Any state regime needs resources to function. At the most basic level, the state needs manpower; in ancient times, it was common for states to literally draft the populace for occasional terms to work on public projects such as city walls or irrigation channels (this was called corvée labor). Many states still do this for their militaries. In modern times, the state typically raises money instead through taxation or some sort of state industry, and then spends money on salaries and such. Law, too, is a resource for getting people to do what you want (provided that enough people obey the law).
Regardless of form, the state still needs to generate resources. Some states are in the happy position of being able to exploit outsiders rather than their own populaces—levying tolls on international trade routes, or selling commodities such as salt, olive oil, or petroleum, or else having regular programs of state piracy or conquest to seize plunder. But for most states, the resources they need are largely generated from the people they rule.
How does this work?
As James C. Scott teaches us, to levy taxes or otherwise extract resources, the state needs to make sure that the resources, and the people who provide them, are accessible. One of the key activities of states, therefore, is to actively change the way people behave to make their resources more easily collectable. For example, in southeast Asian statelets, it was common for rulers to force their peasants at spearpoint to live in the capital city, and work on farms that were adjacent to it, so that the rice grown could be easily assessed by tax collectors. By contrast, growing root vegetables was often forbidden, seen as a means of tax evasion because they were easy to hide.
Banking systems are a frequent tool for resource mobilization, because they literally gather money together so it can be used. Alexander Gerschenkron famously argued that the best way for a state to escape “economic backwardness” was to have a strong state banking system, so that capital could be mobilized for big infrastructure projects. Essentially, people’s savings would be borrowed by the state and used to accomplish state goals.
(Today, we see how states are struggling to respond to the growth of cryptocurrencies, which provide a serious alternative to the banking system for people who want to evade government scrutiny of their money. In the US, some regulators are agitating for stablecoin funds to be regulated like banks—which is a ridiculous idea, but I digress.)
States can also force their citizens to become more productive, in specific ways. This can range from vagrancy laws that force people to work, to mandatory public education or civil service exams, to laws mandating that all farmers must practice archery on Sundays. Head taxes too have this function; if you require people to pay 50 ducats per year each, whether or not they have the money to pay, you force them to spend at least some of their time earning ducats, rather than simply engaging in subsistence gathering or barter (which is harder for the state to benefit from).
States can also encourage or direct their subjects to directly accomplish state goals through nominally private action. For example, if the Duke of Rotherheim offers a bounty of ten gold pieces for each elf ear turned in, bounty hunters will scour the land to wipe out elves without any need for the Duke to hire them formally. In the modern world, “private” financial institutions like banks are subject to a vast range of government rules and reporting requirements, which they must comply with or else lose their licenses. For many purposes, the banks are agents of government policy when it comes to detecting money laundering or other financial crime (to say nothing of economic policy).
Essentially, a crucial part of the art of rule is how to mold the people into cash cows—taking unruly individuals who pass through life in many different ways, and turning them into resources that can serve the state. This is not always bad—having a military draft, for instance, may be inescapable for a country surrounded by enemies. But it shapes people’s lives in fundamental ways that often we don’t even see. And those who resist the system become outcasts, living on the edge of society without documents, or even without homes.
There are stories to be written about all of this. And a good way to start, when considering your fictional kingdom, is to ask: how, exactly, does the regime get its money or other resources?
(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 Tyranny for Worldbuilders. No idea when it will be finished, but it should be fun!)