Economics of Shipbuilding and Maintenance

[oldpop2000]

In many of the threads, we have discussed the economics of designing the ships and building them. So, in that vain, I thought maybe a thread dedicated to that subject would be useful and informative. I am not certain where we want to go. My ideas are to include briefly ship designs with cost. Maybe just provide the year the ship is build, cost per month and total cost with the type of ship be it a battleship, armored cruiser etc. We can use some real historical data but let's focus on the game. Many of you play this game regularly and have great ideas and information. So let's discuss this because deciding when, how many and types of the ships with their important details to me, is important.

Thanks

[ieshima]

Could we perhaps expand this to include ways and methods we have found to cut costs that don't seriously impact us when combat starts?  

[oldpop2000]

I thought I would start by some historical information that does relate to the game because of its starting point in 1900. In around the 1860's we have the advent of iron ships and turrets with the building of the monitor. After that we have the introduction of Bessemer steel. This changed warship construction and cost. Ships were stronger, larger and more expensive to build. The men who built the ships had to be more than woodworkers they now had to know how to manage steel and rivets. With the introduction of the turret on the monitor, ship designers began to develop and install barbettes to hold the guns. The guns now became stronger due to wire winding and new breech mechanisms along with a whole new system of gunlaying. The barbettes were finally covered with steel armor and we have the turrets we all know about. We have the introduction cordite which burned slower and was more powerful than black powder. Ranges got longer so fire control had to be developed to compensate for roll, pitch and yaw. It was due to this that the salvo was used. We have the introduction of the torpedo, which change naval warfare and ship designs. We have the introduction of steam turbines with gears using first coal and then oil. The last thing was now the need for permanent crews well trained to handle the technology. Now you have to pay for these crews 3654 days out of the year, train them, and house them sometimes along with their families.

Of course there were wars and during wars economies begin to surge but then when they end, they now have an economic downturn. The business cycle was always present but it was more extreme. Globalization also changed the nature of ship building as more nations began to build fleets.

Finally, we have the surge in social programs as the average person wanted more personal help from the nation and less expended on nice, expensive battleships.

All this is in the game, in one form or another. I hope there is GDP and depreciation in the game. We know how much a ship will cost when built and then how much it will return on scrap. I suspect that this is a form of depreciation. Anyway, I am still trying to sort all this out and am studying macroeconomics in more detail for many reasons.

Some of you are very good at math and economics so jump in here and educate all of us.

[oldpop2000]

Sept 21, 2020 10:00:07 GMT -6 ieshima said:

Could we perhaps expand this to include ways and methods we have found to cut costs that don't seriously impact us when combat starts?  

let's go any where we think should  go. We can and should do what you asked. I don't restrict learning.

[oldpop2000]

I checked a British game of 1920 and HMS Hood designed and built in 1912. Cost per month of 2455, total cost is 63830.
Now, 1920, scrapping cost is 748. If that is depreciation that is something. 704.375 in eight years. 

[ieshima]

I would start by mentioning that shipbuilding capabilities and naval expansion are tied not just to GDP, but also population growth.  Robert Massie's "Dreadnought" highlights this quite well by pointing out that Imperial Germany had a massive population boom between the 1880's and the start of World War 1, going from 41 million people in 1871 to 65 million in 1910.  This was in contrast to its two main rivals: Britain (31 million in 1871 to 45 million in 1911) and France (37 million in 1891 to 39 million in 1910.)  In less than forty years Germany had added half again as much population to its nation.

Now Britain did similar, adding 14 million to 31 million, but population growth is normally exponential and because Germany was ahead at the start it was very likely that it would maintain and expand its lead even further as time progressed, baring any major upheavals.  You also have to remember that this growth wasn't limited to population.  German coal production was 39 million tons in 1871 while Britain's was 112 million.  By 1913, the two were equal and Germany was pulling ahead.  Same with steel production.  Germany went from making 2 million tons per year in 1890 to 14 million in 1914, more than double Britain's 6.5 million tons.  In every meaningful category, Germany was rapidly pulling ahead of Britain.  While the point is moot thanks to the war, it is feasible that Germany would eventually equal and then overtake Britain in terms of capital warships sometime in the late 1920's or 1930's, becoming the 1st or 2nd largest navy in the world, largely due to being able to just outspend Britain.

How this translates to the game would be the Early Economic Expansion trait that Britain has and the Delayed Economic Expansion trait the US gets.  If you wanted to be accurate to history and real-life, Germany should also get the EEE trait from the get go as well, representing its pre-WWI buildup rush.



Now, in terms of ingame tricks, I found that if you build up your early protected cruisers with heavier armor and more guns, you can largely forgo the need for armored cruisers.  This allows you to have roughly 2 or 2.5 very powerful CL's for the same build and maintenance cost of a single CA.  It keeps the budget in the black with more funds to spare on B's, DD's, Subs and coastal forts, and if you find that you need CA's later in the game, you can just lay more down while not crippling your crucial early game buildup.

