 This video is sponsored by World Anvil. Have you ever come across a fictional or historical city that was simply described as a trade city? Didn't it make you want to punch whoever wrote that in the fucking face? Probably not, because most of you don't care that much, but it's still a dumb way of describing it. If you watched my video on world-building cities, which you totally should, then you'd know that cities just about always pop up because of trade. In other words, they're all trade cities. With that small rant out of the way, let's talk about how economics encapsulates pretty much every facet of every society. Take some time to look around at all the products available to you where you live. Most of it is probably manufactured somewhere else, or manufactured using materials from somewhere else. Not everything can be made everywhere, and so we have to trade in order to get some of what we want or need. Even before the invention of agriculture, people would trade when they came into contact with each other. If I have something you want and you have something I want, then we can swap and both be happy. Then, after the invention of agriculture, there was enough food that people could specialize in different crafts, which was great because it allowed for technological advancement and development of civilization. Hunter-gatherers don't get to have pizza, or video games, or internet porn, or long-winded YouTube video essays after all. But specialization means that trade is the linchpin of civilization. A blacksmith can't eat the tools he makes, so he has to give them to a farmer in exchange for food. A tailor can make clothes, but he has to give them to a fisherman in exchange for fish. Obviously, this is oversimplified, but that's more or less how trade economies got started. Over time, they became bigger and more complicated in things like currency and banks cropped up. As history marched on, the level of trade increased exponentially, and it continues to do so today. If we ever managed to access the resources of other planetary bodies, then trade is only going to grow bigger and more complex. Of course, since trade creates wealth, it also creates something for people to fight over, or in some cases, a reason not to fight since war tends to disrupt the economy. If you want a reason for all sorts of conflict in whatever sort of world-building project you might be working on, putting some thought into how the economy works can give you plenty of opportunities. Not to say you have to think of an entire stock exchange and hundreds of companies to list on there complete with fluctuating prices based on outside events. If you want information on how to do that, then you'll need to learn it from somebody else. People spend their entire lives studying this stuff. I can barely scratch the surface here. I just want to give a basic framework that you can use to set things up more thoroughly than, this is a trade city. God, I hate that term. Part one, economic systems. I'll start by saying that I'm not advocating for or against any particular system here. I'm just explaining a bit about what they are and how they work. That's not to say I'm above having an opinion, just that this isn't the time for it. In addition, if you craft a world or story specifically to showcase how your chosen ideology is great or awful, then you're basically just iron rand. Don't be iron rand. The two most common economic systems that are referenced today are capitalism and socialism. But there's also substance economies, mixed economies, syndicalism, communism, feudalism, corporatism, Islamic economics, and plenty of others. Some of these have overlap between them or are also mixed in with political ideologies, which makes it difficult to draw a clear line between them. I don't have anywhere near enough time to get into all of it, so I'll just briefly go over some of the bigger ones. Capitalism is a system in which trade and industry are privately owned and operated for profit. It's a relatively new system that has only existed on a large scale for a few hundred years now, which is why it kind of throws me off when fantasy settings that are clearly feudal in nature have major corporations and huge merchant classes. It's not a big problem, just weird without things like factories and customers that have disposable income. Socialism is an extremely broad ideology. It's not even an ideology so much as it is an umbrella term to describe a bunch of other ideologies. The common theme between all of them is that trade and industry are owned and operated by the community or the workers rather than a distant owner. This takes many different forms that I'd encourage you to research on your own, but it ranges all over from the nationalization of industries to the collectivization of businesses to the abolishment of capital altogether. Most every country on earth in the modern day operates on some sort of mixed economy, where private entities run the economy but governing bodies exercise some level of control over how they operate. Tariffs, subsidies, labor laws, there are plenty of ways that modern governments can direct the economy without actually controlling it. In addition, there are usually some social programs run by the state such as healthcare and food stamps that better the community but can't really be run for profit. Communism is a system wherein properties such as land and factories, aka the means of production, are owned and run collectively by the whole community. This one is also a political ideology that involves creating stateless societies, which I'll talk about more if my patrons ever vote for it. According to Marxist theory, this is a natural evolution of human civilization but I can already hear some of you typing up a comment where you tell me I hate America and I should kill myself, so I'll leave it at that. Futilism is both a political and economic system. Basically, there's a social hierarchy with a king at the top. He gives out land to nobles in exchange for military