The value of money

[Garuda]

I'm trying to figure out the relative value of the Imperial credit or any other form of currency that an independent world might use.

So, does anybody know the cost of living on the average world in Traveller? Annual earnings of various planetside occupations? The cost of every day goods etc?

Specifically, I'm trying to work out what amount of credits constiutes a tempting bribe to secure the corrupt services or silence of a government official.

 

[rust]

Most informations you need are on the first two pages of the equipment
chapter of the core rulebook.
According to this, a high standard of living costs about 2,000 Credits per
month, so about 2,000 Credits should perhaps be sufficient to bribe an
official under most circumstances.

 

[Garuda]

Thanks Rust,

I'll dig out my core rule book later and take a look at the equipment section.

In the meantime does anybody else have any thoughts or employ any 'rule of thumb' on living costs etc?

 

[Rikki Tikki Traveller]

Also, figure a Credit is about 2-5 US Dollars and you can use real world equivalents.

 

[Solivagus]

Also, figure a Credit is about 2-5 US Dollars and you can use real world equivalents.

Thats inflation for you, I believe it was stated waaaay back that 1 Imperial Credit = 1 US$ when the game was first published.

 

[Supplement Four]

Also, figure a Credit is about 2-5 US Dollars and you can use real world equivalents.

Thats inflation for you, I believe it was stated waaaay back that 1 Imperial Credit = 1 US$ when the game was first published.

This is correct. Marc stated it in an interview. The dollar has changed value in the last 30 years, but prices for things in Traveller has remained stagnant--thus things in the Traveller materials show the Imperial Credit with more purchasing power than the US$ today.



Related Note: If you've got the CT CD-ROM or the JTAS reprints (or the original JTAS mags), you'll have a chart that Frank Chadwick devised allowing a GM to figure the relative worth of the Imperial Credit on specific worlds. There are a couple of articles in the JTAS run where this chart is used.

The chart used TL, Starport class, and some other conditions to come up with a factor that could be multiplied against the Imperial Credit to show an item's worth in native currency.

 

[Rikki Tikki Traveller]

That table is also in Trillion Credit Squadron.

It is VERY valuable and was supposed to be used for buying/selling cargo as well.

 

[phild]

Sounds useful. Another table I've been after is some simple comparison on the costs to purchase, staff and run a freighter and the returns available through the Trade system.

After all, apparently there is a universally fixed price for shifting people around the place. I know, if I was a PC, I'd simply cut 1000 credits off a middle passage, max out my life support, double-bunk the staterooms and make a killing in the no frills marketplace

 

[Knightsky]

According to this website, a dollar in 1977 had the spending power of $3.61 today.

If I'm figuring stuff up on the fly, I usually go with 3 Cr = $10, as a rough rule of thumb.

 

[phild]

From a UK perspective, the food examples suggest 1Cr=£1. However, the accomodation examples suggest more like 1Cr = £4. And I couldn't comment on the armaments or cybernetics ;-)

 

[Ishmael]

I figure 24,000 ( local ) per worker that uses 1 unit capital and one unit of resources to produce one unit of goods. I then use the exchange rate table from Striker to convert to CrImps at the starport ( 'official exchanges give worse rates than black market, of course ).

Costs as listed, but in local currencies times demand divided by supply.
One unit of pop demands one unit of goods and one unit of agriculture.

As I work things out in better detail, I'll break things down to agriculture,resources, hvy industry, light industry and construction. Agriculture produces food and some resources, resources produces materials; Hvy Industry produces capital;Light Industry produces consumer goods, and construction produces infrastructure.... military and unemployed produces nothing.

One worker uses one unit of capital and one unit of infrastructure to turn one unit of resources into one unit of goods. Excess production is available for export. Excess demand can be taken care of with imports.

the start of the idea is laid out here

http://moukotiger.googlepages.com/econosim.txt

an open office spreadsheet with some work on this ( and a world generator which follows my own process as described on these boards some months ago ) is here

http://moukotiger.googlepages.com/worldbuilder.ods

maybe I'll actually finish this someday

-------------------------------
http://moukotiger.googlepages.com/home

 

[phild]

I figure 24,000 ( local ) per worker that uses 1 unit capital and one unit of resources to produce one unit of goods. I then use the exchange rate table from Striker to convert to CrImps at the starport ( 'official exchanges give worse rates than black market, of course ).

Costs as listed, but in local currencies times demand divided by supply.
One unit of pop demands one unit of goods and one unit of agriculture.

As I work things out in better detail, I'll break things down to agriculture,resources, hvy industry, light industry and construction. Agriculture produces food and some resources, resources produces materials; Hvy Industry produces capital;Light Industry produces consumer goods, and construction produces infrastructure.... military and unemployed produces nothing.

One worker uses one unit of capital and one unit of infrastructure to turn one unit of resources into one unit of goods. Excess production is available for export. Excess demand can be taken care of with imports.

