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I have been hearing lots of nonsense out of people regarding economics. I really don’t know how or where a person who doesn’t claim to understand economics would start. There is quite a bit of math in it all and we can imagine people slipping up. I know a smart place to start would be looking into disagreements. If two people don’t agree logically one is wrong. Then perhaps you look for self contradictions. You will find lots of that in eRepublik newspapers. Some cases are just a matter of tolerating people who see the truth in some places and have some totally whacked out ideas in certain areas. Let me however assure you that eRepublik idiots are totally on par in every way with real life economists and policy makers. If you see something that doesn’t make sense here in eRepublik, rest assured that I have seen the same thing in real life in the highest levels of responsibility. I guarantee that many people have gotten high marks in their economics classes and accurately bring these misconceptions to the game and properly apply them as well as they could be applied in real life. Please don’t take my derision as an insult to the game or the caliber of player it attracts. They are world class right and wrong. That makes you in the middle of one of the best places to observe economics and behavior

Getting into why people are wrong and maintain understandings that are wrong is really hard because you have to both think correctly and also think of mistakes that seem possible or plausible or you have to think that they are being dishonest. Sometimes our only frame of reference is limited to the way you thought before and after you learned something in particular. This may not be sufficient.

Economics cannot be just about testing. This is not simply because you cannot isolate all the factors, because you can do a pretty good job. Mass behavior is great in chemistry and gas particles and is useful in economics but you cannot really isolate variables. Economists are not allowed to put economies in closed containers for testing and keep control specimens. You cannot abandon or do without the knowledge of the choices you would make in various scenarios. While I will talk about economics in broad strokes, it has to come back to my experience in the economy shopping and getting value and how I react to stimuli. In computer science there is something called a halting problem which states that you cannot write a program that determines if a program will ever finish. This can be proven by the fact that you can make a program that is defiant. Assuming you were to make a program that could determine that a program would stop or continue, you could include that program within the program to be analyzed and tell it to continue if the answer was that it would stop and stop if it would continue. Humans can be that obstinate, within bounds. Economics needs knowledge of human behavior that has to include personal experience. While self interest is not a given in all situations you must understand what is in your self interest because it is a very predominant factor. The law of resources (that I might have just made up) dictates that if you do not gather then you have nothing to distribute. Analyzing choices and value with many factors is necessary. In the end what is valued in economics are your choices and your values. A common wrong approach is to tell people to do things that they may not find to be in their best interest or saying that we can eliminate a risk by doing something. While doing things that are not in your best interest reduces your ability to do more things that are not in your best interest. Decreasing risk increases risky behavior and may push the danger to new levels, for example guaranteeing home loans IRL.

My advice is start with what you know and be concerned about yourself so that you can understand people who are concerned about themselves. If you are truly selfless perhaps others around you are simply pretending to be to take advantage of that. Anyone who talks about “stimulus” or “creating demand” or inflating a currency to encourage exports or says that profit is bad, or that savings is bad is someone you should look at with extra scrutiny and doubt. I don’t say that you should turn them off, but turn on your critical thinking skills and make sure you follow how well they balance equations. There are lots of things that fit into an equation even in economics.

There is much talk about increasing import taxes. What are some equations? Imports = exports and Demand = supply and 1 USD of apples = 1 USD of Oranges to a seller. 1 unit of usefulness of Weapons = 1 unit of usefulness of gold to a consumer. 1Unit of pay that you are eledgeable = 1 unit of pay in most any another company.

TKC how in the world do you come up with that, that is way to complicated a system for you to make such generalizations. I just say, I didn’t come up with it, YOU DID. I put my money where my mouth is and so did you. everyone voted on it.

