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Source link: http://archive.mises.org/13689/caesar-iii-and-the-ubiquitous-failure-of-central-planning/

Caesar III and the Ubiquitous Failure of Central Planning

August 25, 2010 by

Ever played Caesar III? As the ultimate central planner, I can say that I tried my best to bring forth the paradise envisioned by Marx. Even so, my attempts were met with failure after abject failure. FULL ARTICLE by Mattheus von Guttenberg


J. Murray August 25, 2010 at 7:57 am

That’s a pretty old game. I played it way back when. The problem is, once you figure out the game mechanics, it’s a breeze to play through. I cruised through the game with little difficulty.

Of course, that also points out a major aspect of modern economics. I KNEW what was needed. I KNEW where to place the temples, domuses, bath houses, civic beutification objects, roads, and tax collectors. I KNEW what the impacts of every decision I made would be before I ever made it. It was only because I had, in effect, omnicient knowledge of the future was I able to succeed.

In a real world economy I do not have this knowledge. I don’t KNOW what people want, I don’t KNOW where to put the business or roads, I don’t KNOW what the result of my actions will be ahead of time. No one does.

The key tennent of Marixm, socialism, or central planning in general is perfect knowledge of the present and future. This is possible in games because there are no random variables. The rules don’t change on the fly. I know how it all works before hand. I have save game states and can try levels over again until I figure out how it all works. I don’t have that luxury in real life. No one does.

mycroft August 26, 2010 at 2:25 am

“In a real world economy I do not have this knowledge. I don’t KNOW what people want, I don’t KNOW where to put the business or roads, I don’t KNOW what the result of my actions will be ahead of time. No one does.”

Exactly. The way to find out is through the information feedback mechanism known as the price system.
Asking is not enough, ‘cos people lie/don’t care/don’t know. Prices have built-in incetives attached to help the info they carry reflect real preferences… and still info is always imperfect, incomplete and very quickly outdated.

GK August 25, 2010 at 8:23 am

This reminds of a game I played for the Xbox 360 console. It was called Civilization: Revolution. The idea was to win game against other civilizations on a given world map by either:

a.) Military: conquest and domination, defeating all other neighboring civilizations by destroying them

b.) Science: performing a scientific first, becoming the most advanced civilization (namely, launching a space station towards another planet)

c.) Economics: being the first to build a World Bank

This game tries to perfect the centrally planned society in almost every major way one can think of, all in the hands of the omniscient player, similar to the one in this article. It was totally backward. Needless to say, there were difficulty levels in the game, and made it almost impossible to play against the standard computer players if you raised that level. It’s a shame, because otherwise, video games sometimes are used a learning tools, and if not those, reflections on what is conventional knowledge. It’s a shame, because otherwise this game was fun to play.

J. Murray August 25, 2010 at 8:50 am

As much as I love the Civilization series, playing it libertarian style would be horribly boring. In Civ, nothing happens if you, the govenrment, doesn’t do it. Science never goes anywhere without central funding. No one builds roads, builds new settlements, mines, libraries, markets, or anything else without being directed by the leader. No one defends themselves and everyone complains until you, the leader, provide money for entertainment. It doesn’t matter what government form you select, it’s always a dictatorship.

However, imagine if there was a libertarian option. You would never play the game. You would run the executable and then sit there while the culture just ran itself. You didn’t pick science strategies, don’t pick what to build or where, don’t engage in international politics. You just observe a fancy screensaver you just spent $50 on.

A libertarian video game is a horrible idea. No one would want to play it, not even libertarians.

mpolzkill August 25, 2010 at 8:53 am

Wow, did you hit the nail on the head, Murray. Our rulers are obsessed gamers who could never be satisfied playing without real blood at stake.

Oh, and when you’re done playing for the day, you get a real woman (or page boy), instead of what computer gamers get.

GK August 25, 2010 at 9:34 am

Makes sense.

That popped up in my head. And I did indeed think that would be boring.

Bottom line, I don’t condemn the games themselves, because they are enjoyable. I just prefer not to take lessons from them.

bobobberson August 25, 2010 at 9:37 am

Haha J. Murray. I agree totally a libertarian game would be boring. You should play Civ4 online. With so many dynamic and free thinking people in the game the thing really much more unpredictable. Maybe if you had 100s of civilizations played by 100s of real people would make a very different game. But with so many people, things are bound to get ‘disorganized’ if someone doesn’t step in with rules. But with the heavy hand people tend to leave the the whole enterprise dies. I think Massive multiplayers are a great example of governments and the interference of the state:

A libertarian MMOG could be created I bet… hmmm

J. Murray August 25, 2010 at 11:24 am

A Tale in the Desert is fairly close to a libertarian MMO.

