Editing Economic rules

What use is a nation without an economy? Not much use at all. However, in almost all MS RP's, third world nations are able to man million-man mega armies of doom. The creators of E20 (namely Galveston Bay) came up with a way to fix that, by making rules. Starting as as simple at first, they have since evolved into a complex system.

==Basic Income==

Nations principally gain income from their own internal production, commerce and colonial resources. Production centers provide a variable amount of income, while resources and commerce are fixed income. So to determine your build points, you add your domestic income plus your commerce plus whatever foreign aid you receive and that is what you have to spend each year.

Economic points are used to buy and maintain military units, as well as for social spending, loaning to other nations (or paying them back), economic improvements and special research projects.

Resources represent things like gold deposits, timber, specialty agricultural productions, and other productions that result from extraction industries. Each year each resource provides 1 point of income. Resource values will change from time to time as new discoveries are made. There is no upper limit to how many resources a nation may have

Commerce represents your international trade and for some nations may very well exceed what they produce domestically. That is fine and allowed and historically valid. Commerce points are added to the economy after production points are determined. 

Merchant marine (international trade) adds .20 build point a year for every 100,000 tons of shipping (1 shipping unit) at tech levels 4 – 6. . shipping isn’t just overseas trade but also internal trade, such as river barges, Great Lakes cargo ships etc. Each shipping units costs 1 points, build time 6 months. A nation cannot have more then 1 shipping units per 250,000 people (somebody has to man them after all). Exceptions are Greece, Norway and the Netherlands, which have historically disproportionate sized merchant marines. They may have 1 shipping unit per 100,000 people. 

Passenger liners can also be built (maximum 1 per 5 million people). They provide .1 points a year for each unit, and can be used during wartime as fast transports. A maximum of 1 point can be earned from ocean liners, and they count in addition to what is earned from merchant shipping. They cost 3 points a year for 2 years and consist of 4 ocean liners large enough to carry 1,000 passengers or more (2 ocean liners at tech level 5.5, 1 at tech level 6) 

Tankers do not add anything additional to commerce (except that they are counted as a merchant shipping unit) but you must have 5 tankers for every 1 oil point that your import. Up to 40% of your commercial shipping can be tankers, and must be indicated as such as of 1915. If you do not import oil, you don't have any tankers. The US is a special case, as the East Coast imports oil from the Gulf Coast, so it too has a large tanker fleet. Russia has a similar situation, as its oil exports are sent by tanker from Baku on the Caspian Sea to Astrakhan and from there by river barge to cities in the interior of Russia for export by rail to ports like St. Petersburg. So in the case of Russia, up to 25% of its merchant shipping is considered tankers, and nearly all of these tankers are for coastal and internal waterways. 

Russia, the US, and Canada have vast internal and coastal waterways, and 50% of their shipping is not ocean going, but coastal and internal shipping. Germany has 20% of its shipping in use for the same purpose (ore shipments up the Rhine). Japan, Britain, Sweden, Italy and France have 20% of its shipping devoted to coastal routes, while all other nations have 10% of their shipping devoted to coastal and internal waterways. This kind of shipping is much harder to attack in wartime and of course is unaffected by embargos, should one develop.

Tourism is income earned from having very large numbers of guests into your country who spend on food, lodging etcetera. For most nations, until the arrival of the jet airliner, this income is too small to be noticeable. However, whoever owns Marseilles, Mecca, Cuba, Jerusalem, Florida, gets 1 point a year. 

==Spending Levels==

Production centers represent factories and other facilities that change unfinished resources to semi finished or finished goods. Unlike resources and commerce, governments can vary the amount of income they receive. Income can be modified as follows

Market Economy Austerity Level, growth 4%, each production center provides 1 point, default position for UK, Australia, Canada, and United States unless otherwise indicated. 

Market Economy Budget cuts, growth 3%. Each production center provides 2 points

Market Economy Peacetime. Normal income, growth 2%

Command Economy Peacetime Normal income, growth 1%

Peacetime is the norm. Each production center provides 4 points

Market Economy National Effort, and each production center is worth 6 points, growth 1% (essentially simulates large scale budget deficits)

Command Economy National Effort, production centers are worth 6 points, growth 0% (requires level 3 social spending to offset social costs). Market economies cannot go to national effort unless they are at war, are having an economic depression, or have suffered a major natural disaster that has damaged production centers. Command economies cannot go to national effort unless they have 1 police unit for every 10 million people. 

National effort is a short situation, as a long term effort will strain the economy. Each production center is worth 6 points. Incidentally, if National Efforts continue for more than 5 years, there is a penalty. Accumulated budget deficits in the Market economies trigger a recession of 1 year for every year of the national effort (-2% growth for duration). In Command Economies social unrest begins unless social services are increased to the next level, even if you have police units.

Market Economy Wartime (not available until second year of war), production centers x 9, growth 1%

Command Economy Wartime (not available until second year of war), each production center is worth 9 points, no growth

Market Economy Total War (not available until second year of war), Production centers worth 12 points, no growth first year, -1% growth second and additional years. Plus -2% growth for each year postwar for every year Total War economy was in place. (simulates post war recession, large budget deficits). 

