They specifically have tried to get the EVE economy to follow a similar behaviour pattern to real economies.
This means that real economy models can be used to predict EVE economies.
Even as a non economist I can see warning signs in the MERs. Slowing money velocity plus deflation is a big one if we start to see it on a large scale.
Decreasing money supply… harder to say, that needs matching against PCU to see what is really going on. Because most countries don’t actually loose 20% population also. But if money per person is dropping also that’s another warning sign.
That doesn’t make me wrong about there having been economic crashes in the last 10 years though. And you posted here where anyone could answer. So… deal with it.
As a historian, I want to point out that Solecist has touched on several strong points, which Nevyn failed to understand. There is a fundamental difference between a ‘collapse’ and a ‘crash’. Furthermore, although an economy may collapse, this does not necessarily mean the civilization will collapse.
It’s really only a problem for traders which are (just as irl) parasites.
If “the great collapse” would ever happen someone somewhere still mines ore, someone still builds ships from those ores, someone will still be ratting or doing missions and using that isk faucet to buy the ships.
Unlike the real world where cost of living vs income is an actual issue this isn’t really the case in EVE. So again the only ones who care about any of this are people who live off other people’s efforts.
Well those and a certain narrow-minded strawmanning economist who beyond spouting nonsense is quite terrible at the game.
I don’t know if they specifically tried to get the eve economy to have similar behaviour as just tried to get a living breathing player driven economy working.
I mean, there are some massive parts of the real life economy missing from eve…like energy and government. And then some added extras to the eve economy like isk faucets and sinks.
There are some similarities to how eve behaves compared to the real world. But there are also some huge differences. And this is one of those huge differences. You’re not going to get the great depression in eve. No famine or starvation. No mass unemployment. No homeless crisis.
The eve economy does not break down into nothing. It still functions with everyone running around in t1 frigs.
To quote Milton Friedman, Nobel Prize winning economist…maybe you’ve heard of him, “Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”
And there is not f–king inflation. Not when the money supply is shrinking and every index in the game if f–ing going down.
Seriously…what in the f**k?
No. It is an anonymous authority. I said every economist. Now I’ve given you a f**king Nobel Prize winner.
Talk about a logical fallacy.
Well, the Great Depression was really a monetary collapse problem. The money supply collapsed at the start of a recession and then consumption spending which was already slowing due to the recession completely collapsed.
The same problem happened in 2007/2008. The Great Recession was precipitated by bad lending practices, policies that encourage too much risk taking, etc. But the depth of the recession was most likely due to the Federal Reserve worrying about inflation early on as the crisis started. Even when they injected money into the economy they “sterilized” such injections. That is before they pumped say $1 billion into a banks accounts at the Fed, they first sold $1 billion treasuries to take $1 billion out of circulation. It was nuts. They totally missed what was going on until it was too late. My fear is so has CCP.
It depends. With something like the Federal Reserve they have considerable control over the money supply. They can literally inject money whenever and by whatever amounts they want. CCP can’t really do that without going outside the current mechanics. They’d have to do something drastic like double all wallet balances.
The current mechanic for money creation is actually dependent on players. That is, ISK is injected into the economy by players killing rats. If the # of players who are ratting is declining because the overall number of players is declining then doubling wallet balances is just putting a band-aid on the problem. The real issue is players are simply bailing and new players cannot match those who are leaving in terms of ISK creation.
In other words, a collapsing money supply is a symptom of the real problem…a collapse in the number of players. And you can’t cover that with lore or anything else.
There is one rather stark difference…growth of the money supply.
The money supply in EVE grows by one and only one means: players killing rats. That’s it really. Yeah you can point to commodities…but you get those from killing rats. And incursions…that’s really rat killing too.
So if the money supply is shrinking it indicates a problem with the number of players who are ratting. Which is quite likely correlated with the number of players overall.
So in a sense, the EVE economy is kind of like an economy with a commodity backed currency where in the case of EVE the commodity is time. And time is our most precious commodity. If players are simply saying, “Ahhh f**k it.” And leaving and the money supply starts to collapse then the rest of the economy will not be far behind.
Indeed. It points to a serious underlying problem. A very, very serious problem.
IRL, one.
Last 20 years, 2.
We came pretty damn close circa 1932…
What was the Big Thing™ that got countries out of it? Going of the Gold Standard which allowed countries to engage in expansionary monetary policy. All the nonsense FDR did after that was nonsense and likely hampered the recovery in the US.
Middle men serve a very valuable role. They bring producers and buyers together and often take on fairly substantial risk in the process.
Sure. Mining ore, doing PI and such will likely be the last things to go. The first will be things like T2 production, then reactions, and then mining and PI. The first to feel the pinch will be those trying to sell T2 goods, either the producers or the middle men that would buy such products and re-sell them.
I used to make T2 stuff and would often sell to station traders. Why? I have not patience for the latter. So I’d offer a price to station traders that they found reasonable. Yeah, I’d make less profit but I’d get my profit quite a bit sooner and avoid the downside risk of the market moving from underneath me. But now…my station traders are not buying. I’m having to sell my last batch of stuff myself. And I’m not buying new inputs. No ore. No T2 components. Nothing. So now those people I buy from are feeling the pinch.
