I haven’t run over any clear thread on this subject before. All I managed to find was a few vague references on how the economy of the game should work.

I have a few questions on the matter. I will give my opinion but would also like to hear any thoughts you have on the matter.

1.Demand and Supply?
In my opinion resources should be finite, that is to say you can only extract a given amount of a certain metal from a system. I’m not saying that within a couple of game hours a system should be bone dry when it comes to resources. In my opinion the resources system should take tens of in-game years to be depleted. Over the life cycle of a mining operation the resources should get more and more expensive as the metal gets harder and harder to extract.
Why would I want this, it would create competition and an incentive for both NPCs and the player to explore and move to virgin systems for more accessible resources.
Also I would suggest that the game should have a sort of stock market or electronic trade system through which both the player and NPCs could auction off or buy the goods needed. This is for the simple purpose of creating and easy and accessible trading dynamic that would facilitate the exchange of goods at an optimal price.
2.Economic Warfare?
What do I mean by this, say you have an enemy whose economy depends on the Titanium trade. In order to survive he needs the price of Titanium to stay over 5 credits per KG. You’re in a war with him and you find that you stand no chance against he’s fleets. You could use the trade console mentioned and start selling off your Titanium at say 1 credit per KG. At which point your military superior enemy would slide off the economic edge and though you stood no chance against he’s fleet you managed to starve the beast. This was available at a limited level in Sins through the black market system, though you had to guess which enemy was in need of which resource.
3.Economic Espionage?
In order to facilitate the economic warfare mentioned above you would have to know on what an enemy’s economy relies the most so you could attack him where it hurts. Or perhaps gather this information before hand and ruin he’s economy before declaring war. The choice should be yours.
4.Banking?
Should there be a banking system in LT? My opinion is yes. Why, well because it would help the little NPCs get off the ground faster. Though in my opinion the amount that a bank could lend should be limited to a moderated amount so as to create many medium and small factions rather than bank rolled mega corporations and empires. If you want to reach that state you should work for it, wage war, commence commerce etc, not just to have a buddy at a large bank. Also if you take into account the scarcity mechanic mentioned above, this could make sure than the virgin systems don’t remain the domain of the super wealthy but small time NPCs and players could also play a part as long as bank is willing to finance their endeavor.
5.Economic Cycles?
If all of the above would be implemented I can assure you that an economic cycle of plenty and scarcity would commence. Why do I think this is a good thing for the game? Well in the real world this is a very bad thing, since it often generates tensions between nations and even wars. But in the LT universe these tensions would make the game more interesting. It would generate wars and conflicts and make the Universe feel alive.

I wait to hear your thoughts on the matter.

Hey! I don't have as much time before work but I read your topic and thought a few ideas were something seen before and others I don't think I have seen. I don't have a lot of time to post a huge answer for things but here is a link to another topic that talks about the Macro Economy. I believe there are very good ideas in both so...

Other Link On Economy

Hadrianus wrote: 1.Demand and Supply?
In my opinion resources should be finite, that is to say you can only extract a given amount of a certain metal from a system. I’m not saying that within a couple of game hours a system should be bone dry when it comes to resources. In my opinion the resources system should take tens of in-game years to be depleted. Over the life cycle of a mining operation the resources should get more and more expensive as the metal gets harder and harder to extract.

Josh has already said that he intends to make the resources in given systems regenerate over time. However that time will be variable, so really the number you're looking at for a given system is a "sustainable mining rate". One system may be able to support 100 NPCs mining in single ships or one NPC mining with a large drone platform and processing pipeline. Other systems might only support 30 NPCs mining at one time. Others might support a larger platform.

Trying to overmine a system past its natural rate of regeneration means that resources will get scarce, people will move on, and the system will slowly return to its equilibrium rate.

This broadly achieves the same thing you want it to, without having to reduce populated systems down to resource-scarce ashes and dust.

2.Economic Warfare?
What do I mean by this, say you have an enemy whose economy depends on the Titanium trade. In order to survive he needs the price of Titanium to stay over 5 credits per KG. You’re in a war with him and you find that you stand no chance against he’s fleets. You could use the trade console mentioned and start selling off your Titanium at say 1 credit per KG. At which point your military superior enemy would slide off the economic edge and though you stood no chance against he’s fleet you managed to starve the beast. This was available at a limited level in Sins through the black market system, though you had to guess which enemy was in need of which resource.

It will be possible to flood markets or buy up everything in a market, but it will probably be more complicated and expensive than you think.

Prices are local, not universal. You would have to flood the specific markets the NPC sold to with titanium, and hope that she can't just pick up and move away.

I think economic warfare will be possible, but you'll have to be smarter about it than simply brute-forcing one commodity down.

4.Banking?
Should there be a banking system in LT? My opinion is yes. Why, well because it would help the little NPCs get off the ground faster.

You mean a system of loans?

