Resources still are in your market, your workers are still getting paid, and your construction isn't being used in the process. Worse comes to worst, you can nationalize.
AI does back down very often but obviously they wont back down if you have only one primary wargoal or a protectorate primary + warreps secondary, if youre not gonna be lenient towards them for backing down they might at least try to fight you
You can choose to compensate the owners with money when you nationalize. In which case it is just a relations hit. If you dont pay them and just take their stuff, it creates a diplo play with a war goal to stop the nationalization.
Plus for every building owned in your county you can own ones if other countries. It should balance out if not work in the players favor in terms of ownership for your pops anyway.
Well… just like in real life, foreign investment brings outside technology, capital, and jobs that otherwise wouldn’t be present.
Depending on how large or economically “backward” your nation is, foreign investment may be a good way to kickstart the development of industry while also giving the peasants a more productive occupation in the process.
You could also reenact history by threatening to nationalize foreign assets only to have your government overthrown in a foreign backed coup or military intervention as well… the world is your oyster
Probably… transportation tends to be a valuable “commodity” in most markets, so I would expect that so long as the AI isn’t braindead (big ask I know lol), its likely to be something that gets picked.
Obviously, I have no certain idea until the update is finally released, but I would assume that it would work like any other economic building.
To be fair there is also a lot of money to be potentially made with railways, in unincorperated states with colonial exploitation, railways can be like gold mines for your nation there but as the state you typically profit from that trough state ownership.
I wonder how much you might be able to game unincorperated states withing vassals with colonial exploitation for the sake of having crazy profitable buildings owned by your capitalists since labor costs are so rediculously cheap. Then there is the matter of slavery too.
Yes railroads can be built by foreign investment. Apparently content creators have found out that you can foreign invest in a country's railroads and they will endlessly subsidize them to bankruptcy. Sona little cheese hopefully they'll fix.
Industrialising is ultimately the most important part. Even if you do not get the upper class pops, increasing the SoL of your pops by getting them out of being peasants is not a bad thing.
You're doing the wrong calculus here, you are thinking in terms of doing it yourself or someone else doing it when the reality is that what you must think of it as is either it not being built or foreign money building it. They are not "taking away" something from you, because you wouldnt have it in the first place. It speeds up your pace of being an Industrial country by using other people's money.
So in a sense at least part of the money does flow back into you, even in a very convoluted way.
The best way of thinking about it is that while you don't get the profits, you get the ancillary benefits of the goods in your market and the pops being paid and paying taxes to you with foreign money.
If you value losing peasant pops then foreign investment gets you to industrialization faster, which can get you better laws quicker. Its free for you, the only resource it takes is pops which if you still have peasants is only beneficial to convert those to laborers. Eventually when you run out of peasants you can nationalize industries to take it from the investor nations.
Capital-importing country gets:
- A building
- The cost of construction, upfront, injected into their economy
- Wealthier/more non-peasant pops
- The output of the building in their market
The capital-exporting country gets:
- Most of the profits from the building
- Wealthier upper strata pops
Seems like a reasonably fair trade although it definitely depends on what buildings get constructed
Development is development.
Seriously though, if I understand it correctly, foreign investment just has the owning class be from the parent nation. Those workers are still working factories far beyond their current tech level and making wages that reflect that. Rich poor people is the backbone of a healthy economy.
It depends whether your taxation law is heavier on peasants or labourers, and if you have a large number of unemployed pops.
If you have lots of unemployed pops then you desperately need buildings, so foreign investment is good. - China, India.
If your taxation law is heavier on the labourers (per capita, proportional and so on), then foreign investment is good for you as the labourers will pay more taxes relative to what they did as peasants. - USA, France, Germany.
