The Living Economy, Part 2: From Resources to Riches
There’s a new argument brewing in Kettlebeck.
A merchant is loading his wagon with iron bars, ready for the journey down to Ashford. The miners have spent weeks extracting ore from the mountainside, and the smelter crew has worked long hours turning it into usable iron. The mine owners are delighted. Another shipment, another healthy profit. But a travelling master smith watching the wagons has a question.
“Why do you keep sending so much iron down the mountain? Half the tools you use here come back from Ashford. You could be making more of them yourselves.”
She might have a point.
Kettlebeck has iron, miners, a working smelter, and a handful of local smiths. Why shouldn’t the town produce more finished goods and keep more of the earnings? Well, as you might have guessed, things aren’t quite that simple.
Welcome back to The Living Economy. In Part 1, we explored how a settlement’s resources and dependencies could create adventures. We visited Kettlebeck, a prosperous mining town whose reliance on a single mountain road had landed it in considerable trouble.
This time, I’d like to follow the money in the other direction, starting with the question our travelling smith has raised. Why does Kettlebeck send iron bars to Ashford only to buy back so many finished tools, and could a workshop change that arrangement? Let’s follow the iron and find out.
A Pile of Rocks Isn’t Worth Much on Its Own
Kettlebeck exists because there’s iron in the mountains, although a seam of ore sitting underground doesn’t provide much of a living on its own. Somebody must first find the seam, dig out the ore and haul it to the surface. Turning that ore into something useful then requires workers, tools, knowledge and investment.
Unfortunately for the miners, the mountain is rather less generous with food and firewood than it is with iron. Kettlebeck sits above the treeline, with poor farmland but some grazing land for sheep. It can produce iron, wool, and mutton, but feeding its miners and keeping the smelter running requires supplies from elsewhere. Grain, timber, charcoal and other necessities have to travel up from Ashford in the wooded lowlands, whether the miners like it or not. I like how much that one choice of location tells us, from the food on Kettlebeck’s tables to the timber shoring up its mine and the wagons labouring uphill to deliver both.
Other settlements grow around different advantages. A fishing village needs good fishing grounds and somewhere to land its boats, while a farming community depends on fertile soil and reliable water. A city at a river crossing might have little of either, yet grow wealthy serving the travellers and merchants passing through.
Some places owe their existence to politics, religion or war. A ruler might build a fortress in an otherwise unremarkable location, or pilgrims might sustain a town surrounding a temple. A settlement may have been founded for some grand historical reason, but its inhabitants still have to make a living on an ordinary Tuesday.
The People Who Turn Rocks into Money
Our travelling smith is looking beyond the ore in the mountain, because she knows how much more work can happen after it comes out of the ground. A miner extracts the ore, which other workers haul out, sort and prepare before the smelter crew uses fuel and specialised equipment to turn it into iron bars. By the time those bars leave Kettlebeck, quite a few people have already earned their wages from them. Our master smith would like the next stage of that work to happen in town as well.
In Ashford, a smith might turn the bars into horseshoes, hinges, tools or weapons, while another workshop combines the iron with timber to produce farming equipment. Each stage makes the material more useful to someone, but also adds costs. A finished tool might sell for considerably more than the iron it contains, yet still earn a smaller profit once the smith’s labour, fuel, equipment, and other expenses are considered. That’s what makes her proposal tempting, although having the raw material doesn’t mean Kettlebeck has the people, equipment or spare capacity to make every possible product from it.
Interestingly, the reverse is also true: a town can become famous for manufacturing something without producing any of the raw material itself. A town famous for producing fine cloth might not raise a single sheep. Instead, it could import wool from neighbouring villages and employ skilled weavers and dyers to turn it into something people across the kingdom want to buy. The sheep needn’t live anywhere near the looms, provided the town has capable weavers and dyers, the equipment they need, and merchants willing to keep them supplied.
A settlement’s resources help explain what it could produce, while the skills, equipment and available labour of its inhabitants determine what it can actually make.
And once I start thinking about who does the work, NPCs tend to appear almost on their own: miners, smiths, millers, weavers, merchants, and the people who keep them supplied. If Kettlebeck loses its most experienced smelter operator, the town might have a rather serious problem, even with plenty of ore waiting to be processed.
What Does Kettlebeck Keep, and What Does It Sell?
Kettlebeck can’t send every bar of iron downhill just because there’s a buyer waiting in Ashford. The miners would be distinctly unimpressed if their own tools couldn’t be repaired because every last bar had already been sold. Between shoeing horses, replacing broken equipment and keeping the mine running, the local smiths have quite enough to do before anybody considers exporting the rest. Only the iron left after those local needs are met becomes available to sell to other settlements.
