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How do you create a fictional medieval economy?

Ooh, fun! Lots of people have done some worldbuilding, for a novel, a tabletop game, a computer game, or just for fun. Probably more than half of those have been pretty close to “standard-issue medieval Europe fantasy world” (no judgment, I have one of my own). Thinking about your world’s economics, at least in outline, is helpful in making it more plausible and immersive, and can suggest plot-rich sources of strife for your characters.What I’m describing is more Renaissance than medieval, as post Tolkien most writers have succumbed to the temptation of plate armor, cut gems, and large ships, even if they skip guns and printing presses.The Short VersionPeople gotta eat.* Many writers have neglected this basic fact, dating back to the granddad, Tolkien. A city cannot exist in a vacuum - it needs farmers. Lots of farmers. From the dawn of civilization ~4000 BC to the 19th century, 90 to 95% of the population farmed, with enough surplus for the rest to eat, so a modest city of 10,000 people would need at least 100,000 farmers nearby. Those farmers would need at least 2,000 square kilometers of farmland, probably a lot more. Belgium circa 1300 AD had a population not much more than one million, in an area of 30,000 square kilometers (by modern borders). That was pretty much the best-case scenario for medieval technology.**But what about ships? Sure, in times of peace you can support larger cities by importing food. Rome is famous for importing grain from Egypt and Africa (Roman “Africa” meant roughly modern Tunisia), and supported about a million people in a single concentrated space. That’s very much the exception, though; unless your world has been at peace for centuries, in practice a city can’t survive without nearby farmland. The first siege will cause mass starvation.The long version follows…The FoundationThe foundation of a pre-industrial economy is farming. For a medieval lord, “income” and “land” were almost synonymous, as X acres meant Y farmers and Z crops, which could be traded for Q pounds of silver. Some areas were more productive than others, and some areas had non-farm income (mines, trading centers), but those were usually modest compared to the farming economy.Depending on the quality of the climate, soil, and available technology, one square kilometer of cropland might support 5 to 40 people, and those people will in turn might support a few non-farmers (roughly in proportion: poor soil = fewer farmers and less surplus per farm, while rich soil = more farmers and a higher proportional surplus). Those non-farmers can do fun things like dig up ore, make tools, trade, fight, and pray full time - they get to specialize, teach techniques to their children and apprentices, and advance their civilization’s arts and sciences.If you’d like to take England as “typical,” population density fluctuated from about 3 people per square kilometers shortly after the Romans left to 25 before the plagues of the 14th century, then down to 20, and finally back up to 30 by 1600 AD.Marginal areas, like steppes, deserts, tundras, and taigas, will usually support just one or two people per square kilometer. There will be no real cities, but a few towns for trading near harbors, oases, and mountain passes.Image taken from another Quoran’s answer; I can’t say where it originatesThose numbers are “carrying capacity:” the most an area can support, over the long term. A newly-discovered land, or one recently hit by plagues, famines, or war, will have a smaller population. However, recovering from a disaster could also take just a couple generations; eight children per family, of which half survive, equals a doubling in population every 20 years.An area might exceed its carrying capacity in the short term, but it is not sustainable. Farms get subdivided into oblivion, and younger brothers are left landless; when a crop fails, people grow weak and prone to disease. Desperation leads to war, which leads to burned fields and the spread of plagues. Malnourished people are much more susceptible to illness, so many times famine, plague, and war would ride together.PopulationsDo you have a map? If so, you can estimate the size of each kingdom in square kilometers, judge the productivity of each one, usually from 5 to 40, and multiply the two to get a population. Bump that up a bit if the area is overpopulated, or down if it’s newly-settled or in recovery. If you don’t have a map, you can take a stab at it based on how big you imagine each area: about 50,000 square kilometers for a small kingdom like Netherlands, Switzerland, or Denmark; 150 K for England plus Wales; 300 to 500 K for large kingdoms like Italy, Germany, Spain, or France; up to 5 M for the Roman Empire at its height (very exceptional!).The best areas (most productive) will have an urban fraction of maybe 20%; the worst about 1%. You can now estimate the city-dwelling population of