Monthly Archives: February 2023

Building an Economy: Natural Resources

28 Tuesday Feb 2023

Posted by in Economics, Politics, Politics for Worldbuilders, State Formation, Writing

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Having discussed population density and ease of transport, it’s time to finish off our discussion of land by talking about natural resources—and some surprising implications that natural resources can have for economic development, and politics.

(And in retrospect, this one really should have been the first subtopic in land that we discussed, since it really conditions all the others. I’ll correct that in the book to come!)

“Natural resources” can mean many things. One of the most fundamental will be the presence of available food production, from fertile soils and rain or rivers for agriculture, wild plants and herbs for gathering, animals to be hunted, or fish to be—err, fished. If a region does not have enough food production to feed its populace, it will have to depend on imports, which means that it will have to have something to sell to the outside world in order to pay for those imports.

Other things might or might not be a natural resource, depending on the details of your setting. For example, deposits of aluminum will only be valuable if the society has figured out how to smelt aluminum, a surprisingly difficult process. Small streams might be good places to fish, but if the society has developed the technology of the gear (meaning the round turny thing with teeth), streams can also drive watermills to provide kinetic energy for machines in a workshop.

(This also means that advances in technology, or other changes that turn something that was previously useless into something valuable, could bring new prosperity to formerly backward regions—or make them tempting targets for invasion!)

For each region you would need to decide what the key natural resources are for your story, and how abundant they are. The details of them obviously matter; but for our model, we will abstract away from the details (for the moment) and characterize each natural resource (in relative terms) as

  • rich or poor, and
  • concentrated or widely available.

Resource-Poor

If a region is poor in necessary resources, the people will have to either trade for them, substitute some other inferior resource, or do without.

If the people are wealthy—perhaps they are skilled businessmen or traders, or perhaps they are successful pirates—they can sustain a society even in a place with few resources; but they would be dependent on the outside world for most of their essentials, like food, fuel, raw materials, and the like. Essentially, a region with few natural resources stands in a similar relationship to the outside world as a city does with its surroundings: it must produce a lot of economic value to pay for its imports, and it lives and dies with the ability to transport the needed goods.

If the people don’t want to trade for the good they are missing, or the good is simply not available, they may try to use substitutes. For example, the Scottish Highlands had few trees for firewood; instead, the Scots burned peat (something halfway between coal and mud). Few people would prefer burning peat to wood; but it did the job. Similarly, early iron weapons were actually inferior to bronze in most respects, contrary to the common assumption; but bronze is made from both copper and tin in a specialized process, and when the tin trading network across Eurasia was disrupted for unknown reasons, local communities fell back on iron, which was readily available and easy for blacksmiths to forge. (That was a gross simplification of a complex process with many causes, but for our purposes it makes the point.)

If no substitute is available, then the populace will do without. The typical result is widespread poverty (at least in “objective” terms; a people that has never known the telephone will not mourn its lack, and will find plenty of other prestige goods to compete over). If the missing resource was critical to sustaining life, its lack may put a hard cap on how many people can live in the region. In the worst case, the region may simply be empty of people.

(The concentration of the resource matters, but only on the micro-scale; if you have a small amount of wood and no one else has any, you will be prosperous personally, but it won’t affect the rest of the region much.)

Resource-Rich

If a region is rich in natural resources, on the other hand, it could have wildly varying effects depending on whether the resource is mainly used by the region itself, or mainly exported. If the resource is mainly used by the region—either directly, such as foodstuffs, or as an input into some other production, such as timber into shipbuilding or iron into machine production—it will contribute directly to the region’s prosperity. Not only will the region use the resource, the availability of rich resources will tend to encourage the growth of new industries that require that resource (though not automatically; see our later discussion of entrepreneurship). In ideal circumstances, the natural resource serves as fuel for the larger economic engine, being transformed into ever more valuable uses as products move up the chain of production, and the economy will develop in healthy directions.

Problems emerge if the resource is produced mainly for export, however. The economy will tend to develop mainly to facilitate the export of resources, and other industries will be relatively less developed. An economy that is heavily unbalanced in the direction of exporting natural resources (or really, by any other single desirable export) is prone to Dutch Disease. For our purposes, Dutch Disease happens when a particular economic sector generates massive amounts of money from external sources; this could be oil, or timber, a wildly successful service sector such as London banking, or even foreign aid or foreign direct investment. People end up using that money to import new luxuries or to enjoy more local services, diverting revenue and labor away from local productive industries to a degree. (It gets worse if countries have independent currencies with fluctuating values; the vast exports of oil or whatever will cause your country’s currency to strengthen, making imports relatively cheaper, but also kneecapping your other industries such as manufacturing or tourism.)

