Trade

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Revision as of 12:32, 3 February 2019 by Pang Bingxun (talk | contribs) (Supply and demand for goods)
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"Free trade is not a principle, it is an expedient."

-Benjamin Disraeli

Introduction to trade

The last remaining issue with the economic system is trade. Understand trade, and you will be able to make a quick fortune.

Auto-trade

There are many, many products you can make, buy, and sell in Victoria, and all of them are available for trade on the world market. All commodities start the game being auto-traded by the computer. A word of advice: turn this feature off. History has shown that the computer will purchase items you need, but in quantities and at intervals not usually suited to your budget constraints. To turn off this feature, you must go through and unclick all the little boxes on the left of the screen that have Xs through them. An X signifies that the computer is trading the commodity for you.

In a normal game, however, it is usually safe to leave some basic raw materials auto-traded. These include cotton, wool, coal, sulfur, and timber. But check your economic map first. If you country is short on any of these goods, it is better to leave them under your control.

Manually setting trade

You should rarely leave your higher-end goods under computer control. Allowing the game to auto-trade luxury clothing has lead to several second-year bankruptcies among new players. To set the orders for buying and selling manually, click on the box for the particular commodity. That commodity should then appear at the bottom of the trade window. Click the box to the left to indicate whether you want the game to buy or sell, and then move the slider to the amount desired. Remember to click “Confirm Trade” or else the order will not take effect.

Supply and demand for goods

Trade issues.jpg

Victoria's economy is an open one, meaning that, like all open economies, the price of goods is determined by supply and demand. As mentioned earlier, all types of POPs have different demands. The game keeps track of how much of each good (furniture, clothing, precious metal, automobiles, etc.) is produced on the market, as well as how many POPs are demanding them. Based on the amount of demand for goods, and their relative scarcity, the game will churn out a number for the price of that item. This number is found in the standard, humdrum, Econ 101 supply-and-demand graph.

Because of the game's reliance on this system to calculate price, you can, of course, manipulate it. To do this, you simply have to understand the way supply and demand systems work. If the demand goes down, the price drops, but if the demand goes up, so does the price. Similarly, if the supply drops, the price of the remaining items will rise as well. Therefore, if you are a large producer of a certain item—precious metals, for example—and are unsatisfied with the price per unit you are receiving, all you have to do is stop selling the good for a little while. As required by the system, the price will rise. Once the cost of the good has reached a satisfactory level, you can sell your stockpile and reap enormous cash benefits. Of course, flooding the market that way will drop the price back down to a more reasonable level. Be cautious, though, for messing around with the supply of certain items can increase your POPs militancy, because they, along with everyone else, will have trouble getting them.

Stockpiles and the need for them

It is always good to have stockpiles of certain essential goods. Steel, lumber, and cement, for instance, are necessary for building almost every type of building in the game, including railroads. Products like paper, furniture, and regular clothing are necessary in order to convert POPs into Craftsmen and Clerks, so it is also good to have a small stockpile of these on hand, though it should not be your first priority. You should also try to have at least fifty small arms and fifty canned food in stockpile if you can, as this is the cost of increasing mobilization.

Domestic and international availability of goods

Trade in Victoria is always international. There is always a domestic market for the goods you produce in your factories, but the fact is that the system makes the POPs buy their desired goods from the world market. This means that if, for example, you are the world’s only producer of furniture and you don’t offer your stockpile onto the world market, then your POPs won’t ever get any of it. This situation, recall, increases their Militancy.

This means that stockpiling your goods can be a very, very bad thing. Though you may be tempted to keep the other countries from industrializing by not providing them with the materials to convert their POPs (such as furniture and clothing), you will also be robbing your POPs of goods they need to live a happy life. Remember, free trade is a good thing in Victoria.

It is, however, fine to stockpile certain goods. War materiel, for example, is not demanded by any POPs and is generally a good thing to stockpile as you do not want to be supplying the armies of your enemies. Clippers and Steamers are very well priced, but they are also good to keep off the world market if you can afford it, as it will stymie the attempts of other countries to build up their navies. Of course, you can always utilize the commodities in your stockpiles whenever you want.

Economic benefit of trade for you

Trade also adds to your income. Any products you sell puts money directly into the pockets of your POPs, money which is then taxable. Your trade balance is clearly visible on the main task window inside the “Trade” box.