Money. Pink Floyd said to keep your hands off of their stash. Monty Python said it makes the world go round. No matter who you ask, money talks. And, just like in the real world, money in your fantasy campaign should have an impact. Whether you’re a first level fighter trying to figure out how to get the most armor with your starting gold, or a vampire crime lord looking to expand operations into the suburbs of Chicago, money can be the difference between being a superstar living a multi-million dollar lifestyle, or a criminal driven to kidnapping and extortion to try to capitalize on fleeting fame. Just ask OJ.
But, in the context of your fantasy campaign, how are you going to treat money? Is it going to be a stepping stone to the next level of competence within the framework of a dynamic role-playing milieu? Or is it going to be incidental in your characters’ advancement, an afterthought when compared to experience? And, just as importantly, what does wealth actually entail? Questions of economy, currency, and socioeconomic status can all have an impact on your world, especially as characters grow in power. Planning for that eventuality can help keep the world believable, even as characters grow to mythical status.
It’s The Economy, Stupid!
Economics 101 is about supply and demand. That basic paradigm governs the vast majority of economic activity, and determines how expensive most goods will be in a market economy. Your band of intrepid adventurers should not be immune to the vagaries of the economy.
Demand drives up prices. As more people want goods, competition for those goods rises, which leads to rising prices. But, as prices rise, more people are willing to dedicate themselves to the production of those goods, increasing supply. High, stable demand results in high production, which leads in turn to efficiency in manufacturing and lower cost per unit. Eventually, the market reaches an equilibrium point, where common goods are reasonably cheap to manufacture and purchase. This might seem a boring topic for a fantasy campaign, but bear with me; I’ll be coming back to it soon.
Of course, the reverse can be true. Under certain conditions, demand can out pace supply and lead to an upward spiral in the cost of goods. That was true in the American Gold Rush of the mid-19th Century. Mining tools were sold at a premium, in spite of their low material and labor cost. The same happened when Air Jordans first went on the market, and it happens in the sale of luxury goods of all types, from diamonds to spices to Beanie Babies. And, most importantly, the same happens in war.
A Brief History of Cash
So, with all of this economic activity in your world, how do you know how much stuff is “worth”? Aside from pure barter economies, where stuff is worth whatever someone else will trade, all market economies have a general concept of the value of goods and services. Those values can be denominated in one of three basic ways: foundational commodities, specie currency, and fiat currency.
Most ancient economies were based on the trading of commodities. The common peasant or laborer never got their hands on actual “money”. Sumerians paid their taxes in bushels of Barley. Roman Legionnaires were paid in measures of salt. The Dutch used tulip bulbs as a medium for trade. Just as often, markers bearing an image or symbol representing the commodity were granted, which could be redeemed later for the real thing. But market shortages often destabilized this form of trade, and commodities were heavy, and could become spoiled. Pretty soon, these markers turned into coins, and economics evolved.
Specie currency—minted metals—helped stabilize trade and provide a flexible medium for commerce. Gold and silver coins never spoiled, and gold from one nation was just as valuable as gold from another (with a minor fee from the money changer, of course). Pretty soon, coins weren’t worth a specific commodity; rather, those commodities were worth a certain amount of money. Abstract money, rather than commodities, fueled the rise of nations, allowing city-states to amass great quantities of wealth and raise massive armies in their lust for conquest.
At some point, cash became an instrument not only of trade, but of control by the nation-state that issued it. Promissory notes of currency became common, issued by both the state and by private banks. The guarantee that someone would be able to fulfill the promise of the note allowed banks to issue more currency than they had in gold and silver reserves, giving them additional leverage at the cost of additional risk. Money was eventually not backed by specie at all, but by trust. And so “fiat currency” was born—money based on the idea that we all agreed on the value of a piece of paper in your hand.
A Mix of Currencies
This was a gradual development through time, from commodity based to fiat currencies. But in every sufficiently advanced economy, a mix of the three persisted. In Roman times, salt was as good as gold, and people traded in commodities as often as coins, while the wealthy often wrote promissory notes to make large transactions. Medieval Europe had a similar dynamic, with serfs being paid in grain and beer while noblemen traded promissory notes from one another, or even the Church Herself. As long as there have been goods, coins, and wealth, healthy economies have seen a mix of the three.
Of course, economies aren’t always healthy. When nations go too deep into debt, they can experience massive inflation, as they print money to keep up with rising costs. Wealthy people will horde gold and silver, or even other nations’ money, and loan it to try to amass even greater wealth. Large numbers of promissory notes lets banks and noble houses leverage more wealth than reserves, creating the potential for bankruptcy. All of these can lead to cycles of instability, with price fluctuations, rampant inflation, and blatant corruption creating chaos in an otherwise stable economy.
So, all of this talk of monetary theory begs a question: Why should you care?
Frankly, that’s up to you. The role of “treasure” in your RPG can be as simple or complex as you’d like. Sure, you can just say that everything is denominated in “gold pieces”, with 100 coins denoting a pound of metal. But money can be something more than just a way to buy better barding for your warhorse; it can be a way to introduce complexity and nuance to your campaign while giving you an additional mechanism for exercising control.
Alternatively, you can give treasure in English shillings, German thaler, Italian lira, and Spanish dollars—all silver currencies of varying weights and purities. Having a well-developed monetary system for each culture is historically accurate, and can add a lot of depth to your world. It can also create a paperwork nightmare. Having all of the cultures use metals of roughly the same weights and purities, and making them universally accepted, can add flavor without changing mechanics or creating unnecessary complications.
On top of these coinage types, establishing certain base commodities used in trade is also an easy way to add flavor to a campaign setting. Salt, grains, livestock, and cloth are common types of commodities; and, while salt is universal, the types of grains, livestock, and cloth used by one culture can add depth to your story. A caravan that’s looted won’t typically have a hundred gold pieces; instead, it will have a hundred gold pieces worth of commonly traded stuff. And what one culture views as a staple grain, another culture may view as a rarity—or refuse to trade in it at all. The same can be said for promissory notes written by either noble or trade houses. While they may be worth face value in their homeland, a foreign culture might not trust them at all.
Economics is also a function of culture. Cultures are going to supply the goods that are consistently in demand. While most RPGs do a good job with tables that give you the costs of things, there’s no reason why those costs are going to be static from country to country. Highly agrarian, peaceful countries will likely have better prices on basic foodstuffs, better choices of refined foods (like cheeses and alcohols), and a greater variety in terms of both qualities and costs. On the other hand, weapons are likely to be more basic in variety and quality, and adventurers will likely pay a premium for them. The opposite is most likely true for villages that grew up in the shadows of a keep. That kind of detail not only makes for good worldbuilding, but can also provide for interesting story hooks and explain a dynamic trade environment (and merchants need sellswords).
Finally, supply and demand can be a way to tweak wealth in your party. Your campaign seems like it’s a little cash-light? A glut of goods can lower prices. Your fighter is a bit under powered? Arms and armor might be cheaper in a militaristic border town that has recently signed a treaty with its neighbor. You accidentally gave your party too much cash? Unrest and the threat of war are causing prices to rise across the board. As most things within your fantasy world, the conditions of the economy are heavily dependent upon the “Invisible Hand” that Adam Smith did not foresee—specifically, the hand of the meddling Game Master. How powerful you want that hand to be is up to you.