I don't think that necessarily needs spelling out as a mechanic. Every NPC/Player starts out with enough capital in the form of a ship and starter credits to begin to go out and increase their asset base. You can easily consider that to be as the result of some kind of seed investment if you want.

I think it would be interesting if on harder difficulty levels you effectively started out the game in hock to the tune of your starter capital (and perhaps for the cost of your transfer to space or your mind uploading process too).

If you mean banking as in later game access to large scale injections of liquidity, I don't think it is currently planned - you have to grind your way there to a certain extent.

However, in the Macro Economy thread one of the questions I asked that didn't get taken up was about investment and shares. I would personally like to see a system where you can start a company and sell shares in it to raise liquid capital. Not as complicated as real life, possibly a little more complicated than Sid Meier's Railroads (if anyone ever played that).

McDuff wrote:I think it would be interesting if on harder difficulty levels you effectively started out the game in hock to the tune of your starter capital (and perhaps for the cost of your transfer to space or your mind uploading process too).

I discussed this exact thing with Josh in IRC yesterday. He seemed pretty interested in the idea.

Specifically, the player is at every time registered with a particular bank or loan company. By default (e.g. at the start of the game), this will be a public loan company (i.e. belongs to the local faction in the region); however, the player and other agents could start their own loan companies, same as with any business. In the event of the player's death, they will be recompiled (or re-cloned), which costs a certain number of credits; if they cannot afford the cost of recompilation/recloning out of pocket, their loan company covers the cost, and the player pays back the loan company with interest through a percentage deduction of everything they earn until the costs are covered.

McDuff wrote:

2.Economic Warfare?
What do I mean by this, say you have an enemy whose economy depends on the Titanium trade. In order to survive he needs the price of Titanium to stay over 5 credits per KG. You’re in a war with him and you find that you stand no chance against he’s fleets. You could use the trade console mentioned and start selling off your Titanium at say 1 credit per KG. At which point your military superior enemy would slide off the economic edge and though you stood no chance against he’s fleet you managed to starve the beast. This was available at a limited level in Sins through the black market system, though you had to guess which enemy was in need of which resource.

It will be possible to flood markets or buy up everything in a market, but it will probably be more complicated and expensive than you think.

Josh mentioned something about this really early on as well. You won't be able to buy up everything easily. The NPCs will be smart enough to know that as supply dwindled, prices will start skyrocketing if it's something they need to hold on to.

One idea that was thrown around was if you tried to buy up all the wheat from a planet (assuming you could). Since the planet would need at least a certain amount to survive, you wouldn't be able to buy it all. As well, since food is usually a valuable commodity, while the first few units may be cheap, by the time you got to the 100 millionth unit, each unit would be ungodly expensive. It would be on a curve if anything.

However, since there really hasn't been much design in the area of banking or the supply/demand portion of the economy, I think there is still room for some ideas.

It is actually possible for an economy to export staple foodstuffs while its population starves. As Amyarta Sen has discussed this is actually the nominal cause of most famines - not food shortages, but an inability of a given population to purchase the food.

I expect that may well be outside the scope of an LT economics model though, because it requires quite a complex policy response that can't be fixed by simply sending food to Planet Bob.

McDuff wrote:It is actually possible for an economy to export staple foodstuffs while its population starves. As Amyarta Sen has discussed this is actually the nominal cause of most famines - not food shortages, but an inability of a given population to purchase the food.

Yeah, could be so. I was just checking something on Wikipedia about something called the Holodomor ("extermination by starvation") that happened in Ukraine a while back:

They see the leadership under Stalin as making significant errors in planning for the industrialisation of agriculture. Dr. Michael Ellman of the University of Amsterdam argues that, in addition to deportations, internment in the Gulag camps and shootings (See: Law of Spikelets), there is evidence that Stalin used starvation as a weapon in his war against the peasantry. He analyses the actions of the Soviet authorities, two of commission and one of omission: (i) exporting 1.8 million tonnes of grain during the mass starvation (enough to feed more than five million people for one year) (emphasis added)

See also Irish Potato Famine, that whole deal in Ethiopia, and the one Sen based most of his theory on, the Bengal Famine in 1943.

Pretty regular events. Sen has a theory which holds in the weak form that democracy acts as a stopgap against famine-creating policies, although it is disputed whether it prevents long-term deprivation or malnourishment.

Really depends how the planetary economies work as to whether that kind of failure could be induced.

It's not much remembered any more that Ukraine was once -- prior to Uncle Joe's authoritarian collectivism -- known as "the breadbasket of Europe" for its agricultural bounty.

Access to resources is only a necessary condition for productivity, not a sufficient one. Policy matters, too, as does the ideology that generates policy. Screwing up either one of those badly enough for long enough can destroy any organizational entity.

Or screwing it up for someone else, as I guess we're hoping will be possible in Limit Theory.