Happy Labour Day! A simple suggestion to end over-production.

Day 1,988, 18:00 • Published in Australia Australia • by Paul J Keating

1st May is traditionally a day for celebration of the international workers’ movement. Does May Day hold any meaning in eRepublik? Not really, the current state of the economy module has rendered labour irrelevant. In this article I address what I see as the key problem with the economy module, the lack of a labour market, and propose a simple but radical solution.

The ability to work as manager in a theoretically infinite number of companies, limited only by the amount of capital you’re willing to invest has a predictable and unfortunate outcome - massive overproduction of everything. ‘Normal’ economics would have it that wages and employment is governed by the laws of supply and demand. Company owners will continue to hire new workers (bidding up wage rates) until the marginal cost of production (wages + RM) is equal to the marginal revenue of their product. It’s a little more complex than that, in that bidding up wages usually means increasing wages for ALL of your workers rather than just the most recent recruit, but I think we can live with a little oversimplification. The ability to work as manager means increased production can be gained by building new companies rather than employing workers. In theory, the marginal cost of working a RM company is nil so it makes sense to keep on building them until the price drops to zero. With the marginal cost of production set at zero for manufactures it makes sense to keep on building companies until the price of the manufactures is equivalent to the cost of the raw materials required to produce them.

We are left with a strange world where the value of labour is trivial, marginal cost of production is nil, and as a consequence we build more and more companies producing more and more goods worth less and less.

A simple but radical solution to this problem is to scrap (or limit) the ability to work as manager. While the marginal cost of production is nil there is no real skill or gameplay required to build a business empire. We need to introduce the notion of the scarcity of labour, to force company owners to work hard to attract and retain workers.

What would happen if we switched off work as manager overnight? Initially the results would be somewhat catastrophic. Production would plummet as the vast majority of Food, Weapons and RM are currently produced by manager-workers. Food would become scarce and valuable, there would probably be famine among those who don’t buy energy bars. The price of food would skyrocket and company owners wishing to cash in would start bidding up the price of labour to produce more and reap windfall profits. A similar result would occur in the weapons market, and the reduced production of RM would also drive miners and farmers into the wage bidding war.

Eventually though we would reach an equilibrium where wages and prices would balance out. Fortunes would have been made and lost. Importantly this new equilibrium would be at a point where production is dramatically lower. The change would be sustainable as the scarcity of labour would result in the marginal cost of production equal to the wage rate rather than zero as it currently stands.

There are some obvious problems with this. What about all the poor suckers who have spent gazillions investing in companies that they can’t find workers for? I’d offer a full refund, if a business is no longer profitable let people choose to close it for a full refund of the amount invested. That would pump a lot of currency into the market and drive up the gold/CC exchange rate which wouldn’t necessarily be all bad. People could re-invest in companies that make more sense, or just spend it if they’d prefer. The scarcity of resources may even make it profitable to own Q1-5 weapons companies.

There would probably be temporary famines, with people unable to afford enough food while we move to a new equilibrium. This could probably be mitigated by increasing worker productivity when the change is put in place. Another approach might be to limit the number of companies an individual can work in as manager to something more reasonable, maybe 5.

While there are many problems with the economic module right now, I believe the main issue is overproduction resulting from the ability to work as manager in an infinite number of companies. Labour has become totally irrelevant, there is little skill and no need for company owners to attract and retain workers. While it is a simple change I’m proposing I believe the results would be spectacular, and reinvigorate the economy module without a complete re-engineering effort.

Game admins are obviously interested in having people buy gold to invest in companies. Would this affect game profitability? I suspect not, there are plenty of things to spend gold on, and let’s face it what’s the point of buying gold for a company these days? In fact we would probably see an increase in gold purchases for energy bars and rockets to overcome the reduced production of food and weapons.

International Labour Day is an appropriate time to think about how we might make the role of the worker more central to game mechanics and maybe bring a little more interest back into the economy module and the game as a whole.

Happy Labour Day to one and all!