Jake_nonphixion August 25, 2010 at 11:35 am

You’re exactly right Bob!

There’s one that already exists. Ever heard of Second Life? It’s a completely programmable universe full-packed with individual expression and free enterprise. There is actually a mini-economy that has spurred up within it, and it’s currency actually has a market value since it can be exchanged for US dollars. There even exist a few Second Life entrepreneurs, who have grossed in excess of 1 million US$ per year because companies can generate US dollar earnings from services provided in Second Life.


Mirco October 5, 2010 at 9:19 am

A true libertarian MMORG (as much as it is possible in a game) is EVE Online (they have a real economist, Dr. Eyjólfur Guðmundsson, that compile a quarterly economic newsletter).
99% of the entire economy of EVE is player driven.
If you want build something you need to mine the minerals, refine them, have the plans to build it, find a production facility with a free slot, etc. Stuff must be moved from here to there, from where is produced to where is consumed. Prices are free to float as much as they like.
There are ship for different uses. Groups of players control entire regions of the space and the resources inside, but must defend them from other groups. And often the winning or losing depend more on the money of the game and the resources one control than the military might.
Having a large number of powerful PC is useless, if you have not the logistic in place to fill them with the needed things like ships, ammo, and so on.

Fephisto August 25, 2010 at 4:54 pm

A true libertarian videogame would be:

Railroad Yard

You have $100. You have entered Chicago. There is no government. Your first task might be to find a protection agency.

You have 3 exits:

North, West, and Meat-Packing District.

Jon Leckie August 25, 2010 at 9:09 am

The most realistic state intervention in gaming is the Total War series. Total War: Shogun II is due for release next year and it looks ePiC! Prepare for Total War!

Stephen Grossman August 25, 2010 at 9:16 am

>The game doesn’t even attempt to treat the population as rational humans with changing desires. They are robotic automatons for you to control.

That’s a basic weakness since individuals will respond from their own values to the enforced values of the Socialist Planner. Individuals will create a market(?) within socialism, destroying the socialism. Eg, hoarding more valuable money and spending the less valuable. Buying more subsidized goods than if they were unsubsidized and spending the saved money on other goods, requiring the Planner to use resources to produce more of those ,resources that he had allocated to other goods. Etc. Its a vast ,growing complexity. What if the Planner produces 10 chickens for every cow but people want 5 chickens for a cow?

mpolzkill August 25, 2010 at 9:22 am

“The game doesn’t even attempt to treat the population as rational humans with changing desires. They are robotic automatons for you to control.”

What like Vietnamese rice farmers, Grossman?

[For those not in on my sick joke, Grossman has said many times that all in Vietnam should have bowed to *his* socialist country's desires or rightfully face annihilation. Or, in short: Grossman is a Randroid]

Stephen Grossman August 25, 2010 at 4:55 pm

Youre a subjectivist liar who evades the rational moral superiority of individual rights to collectivism. And who evades the vast extent of individual rights remaining in America ,during the war, relative to mass-murdering, totalitarian N. Viet. collectivism.

mpolzkill August 25, 2010 at 5:11 pm

What lie? Let’s relate your slave army 10,000 miles from home to the farmers they were murdering.

Stephen Grossman August 25, 2010 at 8:45 pm

Youre still evading the moral difference between the individual rights, defended by america and its collectivist enemies. youre a nihilist liar , like the nazis and marxists. civilian deaths are the moral responsibility of the opponents of individual rights.

Murray Rothbard's Wife August 25, 2010 at 9:27 pm

Let’s grant for a moment that North Vietnam was a threat to freedom that needed to be stopped. Does that justify, by Randian morality, conscription? Should slavery be allowed to serve a greater good?

Borislav August 25, 2010 at 9:34 am

Try Tropico 3 :-P.

And Caesar III is easy once you learn mechanics ;-).

jspradley August 25, 2010 at 9:51 am

I’ve always loved those type of games but have always sucked at them… maybe I’m too libertarian? haha

mpolzkill August 25, 2010 at 9:58 am

Maybe Roller Coaster Tycoon would be your thing, JS, I got addicted to it many years back. It is pretty much the running of a world, but in it the people can get very angry at your incompetence and LEAVE.

Tennanja August 25, 2010 at 8:30 pm

Its more like running a business, not a world, you don’t plan for the people’s lives you plan to create a product–entertainment

exile August 25, 2010 at 10:23 am

LOL! I hear that. Mises ruined my favourite game growing up: Sim City.

I can’t play the game anymore without getting sick to my stomach looking at tax rates, Junior Athletic Programs, Clean Air Acts, floating bonds, etc.

