I’m working on adding two new policies to the next update for Democracy 4 today. By popular demand (deduced from in-game player voting during Early Access) I have decided that these two policies are worker dividends (profit sharing) and a ban on all cryptocurrency. I’d like to talk through what these policies represent from a game design and real world point of view, and show how they have been implemented.
First up is workers dividends. Like all Democracy 4 policies, these are not as specific as they sound, but represent a whole ‘area’ of legislation, in this case legislating on how workers must be compensated. In the overwhelming majority of countries, such legislation basically amounts to laying out a minimum wage (if one applies), and perhaps some rules about grounds the company may have to withhold such payments, or perhaps rules surrounding what kind of deductions from wages can legally be made.
In other words, in general, as long as a company pays you minimum wage, thats all you are entitled to. If you notice you earn $40/year and the company CEO earns $50million a year, and its all your effort that enabled this…then basically your option is to just quit and work somewhere else…
Some people take the view that this is unfair. Others take the view that this is capitalism working as intended. A clever company will reward employees fairly, or risk losing them to cleverer companies who spot their potential. This is the ‘perfect market’ school of thought.
Others might suggest that this is fine when we are talking about headhunting people with phds, but when it comes to warehouse workers, or other minimum wage staff, things don’t work that well. A company like amazon may earn billions in profit, but see no reason at all to pay its warehouse staff above minimum wage. If you are of a socialist mind, this is unfair, and exploitation and needs fixing.
Generally in my lifetime this has been a non issue where I live, until the last UK general election, the left-wing Labour Party did propose something akin to this new Democracy 4 policy:
https://www.bbc.co.uk/news/business-50508369
In this policy, the party suggested that 1% of the shares of private companies be taken from them each year for 10 years (total 10%) and placed into an ‘ownership fund’ whose share of the profits would be paid to the workers. In a Marxist sense, this would be described as ‘seizing the means of production’, although in this case only seizing 10%. The idea was to share the profits of big companies with the staff, and was probably one of the most pure socialist policies proposed at the election.
In the end, the party lost (quite badly) so we do not get to see how the policy worked in practice, but it was popular with its supporters (and VERY unpopular with its opponents).
I need to include policies like this in Democracy 4, because as socialist players have pointed out, the game does not go to any particular extremes on the left economically. We have policies for minimum wage, retirement age, worker safety and even mandatory union representatives on company boards, but no direct pure wealth-redistribution from owners to employees. This policy fills that gap. The slider can be thought of as intensity, showing a range of measures from the ‘incentives for bonus schemes’ all the way up to ‘mandatory allocation of 90% of shares among the workers’.
My first thoughts are that this policy pleases socialists, and union members, angers capitalists and small businesses (effectively entrepreneurs), boost the chances of a corporate exodus, reduces foreign investment, but has a side effect of making all strikes less likely. (Why strike when you will feel the pain as profits drop?).
The second new policy I’m adding is a cryptocurrency ban. Sometimes people ask why such ‘ban’ policies even need a slider, but a ‘ban’ can mean everything from ‘some currency mining is banned if using certain power sources’ all the way up to ‘holding, mining or trading cryptocurrency of any kind is punishable by imprisonment’.
In this case the motivation is a combination of loss of government control (and thus tax revenue) and concerns for the environment. Liberals hate banning anything (because…freedom), and obviously any ban would have a vastly negative effect on the usage of cryptocurrency.
For background reading on the environmental costs of cryptocurrencies (specifically proof of work), just use google. Its pretty shocking. I have strong views on all crypto, including proof of stake, which although environmentally better, has the perverse effect of making the rich get richer. Perhaps someone will do an in-depth D4 mod that represents different types of crypto and their effects on socialists and capitalists!
And that reminds me… I must check that crypto’s CO2 impact is modeled in the game…