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ITEM: Idle Theory Economic Model (Prototype version) Primarily intended as a research tool, the simulation model is not (at present) intended as a demonstration model. Research usually entails changing the program as well as the data, as particular problems are explored and solutions offered (e.g. poverty traps). So the model shown here has very little utility on its own, and is merely demonstrates the effects of price changes of one sort or other, including floating prices. Developed from the simpler 1998 simulation model, the ITEM model has a number of tool producers, each making a different tool from an available toolset, and selling these to other producers at prices denominated either in labour (tool 0) or one or other of the tools in the trading system. The tools in the toolset each have a labour production cost C, a labour-saving value V, and lifetime L - although these are stored in two tables rather than 3 tables. Tools can save time in the production of other tools, but in the present system all tools apart from tool 0 require only labour to produce them. The tool producers have some sort of basic self-maintenance work that they each perform to stay alive, and their initial untooled idleness (UI) is set by this amount of work. The tools they make or purchase from each other serve to additively increase their idleness I above UI. UI is usually set to zero (for no particular reason). If UI is set < 0, this means that individuals are not able to survive untooled. Tool producers aim to maintain a stock of tools in their 'shop window' ready for sale. Tool users aim to own a personal stock of each tool, and buy the cheapest tools on the market. They are able to buy fractions of tools, rather like it is possible to buy 100 kg of flour rather than in 1 kg units. Tool producers sell not only their tools, but also their own labour, on demand. So, during any day, individual members of the trading system will a) perform their basic work using whatever tools they own, b) buy tools in order to maintain a personal stock, c) make tools to meet a production target level, d) perform work for other traders, and e) spend the rest of the day idle. Performance The simulation is usually started with just prices, and after an initially period while tool stocks are built up, idleness settles at a uniform level, as would be expected with just pricing. Prices can be doubled, halved, set to zero. Trading can be switched on and off. A floating price option is included. When prices are floated, producers raise prices if they sell out, and reduce prices if they don't sell anything. If prices fall below costs, they cease production. When buyers are discriminating, and prices rise above values, buyers don't buy tools. In general the fixed price simulations work well, but the floating price modeal tend to be highly unstable, and the result very often is that shortages arise, and the idleness of the trading system falls to UI%. Operation The simulation is started and stopped by moving the cursor over it of away from it. The table at the top left give some gives general system parameters - day, number of men in the trading system, tool used as $ currency, untooled idleness, predicted idleness. The main table gives parameters for each man in the trading system - status (alive/dead), average idleness over a period, purse contents, tool shortages, price of labour (P0), min price of labour (P0min), tool produced, tool max price, min price, and current price, stock levels, production targets. daily use thruput and sale thruput. The left hand rolling graphic display shows several tool prices over time, and the right hand one shows individual idleness in range 0-100%, and number of $s in system. The top right table gives a set of options which can be invoked by double-clicking on them. the same set of options is also available to be invoked from the HTML as a sequence of events happening at prescribed times. (e.g cease tradin at day 400, and restart trading at day 600). Values in the main table can also be edited, by highlighting and changing (although this option doesn't work very well). Although some of these may revert back to some value set within the simulation (e.g. production targets).
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The ITEM simulation model is rather more complex than its 1998 predecessor - by using other money units than labour, floating prices, competition, etc -, but is still a very crude and simple model. But in principle such models can be made more and more complex. They might, for example, include banks and lending at interest. Or taxation. Or foreign trade (perhaps by having two separate trading systems, using different monetary units, exchanging goods between them). There could also be a set of luxury goods for use in idle time. And so on. The possibilities are almost infinite. The purpose of such models is to see how Idle Theory's economic systems behave given a number of explicit (i.e. encoded) assumptions about tools in use, and the behaviour of traders, and so on. To the extent that the model reflects a real economy (which would be far more complicated than anything shown here) such simulations might be used to explore the likely outcomes of government policy proposals, or of companies launching new products, and so on. Java Source |
Author: Chris Davis
Last edited: May 2009