Frank Watson's thoughts on economics for Grand Europa are right on track: concentrate on the key elements and keep everything else simple. Some comments:

• Coal probably can be ignored, as Frank states. This area does need to be looked at, however, and not just dismissed. Coal was a problem for Italian industry, as Italy lacked the massive coal fields most other major countries had. Another consideration is that energy-intensive industries tend to locate near coal reserves. Coal is so bulky to transport that it typically made sense to build factories near coal fields and bring in all other materials the industries needed. (Thus the Ruhr remained a top industrial center even after its iron ore deposits began to give out: the coal fields there made it possible to import iron ore and keep the factories running.) This factor may have some impact on relocating or expanding industrial capacity in Grand Europa.
• Strategic materials do look like they can be ignored. Despite various horror stories of what almost happened or might have happened, the historical evidence is that shortages of strategic materials were an annoyance to the war economies, and never decisive.

"Concentrate on the key elements and keep everything else simple

Basic materials do boil down to iron and oil. In World War II, industrial economies could not function long without iron inputs-- stop the iron and the economy collapses. No other raw material was even close to having the same effect. Oil is also crucial, to some degree for industry but mostly to provide fuel and lubricants to the products of industry: vehicles, aircraft, and ships.

Labor probably has to be quantified in some fashion. It has a direct impact on both the economy and the military: the more personnel the armed forces take up, the harder it becomes for industry to run at full production. This is why, for example, Germany became a slave labor economy, with millions of foreign nationals rounded up and sent to Germany while almost every militarilycapable German male ended up in the Wehrmacht.

Industry Types: Frank's system of generalized basic industry seems the only practical way to go. (Otherwise, you end up drowning in a sea of statistics, while allowing players to exploit the simulation model to achieve unrealistic effects.) One function of basic industry, as Frank identifies, is supplying the civilian economy, both for basic needs (a rock-bottom minimum, otherwise things fall apart) and for morale purposes.

Frank breaks the overall armaments industry into separate "armaments" (I prefer "equipment"), automotives, aircraft, and shipping categories. (He then suggests armaments be merged back into basic industry for simplicity.) This area needs to be looked into in detail. The number of categories and subcategories must be worked out so that the system is as simple as possible without introducing important distortions. Should armor be part of automotives or its own separate category? Should artillery be broken out of equipment?

Capacity: Aside from expanding capacity, there should be considerable latitude to switch industrial capacity among categories. Locomotive concerns did end up building aircraft, for example. There would be substantial costs to pay: basic industry would be required to retool the factories, and there would be lengthy downtimes to retool and come up to production again. (Even within the same industry, downtimes for retooling were significant.

For example, it took 6 months to convert an Me 109 factory over to produce FW 190s. Since the Luftwaffe needed every fighter industry could possibly produce, the Germans kept the 109 in production in 1943-45 rather than forgo six months production to get a better aircraft.)

Lead Times: Frank suggests an SPI-style "cash-up-front" production cycle, with exceptions, as the mechanism for the production system. This would work, but there may be a better way: a "pay-as-you-go" production track. The track has a line for each type of item you can build, divided into "production turns" (which could be Europa turns, months, quarters, or some other measure of time). The track would list the costs you need to pay to proceed from one production-turn to the next. If your factory for the item is functioning and if you pay the cost, you advance the item one turn on the track. When it reaches the end of the track, it's built. This system allows for incremental building of items, which you could delay or advance as resources permit.

There are a few details I'd like to add to Frank's discussion:

• Agriculture: Frank doesn't mention agriculture except to include "food" as part of basic industry. While food processing does involve industry to some extent, it probably can be ignored as an industrial factor. Agricultural output, however, is a major consideration: if you don't have enough food to feed your population, your country collapses. This was the single most important factor that led to Germany's surrender in World War I: Imperial Germany wasn't self-sufficient in agriculture, and the Allied blockade starved the country into submission. Britain in both world wars nearly ran out of food, due to the U-boats disrupting imports. Agriculture is going to have to be included, and it will also have an impact on labor.
• Cement: Just possibly, the production system may have to consider cement production explicitly. Cement, used to make concrete, is the critical bottleneck for most major construction activities, particularly fortifications. As you might guess, a significant portion of Germany's cement production was devoted to building fortifications and reinforced structures during most periods of the war. I hope we don't have to track cement directly, but we need to look at this.
• Maintenance: Industry isn't involved in just building new items, it also helps maintain existing stocks against wear and tear. For example, producing a regiments-worth of artillery pieces doesn't mean you have an artillery regiment forever, even if it doesn't take a single loss in combat. Instead, you need to spare parts, relined tubes, replacement guns, etc., to keep the regiment functioning over time. With a historical OB and without a production system, Europa so far has avoided this type of maintenance. With a production system, maintenance may have to be tracked. For example, every 100 REs of non-motorized forces you have may need to have so many equipment points devoted to it for maintenance.

Inside Europa You Ask, I Answer

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