Fwurg

[Gerben]

Domestic Policies
Trade
Free trade is a policy followed by some international markets in which countries' governments do not restrict imports from, or exports to, other countries. Free trade is exemplified by the European Economic Area and the Mercosur, which have established open markets. However, most governments still impose some protectionist policies that are intended to support local employment, such as applying tariffs to imports or subsidies to exports. Governments may also restrict free trade to limit exports of natural resources. Other barriers that may hinder trade include import quotas, taxes, and non-tariff barriers, such as regulatory legislation.

In economics, protectionism is the economic policy of restraining trade between states (countries) through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations. Protectionist policies protect the producers, businesses, and workers of the import-competing sector in a country from foreign competitors. However, they adversely affect consumers in general, and the producers and workers in export sectors, both in the country implementing protectionist policies, and in the countries protected against.

There is a broad consensus among economists that protectionism has a negative effect on economic growth and economic welfare, while free trade and the reduction of trade barriers has a positive effect on economic growth. However, liberalization of trade usually results in large and unequally distributed losses and gains, and, in the short run, can cause significant economic dislocation of workers in import-competing sectors.

Choice between => Free trade vs Protectionism

Union Policies
Economic Growth and Development
Economic diversification is generally taken as the process in which a growing range of economic outputs is produced. It can also refer to the diversification of markets for exports or the diversification of income sources away from domestic economic activities (i.e. income from overseas investment). By promoting a larger variety of products in the market the economy is less susceptible to market fluctuations.

Specialization is a method of production where an economy focuses on the production of a limited scope of products or services to gain greater degrees of productive efficiency within an overall system. Many countries, for example, specialize in producing the goods and services that are native to their part of the world, and they trade for other goods and services. This specialization is, therefore, the basis of global trade, as few countries have enough production capacity to be completely self-sustaining.

Choice between => Diversification vs Specialization

Motivation
Based on this example of a Union and Domestic Policy influencing each other, these can be used to influence the trade between members and the products they make. For a player that wants to focus on trading the combined policy of Specialization + Free trade should yield the best overall benefit since they complement each other based on economic theory. Whereas players that want to focus on their local economy and not trades should benefit more from Diversification + Protectionism, since those policies protect the own market while still increasing the variety of products available.

As long as the choices on both a Union as well as a domestic level are impactful enough, both Diversification + Protectionism and Specialization + Free trade should also see frequent use depending upon the specific situations of players.

Possible technologies:
Possible upgrades that relate to these policies could be a trading office upgrade on a spaceport/support zone that offers related benefit to either the external (free trade) or internal market (protectionism). Likewise, an upgrade that enables to the production of a 3rd raw material could be tied into this tree (diversification) as well as an upgrade (such as a refinery) that increased the production of a single raw material (specialization).

[Brend]

I think the Diversification vs Specialization is best introduced later in the game. As I read it, it will work well by impacting Corporations, and maybe some of the more-advanced upgrades that have their basis in specialization of output.

Free trade vs Protectionism sounds logical, but I have a hard time seeing how that would pan out in the game. I'll have a better view on that once we are up and running. There's definitely something in there though I do not currently see how to make it work with the system.

So I suggest that we review both of these once we get going!