People seemed to like last month’s article on worldbuilding an economy, enough to vote for a continuation on that theme. So, I’ve gone and put together some more thoughts on the topic, which might be useful to anyone seeking to put together their own fictional economy.
Once again, this will not be so much a single coherent article on a given topic as it will be a number of connected, but ultimately separate thoughts on a given theme, covering a lot of the stuff which I haven’t been able to talk about last month. By this point, I’m more or less straining at the limits of my formal understanding of economics, so it’s entirely possible I will get things wrong. If that’s the case, I’m always open to correction, especially since any new information I receive will go on to improve my own knowledge base, improving my ability as a worldbuilder in turn.
Specialists Live in Cities:
Generally speaking, the more specialised a person’s job, the more likely they are to live in a major population centre. Any person who doesn’t devote the majority of their labour to securing the basics of survival needs someone else to help them secure those basics for them. To secure these needs, specialists generally have to physically exist in a place where they can trade for those needs easily, either directly, or through the acquisition of currency. Without easy and ubiquitous mass transportation, population centres like towns and cities provide these specialists with the large customer bases needed to support themselves in ways that rural areas don’t, because not everyone needs a specialist’s services all the time. So, while (for example) a specialised artisan like a swordsmith might not find enough work to keep themselves fed and housed in a community where only a few people carry swords, they’d be far more likely to be kept busy in a large city – even if the proportion of people who carry swords is smaller – because there are so many people overall who might be need of a swordsmith.
-But the Food is in the Countryside:
However, the necessities which the specialists in the cities – especially food and the building materials for shelter – need still have to come from somewhere, and while the availability of customers and labour in the cities may make it easier to make a living as a specialist, food can’t be grown in a factory. This means that cities necessarily rely on food from elsewhere to exist, specifically, surplus food, which the farmers themselves don’t need to survive. This has a whole bunch of knock-on effects: for example, this means cities have to be placed in areas where a lot of food can be grown, or at least near places (like rivers and protected harbours) which allow food to be brought in quickly. Secondly, it means the size of an urban population is directly dependent on the efficiency of agriculture. A society can only support as much of an urban population as there is surplus food to feed it. This is why historically, even the most urbanised societies before the late-modern (which is to say, post-industrialisation) tend to still be majority rural.
Industrialisation, and How it Changes Everything:
When this changes is when industrialisation, and especially mechanisation come about. Before industrialisation, more or less everything is done by hand, with very low thoroughputs, especially in comparison to labour. This means that only small amounts of raw resources can be turned into small quantities of finished goods. This in turn means that a lot of the most complex of these finished goods, and the stuff made out of them, tend to have little economic impact: this is why we sometimes see pre-modern and early-modern societies produce marvellous works of mechanical engineering – but only as playthings for rulers and aristocrats, because each of these mechanical wonders (like the Mechanical Turk) represents an fortune in labour and hand-made parts, making it far too expensive and time-consuming for similar machinery to have a practical application.
This is something of a generalisation, of course. Throughout the ancient, medieval, and early modern periods, new innovations in materials and relatively simple machinery (spinning wheels, iron ploughs, horse collars, windmills to name a few) did greatly improve the efficiency of certain aspects of production, but this was over a period of centuries, and rarely affected the basic nature of so-called “cottage industries”, which worked on a small, or even individual scale.
Where this really changes is with the advent of steam power, and the ability to use heavy machinery to make a large number of workers exponentially more efficient. True, a mechanised version of an old cottage industry could need ten or a hundred times as many people, but the machines involved could process raw material and produce goods at a thousand or ten thousand times the previous rate. The result is a higher thoroughput, with more raw resources being extracted and being turned into more finished goods. Not only does this make previously hand-made finished goods cheap enough to become commonplace objects, but it also transforms agriculture. If a single farmer aided by now-affordable machinery can do the work of five farmers without that machinery, then that means a farmer who was previously making 120% of what they needed to feed themselves is now growing 600% of what they needed to feed themselves. Ultimately, that means what was once a 20% surplus going to feed cities and other population centres, is now a 500% surplus, an increase of twenty-five times. This was what drove urbanisation in our world. Of course, in a fantasy setting, commonplace magic can have the same effect, creating what is essentially a late-modern world with pre-modern aesthetics.
There’s also one more way which industrialisation changes everything. Remember how I mentioned that the introduction of industrial machinery meant that ten times the workers could do a thousand times the work? The problem was that obtaining the machinery itself wasn’t necessarily within the means of those ten workers. If the only way to produce goods efficiently in a society is to have enough wealth and power to secure heavy machinery, then that effectively means the people who provide the machinery have all the power, with traditional crafters being outproduced and outpriced by mass-produced goods made by machines owned by industrialists. In our world, this led to mass unrest, as former cottage industry workers found themselves pushed out of their traditional crafts, losing their former status and independence to become wage-labourers for the small group of people who owned the machines. This is the basis (for good or ill) of industrial capitalism, and much of our current understand of labour and class relations come from that paradigm.
If You’re Using Gold, Don’t Over-use it:
This is something I see a lot of. Gold is a common shorthand for money, so a lot of worldbuilders setting their narrative in an aesthetically pre-modern setting will make some sort of gold coin the common denomination. This may work if you’re mostly dealing in very large amounts, but assuming that a fictional world maintains the same sort of metallic values as ours, most people would probably not be wealthy enough – or deal in transactions big enough – to require the use of gold coins. Even by today’s prices, the sort of coins which a lot of settings casually toss around would be worth hundreds of dollars each. If characters of relatively humble station are paying for daily staples with that sort of thing, then that may end up breaking immersion for some.
There was supposed to be one more point after this one, about the development of currency and fractional reserve banking, but as I got deeper into the subject, I realised it was probably more in-depth and complicated than could be easily illustrated as one small part of a larger article. I suppose I could turn it into its own separate digression, though I suspect a lot of people are already either sick and tired of this particular topic – or are otherwise getting frustrated at the obvious mistakes I am no doubt making.
So I’ll leave that topic for next month, if people want it. Otherwise, we could move on to something I do know quite a bit more about: systems of government, and how they’re affected by the societies they govern.