Most of the cultures of Praedia have Traditional Economies. Galacia and the Fisher coast are the most traditional of the traditionals. These are characterized by several features:
What is produced, how much, and how it is done are all determined by traditional values such as family and religion, as well as what is available in the local area. Generally, individual families produce what they themselves need, sell small surpluses locally, and buy or barter for things that they can't produce, also locally. Because barter is used by many families, money isn't as important as in a Mercantilist or Laissez Faire system, and is often hoarded. There is some long-distance trade, but it is relatively low-volume and aimed at a small aristocracy. The mind-set of the trader is that he is trading with individuals in other places rather than states or "the market."Most traditional economies are based
in staples, especially food and
clothing. This is true even in Achaea, but
here the competition between cities and between families, as well as
with the Sienovese has introduced
capitalism as well. All capitalism means is a system where a drive for
efficiency and luxury products has led to
the development of larger businesses that need more equipment and trade
over longer distances. These
businesses require start-up money and perhaps subsequent boosts of cash
as well - i.e. capital. This system
does not imply either government control or freedom from same. For
example, those big companies may be
state regulated and/or funded, like the British East India company on
Earth, or funded by the money of
individual investors.
So who does regulate farming and trade in a traditional economy? The
central government in a region, if there
is one, may attempt to regulate trade and encourage exports or bring in
imports, but this is not done with a plan
or as part of a system. Rather it tends to be in reaction to specific
circumstances. If there is a famine, then the
ruler will try to find foreign grain to import. If the population falls
and the remaining workers demand higher
salaries, then the legislative body will pass a maximum wage law or or
a tax on income. Some monarchs may
attempt to stay involved more in the economy, but others will have more
pressing concerns, so a consistent
policy does not evolve, or at least not quickly.
The economy is regulated by the nobles
as well. They consider it
their right to regulate prices, weights,
measures, coinage, and wages within their region. Much labor is
regional and immobile. Farmers may be
serfs, or may simply lack the resources or the promise of better
employment to cause them to relocate. Trade
suffers because regions that could benefit from another's goods or
produce tax it heavily when it passes
between counties. Each nobleman is in things for himself and his
personal wealth rather than for either the
good of the producers or the consumers (or economies of scale). The
same is true of the businesses, capitalistic
or not. Almost all established trades will regulate themselves with
guilds. The guilds are similar to unions, but
protect the owner not the worker. They ensure quality products as well
as a low level of competition by
forbidding new master craftsmen to open up businesses without having
first served long training periods under
an existing master, passing a test of skill in the field, and being
voted in by a council of the trade's masters in
the town. Guilds enforce the status quo and limit innovation. Guild
activities are generally regulated by the
state under mercantilism, and unmade under laissez-faire economies.
Achaea is in a unique situation. It has no central government to
regulate trade. The families and cities are
highly competitive, and see their own interests first. Trade in Achaea
can actually be a negative-sum game,
where you win by taking a loss, as long as it is less of a loss than
your main competitor took! Likely an
anarchic form of more-or-less laissez-fare capitalism will evolve over
time. The relatively high degree of
mobility, individuality, and competition mitigate the worst flaws
traditional economies, and encourage the use
of coinage. Due to it's lack of a central government, the Marches
may go in the same direction. They will always be less
competitive, however, because of the strong and unified religious
values.
In Praedia, the Empire is by far the most mercantilist country. King Mark of Mithraea is attempting to institute more mercantilist policies as part of the overall process of centralizing sovereign powers in his country. Mercantilism has the following characteristics:
Trade is a Zero-sum game. For one country to win, another (or several others) must lose. It is crucial to keep a positive trade balance. You must export more than you import, and each country's goal is to be self-sufficient.Why? Bullionism. At this time, the
main form of money was specie -
coins of gold and silver. Some bank or
promissory notes have come in to use, but mostly in Sienova and Achaea
and mostly over short distances or
between branches of the same banking house. Promissory notes aren't
much good between different houses
and there are no universally accepted notes. Given this situation, it
is natural for a kingdom to want to keep its
bullion and sell its products. You don't want your people spending all
their wealth on luxury goods,
particularly not consumables (it's OK to sell luxuries to others,
however!). If more money is flowing out of
your country than in, that's bad. This view of wealth doesn't consider
the point that goods themselves may be
wealth. The only forms of recognized wealth are gold, silver, or
perhaps gems( magically consumables!), and
farm land (real estate). Coins preferred because if enough have handled
them, they don't carry magical
resonances, and the power of the state is in them, so that protects
users as well. In the Imperium and Valmara,
an odd flavor is added to bullionism by the age-of-coin issue. Old
coins are seen as intrinsically more valuable,
which creates hoarding problems.
Agriculture and industry are both encouraged. Industry provides goods
for export (and for sale to your own
people, which keeps the bullion in the country and makes it available
for taxation. Farming makes food
imports less necessary, and also builds taxable income. Import tariffs
are generally high, as you don't want
people to import goods, even if this drives up prices for your
consumers. The exception is for raw materials
from your colonies. You don't want your colonies producing finished
goods that will compete with those on
your mainland, but you do want them producing raw materials for you,
and buying your finished goods. Mercantilists have no problem taxing
the people of their own colonies, setting tariffs on their imports and
so
on. They do, however, have a problem with their nobility regulating
regional economies. Internal tariffs and
local coinage systems are highly discouraged. Still use guilds, for
quality.
