines of sale. However, I recognize that the expression "free market" is elastic and thus requires definition if a discussion is going to be useful.
don't mind me, i'm often utterly wrong.
kind regards
Help me with your math please - you say:
“you'd have 35 of them each producing a revenue of around 80 dollars a day per farm”
____________________________________
My q1 raw food company makes 56 units. You say units are worth .28cents/unit or less. Assume no tax.
Revenue is ……. $15.66 …. That isn’t your 80 dollars/day so I am missing something…..
You could get five other people to work of course - that would give you the 80/day revenue, but you would have an expense of 800 dollars. So that can’t be it. I’m foxed.
Q4 companies
7500 for the RM cattle farm
1000 for the land
production per day 280
now do 35*280=9800
9800*.28=2,744
Now do that math with 180 farms which is productive capacity.
ahhhh...cattle farms are good, no doubt. I have a bunch of saltpeter mines which essentially offer similar benefits. Yep you can make about 80/day working these yourself. 'Course there is a limit to scaling. And for me, when it came time to spend the additional 180 gold it costs to upgrade to a q5 weapons company and supply all the employees myself, the issue is whether the employees can add value - if so how much. And there, the mathematics become more speculative. I'm really lucky. I found some great employees and we churn out a modest number of weapons that i can use, donate or sell while making a very reasonable profit.
The hardest part, however, was getting the first two or three mines. Its easy if you already have 300 gold. Tougher when you are working for wages, and saving every cent. 🙂
Thank heavens for the bot, which creates essentially unlimited demand and relatively inelastic demand. I.E. it isn't a free market 🙂 If it were, massive investment in raw material self-production would lead to collapse in price. When we levy VAT we are essentially taxing the bot and encouraging self supply. A nation of citizens which self supplies may be a very good thing. They pay very very little taxes no matter the rate of tax. Just a different way to get to "no taxes", while still creating a revenue stream for government.
kind regards
excellent article. excellent tax plan. voted.