The Living Economy — Part 1: Making Fantasy Worlds Feel Alive
Imagine your adventuring party arriving in Kettlebeck, a prosperous mining town tucked into the mountains.
The streets are busy, the tavern is full of miners spending their wages, and the local merchants seem to be doing rather well. Iron is valuable, after all, and Kettlebeck has plenty of it.
Your fighter heads straight to the blacksmith to commission a new sword. Unfortunately, the smith can’t promise when it’ll be ready. He’s running short of fuel for his forge.
The innkeeper apologises for the price of supper. Bread has become terribly expensive lately.
And when the party tries to sell a valuable piece of treasure, the merchant shakes his head. He simply can’t afford to buy it right now.
Something doesn’t add up. This is supposed to be a wealthy town!
Well, it is. But you can’t eat iron, and gold coins make rather poor substitutes for firewood.
Welcome to fantasy economics.
Don’t worry. I’m not about to suggest that you calculate the annual grain production of every village in your kingdom. Unless that’s your idea of a good Saturday evening, in which case I certainly won’t judge.
What I want to explore in this series is how a little economic thinking can make our fantasy worlds feel more alive, and more importantly, create interesting situations for our players.
Because behind every merchant, trade route, and apparently ordinary village is a potential adventure.
Forget the Price Lists for a Moment
When we think about economics in fantasy roleplaying games, we often start with prices.
How much does a sword cost? What does an inn charge for a night? How much should the local lord pay the adventurers to deal with those troublesome goblins?
These are perfectly reasonable questions. Players need to know what they can afford, and GMs need something to tell them.
But a list of prices doesn’t explain why a settlement exists, how its inhabitants make their living, or what happens when things go wrong.
Consider two villages.
The first has an inn, a blacksmith, a general store, and a few farms. Everything costs whatever the equipment list says it should.
The second grows grain in a fertile valley. Its mill produces flour for three neighbouring villages, but the mill belongs to a noble family that takes a share of everything it processes. When the river runs low, the mill slows down, bread becomes scarce, and the villagers begin whispering about an abandoned mill upstream.
I’d certainly be more interested in visiting the second village.
Neither required a detailed economic simulation. We simply gave the second village something it produces, something it depends upon, and someone with an interest in keeping things as they are.
That is where I like to start.
Economics for Story-First Worldbuilders
When I build a fantasy setting, I tend to start with the story I want to tell.
Perhaps there’s an ancient ruin that needs exploring, a kingdom facing an invasion, or a remote settlement where several important events will converge. I work out the history, the factions, the people, and how everything connects.
I don’t usually sit down and think, “Right, time to design the regional economy.”
In my own fantasy setting, I established a fortified settlement on a harsh, semi-arid frontier because the story needed a base for expeditions into ancient ruins. The Crown was offering extraordinary rewards for recovered relics, and mounted warriors helped maintain security in the surrounding territory.
I originally created these details to support the adventures taking place there. Only later did I start wondering about their economic implications.
Those royal rewards would attract merchants, guides, suppliers, and all sorts of people who had no intention of entering a dangerous ruin themselves. The settlement needed food, water, transport, and a reason for ordinary people to make their lives there.
I’d created the foundations of an economy without really thinking about it.
And that got me wondering how many other places in my setting might have similar connections waiting to be explored.
That’s what makes economic worldbuilding interesting to me. It adds another layer to places that already exist, and sometimes suggests stories I hadn’t considered.
So let’s return to Kettlebeck, our fictional mining town, and see what happens when we start following those connections.
Six Questions That Bring an Economy to Life
You can build a surprisingly believable local economy by answering six straightforward questions. A sentence or two for each is usually enough to get started.
The Six Questions — Quick Reference
- Resources: What does this place have, and what does it need?
- Production: What do its inhabitants actually do?
- Trade: Where do essential goods come from, and where do they go?
- Power: Who controls the wealth and resources?
- Pressure: What is going wrong?
- Consequences: What will the players actually notice?
We’ll use Kettlebeck to see how the answers fit together.
1. What Does This Place Have, and What Does It Need?
Start with geography.
Look at what the land provides: fertile soil, timber, stone, fish, salt, minerals, or perhaps a sheltered harbour. Then consider which necessities are difficult to obtain locally.
Kettlebeck sits high in the mountains, above the treeline. Its inhabitants have access to a rich seam of iron ore, but precious little farmland or woodland. They keep some sheep, but there’s nowhere near enough agricultural production to feed a busy mining community.
The town has something valuable to sell, but it cannot survive comfortably on its own.
That’s our first important connection.
A coastal fishing village might need timber for boats. A desert city might depend on distant wells. A great capital might consume more food than its surrounding countryside can provide.
A settlement becomes more interesting when it needs something another settlement can supply.
