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The basic form of wealth creation comes from resource gathering, be it mining, farming or animal husbandry. This is where all the raw materials a society needs, be it per-industrial, industrial or space flight comes from. Even with mechanical assistance resource gathering consumes large amounts of time and energy. Again, depending on the setting it can be muscle power (man or animals), environmental power (wind, water or gravity) or mechanical (using a converted energy source such as fossil fuel, nuclear power or shiny magic rocks).
If the key to any economic activity is the profit margin how do resource gatherers make their profits? Two ways:
- Control the rate of extraction.
- Control the amount of “energy” expended in said extraction.
Control of the rate of extraction is to control the flow of the resource in question. Depending on the resource it may be advantageous to sell as much of it as possible or reign in the availability of it. Food, basic construction materials and fuel always have buyers and in order to justify the cost of extraction a steady supply must be maintained. But things like precious metals with limited markets don’t benefit from a flood of the stuff in question.
On the “energy” side of the equation it usually comes down to labor costs. It is one of the reasons why slave labor (or the equivalent, like serfdom) was used through out history in farming and mining. Back breaking labor using skill hands costs more than unskilled labor for which you only have to pay food and lodging. It kept prices low and guaranteed a ready labor pool that was not going to demand high wages or leave to get a better job somewhere else. Never mind the escape slaves or the occasional peasant revolt.
Keeping cost low is also important due to the fact that most of these resources are raw materials. Thus keeping the cost low at the extraction site also helps others down the chain, such as traders and manufacturers. We will talk about the trading in the next installment of The Coin of the Realm.