each kingdom. That, in a nutshell, is the economic power of each kingdom - the manpower available to make goods to trade.ResourcesThe best resource was good land and the food it produced, but beyond that there are primary products (animals and their products, cash crops, ore, salt, timber; “extractive industries”), manufactured goods (predominantly cloth, but also metal, pots, wooden goods, etc.), and luxuries.Here are a few common products to consider, based on where they’re likely to be found. Most places needed to be largely self-sufficient, so these goods would be made for local consumption first, and for export second:Tundra: fish; reindeer antlers, hides, meat, and milk; walrus ivory; good for leather goods, salt fish, scrimshawForests: fur, timber; charcoal, pitch, potash, tarPastureland: hides, livestock, meat, milk, wool; cheese, leather, wool clothFarmland: cotton, flax, fruit, grain, vegetable dyes; linen, oil, wineTropical areas: animal and vegetable dyes, cash crops (e.g., spices, tea), elephant ivory, exotic animals and/or their hides, feathersWetlands: bog ironMines and pits: chalk, clay, coal, marl, mineral dyes, ore, peat, raw gemstones, salt, stone; cut gems, jewelry, metalCoasts: ambergris, animal dyes, fish, pearls, salt, shells; perfume, salt fishWhen you know what resources are nearby, you can consider what industries might develop to take advantage of them. These require an urban (or at least non-farming) population to operate at scale. While many villagers practiced spinning and small-scale crafts such as smithing or woodworking, their output would rarely be enough for long-distance trade.Book-binding: parchment, vegetable dyes → booksBrewing: carregreen, fruit, grain, isinglass → ale, liquor, wine, vinegarBrickmaking: clay, straw → bricksCandle-making: perfume, tallow, wax → candlesCrafting: antler, bone, feathers, gems, ivory, leather, metal, pearls, stone, wood → combs, cups, dice, engravings, flatware, jewelry, musical instruments, notions, sculpture, tools, toys, etc.Dairying: milk, rennet, salt → cheeseDyeing: alum, dye, yarn → dyed yarnFine smithing: gems, metal, pearls → candelabras, clockwork, flatware, guns, jewelry, locks, navigational instruments, springsFish-packing: fish, salt → garum, salted fishFulling: clay, cloth → cleaner softer cloth, or feltGem cutting: raw gemstones → cut gemsGlassmaking: mineral dyes, sand → bottles, hourglasses, lenses, mirrors, telescopes, window panesLeatherworking: leather → coats, shoes, tackPottery: clay, mineral dyes, tin → basic pots, faience, porcelainSewing: cloth → clothing, laceSmelting: charcoal, ore → metal ingotsSmithing: metal (iron for blacksmiths, bronze for redsmiths, tin for whitesmiths) → armor, bells, cannons, fencing, horseshoes, lanterns, nails, pots, tools (axes, hoes, picks, plows, shovels), weaponsSoapmaking: fat, potash → soapSpinning: raw flax, linen, silk or wool → yarnTanning: hides, tannin → leather, parchmentTimbering: wood → charcoal, cut boards and timbers, pitch, potash, tarWeaving: yarn → canvas, clothWoodworking: wood → barrels, carriages, furniture, ships, wagonsThe majority of these products were consumed locally. Anything highly perishable obviously can’t go far without modern refrigeration, and anything of a low value for its weight (charcoal, soap), usually won’t be worth shipping. An ideal trade good is value-dense and durable (gold, marble); these are the ones that will drive international economics. If you don’t have time or interest in describing what goods are produced all over, you can start with those tradable goods. For each city or kingdom that’s relevant to your story, pick a couple goods that the area produces. Poor places may have no exports to speak of; rich places may have several.Raiding and warfare lead to captives, who were often enslaved. This topic is likely to make your readers uncomfortable, but if you’d like to ignore it, feel free; large-scale slavery mostly stopped between the end of the Roman era and the rise of the New World. Slavers make good villains, though.ServicesHuman economies have shifted from foraging, to agriculture, to industry, and now to services. During the middle ages, these were a fairly small slice of the pie, and not easily traded, but they’re worth mentioning.Domestic - caring for children, cleaning, help with dressing and undressingEducation - literacy and “finishing” for children; for adults, tutoring in courtly etiquette, philosophy, or swordsmanshipEntertainment - bawds, chefs, prostitutes, various kinds of performersFinance - accounting, banking, insurance, loans, money changing, wholesalingLabor - migratory or project-oriented workers like masons, miners, and reapersMedical - midwives and physiciansMilitary - mercenaries of various flavors, including crossbowmen, (siege) engineers, free lances, scouts, and pikemenPolitical - diplomats, stewards, translatorsSpecialists - miscellanea like barristers, composers, guides, lamplighters, messengers, and mournersMarketsA