I think any discussion about the state of a D&D world economy is swiftly going to descend down a rabbit-hole of madness and illogical conclusions. A book standard CR 1/3 goblin carries 54 gp in equipment alone (short sword, short bow, 20 arrows, leather armor, light wooden shield), about a year and a half of wealth for a standard untrained laborer. Why anyone works at a trade instead of just hunting for a lone goblin once a year is beyond me.
Even a peasant can, by the rules, gain one free simple weapon proficiency, and with their wealth typically tied up in their property, I'd estimate most would pick a weapon such as a club, quarterstaff or sling which has no base cost involved. With three to five peasants in a party slinging stones at a goblin, you'd likely find them capable of killing it before any of them suffered a fatality. Of course they probably leave that to the town guard instead, but for small hamlets without a strong defending force, a peasant mob would probably be capable of handling defence of their homes against a goblin band.
Goblins tend to go in groups -
SRD says their smallest groups are 4-9 gobbos in a gang, and with their underdog nature, I doubt many goblins travel alone in human lands.
Suddenly, that group of peasants is in a lot more danger.
The goblins have more HP and AC, and their superior weapons compensate for their small size.
They're also got points in hide and move silently, as well as the alertness feat by standard, meaning they're better at ambushing the peasant party than the peasants are at ambushing them.
With a sling, presumably the peasant buys some lead bullets, or else they're only doing 1d3 damage with a -1 to hit, so at the least they'd be spending 1sp.
Using a club or quarterstaff brings their damage up to par with the goblin, but then they have to fight in melee something that is tougher, harder to injure, and probably more skilled, as well.
Once the battle is over, how many of the peasants have died? Was it worthwhile, compared to a less interesting but much safer career of farming? Can they get back to safety without encountering anything else, which might be inclined to hostilities?
They can now go into town and sell the goblin gear. To who?
Who wants old goblin gear? It's probably not well looked after, the majority of adventurers and warriors are Medium, so they don't want it. How many halflings are in town to buy crappy second-hand leathers and weaponry?
Is the armourer or weaponsmith going to buy it? Well, he could, but he doesn't have a huge amount of prospective customers for it, so perhaps he offers less than half value for it (as the standard selling is half value). Do the peasants accept? After all, they risked their lives, but no one is going to buy it out on their farm, and they have no use for it themselves, unless they're going to raise some child soldiers. Less and less profit.
Of course, goblins aren't the only danger out in the wilderness. There's all sorts of dangerous and deadly creatures lurking out past the beaten path. Better hope you don't encounter something more deadly than a few gobbos, since your club might not do much to a troll.
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If nothing else, most people don't
want to engage in life-or-death battles. They're not going to go out looking for trouble with superior enemies, when they could bunch together some copper coins and a cheesewheel or two and hire a couple of burly men professional in violence to go kill them instead.
Defending their homes, I imagine the peasants have the advantage of cover and their backs being against the wall to spur them on - but if the goblins are actively attacking a hamlet, they probably have the advantage of numbers. Goblins are cowardly sorts, after all, and like to hold the advantage. If there's only a few, they're more likely to attack people on their own or steal animals or crops.
I guess it depends what the goblins are there for. If they want just to steal anything valuable like food, they're not going to attack hamlets, because there's more danger in it - rather than running, the peasants will be forced to fight, and so the risk to the goblins is much higher. They're cowards - they don't like lots of danger. They'll rustle cattle and steal crops. Perhaps there'll be a fight occasionally, and some goblins and peasants will die, but it'll rarely escalate, because neither peasants or goblins want to have a big battle. If the goblins do too much, then the peasants will organise a mob or hire warriors - or both - and the goblins will have to fight at a disadvantage or run.
If they want the
land, then they'll be there in much greater numbers, beyond the capacity of a hamlet of peasants to reasonably deal with. The peasants will take what they can and leave, appealing to their lord for help, and trying to hire some warriors or adventurers to deal with the goblins if the lord isn't interested.
At least, that's how I think of it, on both fluff and crunch terms.
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