Capitalism 2 and Capitalism Lab Forum

*I welcome critiques and suggestions.

Technology in real life does two things, broadly: it raises productivity (more units produced from the same labor) and premiumization (better and newer goods). Capitalism Lab captures only the second half: R&D improves quality, thereby supporting a price premium, and R&D also unlocks new products. I'm not saying this mechanic has to change; I am stating (at least from what I understand) how the game works.

Additionally, real wages do two things broadly too: wages raise the quantities bought up to the extent of a personal "Engel Curve" (people don't buy more bread just because they earn more money in real life), with the residual cash as savings. In the game, wages only do half: each product has an Annual Demand per citizen (hard-coded and capped) which is shaped by the Necessity Index. Assuming real wages are at 100.00, that means 100% of the population is able to meet the game's hard-coded Annual Demand and Necessity Index (I could be wrong here though). Real wages in the game do not raise the baseline Annual Demand, meaning, as the city gets richer it buys the differing mix of Annual Demand and Necessity Index, not more of the same goods per person.

The quantity of an existing good sold in a city is, roughly, [Population] × [hard-coded Annual Demand] × [Necessity Index %] × [price, quality, brand] = total aggregate demand cap. The only way to raise aggregate demand in the game is through population and employment(?) + technology premiumization + real wages out of 100.00. But technology premiumization and real wages out of 100.00 only help the player reach the total aggregate demand cap, not increase the demand per citizen.

I propose an additional mechanism in general: increasing the Annual Demand per citizen such that we have the same number of population buying more units of goods that exist. Here are some ideas:

A) Higher real wages also raise Annual Demand per citizen, not just trying to reach the demand cap. Meaning: wages could climb to $500k+ per person, buying more of the same goods, where wages rise through more of a closed-loop Keynesian fashion.

B) Weave Annual Demand per citizen with R&D centers, where R&D centers also manipulate the Annual Demand per citizen variable based on Total Tech Gain.

C) Branding manipulates Annual Demand per citizen, not just quality.

D) QoL manipulates Annual Demand per citizen. But that still technically caps the demand because QoL seems to be capped at 100%.

E) A script. The script could be as simple as Annual Demand per citizen growth rate X every year or so. The current experimental script, Consumer Demand Modifier=<10 to 500>, is only a blanket one which feels weird on day 1 because the scale is immediate.

I personally think A, B, and C make sense from a game-loop perspective. Options B and C should cost the player an immense amount of in-game cash, in order to balance the extra business income gained from a rising Annual Demand per citizen. Option A is the wage attempt (and also serves a role-playing purpose of having a very wealthy society where people earn $500k as a median income without inflation), and is a natural progression as the player grows their business.

Essentially, what I am proposing: make per-capita demand for existing goods able to rise without immigration and without adding new SKUs to the game. This makes for a "denser" existing population instead of growing a larger population.

Two major caveats:
1. Annual Demand per citizen must also be able to collapse so as to accentuate boom and bust cycles. How that happens, I think, is worth deliberating upon because I'm not sure. Currently, the Necessity Index acts as a means of accentuating existing boom and bust: during the boom, luxury purchases rise; during a bust, luxury purchases massively collapse, but high-necessity products stick to their demand. If Annual Demand per citizen increases, it is possible that the current existing boom and bust cycle becomes softer, which erases some of the challenges and what makes the game unique. Thus, to implement a mechanism that manipulates Annual Demand per citizen, it must also not erase the boom and bust cycle challenge.

2. Separating Annual Demand per citizen versus player versus AI competition.
- If we are to manipulate Annual Demand per citizen as it is, it will manipulate the total demand per product *available* to both the player and AI competitors. The question is whether we should separate Annual Demand per citizen globally or not. For instance, for the player, if only Annual Demand is manipulated, option B and C would indirectly subsidize AI competition as the player increases their research or branding because Annual Demand per citizen affects products globally.
- The yes-separation argument is that it is fair and is a result of the player making savvy gameplay choices; the no-separation argument is that it is an additional gameplay puzzle for the player to solve. I personally lean towards the no-separation argument because differentiation already exists through product quality variables, but I think this should also be deliberated upon.
- Option A is simply a result of wealthier city, which is neither good or bad.