I love the idea of this. Two comments though.

1. You might want to think about how you would include the financial and insurance services. Much of the wealth of the UK is based entirely on this sector which produces few discernable "products", but takes excess financial resource and makes it work more efficiently. Allegedly.

In your terms, this might be an alternative human resource model that takes multiple units of capital with 1 unit of infrastructure to generate additional capital, and that capital is then available for export in return for importing goods and agriculture.

2. Also don't forget Leisure Tourism and Hospitality. On Rich High Techworlds this is likely to be a hugely significant sector, as they use technology to reduce their working day and/or increase their efficiency, creating more time and free cash for non-productive activities.

In terms of your model, there may be an "acceptable wealth" point where efficiency is generating such a return on human resource / production that excess is not used to generate more production but to increase leisure time.

Phil

 

[Ishmael]

I love the idea of this. Two comments though.

1. You might want to think about how you would include the financial and insurance services. Much of the wealth of the UK is based entirely on this sector which produces few discernable "products", but takes excess financial resource and makes it work more efficiently. Allegedly.

In your terms, this might be an alternative human resource model that takes multiple units of capital with 1 unit of infrastructure to generate additional capital, and that capital is then available for export in return for importing goods and agriculture.

2. Also don't forget Leisure Tourism and Hospitality. On Rich High Techworlds this is likely to be a hugely significant sector, as they use technology to reduce their working day and/or increase their efficiency, creating more time and free cash for non-productive activities.

In terms of your model, there may be an "acceptable wealth" point where efficiency is generating such a return on human resource / production that excess is not used to generate more production but to increase leisure time.

Phil

I'm not working at a level of detail that makes financial industries or tourism a concern. In this model, capital is purely the tools of production and not financial backing. The finance industry creates no 'wealth', aka goods that have value. They only transfer paper around.
The paper is worth only as much as the goods it represents. When the amount of paper does not match the value of the goods, you can get inflation ( Zimbabwe ) or other financial $%#% like the US's housing bubble.

Tourism/leisure is abstracted by consumer demand which might be for televisions or beer or souveniers... consumer goods produced by light industry.
Free time is not worried about... I don't care if the worker makes the product over the course of one day, or one hour.

Both of these areas are abstracted as 'other' economic sector. They produce no wealth/goods but the population themselves are goods which other sectors have a demand for. .. and they themselves also have a demand for food/goods/resources/services.

If there is more supply than demand, the prices will plummet and the sector's return should plummet too. If there is more demand than supply, prices will skyrocket and 'happiness' will eventually start to fall....fall too far and riots/revolution might occur ( I haven't got that far with this yet.

I"ll get things worked out in a spreadsheet eventually.
They fun part will be when variable demand is factored in.

" Last year, blue rocks were hot...now I can't give them away "
< okay..that's a bit extreme as supply/demand rarely swings that far that fast. >

-------------------------

All this because I was curious about trade volumes between worlds.
and no, I'm no economist......

 

[phild]

I'm not working at a level of detail that makes financial industries or tourism a concern. In this model, capital is purely the tools of production and not financial backing. The finance industry creates no 'wealth', aka goods that have value. They only transfer paper around.

While true in a sense, what the financial industry does is mitigate risks that encourage people to transfer money into entrepreneurial activity rather than saving, as well as maximising the availability of capital when people need it most. In a way they are transferring paper around not just in space, but also in time! So a world with weak financial services may have 100 Capital. An otherwise identical world with strong financial services may have 110 Capital. A small but over-time highly significant difference. And while financial services over the Imperium would be difficult to centralise, it is certainly foreseeable that one world per subsector could well establish a notably stronger financial services sector that would make it the capital broker of choice for a network of 10-20 worlds.

World A that specialises in financial services will then be able to generate capital more cheaply than another world, but World B can build Widgets more cheaply. It's then in the interests of World B to maximise it's Widget production by purchasing additional capital from World A, both worlds increase their profits* on their activity and in some abstract way the entire universe gets a little bit better off.

Of course, I do understand where you're coming from and this does risk getting complicated. However, it might be worth considering adding something like this for a "version 2". At the moment it is - again, understandably - something that is entirely lacking from Traveller core rules. The emphasis on trade there is all about moving produce from Planet A to Planet B and randomly rolling for profit. Pretty much everything else is fixed, including cost of loans, cost of ships, cost of shipping, running costs etc.. The fact of the matter is that access to capital massively impacts on trade.

The individual with access to capital can purchase a larger, newer ship. This will:

• cost less to run (lower staff costs per tonnage of freight, for example, as many crew costs are fixed, expensive new ships have lower maintenance than cheap old ships).
  generate more turnover (more tonnage = more sales)
  potentially drive out competition - lower costs and higher sales means they can accept lower prices and still make profit because of lower costs and higher turnover, forcing down market price and making products uneconomical for smaller traders.