2. What Do the People Actually Do?
Having a valuable resource isn’t quite the same as being able to use it.
An iron mine needs miners, tools, timber supports, transport, and skilled workers to process the ore. Kettlebeck has a smelter, which means it can turn some of its ore into iron bars before selling them.
That makes the iron more useful and potentially more valuable. But it also introduces new dependencies.
The mine needs timber to support its deeper tunnels. The smelter needs fuel. The workers need food, clothing, and somewhere to live.
Now we have miners, smiths, merchants, mule drivers, innkeepers, and all the other people who make the settlement function.
We also have possible problems. The smelter might break down, skilled workers could leave, or the mine owners might demand longer hours to meet a lucrative contract.
You can create interesting NPCs simply by considering who does the necessary work, and who benefits from it.
3. Where Do Goods Come From, and Where Do They Go?
Kettlebeck relies on a trading relationship with Ashford, a settlement in the wooded lowlands.
Iron travels downhill. Timber, grain, flour, charcoal, lamp oil, and rope travel uphill.
A single maintained mountain track connects the two settlements, and snow makes the journey difficult or impossible during part of the year.
That road has suddenly become rather important.
Merchants must plan their journeys around the seasons. Caravans need guards. Storage space becomes valuable before winter, and a damaged bridge could threaten the entire town.
Not every exchange needs to involve coins, either. A mine owner might provide housing and food as part of a worker’s pay. A lord might collect grain as rent. Neighbours might exchange labour, favours, or goods.
These relationships help explain how people actually get the things they need. And every relationship gives us something that could go wrong.
4. Who Controls the Wealth?
Now we get to an especially interesting part.
Let’s imagine Kettlebeck’s mine belongs to a wealthy family. The family negotiates iron contracts with merchants in Ashford and employs most of the town’s workforce.
Meanwhile, a chartered road guild collects tolls on the mountain route.
Both organisations have legitimate interests, but those interests aren’t necessarily the same as those of the miners, traders, or ordinary townsfolk.
The mine owners might be getting fabulously rich while their workers struggle to afford bread. And a merchant whose wagons carry essential grain may possess considerable influence without owning a single acre of land.
Suddenly, we’ve created the beginnings of local politics.
Perhaps the miners want better wages. Perhaps the guild has increased its tolls. Perhaps the town council suspects that the mine owners are keeping more of the profits than they admit.
None of this requires an evil villain.
Just people with different interests.
5. What Is Going Wrong?
A perfectly functioning economy might make a believable backdrop, but problems are where the adventures begin.
So what’s behind the trouble we encountered when we first arrived in Kettlebeck?
A few weeks ago, a group of former soldiers occupied the mountain pass between Kettlebeck and Ashford. They claim the road guild has been collecting tolls without maintaining the route properly, and they’re now demanding payment for providing protection themselves.
The guild refuses to recognise their authority.
Caravan drivers, faced with competing demands and the possibility of violence, have begun turning back.
The soldiers might be opportunistic bandits. Or they might genuinely have been abandoned after a war and be trying to earn a living.
We don’t need to decide which interpretation is correct before play, although we’ll eventually want to understand the soldiers’ motivations well enough to respond to the players’ actions.
For now, the consequences are clear.
Kettlebeck still has its iron, but it cannot easily sell it. Grain, timber, and charcoal are no longer arriving reliably, and winter is approaching.
The blockade explains the problems we encountered at the beginning. The blacksmith is struggling because his fuel supplies are running low, while the innkeeper is charging more for supper because food deliveries have become unreliable.
The merchant has plenty of valuable goods, but much of his money is tied up in iron he cannot ship.
One dispute over a mountain pass has become a serious problem for an entire community.
6. What Will the Players Actually Notice?
This is perhaps the most important question of all.
An economic problem that exists only in the GM’s notes doesn’t contribute much to the game. The players need to encounter its consequences.
We’ve already seen how shortages affect Kettlebeck’s shops and taverns. But the trouble reaches further into everyday life.
The mine owners are looking for armed escorts, and the town council is discussing rationing its grain reserves. A few miners have been sent home because the smelter is slowing down.
Perhaps a suspiciously well-stocked merchant is selling flour at an outrageous price, while someone else has started smuggling supplies over an old mountain path.
And the players might respond in ways you hadn’t expected.
Perhaps the wizard offers to repair a merchant’s broken equipment with a Mending spell in exchange for provisions. The fighter volunteers to escort a grain wagon, while the rogue takes an interest in whoever is moving flour along the smugglers’ trail.
These interactions don’t all need to become adventures. Sometimes they’re simply opportunities for the players to engage with the world in ways that go beyond buying something from an equipment list.
The players see the problems in the market, hear about them in the tavern, and feel their effects when they try to spend their hard-earned gold.
And importantly, they can do something about them.