mountain of gold is of no use to a man on a deserted island. For each important city or kingdom, consider briefly with whom they can trade. Pre-modern trade was predominantly by sea; despite the risks of weather and the slowness of a sailing ship, it was far cheaper than travel by land. An inland region may have land routes (e.g., the classic desert caravan, or the trade fairs of medieval France). These will be important, on the grand scale, only if there are valuable products either in the area or on the far side, and there’s no good water route. Coastal regions will funnel their produce to harbors, along rivers when possible, and trade with other port cities.In practice, even with a good harbor a city (and by implication, the hinterland from where it gets its materials) may not be able to trade with all others. In time of war, or at least tension, city A may not be able to trade with city B (but if city C is neutral, traders may find a way; Britain bought German optics during World War I). If a power controls a strait or canal, they can block hostile ships; consider Byzantium, Gibraltar, and Malacca. Pirates, bandits, soldiers, and other raiders may make an area too risky for travel. These factors can change when treaties are signed or raiders are suppressed.In cold areas, a harbor may freeze in the winter. That’s fine if all you’re shipping is durable luxury goods, but if you’d like to import food you’ll need an all-year port. A large part of Russian foreign policy over the past millennium has revolved around securing access to warm-water ports.In the Indian Ocean, Muslims were keen on long-distance travel as part of the hajj (pilgrimage to Mecca), while in India some groups eschewed sea travel for cultural reasons. As a result, Muslim traders settled along the coasts from East Africa to Indonesia, while Hindus focused inland. In your world, maybe traveling a certain distance from a holy site is forbidden, or crossing the equator requires a ceremonial ablution which is involved and expensive. It could be that a certain subgroup conducts trade, eventually making an underclass into a very wealthy group.Overland trade will be interrupted by cataracts (waterfalls, basically), where ships must stop, unload, haul their good and ships overland and resume. Roads will converge with rivers at fords or bridges. Either way, you’re likely to see a town or city.With travel being so expensive, trade tended to be “hub and spoke,” like modern air flight. Villagers would send their surplus produce to larger villages within a few miles, and those larger villages would trade with market towns. Those market towns would see dedicated merchants coming and going, with nearby towns and with the few cities. A “typical” medieval kingdom would have a handful of “cities” (just towns by modern standards, with a population of several thousand), and that’s where most international trade would take place.So to get Chinese silk, a medieval Englishman would probably have to travel to York or London. He might find gold jewelry, spices, or a steel sword in a market town. If he lived in a village (as most did, remember), he’d have to travel or wait for a traveling peddler to pass by just to buy a silver spoon.Supply and DemandSo now that you know where resources can be found, where they’re gathered to be sold, and what links connect the trade cities. Give it a once-over with a thought to supply and demand. What goods can’t be brought to market based on the trade routes you’ve sketched out? Will it stay trapped, or would it be worthwhile for local (or colonial) powers to dig a harbor, build roads, fight barbarians, or otherwise do whatever it takes to get the product out?If an area produces a lot of a particular good, that supply will find markets. Historically, the Basque people and their cousins around the Atlantic gathered vast quantities of fish. To get this abundant but perishable good to market, they brought it to salt-making areas along the French coast, and made salt fish. Demand is just as important. If a product is considered essential by powerful people, they'll find ways to get their hands on it, even in the face of war. Christopher Columbus famously traveled west in search of a safe route to the spice- and silk-producing lands of the east.Climbing the Value ChainAs a rough rule, gathering raw materials does not make one wealthy. In medieval Europe, timber-cutting was common in the vast cold forests of Sweden, Finland, and Russia. The towns produced tar and pitch from the pines, and shipped it (plus logs) to the Hanseatic cities around the Baltic and North Sea. In these cities, burghers bought and sold these along with English and Flemish wool and German manufactured goods up the Oder, Elbe, and Rhine. Each step from “it comes out of the dirt” to “crafted by an artisan” usually came with a step in wealth.So for you as a worldbuilder, the rule of thumb is that places that primarily produce raw materials will usually be poorer; places that produce manufactured or luxury goods will be wealthier. If raw gemstones are found in a kingdom with little else going for it, they probably won’t have the infrastructure to cut their own gems, instead they’ll sell them to someone else, who will most likely capture most of the added value in the final product. As a modern example, Apple phones are physically made in China, from components manufactured across East Asia, but Apple takes the lion’s share of the profit, which pays for marketing and product development. A country which not only mines ore and smelts metal but also crafts tools, arms, or jewelry from it will have an easier time prospering, as they’ll be resilient to interruptions in trade and they’ll get the full benefit of their produce.