These factors work together to secure the higher revenues that allow them to pay off the initial finance on the ship.

If you were so inclined, and had a degree in Economics and a interested group, you could have a lot of fun playing around with the core financial assumptions of Traveller, from the fixed costs of High passage down to crushing the native economies of small pre-industrialised worlds through the mass import of cheap mass-produced consumer goods. Or perhaps that's just my odd definition of fun...


*although on a galactic scale the range of govt types means that profit doesn't have to equal cash. It could be standard of living, leisure time, or any other similar measure of relative gain.

 

[Ishmael]

World A that specialises in financial services will then be able to generate capital more cheaply than another world, but World B can build Widgets more cheaply. It's then in the interests of World B to maximise it's Widget production by purchasing additional capital from World A, both worlds increase their profits* on their activity and in some abstract way the entire universe gets a little bit better off.

I understand what you're saying, but in this instance, I must disagree because you and I are using the word "capital' to mean two different things. I use it as 'means of production' and you seem to be using it as 'purchasing power'.

I still say financial industries do not create wealth, but sees to its smooth transfer between entities. They also act as "bookies" where the bet is on whether a company can pay back a loan and the odds are set through the use of credit ratings. These are services that people are willing to pay for and are lumped into the economic sector "other" in my model.
On a single world, its functions are abstracted, but when acting across to other worlds, the financial industry makes its money through interest on loans and outright betting on real production and demand fluctuations ( commodity futures, for example ).
The worth of their money is based on actual stuff. When it becomes artificially out of balance, then you get inflation and market collapses.

 

[phild]

I understand what you're saying, but in this instance, I must disagree because you and I are using the word "capital' to mean two different things. I use it as 'means of production' and you seem to be using it as 'purchasing power'.

I'm not sure I agree with the distinction. With any given resource you can expend now or invest for the future. Expending the means of production today gives you a product; expending less of the means of production today on the basis that you'll be able to generate more products tomorrow. In this sense, I think we're using the same definition of Capital. However, we've strayed well away from Traveller discussions now so I'll leave it here and look forward to your finished models

 

[SSWarlock]

< okay..that's a bit extreme as supply/demand rarely swings that far that fast. >

Wanna bet? The '70s had a fad called the "Pet Rock" that made the person who came up with the idea a multimillionaire in 6 months..which about how long the fad lasted.

http://www.super70s.com/super70s/Culture/Fads/Pet_Rocks.asp

And, no, I never bought one. Dumbest thing I ever heard of, even as a young'un back then, but I learned from it that even dumb ideas can make people filthy rich.

 

[Ishmael]

< okay..that's a bit extreme as supply/demand rarely swings that far that fast. >

Wanna bet? The '70s had a fad called the "Pet Rock" that made the person who came up with the idea a multimillionaire in 6 months..which about how long the fad lasted.

http://www.super70s.com/super70s/Culture/Fads/Pet_Rocks.asp

And, no, I never bought one. Dumbest thing I ever heard of, even as a young'un back then, but I learned from it that even dumb ideas can make people filthy rich.

sure..I'll give a small bet....

How much money was spent on these things?
What percentage of the Gross Domestic Product did trade in "Pet Rocks" make up?
I'll bet it was a relatively tiny blip compared to the rest of the world's economy.

btw..I'm more than old enough to remember pet rocks

I figure on monthly 'turns' and while the maket can go up or down in big jumps ( 5% on more of total value in a single day, in extreme cases ), I'm guessing that the overall trend is much smoother. It just means I'll have to carefully consider the mechanism I choose to track changes in demand. I'll probably use a simplistic semi-random method as discussed on my googlepage.

A better method might be to track the population's income which means praeto curves and gini numbers..bleh.! per capita doesn't tell the whole story when it comes to an individual's purchasing power, eh? Actually, if I figured things right a couple of years ago in an earlier attempt at this sort of thing, two thirds or so of the population makes less than the per capita income. Lots to think about.

btw I'm more than old enough to remember pet rocks... I thought it was stupid even back then.

 

[aspqrz]

A better method might be to track the population's income which means praeto curves and gini numbers..bleh.! per capita doesn't tell the whole story when it comes to an individual's purchasing power, eh? Actually, if I figured things right a couple of years ago in an earlier attempt at this sort of thing, two thirds or so of the population makes less than the per capita income. Lots to think about.

BTRC's "Stuff!" for EABA has a whole chapter on designing a Civilisation, which includes working out not only per capita income, but how it varies by occupational/social class grouping.

It's quite broad brush, but it gives some interesting figures to work with. And there is an automated worksheet in Acrobat that does the heavy lifting for you!

Phil

 

[SSWarlock]

Gah! That sounds too much like a job rather than play. Realistically, how many GMs are going to stop an adventure to look up per capita income based on a social group?