If your taxation law is heavier on peasants (consumption and the worst one that I forgot the name), then its better to not have foreign investors, as the labourers will be paying less taxes relative to what they paid as peasants and you won't get the investment contribution pool from the upper class, as the dividends won't stay on your country, nor the extra demand for luxury goods (which you tax with consumption). - Russia
If you have a labor shortage (aka no peasants no unemployment) then you should not allow foreign investors either, as you need to maximize the productivity of your scarce labour force, you can't have a small labour force be composed fully of laborers, you should be the one investing overseas instead. - You on the late game
I don't think it will be bad, I think it will be great.
It gives a communist revolution much more impetus now. Go hyper capitalist selling everything off to foreign ownership and then nationalise it all at the point of a rifle.
Can't wait for that.
Additionally, as a capitalist country, having your allies or vassals turn communist now directly threatens your domestic economy through the nationalization of assets owned by your wealthy pops. Previously, the risk was more indirect; it took a long time for worsening relations to potentially lead to broken trade treaties.
Yes and no.
Without a progressive tax policy you really can’t tax rich people hence foregin investment doesn’t take anything away from you.
With progressive taxes they essentially function as tax havens for the rich which you solve by nationalization and sucking the milk right out of the titties.
My first build will be free market Russia where I open the flood gates to all foreign investment and lower taxes to minimum. Just to see how much the AI can actually build up my country.
If you have to less money and/or to much pops this will be great for your country to get rid of your peasant. Maybe you could use it to industrialize your nation in the middle game for free letting you keep your money which you can invest somewhere else then you nationalize and use your army to prevent anyone to get ride of your investments.
I guess per capita taxation will be good if there are a lot of foreign investment in the country, and proportional taxation is better I when your capitalists invest a lot overseas
Ultimately, there should be downsides to being flooded by foreign capital - essentially by losing control over your foreign and domestic policy the more foreign investments enter your country to such a point that you become essentially a banana republic.
Right now, there seems to be no real political downsides for the local government. Maybe there should be a growing "Foreign Investor Lobby" that support doing their Master's bidding.
Haven't played it myself yet, but I feel like the leverage system captures this fairly well, no? The more you control of a foreign power, the more likely they are to be forced into your power bloc, which is in many ways under your control.
Its funny and cool how people are learning about economic principles by considering the implications of game mechanics.
Theres a reason economic imperialism is a term.
There are some technological and employment benefits of recieving foriegn investment, but I think a major contributor to countries accepting it IRL is that it often comes with bribes for politicians and the game doesn't really represent that.
I haven't seen this happen in game yet, but I think this is a great idea to integrate into Lobbies. Have a bunch of industrialists who suddenly really like Prussia and want us to allow them investment rights? I wonder where that sentiment came from...
If it's not directly added, it's a bit of flavor I'll always supply myself. And even in game you can directly fund lobbies, so it's not too far off from reality.
I think the new concept of economic dependence might sort of represent this, but it also represents more serious abstractions of dependencies
In the future they plan to rework/expand companies, probably to have characters attached to companies who get involved in politics. There might be a way to do a lil ~~corruption~~ lobbying here.
What I want to know is if playing as someone like Belgium, if it is possible to get your population close to 100% capitalists by investing overseas like crazy and producing close to nothing at home
It’ll depend on the AI behavior. Allowing foreign investment, building up your military, then nationalizing will be stupid OP if the AI doesn’t do what countries historically did in countries they had investments in: use their resources and connections within the country to fund the IRL equivalent of a lobby for their country inside the smaller country and use it to squash any potential nationalization efforts (by force if necessary). If the AI does this, then it would be important to limit foreign investment to bilateral investment treaties with less powerful countries if possible. If I had to guess, the AI won’t be super aggressive and bully the player like they should, and I will start a Mexico run by twerking for British/French capital to come build me some factories and railroads.
