Worlds of Design: The Cost of Trade

This is related to world building, and also related to player characters when they choose to invest in or participate in trading activities in your world/campaign. In some rulesets the characters need lots of money, in others they don’t. Trade has the potential to make lots of money.

Picture courtesy of Pixabay.

“If you don’t take a hard look at risk, it will take you.”
--Larry Hite

Trade in general is a mysterious thing. When the trading is between different nations, usually both are better off for it. In other words by some alchemy nations trade and both increase their wealth. Think about that for a minute, and you won’t be able to think of many other things where two nations (or even individuals) can do a simple activity that benefits both, sometimes massively.

The key to trading between nations is the cost of production. Nation A can produce good A cheaply, but it costs a lot to produce good B. Nation B can produce good B cheaply, but producing good A is expensive. The difference may come from the skills of the workforce or from natural resources readily available or from differences in infrastructure. When nation A trades their good A to nation B for their good B, both are better off. They both acquired a good for much less than it costs them to produce it themselves.

Trading was a big road to national wealth in the ancient near East, and countries fought over trade routes. One example of trade was the Assyrian trade in textiles to the Hittites in return for certain metals. The Assyrian population produced textiles easily, kind of a national industry, while the Hittites had many metal resources available in Anatolia. Everyone benefited. We can name many more recent examples, of course.

The cost of transportation had to be figured into this. In the modern world the cost of transportation by sea is so ridiculously cheap that we can have even the simplest things produced in China or Mexico and shipped to the USA, more cheaply than producing them in the USA (the difference is in the cost of labor and the cost of living). Transportation for the Assyrians and Hittites was human and four-footed pack animal, but still cheap enough to make the trade worthwhile.

The same forces are at work whether trading in the modern world or trading in a fantasy world or science-fiction world. Where one side can obtain a good cheaply, the other side will trade their own cheaply produced goods for it, assuming there’s demand. The Romans traded wine to the Germanic barbarians (who could not at that time grow grapevines owing considerably to climate) in return for slaves, which the tribal chiefs acquired in their wars with one another. This is after the Romans no longer engaged in aggressive wars and consequently no longer collected prisoner of war slaves in large numbers.

So in your world building or your campaign the first question is always what can be produced cheaply in one place and traded to another place that has a good that they can provide cheaply in the trade, assuming both want/need the cheap goods. But a question nearly as important is the cost of transportation. Keep in mind that transportation by water is always much cheaper than other forms of transportation, but is subject to availability, warfare, storms, and piracy. Yet even when pirates were rampant there was lots of sea trade because the profits could be so great, when you traded for something that was in great demand such as spices or even just tea from the Far East.

If player characters want to trade then you’ll have to decide how dangerous the transportation is, whether they go along or not. If they go along on the trip then it’s obviously an opportunity for adventure. For example, Sinbad’s famous stories (which are pretty innocuous for modern readers, but weren’t innocuous a millennium ago) derive from his trading voyages. If the characters are not going along then you can estimate the percentage chance that the trade and voyage will be successful and roll the dice, and either the characters benefit or they lose some or all of their money (depending on whether the ship/caravan makes it back it all). The origins of the company as an institution are tied with trading, where a group of people pooled their money to support trading ventures while reducing their individual risk.

Trading profit margins are much smaller today because there’s little risk and cheap long-distance transportation. But that was not generally true in the ancient and medieval worlds, the risk was quite large, so the returns tended to be quite large or the trade wouldn’t happen.

For science-fiction worlds, many people believe there would be very little interstellar trading because the cost of transportation much exceeds the cost of highly advanced means of production. For example, if you need a particular metal you’d be able to set up factories that could convert one metal, or even just rocks, into another, and every solar system is likely to have lots of large bodies that can be mined for ordinary materials. (Think of 3-D printers even today.) Why trade in that situation?

Trade may not always be exciting, but under the right circumstances it can be profitable for everyone involved. My question to readers is, how often have you seen player characters get involved in trade, especially long-distance trade?

 

[Hussar]

There's another issue though when talking about trade. It becomes very obvious when you start looking at some settings that people have created that they did not give a second's thought to trade when describing the setting.

Perfect example comes from Sword & Sorcery Press' Scarred Lands setting. In SL, Shelzar is described as the hub of trade for the continent. Which is all well and good until you realize that, because of the way the setting is described, no actual trade could reach this place, and, again because of geography, no one would ever bother.

There's a reason that London was not a hub of trade and Venice was. To be a hub of trade, you actually have to be ON a trade route. If there are no trade routes that plausibly travel through your city, then, well, you're not a hub of trade.

And it makes a DM's job a massive PITA when game designers don't bother actually spending any time on this. Because now I have to come along and try to actually make this dog's breakfast work. And, it honestly doesn't. There's no way that it could.

 

[dragoner]

Barges, such as you would see on rivers, with a fairly low draft, could still transport tens of tons, if not hundreds of tons of goods, depending on the size of the ship.

