Google+ Worldbuilding Hangout Report: Economics

This is a report of the discussion about worldbuilding and economics held on Wednesday, October 5th on Google+. It was our biggest worldbuilding hangout yet, and we had such a good time that we ran over a few minutes. I was joined by Jaleh Dragich, Barbara Webb, Amy Sundberg, Glenda Pfeiffer, Heidi Vlach, and Kyle Aisteach.

I started off the discussion by asking a question that is often neglected in economic worldbuilding: "Where do the rich people get their money?" If they are nobility, do they own the land? Do they then take a cut of whatever is produced off that land? Of course, there is always the option of taxes, but we got to those later in the discussion

Economics is a battleground - as we see in real life - and as Glenda said "everything is economics." It underlies a lot of the other features of worldbuilding and societies, so watch out for it as you construct your world. Barbara brought up the idea of how economics underlies food. If there's a mismatch between the climate and the food being eaten, such as rich delicacies or jungle fruit being consumed in a desert, then you need to think of another resource that desert offers which the desert people can trade in order to get that lovely food. Jaleh mentioned the Dragon Jousters, how they had supplies in the desert because refugees to that area brought with them herbs and spices that they could then trade. Heidi took us from there onto the idea of trade pathways, and how they bring resources to an area. Economics and trade can be the reason that a particular city exists at all. It happened on the silk road, which as we observed runs through some pretty dangerous and inhospitable territory, but which happened to be the way to trade most effectively through the area. I mentioned also Route 66 and the movie Cars, for the way that cities can spring up when a road leads through them, and die when it doesn't (mind you, I got laughs for this, but it did fit!).

After that we turned to the topic of money. If you're designing a money system for your world, whatever you use as currency has to have some key characteristics: it has to be portable, divisable, and its value must be agreed upon as verifiable by the people engaged in the trade. In a sense it's a glorified form of barter (thanks for mentioning this, Heidi), where everyone has simply agreed to use money as an intermediate item to trade for. The "default 3 coins" may be copper silver and gold because of Dungeons and Dragons, or they may be bronze silver and gold because of the Olympics, but they don't have to be. In our own real world history rice has been used as a currency, as have salt and cowrie shells. When I mentioned the way that Europeans traded beads for land with the American tribes of the northeast, that brought us to the idea of problems with currencies. Those beads were a problem because they were not part of a larger system of trade in which beads would be accepted by other groups. Wouldn't it be interesting, we thought, to have a story involving several different groups with incompatible currency systems? What would happen then? Glenda mentioned the solution some would take, which would be enforcing the system with guns or weaponry. It's not the only option, I'm sure.

I mentioned the island of Dejima, which was off the coast of Nagasaki in Japan and for about 400 years was the only point of legal contact between Japan and the "Western world," mainly in this case the Dutch. Through this tiny conduit, goods were allowed to pass, and the influence of the Dutch can in fact be seen in Nagasaki architecture to this day - fascinating, because of the difference with Tokyo, where all of the Western overlay is more modern.

Glenda brought up a critical question for those working with trade in science fiction contexts - that of the value of a commodity versus the cost of travel. When faster-than-light transportation occurs simply and easily because of quasi-magical things like dilithium crystals or "jump points," we can easily gloss over it, but traveling between the stars could be incredibly expensive, which would mean whatever you found to trade would have to be super special to justify doing it at all. Amy pointed out that if you traveled in generation ships, the trade would all be within the ship, and none of it would be between worlds. Heidi suggested that trade in ideas might be more valuable - which would bring up other questions of the costs of communicating over such large distances.

Economies, and especially complex economies, resist change. Simple trade structures grow other things on top of them until they form an incredibly complex web, and the more integral a particular commodity or other variable is to the whole, the harder it is to change its use. Fuel is a prime example of this. Power and money tend to flow together, and then people add to the natural resistance of the system to change. Glenda mentioned how rare earth metals are very toxic to produce, and she said as a result of this they are only now being produced in China. Monopolies lead to control of price and then to pressure to find alternatives to these commodities.