[oldpop2000]

Sept 21, 2020 10:42:50 GMT -6 ieshima said:

I would start by mentioning that shipbuilding capabilities and naval expansion are tied not just to GDP, but also population growth.  Robert Massie's "Dreadnought" highlights this quite well by pointing out that Imperial Germany had a massive population boom between the 1880's and the start of World War 1, going from 41 million people in 1871 to 65 million in 1910.  This was in contrast to its two main rivals: Britain (31 million in 1871 to 45 million in 1911) and France (37 million in 1891 to 39 million in 1910.)  In less than forty years Germany had added half again as much population to its nation.

Now Britain did similar, adding 14 million to 31 million, but population growth is normally exponential and because Germany was ahead at the start it was very likely that it would maintain and expand its lead even further as time progressed, baring any major upheavals.  You also have to remember that this growth wasn't limited to population.  German coal production was 39 million tons in 1871 while Britain's was 112 million.  By 1913, the two were equal and Germany was pulling ahead.  Same with steel production.  Germany went from making 2 million tons per year in 1890 to 14 million in 1914, more than double Britain's 6.5 million tons.  In every meaningful category, Germany was rapidly pulling ahead of Britain.  While the point is moot thanks to the war, it is feasible that Germany would eventually equal and then overtake Britain in terms of capital warships sometime in the late 1920's or 1930's, becoming the 1st or 2nd largest navy in the world, largely due to being able to just outspend Britain.

How this translates to the game would be the Early Economic Expansion trait that Britain has and the Delayed Economic Expansion trait the US gets.  If you wanted to be accurate to history and real-life, Germany should also get the EEE trait from the get go as well, representing its pre-WWI buildup rush.



Now, in terms of ingame tricks, I found that if you build up your early protected cruisers with heavier armor and more guns, you can largely forgo the need for armored cruisers.  This allows you to have roughly 2 or 2.5 very powerful CL's for the same build and maintenance cost of a single CA.  It keeps the budget in the black with more funds to spare on B's, DD's, Subs and coastal forts, and if you find that you need CA's later in the game, you can just lay more down while not crippling your crucial early game buildup.

Yes, population growth does have to be figured into this. In Battleship Builders, they discuss the increased population around the Thames which hindered expansion of the shipbuilding industry  so that is why much of the warship construction went to the Clyde and Belfast. I do remember reading all this in Massie's book. I am going to read it some more today. BTW, thanks for the suggestion. This is the kind of suggestion we need. I will start a new game in 1900 to test all this.


www.lse.ac.uk/Economic-History/Assets/Documents/WorkingPapers/Economic-History/2018/WP278.pdf

[aquelarrefox]

The seize of fleet and the variety of caliber should affect the maintenace cost (incluiding caliber and the level of the caliber to representate the variation of shell generation, also the value could be varied by some tech).

Also torpedoes should be much intersting with a development type with obsolete mechanic as with the planes. Torpedoes have historic flaws in many navies. Torpedoes need to much care and then a little nerf when you jump of technology. Torpdoes with realiability is a great idea. Get a full new generation of torps should have a cost in game.

Also logistic in general should need a little of work. One thing its much anoing to me. capital ships could be repaired in any region, big drydock was a problem in places like pacific in ww2, should be something usefull to add.

[oldpop2000]

Sept 21, 2020 12:49:59 GMT -6 aquelarrefox said:

The seize of fleet and the variety of caliber should affect the maintenance cost (including caliber and the level of the caliber to represent the variation of shell generation, also the value could be varied by some tech).

Also torpedoes should be much interesting with a development type with obsolete mechanic as with the planes. Torpedoes have historic flaws in many navies. Torpedoes need to much care and then a little nerf when you jump of technology. Torpedoes' with reliability is a great idea. Get a full new generation of torps should have a cost in game.

Also logistic in general should need a little of work. One thing its much annoying to me. capital ships could be repaired in any region, big drydock was a problem in places like pacific in ww2, should be something usefull to add.

We should explore your ideas. I know that many South American countries purchased ship from Great Britain and the Kongo for Japan was ordered and built in England. During WW2, many damaged British ships were repaired in US shipyards. However, large warships cannot be repaired everywhere, the US had floating docks to use, England had Singapore and Australia. 

[oldpop2000]

Extract from the manual, for reference:

The base resources will increase as a result of wars won, and decrease when wars are lost. Loss or gain of possessions will also affect the resources available. The base resources will also increase steadily at about 3-5% a year as a result of economic growth.

The naval budget percentage will vary with various events and your response to them (see Events). In general it will tend to rise in times of high tension and be low in periods of low tension.

Your yearly budget will be divided into monthly payments to the navy. Running out of funds is not a good idea, and will tend to upset the finance ministry and lower your prestige. You can run up a surplus and save money for future expenses or for building that super battleship. Be aware however that if you have substantial funds in your coffers, the Kaiser, Prime Minister or the finance ministry might find a use for some of those funds.

The highlighted sentence is interesting.