Other notes for readers:
- I am not arguing for a change in income elasticity.
- I might be pointing at the wrong variables.
- NECESSITY scales by the city’s real wage. The field is 0 to 10 and becomes 0 to 100 in game. High necessity keeps realized demand near the file value even at a low wage. Low necessity lets a low wage cut it hard, and a high wage push it up. Burger Buns stay near their DEMAND. Motorcycle does not, but its DEMAND is 0.010, so the wage can only move a very small number.
- Price, quality, and brand do not change DEMAND. They change rating, through PRICE, PRICE_CN, QUALITY_CN, and BRAND_CN, and rating changes how much of the baseline is actually bought. The standard price itself is also shifted by the local wage and by inflation. A lower-wage city has a lower standard price.

deepCapital, what you wrote inspired me, thank you. I think you defined the problem very well. I've written my solution below. What do you think?


Feature Proposal: Annual Employee Wage Demands & Organic Cost-Push Inflation Spiral

I’ve been analyzing the macroeconomic engine of Capitalism Lab, and I wanted to share a structural limitation I noticed, along with a gameplay-friendly solution that solves multiple end-game issues at once.

The Current Limitation: Hard-Coded Per-Capita Demand

Right now, the game treats the Annual Demand per citizen as a hard-coded cap. R&D and high real wages only help the player reach this existing demand cap (by driving the Necessity Index toward 100%). However, no matter how rich a citizen becomes, they still buy the same maximum physical quantity of a good per year. The only way to expand aggregate demand is through population growth or adding entirely new SKUs.

Instead of forcing players to rely solely on immigration to grow their market size, I propose a new mechanism that creates a "denser" and wealthier consumer base through an organic cost-and-price spiral.

The Proposal: "Annual Employee Wage Demands"

Instead of overhauling the demand formulas or changing how the core variables work, we can solve this purely through a labor cost and inflation mechanism.
The system would trigger once a year during the financial report period (e.g., January 1st) as a single company-wide report to avoid micromanagement fatigue.

• The Trigger: A union/employee committee requests an annual wage increase (%) based on city inflation, company net profit records, and local unemployment rates.
• The Player's Choices:
1. Accept the Wage Increase: Employee loyalty increases, production/sales efficiency is maintained. However, Labor Costs per unit will directly rise.
2. Reject / Counter with Low Wage: Labor costs stay low, but employee loyalty drops. If wages stagnate for too long, production quality drops (higher defect rates in factories), retail service ratings decline, and workers begin to quit.

Why This Perfectly Solves the Problem (The Logic)

1. "Inflationary Growth" of the Market (Bypassing the Quantity Cap)
Even though the physical number of units a citizen buys per year (Annual Demand) remains capped by the game code, the monetary volume (revenue potential) of the market expands dynamically.

• Example: A citizen still buys only 1 smartphone per year. However, because labor costs and wages rose, a phone that sold for $500 in Year 1 now sells for $2,500 in Year 10. The player's business grows through higher margins and larger cash flows, reflecting a truly wealthy, high-income society.

2. Natural Burn for Late-Game Cash Accumulation

One of Capitalism Lab's biggest end-game hurdles is the massive accumulation of idle cash. When your corporation grows to tens of thousands of employees, these annual wage demands will turn into a massive, scaling expense. This keeps the financial challenge alive and rewards tight optimization even in the late game.

3. Real "Cost-Push Inflation" Dynamics

Currently, inflation in the game feels like a background formula. With this feature, it becomes organic: Higher Wages Increased Production Costs Player Raises Product Prices to Maintain Margins Natural, Macroeconomic Inflation is Born.