The result is that even as the growing sector prospers, the other parts of a region’s manufacturing economy will tend to stagnate. If allowed to continue unchecked, the end result of Dutch Disease is to turn the region into a supply region with a hypertrophied primary export sector and a bloated service sector, and relatively little industry otherwise. The region will be excessively dependent on its main export industry and suffer booms and busts along with that industry. (This often happens on a smaller scale with oil towns, mining towns, and the like.)

The Resource Curse

We must also ask if the rich resources are concentrated or widely available. A large timber forest is relatively hard to monopolize, though kings certainly try; and as a result, it would allow a relatively large number of people to support themselves from the resource. But a much more concentrated resource is easier to monopolize, either by the state (a common occurrence) or by a private actor (which might accumulate much of the effective power of a state, as with the “Shell police” in Nigeria). Often, this actually leads to worse outcomes for the region—the so-called “paradox of plenty” or “resource curse.”

Investigating the paradox of plenty, Terry Lynn Karl in her book identified a common pattern in modern oil-dependent states. When oil is first discovered in a previously poor state, the state has a sudden budget surplus—either because it takes control of the oil directly, or heavily taxes the oil companies. With the sudden influx, the state massively raises its spending, usually first on social services, then on subsidies for new heavy-industry as the state tries to translate its new wealth into durable prosperity. Often, taxes on the broad populace are reduced, sometimes to zero. (This is not an unmitigated good; often, regimes reduced taxes and increased subsidies in order to demobilize their populaces and render them indifferent to national politics, the better to rule tyrannically in the absence of popular opposition.)

However, state spending often grew much faster than oil revenues, as new interest groups form to feast on the new state largesse. Moreover, efforts to nurture new industries often failed, overcome by the mismatch between the planned new industries and the existing technological competence of the society, the resulting inability of the economy to support the planned new industries (as Jane Jacobs discusses), the eventual growth of political patronage in subsidized or state-owned industries, and their resulting implosion from ineptitude. Factor in the effects of the Dutch Disease and consequent inflation, and the economy as a whole actually suffers from the new oil wealth. Many petro-states found that they could no longer feed themselves without imports, as local food production was crowded out by inflation and the lack of farm labor.

The ultimate beneficiaries, however, are the state itself (which grows massively from the new revenue) and the new stratum of state functionaries that fills all the new state jobs. But such prosperity is brittle, depending as it does on the revenue from oil. When oil prices suddenly fell in the mid-1980s, these states faced crippling crises that lasted decades.

Matters are less bad in states that already have strong state institutions, even if their economies are heavily dependent on the resource in question. Alaska, for example, managed to avoid the worst ravages of the resource curse by distributing much of its oil wealth directly to its citizens each year. The temptations of rentier-state gluttony are certainly present, but mitigated by the preexisting power of the citizenry and the strong tradition of limited government.

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This post has already gone on too long, but you can already see that the effects of a region’s natural-resource endowment can provide great fodder for plot conflict. And once you add in a few elements from the other building blocks of an economy? Yowza.

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(This post is part of Politics for Worldbuilders, an occasional series. Many of the previous posts in this series eventually became grist for my handbook for authors and game designers, Beyond Kings and Princesses: Governments for Worldbuilders. The topic of this post belongs in the planned second book in this series, working title Wealth [Commerce?] for Worldbuilders, along with some overlap with the planned third book, working title Tyranny for Worldbuilders. No idea when they will be finished, but it should be fun!)

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Building an Economy: Ease of Transport

22 Wednesday Feb 2023

Posted by in Economics, Politics, Politics for Worldbuilders, State Formation, Writing

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In our last post, we started building a model for how to think of a region’s geography with three major factors: population density, ease of transport, and natural resources. Here, we will discuss the second factor, ease of transport.

We’ve referenced the importance of transport several times before, including with regard to cities and touching on it briefly in Book 1 of my “Politics for Worldbuilders” series during the discussion of the Nobility. Now we’re going to discuss transport squarely. It plays vital roles for economic activity, the placement of cities, and politics.

