Before I get started on this annoyingly misunderstood technology - and that it is a 'technology' is where I will start - first I'll suck up some of the maximum blogger-approved space on this blog by embeding the following video:
I hope you all take the time to actually watch it. And let me say that if it leaves you thinking that one side is right and the other is wrong, then go back and watch it again, because you clearly have not understood a fucking thing.
I've been writing my way through Civilization IV, accepting as 'technologies' the various elements from the tech-tree of that game. A method of organization is a technology as much as a tool or a machine. Technologies exist to solve problems, which occur as the result of some social element getting out of control. For example, increased food supplies in late 17th century Europe caused a population spike, which encouraged the growing of more food, which put pressure on public lands and created the need to define ownership of said lands where no need had previously existed, which inspired John Locke to write about what ownership was, which helped kicked off a greater investigation amongst intellectuals about the rights and privileges of individuals, which we call the flowering of liberalism. The problem was social pressure; liberalism was a technology proposed to address that problem.
Very often we are given to believe that technologies are things that sit around in existence waiting to be discovered ... and sometimes we propose or imagine that this or that technology could have been incorporated seamlessly in any period of human history, such as pistols in the late Roman Empire, or motorcars in feudal Japan, or the printing press in pre-Hyksos Egypt. We assume that if we had the paper and the actual know-how, that Cheops could have presided over a spectacularly educated Nile civilization. We conveniently forget that the principles of writing long essays haven't been conceived of yet; or that the sum of human knowledge was so small that it could have been printed on presses in the space of a few afternoons. We think, no problem, people will INVENT those things as soon as they have the technology. We fail to recognize that a printing press that does not address a societies need for a printing press is really only a large piece of junk, which would more likely be dumped in a Nile-fed bog before it inspired a civilization-changing revolution.
In some of the discussions I've had in the past about my trade system, I've heard arguments advanced about how economics work, or what's right and wrong about economics, and the 'law' of supply and demand, etcetera, etcetera, and I've shaken my head in wonder at the hopelessly entrenched perception people have of this era and how it works ... and how it defines how every era must of worked. That every era is the same, and that human beings are substantially the same beings regardless of the age in which they live, is a liberal fantasy which I hope some of these civilization posts have been able to dispel in some small part. We'd all like to think we could walk up to a Roman, wave a hand and then share a beer with him or her just as though we were all down at the pub on an ordinary Friday night. We have proof the Romans knew what beer was, so the rest of the supposition simply follows from there. If they had beer, they clearly had Friday nights, with the end of a long week being time to party.
And thus it follows that if there were people producing objects, and people buying objects, an economy existed that must have followed the principles laid out by Adam Smith in the late 18th century, or by the two fellows depicted in the video above. These ancient peoples just didn't know it, goes the argument ... but those 'laws' were there, unquestionably.
That Adam Smith was describing his time, or the peculiar circumstances arising from the Industrial Revolution, in which production and demand soared due to a wide array of political, cultural, biological and technological influences, is irrelevant - goes the argument. We human beings are who we are, and that will never, EVER change.
Economics as a social science was developed in the ensuing century with all the accuracy and rationale to be expected of people who did not have the resources to know what the hell they were talking about. And today there is an abundancy of misinformation defining the actions and behavior of both economists and the "practical men" who believe in economists that can't hope to be measured except in the certain truth that rulemaking for either Hayek or Keynes only creates chaos and suffering. At this point, "leaving the economy alone" is a euphemism for changing all the regulations currently in place ... which is funny, since "fixing the economy" also means changing all the regulations currently in place.
A medieval world has no such conceptions. "Regulation" was a principle in which a seller's wares, if proven to be worthless or improper, meant the use of physical force in order to have the money returned, along with physical force to ensure the disappearance of said seller from the general community. This ranged from beatings to slavery to prison to death, depending on the quality and social danger presented by said worthless goods. You might get away with selling a blind mule. But if the saddle you sold leads to the death of a child, don't count on outliving the child long.
The idea that laws needed to be passed to ensure the quality of goods and services simply did not exist. Guilds controlled the quality, and did so at the end of a stick or a rope, as need be.
"Debt" was something states practiced - and which nobility took a part in, being responsible for states or parts of states. Ordinary individuals did not take out 'loans,' and certainly not from a bank. Starting capital was provided by guilds, the former taking a percentage of your wages through most of your life, in decreasing or increasing amounts, as circumstances warranted. A "bank" existed only on the largest possible level ... and when huge banks failed, as the Fuggers, the Medici and others certainly did, the "economy" did not rush to rescue them with capital. Wealthy individuals went belly up, some were killed or left penniless, while new financial wizards took their place, and the poor continued their lives unaffected. If the country was overrun for lack of funds for an army; if the local lord was forced to bargain slaves and goods as a tribute to maintain independence; the ordinary person had little or no say in the exchange. Persons were seized, lands were seized, material was traded and the "economy" went on exactly as before. People raised food for themselves and their lord, they lived miserable, non-materialistic lives, and the bourgeois did not exist.
The world's reaction to modern economic crises is based upon one simple criteria which did not exist in the medieval world: COMFORT. Specifically, the comfort of the modern consumer, which is based upon the cultural structure that promotes comfort in every aspect and circumstance of your life. Governments now exist to ensure your comfort, and they campaign with arguments that they will ensure your comfort. And as long as you are comfortable, in some job, with enough money to buy the elements of your comfort, media and furniture and housing and the like, you will continue being passive and ignorant about both your economy and your government. Producers struggle to make profit in the industries that bring you the very most comfort possible, and the richest producers are those who create things which you in your comfort-driven lifestyle perceive that you CANNOT live without: transport and distraction, both of which are fed by the production of stored kinetic power.
No one cared to provide either to your medieval counterpart. There was nothing to be gained in providing either, and in most cases it was impossible to provide either. Your medieval counterpart was expected to get along anyway. Unsurprisingly, your medieval counterpart did, with less comfort and less likelihood of success.
The modern economy panders to you. No one pandered to your medieval counterpart. If you cannot recognize the difference in how that economy must have worked, no amount of wordage I could throw at you will.
Bonus Question: Why is the economic structure of EVE not a representation of a primitive economy?