Inflation, what is it good for?

[Onbird]

As a game mechanic, what's the point of having inflation in the game? It just makes it harder to get a grip on price changes over time, when you have to adjust the numbers for inflation to know whether the real value of any resource has gone up or down. I don't think there's any case to be made for realism in this case either, as prices are just convenient numbers rather than actual historical prices.

[Nokia 3310]

You can turn money off - there is “unlimited money” setting in menu.
Hope, it helps.

[esbenmf]

I does mean that your starting money will lose value over time, but other than that not so much.

[MG83]

inflation is never good. that is why you should design for full self sufficiency

[Silent_Shadow]

Inflation incentives the player to spend their money and to replace imports sooner rather than later. Your exports also go up in price, really it is just one of the game's subtle ways to push you into developing your republic a little faster.

Longer term loans also make you pay less actual value over time (the payment stays the same but the money is worth less). I think dollars are going to have less inflation, so they would also make better stores of value than rubles.

[bballjo]

Inflation means your money you have right now is worth less later, but a bad investment now could have bad consequences...so it really just adds meaning to money while money still matters... In the end game money should ideally have lost it's meaning, because you are independent and self sufficient, and if you didn't, inflation can make the game a lot harder.

If the inflation gets out of control, and a loaf of bread is worth a few million, then you can use the in game adjustment button that removes 3 zeros each time (or 6? Or x?) To get back to a meaningful number.

[Thomas]

Build vehicle production factory. Buy western blue print.Sell produced vehicles for rubles. Watch how price of produced vehicle goes up in 20 years .

[ling.speed]

There is no "real value" of anything. Games simplify a lot of by giving things set price but thats not really how real world works. The value of something is exactly how much someone wants to pay for it.

In this game there is a bunch of algorithms that try to approximate state level trade.
When costs of imports rise, the inflation has usually very little to do with it. Rather its supply-demand-logistics-politics dependance that changes the price. In most cases early game the market outside your country is slow or unwilling to react to your sudden demand and after regional stocks run out the price goes up. Similarly to how GPU prices went up in recent times IRL. Same deal with reduced price of exports. And as Thomas points out some products can go the opposite way too.

As for inflation itself... you are the driver for it. Inflation means increase in money pool. If you'd never export or import anything there would be no inflation in your state.

In the end it's a simulation of socialist system, not a capitalist one. Capitalistic games can have pretty simple simulation of free trade. Because it is, at least in principle, self correcting, hence prices being fixed is a resonable approximation.
But for socialism, it's humans in charge that make all the correcting decisions manually. You are that human here and so fighting changes is core to the gameplay.

[Deco Boladasso]

USSR didn't have inflation since the Berlin Wall until Gorbachev. The ruble was only used internally and couldn't be converted into any other currency. Prices were set so everyone could afford products for the same price, as in the capitalist system prices go up or down according to production. It means when there's a shortage, poor people can't afford those items in the capitalist world (so, shelves are always full); while in the communist world, everyone would be able to buy, sometimes with a maximum number of a certain item you could get (so, shelves could be lacking one or more items).

However, what you're seeing in the game is a simpler way to imagine international trade. Soviet republics usually traded with capitalist countries (when there wasn't an embargo) to get hard currency, and then buy what they needed from other coutries. When dealing with soviet countries, they usually exchanged goods, since prices were artificial. Prices in the soviet system are no more than a way to control the use of resources, making everything kinda free but not to the point you would expend it without thinking. So, it doesn't make much sense trade based on rubles, because prices in rubles are not based on a market system; they don't float, they're decided by the strike of a pen. It doesn't mean they didn't do it, but it was kinda weird. You must remember that both systems are manmade, not some kind of natural law. What soviet countries could get is a devaluation of their products if they did flood the capitalist market with them, or debt from getting foreign loans.

In this game, rubles are more a representation of you resources and - why not - political power. You can't get a republic operating on the red all the time; if you don't produce stuff, soviets won't send you everything. If your republic is a hellhole, people are going to flee to the east and to the west. You can't print money because you're not the head of the kremlin, you're just the head of very, very small republic. You can allocate people to work and give them resources but, in this sense, that where the real capitalist money/power relationship would be. That's why your rubles are kinda figurative, as they were in real life. Giving people the food or printing paper money, giving it in exchange of their work and then getting it back from prices is irrelevant, because, as I said, prices in rubles are not based on a market system; they don't represent real monetary power outside that system. Its kinda like trying to buy stuff in a postapocaliptic scenario, you see that money becomes irrelevant pretty fast, due to the fact its just a representation of goods, not real goods. Printing money doesn't create more wealth; printing rubles in order to spend the double on oil production wouldn't mean anything if you don't put more people and machinery there.

