Posted by
cavalier973 on Sunday, April 13, 2008 10:37:11 PM
In the game Tropico (here's the wikipedia article:
http://en.wikipedia.org/wiki/Tropico), you quickly find that there is no such thing as a free market. Sure, you have a "Capitalist Faction" that you must placate, but in real Capitalism, it wouldn't be anything you as the government would worry about. Because Capitalism, or free enterprise, is the concept of as little government invervention as possible. But in this game, Capitalism is equivalent to "heavy industry," and I wonder if that concept is how most people think of Capitalism in the real world.
Regardless, this article is focused on the concept of trade, as effected within the game. Since your government collects no taxes, you must raise funds through rents, foreign aid, and exports. You begin the game having only one product to export, that being corn grown from the farms. If you switch some farms to, say, bananas or coffee, you can export that as well. The next couple of items you can quickly get to the docks is timber and beef. If your island has some mineral deposits nearby, you can export gold or bauxite. You know, commodity-type goods.
Then, after building up your industry, you can start making more money by exporting canned pineapples instead of the raw fruit, furniture instead of lumber. (There is also the option to build hotels and touristy type businesses, but we're discussing trade). On the other side of the ledger, the things you can import include: Nothing. The game, therefore, is strongly influenced by mercantilist philosophy.
The Mercantilists believed that nations must maintain a "favorable balance of trade", meaning that the nation's industries export as much as possible and import as little as possible in order to build up the national reserve of gold and silver ("specie", which was the basis for just about every nation's currency at the time). The idea was silly for its time (as Adam Smith detailed in his "Wealth of Nations"), and should be considered even sillier today, what with fiat money being the currency of choice. For example, people are in a state of near panic over our "trade deficit" with China. What they are worried about is that the Chinese are being much too willing to give us manufactured goods, televisions, microwaves and such, in exchange for little pieces of paper bearing the image of our former Presidents. It's a worry that is comforting, in a way, since it shows that people still believe in the purchasing power of the dollar; that is, they believe that the dollars that the Chinese hold somehow give the Chinese people power over us.
Back to the game, though. Having established that trade in the island of Tropico is exclusively of the export type, we find that playing the game to its later stages brings up a unique problem: your government has loads of cash, and your people are starving. Because the best paying jobs are in the factories, no one wants to work at the farms. No problem, as the supreme dictator, you can raise the wages of farm workers. But it takes a lot of people to work enough farms to feed the rest, and government coffers start to run dry as you're shelling out the big bucks to people who have the eductation to be professors or bankers, but who are working on farms. There's a lot of rabbit trails I could follow here, but to stick to the trade issue, the game doesn't allow you to import food or any other item. Unwittingly (I assume it was unwittingly), the game's programmers have set up an important negative lesson about the value of trade. Everyone seems to be worried about exports, but no one really is concerned with the imports.
Imports are actually the more important factor in trade. Think about it from a personal (microeconomic) level. You work at a job for money; you build cars or answer telephones or deliver pizzas. You take the money and buy things you want. While you are working, you are thinking about what to get for lunch, or the cell phone you plan to buy after work, or the car you are saving up to buy in a few months. While you may be proud of your work, your main concern is what you plan to buy. Your work is a means to an end, not an end in itself, Protestant Work Ethic notwithstanding.
The same holds true on a macroeconomic level. A nation's population should be actually trying to get as many imports as it can by trading as few exports as it can. Of course, it all balances out in reality, even if it doesn't on the accounting ledger, because when two people, or two firms, trade, each is giving something that he values less than the thing he is receiving. If I for some reason have one of Babe Ruth's Rookie Baseball Cards (Mint Condition), and I trade it to Mr. Smith for a first edition copy of Adam Smith's "Wealth of Nations", who got the better deal? One could look up the respective blue book values of each item and go by that. But if I am satisfied with the trade, and Mr. Smith is satisfied with the trade, then any such evaluation would be artificial. The same goes for televisions and telemarketing.
For God and Free Trade
cavalier973