service. Then the nobles let serfs work the land in exchange for military protection, a portion of everything they produced, and sometimes also military service. The serfs usually didn't get paid in money, which meant that they didn't have much to spend. Tradesmen like Blacksmiths or Tailors were different, however. They weren't serfs, which meant they got paid for the work they did. They were only a small part of the population, though, meaning trade and profit were less of a driving force in their economy than in modern ones. Some people even describe feudalism as a sort of proto-capitalism, but that's a matter of interpretation. This is how feudalism worked in medieval Europe, at least. In other parts of the world, there were other systems with some differences that are often considered feudalism. Substitutes economics, sometimes called primitivism, is basically just what happens when we let the hippies win. Rather than growth or advancement, it's all about just producing enough food and other materials to survive. Some proponents even go so far as to advocate for the abolition of agriculture altogether, and a return to a hunter-gatherer lifestyle, because... I don't know, vaccines are the devil's saliva or something. I'll leave it at that for now. I'm sure there are already comments telling me that I got everything wrong about all of those, and I need to study the works of 30 different economists, each to truly understand them. Part two, jobs and payment. This might sound weird, but the concept of having a job is fairly modern. For most of human history, your job was to hunt animals and or gather plants. Then when agriculture came into the picture around 10,000 years ago, 90% of the population's job was to farm and or raise livestock. The last 10% were scholars, priests, nobles, and people who did whatever other miscellaneous tasks were required for civilization to function, or people that did nothing in the case of the nobles. These jobs were typically hereditary, at least unofficially. If your dad was a blacksmith, you were probably a blacksmith. If you were a woman, you usually just stayed at home and raised babies. And since most people were farmers, they produced all the food they needed, plus a little extra that the nobles would take for themselves. It was rare for anyone to get paid in money, partially because currency wasn't invented for a couple of centuries. But even once that happened, it was simpler to stick to the various forms of feudalism that existed. This went in and out of fashion over the centuries. Sometimes serfs would get paid in money, sometimes not. Sometimes they'd have some basic rights, sometimes not. The systems were all inefficient, though. And when Eurasia came into contact with the Americas, trade between all corners of the world exploded, which created markets for new stuff like sugar, coffee, silk, guns, you name it. These new markets led to new wealth and gave opportunities for new kinds of work. New jobs sprang up, or old jobs became more in demand. You didn't have to be a farmer anymore. You could be a furniture maker, a sailor, a gunsmith, a slave, or a merchant. And when your job doesn't involve making your own food, you have to make actual money in order to pay for it. What jobs were available depended on what was needed in the area, kind of similar to how trade depends on what you have nearby. If you have animals with valuable pelts nearby, then you trade those pelts, which means you have a lot of hunters and or trappers. If you have really good blacksmiths that make high-quality tools, then you trade those tools. Work to your strengths. This is when we start to see the rise of businesses. Someone would own a printing press, hire others to do all the work, then take their own cut of the profits. Someone else would own a ship, buy some stuff to transport on it, then resell it somewhere else. Not to say that businesses didn't exist before capitalism, just that they didn't make up the entire economy back then. And with the rise of businesses came things like contracts, property disputes, things that made attorneys more important and widespread than before. Then companies began to advertise themselves, which required people to come up with and distribute those ads. Then things like newspapers and magazines became widespread, and they required people to work on them too. Every change created economic demands, which in turn led to different types of employment. Agriculture still made up the bulk of employment until the 20th century, because that's when machines like tractors came around and made it possible to produce the same amount of food with less human work. As we make strides forward in robotics and AI technology, more and more work is being done without human involvement at all. Some economists even estimate that by 2060, all human labor will be done by machines. With no means of employment, people will have to make a living some other way. There are plenty of ideas that have been put out there, from universal basic income to re-educating people to learn new skills to full communism. But right now, we really don't know what's going to happen or how to deal with the problems that arise. In a nutshell, what I'm saying is that employment depends on what work can or needs to be done, which is largely based on technology level. Is it possible to have a science fiction world that runs on feudalism? Yes, but it would require some tweaking to justify why the lords use humans to do their work and not machines. Now let's get to the topic of money real quick. This is another thing that's really complicated, so I have to just skim the surface of it. Money is just something that everyone agrees has value that they can use to trade for other things that they want or need. Lots of weird things have been used as currency over the years. Liquor, seashells, salt, and beaver pelts, just to name a few. The most common in fantasy are coins of precious metal, usually gold and silver. This is accurate to real life, since gold and silver