Note that this system protects the producer more than the consumer. The main consumers of commercial products and luxuries at this time will be the aristocracy and the crown. Peasants and laborers have little discretionary income. So you aren't hurting a big segment of your population. As your middle class grows, especially in your colonies, mercantilism can become more problematic.
Since the country's colonies are likely to be over-seas, as are your competitors, sea power becomes very important. It ensures self-sufficiency (no need to use the ships of others), can be used to blockade or carry out privateering actions, and otherwise limit trade into your realm. The new Imperial fleet (especially the Black Ships) is itself is a capital investment, and requires a positive balance of trade to exist.To make sure all these policies are enacted, the state takes an active role in regulating the economy. The monarch will set tariffs, taxes, weights, measures, and coinage. He will outlaw the charging of internal tariffs, ensure that guilds receive protection, but encourage the founding of new businesses as well.
The only thing close to a laissez-faire economy in Praedia is Sienova, followed by the Covenant States. In reality, neither one is nearly as laissez-faire as, say, 19th c. America. Both regions have strong central government, but they would be classified as "enlightened absolutism" rather than "traditional absolutism." This means that while they ensure national standards in such things as coinage and do not allow their nobles sovereign power over the economy, they also do not encourage high tariffs while they do limit guilds and encourage new businesses. They also back a national currency, as much to restrict the nobles as to encourage trade and banking. We would call these economies "Mixed."
Traditionally Sienova and the Covenant States are characterized by fairly little govt. regulation of specific industries and an encouragement of free trade, both in and out of the country. They do, however, also encourage national systems of currency, a little state over-site of banking (simply to make sure the banking houses are legitimate and have assets, which makes their notes easier to exchange), and in the Covenant states, state-produced bank notes.Unlike in Mercantilist systems, goods (particularly non-consumables) are seen as a form of wealth along with land and specie. In addition, in Sienova in particular, the idea of the Limited Liability Corporation is evolving, and investing in someone else's business is considered, in an of itself a potentially lucrative endeavor. This necessitates the change in attitude towards banking seen above. Because of the broader definition of wealth, trade is no longer seen as a zero-sum game where one side loses by losing bullion and the other side wins by gaining it. Under this system, then, luxury products are not discouraged.
There are several requirements for this sort of system. The country needs an educated and mercantile middle class. It will probably lack or at least question ideas such as the idea that money is evil and sinful, or that trade is "common" and to be avoided by the aristocracy. These societies are generally on trade routes or prosper through trade and international relations. They tend to encourage innovation and invention. Both these characteristics mean that the societies are generally capitalistic as businesses tend to be the sort that require larger financial investment. The state sees money is a tool for its prosperity rather than a goal in and of itself. Thus it encourages free trade and a self-regulated market. However, it is willing to regulate some business and industry for the good of the state. For example, the Covenant states might encourage the fishing industry because then they will have a large numbers of trained sailors at their disposal in a time of need. Sienova might encourage and subsidize the building and widening of roads, and the creation of canals in order to increase travel and trade. This leads to our next point, that even the people of a country may be seen as commodities or capital of a sort. This is particularly true in the Covenant States where Covenanter soldiers and sailors often serve as mercenaries in other regions. The state is willing to make changes in government to attract more potential workers, and also to keep the more educated populace happy and give them more of a sense of control. This may include reforms that at first do not seem primarily economic such as instituting religious toleration, abolishing torture, eliminating corruption in local governments, circuit judges, and tax collectors, granting limited freedom of speech, and so forth.Most of these economic and legal changes occurred in these states via trial and error, or out of necessity. For example, freedom of religion in Sienova began as a necessity. Centered where they are on the trade routes that cross the Northern Continent, Sienova evolved a religiously diverse population. If they had outlawed any one religion, they would have lost a significant percentage of the population. Religious toleration also became a factor in maintaining peaceful relations with a variety of mono- and polytheistic countries. Over time, as persecuted religious minorities, often skilled artisans, fled their homelands for Sienova, the kings realized that the policy was also economically valuable. The same is true of Sienova's low tariffs. They were initially lowered to encourage trade in time of civil unrest and conflict with Garrone. Tariffs were lowered to encourage trade along the river. The kings discovered that they actually made as much if not more money off the trade, because the volume increased in response to lowered expenses.
Much of this Enlightened political and economic theory is elaborated in a book entitled Il Congedo di Fare, or the Leave To Do. This book discusses the advantages of allowing your citizens more freedom. It is part John Locke (arguing that citizens have value and natural rights life, liberty, chance at prosperity) and part Adam Smith (arguing that people and economies are more prosperous if allowed to self-regulate to a degree).It does not propose lack of govt.
control, but that the govt.
question its actions and make sure they are for the
common good and that they generally enhance freedom and innovation
rather than destroy it. It was written by
Etienne Brun, one of Niccolo's III's ministers, and praises his family
for their perspective and foresight and
concern. The book advocates: free-er trade, national currency and
support of banking, little interference with trade, low
levels of taxation based on a perentage of moveables, no sumptuary laws
or limits on education (other than
money) and perhaps even some charity schools. It proposes freedom of
religion, no torture, preservation of
rights of traditional nobles, but ensuring of due process for common
man and written, published, consistent and
universal law codes. It speaks in terms of the state, and there are
proto-nationalist sentiments in it, the idea that
the state or land is something worth owning, worth fighting for and
that the educated subject is also a citizen.