Now, dollars are dollars. Its you relationship to buy stuff at market prices. That's why I propose that the West should have larger supplies avaliable to purchase, but with floating prices; while the East would have fixed prices, but less stuff to offer. It could be made in a way the East had more raw materials, and the West more eletronics and vehicles. It would make you wanna negociate with the West to get them dollars. For now, you can totally ignore it. Btw, that's where I think inflation should hit you hard: to get more techs, finished goods and so on, you must get more dollars; to get more dollars, you must export more; to export more, you need to diversify and expand, because prices are going up and in no time you gonna get a huge deficit if you're not expanding or becoming more autonomous.

That's the way I see it and that's how I believe it would be better implemented. The idea of inflation is to put some pressure into your development, but I think they must be more dynamic in order to don't deliver us just some random repetitive and unbalanced mechanic.

Please, fell free to share your toughts, commrades.

[Deco Boladasso]

Originally posted by Ephemera:

Originally posted by Deco Boladasso:

USSR didn't have inflation since the Berlin Wall until Gorbachev. .

This is completely false and not true. Price controls don't stop inflation.

Its correct, they don't. What I said was based on two facts: i)the soviet system didn't operate on a market basis. I didn't have inflation because it had shortages. I explained that latter in the text; prices don't float, goods dissapear from them shelves; ii)USSR was growing miraculously for a long time. It was the second world largest econnomy, not counting countries like East Germany or Poland. Russia only got close from the Russian Federation metrics on gross GDP on 2020 - notice those were the metrics from the worst phase of the Russian Federation in 1991, after the failed October coup.

Originally posted by Ephemera:

Originally posted by Deco Boladasso:

USSR didn't have inflation since the Berlin Wall until Gorbachev. .

The Soviets famously had a shortage of cars, and poor public transportation, because they could not pay for drivers (worker truancy was common), and the command economy could not ever provide people with private vehicles.

That's not quite accurate. They had excellent public transportation, probably the best on the world. The French and the Japanese were the first to try to copy it. So many things were avaliable on foot reach, you don't even need a car. The automobile industry was way behind the western one, that's a fact. But its also due to the fact they were under some severe trade embargoes. It is usually used as an argument to everything, but actually in the automobilistc industry it was a miracle that they had one having an embargo. No country is able, since those days, to manufacture every single part of a car and have a wide industry. Just imagine if a country like Brazil, almost the size of Russia, had the same embargoes since the 1940's.

[Deco Boladasso]

Originally posted by Ephemera:

More so, the whole, "It was Gorby" argument is a strange one. The idea he was some "bad actor" isn't founded.

I read everything he published. I didn't make sense to me because soviet figures were bad, but not like collapsing bad when he was put in charge. He changed a lot his discourse and put many people who did wanna dissolve the USSR on power. Lesh Valesca once said in an interview something in the following lines: that people debated a lot about Perestroika, but it has nothing to do with that. What happened was that Gorbachev called them and said that he wanted to open the USSR to capitalist market and free speech; in that moment, Valesca noticed that he would create a huge crisis, that if it didn't destroy the USSR would be at least their best chance to get into power. They weren't actually anticomunist, but they would never get on power through the Communist Party, so they had to make people angry to get power for themselves.

So, yeah, I don't like him. He lied a lot, that's a fact. Some of his changes were great on paper, but what he did was political suicide. We must remember he didn't stop many ethnic violence, giving a white card for anyone who wanted chaos. You can't expect to get peace if you're just destroying the ballance of power, that's not how things work. And I refuse to believe the head of the Kremlin was an idiot.

Many experts adviced about how it was political suicide. Moshe Levin even said in his book The Gorbachev Phenomenon that starting real capitalist shock therapy and fully democratic change would be something that would never happened, because it would destroy the whole system at once. Any sovietologist did know that. That's why they tought the changes were cosmetic. Also, we must give credit for the US, for playing that peace card with perfection until the late game. Most factories that were bought on the Eastern Bloc were immediatly dismantled and soviet revolts suffocated.

[ling.speed]

lol this escalated quickly. As someone that lived through both systems... if we take average of both above posters it's going to be pretty reaslistic haha.

But Deco Boladasso has a point about closed economy (considering OPs question). It kind of does not feel right using rouble like its "normal" currency and have price fluctuate. But thats game simplification for us. Here money is used for external deals only so it has to move around. If we fixed the prices properly and added next level of deal making it would still be the same beast in different clothing... thou it would be cooler :).