This is to simulate the fact that Market economies have more capital available and more slack then Command economies but are slower to respond. They also can accumulate massive debts.

==Growth==

Points added to the economy from growth create new production centers. Nations must actually have at least 1 production center to benefit from growth. Players adds up their commerce, tourism, resource and production income, SUBTRACT how much they spent on maintenance for the military and for social services, and then multiply the REMAINDER by their percentage of growth to figure out how many new production centers they get. If less then 1, that growth is saved year to year until 1 is reached. New production centers are created first at resource areas (1 production center replaces 1 resource point) and then elsewhere. Special note: When figuring growth, an economy that is at cut spending or austerity gets to add in its production as if it was at normal peacetime spending. 

If a country has reached its economic productivity maximum and still has growth, one quarter of those production centers normally created represent excess capital available to the private sector and will appear in a country of the players choosing (basically your banking industry is loaning people money). If the player doesn’t choose a country, then the referee will choose one. Production centers can only be placed in a country that is tech level 3, and that is not a war or in civil war

Economic potential is the maximum build point limit that can be reached with just internal production (factories) at tech levels 4 – 6 is 1 production center, or "factory," per 1 million people. Once that limit is reached, your economy simply cannot expand further. This is the maximum potential for your national economy. At tech level 7, that increases to 2 production centers per 1 million people, and at tech level 8 it becomes 3 production centers for every 1 million people. 

Foreign Aid is allowed, and nations may loan build points to one another, or even give them as a gift.

==Special Costs and improvements==

Social service spending provides education and a social safety net and is useful in preventing rebellion and subversion. 

Education and Safety net (medical, welfare):
Level I: 1 point per 10 million people gives you basic schools and clinics. Available at tech level 1.

Level II: 2 points per 10 million people gives you the above plus high schools, public hospitals, orphans and widows assistance, available at tech level 3. At tech level 5.5 cost rises to 3 points per 10 million. 

Level III: 3 points per 10 million people gives you the above plus public universities, social security type assistance for the elderly and disabled. Available at tech level 4 and at tech level 6, this increases to 4 points per 10 million people.

Level IV: 5 points per 10 million people gives you the above plus unemployment insurance, food assistance (like food stamps), junior colleges. Available only once your nation has had a depression for one or more years and tech level 5 has been reached. At tech level 8 this cost increases to 6 points per 10 million people

Level V: 10 points per 10 million people gives you all of the above plus free health insurance, and a basic living allotment to all who aren't working. Not available until tech level 7, and it acts on economy the same as National Effort (as far as growth is concerned). At tech level 8, this increases to 15 points per 10 million people. (why do you think the real life costs of Medicare, National Health Insurance etc is climbing so much)

==Special Infrastructure==

You may improve your transportation infrastructure (increased rail links, or highways etc) by spending 2 points per 10 million people for three years. This will automatically move an area that is tech level 1 or 2 to tech level 3. There will be social costs to this in some cases. This will increase your strategic moves available during wartime, and help accelerate your move up the tech level ladder as well. 

You can also choose to improve your road and railroad infrastructure after reaching tech level 4. This simply adds extra strategic movement for military forces, and costs as above but is required in order to reach tech level 5 and again at tech level 5.5. 

Major historical projects like the Panama Canal, can be built, and the amount varies.
 
Panama Canal 2 points a year for 10 years (tech level 4.5)  Other projects will vary in cost and availability. 

Rural electrification, available at tech level 5.5, costs 1 point for every 10 million people and boosts your economy by 10% permanently. This is a 3 year project and the points must be spent each year. This is a revolutionary change and brings the rural and urban portions of your society closer together. Builds national cohesion in addition to its economic benefits. Only available if you are tech level 5.5 and is required to reach tech level 6. 

Industrial centers may be built (for 48 points or 24 points if built to replace a resource area) or repaired (for 12 points). In addition, 2 damaged industrial centers can be combined (reflects salvage efforts) to form 1 undamaged industrial center. This represents direct government spending on industrialization, and only command economies may build industrial centers in their own countries. (as its direct competition with the free market). No more then 5 production centers a year may be added in this way by any one country. 

==Economic Pacts==
Joining an economic pact or creating a large trade agreement between multiple nations will give you an added boost to your economy. However, there are some stipulations. Such pacts or agreements must take place between at least four nations, and at least two of those must be either tech level 7 or have some necessary resource (i.e. oil) that other nations need.
After being in an economic pact for five years, your annual growth will get a +1% increase. This represents the maximum amount that you economy can be bolstered by that pact. Being in mulitiple pacts will not increase your growth further

==Energy Rules==
Each nation has a certain number of energy points that it produces domestically. Energy points fuel domestic production. They also fuel commerce, military forces, and tourism. Only coal (tech level 4-5) and then oil (tech levels 5+) can be used to fuel commerce, military forces and tourism, but any energy source can be used to fuel domestic production. Each energy point fuels production, commerce, tourism and military forces to a varying degree of efficiency based on tech level. Fuel is generally considered to be available on the world market unless otherwise indicated. Energy supplies in excess to needs can be sold on the world market. Treat them as resources for this purpose. 

