They purposefully make abusing the auction house more or less unprofitable. Without it, theoretically it's possible for an insanely rich player to buy up all the steel in the market and then rack up the prices. If that happened, if someone cornered the market on some essential resource, then the whole economy would come crashing down. These taxes also incentivize guild control of regions, because not only do guilds get tax discounts on regions that they control, but they also get a portion of taxes collected from anyone buying or selling within that region (among other benefits).
Most items cannot be traded outside of the market house. Players can trade certain types of items, but generally things like money or resources or equipment can only be transferred via AH sale. Because of the mechanics of the AH this can be abused, and some players are able to make "illegal" transfers, but it requires specific conditions and coordination with the other player. The cash shop currency is pearls, and that kind of thing happens, but if you get caught your account can get sanctioned.
Just like how players can't trade certain items, they also can't make certain things, or it would be inefficient to do so. For example, to make a sword you not only need raw materials, but also the facilities to craft in. Say you needed ash wood, steel, and an earth crystal to make a level one sword or whatever. It's possible to collect this stuff yourself. You can mine the iron and coal if you know where the collection nodes are. You can even refine these into steel.
However, it's unlikely that doing so yourself would be as efficient as having a worker do so. Workers will ply assigned resource nodes until they run out of stamina and have to regenerate. A level one worker will generate more iron in an hour than a level one player. They'll also do this while you're off mucking about in dungeons or whatever.
To get a worker though you need the property to house them and the facilities to store what they gather. Every inhabited settlement has buildings that you can claim, which enable various functions. To activate these buildings, you have to allocate Contribution Points, which you earn by fulfilling special quests which give you Contribution Experience, and every time you level that you get a single point which you can allocate. These points are never lost or destroyed. If you dismiss a worker that you no longer need, you can retract the CP you invested in his lodging and reinvest it elsewhere. The more CP you have, the more that you can do, but generally the more you do, the more CP it costs.
So while it's heavily abstracted, you have a simulation of property management and commodity production where the more socially necessary labor that you perform, the more you can access and use productive property, which is "yours" for as long as you are using it, but the use of which precludes you from monopolizing all productive property. You can't have a Max level sword smith and foundry AND a Max level wand maker for example. But if you change your mind and want to change from the one to the other, the only thing stopping you is the effort involved in reorganizing your labor and property. In reality, one person occupying the blacksmith doesn't preclude other players from using that same building, but I think that's an interesting way of simulating property ownership, use, management, etc.