[Deco Boladasso]

Originally posted by ling.speed:

But Deco Boladasso has a point about closed economy (considering OPs question). It kind of does not feel right using rouble like its "normal" currency and have price fluctuate. But thats game simplification for us. Here money is used for external deals only so it has to move around. If we fixed the prices properly and added next level of deal making it would still be the same beast in different clothing... thou it would be cooler :).

Exactly.

Originally posted by Ephemera:

This is a game that has profits, and profits can only exist if markets are exchanging commodities for a price. I'm not sure what Boladassso is on about, but its certainly not sound or logically consistent with the reality of Marxist-Leninist regimes. Even North Korea, the most closed economy in the world, still has price fluctuations in consumer products. The laws of economics don't disappear because you call yourself a communist republic lol.

In this game, you don't control prices in the selves. I'm talking about international trade here, but just made a point to why I'm proposing it like this. What I'm proposing is that when you deal with communist countries, prices could float, but way less than when you deal with the capitalist ones. Having a small surplus of some resources on the East would make players trade with both blocks. Events like shortages or embargoes would make it more dynamic than giving generic inflation to both blocks - a mechanic that, mind you, the devs themselves are saying that is, at least for now, totally broken. Prices could float from time to time, to simullate contracts and avoid bugs, like the ones reported from the devs (ex.: selling a huge ammount of oil due to a shipment being dellivered makes inflation goes trough the roof); or, at least, float between a fixed ammount so I won't be gamebreaking. So, a small percentage of inflation applied to prices from time to time would make the trading system more stable; it could be also based on how many you exported (specially the prices for raw material, so you can't build your economy on selling crude oil forever). But soviet prices would be lower and more stable, due to politics and the soviet financial system when dealing with a fellow communist country.

And what I said about internal inflation is that inflation is a rise on prices. Soviets had their prices mostly frozen (or sallaries followed the high on prices), so they had shortages instead of inflation. Its the same phenomenon, but it gets different forms when in different systems. In capitalism, its inflation (rise on prices); on communism, its shortages. I just made that point to say: East could sell for kinda frozen prices, but with low supply of finished goods (like food, vehicles, eletronics); this would force you to trade with the West - but now you have to plan for dealing with floating prices, which is different from the kinda fixed expected productions you get in this game. Gravitating around both blocks would be very nice and could be implemented somehow rellated to the millitary mechanic the devs are planning for the future. Maybe your hard power could give you more leverage on deals, but also create embargoes. I'm rambling about it now, but now I hope you can see the picture I've in my mind.

This mechanic of kinda fixed prices in the East and floating in the West would make your planning more dynamic because if you're importing western eletronics to your shops, if you don't take care and expand your own eletronics industry, soon enough you gonna have a negative ballance on your budget (because you're now paying higher prices than you were 2 years ago, when you decided to start importing them); or you can stop importing it and have a shortage (you can't raise the prices of goods you give to your population to reduce their consumption, so no internal inflation, but shortages or international debt). I think this should be a slow but progressive mechanic in order to force players to plan ahead. Its very simplistic, yes, but its way better than the one presented by the devs. I'm not here to discuss in-depth soviet economics, I just trying to make a point why this mechanic could be a funny way to represent international trade during that era.

Also, that mechanic could make you have more economic and kinda political tact, once you probably gonna need the West. Not being able to only deal with the communist block, or to survive only on the export of raw materials would be great; remember that the Oil Crisis of the 80's were one of the main causes for the collapse of the USSR, due to its relliance on, you guessed it, exporting commodities.

[Deco Boladasso]

Originally posted by Ephemera:

Originally posted by Deco Boladasso:

Its correct, they don't. What I said was based on two facts

There's no point in continuing the conversation either because you can't really convince communists to change their views. It happens when their hubris gets ahead of them. That's why Xi himself says China will never return to a planned economy again and jails Maoists now.

Enjoy buying video games (commodities), including Tetris, on the steam market place. No communist is complete without being a hypocrite, and indulging in consumerism that otherwise would not be possible if their beliefs were more widespread.

First of all, I wanna apologise to Konrad due to having such huge and out-of-topic answers on his post. I won't discuss politics anymore, just the game mechanics.

But, Ephemera, just so you know, I'm not a communist. I usually tend to get more closer to moderate stances and that's when I get attacked by both sides. I just said that i)soviet system wasn't just total garbage, some things workerd; ii)due to having an isolated (not conversible rubles and the iron curtain) and different system, the way we use to think economics actually was kinda different to what they get in the USSR and so this game mechanics should try to mimic that; iii)on the political stance, Gorbachev was irresponsible. He could've created special areas to make a market change, like Taiwan is today. Replacing too many people too fast (many of them were inneficient and treacherous) was a disastrous idea and I don't like the fact he didn't do anything about ethnic violence. He lied a lot to keep power to himself, and many people advised him against basic mistakes. I'm not on the what if part, I just don't like the idea of the collapse of the USSR being something calm when it wasn't.

