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It seems fairly common in fiction for a single city to be known for a single trade good (resource or manufactured item). It then follows that any discussion of economy, which is rare enough in fiction, includes only that main trade good.

Can a system function 'well enough' to be plausible if each city in a network (think Greek city states) specializes in the trade of a single good? What would that system look like?

I am not looking for an explanation of how a single resource economy would function (I actually know the answer to that) Rather I am looking to include discussions of economics in my world but it will not be a focus. Therefore I would like to make an overly simplistic scenario that doesn't get into the details. I want to include economics but it needs to be simple enough that I don't have to explain things too much.

  • There are around 15 cities in the network. They range in size from 5,000 to 50,000 with the majority closer to the lower end. (there is only one city of 50,000)
  • Dominant resources/products include:
    • Wheat
    • Horses
    • Stone/Marble
    • Lumber
    • Ore
    • Tools/Weapons/Armor
    • Fish
    • Sculpture
    • Wine/Booze
    • Cattle
    • Slaves
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    $\begingroup$ Tools/weapons/armor and sculptures are products, not resources. $\endgroup$ – Frostfyre May 11 '15 at 19:20
  • $\begingroup$ @Frostfyre true enoug I will reword... $\endgroup$ – James May 11 '15 at 19:26
  • $\begingroup$ Does each city produce all of the missing products for itself? There's a lot more than just these that a city might need. Some of which it might not plausible produce itself. $\endgroup$ – Erik May 11 '15 at 19:50
  • $\begingroup$ @Erik Thats the point of the question. In fiction the story/world tends not to go into that detail, if it goes into any info at all about economics...but not mentioning economy at all bothers me for my world so I am trying to decide if this level of information...or this simplistic view is good enough. $\endgroup$ – James May 11 '15 at 19:58
  • $\begingroup$ Are the majority of the products being created/harvested by individuals (artisans), small groups like guilds, or larger groups like a factory? This is a main deciding factor of how an economy will function with it's trade. $\endgroup$ – Vince Scalia May 11 '15 at 20:49
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(edit - I'm now a bit confused what this question is asking and if my answer is even applicable)

I think the Greek city state 'nation' is one of the few nations that had both the need and the resources to do this. I think you need sea trade here, land based is tougher to pull off and it lessens the need (more land means more resources, limited land is less resources).

The Greek city states were a series of cities located either on small islands or on mainland but hard to access except via ship (due to terrain). Small islands are not resource rich, in fact they are usually the opposite where they only had one or two resources to draw from. This somewhat puts them into the position where they are a one or two resource economy and must rely on other cities to buy what they can produce and sell what they require to survive.

It gives them 2 pretty unique attributes...

  1. Island with only 1 or 2 resources. A few of these islands have exceedingly limited resources, so if you were on this island you pretty much had no choice but to use one of the few resources available. This is a bit different on a larger landmass as a city can sprawl and take more land and more resources for itself. I guess the simplest reason to only have a one resource city is because that's the only resource you have access to due to geological features.

  2. Sea faring nation. Land trade doesn't work well for this as it's slow and inefficient when compared to sea based trade. Established and frequently traveled routes along with some form of sea domination are (mostly) required for this to work.

It's quite possible Carthage and their earlier Phoenician predecessors are the other two examples of nations capable of pulling this off.

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A system is possible but specialized trading require stability (absence of conflict). It can be attained when a country control a relatively large amount of land, like Rome or China. It is not necessary but specialization makes you vulnerable if you go at war with your trading partners. The good thing is that states are also less inclined to go to war because it will cause greater harm to their economy since they are dependent of the others.

If the states are small, they can trade with others but they are more likely to trade what the others cannot produce or what they cannot produce at a low cost. Availability of the resources is important. For example, Scotland is not ideal to grow wheat but it's much better suited for cattle/mutton. Some of your resources require a different terrain or a different climate to grow. A great diversity of climate could help with specialization of natural resources. Otherwise, the incentive for specialization is smaller especially with food. Everybody needs to eat so everybody will produce food. If 2 places have the same climate, they will probably produce the same thing.

Unless they have a fast and reliable transportation system. Because, yes, they could maximize the production if they specialized the production of food. Then, they could overspecialize and export their Irish potatoes and Ceylon tea all across the Empire. The capitol doesn't need to produce food anymore. The transportation method could be sophisticated as they are using steamboats/trains/planes... or just using water canals. The last one can do the job.

The price could play a major role if your countries have a lot of trade between them. The country with the lowest prices gets to dominate the market. Producers of the foreign country could try to stay in businesses with a smaller margin of profit or do something else.