===Tech level 4 – 7===
1 energy point fuels 20 points of domestic production (not production centers, actual production as energy use increases if demand increases). Military units require oil or coal (warships that burn coal only) equal to their maintenance cost. 1 Oil point can fuel up to 20 points of military units. Coal or oil can be used to fuel shipping. At tech level 5.5, hydroelectric power becomes available and information will be provided on the hydroelectric potential of the nation and areas it controls for each player as they reach it (request that when you get there). Hydroelectric power resources cost 24 points to develop for each point and can only be used to fuel domestic production. 

==Food Production rules==

Each nation has a food production figure indicated. That is how many people (1 point feeds 1 million) it can feed using its own internal resources, and is adjusted for tech level. As with energy, food is generally available on the world market unless otherwise indicated. Excess food can also be sold. Every 5 points of food converts to 1 resource point. 

Special Rule: Food production is penalized by 2% for each percentage point of men mobilized into military service until tech level 7 above the usual 3% norm. So for example, if the Russians have food production of 180, and a population of 175 million, and have mobilized 5% of their population (9 million men, or roughly 360 divisions worth of troops), Russian food production is reduced by 4% (down from 180 to 172). Which means Russia starts to have food shortages and either has to import or ration food. If Russia starts losing agricultural areas it suffers even more shortages

===Famine===

If your food production is below what you need, you have to buy food (which is simply assumed, just like for energy). If your food production is less then what you need you have food rationing if you can't buy food, and if it falls below 50% of what you need you end up with a famine. Famine will eliminate the excess population that you have. So if you produce enough food to feed 2 people and have 5 people in your population, your population is reduced to 4 people as the excess dies off.

==Emergency measures==

Government can take emergency measures if they are at National Effort or Wartime spending. These include the following:
Food Rationing: each food point can feed 2 million people instead of 1 million.
Emergency gardens: at the cost of 10% of your industrial production, you can redirect people into food production. This increases food production by 20%. (fewer workers available)
Fuel rationing: Reduces the amount of oil needed by 50%, reduces domestic production by 10% (efficiency is reduced)

These are not popular, and the people of your nation will only put up with them as long as they see that a clear emergency exists. If continued after the emergency ends, the people get restless.

==Forced Labor==
You may use POWs and forced labor obtained from occupied countries to make up for your manpower in the army. You must have 1 police unit for every 1 million people so enslaved. In addition, no more then 10% of an occupied countries population can so be enslaved, and this of course is going to be rough on the country so victimized. Which may come back to haunt you later. This of course is an atrocity, and could also bring you retribution... if you lose. You can also use slave labor for special projects like railroads etc which cuts the cost by 50%. 

You can also use the unemployed as forced labor, but requires the same police forces. They no longer cause social problems, but then they aren't going to like you much in the long term. 

You do have to account for these people as far as food production requirements are concerned. You can however but them on food rationing (which will kill 10% of them a year) or Emergency food rationing (which kills 25% a year) or if your particularly nasty, destructive labor rationing (which kills 50% of them a year). 

Needless to say, Democratic countries may not use slave labor.

==Intelligence Agencies==
Funding does not ensure a competent or effective intelligence agencies. It does help though. Base cost is 10 points and creates a 5,000 person organization able to analyze data, do some spying and code breaking and able to investigate dangerous threats to the government (kind of a combination of the US FBI and CIA or KGB in the real world). To maintain an intelligence agency costs 5 points a year.

Having an intelligence agency allows you to occasionally get secret information from the Referees on what is going on in the world, and effectiveness varies widely. Most intelligence agencies are good at knowing what their neighbors can do or are planning, and effectiveness decreases the further away they are looking.

==Secret Research==
Secret Research is, obviously, research that you want to keep secret. This can be anything from nuclear weapons programs to missile technology to new infantry weapons. In order to conduct secret research, budget the requisite number of points to the project and then call it something else.

Example: Nation X wants to build nuclear weapons, but doesn't want its neighbor Nation Y finding out. When Nation X spends 24 points on the nuclear research, they can call it something like "Renovating Science Departments in Universities."

==Tech level advancement requirements==
Tech level 3 – requires level 1 social services, transportation infrastructure improvements

Tech level 4. – requires level 2 social services, 1 production center per 50 million people.

Tech level 4.5 – requires 1 production center per 10 million people and 10 years at tech level 4

Tech level 5 – requires 1 production center per 5 million people, transportation infrastructure improvements (yes, spend again as it represents paved roads for cars and trucks), and 10 years at tech level 4.5 

Tech level 5.5 – requires 10 years at tech level 5, level 3 social services for 10 years, and transportation infrastructure improvements (yes, again, this time represents telephone lines,) Not available before 1925 unless circumstances change.

Tech level 6 -- requires 10 years at tech level 5.5, level 3 social services for 10 years, rural electrification, not available before 1939 unless circumstances change