are valuable on their own, and by minting them into coins, you don't have to weigh out the amount. In imaginary worlds, you can go nuts with what sorts of things are used, though. In the Stormlight Archive, the citizens of Roshar use glass spheres with chips of precious stones, like diamonds and emeralds in them. In this setting, the spheres can also hold a magical energy source called Stormlight, which can be used to perform other tasks. So the spheres hold a practical value before they hold a monetary value. When you get to control what people use as money, you can really go nuts with it. Have them use magic stones, berries that make you fly when you eat them, bullets, alchemical potions, anything that's relatively rare and hard to reproduce can be used. However, the limited supply of hard currency also limits the size of your economy. So in real life, everyone eventually switched over to using slips of paper that were worth a certain amount of gold instead. Then later, we decided that even that was too limiting, so now paper currency is worth as much as we have faith in it. However, this raises the danger of inflation since whoever is in charge of printing money can print too much and make it worthless. In sci-fi worlds, we often see a switch away from physical paper currency to currency that only exists on computers, often just called credits. This is the direction our world is heading in. The form of money hasn't changed at all, it just exists on a screen instead of a physical form. Just consider how ubiquitous debit cards and apple pay have become in the past few years. No matter what type of economy the world you build has, it will probably require some sort of currency. Bartering can only go so far, and if people do work, they usually want to benefit from it somehow. Basically, just remember that in a fantasy or sci-fi world, the demands for human labor will be different than they are in our modern world. What jobs are available depends on what the inhabitants of the world need humans to do. And it IS possible to have an economic system that differs from what's in our modern world as well, you just have to think it through to justify it. Part 3. Isolation. So, who here has seen Black Panther? It's a good movie, and one of the most interesting parts of the movie is the country of Wakanda. It's an African nation that has completely closed itself off from the world for most of its history, yet its technology is far beyond the rest of the world due to being the only source of a miraculous metal called Vibranium. Let's talk about why this doesn't make any sense. Wakanda has been isolated for a long time, but we don't know exactly how long. The problem is that they'd be cut off from whatever technological changes happened in the outside world after they isolated themselves. If they closed their borders before gunpowders reached them, they won't know how to make it unless they discover it themselves. Same with things like written language, wheels, metalworking techniques, computers, indoor plumbing, electricity, all of these would have had to be discovered slash invented by the Wakandans themselves. They wouldn't be able to benefit from things that foreigners made. They'd have to put all their time and effort into making it themselves. Even setting that aside, they would require other rare minerals that weren't available to them to construct all their crazy tech. Just look at how many different things are needed to make a modern smartphone. Around 40,000 years ago, the first humans arrived in Tasmania. Then around 12,000 years ago, the land bridge connecting it to Australia flooded, leaving the people there isolated on the island. When they were contacted by the rest of the world in the 19th century, their technology was some of the most primitive in the world, even more so than the rest of Australia. Please note that the term primitive only reflects their technology and not the people themselves. According to Jared Diamond, Tasmanians lacked technology that other aborigines had access to, including boomerangs, spear throwers, bone tools, fire making equipment, and traps to catch animals. The Tasmanian isolation didn't just stunt their technological development, it reversed it. At one point they had things like bone needles, but they somehow fell out of fashion. They couldn't adopt the new ideas and technologies of other people, they had to rely completely on themselves. We see this throughout history. One group of people will make an invention or discovery, and another people will expand or improve on it. Gunpowder was invented by the Chinese on accident around 1,000 years ago. Then the first ones to make cannons and recognizable firearms were the Arabs, and we've been improving on that same basic design ever since. These ideas and inventions were all spread throughout the world by trade. People had one thing, other people had another thing, and so they swapped. Resources, ideas, technology, and people crossing borders tends to enrich all sides. Too often in fiction I see places like Wakanda, isolated places that are still somehow superpowers. If you want to make an isolated people or country that's perfectly fine, just be aware of the consequences for it. Generally speaking, lower tech societies can afford to be more isolated from their neighbors since they can produce their own food and require few rare materials to make their tools. It would still be difficult to advance their technology, but they could survive. Higher tech societies are less able to isolate themselves since, like I mentioned before, they need so many different materials to build their technology. Our current way of life is completely impossible without our modern globalized economy, which leads me to my next point. Part 4, Transport For most of history, the most common way of going from place to place was walking. If you were near water, you could sail and that was faster, but it still had its limitations. Today, you can drive, fly, or ride a train just about anywhere in the world