Let’s begin by assuming that a given territory can be easy to cross, difficult to cross, or have particular constrained routes such as rivers or valleys that allow for easy transport but can also be easily controlled. Each of these options generates its own set of possibilities.

Trade

The easier it is to transport goods and people, the easier it is to trade—you have to be able to get your goods to buyers without too much cost, and on the flip side you have to be able to access raw materials. If transport is cheap and easy, a lot of trade becomes feasible and economic activity will tend to flourish. Cities will be supported by food transports and shipments of raw materials such as iron ore or coal, paid for by the goods and services they generate, and they can also trade finished goods with each other and with their surrounding rural areas.

Similarly, the easier that transport is, the easier it is to stay current on news from distant places. This is somewhat less of a factor in our modern era of instant communication, rather than having to wait for the latest ship from far-off shores; but even today, there needs to be people on site to report what is going on, who want to report it to you or to an audience that includes you. This is more likely when transportation is easy and cheap.

If transport is difficult—the territory is a rugged mountain range, for instance—trade becomes difficult as well. People will have to depend more on their own production, rather than producing for trade with distant buyers. Villages will be inward-focused, struggling to produce their own food, clothes, tools, and other goods. Traveling peddlers might come along every month or three, or not at all. Cities will be rare, placed in the few places where transport is relatively easier, and more likely to be administrative/garrison cities supported by the government than commercial or industrial cities, simply because it is so hard to produce anything and transport it out to buyers. Economic activity as a whole will be stunted as a result.

(Many scholars believe that this is one of the reasons for the relatively low economic growth of the inland part of the African continent and Eurasia. In contrast to Europe, which features long coastlines and many rivers that penetrate into the hinterlands, Africa and Eurasia are mostly landlocked and have few rivers. As a result, areas along the coast and next to rivers will tend to flourish more than inland areas that have a relatively difficult time getting goods to market.)

Trade and production in places with difficult travel will tend to focus on valuable and rare goods if they are present, such as gold, spices, uranium, and the like. If there is enough money to be made, governments or merchants will invest in roads or other transport at fantastical expense that go directly to the production site and nowhere else, in order to make extraction easier. This will create path-dependency effects that favor continued focus on the extractive industry, rather than allowing the economy to broaden and deepen in healthier ways. The region will likely become a supply region. If no such valuables are present, economic activity will simply stagnate. People will focus on producing their own needs, or else migrate to greener pastures if available.

If transport is possible through otherwise rough terrain down particular pathways such as rivers or valleys, we can expect these roads to become the focus of military conflict or economic competition. Whoever controls them will be able to profit from the trade that goes through them, and if the pathways are the key enablers of trade between vast regions then the rewards might be great indeed.

Note that if the transport situation changes—new roads are built, or somebody invents magical zeppelins, or the mountain pass suffers an avalanche and is blocked until spring—the effects on the society might be profoundly good or bad. There is certainly a story to be written here, about who would benefit from such changes, who would be threatened, and what they would do about it.

Politics

Just as trade is easier if travel is easier, so is power projection. It is no accident that the Roman Empire spent incredible effort on building its famed roads.

Political boundaries often map onto geographic boundaries such as rivers or mountain ranges, simply because it is hard to transport armies across, or to enforce laws or collect taxes on the other side. The more rugged the terrain, the more likely that an area will feature a patchwork of smaller domains rather than a unified government. (This is part of why Afghanistan continues to be the graveyard of empires.) As with trade, nominal distances as the crow flies matter less than travel time. This is particularly true with the transmission of information; the less information that can get through, the less likely that an empire or other political unit can maintain its control and the more likely that control will devolve to a more local level.

And naturally, the political situation will have effects on the economic one as well, good or bad. A vast regime might enable more internal trade, as Rome did, or it might ruthlessly squeeze its subjects, as Rome also did at various times. A patchwork of small principalities might be littered with obstacles to trade and feature frequent conflicts, or it might become a fecund region promoting creativity and economic development.

You can see how these factors interrelate. A government might build roads for military purposes, which then have the side effect of stimulating new economic activity. The interstate highway system in the United States, and the Autobahn in Germany, are good examples. So is the rail system in much of Europe. Or a transportation system built for commercial purposes might be adopted for military ones, such as airplanes.