Probably one of the most famous Russian folk songs: Song of the Volga Boatmen it is called the "mother river" for a reason. Without the sprung suspension, most carts are very slow, and even with, unable to cross soft ground, you really have to have some sort of improved road. I think that trade in the past was more incidental, and not the lifeblood of countries as it is for some now. Plus you get things like the Mongols using the trade routes to invade, that then disrupts trade.

 

[lewpuls]

Nations in the ancient near East fought over trade routes. A well-known route was from Assyria (where textiles were produced) to the Hittite Empire (copper, I think). This was at least partly trade by donkey etc. But it was still valuable to those economies. Part of the reason for the Bronze Age Collapse (ca 1200 BCE) was disruption of trade routes.

Trade was important even when transportation was difficult.

 

[dragoner]

Part of the reason for the Bronze Age Collapse (ca 1200 BCE) was disruption of trade routes.

The collapse, which was climatic based iirc, definitely would have had a disruptive effect on trade. I would argue that most communities were self sufficient food wise, unless talking ancient urban centers such as Rome.

 

[lewpuls]

The collapse, which was climatic based iirc, definitely would have had a disruptive effect on trade. I would argue that most communities were self sufficient food wise, unless talking ancient urban centers such as Rome.

No one knows for sure. But there seem to have been several causes. Climate, earthquakes, too big a gap between the rich and the non-rich, "Sea Peoples", Phrygians, and so on.

 

[dragoner]

No one knows for sure. But there seem to have been several causes. Climate, earthquakes, too big a gap between the rich and the non-rich, "Sea Peoples", Phrygians, and so on.

Yes, all of those, 30-40% of cities burned in the levant. Secrets of the Dead "Egypt's Darkest Hour" Secrets of the Dead | Egypt's Darkest Hour | Season 17 | Episode 4 is about that SECRETS OF THE DEAD: Egypt's Darkest Hour

 

[the_redbeard]

Well, even a faux earth, the rivers will tend to run in the same direction on a continental shelf. Most will only be navigable for specific distances before natural issues kick in. There could be a Nile or Mississippi per continent, but they only have (relatively) fast traffic in one direction, and slow in the other, and are subject to seasonal droughts (the nile) and flooding (both). And they will require dredging, stump-cutting, and other post-Steam Age work to keep fully navigable for their length.

Pre-industrial use of bulk long-haul on rivers is not as easy or common as you would seem to think.

Rivers were so important to shipping for commerce that Charlemagne attempted to build a canal to connect the Danube and the Rhine. Cities became cities BECAUSE they were on rivers BECAUSE goods were so easy to ship to and fro on them.

 

[the_redbeard]

Nations in the ancient near East fought over trade routes. A well-known route was from Assyria (where textiles were produced) to the Hittite Empire (copper, I think). This was at least partly trade by donkey etc. But it was still valuable to those economies. Part of the reason for the Bronze Age Collapse (ca 1200 BCE) was disruption of trade routes.

I've read much more about the collapse of Rome than of the Bronze Age, but in regards to Rome I get to use one of my favorite 50 cent words and say that trade collapsed concomitant with the collapse of the empire. Pretty much a feedback loop between the two processes.

 

[Warren Ellis]

Perfect example comes from Sword & Sorcery Press' Scarred Lands setting. In SL, Shelzar is described as the hub of trade for the continent. Which is all well and good until you realize that, because of the way the setting is described, no actual trade could reach this place, and, again because of geography, no one would ever bother.

Except Shelzar is a sea port city known for its merchants wnd shipbuilding. Couldn't it rely on both caravans and ships to move trade goods around?

 

[Hussar]

Except Shelzar is a sea port city known for its merchants wnd shipbuilding. Couldn't it rely on both caravans and ships to move trade goods around?

Not really. If you look at a map of Ghelspad, it's basically a circle with all the major centers of population on the outer coast and the interior is largely impassible, owing to the Godswar.

So, if we picture Ghespad like a clock, if your city is at 10 o'clock and my city is at 2 o'clock, why exactly would you send your ships through 7 o'clock to get to me? There's no reason you cannot circumnavigate the continent as the north is not icebound, the setting is further south than that. And, again, if you're going overland from any two points on the coast, why would you travel to a third point on the coast?

And, specifically, Shelzar is actually impossible to travel to for most of the continent. At the "8 o'clock" position, there's the Infernal Gulf, where ships can't pass and the locals eat outsiders. To the east, it's the Calastian empire, which has zero interest in trading with its enemies and is perfectly capable of maintaining trade within the empire.

Traveling to Shelzar overland, you need to pass through hundreds of miles of very inhospitable desert filled with nasties, or through the infested Swamps of Kan Thet.

Like I said, it makes ZERO sense for Shelzar to be a trade center. Why one earth would someone go from Darakeen, through Shelzar to trade with Mithril? That's 3 times longer and far, far more dangerous than the direct route.