Pathfinder Zaniness: Crafting Supply and Demand

Just how broken is the Pathfinder economy?  I was talking about this today with my brother-in-law while on a walk with Smiley.  We know that in the future of our Kingmaker campaign our characters will be both adventuring and founding a city.  How would a mayor of a Pathfinder city maximize it's overall economic profit?

Well, only a little bit of a walk; usually either Follow The Leader using some pink string (which began with Smiley pulling a toy car until he decided he would rather pull a grown-up), playing chase down the sidewalk, or holding hands and pretending to be a train.

For game balance purposes, magic items are really expensive.  This means that crafters of non-magic items have negligible income compared to people who make magic items.

All magic item creation profit is capped at 500 gp per day.  Any character with the Craft Wondrous Item feat who can cast first-level spells can be that productive.

In contrast, the slightly complex rules for creating non-magic items provide as daily profit a multiplier of a die roll.  An average craftsman with a skill of 5 would have an average die roll of 15 and multiplier of 30/210, so a profit of 2.1 gp per day.  A master craftsman with skill of 26 would have an average die roll of 36 and multiplier of 72/210, so a profit of 12.3 gp per day.

Crafting tasks have a DC rating up to 35.  Divide this by 10 to get a multiplier in gp instead of sp. Multiply this by two-thirds to get a multiplier for profit instead of retail cost.  Divide this by 7 to get a daily profit instead of a weekly profit.

Tangentially, the above calculations contradict the rule-of-thumb provided earlier in the Craft skill description: profit of half the die roll in gp per week.  But they are consistent with a master performer who also earns about 12 gp per day.

So even greenhorn makers of magic items can earn over 180 times the profit of average crafters, and over 40 times that profit of master craftsmen.  Thus the Pathfnder mayor who wants his or her new city to thrive economically must encourage supply and demand for magic items.

Increasing supply is simple: send messengers to neighboring cities to whisper in every temple and arcane academy that even first-level spellcasters can realiably make a magic item creator's maximum income in the new city.

Increasing demand is more complicated.  We never produced a good way to do this.  But we came up with several evil methods:

• Good Fences Make Good Neighbors: Work with allied monster clans (neutral kobolds, etc.) to convince evil mosters to dwell near the city.  "Don't live too close or the city watch will hunt you down.  But living near the roads a few days distant is great for attacking the caravans traveling to and from the city."  Then send messengers to other cities describing all the caravan-enriched monsters ripe for adventurers to slay and loot.  Yet no caravans actually need to be looted since the goal is only to have many traveling adventurers to buy magic items as they pass through the city to fight the monsters.
• We've Always Been At War with Oceania: Establish a second city of Lawful Evil folk by using secret agents to organize the region's bandits, smugglers, and pirates into an urban mafia-like government.  Monitor this evil city.  Encourage it to enrich itself by attracting more established criminals.  Yet keep the evil city subdued and plundered by sending out the army of the main, good city often enough to minimize risk to good soldiers--but always avoid any chance of totally eradicating the evil city.  Encourage members of the main city's military to spend their plunder on magic items to keep them safe during their next invasion of the evil city.
•  The Height of Fashion: Use agents to other cities, to convince the nobility and other wealthy folk that certain small magic items are now required to be fashionable.  After all, no one who is anyone maintains a kitchen without a continual purify food and drink barrel, attends a costume party without a disguise self ring, etc.  When spellcasters in other cities notice this new demand, secretly sabotage their attempts to also make fashionable magic items and point the blame to the local wealthy families who were the first few to puchase those items and would benefit by retaining the resulting elite status.