Medieval Economics

Background & History

A Medieval Economy such as being represented here refers to a pre-industrial economy. That means that the culture/society has the following general characteristics: a population that is mostly involved in subsistence agriculture (85% or more), with the few city dwellers involved in at most handcraft level industries that rarely employ more than 2-3 workers. The general level of technology is fairly low due to a lack of a large enough leisured middle class to stimulate industry into creating technological advances.

Unless a society is reasonably close to the above structure it is moving towards the process of industrialization that resulted in the great technological and scientific advances of the Renaissance – something that Pathfinder is designed to deal with.

The major limiting factor in a Medieval/pre-industrial society is the extreme fragility of the urban concentrations that provide what limited amounts of manufactured goods there are – as well as providing the basis for future development into an industrializing society. As noted above, 85% or more of a culture’s population will be involved in more or less subsistence agriculture. In fact, some conservative estimates show that it requires at least 10 farmers to support every city dweller.

The obvious factor here is that any reduction of the number of farmers, whether by war or by plague, is going to result in a similar reduction in the number of city dwellers, mainly through starvation but also because of a loss of rural markets for their manufactured goods.

There were 4 major reasons for this fragility. Firstly, the initial lack of a suitable plough, which limited cultivation to thinner, less fertile lands until about 1000 AD. Secondly, the use of biennial crop rotation, which left half of all cultivable land fallow each year until the introduction of triennial rotation about 800 AD, which left only a third fallow. Thirdly, the use of oxen as draught animals rather than the horse that was twice as efficient. This was due in part to poor harnesses that tended to choke a horse limiting loads to about 250lbs. In the 800′s a new type of harness was introduced that increased load capacity fivefold. Finally, the very low agricultural productivity which varied between a return of 3 to 4.7 times the amount of grain sown, and from which next year’s seed had to be taken.

The limited chemical knowledge of the time meant that only the richest bullion mines could be operated. This, coupled with the fact that a token currency had not yet been thought of, meant that there was not enough gold or silver to go round. This in turn meant that frequent and massive currency debasements were necessary to meet the growing need for currency that increasing trade and industry demanded. The problem became so bad that at one stage ‘silver’ shillings minted in Germany contained no silver at all. These problems naturally caused a rollercoaster ride of depressions and recoveries, as well as limiting economic development and growth.

Two final limiting factors are also important to note. These were the shortage of iron and the uncertainty of transport in the period. Iron was in very short supply due to inefficient working methods and because deep shaft mining was impossible without powered water pumps. This meant that iron tools and utensils were rare, and were used mainly by the rich and well-to-do, with bronze items being used by the great mass of the people.

The shortage of iron also meant that chain or scale mail was easier and cheaper to make – despite the long hours of labour involved – than full plate, which would have been incredibly expensive, even if enough iron could be found to construct it. The shortage was so acute that many ironworkers were dependent on scrap metal for raw materials for much of the period involved.

Since the breakdown of law and order that came with the fall of the Roman Empire the major and the safest form of transport became sea transport. Yet even this medium was not all that it could have been, as the compass had not yet been invented and thus sea travel was limited almost totally to coast hugging except for a few well known routes, mainly in the Mediterranean.

These then were the major limiting factors on the development of the world that should be kept in mind when developing a fantasy world.

But what does that mean in game terms? Well, people can no longer go around slaughtering innocent farmers, unless they wish to starve to death. Famine is a real possibility with the margin of cereal production so low. Heavy land transport will move at the slow pace of teams of oxen, and ships will be very slow also, hugging the coastline all the time. Finally, most warriors will be armed in chain or scale mail at best, unless they are incredibly wealthy.


The important thing to remember is that actual money (coinage) was scarce – and only those who possessed it could buy manufactured goods. This meant that serfs and peasants operated on a barter economy, doing without manufactured goods for the most part. The market for such items was limited to the richer peasantry (Yeomen), the landed Gentry, rich merchants, and the Nobility. However, even within these classes money wasn’t plentiful, and the supply could dry up very quickly (especially after a bad harvest, when all free coinage went towards buying food – after all, you can’t eat a new sword!) making the Demand Factor for manufactured goods very elastic.

As already indicated, the only item for which demand cannot be cut by too much is, of course, food. During the Medieval period, the major type of food consumed was cereal (wheat, corn, maize, etc.) with meat and fish being relatively scarce. Fortunately we can determine that the average annual consumption of cereals worked out at 300kg per person, or 1200kg for the average family of four. We also know the average number of working hours available annually, and with these two pieces of information it becomes easy to work out average wages – if we know food prices.

