Satanus:
"For production efficiency, it's hard to beat the factory. Applying that principle to your illustration, in that village, there could be diversification. For example, shoe supply could be taken by one person/family. The shoemaker may chose to cut back on his gardening. Or further, the different villages could go into various specialties, then trade w other villages. This develops naturally, of course."
In this economy, growing your own food will be essential but, because it would be advanced Permaculture and because some of the food from orchards can be best handled collectively, the total man hours spent on growing food would be very low. Let's say it averages out to one hour a day. I would refer to this food self sufficiency as the primary economy. Since there is no transportation of food involved it will be able to compete with somebody elses staple foods grown a hundred or more miles away. That doesn't mean that there will be no food bought and sold throughout the network of villages but it will be high value specialized food items like caper berries and seaweed rolls for sushi and other such odd items.
As far as your comment about inevitable specialization is concerned I have worked that into the very fabric of the Society I am advocating. With a population of 500 people, let's say half of them adults and some of their children learning their trade by performing light duties you can have a very advanced system of production going on (By the way, I am not a Primitivist in case somebody assumed that). The "villagers' would own, operate and manage their business without any of the gross inefficiencies and injustices of Hierarchical relationships. In other words this society would be partly Syndicalistic in nature. This I would call the secondary economy.
This secondary economy would be subject to some of the problems of our economy (in much milder form) such as market saturation, etc. That is why it is important for these communities to be self reliant in food in case there is a "Market Crash". Furthermore a several year supply of food like what the Mormons advocate would be wise. No need to worry about being evicted from your home because the land is free but the food is not.
villabolo