†Keep in mind that medieval rulers did not have the benefit of modern economic theory. Trade patterns fell out from the individual decisions of thousands of craftsmen, ship owners, petty lords, and more, not from any centralized planning. For a king, a silver mine was a great resource, because he could easily control it, taking his share of the easily-measured output. Rulers of the time were not stupid, but they often had short-run problems to solve, like invasions, and many ideas about free enterprise, the invisible hand, and the benefits of international trade simply didn’t exist yet.Each area will want to hold onto what it has. It took centuries for England to move from primarily producing wool (to be finished in Flanders), to selling fulled broadcloth. They learned an important lesson, and later used their economic and military leverage to hold back industrialization in overseas colonies, though this eventually contributed to them winning their independence.DramaThe economy of your world can create interesting conflict in a thousand ways. People in poor areas may migrate to, or raid, wealthy countries. A wealthy country with a strong military may impose its will on others: by threatening other countries’ ships at sea, by attacking raiders’ basis, or simply by wars of conquest.A new resource being discovered or developed is an opportunity, and can be a threat to others, such as by undercutting a monopoly. A resource drying up, or being blocked by hostile powers, will create hardship (“the spice must flow!”). Of course, hardship for one person is opportunity for another: a character may have a crate of of fine goo-foo feathers, the only batch in the kingdom until the war ends. Sell them now? Hold onto them and see if the price goes up? Thieves may try to take them, or break in looking for them, even if they’ve already been sold.Characters may escort a ship or caravan through dangerous places. Bandits and pirates are a staple of fiction (they outnumber actual merchants by such a degree that you have to wonder how traders get by); characters may fight them, or join them. They may smuggle profitable goods in the face of a law, tax, or embargo. Heroes may be commissioned to explore a new land looking for resources or trade routes.If characters gain wealth, they may want to buy rare things, and they’ll need to travel to get them. If they earn the gratitude of a lord, he may reward them with land, and they’ll need to maintain it, attract tenants, and sell the produce. They may attract suitors - or charlatans. A band of heroes who acquire a chest of priceless myrrh will need to find a market, and a buyer.* If it’s a fantasy world, with magic, that can change anything. Maybe mages make food or water from thin air, golems do all the labor, or goods can be teleported wherever they’re needed. Perhaps dreams are bought and sold in the form of air-light crystals. On the other hand, marauding magical monsters, or the absence of real-world crops or animals, could limit economic development. Just be aware of how magic can change things, and try to think through the consequences.** I’m not very familiar with medieval China or India. Rice paddy cultivation produced extraordinary yields, leading to very high population densities in the warm and well-watered lands where rice could grow. Central American floating agriculture was also very productive. My answer is just based on Europe and, to some extent, the Middle East/Mediterranean basin, where the staple crops were grains.† On the other hand, there’s the concept of “comparative advantage:” each country should do that which they can do most profitably. E.g., Finland should stick to growing trees, because they grow so well in Finland, and never mind about industrializing. As you can imagine, this idea was very popular in the West when the Western World was ahead of everyone else, but it’s a bit short-sighted. Countries like Japan, Taiwan, Korea, and China have clawed their way up the ladder from making cheap clothes and toys to world-class electronics, aerospace, military tech, etc. Vietnam is on its way; Bangladesh is languishing; the Middle East is trying to diversify but is trapped by demographics.

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