At this point Kyle joined the discussion we turned toward different assessments of the value of human life. It started out with the question of valuing labor. What value is placed on manual labor? on skilled labor? Is your "value" as a person equal to the amount of labor you can do in your lifetime, or not? I think many people would hesitate to say that monetary value is placed on human life, but in fact it gets done all the time, by different groups in different contexts. Kyle mentioned that there is a monetary value (he wasn't sure of the precise figure, but somewhere around 2.3 million dollars) placed on saving a life in the context of airline travel. If an improvement that will save a single additional human life costs less than that amount, then it is mandatory for it to be implemented across the airline fleet. But what is the value of a human life when you're calculating money going to hurricane shelters, asked Heidi. That number would be different. In the justice system (wrongful death) the number put on a human life is estimated as the amount the person could earn over their lifetime. A similar kind of number is used in the calculation of life insurance.

Does your world have an economic system complex enough to support life or other insurance? Or what about a stock market where people can speculate and buy odd non-corporeal things like "futures"? It doesn't have to, but if it's a nice complex society, you shouldn't rule it out.

At that point the conversation turned to how to put monetary value on artistic activities like writing and crafting, where the product can't be precisely measured in terms of materials cost plus labor in the same way as a less creatively intensive pursuit. It's another case where the surrounding culture ends up placing a value on something which may not be directly related to the work of creation itself. Kyle observed that market research used to be expensive until the internet made it far easier to obtain and entirely changed its value.

I found the idea of value change (in the monetary sense, here) to be very interesting. Stories can be born out of the question of who is hurt when these changes occur, as Amy and I both observed. How do people respond to economic upheaval? What happens when people take power who haven't had this power before?

We also briefly discussed taxes. I mentioned how my idea of taxes first came out of the story of Robin Hood, where the king would send an army through the countryside and shake people down so that he could sit in a room full of gold. However, as Kyle observed, there was a real economic situation behind that story, in which the war debt from the Crusades was set on Prince John's shoulders and he had to collect even though there was nothing visible the money was being spent on. The result of course being a tax revolt. There is a lot behind the whole idea of taxes, but one of the key ideas that should go into worldbuilding a society that pays taxes is what exactly the people expect their leaders to provide for them. There is less likely to be objection to taxation if people can see what the tax is going to. Kyle asked what would happen in a society where you could tax thieves...would that mean thievery was seen as more legal? Jaleh mentioned a situation where anything could be legal with a permit (and you could get a permit for just about anything, including "illegal" behavior). We all felt that this put quite a bit of power in the hands of the person issuing permits...

You can also find conflict between economic micro-cultures and macro-cultures, as when a small organization is financially doing well but the larger culture is in the midst of difficulties. This can lead to the values of frugality bleeding down into the operations of the smaller group even though they are not necessary, or may in fact be harmful to its operation.

The last major concept we talked about was how to take larger economic models that we may have dreamed up for our societies, and translating them onto the small level of day-to-day personal interaction. When we write stories, it's not as though we have the leeway to spend pages and pages talking about how the world's economic system works. We have to exemplify it by showing the viewpoints and situations of people who live within it. It's very valuable to ask questions like, "how do these people actually get paid, and what do they get paid for?" because very often that will translate into very specific patterns of behavior (as I talked about in my Monday post). Jaleh posited a situation, for example, in which seamstresses would have to buy materials themselves but would be paid for their labor by patrons. This might turn out very differently from a situation in which the patron bought the materials as well as paying for the labor. The patron would have different expectations about the disposition of the materials in these cases. Think through if you can how an individual of a particular social class gets money, whether they are able to increase that amount of money through their own efforts or whether it is controlled entirely by someone else. Once they have it, where would they then spend it? How are their basic needs provided for? Are they? Answer these questions by showing small interactions between people.

When you're working with a story, there are two directions from which you can approach the economics questions. One is to design the system from the "top down" with macro-economic trends and then try to find your way down to how those would be enacted day to day. The other is to start with small individual interactions and then extrapolate "bottom up" into larger patterns that might have influence across the society in other ways. If you choose top down, make sure you get all the way to the nitty gritty bottom level. If you choose bottom-up, you probably don't have to go all the way to the macro-level, so long as you show that you have some understanding for the larger implications of the system.

We could have gone on and on, because we didn't even get into questions of how economic issues influence language use, and how to name currencies, etc.

But perhaps we'll be able to talk about those another time.

Next week's hangout will be on Wednesday, October 19th at 11am PDT and we'll be talking about Manners. Should be fun! I hope to see you there.