The same principle applies to food. A farming village needs enough grain to feed its inhabitants, sow the next crop, and maintain reserves. Whatever remains may be available for trade. I could spend an evening calculating precisely how many bars of iron Kettlebeck produces, although I’m not convinced my players would thank me for it. For most games, I’d start with four lines:
Produces: Iron ore, smelted iron, wool, mutton, and basic blacksmithing services.
Surplus: Iron bars beyond local needs, some raw ore, and wool.
Imports: Grain, timber, charcoal, lamp oil, rope, and specialised equipment.
Exports: Mostly iron bars, with occasional shipments of ore and wool.
Those four lines tell us why merchants make the journey to Kettlebeck, which supplies the town cannot do without, and what keeps money coming in. At the table, that’s far more useful to me than an impressive-looking list of trade goods. We can already imagine what might happen when a customer appears or a supplier fails.
Why Doesn’t Kettlebeck Just Make Everything?
Our master smith thinks she sees the answer: instead of sending nearly all the iron bars to Ashford, why not keep some of the next stage of work in Kettlebeck? She doesn’t intend to replace the mine or the smelter; she wants to build on what the town already does well. It’s a reasonable proposal. She knows the trade, has several skilled apprentices, and believes she can find buyers for the finished goods.
There’s a catch, though, because Kettlebeck has a limited workforce and most of its skilled workers are already occupied with mining, smelting and maintaining local equipment. She’d need a workshop, additional craftsmen, and enough charcoal to keep the forges running. Kettlebeck already imports much of its fuel, so expanded manufacturing would mean buying even more.
Even if she solves those practical problems, there’s one question that no amount of hammering will answer: who’s going to buy everything the workshop makes? A mining town can only use so many horseshoes, hinges, and pickaxes. Beyond that, her workshop needs buyers elsewhere, which means competing with manufacturers who might have cheaper fuel, experienced workers, or better access to markets. Even if the master smith makes excellent tools, she’ll still need to sell them for enough to cover her costs.
The plan might work beautifully, but if the expected orders never arrive, Kettlebeck could be left with an expensive workshop whose fires seldom burn. Where the master smith sees an opportunity, the mine owners see an investment whose return is uncertain. The merchants who already earn a living carrying iron to Ashford may be perfectly happy with the arrangement they have.
None of them has to be foolish or dishonest to disagree. Personally, I find that much more interesting than inventing someone who’s simply out to ruin the town. Once people start arguing about who should take the risk and who stands to benefit, we have the beginnings of an adventure.
Not Every Settlement Makes Its Money from Goods
I’d be doing our world maps a disservice if I made every settlement’s prosperity depend on turning one kind of material into another. Some places do perfectly well because of their location and the services they offer to people passing through. A harbour town might have poor farmland and no valuable minerals, but its sheltered anchorage attracts ships needing repairs, supplies, and somewhere to unload their cargo. That creates work for shipwrights, dockworkers, merchants, warehouse owners, and innkeepers.
A settlement surrounding a famous temple might earn its living from pilgrims, while a fortress town could depend on soldiers, public spending and the travellers who use the protected road. These places might import most of their food and materials while earning a comfortable living from their location and services. When I add a new place to a map, I try to ask what draws people there in the first place, preferably before I’ve filled it with taverns and mysterious strangers. It might be a resource worth selling, a useful harbour, an important temple, or simply a road everyone must use. Somewhere in that answer is usually somebody making a living.
A New Opportunity for Kettlebeck
Meanwhile, back in Kettlebeck, the master smith has stopped questioning wagon drivers and started trying to persuade the mine owners that a proper workshop would be worth their investment. Although she has the skills, a few apprentices and buyers who have expressed an interest in her work, she lacks the money to establish a workshop on her own. Before her first batch of tools can leave Kettlebeck, she’ll need investors, equipment, permission to build near the smelter and someone who can promise a dependable supply of charcoal.
The mine owners are intrigued, although they’re hardly united: one sees the chance to earn more from Kettlebeck’s iron, while another would rather invest the same money in expanding the mine. The established local blacksmith has reservations of his own, since a larger workshop could take away some of his customers and might even lure away his apprentices.
Word of the proposal has reached Ashford’s smithing guild. The guild holds trading privileges in several nearby markets under a charter granted by the regional lord, and its members have spent years building the businesses those privileges protect. To be fair, the guild has a reasonable argument, since its members train apprentices and follow standards that cost both time and money. Why should a newcomer be allowed into the same markets without accepting similar obligations?
From Kettlebeck, the situation looks rather different, because a guild charter is difficult to admire when someone is using it to keep your goods out of the market. Even if the new workshop makes excellent products, gaining access to the most profitable markets might prove harder than making the goods themselves.
