Everything I Need to Know About Economics I Learned Playing Age of Empires III

This is a guest post by my husband, Paul Entin.

If Age of Empires III wasn’t called a video game, it could be called an economics simulation. Then it could be used as a tool for learning instead of dismissed as a waste of time. In this PC game, each player starts a colony with an explorer and seven settlers. To survive and thrive, settlers must set to work gathering berries and hunting for food, cutting down trees for buildings and mining metals for money. As the colony grows, more settlers arrive. Hunting and gathering are
replaced by farming and domesticating livestock, mining is replaced by banking and woodcutting is replaced by factory production. A market promotes the efficient conversion of commodities and money from one to another – minus a percentage as a brokerage fee. And all of this needs to be humming along while accounting for the colony’s defense against the colony on the other side of the plain. It would be impossible to win at this game without understanding several fundamental principles involving economics, defense and government. And lo and behold, these principles are learned and retained simply by playing the game. No textbooks required. For example:

1. Everybody contributes. Every person living in the colony needs food and shelter. Everyone is, to some degree, a cost to the colony. Therefore, every member of the colony needs to contribute, or in economic terms, needs to produce goods. A settler who isn’t farming must be building or mining or otherwise producing. An idle settler is a burden draining the colony of resources. So destructive idleness is, in fact, that the game alerts the player if a settler is left idle between tasks. Watching TV, lounging by the pool and vacationing on the beach are economically unthinkable. If you’re not helping, you’re hindering. There certainly aren’t any inspectors, administrators or other officials living off of the work of others.
2. Opportunity cost. Since resources are limited and costs are involved in gathering resources, how the limited resources are allocated requires careful, thoughtful decision making. Should the available wood be used to build houses to support and attract additional settlers or to build a mill to boost agricultural production? Should the available gold be invested in technological improvements that boost production of goods or in raising an army to protect the colony? Each purchase is at the expense of another purchase and each decision has consequences that impact everyone in the colony. Now don’t forget to consider that military personnel require food and shelter but don’t contribute in terms of economic production. With a finite amount of population permitted (200), each soldier represents one less settler able to produce goods.
3. Sustainability. The game starts with numerous head of bison roaming the plains, a number of gold mines and lush forests. But eventually, these resources will be depleted so alternative methods of production must be found. Domesticating livestock, farming and using advanced materials, for example, must be considered and they must be considered before resources expire, not after everyone is starving.
4. Technology is good. Settlers can cut wood at a given rate but investing in a log flume and sawmill boosts the production rate. Settlers can plant a farm but studying seed technology boosts the production come harvest time. Raising an army of musketmen is fine but improving their weapons with rifling allows the same number of soldiers to more effectively defend the colony. It would be unthinkable to believe that it’s better to use a lot of human labor to perform a job slowly when a few tools can help fewer people perform a job faster and easier, freeing the human labor to contribute in another area.
5. Value of services. It’s common for politicians and TV commercials to slam “transaction fees”, “brokerage fees” and “convenience fees”. We’ve been told for decades that providing services should be free of charge as if they offer no value. In Age of Empires, players are grateful for the ability to instantly exchange one type of commodity for another. This ability has value. The market where these transactions occur wasn’t built there without cost and for this ability to trade goods, a transaction fee is paid. This fee pays for the service being provided – the ability to easily exchange goods. It is no different than a credit card company offering the ability to write a check for instant access to cash and earning a percentage for both the service and for bearing the risk of extending credit. Yet people have been taught to become irate when required to pay for services like these, though without them our economy could not function as smoothly.
6. Deterrence. At first, while I was carefully and methodically sending my settlers hunting, gathering and building, my opponent’s army would quickly arrive and destroy my colony. Game over. Then my 11-year old son, who convinced me to try this game, explained how to prevent it. “You don’t need to raise a whole army – that’s too expensive – you just need a few soldiers so the other guy won’t attack.” Aha! A deterrence. The opposite of which I’ll call an invitation. It’s a concept that’s self-evident to a pre-teen but seemingly alien to our leadership in Washington D.C.

Video games have come a long way since Space Invaders and Asteroids. And while vile, cop-killing, Grand Theft Auto-style games capture the headlines, hundreds of other games that don’t grab headlines would be labeled educational if they simply weren’t so much fun to play. Parents need to rethink their perception of video games and stop lumping everything on a computer or console as a wasteful diversion away from productive, educational activities. It may be time to recognize that some video games are both productive and educational and it’s their extra element of fun that makes the learning process so effortless.

Tagged as: educational activities, gaming, screen time