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Tag Archives: political economy

Building an Economy: The Struggle Between Urban and Rural

10 Tuesday May 2022

Posted by Oren Litwin in Economics, History, Politics, Politics for Worldbuilders, State Formation, Writing

≈ 1 Comment

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Fantasy, government, political economy, politics, worldbuilding, writing

As Trotsky noted, much of politics is about “who and whom?” In other words, which social group gets to benefit at which other group’s expense? This plays out vividly in the conflict between rural farmers and city workers—and governments often take the side of the city. This clash of interests can be a fantastic engine for fictional conflict, in your stories and your worldbuilding.

(This post is largely based on Robert Bates, Markets and States in Tropical Africa, with some flavor from Charles Tilly, James C. Scott, and David Graeber.)

We said before that cities play important roles in generating wealth and projecting state power, but that their size is limited by their access to food (or more abstractly, the energy surplus of the society). This also means that city dwellers and farmers have precisely opposite interests with regard to the market price of food: farmers are selling food and would like a high price for their crops, but city dwellers must buy food and want a low price.

Another limiting factor is capital, the fuel not for people’s lives but for their ability to produce goods and infrastructure. (This often takes the form of money, but remember that money is simply a convenient representation of other things people need—natural resources, machines, human labor, et cetera.) This presents a problem for state rulers in a dangerous world: if they want to develop modern industries and manufacturing in a country that is presently agrarian, where do they get the capital from? Often, the best available source of capital is the rural farmers—who might be individually poor, but still collectively have the largest available source of capital: their crops.

Worse, keeping the cities happy is often far more important to states than is keeping rural provinces. The reason is simple: the state officials are in the cities. If the state antagonizes a bunch of farmers a hundred miles away, they can do little to the state officials; but if the state antagonizes a bunch of city dwellers, the city dwellers will riot and perhaps lynch state workers or even overthrow the government entirely.

Thus, states trying to build up their cities must somehow balance off three competing priorities:

  • keep food prices low;
  • extract capital from the rural populace and use it to develop city industries (or perhaps to build a military, or other purposes); and
  • don’t leave farmers so poor that the food supply dries up.

In ancient times, this was done straightforwardly. Taxes were levied on food directly, which the government then distributed to its own personnel and to associated artisans; and people were also drafted for terms of forced labor (“corvée labor”), their own bodies providing the capital that the state needed. (The Bible, for example, attests to people being drafted for three months out of every twelve during the period of King Solomon’s great building projects.) If taxes became too burdensome, the people would resist, but as long as the state didn’t push the populace to the breaking point they could access a fair amount of resources with little trouble.

In more modern times, states had some fancier tools available. Robert Bates writes of postcolonial African states, which were able to make use of a preexisting colonial institution, the monopsony—a single buyer which farmers were obligated to sell all of their cash crops to at a given price. (As opposed to a monopoly, a single seller of a good.) This allowed states to extract foodstuffs from the rural populace at artificially low prices, which could then be sold to urban workers or exported for cash. (To do so, they often had to ban export of crops as well when the world market price was higher than what they were paying.) This meant that urban workers could pay low prices for their food, and the state had lots of capital available for economic development (or other, less useful purposes).

But how to sustain the farmers if you’re paying dirt-cheap prices for their goods? The answer was to subsidize farming inputs, such as machinery, fuel, and access to cheap credit. This had the additional advantage to the state that you could direct the subsidies to chiefly benefit your own supporters, often wealthy members of the government who entered farming specifically to soak up all the subsidies they could. In practice, therefore, a regime of subsidized inputs and too-low output prices would squeeze the peasants while benefiting large farms owned by elites.

(Meanwhile, farmers often resisted by shifting some of their crop production to goods not covered by the monopsony, and by selling some of their goods on the black market. Bates estimates that no more than 30% to 40% of agricultural production was captured by the monopsonies, on average.)

Such systems in real life often performed worse than expected, because the states’ programs of economic development were poorly run, frequently corrupt, and prone to pursue prestige industries such as heavy manufacturing that were impossible to sustain with the countries’ given level of technology, human capital, and infrastructure. But that is a story for another post. For now, the point is to highlight the conflicting interests between urban and rural populations—and how the state, trying to augment its own power and economic resources, will favor the city over the countryside.

*****

(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!)

Recent Posts

  • Building an Economy: Capital
  • Building an Economy: The Struggle Between Urban and Rural
  • Building an Economy: Types of Cities
  • Building an Economy: Cities and the Wealth of Nations
  • Building an Economy: Energy

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