England 160kg cereal cost 37 shillings
France 1339-69 100kg cereal cost 50 shillings

Thus in England the minimum hourly wage had to be 1.75 pence. Similarly in France it would be 2.5d. In most cases of course this food would have been grown by the family themselves, or in the case of labourers in cities provided by their employers. On top of this, there would almost certainly have been a payment in cash; to the farmer this would have been in the form of extra crops for barter. Such pay merits would probably have been on a similar scale to that suggested next:

Unskilled Labourer ½d/day 3½d/week
Skilled Labourer 1-2d/day 7-14d/week
Skilled Craftsman 3-6d/day 14-42d/week

This gives an average conjectural weekly wage as follows:

France England
Unskilled Labourer 15¾d 21d
Skilled Labourer 19-26d 24-31d
Skilled Craftsman 34-54d 38-59½d

Those persons who are self-employed would have to pay for their own food as well as making a bit extra if possible out of their profits.


Now that we have an idea of the wages paid to labourers, we can work out what items would have cost if we know how long it took to produce a particular item. For instance, Chainmail took 12 months to produce (a suit down to the knees, with long sleeves and integral hood and mittens) and Plate Armour took 24 months – probably by a team consisting of a Master Craftsman, Skilled Craftsman and two Skilled Labourers Thus Chainmail would cost about 676 shillings in labour alone; it is reasonable to assume that profit and materials would boost this by 100% giving us a ‘for sale’ cost of 1352 shillings, or about £67. Plate Armour would cost about twice as much, say £134. If we also remember that the major armour producing areas (for Plate Armour anyway) were in Italy and Germany, we must add middleman profits depending on distance and safety of travel of say 50-100%, bringing us to £201 – £268. This latter price tallies with the known price paid by an English King for a suit of Plate during the Hundred Years War of 5000s.

Of course armour was a luxury item and profits were charged accordingly. Second or third hand Armour may have cost a quarter of the new price. Other items would probably have less excessive profit margins, being from 10-50% at each step.

Medieval Wages and Prices

English army 1316-1415, per day, not including any share of loot and plunder!

Dukes 13/4d Mounted Archers 6d Welsh Vintenaries 4d
Earls 6/8d Armoured Infantry 6d Foot Archers 3d
Barons 4s Hobilars 6d Welsh Spearmen 2d
Knights 2s Vintenaries 6d

Constables 1s

1321-1420 (England):

Horse £7 Mule £1
Cereal 2d/lb Iron 5s/kilo

1339-69 (France):

5lb Twisted Candle 7/6d 2oz Medicine 1s Bronze Coffer £1/14s
Flour/lb 3d Horse £20 Draught Horse £10
Ox £4 Mule £6 Donkey £5
Knife Blade 2/6d Blankets 2/6d Mail Hauberk £30
10z silk 1/3d Wine/qrt 2/6d Lance Head 2/6d
Stirrups 2/6d Mirror 1s Paper/ream £3

Lord’s Interest

The development of the medieval city is largely due to the lord of the manor. Without the lord’s protection, backing and surplus, towns and cities, which are filled with people who do not work the land for a living, could not exist. A lord’s main advantage in possessing urban communities within his demesne is receiving wealth without dealing in the particulars. Medieval towns and cities are organized to run themselves. A lord does not have to hire administrative and managerial staff for a city. A lord does not have to maintain a city’s infrastructure, because he allows his city enough rights to maintain their own. In return, he simply collects his money.

Lords also benefit from towns and cities because they create a free (non-servile) labour pool. As the medieval economy goes from bartering to a coin economy, feudal obligations are transferred into money payments. This means lords can transfer manorial rents and labour obligations into coin. This allows lords to hire day labour from the urban labour pool. These labourers are considered more efficient than the labour from manorial obligation. A lord also has fewer social obligations to a labourer than he has to one of his peasants. Although heavily weighted on the lord’s side, the feudal system does provide peasantry with some protections usually withheld from labourers.

Movable Wealth

In the manorial system, the land and its fruits are the lord’s wealth. With cities, lords have access to movable wealth that is not directly tied to the land, namely coin. Lords get coin from cities in various manners. The most obvious is bribes and payments. Attaining new charters, renewing old charters, gaining certain rights as a citizen of the city, and holding positions in the city government are usually negotiable with enough coin. Lords get regular payments from cities, as well as money rents, opposed to the four capons and the bushels of wheat he gets on the manor. Trade is another source of income for the lord with a city in his demesne. Cities are consumers for the surplus off a lord’s manor, ensuring his surplus grain always has a buyer.

Some lords use cities to increase their wealth at the detriment of other lords. Lords may found or charter a city and offer benefits to peasants who settle the new city. Of course, these benefits do not apply to peasants from his demesne, but they certainly apply to another lord’s serfs. Lords attract people to towns and cities, because more people generate more local trading. As towns and cities have more money flow (or more goods and money are changing hands), a lord reaps higher taxes and payments from his urban communities, and usually in coin. A lord’s magical taxation also increases from the concentration of higher-powered spell casters found in urban environments.