Go look at the transaction tax ISK sink. It is down.
Go look at the various price indices, all of them are now trending down.
Go look at the ISK velocity, it is down.
These are all indicative of a money supply collapsing and by implication consumption spending collapsing.
That’s a bad thing. The money supply has contracted before for very brief period of time and by rather modest amounts. This contraction has been going on for 5 months and the money supply is roughly at a level that we saw 10.4 f–king months ago. That’s bad and unprecedented.
Yes, which makes this potentially worse! Government spending can act like a stabilizer. Sure consumption spending might drop precipitously IRL, but not so much government spending. If 20-25% of GDP is due to government spending then that means a drop in consumption spending by consumers is not as bad. Since we don’t have that in EVE then the drop in consumption by players is actually felt to a greater degree.
We seem to be hurtling towards one. I do quite a bit of trading, producing and invention in Delve. One of the most economically active regions outside of the Forge and it is slowing down, IMO. For everything I make/sell prices are down…alot.
They can just implement things, though, that pretend to be consuming items. I don’t see CCP not trying everything they can to save the game, if necessary.
That’s not magical thinking!
His thoughts don’t break the laws of causality.
You probably mean “wishful” thinking.
Sure, but that is just a band-aid IMO. The real problem is with # of players. Sure CCP could start putting up buy orders for all sorts of items, but that is what they did to get the in game economy going. And once it got going it became sustainable and CCP stopped doing that. They could do it again, but that only underscores the problem. This is basically turning mining, PI, and just about everything else into an ISK faucet. Literally. This simply underscores the problem. This is, literally, and “Oh ■■■■!” moment.
In another thread, @Black_Pedro references new players and mining. Fine, but new players cannot replace old players in terms of consumption. When I’d go buy stuff to do a batch of invention it was several hundred million for each item. No new player is going to do that, ever.
CCP, IMO, is on the wrong track. Mining while semi-AFK was a freaking feature not a bug. Now they’ve changed that. Black out was a freaking disaster. CCP implements it and the look at the money supply it has started going down at an unprecedented rate. If it continues in another 5 months we’ll be back at an ISK supply that is similar to the start of 2018 or even lower. Economies have feedback loops so it is entirely possible it will be even worse.
To be clear, even if CCP did things such as making carrier and super-carrier ratting were more efficient and the money supply started growing again it would not address the real problem…the loss of players. The blackout was a terrible experiment that CCP may never recover from, IMO. It was stupid. Blinkered. Idiotic. They should never have done it. They’ve been talking about removing local while giving player the observatory array to claw back aspects of local, but instead they simply removed local. The ISK supply peaked on June 1, 2019 and has since fallen 12.5%…in 4 months. The growth rate in the ISK supply leading up to the inflection point was 9.6%.
Unless we are going to all be flying around in noob ships with civilian modules no…the game will not continue with just T1 frigates either. I know people have said production is too high for years, but they are idiots. Production outstripping destruction means that players will put their stuff at risk. When it gets to the point you can no longer buy the ship you lost because nobody is making it…you won’t put it at risk.
For the love of ■■■■■■■ God…we are all ■■■■■■■ risk averse. Sure some ■■■■■■■ dip sh!ts in game hurl that phrase around like a slur but they are ■■■■■■■ dip sh!ts. Just about everyone is risk averse. Even in video games.
Let me try it this way…
Suppose I’m out there in a retriever mining away. And a CODE. guy (bless his heart) comes along and blows me up. I’m annoyed, maybe even pissed. But I can go to the market and buy a new ship, mods, and so forth. With insurance and sufficient production it is not big deal. And soon I’m back out in the belt mining away…and I am once again a target for those CODE. a–holes (whom I love despite all their James315 roleplaying–can someone get James315 a f–king editor please!). But with production falling, the ISK supply falling, and people sitting on their ISK because now holding ISK has a positive rate of return (with inflation holding ISK means you suffer a loss, better to spend it than to hold it)…when my retriever is blown up I may not be able to replace it (at a cost that makes me want to put it back in a belt). So then I undock in a venture. But as production and the ISK supply continues to contract soon I’m back out there in a velator or ibis or ■■■■ it…I’m off to play another game (the most likely scenario).
Oh…and look…the destroyed graph is dropping too.
But…hey…it’s awesome right! People are leaving. Prices are dropping. So players who mine, do PI, invention, reactions can…lose ISK…for…ever…oh…wait. No they can’t.
Unless CCP realizes how goddamn stupid they’ve been this is it. There is a good goddamn reason various devs have been bailing. The ship has been holed below the water line and is taking on water.
Prediction: Before June 2020 CCP Falcon will leave…I hope I’m wrong and things turn around, but I’m not hopeful. I really, really want to be wrong. I hope in July 2020 I can say, “Welp, blew that prediction.”
Except making t1 ships, including barges, takes very little time investment and everyone can do it.
You’re not going to get the situation where you cannot do a little ratting and mining in high sec and make t1 ships. And code won’t become rife either…
You’re still treating the economy like we can’t make cars from ingredients we find in our back yard and print money.