I do like Gagarin tho, but because he was a poor guy who went after the possibility of studying to get a greater life even when his family didn't approve it; that's due to my personal history, not a political system. Also, its a funny joke to my friends because I kinda look like him. Being a communist today wouldn't even matter much, due to the fact real socialism collapsed and I doubt it could come back the same way it did, at least for a long time (real socialism being the socialism that was implement on the COMECON, not the ideological one). And I have sympathy towards people of the former USSR, due to the drop on living standarts. They weren't to blame on political decisions, and thieves became the people who were able to run many aspects of those countries.

I didn't denny the production problems of the USSR, they were rampant. I just said they ocurred in a different manner because what is considered the market in a capitalist society is totally interfered by the State under communism. Prices policies don't make goods appear out of nowere, we both agree on that. I just said they froze prices, leading to shortages instead of inflation - but the lack of goods is the same. You only consider inflation when prices goes up; technically they had deflation, because they usually tryed to reduce prices every year (which was mostly cosmetic when they didn't have enough production, altough they probably didn't get recession even by CIA figures, mostly due to their huge ammounts of commodities).

I experienced myself frozen prices, censorship, dictatorship and so on in a capitalist economy; its not about the political ideology per se, but about the groups that are keen to do anything to keep their grip on power. And yes, frozen prices were terrible: when we had inflation, you had to go shopping the day you get payed, because the next day it would be devaluated; when prices were frozen, there was no inflation (no price change) but shelves were empty and corruption went rampant. When prices were unfrozen, it went bananas, like in the USSR. And in my country we are, even today, lagging WAY BEHIND some of the infrastructure and social benefits they had in those socialist countries.

About infrastructure, Soviets got it good into many planned cities, so things were on footreach. But their transportation for long distances and materials was really bad, as you mentioned with those articles. You're correct on that, soviets didn't have the money to afford infrastructure and transportation upgrades. That's why I'm always asking for a mechanic where we would get vehicles and building maintenance and decay, so expanding too fast would be a time bomb latter if you can't keep your buildings and vehicles well kept (also I would love to make the old tv sets be linked to fires, like in the real USSR).

I also agree this isn't exactly the place to this discussion and I think we got carried into that. I'm sorry if I was unpolite during any moment, but I didn't make the radical mentions you seemed to have read. I'm a political psychologist, actually, and we notice how the internet has this aspect of making some conversations spiral out of control. But please, also be polite when talking to people. I have nothing to do with an old model of Russian administration of communist economy; I wasn't even born by them. I just exposed my views on a subject to make a point about a possible funny game mechanic that involves it.

Again, I'm sorry if I offended you somehow. Hope you have a nice day and I offer you my sincere best wishes.

*edit: typo.

[Onbird]

Originally posted by Deco Boladasso:

First of all, I wanna apologise to Konrad due to having such huge and out-of-topic answers on his post. I won't discuss politics anymore, just the game mechanics.

But, Ephemera, just so you know, I'm not a communist. I usually tend to get more closer to moderate stances and that's when I get attacked by both sides.

You and me both. I know the feeling. Whenever I think I've found an ideological home, I tend to get off-put by others in it. No need to apologize, and least of all to Ephemera. He has shown himself very much an anticommunist counterpart of the tankie he takes you for. I don't even bother replying to someone whose attitude is one of naive realism, of believing in simple cliched explanations and who'd condemn those who disagree as simply stupid or otherwise deficient, rather than acknowledge that reality is complicated. The classic "You're a hypocrite for being a communist on a computer that you have thanks to capitalism" is just the cherry on top.

[Onbird]

Anyway, as has been pointed out, trade within the COMECON was done through barter negotiated on governmental level, not by using money. So the "Ruble" in the game is just an abstract game mechanic, not the actual domestic, internally circulated currency of the Soviet Union. So there is even less reason for the game to have ruble inflation, nor would historical inflation of the Soviet ruble or lack of it have any implication for the game.

It would bring a whole other level of economic dynamism to the game if the rigidity of the COMECON made it different from the West. I'm not sure how that could be implemented in a good way though.

If prices are fixed but quantities limited, what happens if you auto-buy a building but have already used up your annual quota of one of the resources needed to build it? Should there be a way to make use of comparative advantage and become a major exporter of some resource, by negotiating with the rest of the COMECON to find buyers for it, increasing your export quota but getting a lower unit cost (and if you do, isn't the outcome anyway the same as the current supply-and-demand driven prices?).