Thread: Economics of a fantasy/old world Setting

There is no reason the economic system in a fantasy world would have to be significantly different from the real world. First you have to decide on a stage of development for the economy in question. Is it a primitive economy based largely on barter? It is a pre-coinage society where wealth is transferred in something like salt or hack silver or seashells? Or is it a more modern economy with official coinage? This gives you an idea of what is valued. A medium of exchange needs to be rare enough that it has value, but common enough that there will be some to change hands on a regular basis. Maybe you even have a fiat currency, backed by little more than the perception of wealth and power, which would cause that perception to be aggressively defended.

You also need to think about credit. Without credit, you have a wealthy class that holds most of the wealth and therefore owns everything. With credit, you can start to open up a middle class that can get the money they need to open up shop without the backing of family wealth.

So, if you want a comprehensive approach to economics in a fantasy world, one place to begin might be with classification of different levels of economic development, different monetary systems, and different systems of credit.

Terminal, another member on this site has done a fair bit of work on economics and demographics which can be found here http://www.cartographersguild.com/sh...ight=economics

Maybe this will help a bit.

-D-

Originally Posted by mtbill

There is no reason the economic system in a fantasy world would have to be significantly different from the real world. First you have to decide on a stage of development for the economy in question. Is it a primitive economy based largely on barter? It is a pre-coinage society where wealth is transferred in something like salt or hack silver or seashells? Or is it a more modern economy with official coinage? This gives you an idea of what is valued. A medium of exchange needs to be rare enough that it has value, but common enough that there will be some to change hands on a regular basis. Maybe you even have a fiat currency, backed by little more than the perception of wealth and power, which would cause that perception to be aggressively defended.

All of this is exactly the point of this thread, to really think about each of these economic tears would function and how the character in the game would interact with it.

Originally Posted by mtbill

You also need to think about credit. Without credit, you have a wealthy class that holds most of the wealth and therefore owns everything. With credit, you can start to open up a middle class that can get the money they need to open up shop without the backing of family wealth.

While this two is something to consider, I know your assumption to be incorrect regrading "credit make the middle class possible". I have built three successful businesses without ever borrowing a dime.

What created the middle class was the concept of "stocks". The ability to sell a portion of future gains for operating capital. This created the modern economy.

Originally Posted by mtbill

So, if you want a comprehensive approach to economics in a fantasy world, one place to begin might be with classification of different levels of economic development, different monetary systems, and different systems of credit.

I believe you already did that.

Originally Posted by LonewandererD

Terminal, another member on this site has done a fair bit of work on economics and demographics which can be found here http://www.cartographersguild.com/sh...ight=economics

Maybe this will help a bit.

-D-

I'm sure it will, I'll check it out.

Originally Posted by LonewandererD

Terminal, another member on this site has done a fair bit of work on economics and demographics which can be found here http://www.cartographersguild.com/sh...ight=economics

Maybe this will help a bit.

-D-

Now that I'm reading it, its not as much of a help as I had hoped. It however does have some insights on the large scale areas.

good initiative someguy - I use a little economics in my game (slowly getting more as the players get more money) and I've thought about writing the stuff down as well - I bought the city book from Wizards for the 3.5 game, but although it had a lot of good gaming info, the economics part was really bad - just based on some dice rolls and general classes ... no HARD info... I'm a lot wiser for skimming "And a 10' pole" from ICE instead.
I'll glady share ideas with the forum as they pop-up

In my world there are banks (with bank notes to take to other banks), there are lots of trading and there is buying or leasing places to live or work. As I'm planning for my characters to found a little town later on, I'm slowly thinking of how trading should work in D&D and how a town works and taxes and all that stuff. Of course the shopping list in D&D is a little here and there to begin with - so that could use a tightening ... and the magic items can only be sold for 1/10 of its value rule I threw out at once - I like semirealism in the game economics.

I can tell you that the Middle Ages did have a bank system by the time of the Knights Templar - you could deposit your gold before you went on pilgrimage, travel with something like a voucher, and withdraw your gold once you arrived in the Holy Lands. This naturally made travelling much more appealing once you didn't have to worry about being robbed at every turn.

The city's guild systems also were a significant force in the economy, covering everything from quality control to collective bargaining power, so I'd also look into those.

