DnD Economy

[fusangite]

Interesting. Can you expand on this?

Before the 1300s, people believed that commodities had fixed "real" objective values that were always at the same ratio to one another regardless of supply or demand. X number of ounces of pepper always equaled Y number of ounces of gold, regardless of the amount of gold or pepper in the world or at the location of the transaction. Governments would appoint scientists and philosophers to conduct investigations to figure out what the proper ratios were.

When merchants made profits, this was understood as them charging people for the cost of transporting or storing goods not as the cost of the good changing because it was now in a location where there was greater demand or less supply. That's why charging interest or upping prices during shortages was understood as morally wrong -- it wasn't because gouging people was bad but because it entailed misrepresenting the true, objective value of the commodity. After all, how could gold today be worth more than the same amount of gold next year (the basic premise of lending today).

Aristotle was the thinker who spelled out this view of trade most authoritatively. And given that he was also the most eloquent and comprehensive authority on the four-element theory, I tend to use his versions of the physical and social sciences as the D&D default. Althought they're not a perfect match to the D&D rules by any means, they are a closer match than Adam Smith's economics or Newton's physics.

It took the Fransciscans' theological innovations to break out of this idea during the 14th century.

I hope that's what you wanted me to expand on. The rules part seems pretty self-explanatory.

 

[fusangite]

This pretty much goes for any RPG. Few, if any, RPGs, even modern ones, deal with supply and demand or other such factors in economies. They only provide a list of equipment with set prices. The only instance I can think of would be Traveller which has resell values for trade goods that are based on random die rolls modified for the planetary code.

Equipment prices can change by GM fiat without the system, as a whole falling apart. Sure it's inconvenient to rewrite an equipment price table for a modern setting but rewriting the table doesn't alter the relative power of spell casters every time you do it, unless you have something like the item creation mechanics of 3.x.

 

[Kid Charlemagne]

I don't have any problems with adding an illusion of market forces to a D&D game. The players will never be able to assemble the data to determine if I'm making it up as I go or if I have pages of rules to back it up. I personally run a late medieval/early renaissance style game, so economies are more developed - stage 2. moving towards stage 3 per the OP. Banks and letters of credit exist, and are reasonably common. I'd recommend the Baroque Cycle by Neil Stephenson for a rip-roaring adventure that also has to do with monetary systems and economies moving into stage 3...

I'd draw the line between coin and barter around 20,000 gp - and the transaction would still tend to be in coin, it just would take time and effort to find craftsmen, etc.

 

[JDJblatherings]

Before the 1300s, people believed that commodities had fixed "real" objective values that were always at the same ratio to one another regardless of supply or demand. X number of ounces of pepper always equaled Y number of ounces of gold, regardless of the amount of gold or pepper in the world or at the location of the transaction. Governments would appoint scientists and philosophers to conduct investigations to figure out what the proper ratios were.

When merchants made profits, this was understood as them charging people for the cost of transporting or storing goods not as the cost of the good changing because it was now in a location where there was greater demand or less supply. That's why charging interest or upping prices during shortages was understood as morally wrong -- it wasn't because gouging people was bad but because it entailed misrepresenting the true, objective value of the commodity. After all, how could gold today be worth more than the same amount of gold next year (the basic premise of lending today).

Aristotle was the thinker who spelled out this view of trade most authoritatively. And given that he was also the most eloquent and comprehensive authority on the four-element theory, I tend to use his versions of the physical and social sciences as the D&D default. Althought they're not a perfect match to the D&D rules by any means, they are a closer match than Adam Smith's economics or Newton's physics.

It took the Fransciscans' theological innovations to break out of this idea during the 14th century.

I hope that's what you wanted me to expand on. The rules part seems pretty self-explanatory.

not quite-


The Code of Hammurabi regulated the interest that can be charged on a loan.

533 A.D. The Roman “Code of Justinian” set a graduated maximum interest rate that did not go over 8 1/3 % for loans to ordinary citizens. This law lasted until 1543 A.D. It had been establishes at 8 1/3% much earleir but was allowed to hit 12% sometiem in the 1st century AD.