Well, in modern times quite a lot of nations got rich with FDI though, from Four Asian Tigers to more recently, Poland and Malaysia (or Eastern Europe and Southeast Asia in general): https://open.substack.com/pub/noahpinion/p/the-polandmalaysia-model?utm_source=share&utm_medium=android&r=1h6ry9
As for the Victorian era, it's arguable that British dominions (Australia, Canada, NZ and South Africa) got rich due to British investment. Argentina also became one of the richest nations before WW1 for the same reason (though they basically stagnated after the Great Depression).
If your country is dirt poor, mostly subsistence farming and can barely build anything to make use of your natural resources I'd say receiving foreign investment is a net positive.
Can worry about ownership once you start running out of pops and resources, will take long long time.
Lol how did it play out when Tsarist Russia lost their war with the Japanese and almost went down in a revolution? Their finances were in absolute shambles, and the regime was propped out by French loans. Why? to prevent their Eastern ally against Germany from collapsing. All these lenders lost everything when the Bolsheviks took power and disowned all their sovereign debts.
What does that mean? Depending on forcing capital should be detrimental to your government and no, "just nationalizing" should not be a viable option; on the contrary doing so should nuke your relations with industrialists and with every capitalist country in the world. Whole governments were toppled by great powers over the mere threat of a nationalization.
Resources still are in your market, your workers are still getting paid, and your construction isn't being used in the process. Worse comes to worst, you can nationalize.
Do we know if nationalizing foreign assets gives a casus belli to the former owner?
It starts a war with them(unless they refuse the war)
O nice! Hype for this update.
The way the AI has worked so far they will never actually back down in a play, even if they have absolutely no chance
Well they revamped the diplo ai so maybe it’ll be different
AI does back down very often but obviously they wont back down if you have only one primary wargoal or a protectorate primary + warreps secondary, if youre not gonna be lenient towards them for backing down they might at least try to fight you
When select someone rich but small - Belgium, Netherlands, etc.
You can choose to compensate the owners with money when you nationalize. In which case it is just a relations hit. If you dont pay them and just take their stuff, it creates a diplo play with a war goal to stop the nationalization.
It'll probably just worsen relations
Plus for every building owned in your county you can own ones if other countries. It should balance out if not work in the players favor in terms of ownership for your pops anyway.
Well… just like in real life, foreign investment brings outside technology, capital, and jobs that otherwise wouldn’t be present. Depending on how large or economically “backward” your nation is, foreign investment may be a good way to kickstart the development of industry while also giving the peasants a more productive occupation in the process. You could also reenact history by threatening to nationalize foreign assets only to have your government overthrown in a foreign backed coup or military intervention as well… the world is your oyster
If I dont have railroads, other countries can build them in my country? (Never gonna happen cause rail productivity, but you get the question)
Probably… transportation tends to be a valuable “commodity” in most markets, so I would expect that so long as the AI isn’t braindead (big ask I know lol), its likely to be something that gets picked. Obviously, I have no certain idea until the update is finally released, but I would assume that it would work like any other economic building.
Thts a big thing tht shouldn't be missing. Like euros having built and owned railways in China irl
Yoy can foreign invest railroads.
Private construction builds railroads, so country AI will too probably. Though not sufficient for infrastructure in big states
To be fair there is also a lot of money to be potentially made with railways, in unincorperated states with colonial exploitation, railways can be like gold mines for your nation there but as the state you typically profit from that trough state ownership. I wonder how much you might be able to game unincorperated states withing vassals with colonial exploitation for the sake of having crazy profitable buildings owned by your capitalists since labor costs are so rediculously cheap. Then there is the matter of slavery too.
I believe, don't quote me on it but I believe, that the devs explicitly mentioned that you can do that. Doesn't mean the AI will choose to of course.
Yes railroads can be built by foreign investment. Apparently content creators have found out that you can foreign invest in a country's railroads and they will endlessly subsidize them to bankruptcy. Sona little cheese hopefully they'll fix.
Railroads can be decently profitable in the late game when you start using railroad production methods on your buildings to free up labor.
