Ambient on/off

Sign up

 

Continue

Continue By creating an account you agree to the Terms of Service & Privacy Policy
Resend email   |  Can't find the email? confirmation@erepublik.com

Resend the confirmation email to this address

Resend email Can't find the email? confirmation@erepublik.com

Learning The Ropes: The War On Wages

Day 1,804, 18:56 by Ian E Coleman


Est. 2010
Thirty-seventh Edition: Sunday, October 28, 2012

New World vs. Real World



One of the most common mistakes made by new players (and some old) is to try applying real world concepts to the dimensions of eRepublik. Now while this is understandable since at a first glance there seems to be some parallels, ultimately eRepublik’s mechanics deliver an extremely different environment – one that calls for drastically different ideas and ways of thinking.

To better understand this, let’s take one of the most common examples: minimum wage.

(Executive Summary): Generally,having our minimum wage as low as possible allows our nation's communes to operate more efficiently and effectively by allowing them to exchange goods without leaking currency unwontedly. Raising minimum wage would either have no effect on our free markets, or have a negative effect on them.



Real Life Minimum Wage

Minimum wage is a real life concept that most of us are probably familiar with. It is the lowest wage that an employer is allowed to pay employees.

In real life, minimum wage is used to ensure a more livable income, based on an index of the costs of basic living, for workers in “unskilled jobs”. These are jobs where the labour market (the people who are willing and able to work) is much larger than the available jobs. This creates a supply and demand relationship that favours employers and drives down the wage that must be paid to attract workers to fill the unskilled jobs.




eRepublik Labour Market

In eRepublik there are two things to note concerning the labour market:

1. Every citizen has the same production output when they work in a factory. Their is no skill factor.
2. In eIreland’s free market there are more jobs than there are unemployed workers.

These two factors combine to create a supply and demand relationship that favours workers and drives wages upward as free market employers compete for labour services.



This means that employers are paying just about as much as they can before no longer making a profit by operating. Given this, minimum wages above the current levels would cause (any semi-competent) employers to fire all of their employees and run solely on their own labour. Either that or we would see market prices shoot up to compensate, thus causing inflation, devaluing our currency, and decreasing the purchasing power of workers – which would defeat the point of minimum wage increases.

So, in our current economy, if you care about our free markets, you don’t want to raise minimum wage above the normal levels.

BUT THERE’S STILL MORE TO THIS!



Communes

Let’s go back to note number two from our eIrish economic model.

“2. In eIreland’s free market there are more jobs than there are unemployed workers.”
Why is this?

Well the long and short of it is, that communes are the major reason for this. In fact, communes define the working economic model of eIreland.



"OH NOES COMMUNISMS!" you say! Well, calm down for just a second and let’s remember the golden rule: real life doesn’t into eRepublik.
So for a starter let’s look at why communes are so popular in eRepublik vs. Real Life.



Real Life Economic Models

In real life, communism is tricky because it requires central planning. The needs of citizens have to be calculated down to how many nails to manufacture and how much vodka to produce. Because different workers have different outputs, which can be hard to measure, wealth distribution becomes an issue without an objective measure of economic worth like that offered by free markets. Marxism was a product of the industrial revolution, at a time when the full complexity of a modern global economy couldn't be fathomed.



Capitalism on the other hand works on the basis of supply and demand for both labour and goods – this works well when it comes to complex economies where a central authority could never comprehend every factor as efficiently as many the self-interestedly motivated specialized organizations of a capitalist model – it’s not perfect, but our real life economic realities explain why it is used.




eRepublik Economic Models

In eRepublik, we have basically 2 products, and 2 kinds of raw materials. An economy like this can be more easily planned – we know exactly what each citizen needs. In that way at least, this game's economy is very simple. We also don’t have to worry about differences in labour – the lvl 1 citizen and the lvl 50 citizen will do equal work and can easily be given equal pay on those grounds. So right off the bat, the economic features of eRepublik are much more in favour of communes that the features of real life. In addition, communes in eRepublik are not run by the state exclusively. In my opinion, what we call communes are more like corporations where citizens make an investment, and collect dividends.




Why We Use Communes
Given this game's economics, why do we use communes? Well here are some good reasons for a start:

1.Communes can be based out of other countries to take advantage of resource bonuses.

2.Members avoid income tax because they are paid in untaxed goods rather than taxed currency.

3.Total production can be allocated based on need or by debt, which is ideal for military unit supply.

4.Commune leaders generally don’t look for a profit margin. Workers are effectively given more for their work.

5.Communes are more insolated against market flux – X amount of work results in Y amount of direct production regardless of market activity.

6.Communes can be more efficient since they encourage citizens to pool their funds for upgrades that one citizen on their own would have a hard time affording.

7.As a culmination of these factors, communes often offer more than you would be able to buy with the currency you earn at a freemarket job.

