I'm sorry but I have to disagree here
@Mykan
The present system is NOT balanced. If it were, there would be no need for so many people focusing only on producing tier3 goods and posting trades where some other sucker needs to work his ass off to fill such an order.
Personally, I think it all comes from the tampering the devs have done with the fighting and the prices of premium expansions.
When its possible to fight more provinces and thus gain more expansions, like it used to be, then space is not so much of a problem.
And when the prices for premium expansions arent ridiculously high but more like they used to be, the same.
With the severe limitations of getting enough space it really is not that strange that people will try to optimise the use of their valuable space. Since the tier3 factories are so unbalancedly more productive than the tier1 factories, PLUS giving a lot more ranking points, the fact that many players switched to cut down on their tier1, or even eliminate it entirely, and instead focus on overproducing tier3 goods was something that could have been foreseen.
When they started the game the ratio may have been acceptable since people could place all the factories they needed with relative ease, so an exchange rate based on gold and supplies made some kind of sense. Though even there I would say its not even close to correct when one takes into consideration that the pop requirement is not nearly close to balanced.
But take away the available space and suddenly that becomes the limiting factor. Just one more example of the devs not thinking things through far enough. And I feel that partly comes from them not playing the 'normal' game but whipped up cities with unlimited possibilities to just place a few buildings, fully maxed out, so have a quick view of how they work, but not taking the real game-situation into consideration...or at least not enough.