But the libertarian in me can get behind a game like Monopoly Tycoon. You basically start as a small-time property owner and build yourself up to top dog by allowing businesses to rent property to you which cater to the needs of the community.

Mac August 27, 2010 at 3:24 am

I know what you mean!

greg August 25, 2010 at 12:04 pm

If caesar3 is like caesar2, ask your friend this.

Why is the most efficient way to handle library and hospital services to build dozens of them on an isolated stretch of road completely detatched from the main roads of the city? It would be like putting all of america’s hospitals in montana.

Jonathan M. F. Catalán August 25, 2010 at 12:22 pm


Caesar III is a bit more sophisticated. Rather than reaching full employment by building things in arbitrary locations, in Caesar III these services actually have to reach the homes of your people, so city blocks have to designed in such a way that every service is provided to them (as such, merchant women have to walk house to house, as do prefects, philosophers, et cetera). So, employment stimulus through public works projects are only successful if the neighborhood is clearly satisfied by its services.

Another thing Caesar III improved upon was the “plebes are needed!” message, which was pretty darn annoying!

J. Murray August 25, 2010 at 2:49 pm

That’s not entirely true. There was still a range component in Caesar II which most notably impacted land values, which was the primary component of potential population size of residential blocks and happiness. Also, you couldn’t just arbitrarily build certain buildings like markets, tax collectors, or guard houses just anywhere. Especially guard houses as the unit has to physically make its way to any invasion, riot, or fire on foot, so placing the guard on the opposite end of the map would result in most of your town burning down or getting sacked. Also, guard houses, training yards, and walls would reduce land values, so it was a bit of a trick to find the optimal distance away from them to gain the benefits without incurring the negatives.

The other major difference is that Caesar III doesn’t have the RTS component in it. It’s all city building all the time with just about no province or invasion component to concern yourself over.

Otherwise, the rest of it is pretty accurate.

Greg August 26, 2010 at 7:05 am

It was the same in C2. You had to have the tax collectors, merchants, etc. walk by the residential areas to confer their services on the area. But hospitals and libraries were special in that they didn’t have little guys walking down the roads to bring these services. They magically conferred their services while being on the other side of the town, with no roads between. It led to some ludicrous city designs, and a trick to boost one of the city stats needed for winning (I forget which) was to just build rows and rows of these buildings. A hospital for every man, woman, and child! Truly a perfect example of central planning.

Mattheus von Guttenberg August 25, 2010 at 12:44 pm

Hey everyone,

I had similar planning problems when playing Civ IV, as well (problems of a different nature). I just decided to write on Caesar being that the problems were much clearer and easier to explain.

Abhilash Nambiar August 25, 2010 at 2:20 pm

If my friend, like Plato before him, thinks society could be modeled like an ant colony, I welcome his attempts to explain how.

An FYI. There are no central planners or master architects in an ant colony and I mean real ones. The fertile queen ant is dumber than the sterile worker ants and is in no sense the central planner.

Mattheus August 25, 2010 at 2:58 pm

I only make the resemblance because ant colonies are highly ordered, regimented, and monotone. The functions of individual ants in a colony mirrors that of individual citizens in a socialist state.

J. Murray August 25, 2010 at 3:02 pm

In an ant colony, ants that don’t pull their weight are eaten or killed. In a socialist community, people who don’t pull their weight are allowed to mooch off everyone else for their entire lives.

There isn’t much comparison between socialism and ants.

Einar Friðgeirs August 25, 2010 at 3:14 pm

There is a reason why games like Caesar, Civilization etc. were(and maybe still are) considered part of the “God Games” genre, a name that goes back to the classic Populous.

As much of a libertarian as I am, I thoroughly enjoy these types of games. They are basically just puzzle games with a veneer of civic planning. Anyone who thinks governing an actual economy is anything like these games is an idiot.

Still, I think it’s better we get an outlet for our central planning impulses in digital form, there’s a little control freak inside all of us, and I think it’s healthy that it gets to go out for a walk once in awhile.

And for a truly libertarian game, look no further than the MMO EVE: The Second Genesis. An unashamedly “hyper-capitalistic” game.

Skrag August 25, 2010 at 8:18 pm

I used to enjoy playing this game, though of course it is only relevant in showing how an empire and central planning work, as you pointed out quite thoroughly. Off point a bit, I do remember back when I first played it many years ago, that I played it so much that I would quite literally see the game playing out in the dirt(like tiny ants) at work the next day during breaks. Perhaps that is another point to games such as these that take quite a bit of time, to distract people who otherwise might be able to put their minds to better use in seeing the truth.