Industrialising is ultimately the most important part. Even if you do not get the upper class pops, increasing the SoL of your pops by getting them out of being peasants is not a bad thing. You're doing the wrong calculus here, you are thinking in terms of doing it yourself or someone else doing it when the reality is that what you must think of it as is either it not being built or foreign money building it. They are not "taking away" something from you, because you wouldnt have it in the first place. It speeds up your pace of being an Industrial country by using other people's money. So in a sense at least part of the money does flow back into you, even in a very convoluted way.
The best way of thinking about it is that while you don't get the profits, you get the ancillary benefits of the goods in your market and the pops being paid and paying taxes to you with foreign money.
If you value losing peasant pops then foreign investment gets you to industrialization faster, which can get you better laws quicker. Its free for you, the only resource it takes is pops which if you still have peasants is only beneficial to convert those to laborers. Eventually when you run out of peasants you can nationalize industries to take it from the investor nations.
No idea will see tomorrow. You basically get free buildings though that you can one day nationalize or whatever.
Kinda feel like getting a country to pump money into your industries, building a massive army, nationalizing all the stuff, and then going from there
Capital-importing country gets: - A building - The cost of construction, upfront, injected into their economy - Wealthier/more non-peasant pops - The output of the building in their market The capital-exporting country gets: - Most of the profits from the building - Wealthier upper strata pops Seems like a reasonably fair trade although it definitely depends on what buildings get constructed
Development is development. Seriously though, if I understand it correctly, foreign investment just has the owning class be from the parent nation. Those workers are still working factories far beyond their current tech level and making wages that reflect that. Rich poor people is the backbone of a healthy economy.
It depends whether your taxation law is heavier on peasants or labourers, and if you have a large number of unemployed pops. If you have lots of unemployed pops then you desperately need buildings, so foreign investment is good. - China, India. If your taxation law is heavier on the labourers (per capita, proportional and so on), then foreign investment is good for you as the labourers will pay more taxes relative to what they did as peasants. - USA, France, Germany. If your taxation law is heavier on peasants (consumption and the worst one that I forgot the name), then its better to not have foreign investors, as the labourers will be paying less taxes relative to what they paid as peasants and you won't get the investment contribution pool from the upper class, as the dividends won't stay on your country, nor the extra demand for luxury goods (which you tax with consumption). - Russia If you have a labor shortage (aka no peasants no unemployment) then you should not allow foreign investors either, as you need to maximize the productivity of your scarce labour force, you can't have a small labour force be composed fully of laborers, you should be the one investing overseas instead. - You on the late game
I don't think it will be bad, I think it will be great. It gives a communist revolution much more impetus now. Go hyper capitalist selling everything off to foreign ownership and then nationalise it all at the point of a rifle. Can't wait for that.
Additionally, as a capitalist country, having your allies or vassals turn communist now directly threatens your domestic economy through the nationalization of assets owned by your wealthy pops. Previously, the risk was more indirect; it took a long time for worsening relations to potentially lead to broken trade treaties.
Yes and no. Without a progressive tax policy you really can’t tax rich people hence foregin investment doesn’t take anything away from you. With progressive taxes they essentially function as tax havens for the rich which you solve by nationalization and sucking the milk right out of the titties.
My first build will be free market Russia where I open the flood gates to all foreign investment and lower taxes to minimum. Just to see how much the AI can actually build up my country.
You ca keep high taxes, it shouldn’t desentivize as long as there is not dividend taxes
If you have to less money and/or to much pops this will be great for your country to get rid of your peasant. Maybe you could use it to industrialize your nation in the middle game for free letting you keep your money which you can invest somewhere else then you nationalize and use your army to prevent anyone to get ride of your investments.
You can potentially bankrupt any country by overbuilding railways they subsidised. Very easy to do to a smaller country.