4. Organic and Balanced AI Competition (No-Separation)

This mechanism should run under the hood for AI companies as well. As the city gets wealthier, AI workers will also demand raises. Cheap/stingy AI competitors will suffer from severe quality drops or lose their skilled workforce entirely as employees defect to the player's higher-paying factories. This adds an engaging "talent war" to the gameplay.

Critical Balancing Elements

• Automation Counter-Play (R&D Synergy): Players should be able to counter rising wage pressures by upgrading factory technology. Higher R&D/Tech levels in factories should increase automation, drastically reducing the required headcount and lowering the impact of wage demands.

• Non-Linear Scaling (Exponential): To protect early-game startups, wage demands should be minimal during the first few years. The aggressive, profit-driven wage hikes should only kick in once a corporation starts hitting record-breaking net profits in the mid-to-late game.

I believe this approach adds immense tactical depth and provides a realistic macroeconomic loop without breaking the existing game balance or requiring risky rewrites of the demand engine.

What are your thoughts on this? Would you prefer this to include actual strike risks if loyalty drops too low, or is the drop in production quality and worker attrition enough of a penalty?

Looking forward to the community's feedback!

mdemircan2, thanks for the reply.

That makes sense to me. I do think wages should probably play a larger role in the game, specifically growing GDP, which more than likely falls under the Consumption variable. Additionally, the game has an automatic(?) function in terms of employee production, which is more directly tied to utilization(?) than wages. Meaning, perhaps it is reasonable to tie some sort of mechanism that allows the player to speed up training / become more productive by paying employees more than just using the HR Department Intensive Training Program; wages could be tied to the HR Department in a similar fashion that training already is. The HR Department is just a couple clicks and there is no drawback beyond just capital. Whether this is a HR Department thing or a Union / political mechanism in the game, I think, is worth deliberating upon.

Additionally, I agree that idle cash is a "problem" in the end game. “Let’s just say I owned a billion dollars of Tesla stock. If I sold it, now I have a billion-dollar problem. What do I do with that money?” —Chamath Palihapitiya. There isn't much to do with our current cash on hand when markets are dominated, and the game becomes an idle game that waits for immigration. The upcoming Billionaire DLC seems to address that problem. I do think adding some sort of wage mechanism would also keep things dynamic.

However, there is a separate mechanism I have been thinking about regarding idle cash: massive player profits should probably cause a bust cycle. This is because in a closed-loop Keynesian environment, cash that sits on hand without being spent back to the economy is a leak in the circular flow: it is income that never becomes someone else's revenue. In a closed loop, your profit was extracted from local wages, supplier receipts, and consumer spending. If that cash is not paid back out as wages, investment, or consumption, aggregate demand falls by the same amount that your balance sheet rose. Sales slow, margins compress, and the boom that produced the pile unwinds into a bust until the idle cash is either spent, invested, or wiped out by falling prices and bankruptcies. That is the paradox of thrift inside a closed system: the rational hoard for one player is a demand shock for everyone else, including the player who hoarded it.

But I'm pretty sure the game does not have a completely closed circular flow of money, but I could be wrong here. If the circular flow does not exist, I think maybe it should. But that's probably asking too much (I can still hope though, haha).

One slight pushback on your suggestion. You are arguing for nominal inflationary growth. And these three sentences in particular: "A citizen still buys only 1 smartphone per year. However, because labor costs and wages rose, a phone that sold for $500 in Year 1 now sells for $2,500 in Year 10. The player's business grows through higher margins and larger cash flows, reflecting a truly wealthy, high-income society." That really is just nominal inflation rather than a result of a wealthier city. If wages are nominally higher but could only by the same number of finished goods, that is cash being inflationary rather than the result of technological improvement / production efficiency / wages rising for more demand. Though, I still agree with the wages idea.

In my case, I'm leaning towards a more demand-based approach with wages leading here; that way, immigration is not the only way to gain global demand for existing products. How we get there depends on what mechanism is worth pursuing, though, I do lean towards a wage approach as I do think that serves a more dynamic approach in terms of the game's existing mechanisms.