Guns or Butter?

I have come to realize that opportunity costs are a huge part of Civilization 3. Every decision I make about what to produce has a positive effect on one thing and a negative on another. An economic principle that I have learned in Economics David by Colander is that an economy can only produce so many goods, and therefore a decision has to be made about which goods should be produced and also how much. A production possibility curve demonstrates how many goods can be obtained (the output) based on how much is put into the production process (the input). Assuming the same input, many times the output of one good is much higher than that of another. When this is the case, the focus of production should be on the good with a better output, and the other good should be obtained by some other means that is more efficient (usually by trading).

The problem I am facing in Civilization 3 relates to the "guns or butter" dilemma. Since there are many very powerful civilizations in close proximity to my civ I feel there is a strong need to build up my military. A strong military would prevent other civs from easily defeating me in a war or bullying me into paying a tribute to them. At the same time, however, a strong military is also very costly and the opportunity cost is that my civ won't have as many luxuries and improvements for the citizens to enjoy. Unhappy citizens are unproductive citizens, so there is obviously a great need to cater to the "butter" side of the dilemma as well.

The principle of increasing marginal opportunity cost states that "in order to get more of something, one must give up ever-increasing quantities of something else". This means that the opportunity cost increases at a very unfavorable rate, and therefore it would be smart to strike a balance between the production of goods to minimize the opportunity cost. In the game I keep this principle in mind and make sure that I produce a fairly even proportion of military improvements to food/luxury improvements. A rule of thumb I use is to first increase my civ's population and build improvements, and then I produce a few more soldiers to defend my now larger civ. This ensures that one good is not over-produced at the increasing expense of another good. The only problem with this plan is that it will be hard for me to expand my civ because without an extremely large army I won't be able to conquer my neighbors. My mistake in the beginning of the game was not expanding fast enough, and now I have no room to start a new city outside my borders without encroaching on my neighbors' borders. My plan is a good one to merely survive, but not grow. I am still looking to form military alliances with other civs to conquer a neighbor, but I have not yet been able to do this.

A new beginning

My first attempt at Civilization was a complete disaster. My cities were poorly located and not connected by roads, I made enemies with stronger civilizations, and I was unable to advance enough to be able to survive. My civilization was destroyed before I even advanced to the Middle Ages, but I did at least learn a lot about what it takes to survive (and I didn't have it). I started a new game and decided to not make the same mistakes again.

My plan was to build a strong civilization, and I did several things to get the ball rolling. From my failure in the first game, I realized that building roads and having connected cities was crucial. This would allow my citizens to move quickly to wherever they were needed and would promote trade with other civilizations. In history the Roman Empire made good use of roads mainly to help soldiers get from place to place fast, but of course roads did increase trade as well. Road building has made my civilization very efficient. I also used roads to bring horses and other valuable resources into my civilization, which I have realized can be very valuable commodities to use for myself and to trade if I have a surplus.

Diplomatic agreements with other civilizations is probably the most important aspect of the game to pay attention to. Being in the midst of a war early on in the game is devastating because it makes you focus on military production rather than on expanding your civilization (which peaceful nations are able to do). I now trade with other civs a lot to remain on peaceful terms with them, and I also make peace treaties and allow rights of passage whenever possible. Currently I am not at war with anyone, but other civs are closing in on my territory and it is hard to build more cities. For this reason, I am considering attacking the weakest civ around me so that I can takeover that land and its valuable resources. If it all possible I would first like to create a military alliance with the Americans because they are strong and can help me in battle.

My civ needs to expand in territory and get more resources because if it doesn't then I know that I won't have any resources to trade with other civs. Just as many European countries traveled to the West Indies in the 1400's to obtain spices and other valuable resources, I also am making the same attempt to gain control of a scarce resource. As Colander makes clear in Economics, scarcity of resources makes them of high demand because they are in short supply. If I can bring spices into my civ I will be able to offer my strong neighbors something valuable, and I can then get something valuable in return as well. It will also help my relations with my neighbors, which I really do think is the key to survival.

The first few hours of playing Civilization III was a very realistic experience that was true to the history of early human civilizations. The civilizations that were able to advance the fastest had both economic and military advantages over stagnant civilizations. Advancement required an ample food supply to promote population growth, a strong military to protect cities, efficient production methods, and a fairly large treasury to support the military and structures within the city. Achieving those prerequisites was not an easy task with limited resources, so the allocation of resources became the essential problem to figure out.
My initial strategy at the beginning of the game was to build a city with a strong military so that I could protect myself from "barbarians". I learned bronze working and iron working very early on, and also built a barracks so that my soldiers could heal themselves. My civilization fended off foe after foe with superior military strength, but my preoccupation with military advancements resulted in my civilization growing at a very slow rate compared to the other ones. I erected my first few towns in South America, a land rich with gold in the Andes Mountains. For that reason, funding my civilization was not much of a problem. Food, on the other hand, wasn't quite as plentiful so I created some workers to irrigate the land and produce more. According to Jared Diamond in the book Guns, Germs, and Steel, farming is what allowed the earliest civilizations to advance ahead of hunter/gather societies because a larger food supply was needed to be able to support a large population. It also allowed for certain specialists to exist who could help advance the civilization by not having to focus on producing food for themselves. I took Diamond's food for thought and the result was indeed beneficial to my civilization's growth. The area in which I had huge problems, however, was the production of shields. Apparently I placed my towns in locations that didn't produce enough shields because I had a very hard time speeding up the production process. This resulted in not being able to advance as fast as other civilizations, and what I thought was a strong military ended up being very weak later on in the game. It took me awhile to figure out a good solution to the production problem, but in the end I learned that it was all about making the best trade-off decisions.
My first solution was to build new cities so that I would produce more shields, but the real problem was that I was losing about half of the shields my cities produced due to corruption. My next move was to try advancing enough to be able to learn about new forms of government that would experience less corruption. This effort was useless though because it was taking way too long to advance toward a new government without a lot of shields to speed up production. In this sense, my lack of shields was preventing me from being able to produce more. This concept is a very real economic issue in today’s world: those who have very little find it hard to get more, while getting more is much easier for those who already have a lot (the rich get richer while the poor get poorer). I finally had to make a trade-off in order to solve the production problem, and this consisted of reallocating my human resources to the places where they were needed the most: workers were moved to the locations with the most shields, which had a negative impact on the amount of food and money I was able to acquire. But this trade-off was very necessary to the development of my civilization.
Trade-offs have always been an economic reality, and choosing the less beneficial alternative can be devastating. Governments must choose what is best for their people, and this is especially crucial when everyday needs aren’t being met. I made a good economic decision to expand my shield production at the expense of food production and money because shields were scarce while the others were in surplus. I favored this command style economy which enabled me to position workers exactly where they were needed. The market-based economy where the workers chose where they wanted to work themselves was not satisfactory, so I took command. At the time it was really the only option I had that could solve the scarcity problem.