within a couple of days. This means that even if you live far away from any farms that grow food, you can still get enough to eat. In the past, you could only eat what was produced close by. If food was coming from too far away, it would rot before it reached you. Not just because of slow transport, but because there was no way to refrigerate it. This not only limited the number of people that could live in an area, but limited opportunities for travel, which limited opportunities for trade, too. I've already brought up issues with isolation, so now let's talk about solutions to the problem. The most obvious is to develop new technology. If we tried mining asteroids nowadays, it would take years for the resources to get back to Earth, so inventing a really fast spaceship would be helpful. But inventing something new is easier said than done, so what are some other possibilities? In a fantasy setting, cutting down travel time could be as simple as building proper roads. Walking down an overgrown dirt trail is slower than a paved road. Ancient Rome was particularly famous for their extensive road system that allowed people to move around the empire quicker than in most places. Resources and valuables could be taken from the provinces to Italy fast and cheap, creating more wealth. This wealth stayed concentrated at the top of society, but, you know, progress. Another possibility is a canal system, which is the same thing, but with water. If your setting already has a good road slash canal system, then the next thing to do is to make sure it's safe to travel. It doesn't matter how great your roads are if they're constantly being raided by bandits. No one's going to travel with valuable wares in that case. And since magic can be a thing in your world, think of how it can be used. Can it teleport people? Then roads are useless. Can it allow you to fly? Then roads are useless. Can it fire gold and silk halfway across the world in a giant cannon? Then roads are useless. Use your imagination. Sci-Fi is a bit simpler in this area since crazy advanced technology is kind of the focal point of the genre. Make a teleporter. Make a spaceship that can go faster than light. Make a device that creates wormholes so you can travel to another galaxy instantly. Go nuts with it. The important part to remember is that when transport gets faster and cheaper, the products being transported get cheaper as well. This means that more people can buy them and raises the lower classes to a higher standard of living. Part five, tying it together. So now we know a little of how to make an economy, but how does it connect with everything else? I said before that the trick to good world building is knowing how to connect everything with everything else in a logical way. The first thing the economy affects is the standard of living in the setting. An impoverished feudal kingdom will have less to go around than one where people get paid in money and there's commerce going around. Next is the government. If the people are taken care of and have enough to enjoy themselves at least a little, then they'll usually be content with whatever ruler or ruling system is in place. If they aren't, then they'll be more receptive to a regime change, whether that's just a new king or a transition to a totally different government type. Just look at the history of various peasant uprisings or communist revolutions. They almost always happen during economic depressions. Bill Clinton said it best when he said, it's the economy, stupid. Ah, shit, here come more comments telling me to kill myself. Third is war. If two countries have a lot of trade and interdependence on each other, then they probably won't go to war. If one country has resources that another one wants and won't trade fairly for them, then war is more likely. War happens because one side or another thinks they'll benefit in some way, especially if these benefits involve enriching their ruling classes. And finally, we have magic. I know this isn't going to apply to all settings, but just think of how you can integrate magic into the economy. In Mistborn, magic works by using various metals like copper and seal. The people using them have to pay for them, so if there's ever a shortage, then the materials for magic costs more, which helps to restrict its use to the upper classes. There's other ways you could do this. Mages could become professionals that deal with various problems for citizens in exchange for money. If there was enough for them to deal with, they could become fabulously wealthy and turn themselves into a real political force. Or maybe magic can be learned by everyone, but hiring a tutor is prohibitively expensive, so only a small portion of the population can do it. Or maybe magic requires the shells of crabs that only live in one area, so whoever controls that area will have approximately all of the money. But it would also make them a target. As in all things, let your imagination run wild and worry about how it makes sense later. Conclusion. So that's about everything I have to say about crafting the economy of a world that's definitely not all that can be said on the subject, but it should give you a foundation to build off of. Trade is something that I rarely see given much attention in any fictional settings. The only places I've seen it done are in Brandon Sanderson books and the occasional RPG campaign. Part of the fun of worldbuilding is trying to make your world stand apart, to make it alien. Sure, you can try to make it stand out by populating it with nothing but lizard lowly anime girls, or by making the magic powered by the souls of ants that were burned by a magnifying glass, but you run the risk of being too bizarre in that case. So why not come at it from a different angle? And who knows, you might learn some stuff about how the real world works in the process. And now, a word from our sponsor. If you're watching this, it's safe to say that you're into worldbuilding. 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