  • Recap: Yes, they need stability and a cheap way to move large quantities of goods over moderate to long distances. A difference in climate would help because obviously, a city near the desert does not produce the same kind of goods that a city in a temperate climate. Example: Apple vs camel
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  • $\begingroup$ and don't forget the shelf life of the products. Slaughtered cattle and fresh caught fish both won't survive for very long. Either your transportation system needs to be quite quick or you'll need a very good food storage mechanism (drying, salting, smoking, candying, etc.). $\endgroup$ – Jim2B May 12 '15 at 18:07
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In such a scenario as you've described, there would be several implausibilities:

1) In order for such a system to work, each city's specialized good must be relatively equal in value to the goods offered by the others. An imbalance in trade-good value (i.e. human-manpower expended in harvest/creation per ton of good) would lead to destabilizing to the entire network. Case in point, Greece's lower-than average GDP contribution to the European Union has been cited as a major cause of the Greece financial collapse due to its inability to stabilize its own currency. Since we know intuitively that not all goods are equal, this is a particularly troublesome plausibility point.

2) As with all Monopolies, the tendency of humans to manipulate their Monopoly for financial gain would likely lead to its eventual collapse, as the people might eventually grow tired of the manipulations of the markets in other countries/cities and thus lead to wars. Case in point, I've read that Japan may have never joined the Axis Powers in WWII and thus never attacked the USA if the US Oil market had not been closed to them. Whether or not that's true, it is true that Japan had a severe energy crisis as it tried to industrialize. Whether right-headed or not, one of the stated reasons for Japan's attack was to get access to more energy in the form of oil.

3) Finally, the scenario as describes might fall into a type of trust-arrangement where several big players can manipulate the market (ref. OPEC). The problem with trusts are that there is often little penalty for the trust-members to break their agreements. If Party-A and Party-B jointly decide to raise the price of Eggs and Ham (respectively), there's more incentive for Part-A to start selling eggs on the black-market at a discounted price compared to the open market. Such situations lead, again, to destabilization and wars.

So in short, no I don't think such a system would be "stable-enough" to pass the plausibility test. The most stable markets are those where consumers have more than a few alternatives for each product. These types of markets self-correct over time, much like a brain's neurons encode patterns (or artificial neural networks for you tech-types).

If, however, you wish to tell a political suspense/drama, this proposed structure would lend itself to myriad story-lines.

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You don't need to have each city limited to only produce a single item. Each city can produce most of what it needs to maintain itself. Each city will also likely have some surplus of these basic goods that might be sold to traders to be taken to other cities.

You can still have a very simplified trading economy by having each city have a primary export. You will need to set up your geography to give a reason for such a focus.

Below are some ideas.

The overall territory is very hilly and quite rocky. Cities generally have some nearby farm-able land to support itself, but generally not much more than that. There are a few exceptions.

"Wheat-city": This city is near the mouth of a river. The delta of this river is large and fertile. Yearly (seasonal) floods refresh the soil each year prior to planting, allowing massive amounts of grain to be grown.

"Horse-city": This city is located in a wide, mostly level, valley. Some small streams flow into the valley, but most water is obtained from wells. The rainfall allows for grasses to grow in abundance, but attempts to grow surplus amounts of grains generally results in depleting the soils fertility fairly rapidly. Enough fields are maintained through liberal use of horse droppings to feed the city, but not much more. Large herds of horses are maintained on the grasslands in the valley. A reason is needed to prevent cattle from also becoming an export. Perhaps cattle ranchers are looked down on in this culture, or that the horse quality and prices are so good, that using any of the limited valley floor for any herds but horse-herds is simply not done, or only done on a scale small enough that anything produced is consumed locally.

"Marble-city": This one is easy. This city has the only substantial marble quarry or quarries. A reason will be needed to prevent this city from also being an exporter of sculpture. Perhaps the city is dusty and seen as uncultured, so that artists are not attracted to the place. Or perhaps this city grew from stone-cutter camps that were initially set-up to provide the stone for an existing city with a large population of sculptors. Even as this city grew, the sculptor guilds were still in "Sculpture-city".

"Lumber-city": This just requires that most trees are simply not suitable to turn into lumber. One or two forests may have prime lumber trees and each have a city nearby to harvest it.

"Ore-city": Also easy. The type of ore is only available at these locations. "Silver-city", "Copper-city", "Iron-city", etc.

"Tool-city": Perhaps the method of forging quality steel, is limited to a single guild that jealously guards its secrets. Or perhaps the local ore quality and mixture is such that the steel is just naturally superior. The local ore would never be sold to outsiders, but would be consumed internally to produce the worlds best tools, armor and weapons.

"Fish-city": This city is located in a narrow valley next to a swiftly flowing river. Yearly salmon runs results in massive catches. In the off part of the year, boats and nets are used to fish out beyond the mouth of the river to catch other types of fish.

"Wine-city": This city has the only climate and land to grow the ideal grape for their wine or hobbs for their beer. Other cities may make their own, but most will be consumed locally. Only this city produces enough in the bulk and quality that results in the demand for the export.

"Cattle-city": Another wide valley that is useful for herds. The culture here is that cattle-is-king. Some horse herds are maintained, but only to keep up with the needs of the local "cowboys".

"Slave-city": This city is on the coast of a relatively undeveloped continent. The local tribes had a culture where taking a defeated enemy as a personal servants was common. When outsiders set up their city on the coast, selling these servants became an easy way to make money, which resulted in tribes going to war with each other to capture more slaves to sell.

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