Realism problem within warfare

I would not be so bold to predict the economy at the galactic level, to say what is realism or not.

The assumption that the economy is stimulated by a war arises, I suspect, from the kind of discredited Keynesian thinking that, for example, posits that the government can increase employment and stimulate the economy by hiring people to dig holes in the ground and then fill them in again. The fact of the matter is that war-stimulated economic activity is largely non-productive, with exceptions like enhanced technological innovation. The myth is that WW2 brought the US economy out of the Great Depression, while the reality is that the US economy didn't really recover until world wide trade resumed in 1947-48. I can't think of anyone who would claim that WW2 helped the economies of Great Britain, Germany, China, Japan, or France.

Leaving reality and returning to the game, however, I somewhat agree with the Citizen TechGreg that the recession event occurs too often in Beta5 and I hope its frequency is reduced in the final game. I played one game where I was in recession for over half the game. Combine that with the UPC resolution (passed over my objection) that starbases could only have 2 modules, and it was the most painful game of GC2 I've played.

Diplomat jmgarth,

I don't mean to be argumentative but offer only as discussion that I wasn't thinking of the government as an employer, per se, but as a consumer. While the government doesn't purchase ships, planes, tanks, ammunition and supplies at anywhere near the rate in peace time as they do in wartime, doesn't that stimulate the economy by forcing industry to keep up with the very real demand? As war material is destroyed, more needs to be produced and delivered, as well as many more troops being on the move and needing to be supplied in the field - a much larger task than normally feeding the standing army at their assigned bases. Also I might note that four of the countries you mentioned from WW2 were defeated. Obviously, carpet bombing of the entire industrial base of a country would not help its economy. But the winners, if not crippled by massive indiscriminate destruction, should see the benefits of this very real increase in consumer demand, providing most of it is not being used to rebuild. Obviously, even the "winners" in Europe only had limited benefit because of all of the displaced or destroyed industries and their displaced or destroyed workforce.

Sorry for not applying this more directly to the game, but I think that Earth macro economics would probably apply to empires in space.

It has been said that Economics ( the dismal science ) is "Politics in disguise" -Hazel Henderson.

The model of Self-equilibrating market theory that drives banking conglomerates tends to overlook the banks own methods of profiteering. You are probably familiar with it--Service fees for 'loans'. Is the fee for a bounced check a matter of supply vs demand? I've only seen the price go up, not down--does that mean the demand for bounced checks has gone up? Or has the supply gone down? How about the cost of a pack of cigarettes? Or the cost of gasoline? It doesn't look like limited supply from where I sit -- at least not for another forty years or so anyway.

So it's really a matter of perspective, rather than truth. I would prefer something along the lines of a barter system that equated value with how much labor was involved in the product/service being traded. No inherent value, only the effort involved in manifesting said item.

The point I am making is a narrow one - that war by itself does not stimulate the economy. The people hired to produce armaments are employed by the government, whether directly, or indirectly as contractors or subcontractors. The government has to finance this by raising taxes, inflating the currency, or raising debt, none of which is good for the economy.

Economics is the science of allocation of scarce resources. The material used to produce those armaments, the labor used in producing them, and the capital used to pay for them could all be more productively used in other ways, absent the war. Given the war, there's no other choice, but in purely economic terms the war diverts resources from more productive purposes to less productive ones.

In addition war disrupts trade, both international and domestic. This is a serious hit to the economy.

Finally, and this is the reason I mentioned the countries I did, it's unusual for a country to not suffer any damage to its infrastructure in a war. (As an aside it should be noted that during the existence of the Soviet Union, and for some years at least following the emergence of the current Russian state, many state owned enterprises actually subtracted value from the Russian economy, as the goods they produced were worth less than the raw materials used to produce them - the destruction of these enterprises in a war would have actualy benefited the economy - but this is a phenomeon found primarily in centrally planned economies).

Having beaten that point into the ground, I hope, back to the game - I disagree that the recession event should be prohibited during a war. I believe that it should occur less frequently than it seems to during beta 5. I also do not believe that every aspect of the game should be made "realistic". We are, after all, suspending disbelief when we suppose that there are alien races, that there's such a thing as hyperspace drive, and that interstellar trade would be possible or profitable. These things may be possible (in time), but they're not realistic.

I have other complaints about the game (that I hope will be resolved during the gamma) but lack of realism isn't one of them.