Tennanja August 25, 2010 at 8:46 pm

This argument as laid out in the article, strikes me as a very weak blow against central planning. For example, stating that you couldn’t beat the game, just proves to the socialist that it is just more important to find the smartest planner, after all your friend probably suggested the game because he found it easy and therefore thought that central planning was easy. The better arguement to be made is that the game doesn’t require you to meet the demands of the people as much as it does the demands of ceasar, it goes so far that the people in your town are such automatons that they can be pleased by a formulaic approach, a far cry indeed from pleasing people. A further problem is that the people failed to grow and want different things, in real life we see in the last few years how the market has reacted to peoples demand, even in fields of life such as video games as they have changed from text adventures, to simulation, and now mostly to action games. If it was up to a central planner they never would have the foresight to try something new and different, nor would most bureaucrats be willing to take risks. However that is exactly what is need to be done to please people, the entrepreneur must look into the future and forecast what people want, many times before people themselves knew that is what they wanted. Even if the central planner was able and willing to take risks, that system would still stagnate as the planner would make poor choices, but unlike the entrepreneur who must shoulder the costs of his own mistakes, the state’s planner just pushes these cost onto the people and tries to hide his failures from anyone with authority to punish. Basically this becomes a societal principle-agent problem.

andy August 26, 2010 at 12:34 am

My thoughts exactly. (it wasn’t that difficult anyway!)

To be fair he does make the point that, unlike real people, game inhabitants are obedient little automatons with no choice and a preprogrammed set of (very limited) responses.

Other big differences are predictability, static technology, predetermined goals… and of course, when talking of economic calculation it should be noted that prices are a given, there are no market set prices at all and costs are all known ex-ante making profit/loss a non-issue.

OTOH, the little megalomaniac in all of us makes these games thoroughly enjoyable!

Tim August 25, 2010 at 10:47 pm

I remember playing Rome Total War: Barbarian Invasions as the Western Roman Empire starting at around 380 AD.Your provinces are underpopulated and underproducing, your treasury is in the 5 digit negatives, your army and state expenses create unsolvable debt, and worse of all, huge hordes of barbarians are knocking at your gates. Basically, I was screwed.

The only way I found to win in the long run was to do the following: disband most of my armies in remote provinces, sell off most government buildings to balance the budgets and set taxes everywhere in the empire to lowest possible to facilitate population growth in cities and hope my European legions could stave off the hordes of unwashed Germanic hippies from crashing in my rich Alpine and Gallic land. Another thing I had to do was force the same religion, in my case Christianity, on every province, but that’s a different story. Success from then on largely depended on luck and tight maneuvering during battles against armies 3-4 times my size. In the end, the satisfaction of seeing Roman banners over what now comprises Ukraine was immeasurable.

If only real life had a quick save function, then maybe we’d all be still speaking Latin today.

roy August 26, 2010 at 1:16 am

Anybody who’s ever played any RTS knows the chasm there is between playing v. the machine and playing v. real people.

You want proof that central planning does not work?
Tell your friend to play multiplayer with real human volition at work.

Also, RTS old-timers know very well that attempting to micromanage an empire is the surest way to lose sight of the big picture and lose the game beyomd a certain level of complexity.

eddy August 26, 2010 at 11:27 am

I’d like to preface the following statement with the admission that I hate socialism.

You just suck at Caesar III. I beat that game with ease when I was a freshman in high school.

Rob August 26, 2010 at 1:39 pm

You should try Tropico 3. At least that game makes no bones about your being a dictator. It’s a bit interesting to see how you can manipulate a populating using things like books, newspapers, radio, TV, movies, etc. As you can also imprison, exile and even execute citizens, you can have your own little virtual Cuba, if you want.

Stephen Grossman August 26, 2010 at 8:51 pm

>[Murray Rothbard's Wife]Let’s grant for a moment that North Vietnam was a threat to freedom that needed to be stopped.

even leftist joan baez was sickened by post-war viet mass murder. viet marxism, acc/to rand ,was a lesser threat to individual rights than cuban marxism. but to subjectivists, reality is whim.

Does that justify, by Randian morality, conscription? Should slavery be allowed to serve a greater good?

no. slavery is not a lesser good nor a necessity for the militaries of individual rights societies.

Current August 29, 2010 at 8:42 pm

Over on Crooked Timber there are a lot of folks taking the mickey out of this article…


If I were to draw a conclusion from this it would be that both libertarians and socialists have spent far too long playing computer games.

Edmund Carlyle December 3, 2010 at 12:41 am

The central planning/econometric nonsense in Hearts of Iron or Victoria (by Paradox) is MUCH worse. At least in Civ you can pretend that you represent the zeitgeist, in Hearts of Iron you manage your ‘Industrial Capacity’ and trade in three homogeneous ‘resources’.

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