A lord usually grants his city rights to taxation on a limited scale. The most common taxation is trade taxes. Gates, fords, ports, and harbours become tax checkpoints for incoming goods. As merchants and tradesmen bring in goods, the city taxes them according to their wares. Whether it was a wine tax, beer tax, or grain tax, if the city can monitor the movement of a commodity, it can tax it. City councils may also tax guilds, much like what the lord does to the city. Cities often levy taxes in times of emergency, such as war taxes, and neglect to revoke them once the emergency has passed, such as an indefinite war tax. The bulk of medieval taxes come from the use of public infrastructure (bridge tolls, entrance fees) and financial transactions.

City Council

The city council is the municipal head of the city. The right to have a city council and the rights of the city, which the city council oversees, are spelled out in the city charter. Almost all cities have the right to tax and form a militia for civil order and defence. The right of taxation includes levying various taxes, such as poll taxes, gate taxes, taxes on luxury goods, tax on magical items, mercantile taxes, war taxes, and emergency taxes. The right to levy taxes creates an entire financial system for collecting taxes and accounting, as well as other financial practices like forced loans. Forced loans are loans to the city from a merchant or patron by physical force, revoking special privileges, or threat of confiscation or exile. Although the name implies unpleasantries, most of the time wealthy merchants and patrons pay forced loans without too much duress. They even earn interest on the loan from the city. City councils have been known to over-tax their citizens, pay their town lord, and pocket the difference. However, the city treasury is usually in debt from military expense, poor financial practices (toll/tax exemptions granted in recompense for personal gain), and inflation. The right to form a militia includes stockpiling weapons, magic, food, other logistic materials, and men for military use. Most city militias are just burghers who bring their own simple weaponry. Cities with more to protect often develop their military forces into a professional standing army. Cities also hire mercenaries to man the walls, especially in the later magical medieval period, when burghers opt out of guard duty.

Cities usually have their own judicial system separate from their lord’s court. Although a city’s jurisdiction is only within city limits, city courts generate income and give the city leaders more power over the city and its inhabitants. They also make city ordinances on sanitation, curfews, guilds, and nightly patrol of the streets. They oversee city projects and city planning, and in free cities, the city council can even charter guilds.

Trade and Economics

Medieval trade and economics are often mistaken for anachronistic modern concepts. Things like supply and demand, purchasing power, and the market do exist, but in a proto-form of its developed descendants. Medieval economics are not capitalistic, socialistic, free trade or restrictive. It borrows traits from all four systems and creates an economic system that is neither here nor there to modern economic thinking. The biggest difference between medieval economic thought and modern thought is the purpose and conduct of business. Maximizing profits is not the goal of magical medieval trade. Making a profit is much more important. Medieval societies did not have the modern tools, resources or ideas that allow modern societies to hone maximization of profits in an art form. Most people make the goods they sell. There are fewer middlemen in commercial transactions in a medieval society. Usually, the only cost associated with a good is the cost of materials and the craftsmen’s time. Only wholesale merchants are concerned with base costs and selling goods for more than they bought them, but even wholesale merchants usually buy their goods from the actual craftsmen and producers. Since most people make the goods they sell, a large inventory is not a typical practice in most workshops. A large inventory means things are not being sold or that something has been sitting on the shelf too long. Expensive items are not kept in inventory because they cost too much to make. This is especially true of magic items, expensive in either material cost or the level of skill required in their creation. A ring of protection +1 only costs 4,000 gp, but its forging requires a 12th level caster with the forge ring feat. Expensive or unusual items typically have to be commissioned. If expensive or unusual items are bought on site, they are probably the craftsmen’s personal belongings. Medieval economics differ from modern economics because price is not set or static. A merchant may want 5 gp for an item but he’ll be willing to sell it as low as 3 gp. But he’ll start his negations at 8gp or better so he has room to negotiate down. Depending upon the skills of the purchaser, the merchant may receive 6 gp for his item and be a bit happier.


There are no fixed prices in a medieval society. The craftsmen who make the items determine their worth, and they have the power to negotiate the price. The prices listed in the core rules are suggested prices for GMs’ and PCs’ ease in buying and selling. But when a PC buys a bedroll, it does not come with a tag labelled “1 sp.” In a medieval society, prices change due to local and regional production, supply and demand, and the interaction between buyer and seller. For example, wine is cheaper in winemaking regions than in areas that import their wine. A peasant buying a chicken for dinner pays much less than a PC fighter encased in 50 pounds of metal with three weapons, a nice cloak, and boots, even with a high bluff or diplomacy check. In kingdoms at war, everything costs more, from wheat to weapons. A city that specializes in weapon manufacturing is unlikely to pay much for a party’s spare mundane weapons.