In medieval times all sorts of anti interest laws were out on the books in western europe. But clearly interest ws not unheard of as there would be no history of limiting it or historiacally set rates.

 

[IanB]

The letters of credit in the Ptolus setting are, if I recall correctly, of the "you can take this letter somewhere and hand it in and get cold hard cash (literally) in return" nature. That is *not* the same thing as an abstract currency, like the American dollar.

 

[fusangite]

The Code of Hammurabi regulated the interest that can be charged on a loan.

533 A.D. The Roman “Code of Justinian” set a graduated maximum interest rate that did not go over 8 1/3 % for loans to ordinary citizens. This law lasted until 1543 A.D. It had been establishes at 8 1/3% much earleir but was allowed to hit 12% sometiem in the 1st century AD.

Forgive me. My statements were solely about the Latin West and not about the Near East. Justinian's code is one of the crucial moments of divergence between West and East. Those subject to Roman Law in the Latin West continued to be subject to the Theodosian Code after 533.

Also, ideas of objective versus subjective value continued to be the norm throughout the region and interest operated as an exceptional case rather than part of a clear philosophic framework that theorized value in a non-Aristotelian way. Interest, in the rare situations it was theorized at all, was understood as payment for a service not a situational adjustment of value.

 

[JDJblatherings]

The letters of credit in the Ptolus setting are, if I recall correctly, of the "you can take this letter somewhere and hand it in and get cold hard cash (literally) in return" nature. That is *not* the same thing as an abstract currency, like the American dollar.

That'd be a note.

The american dollar started out backed by gold, meaning 1 dollar was supposed to represent one dollars worth of gold. That changed over time to be the modern dollar (backed by hot air).

 

[Tonguez]

There is a fourth stage or more a zeroth stage before (possibly parallel to) stage 1 which involves 'Gift Exchange' (which was the system in classical Greece and other tribal cultures)

Gift Exchange - relies on an 'honour code' whereby a gift is given which the receiver is honour-bound to return with extras, at the level of the village/city/state this is controlled by inter-tribal ritual, however it can also have effect at the individual level eg Chief Mack gives you a sword which you use on an adventure you are now honour-bound to return to Chief Mack later and either give him a better sword but also the suit of armour you recovered or to do some other task which he sets. The objective then is to maintain your status and stay friendly with the Chief. As a DnD mechanic it simply requires a status mechanic similar to the wealth system om D20Modern

 

[Plane Sailing]

Stage One - Barter Economy: I will swap you a valuable item I have that you need (food say) for a valuable item that you have that I need (some cloth say). The problem with a barter economy is that it isn't very liquid in that it relies of me finding someone who has what I need who also happens to need what I've got.

I would argue that the 'problem' here is overstated. In a barter economy you can still have middlemen (merchants who swap something with you because they know they can swap your goods with someone else elsewhere. The statement suggests that a barter 'economy' is necessarily an atomic transaction between two individuals. However, two communities could barter with each other, or there could be a chain of bartering individuals.

BTW, a lot of very interesting historical information coming up in this thread

 

[Primitive Screwhead]

This is one of the most interesting threads I have seen recently. I appreciate the detail and depth at which folks are posting... keep it up!

Plane Sailing.. I agree that the 'problem' with the barter system is overstated, but the basic seperation between the three kinds of economy makes sense to me...

As simply as possible:
Stage 1, trade a useful X for a useful Y
Stage 2, trade a handful of coin that have thier own value for a useful Y
Stage 3, trade a promise whose value exists only due to backing by the goverment/law for a useful Y

Tonguez's 4th stage, Gift Exchange, would be very interesting to integrate into certain societies

And if some more folks could add thier opinion for the answer to...

If you were to adopt this view of the DnD Economy, where would you draw the line between Coin and Barter?

So far we have Kid Charlemagne suggesting a line at 20,000 gp... at which point coin transactions for most moderate Wonderous Items and mundane things like Longships are feasable. A magic +1 weapon or armor would also fall under this line, meaning greater magic weapons would be bartered or commissioned.

There are many great posts so far, so I am going to go back to watching and learning