Users invest in the system and collect dividends. Communes compete against each other for investment by being more efficient and offering better service… sounds kind of like capitalism to me ;)



There’s a reason why every nation in eRepublik now uses communes as the centerpiece of their economies. They work extremely well in the eRepublik economic model. Some citizens then supplement communes economic contributions by running their own factories on their own labour and selling it on the free market.

Having our minimum wage as low as possible allows our nation's communes to operate more efficiently and effectively by allowing them to exchange goods without leaking currency unwontedly. Raising minimum wage would either have no effect on our free markets, or have a negative effect on them.


What Did We Learn Today?

First: That we should leave minimum wage alone and support our nation's communes.

Second: Never assume that real life concepts and ideologies will translate flawlessly into eRepublik strategies. Look at the mechanics first and construct your views from the inside-out, not the outside-in.




End Notes

Need help researching eIreland? Check out the official wiki of eRepublik:
http://wiki.erepublik.com/index.php/Ireland

Have questions about how things work? Check out Irasians NC Guide:
http://www.erepublik.com/en/article/-tutorial-read-me-2129973/1/20

Need help with eRep Jargon?
http://wiki.erepublik.com/index.php/ERepublik_Dictionary


Thanks for reading!

Cheers,
Ian E Coleman





Forum: eireaonair.userboard.net
Wiki Page: Eire Aonair @ the wiki
eRep Page:Eire Aonair
Video:Eire Aonair @ YouTube
 

Comments

MR. PADRAIG PEARSE
MR. PADRAIG PEARSE Day 1,804, 19:26

inb4 ian steals newbs BH's

Lliam Costello
Lliam Costello Day 1,804, 19:36

Padraig is sexy, Just sayin

A Legend Killer
A Legend Killer Day 1,804, 20:05

Loving the graphs.. voted.

Sweet Drinker
Sweet Drinker Day 1,804, 21:44

repost this article 1 wk before every congress election

Bristel Akina
Bristel Akina Day 1,804, 21:55

Non-communist capitalist communes ftw!

Sleep is for the weak
Sleep is for the weak Day 1,805, 00:21

Really great article.

repost this article 1 wk before every congress election X2

Irasian
Irasian Day 1,805, 00:58

real life doesn’t into eRepublik. x2

Stilpo
Stilpo Day 1,805, 02:29

Amazing work once again. Must read for all noobs interested in politics.

Death and Taxes
Death and Taxes Day 1,805, 02:36

Good stuff, you might re-post this along with the impeachment article and the natural enemy article before congress is elected again

clancerz
clancerz Day 1,805, 04:57

Thank you.

Releasethe Krakken
Releasethe Krakken Day 1,805, 05:12

actually think there is a difference in production of a worker you befriended and one that is not your friend. perhaps research that as i quite certain of it. but nice article anyway.

collinfigures
collinfigures Day 1,805, 13:06

Good explanation. Very educational.

Anthony Colby
Anthony Colby Day 1,805, 15:24

Wonderful explanation of eWorld realities.

Is that an oxymoron?

Anyway. Awesome article. Explains a lot in simple terms that most should be able to understand.

Comrade Lovely
Comrade Lovely Day 1,805, 17:46

i do hate to be contrarian ian, and generally appreciate your writing, but i think you need to read marx's theory of labour value to understand why owning the fruits of one's labour a la the erep commune system, as opposed to selling one's labour for a wage, is perfectly consumate with this "RL communism" which you decry.

Sean Power
Sean Power Day 1,805, 17:57

Excellent breakdown. Essential reading for all TDs

Ian E Coleman
Ian E Coleman Day 1,805, 18:14

@C.Lovely. You'll have to write your own article explaining that one to me. I'm familiar with Marx and the eRep system, and I would look forward to an article where we could have that discussion.

I'm actually more open to RL Marxism than most westerners, and I'm not opposed to in-game communes as you can see from this article. Sorry if it seemed as though I was decrying anything other than Min.Wage hikes!

Ghost of Tom Joad
Ghost of Tom Joad Day 1,805, 19:20

Great job. . You could spend years on this subject.

New Faustian Man
New Faustian Man Day 1,805, 19:45

Voted, great stuff!

collinfigures
collinfigures Day 1,805, 21:03

Independent RL reflections this article is valuable because it explains why it is advisable to keep the a small minimum wage. Good work

CaffeineHit
CaffeineHit Day 1,806, 14:23

Great article

Sean MacDiarmata
Sean MacDiarmata Day 1,806, 15:43

Quality articles as always man

 
Post your comment

What is this?

You are reading an article written by a citizen of eRepublik, an immersive multiplayer strategy game based on real life countries. Create your own character and help your country achieve its glory while establishing yourself as a war hero, renowned publisher or finance guru.