And remember the charcoal? Kettlebeck depends on charcoal supplied through the same lowland trading network that supports Ashford’s smithies. If the new workshop starts buying substantial quantities, fuel prices could rise for both towns. The charcoal suppliers might welcome the extra business, of course, although the manufacturers competing for that same fuel may feel considerably less enthusiastic.
Lovely.
That’s quite a lot of trouble for a workshop that doesn’t even exist yet, and we haven’t needed to invent a villain or an ancient curse to create it. And nobody has drawn a sword yet.
Where Do the Adventurers Fit In?
Perhaps the master smith approaches the party looking for investors, since adventurers have a habit of accumulating rather impressive amounts of gold without necessarily having a sensible plan for spending it. She offers them a share of the workshop’s future earnings if they help get the business established. Alternatively, the mine owners might hire them to negotiate supply contracts, or the local blacksmith could ask them to investigate how the new workshop intends to operate.
The guild might offer a compromise: accept its standards, train apprentices under its rules, perhaps pay a fee, and it will recognise the new workshop. The master smith might consider that a reasonable compromise, while the mine owners regard the guild’s terms as an expensive nuisance.
The players might help establish a thriving industry, negotiate between rival craftsmen, or decide that the whole proposal is too risky. Perhaps they discover a better opportunity altogether.
If the adventurers aren’t interested, the argument still carries on without them. The mine owners might refuse the investment, the master smith might find another backer, or the guild might make her an offer of its own. I like leaving room for those possibilities, because the town should have a life of its own even when the party is off fighting monsters. I’d establish what each interested party wants, what they’re prepared to offer and how matters might develop without the adventurers, then leave the players to decide whether any of it interests them.
A successful workshop might attract more craftsmen and merchants to Kettlebeck. A failed investment could leave the town with an expensive, unused building and several unhappy creditors. Or perhaps the adventurers find themselves part-owners of a successful business, wondering why they ever thought fighting dragons was financially risky.
Try This in Your Next Session
If you’re anything like me, you’ve probably got a few towns on your map that exist because the story needed them long before you considered their economies. Pick one and ask what keeps its people busy when the adventurers aren’t around. A quick settlement economy exercise:
- Start with the source. What resource, location, skill, or institution makes the activity possible?
- Follow the work. Who produces, processes, transports, or provides it?
- Find the dependencies. What materials, workers, skills, or infrastructure are needed from elsewhere?
- Consider the customers. Who needs the result, and how does it reach them?
- Introduce an opportunity. What could improve the activity, and who might support or oppose that change?
You don’t need a trading simulator or a page full of prices to get started, because those five answers will usually give you plenty to work with. Now give someone the bright idea of making things better: a new mill, a larger harbour, a different supplier, or a workshop like our smith’s.
Then give someone else a reason to worry about the proposal. Once somebody sees an opportunity and somebody else has good reason to worry, you’ve got the beginnings of a disagreement the players can actually influence. For me, that’s usually enough to get started.
Wealth Is About More Than Gold
What I enjoy most about this approach is how quickly a settlement begins to feel like somewhere people actually live. A mining town and a farming village won’t have the same buildings, skills or worries. Those differences should be visible in their streets, audible in their taverns and apparent in what people are prepared to argue over.
Those details are worth paying attention to, because they’ll change when the settlement’s fortunes do. A new mine or workshop might bring skilled workers and merchants into town, while its closure could leave behind empty buildings and families wondering where they’ll go next. When we first visited Kettlebeck, a blocked road was causing trouble for everyone. Now somebody wants to change what the town does with its iron, and a rather mixed collection of people has strong opinions about that future.
Of course, even the finest ironwork in the kingdom won’t make Kettlebeck prosperous if nobody can get it to the people willing to buy it. So next time, let’s head down the mountain.
In Part 3 of The Living Economy, we’ll follow the wagons beyond Kettlebeck to see how the routes they travel can shape settlements, cities and even entire kingdoms. We’ll look at why some towns grow wealthy because of their location and how competing routes can change their fortunes. Sometimes a new bridge or mountain road can be just as politically important as a castle.
Until then, take another look at the settlements in your own world. What do their inhabitants do for a living? And what might happen if someone discovers a better way of doing it?
This article is part of The Living Economy, a series about using trade, resources, wealth, and scarcity to create more believable fantasy settings and better adventures. You can read Part 1 here. This instalment draws on the worldbuilding framework from Codex Cryptica’s guide to settlement production, imports, and exports.
About the author: Espen Erlandsen is the creator of Codex Cryptica, a worldbuilding and tabletop RPG toolkit for creating and connecting settlements, characters, factions, and stories.
