Worldbuilder Tips and Guides

Civ. Culture Guide: Economics

DISCLAIMER: This chapter is going to be rather...technical and lengthy. Economics is by far a complex topic and diverse. If you are not worried about having a functional economy for your civilizations, skip this. But if you want to go that extra mile (hehe, like me) then stick around and lets get through this. Here we go. 

            Before we get into the types of economies available, lets take a moment to understand what an economy is. By definition, an economy is the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services. Note, there is no limitation on what those goods/services are. That is important.

            So, this in mind, where do we start? Personally, I start with the basics. Before you get into the details of what things are valued at or how you trade for them, lets decide what it is they have available to begin with. It is important to note that your available resources is going to vary based on your technological era. Especially when you touch into modern and sci-fi and are working with the capability to create or manufacture resources/goods. 

            For the purpose of this guide, I am going to assume like most fantasy writers, your working in the medieval era or something similar. For you Sci-Fi writers or Modern Writers, don't worry, this will all apply to you as well, just with a more complex setup depending on how deep you get into this. But more on that later. So to begin this guide, lets look at location. 

Location:
            Literally the most important factor that plays into this is your location. Look at a world map of our planet one of these days and have it display what kinds of natural goods are located where. Then make a list of what might or could exist within the borders of your selected civilization. Simple right? Haha, most of this is really. It just gets tedious by the third time you do it xD

            Back on topic though, this is the foundation of your economical stability. The more natural resources your civilization can own or possess, the more trade opportunities available to them. Keep in mind too, that the desire for resources or goods they don't want to trade for can be enough incentive for conflict between two civilizations. Especially when said civ controls the majority of that resource. 

            Now, based on your given list, you got options. You can try and guess how much of that resource your civ possesses or is able to harvest on a yearly bases. (use real world statistics to make life easier mate. NOTE: You MUST account for the use of magical devices or machines being used to assist in the harvesting.) Once you have this accounted for, all you need then is a price that (once sold) makes up for the cost to harvest the resource. And that cost is determined by the time it takes to harvest + the cost of labor. 

            Note that in the case of slaves, you still have limitations. As the human body is only capable of so much work before it breaks down. Your yield might be greater, but you also have to then pay for the guards who keep those slaves working and the cost to acquire said slave. That cost is going to affect how you are able to sell your goods and at what price. 

            Alternatively you can just base your prices on historical prices and call it quits there. If you do though, just make sure that the quantity of resources available to harvest is roughly equivalent to that of the historical civilization (or modern) you base your numbers off of. This just keeps the logistics consistent and leaves you with less to stress over. 

            The same logic above also applies for manufactured goods. Note that a manufactured good is going to be any item made through a combination of materials to make a single new item. This can be anything from food like bread to weapons and arms like the sword or shield. If your working in a modern or more advanced civilization, your options to develop the economy just get bigger as you are also going to have more natural resources that are usable. 

            And honestly, that is all that you need for a foundation on your economy system. Knowing what you can or can not trade and the expenses required to harvest (and I should not forget transport) the goods. Which brings us into the big choice. How does your civilization conduct trade? We can simplify this down to a few options. 

            1.) Directly trading goods/services or other goods/services. 
Note that with this, it is a lot more functional with a small community than something super large. In theory, this could be functional in a modern society, but the issue it presents is that unless everyone offers services out of the goodness of their hearts, not everyone is going to have something of value they could pay in return. If you want this to work on a larger scale than small local towns, its going to take a little work. Or you could be like me and just make it so your race does not care for or desire wealth through gold or other riches. In this case, the careless exchange or offer of services is rather normal if not expected. 

            2.) Exchanging wealth for goods/services.
This is normally what people expect from an economy. Goods/services are given an apraised value that those who want them must pay for. Weather it be out of gold, paper money, bottle-caps, or something else, this normally what people will go for. 

            Past either of those options, I am not really aware of any other functional means to establish an economy. Now yes, there are PLENTY of different economies out there in the world, but they all come down to functioning off one of the two basic ideas above. In some cases though, you could even mix them together. The key thing to remember is that the community/country as a whole still needs a means to measure their wealth. 

            Even if you do what I did, and the race/civ has no interest in gold or other treasures, they still need a means to trade their goods to other civs and vise versa. Unless they don't believe in trade, this will still require them to have some sort of bank or treasury. And they will need a means to acquire that wealth. 

            Once you have an idea in your mind about what can be traded and how they conduct that trade, it is just a matter of filling in the gaps as you need too. I mean, you don't need a document list of all the goods available and their prices but you can still make one. Makes it even more fun when you write a market scene and you are able to tell what is in each stand and their value. Even more fun when you can have two merchants fighting in the background over a price haha. Or, even better, if your novel centers on the story of a merchant, now you don't have to go making up random numbers from thin air xD

            All in all, this should give you a good start on your economy. If you have any questions or ideas, or anything, just let me know in the comments, my message board, or PM me. Until next time!