The Economist ~ Deflation and the slow slide into economic ruin.
Spite313
OK, so this is what happened. One day, eRepublik changed. They changed the formulas, the modules and the way products were used. Unlike in a real market environment, this changed in one day. Suddenly, everyone in the entire economy was made unemployed. Manufacturing workers who had been making food now found they could only make weapons. Weapons workers found they could now only build houses. No supply and demand was present, it was the random hand of fate which decided who did what and when and how.
“he is ... led by an invisible hand to promote an end which was no part of his intention.”- Adam Smith
In this situation there was no invisible hand, slowly guiding the market towards the most profitable, most efficient means of satisfying demand. There was instead a giant, very visible hand, which did not guide. It wiped the board, reset, changed everything. The result was total chaos. No gradual changes in wages- vast supplies of almost free labour resulted in huge profits. Whole sectors were decimated. No war meant the entire weapons sector collapsed, leaving tens of thousands unemployed or working on slave wages.
"Mere parsimony is not economy. Expense, and great expense, may be an essential part in true economy."- Edmund Burke
To make the situation worse, once the beleaguered manufacturing industry realised its products were worthless, prices of RM, the only stable and strong industry, collapsed. Prices dropped, and many companies collapsed causing further unemployment. In eRepublik terms, unemployment doesn’t mean literally not employed, it means that you are forced to take a job which pays well below the value of your productivity. The number of people on a slave wage gradually grows, which means that few people can afford to buy anything other than food, which means every sector except food is forced to lower prices to make sales. And of course, the cycle of deflation continues.
But to make things worse, the pound itself is losing value against gold. Despite its value in terms of productivity increasing, excess monetary supply has forced down its sale value internationally. With the market shrinking by more than half (due to mass die-off of 2 clickers) we have seen the value of GBP plummet. This is simply because the market is saturated with it, and there is no demand for the kind of money supply we have. Coupled with this, the necessity of gold for battle and boosters has effectively drained all the non-fixed gold out of the economy.
What is the result of all this? Economic paralysis. Prices are slowly dropping, but wages are constant. Poor migration, poor management of the economy, poor understanding of macroeconomic theory, all these things have led to the slow and inevitable collapse of the entire economy module of the game. The blame for this can be laid squarely at the feet of the admins. Due to the media module being severely restricted, I’m not going to ramble on any more, lest I kill you via wall-of-text. But if this isn’t sorted soon, the short term problem of hacks is going to be nothing in comparison.
Iain Keers
Phoenix Treasurer
"Economy is the method by which we prepare today to afford the improvements of tomorrow”
Comments
voted!
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Oh god, a serious article.
Fantastic.
voted
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Nobody.ua и тут первый) почти))
about an article:
sad but true, voted.
Heh you quoted smith out of context entirely
No I didn't, but then you're Irish so what would you know.
I agree + Vote and Sub.
Agreed, a game where the economy doesn't function, is no game, but pointless clicking.
true story. voted
There is so much negativity in the press recently. What happened to optimism? Important point though.
iain, we all know that they hire the crappy programmers.
but i m in doubt that they would have hired any economist.
This assessment is mostly spot on, but the other side of the coin is the lack of communication in explaining how things work on migration.
Formulas have been screwed. Therefore the fault lies with admins.
However, players that used to make 1.20 GBP in the old module were suddenly demanding at least 2 GBP from the outset for misunderstanding hourly wages and how it works out. The country administration failed to lower taxes on wages to help the economy adjust (in order to fund wars presumably). Lastly, companies got greedy, but later realized they have a lot more employees to pay so there was no such thing as a cheap product -- not even if the raw was cheap.
These all originate with faulty formulas and lack of understanding on part of the admins. But in addition they failed to communicate things and to translate them in such away that the economy underwent as little change as possible from their end. As you said they wiped it clean. 1.20 GBP for a job should have remained for lower workers. It is far too late for that now. With a lower living wage, products can be made cheaper and affordable for those players -- as long as the greedy profiteer businesses allow them to. Some fault lies with the players for their misunderstanding of things work. But that also just comes back to the admins.
Enjoy your articles a lot. Keep it up.
Overproduction and underconsumption once again. Is there any way for the government to remove currency from circulation to inflate the value?
I've gne back to two clicking \o/
It's the way forward.
The problem is the admins are NOT reading these articles and seem to be creating the impression everything is going well and we all are on the edge of our seats waiting for their next imaginative tweak of the system. Hooray a new gimmick, multiple eating (goodbye housing industry) no auto eating (goodbye anyone who takes a holiday)... blah blah.. hey maybe we will get another 2D chick in shorts at the food store..
Yes everything is indeed screwed royally.. our playing options diminish daily, back to a mere 'click to work/eat/survive' so it's just dross in a new 24 hr graphic format .. and can't even post pictures in news anymore.. dumb and dumber!
very visible hand...it wiped the board.
Now they realise that messed it all up and so they will change the rules again! Another chance to migrate & food consumption project. Should have got it right the first time they migrated by trying to keep it as close to V1 as possible
the minimum number of clicks to do all the stuff in the uptown area is 13.... i think they should now be refered to as 13 clickers 😉 or 32 clickers cos it sounds better than 13... 😃
Anyway i agree with this article...and ofc i voted
@Spud of Doom: The only reliable way to remove currency is taxation, buying it directly is impractical even at the current exchange rate. What admins really need to do is fix the formulas and develop new ways to inject gold into erep.
Solid.
Well, I've left now, but the situation seems to be the same world over.
The population also seems to be in decline. There isn't much the government can do about that. It just seems that V2 is too elaborate for new citizens. They already seemed to have a hard time in V1 getting their clicks right !
I'm getting my sandwich board ready - "the end of the world is nigh...and all that."
Seriously, the few (flawed, I admit) calculations I've done suggest ten days before the whole game collapses, nevermind the economy.
I have had ideas that could help pick the game back up, but it is pointless telling anyone about them since the admins just don't care. Shame really.
never in the field of e-history have so many lost so much at the ineptitude of so few!.. doesn't ring right - but works for me!
Iain i agree with all u say now!
The economy soon will broken, a hole of gold are open and the monetary market of all nations will down, more and more.
Soon nations stop with wars and mpp´s son that game will over.
Britain needs a serious leader for once.
At the moment I'm just sticking around because I've invested a reasonable amount of time into the game, which I don't want to go to waste. That said I've gone back to working only. I wouldn't touch the military module with a ten foot pole. Sadly I don't have hours to spend online each day, and I miss the days when I could make my mark on the world wide stage quickly and efficiently, rather than having to sit online forever. I'm starting to get the feeling that I'm throwing good money after bad (in a manner of speaking). And should stop wasting my time here. Besides, my house collapses in two days, sounds like that might be the time to start thinking about heading offski.
I'm sure the economy could do with a babyboom.
Voted!
And I agree with logamac.
you can't get serious with an impossible game that is supposed to be an "improvement" ?
Iain figures it out, just wonder if had the time to become an admin?
Sir Humpty is asking for more idiots to join a fragged game, what a dikead, why would they wanna waste RL cash- on which is obviously what the admins r after.
Sorry but the company employing me was fair but seems thay cannot afford teh Titanium to keep the company running.
so i guess i'll eventually e-starve to death.
mil module, seems ppl can attack a stack of players and yet pick one individual - where's the mutual defence in that, u may as well be on your own.
and i didn't see the hospital working in dublin for anyone yesterday ??? what a waste of tactical expenditure by Govt.
Now the games a loada bollocks if you were to ask me.
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