[oldpop2000]

Quote from the London School of Economics and Political Science

..Moreover, if seen from a global perspective the Great War also marked the end of
European dominance and the beginning of a decline of the continent in weight and influence.

Do we see this in the game at any time? I haven't. 

[ieshima]

Sept 21, 2020 19:56:40 GMT -6 oldpop2000 said:

Quote from the London School of Economics and Political Science

..Moreover, if seen from a global perspective the Great War also marked the end of
European dominance and the beginning of a decline of the continent in weight and influence.

Do we see this in the game at any time? I haven't. 

Certainly, as the USA tends to overtake everyone in roughly the 1920's in terms of budget and capital ships.  The problem is is that the USA is really the only non-European power in the game that can do that, as Japan, China, or the CSA don't really have the financial umph to make it work.  This means that Europe, barring an in-game recreation of WWI with similar results (Multiple nations getting their navies flattened and having to start from scratch) just continues on like nothing is the matter.  

A big part of this is the fact that the player is the true driving force in the game, as the AI powers don't fight with each other in their own personal wars.  If they did it by, say, "X number of powers in region gives Y chances of increased tensions between nations per turn," and those nations were capable of dealing real damage to each other, then we would see a far greater decline in European power as the Old States start to beat each other bloody due to spiraling relation breakdowns in a cramped environment, leaving the outside parties to start to catch up and over-take.    

What you also have to remember is that after WWI, every major European state that was involved had literally lost an entire generation in the trenches, while the USA, Canada, Japan, India, Australia, and New Zeeland managed to avoid most of the devastating losses.  This meant that Britain, France, Germany, the various states that made up Austria-Hungary, and Russia all struggled to fill jobs and positions thanks to the lack of men, while the USA just chugged merrily along having suffered practically no losses compared to the size of its population.  The resulting economic boom in the USA in the early 1920's probably would have continued if not for the Great Depression, which was largely started thanks to the European economy remaining in a permanent post war slump for a decade or so.   

Another argument is that after the war, the various treaties that hamstrung the Royal Navy, forcing them to scrap most of the Grand Fleet, really didn't have that big of an effect on the USA, who proved that even after two decades of very little shipbuilding it could turn on the Carrier printer any time it wanted to, while the British struggled to get enough major warships in the water to even match the number of Essex's, to say little of the various fast battleships, cruisers, light carriers, destroyer swarms, and cargo ships the USA was pumping out at the same time.   

[aeson]

Sept 21, 2020 20:45:21 GMT -6 ieshima said:

Certainly, as the USA tends to overtake everyone in roughly the 1920's in terms of budget and capital ships.  The problem is is that the USA is really the only non-European power in the game that can do that, as Japan, China, or the CSA don't really have the financial umph to make it work.  This means that Europe, barring an in-game recreation of WWI with similar results (Multiple nations getting their navies flattened and having to start from scratch) just continues on like nothing is the matter.

Japan might not have the economic growth to really match the USA and perhaps Britain in the late game, but it certainly has the economic growth to go from being a bottom-tier power in 1900 to being a mid- or upper-mid-tier power from about the 1920s-1930s onwards even as an AI-controlled power and even on 'historic' rather than game resources.

Almanac summary table for an old 1964 USA save state (1900 start, I don't recall which resources setting but probably game). Japan's the third navy in the world by budget - and the second by base resources. Japan, it should be noted, is easily the weakest of the USA's competitor powers on the 1900 start with game resources, having about two-thirds the starting resources of the next-weakest power (Italy). Of the European powers, only Britain and Germany consistently remain ahead of Japan by the mid-'30s despite the fairly considerable lead enjoyed by France and Russia on historical and France, Russia, and Italy on game resources in the 1900 start - and Britain and Germany aren't nearly as far ahead of Japan in the mid-'30s as they were at the start. Even if it's only relative, the European powers are definitely in decline while the USA and Japan are on the rise within the game.

[oldpop2000]

Here is an almanac summary table from my closed 1956 Germany game. It shows the USA leading with Japan second, UK third. Now was this the Path not taken without WW1 and WW2. This is my question to all. Would the depression of the 1930's still have occurred? 

So, consider this. Do we need more nations in the game to depict what actually could have happened economically namely globalization. They would not be countries a player could actually play, they would just be controlled by the AI.  I would suggest three: China and India and Canada. I suggested India because she is the source of British cotton for her industry in Manchester which was a large part of her GDP. Cotton originated in India but the UK source until 1861 was the South. During the Civil War, she was cut off from that supply and turned to India. 

China has a great amount of natural resources like iron ore, coking coal[ anthracite coal], salt, soybeans, rice. Also more land. This is why Japan began to look towards Korea and China to gain control of those resources which she does not have locally. 

Canada because of her proximity to the US.

[decourcy2]

Oldpop, I don't intend this as being mean, but that is incorrect. Indian cotton is of low quality, so the British bred Indian and South American cotton and grew that in Egypt which became their cotton source in the late American civil war.