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All in all, the ease of transport across a territory will dramatically condition what happens there and how people live. For worldbuilders, we can readily exploit some of the challenges that this presents in our stories.

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(This post is part of Politics for Worldbuilders, an occasional series. Many of the previous posts in this series eventually became grist for my handbook for authors and game designers, Beyond Kings and Princesses: Governments for Worldbuilders. The topic of this post belongs in the planned second book in this series, working title Wealth [Commerce?] for Worldbuilders, along with some overlap with the planned third book, working title Tyranny for Worldbuilders. No idea when they will be finished, but it should be fun!)

Building an Economy: Population Density

20 Monday Feb 2023

Posted by in Economics, Politics, Politics for Worldbuilders, State Formation, War, Writing

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After a great deal of procrastination, it’s time to revisit the Land/Labor/Capital triad, identified by the classical economists like Adam Smith and the like as the key factors of production.

(Side note: modern economists consider entrepreneurship to be a fourth factor of production. I’m still trying to figure out whether there is a nice way to characterize entrepreneurship in our model, as it would obviously lend itself to strong stories.)

Remember, we’re not trying to explain everything about an economy from the ground up. We’re trying to build a relatively simple, yet powerful and flexible framework that worldbuilders can use to quickly mock up the contours of their invented societies. Once the bones are in place, you are then in a position to dive into all the cool little details, confident that they will be consistent with the structuring logic.

So when we talk about land, we’re going to focus on three broad variables—each of which can have surprisingly powerful implications:

  • Population density
  • Ease of transport
  • Natural resources

Really, these are interrelated. For example, you can’t have a dense population without lots of food, and and an easy way to get the food to people. Still, it’s useful to consider them separately to keep everything straight in our heads. Let’s begin with population density.

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If you want to have a country or region with a high population density, that implies several things. We already noted the need for lots of food and efficient transportation of it. On the other hand, you don’t necessarily need to have urban cities, if people are living in densely placed villages and growing their own food with intensive agricultural methods. (It will mean that animal husbandry will likely use methods that require little land, rather than pasture-grazing.) And the material standard of living might still be low if most people are producing food, rather than more specialized goods. Still, the more people there are living close together, the more opportunities for specialization and exchange, and the more likely that the economy will develop more complexity.

Conversely, if the population is thinly spread, the people might still be relatively prosperous. They could have large herds of livestock that move from place to place, or practice a carefree foraging lifestyle where they only spend a few hours a day gathering food and use the rest of their time making luxuries, playing games, fighting with neighbors (!), or relaxing. Or they might be desperately poor, if the land is not very productive and they all have to work hard to feed themselves, since there are few opportunities for trade. With a thinly spread populace that cannot sustain specialization and exchange, chances are that the energy surplus of the society will be small, which limits the development of their society and culture. (And you can see how the productivity of the land interacts with population density.)

So whether you choose to have a dense population or not, you can play around with what that looks like for you and your story.

But what about the political effects of a dense population, or its opposite?

Note that the more thinly spread the population, the harder it is to control the territory. If you are being oppressed by a ruler, or landlord, or moneylender, or cruel family members or whatever, you always have the option to pull up stakes and run; and all else equal, it is more difficult for a ruler to stop you if the population is thin. This is because fortifying the border to keep people in would be too expensive, compared to the number of people being contained. By contrast, if the society has a dense population, it is relatively more efficient to fortify the border even at great expense, because of the large number of people you will be able to contain and control.

Jeffrey Herbst argues that this is one of the key differences between the experience of Western Europe and of precolonial Africa; Western Europe, being densely populated and urbanized, made it worthwhile for rulers to fortify their borders, the better to control the moments of their people (as well as to defend against invasion!). In Africa, however, the landscape was so vast compared to the populace that there was little practical way to control the territory as such. Instead, African rulers focused on strategies to control people directly—ties of loyalty or marriage for some, enslavement and physical domination for others.

Let’s see why. When seeking wealth or other resources, a ruler must ask a key question: is it easier to exploit one’s own people, or someone else? If your people are easily controlled and restrained, it will be relatively easier to tax them. If your people can move around easily, however, then they will not tolerate heavy taxation. On the other hand, if your army can also move around easily, it becomes more attractive to invade your neighbors and cart away plunder, in goods or people.

