The greatest influence on the price of anything is the cost of transporting that item from point A to point B. In the modern world, we have very little sense of the cost involved, because the price of transportation is profoundly cheap in comparison with that of the medieval or ancient world. Often, scholars tend to see through a poor lens when making estimates for the cost of haulage, because, for the most part, the only scholars who care very much about such things are historians—who have little experience with the science of economics (trust me, I’ve known a lot of historians).
I am no herald for the genius of economists; “head up ass” is standard operating procedure for that crew…but when discussing economics it helps to go to the books and find out how it’s done. The transportation system I use is based on a fairly simplistic economic dictum, a fairly inaccurate one because it does not take into account a vast array of influences. For economists, it is where you start. For me and my world, it is simplistic enough to work without hopelessly bogging me down into details that I haven’t a long enough life to solve.
It works this way:
Viewing the above, not to scale diagram, we have cities A, B and C and the distance between them. This distance can represent whatever unit you care to apply—a mile, twenty miles or a day’s travel. I use, for my purposes, the time it takes for a wagon to travel a distance of 20 miles—which, over a level distance paved by a good road, is approximately one day.
The system argues that the availability of an article imported into City A from City B is equal to the availability of that article in City B divided by the distance between the two cities. In other words, if City B produces 5,000 tons of wheat, the availability of wheat in City A will be equal to 2,500 tons. This does not mean that the actual amount of wheat in City A is 2,500 tons, or that the actual amount in City B is 5,000 tons (together that would be more wheat than City B produces). This is a representational total, to give a comparison in the value of wheat between cities A and B.
So, wheat is twice as costly (200%) in City A as it is only half as available.
What if City C also produces 5,000 tons of wheat?
Here is where things get a little complicated. City C’s availability of wheat continues to be 5,000 tons, but economically we also add 1,250 tons from City B (divided by 4 for distance). City B also totals out at 6,250 tons, after adding a quarter of City C. City A gets half of City B and 1/5th of City C, equaling a total of 3,500 tons.
Between importing from both of the other cities, City A has improved its supply in comparison with the other cities very slightly…the price is now about 179% (6,250/3,500).
Suppose, however, that City A also produces 1,000 tons of wheat. Re-evaluating the above calculations, we now have:
City A: 4,500 tons. Price: 150%.
City B: 6,750 tons. Price: 100%.
City C: 6,450 tons. Price: 105%.
Thus, the manor lord selling his excess grain in City A is able to sell it at 150% of the price that a manor lord in City B, because he is able to anticipate how much it will cost to ship in extra wheat from the other two cities.
Of course, each city may have different population levels, meaning a lower demand for wheat; and if you like, you can apply the same economic rule to the population of the three cities to discover how much inter-travel there exists between them (remember, City B and City A will likely share a greater percentage of casual labor between them, as they are only two days apart).
The above example is as simple as it gets. Establishing an economic system of your own, you could simply divide the world into four or six or eight different regions (depending on how much work you want to do), make a judgment call on how difficult it is to move material from one region to another, and there you go: an economic system. From something as simple as that, you would have a reasonable idea of what the ship the party was plundering OUGHT to be carrying, beyond making an ad hoc call about it. You could also, from the numbers I provided yesterday, make a reasonable estimate of the total income of any of the kingdoms of your world, and how unlikely they would be to succeed at a war with a neighboring kingdom…or how much they might dearly require help from a powerful mage and his buddies, vis-a-vis, the party.
With a little imagination, there are a number of facts you could interpret from the manner in which your kingdoms interacted with one another economically. What is the shortest distance of travel? Where ought there to be a trading point or an entrepot for the collection of goods before moving on to the next market? What countries would establish tariffs, and upon what goods? Where would smuggling actually make sense?
These are all questions that DMs usually answer by effectively pointing randomly at a map and saying: “there.” Which helps create the completely confusing and irrational world that raises the eyebrows of the smartest member of your party. It is the same as the player asking, “Why is that castle there?” Only the question is, “Why would they be smuggling tobacco into a tropical country?”
For myself, I have about 500 designated trading centers, based on the City A, City B and City C example above. That means 500 different calculations on the price of all the individual commodities…approximately 140,000 calculations every time I want to determine the actual value of traded goods in a given city. I would like to say a computer does these calculations, but in fact only some of them are. And there are several steps involved. Thankfully, it does not take me too long…three hours or so…to produce a new table. It would take me much, much less, but I’m a lousy programmer.