Jump starting an economy

A couple of years ago I ran a server that had introduced a currency plugin, iConomy, as an experience in monetary policy for our server government. We ran into a lot of speedbumps that I think Econicraft can avoid if money is governed wisely.

1. CREATING AN ECONOMY
There are a couple of ways that we can go about doing this. Essentially what we want to achieve is to (a) get money into people's hands and (b) provide a method for people to earn more money.

the State
The first way is the creation of a nation-like state. Complete with laws, elected officials, and a formal government, the State could be a powerful tool in managing an economy. With abilities to create new laws from people's input, the economy can be effectively governed and controlled from a central source. The state could:
• commission new public buildings and pay builders and architects for materials
• pay elected officials a salary
• regulate tax revenues and find methods to redistribute collected monies
• create other jobs and agencies that can host salaried positions on behalf the State.

This method requires a lot of work, but can also add the most exciting dynamics to a server's community: politics.
A government can still implement the system I propose below:

the Exchange
A big shop operated by the administration, what I like to call the Exchange, would be another -- albeit less exciting -- way to get money into people's pockets and allow them to make more.
The Exchange would just be a giant shop that had every single material in the game (what would be allowed, of course) for which people can buy from and sell to. Of course the Exchange's coffers wouldn't belong to any single person, but the point of the business is to regulate prices, but not enforce them (I can't stress that enough).

Here's the concept in action:
EXAMPLE ONE
1. The Exchange evaluates that there is not a lot of stone blocks the server. The admins decide that they want a lot of people to have stone blocks, so they set the price as a lowly $5.00.
2. People buy up a lot of stone blocks, and now there's a whole bunch out there for people to use. The Exchange raises the price to $15, slowing sales.
3. Now that people have a lot of stone blocks and aren't buying from the Exchange, they are free to sell to one another for whatever prices they decide to set. This now creates a way for people to make money and set up business.

EXAMPLE TWO
1. Admins decide that there is too much TNT floating around on the server, and want to get rid of it. They make it so the Exchange will pay $20 per TNT block to anyone who sells it to them.
2. Lots of people sell their TNT blocks to the Exchange and earn a lot of money. This not only gets TNT out of people's hands, but also gives them cash to spend.
3. Having received sums of money from the Exchange, players now have cash to spend at private businesses and to trade with each other. Economy stimulated.

I think that every weekend we should host a market that would offer deals on resources. The revenue generated would go to pay for new projects. This would be run by the admin and so the resources would come out of thin air. During the week, the admin shops would be closed so that the player shops could compete with each other.

Masterrobot wrote:I think that every weekend we should host a market that would offer deals on resources. The revenue generated would go to pay for new projects. This would be run by the admin and so the resources would come out of thin air. During the week, the admin shops would be closed so that the player shops could compete with each other.

Why have it available only on certain days when instead have it operate in real time to respond to market changes? If I needed a certain item, or needed to make money, I'd rather not wait until the weekend for the markets to open.

SovietReunion wrote:

Masterrobot wrote:I think that every weekend we should host a market that would offer deals on resources. The revenue generated would go to pay for new projects. This would be run by the admin and so the resources would come out of thin air. During the week, the admin shops would be closed so that the player shops could compete with each other.

Why have it available only on certain days when instead have it operate in real time to respond to market changes? If I needed a certain item, or needed to make money, I'd rather not wait until the weekend for the markets to open.

I think what he means is that people generally will lean toward the admin shop when buying and selling rather than fellow citizen's shops. Arguably it's more convenient, but it doesn't really feel right if you're trying to create this world full of realistic politics and economics. Eventually store owners will see it more convenient to sell their products to the admin shop, since you're getting the same range of money minus the time it would take for someone to buy the item in your own shop, which would lead to no player shops at all.

In a weird way it's sort of like comparing Walmart to mom and pop stores, though admittedly the analogy isn't perfect. I think a possible solution is in each town to have a commercial district of sorts, sort of like a mall or market. Condensed (somewhat) into one area for convenience, because not one person is always going to have everything you need in their shop, but it's easy to pop in and out to get what you need, without having to run around town. Plus it would help towns depend on each other more with shops easier to find. A town in the desert would have a lot of glass and sandstone to sell someone who in a snowy biome who doesn't have immediate access to such things.

Doesn't mean down with the admin shop for good of course, because maybe you have bulk to sell and nobody around town has cash/wants to buy all your dirt or something. So specific days for admin shop could work, and simply have it barred up every other day.

Okay, that makes justifiable sense. I guess in that time the admins can adjust prices depending on observations of the private market during the weekdays.

Okay, so it seems like there would be a few things we'd need to work out:

• Location of the Exchange:
I'd propose that at or near the spawn would probably be best, as constructing shops in every town would be too time consuming. If we do need multiple locations, I think it would be fairest to only open Exchanges in the largest of cities.

• Management and price setting:
Who sets the prices? What should the prices be, and how do you determine them? Do we designate one person to do that, or is it whatever anyone think is best?