Teaching Economics: Age of Empires and Central Planning

When I was young, I played a lot of Age of Empires. For those who are unfamiliar with the series, they are games where the player must direct a tiny civilization’s development. He begins with one building and only a few villagers. By right clicking on a villager, then left clicking on a tree, stone mine, gold mine, or animal, the player can direct the villager to gather wood, stone, gold, or meat. He can also direct villagers to make buildings. And with buildings, he can recruit more villagers or soldiers.

By directing every action of every person in his civilization, the player can eventually turn his tiny village into a sprawling city, clashing militarily with other players’ civilizations.

I think a game economy like that one could be a good teaching tool for young people. In the early stages of the game, centrally managing a few villagers works well. But as the civilization grows, the player’s attention becomes more stretched. It is common, in the game economy, for the player to discover a group of villagers clustered around a (now exhausted) mine or forest. The growing economy becomes ever more difficult to manage, and it becomes more difficult to coordinate the growing numbers of workers and soldiers.

Age of Empires is a mini-simulation of command-economy economics, so I'm technically studying! Click To Tweet

In the game, the complexity cannot grow without limit. The computing limits of the day meant the game had to cap the population at about one hundred tiny people. Furthermore, the production processes allowed anything to be created from wood, food, gold, stone, and villager labour. In a real economy, these would expand into ever more complex and roundabout processes as the economy continued to grow.

Nonetheless, a game like Age of Empires is a good demonstration of how the difficulties of central planning compound as an economy grows in size and complexity. What remains is an explanation of the alternative: an economy where each of those villagers decides for himself whether he will chop wood, mine stone, mine gold, or hunt deer. Sadly, I don’t know of too many games that show how private property and prices can coordinate the actions of disparate individuals. There are plenty of business simulators, but these only show the activities of a single businessman, the player, and sometimes his competitors.

But maybe games aren’t the right place to look for examples of spontaneous order. The place to look for spontaneous order is the real world. Ask young people who have played Age of Empires (or similar games) what the difference is between the game economy and the real economy. They told each person in the game economy whether to be builders or miners or hunters; who in real life directs each person into an occupation? Nobody, at least under capitalism, performs this role. Each person decides for himself what job to apply for given the wage he thinks he can earn. Point to one of those clusters of workers around a long-since-exhausted resource. Ask the young people what the owner of that resource would pay to have people work there, even after it has been exhausted. Clearly he wouldn’t pay anything, so those workers would look for other jobs. Thus, if those workers had the free will to decide what to do for themselves, they would not be wasted waiting for the central planner (i.e. the player) to tell them what to do.

In my education, I was never told about the way people coordinate through prices until I saw someone draw supply and demand curves in an undergraduate classroom. But ultimately, these concepts are not too difficult for people to grasp at young ages. You don’t have to get into difficult, technical debates to show that prices reflect scarcity and people respond to prices, so people respond to scarcity through prices. Age of Empires demonstrates a world without prices, so it might be a good place to start.

7 thoughts on “Teaching Economics: Age of Empires and Central Planning”

  1. You might be interested in the game Cities: Skylines, which, thanks to modern computers, can process much more than 100 tiny people!

    Interesting that in Age of Empires, one scout cavalry, even fully upgraded, requires 50 food to produce and nothing more. If we assume that “food” represents much more than just food in this case (there is no clothing unit in the game, but those farms and sheep are likely used efficiently for more than just food!), it appears that the individual unit in the game doesn’t need to do anything to ensure himself (or herself in the case of some units…) a life of relative comfort, where death can only come by combat.

    It might be cool for each unit to have, say, a weekly food cost of 10 food, or something like that. But we can’t ask too much out of a game that’s really focused on other dimensions!

    1. Actually, more complex games that AoE, like Rise of Natios, incorporate things like that, because there is some kind of “law of diminishing returns”. Every time you build a unit, whatever it is a civilian or cavalry, the next unit of that kind will cost to you more. For instance, you first civilian costs 25 food but the next one cost you 27 food. You are paying more because you already have a certain amount of that unit, it is some kind of “living cost”.

  2. Age of Empires isn’t about capitalism. It’s about antiquity and feudalism. :-

  3. Maybe you should show students the Anno series, the Settlers series, or The Guild 2?

  4. I mean another thing about capitalism is unless you’re a Marxist, you shouldn’t believe it automatically leads to imperialism which is what AoE basically is also about – warfare and conquest. The economy doesn’t serve any other end purpose. Likewise, the “central planning” in your head isn’t the same as central planning in real life where politicians are jockeying for internal social status. Heck, this is why Stalin didn’t push worldwide communist revolution. He was primarily focused on his cult of personality within the Soviet Union.

  5. I remember a game called Zoo Tycoon in which I coordinated the prices of the attractions and services such as restaurants in order to sell more and it was great.

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