The simplest statement there is 1 USD of apples = 1 USD of oranges. People pay that on an open market. I don’t have to guess the ratio of apples to oranges in this equivalency but once I find out I can look at which one is easier for me to get. I do that and the market responds adjusting the ratio of apples to oranges. In an open market people who have small advantages in areas fit best into those niches. Spain owns their High Iron region making it easier to protect there is less risk there and less rent cost. And they have less competition in other raw materials. The market suggests a certain ratio of Raw materials to finished products is most efficient because export licenses cost money and would be needed to balance other things. Who should be producing the most Iron on an open market? Who has lower production costs and risks? What government should Iron be produced under? I don’t even need to answer that because an open market finds that balance through profit, what is is what should be. It may be that war may break out between Spain and USA and I may be proved wrong by the market(the market may disagree with it’s earlier consensus). USA Iron may become more profitable. That means the people who put their money where their mouth is were proven correct. I for one will be glad for the obstinate one who succeeds in the face of a market of nay sayers.

I made a statement that One unit of pay that a person is eligible for in one company is equivalent to one unit of pay in another. How can you say that TKC? Because people factor in the costs of wellness loss themselves and people think about the cost of switching between skill sets and future loss or gain of wages, also the mental cost of finding a job is all factored in. You vote on how much compensation working a skill set is and how much compensation having to search for a high skill job is or how much compensation a lower quality job is. The market decides how much you have to pay.
Do we want to throw up barriers so high that it will persuade people to switch between skill sets and become less efficient?

What do you mean Supply = Demand TKC? Obviously people want more than is supplied sometimes. Actually People want more than is supplied all the time in every situation. I want everything in the world for free, "selfless people" want it all so that they can hand it back out again, so that is obviously not what anyone is talking about. Supply meets demand because the price varies to match up production costs with the people who actually need it enough to meet production costs and profit goes to those with foresight who invested capital where they think it is needed and guess correctly. (put their money where their mouth is). On the larger scale everything is a commodity. Currency, Gold, finished products and raw materials are all produced. My demand of Products and services is my supply to the market of Gold and products and services. You cannot create actual demand without supplying something to the market that it wants(demands). If you have nothing it is because you consume more than you produce. If you stay at owning nothing you constantly use as many resources as you produce. If you want to make everyone better off including yourself you think about what you can produce and how you can do a better job. There are no exceptions. Even if you mix up your analysis into something complicated that you do not understand you cannot change this. If you involve the monetary market the story is the same. Picking up a mistake someone made on the Monetary market is offering a service to the side of a war you are on. It is certainly a service to yourself. What if your service is in helping someone else understand the game and be more efficient? You could either say you spent your time and you personally demanded it and it cancels or you could include that person in your group and consider that the group is richer for your effort. There is no exception.


What is this about imports = exports TKC? It is obvious that a rich nation got that way by exporting more than it imports and you can assist this by inflating the local currency.

Really? Really really? How do you figure? Please continue.

Come on TKC, this is like basic economics. If the currency is worth less then locally produced good are more of a value and more sell.

Please continue.

I just explained it TKC.

Interesting so changing the value of the currency affects the prices of goods to foreigners by tricking sellers who think that the USD will be worth more than it actually will be and they get less for their goods.

No TKC The value on the local market does not change, just on the world market.

Interesting, please tell me more. I see that somehow you are saying when we dump cheap goods on the world market that is good and so getting cheap goods from abroad is bad?

Yes TKC

So we need to increase the cost to natives over what it would normally be and cut profit to make the nation stronger… Hmm. Well back to your question, I was just saying that since it is a market the market determines what the equivalent value of the products is because 1 gold of apples = 1 gold of oranges. Whether player produced goods, gold or currency. All trades are canceled out as equivalent value as determined by the market. Something comes and something goes. Another way of looking at it is that foreigners cannot spend native currency it must be canceled against a flow of goods in the oposite dirrection. If we give stuff away that doesn’t count as trade and if we sell it cheaper than the market would allow we are losing out. I would prefer that cheap goods were dumped on our market so that we can shift and play to our strengths so that we can more effectively export instead of supplying every one of our needs personally then digging out what little labor we have left to export abroad. Leaving no niches in our market and exploiting their niches that we can accommodate seems fairly reasonable to me, but what do I know, it is not like I am going to second guess all the millions of decisions that take place in eRep marketplace.