Expansion and Demand: Relating Real Economics to the Quest for World Domination

"Quantity demanded falls as prices rise, other things constant." Thus runs one version of the law of demand as defined by Collander. (pg 91) (This definition can also be reversed to read "quantity demanded rises as prices fall, other things constant.") At first glance it may seem that this concept could not be any more remote from fictitious conquests led by long-dead generals. Yet the law of demand is highly relevant to expanding empires. How? you may ask. Read on, dear blog peruser, and you shall see.

But first let's back up. We all know how a game of Civ IV starts: You, the illustrious head of a would-be empire, are dumped on Earth with nothing but a Settler unit and a Warrior unit, ignorant of pretty much everything (terrain, location of resources, existence of potential enemies, shape of the continents, etc.). From these humble beginnings, you proceed to construct the skeleton of a world power. And what forms this skeleton? Well, military is important, as are population and resources. But you need one crucial element before you can grow a population, found a military, and hunt for resources--before you can do anything else. You need land.

Land is central to the formation of an empire, a centrality illustrated by the fact that the very first act of any game is to found a city. We've heard this argument from Diamond in Guns, Germs, and Steel: Land feels people, provides raw resources like timber, stone, and iron, and provides something concrete and immovable for military to defend. Can you imagine a country existing that possessed no physical territory? It defies our very concept of a nation state.

Anyway, back to the point--how does territorial expansion relate to the law of demand? It's quite simple, really. When empires are first founded, there is an enormous amount of available land at a relatively cheap "price": If you can plant a city there (and defend said city from marauding barbarians), it's yours. Also, demand is high (as the law states it should be) because let's face it, empires need land for food and resources. Intially, empires expand quickly, gobbling up land adjacent to their capitals and spreading from there. However, as the empires reach a level of sustainability and start to rub borders with other empires, the rapid pace of initial expansion slows somewhat. In other words, the demand decreases. This is due partly to decreased availability but is also directly related to the increased "cost" of land. Once another empire has claimed a plot of dirt, the "price" of acquiring it increases dramitically because now, if you want it, you must fight for it. War is a very expensive and risky enterprise, so you have to want (or need) land particually badly to attempt to wrest it from another empire by force. Most empires try to avoid the costs and risks of war, which means demand for land drops sharply. Or, as Collander states it, "quantity demanded falls as prices rise, other things constant."

There are, of course, other ways to get land than by bloody conquest. If you're playing on Earth, you start on the Eurasian continent, and by the time Eurasia and Africa start to get crowded it's possible to develop the technology to launch an expedition to America. Yet even this is more expensive. Starting cities so far away takes extra resources--particularly military, since you have to defend against the small barbarian settlements over there. You have to know what you're doing to keep these sorts of colonization attempts from turning into suicide missions. (I speak from experience.) Again, cost is much higher than crossing the valley and planting your flag on the next hill. Thus demand (willingness and ability to "pay" for such expansion) decreases.

I have deliberately avoided any discussion of supply. My reason is simple: the law of supply assumes there is a "supplier" attempting to derive profit from the sale of some commodity. In the case of territorial expansion in Civ IV, there is no supplier, no real estate agent trying to convince China to pay a few extra bucks for plot X because it offer an ideal avenue for launching an attack on Mongolia. Empires could conceivably function as suppliers, but I can't imagine any emperor/empress selling his or her land except under extreme duress. That is why I have not discussed the law of supply in this post: I do not believe it functions (or if it does function, it does so weakly) in the expansion efforts of the various empires.

Well, there you have it. Territorial expansion reflects the law of demand. Economics really can be applied to Civ IV. Who would have thought it.

Works referenced:
Guns, Germs, and Steel by Jared Diamond
Economics, sixth edition, by David C. Collander (Chapter Four)