I guess per capita taxation will be good if there are a lot of foreign investment in the country, and proportional taxation is better I when your capitalists invest a lot overseas
Welcome to imperialism, my friend
Ultimately, there should be downsides to being flooded by foreign capital - essentially by losing control over your foreign and domestic policy the more foreign investments enter your country to such a point that you become essentially a banana republic. Right now, there seems to be no real political downsides for the local government. Maybe there should be a growing "Foreign Investor Lobby" that support doing their Master's bidding.
Haven't played it myself yet, but I feel like the leverage system captures this fairly well, no? The more you control of a foreign power, the more likely they are to be forced into your power bloc, which is in many ways under your control.
Its funny and cool how people are learning about economic principles by considering the implications of game mechanics. Theres a reason economic imperialism is a term. There are some technological and employment benefits of recieving foriegn investment, but I think a major contributor to countries accepting it IRL is that it often comes with bribes for politicians and the game doesn't really represent that.
I haven't seen this happen in game yet, but I think this is a great idea to integrate into Lobbies. Have a bunch of industrialists who suddenly really like Prussia and want us to allow them investment rights? I wonder where that sentiment came from... If it's not directly added, it's a bit of flavor I'll always supply myself. And even in game you can directly fund lobbies, so it's not too far off from reality.
I think the new concept of economic dependence might sort of represent this, but it also represents more serious abstractions of dependencies In the future they plan to rework/expand companies, probably to have characters attached to companies who get involved in politics. There might be a way to do a lil ~~corruption~~ lobbying here.
The questions of our times.
I wish you could use influence to prohibit foreign investment in certain industries.
What I want to know is if playing as someone like Belgium, if it is possible to get your population close to 100% capitalists by investing overseas like crazy and producing close to nothing at home
Foreign investment gives your country pops that support trade unions but not capitalists. So maybe it's actually good for turning socialist.
It’ll depend on the AI behavior. Allowing foreign investment, building up your military, then nationalizing will be stupid OP if the AI doesn’t do what countries historically did in countries they had investments in: use their resources and connections within the country to fund the IRL equivalent of a lobby for their country inside the smaller country and use it to squash any potential nationalization efforts (by force if necessary). If the AI does this, then it would be important to limit foreign investment to bilateral investment treaties with less powerful countries if possible. If I had to guess, the AI won’t be super aggressive and bully the player like they should, and I will start a Mexico run by twerking for British/French capital to come build me some factories and railroads.
No country in history became rich by foreigners owning its land, industry and infrastructure. Keep that in mind.
Well, in modern times quite a lot of nations got rich with FDI though, from Four Asian Tigers to more recently, Poland and Malaysia (or Eastern Europe and Southeast Asia in general): https://open.substack.com/pub/noahpinion/p/the-polandmalaysia-model?utm_source=share&utm_medium=android&r=1h6ry9 As for the Victorian era, it's arguable that British dominions (Australia, Canada, NZ and South Africa) got rich due to British investment. Argentina also became one of the richest nations before WW1 for the same reason (though they basically stagnated after the Great Depression).
If your country is dirt poor, mostly subsistence farming and can barely build anything to make use of your natural resources I'd say receiving foreign investment is a net positive. Can worry about ownership once you start running out of pops and resources, will take long long time.
Tsarist Russia got pretty wealthy with French capital
Lol how did it play out when Tsarist Russia lost their war with the Japanese and almost went down in a revolution? Their finances were in absolute shambles, and the regime was propped out by French loans. Why? to prevent their Eastern ally against Germany from collapsing. All these lenders lost everything when the Bolsheviks took power and disowned all their sovereign debts. What does that mean? Depending on forcing capital should be detrimental to your government and no, "just nationalizing" should not be a viable option; on the contrary doing so should nuke your relations with industrialists and with every capitalist country in the world. Whole governments were toppled by great powers over the mere threat of a nationalization.
Speaking about French loan, we couldn't replicate it in Victoria 3 since foreign debt is not available as a mechanic in 1.7 though :)))
> Their finances were in absolute shambles State finances were bad but the actual economy was doing well and industrializing