And m preferred source: Philip and Margaret Gies wrote a three-book series, Life in a Medieval Village, Life in a Medieval City, and Life in a Medieval Castle. The three are compiled into a hardbound volume called Daily Life in the Middle Ages as well. Each book approaches a slightly different time period, but makes a point of putting its research into context, and each book has a section on the economy of the time and place being studied. Their sources include court documents and tax records of the time; so if you're looking for a good starting point to adapt to your game world, this is it. I recommend City as your first book, since I think it will be most relevant to what you're describing.

The other thing I'd tell you is that the average adventuring party would wreck the economy of most small kingdoms in nothin' flat - coming home from most trips with pockets full of gold, individually wealthier than most of the high nobility, and plonking down hard currency in every tavern and brothel they cross, is a great way to devalue the local currency down to nothing, watch prices skyrocket out of control through inflation, and from there... hmm. Every area they haven't visited is now too poor to trade with those places they have dumped gold into, and since we can assume the wealth doesn't distribute evenly through society, you'd have massive fluctuations in joblessness, immigration/exodus, civil unrest, starvation and rioting in the streets, and so on. Fun!

Magic in your economy is easy - it's high tech. Some people have it, some don't. Some have the skill to use/make these tools, some don't. What's interesting is that you could possibly set up a closed subsystem within your economy, assuming that most people who don't have magical ability also don't have the ability to use magic items. Then your magic item is a product that is only made by and for a single group of people. If that's not the case, then it's basically high tech. Groups may or may not guard the secrets to building certain items, there may be laws restricting their sale, the people able to make them would certainly fight to keep some economic control over the money generated.. I mean, would your mages be employees of some other group, or would they be a self-governing body? Would governments and customers tell them what their stuff was worth, or would they get to decide that?

Okay, now I'm yammering. You've caught my curiosity and I'm enjoying myself.

Cheers!
Heather

Originally Posted by someguy

While this two is something to consider, I know your assumption to be incorrect regrading "credit make the middle class possible". I have built three successful businesses without ever borrowing a dime.

Well, we could break out the notion of credit a bit. Businesses are often funded with bonds and stocks. Bonds are debt taken on by the company, a form of credit. Stocks are equity investments, but if a world does not have a particularly sophisticated economy, might still be handled under the umbrella of credit, as they involve someone with wealth giving over that wealth to someone with certain expectations of performance.

In a sophisticated economy, your equity investors may be out of luck if your business goes bust. In an unsophisticated economy, they may break your knees and sell your daughter into slavery. That looks more like credit to me.

Either way, that middle class, generally having little accumulated wealth, depends on those who have the wealth to free some of it up.

Originally Posted by PeaceHeather

The other thing I'd tell you is that the average adventuring party would wreck the economy of most small kingdoms in nothin' flat - coming home from most trips with pockets full of gold, individually wealthier than most of the high nobility, and plonking down hard currency in every tavern and brothel they cross, is a great way to devalue the local currency down to nothing, watch prices skyrocket out of control through inflation, and from there... hmm. Every area they haven't visited is now too poor to trade with those places they have dumped gold into, and since we can assume the wealth doesn't distribute evenly through society, you'd have massive fluctuations in joblessness, immigration/exodus, civil unrest, starvation and rioting in the streets, and so on. Fun!

Lots of ways to deal with this. The first is in differentiating coinage. If only the nation's official coinage is legal tender, then ancient and foreign coin has become a lot more difficult to deal with. That dragon horde probably doesn't consist of Gold Crowns minted during the reign of the current king. If the government demands a tax of, say, 60% on all found money, that is also going to make adventurers a lot less likely to flash it around. If the government also has a tax of, say, 50% on the exchange of ancient to modern currency and, say, 30% on the exchange of foreign to local currency, this is starting to get painful.

If they have foreign coin, they can go spend it in a foreign country, where they are obviously foreigners and probably subject to the same kinds of high taxes - or maybe even forfeiture over a certain amount. It may be even more difficult to get away with spending a lot of foreign coin in a country where you can't pass as native.

So, adventurers might be tempted to participate in a more underground economy, with all its attendant risks. Do they try to barter for goods with these foreign or ancient coins, knowing that any transaction could be reported? Do they try to find an organized criminal organization that can melt the coins and produce counterfeit?

The problem with money is that it is hard to hide it if you use it and hard to enjoy it if you don't.

I'm liking where this going. I think I will finish up the "Kingdom structure and laws" doc for my home setting so that we can use that as the first economic foundation for developing a model.

I will attach it to this post once complete.