So as a broad pattern, we see regions of high population density focus on fortification of borders and relatively high reliance on taxation or other means to generate resources from their own people (which does not exclude invading and pillaging neighbors, of course!); and regions of low population density feature relatively higher mobility, societies that feature relatively less political coercion and taxation, and lots of raiding of neighbors for treasure and slaves.

Of course, rulers can also change the population density of their territory. A very common pattern, as James C. Scott tells us, was for city rulers to concentrate the surrounding populations by force within the city walls, and have them cultivate fields that were within easy reach of the city (and the city’s military). This allowed them to tax their peasantry’s output more easily than if farmers were living in distant villages.

So when you’re creating a new territory, think about the population density of the land, and then consider what consequences flow from that. The implications for your story might be surprising.

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(This post is part of Politics for Worldbuilders, an occasional series. Many of the previous posts in this series eventually became grist for my handbook for authors and game designers, Beyond Kings and Princesses: Governments for Worldbuilders. The topic of this post belongs in the planned second book in this series, working title Wealth [Commerce?] for Worldbuilders, along with some overlap with the planned third book, working title Tyranny for Worldbuilders. No idea when they will be finished, but it should be fun!)

Building a Worldbuilding Model for Military Effectiveness

17 Friday Feb 2023

Posted by in Politics for Worldbuilders, War, Writing

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Worldbuilders who plan for their stories to feature wars as a key plot conflict face a fundamental tension: the “bad guys” must be powerful enough to pose a serious threat, yet must still lose (usually!). How this happens is often fertile ground for stories.

A common fictional pattern is for the enemy to have overwhelming force, but be fundamentally stupid—tactically incompetent, strategically myopic, prone to getting distracted by personal feuds and such. I would tend to view such stories as being far too convenient and even a sign of lazy writing, but the current invasion of Ukraine shows that this can actually happen in real life.

Still, fiction has the burden of needing to make sense. How then should worldbuilders proceed? Essentially, if you want your enemies to have an exploitable military weakness, you should be able to justify it.

This post will not give you an entire theory for doing so (I plan to spend about half of Book 4 in my “Politics for Worldbuilders” series on that topic), but it will lay out a high-level framework. Essentially, you can view military effectiveness as a product of the state structures (or societal structures, in societies without strong states) built to support the military. Those structures, in turn, were created (in part) because the ruling regime (or ruling elites, or dominant societal ethos, or whatever) decided on specific political-military objectives and then decided to devote resources and create structures to achieve those objectives.

Hence:

  • Political-military objectives come first, and lead to
  • Strategic and organizational decisions for how to create a military that can achieve the objectives.
  • This leads to the creation of structures for generating and supporting the military, such as recruiting capacity, manufacturing base, logistics, scientific research, the development of doctrine, and the cultivation of a particular military mindset.
  • These then condition military success on the battlefield.

All of these can be discussed in great detail, and I plan to. Moreover, the arrow of causation isn’t in one direction. As Donald Rumsfeld famously said, “You go to war with the army you have, not the army you might want or wish you had at a later time.” So political decisions might be constrained by existing military weakness or institutional flaws.

But for a quick example, we can see how the political decision by the Russian regime to try and rush tactical success in Ukraine, as well as the long-standing policy of treating the infantry as a potential political threat that needs to be weakened and held in check, has led to drafted Russian soldiers being insufficiently trained. This means that they cannot execute complex tactics and are instead being thrown into the meat grinder in human wave attacks. So the seeming stupidity of Russian tactics is in fact rooted in a coherent (if equally stupid) set of political decisions.

For another example, the famed English longbowmen didn’t spring from the ground fully formed. English bowmen were required by law to spend their whole lives practicing; the English kings decided on this policy even though it made the peasantry more of a threat to the elites, while other states chose to disarm their peasants and rely on professional soldiers.

My aspiration is to give worldbuilders a clear structure that they can use to explain why their invented militaries look the way they do, think the way they do, and fight the way they do. In the interim, you can use the above model as a way to organize your thinking.

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(This post is part of Politics for Worldbuilders, an occasional series. Many of the previous posts in this series eventually became grist for my handbook for authors and game designers, Beyond Kings and Princesses: Governments for Worldbuilders. The topic of this post will end up in the planned fourth book in this series, working title War for Worldbuilders. No idea when it will be finished, but it should be fun!)