From Economic Problems to Adventures
We’ve now built Kettlebeck’s economy using six simple questions.
But let’s take it one step further.
The mine owners approach the adventurers with an offer: a substantial payment to clear the pass and restore trade before the first snowfall.
A straightforward job, perhaps. There’s a road full of armed troublemakers, after all.
Except the former soldiers have their own story.
They claim the road guild abandoned its responsibilities years ago, leaving travellers vulnerable to bandits and monsters. They’ve been protecting the pass, and they want payment for their work.
Meanwhile, the merchants of Ashford would prefer a peaceful solution. They need Kettlebeck’s iron, but fear that attacking the soldiers will provoke reprisals against their caravans.
And the people of Kettlebeck? They mostly want to survive the winter.
Now the party has several choices.
They could accept the mine owners’ offer and force the pass open. They could negotiate with the soldiers, investigate the road guild’s claims, escort supplies along a dangerous alternative route, or devise something completely unexpected.
The guild might genuinely have neglected the road. The soldiers might demand an unreasonable price. Someone else could be encouraging the dispute to profit from the shortages.
I wouldn’t prepare a single correct answer.
I’d establish what each group wants, what resources it can use, and what it will do if the adventurers refuse to get involved.
Then I’d let the players decide.
The economy creates the conflict. The players create the story.
And because we understand the connections between Kettlebeck, Ashford, the mine, and the road, we can work out the consequences of their decisions.
If the pass reopens, food begins arriving again. If the guild loses its charter, someone else might take control of the road. If the dispute drags on, the miners may abandon Kettlebeck entirely.
What began as a delayed delivery could eventually change the political landscape of an entire region.
Not bad for a problem that started with the price of bread.
But What About Magic?
Of course, we’re talking about fantasy worlds. Someone is bound to ask why a wizard doesn’t simply teleport the grain into town.
Fair question!
Magic can change an economy enormously.
A spellcaster who can create food might transform an isolated community. A network of teleportation circles could make traditional trade roads far less important. Magical crafting might allow a settlement to produce things that its geography would otherwise make impossible.
But the effects depend on how magic works in your setting.
Perhaps magically created food is common enough that famine has disappeared. Perhaps only wealthy cities can afford permanent teleportation circles. Or perhaps the local temple can feed a few dozen people each day, leaving everyone else dependent on ordinary farmers.
There’s no requirement for a magical world to behave like a medieval European kingdom.
The interesting part is working out what magic changes, what remains difficult, and how people organise themselves around those differences.
That’s a subject worth exploring in greater depth later in the series.
Try This in Your Next Session
Here’s a quick exercise.
Take a settlement your players already know. It can be a village, city, trading post, or even a remote fortress.
Your five-minute settlement exercise:
- Choose its livelihood. What makes this settlement valuable, or allows its inhabitants to make a living?
- Identify a dependency. What important resource or service must come from somewhere else?
- Find the connection. Who supplies it, and how does it reach the settlement?
- Interrupt it. A bridge collapses, a harvest fails, a guild raises its prices, or a neighbouring ruler imposes new restrictions.
- Show the consequences. Who suffers, who benefits, and what changes will the adventurers encounter?
Put some of those consequences where your players can interact with them. An angry merchant, an unusually expensive meal, or a request for an escort might be all you need to introduce the problem.
Start with one settlement, one important dependency, and one disruption.
You might be surprised by how many adventures emerge.
A World That Keeps Moving
The reason I enjoy this approach is that it makes the world feel as though it exists beyond the adventurers.
Merchants still need to move their goods. Farmers need good harvests. Rulers need revenue. Craftspeople need materials. Ordinary people need to eat.
And all these things continue whether the players are watching or not.
For someone like me, who tends to build worlds around stories and events, there’s something rather satisfying about discovering what happens between the adventures.
A town I originally created as somewhere for the characters to visit might turn out to depend on a fragile trade route. A noble family might owe its influence to controlling a resource everyone else needs. An apparently ordinary merchant could find themselves holding the future of a settlement in their hands.
None of those details necessarily changes the adventure I originally planned. But they give the world more depth, and sometimes suggest adventures I hadn’t considered at all.
In the next instalment of The Living Economy, we’ll take a closer look at where a settlement’s wealth actually comes from, and how its geography, resources, people, and skills determine what it produces and trades.
We’ll also return to Kettlebeck, because there’s quite a lot more to a mining town than digging shiny things out of the ground.
Until then, take another look at the settlements in your campaign.
What do they depend on?
And what would happen if that dependency suddenly disappeared?
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. It draws on the worldbuilding framework developed for Codex Cryptica’s guide to believable fantasy economies.
About the author: The creator of Codex Cryptica, a worldbuilding and tabletop RPG toolkit for creating and connecting settlements, characters, factions, and stories.
