Different anon, but in regards to Lannister and the gold market, how likely is it that they insisted upon ALL taxes being paid in gold from at least the bannermen with mines if not all of their principal houses, while most other Kings/overlords were fine with whatever combination of precious metals, food, timber, etc… their subjects could provide.

opinions-about-tiaras:

racefortheironthrone:

Almost certainly, yes. 

This seems like it would produce a lot of… I think economic velocity is there term?

Like, if their bannermen need to pay taxes in gold, they’re going to concentrate on either mining it (which is going to require paying workers or letting them keep a share of it or something) or on producing things they can then sell for gold to pay their taxes.

The Lannisters, in turn, cannot eat gold or sleep on it or make armor or swords out of it or whatnot. They’re going to turn around and immediately spend a lot of that gold on stuff that isn’t gold, pumping it right back into the economy they just extracted it from and once again encouraging people to accept payment for things in currency rather than in kind.

Absolutely agree. I would imagine, therefore, that the economy of the Westerlands is more economically “advanced” than a lot of its neighbors, in several ways:

• You’d see much less barter and trading “in kind” and almost all transactions are made in currency (not getting into bills of exchange just for the sake of clarity). Even without a Golden Bank, I would expect to see more in the way of a financial sector, with goldsmiths and merchants acting as moneylenders using gold stocks as reserves for loans. 
• In the Riverlands or the Reach, where the most common thing you have to exchange is agricultural products, I imagine you’d see the reverse, where there’s more barter and trade in kind and fewer transactions in currency – and a lot more of the phenomenon where prices in currency change rapidly during times of crisis when people’s liquidity preferences would change b/c you can’t eat gold. 
• You’d see mining, processing (smelting), and smithing of gold and silver as a much bigger percentage of the economy (I talk about Westerlands guilds here), and correspondingly a lower percentage of the economy working in agriculture. That’s not to say that there’s no farming in the Westerlands – those vast herds of cattle Robb’s army rustled were tended by someone, and Cornfield clearly suggests that the southern Westerlands grows a fair bit of cereal crops – or that agricultural workers aren’t in the majority, but I might expect to see 75-80% as opposed to 90% everywhere else. 
• In turn, this would suggest that the Westerlands might have a higher rate of urbanization per capita than the Reach, even though the Reach would have a higher absolute number of towns. 
• Moreover, I imagine there’s a good bit of interregional trade between the Westerlands and its immediate neighbors – the West has the gold, the Reach and the Riverlands have the food, it makes sense. I also wouldn’t be surprised if a lot of wars between these three regions have broken out over changing terms of trade, if one side gets too greedy or decides that it would like to horizontally integrate instead of trade.
• And finally, we have textual evidence from WOIAF that there’s a lot of international trade from a very early period. This might explain why Lannisport is such a big city despite being on the wrong coast, because the gold was such a lure to foreign traders that they were willing to sail west across the Summer Sea, and then the city grew to serve foreign trade. It sort of reminds me a little of the trade imbalances between Europe and China in the 18th and 19th century, but in reverse, where the Westerlands has the gold and Essos has the manufactured goods and luxury items and so Essos gets the hard currency it needs to have a large banking sector. 

(And velocity is exactly the right term…)