So this has been loosely on my mind for a while. In the endless strive to have my games feel more immersive I’ve started running up against a few problems when it comes to money. You may well have come up against these problems yourself. The PHB’s price lists relative to villager wages are fucking bonkers, scarcity is never accounted for, and frankly some objects like spell scrolls don’t have useful prices at all.
The solution I’ve found is to completely change mine and my players’ thinking about how currency works. The end result is something that is all at once far more simulatory while also being far more robust when it comes to managing the economy of your game worlds.
It all runs off one simple principle with wide-reaching consequences:
Money isn’t worth what the PHB says, it’s worth what the NPC says.
Starting At The Beginning
To understand what this means we need to have a bit of an understanding about why currency exists in the first place and the general history of using money as a means of representing value.
Most people have a tacit understanding of this already, but at one point all exchange was done through barter and a thing was essentially worth whatever you could trade it away for. There was no ‘universal metric’, value was determined during the course of an exchange. If both parties felt that one sack of grain was worth three quarts of fresh milk then that was the relative value of those things for that transaction.
The emergence of currency does a couple of things, some of which happen on the societal level and some of which happen on that transactive interpersonal level. For a government, currency creates a unit of value that they can gain and spend to carry out necessary functions of governance. It wouldn’t do well to have a bunch of government cows producing milk so that they give milk to labourers in exchange for building a road. Money is a far more elegant unit of value.
In this context money also broadens economic possibility. If I travel from my village to the nearest city I can’t very well walk my entire herd of cows there so I can barter them away in exchange for the goods I need. Having a portable unit of currency with a relatively consistent value is far more helpful to me. This is still a societal benefit though, not an interpersonal one. Having the individuals within your society able to interact with this new economic unit of value increases the flow of goods through a society.
The prime interpersonal benefit of currency is that now we have a value middleman for our transactions. Let’s dive into what that means.
Money Doesn’t Replace Barter, It Augments It
This is the core of how I actually treat currency in my DnD games.
One of the best uses of money for a couple of villagers trying to do business together is if they agree that a whole cow is worth more than 2 sacks of grain but less than 3 sacks, they now have an extra representative unit that they can use to express that difference. The cow is now worth 2 sacks and this handful of coins.
So now our barter can happen on a more precise level. There’s just one problem. What exactly is that handful of coins worth? How many coins to a full sack of grain? How many coins to a cow?
Well the answer is there isn’t actually a universal idea of what a unit of currency is worth on the individual level. This is why it’s important to split what currency means to a society from what currency means to an individual.
A government can say ‘The price of a sack of grain is 3 Shims’ and ‘The price of a cow is 7 Shims’, and that now gives us a basis from which we can understand the value of a given coin across a variety of transactions. In terms of a single transaction though that value is actually a lot more flexible. It might seem on the surface that our trade should be ‘I’ll give you 2 sacks of grain and 1 Shim for that cow’ but that’s still not actually true because what that 1 Shim represents is still very fluid and uncertain in terms of value.
Here’s the bones of it. To a government 3 Shims are worth a sack of grain. To an individual person 3 Shims aren’t worth a sack of grain, they’re worth whatever the individual reckons they can get for 3 Shims. The same is true for that 1 excess Shim in our grain-for-cow transaction. That deal is only as good to the cow merchant as whatever they can get for that 1 Shim elsewhere.
Value Is Messy And Relative
We’re not always trying to buy grain, and the actual value of grain is determined by invisible economic forces that medieval peasants don’t really understand. Hell even governments might not have a codified understanding of Supply and Demand.
A bad harvest changes the value of grain. It’s worth more in real terms, but the government-set price from which they anchor their currency doesn’t change. A sack of grain is still worth 3 Shims, but the net effect is 3 Shims are now worth more too because grain is more scarce.
But to a farmer? If you have sacks of grain you’re not going to give them away for 3 Shims. Rather than convert that grain into currency you’ll seek to extract its value more directly. Let’s say you have excess grain and you want a bigger cart so that you can start taking more grain to market. You sell two sacks of grain for 6 Shims then go to the town’s wainwright and say ‘Make me a bigger cart, I’ll pay you 6 Shims. The wainwright says ‘I don’t need money, I need grain.’.
See to the wainwright those Shims are only as good as the grain they could buy him, because grain is scarce right now. He would rather you came to him and said ‘Make me a bigger cart, I’ll pay you 2 sacks of grain’.
If you come to market with the more in-demand good (between the physical good and the currency’s value of that good) then people will be more receptive to trade.
Even though in purely mathematical terms those 2 sacks and those 6 Shims are the exact same value, the perception of their value is not the same. The grain is more important.1
But economics would also tell us that the perceived value of those two things actually is the real value. If the grain is considered to be more valuable than the coins then it is in fact more valuable.
So now the value of the grain is increasing at a higher rate than the value of the currency as compared to grain, which makes very little sense when we view the world through the lens of currency.
So does that mean our entire economy collapses? No way, not even close. Why?
Economies Are Not Rigid
Modern society is very interconnected. A Big Mac costs the same in my city as it does in the next city over. If I convert my local currency to USD and fly to San Francisco then I can still buy a Big Mac for roughly the same amount of money, and any differences can be very accurately accounted for by other market forces.
Medieval economies are not like this at all. They are more rigid in larger population centres, especially when in said centres agriculture is not the primary economic activity, and less rigid in rural areas where agriculture is the primary economic activity.
The reason for this is simple (it’s not, it’s actually extremely complicated, but we can reduce it to something usable that’s close enough to the truth). The closer we are to the primary economic activity of farming, the more accessible the ‘Grain’ side of that ‘Grain vs. Coin’ dichotomy is. People can afford to transact in grain rather than coin because they are where the grain is. The value of the coin matters less, so its tangible value is more loose and fluid. 2
In a city this is the opposite. The grain will still reach the city, sure (probably by way of government taxes and tithes), but the value of the coin matters more. As a result, it’s important to the denizens of the city that the coin’s value is clear and stable. If 2 Flats and a Shim buys me meals and rooms for a week this week then it should be able to do the same next week.
In cities we measure goods by their coin value. In the country we measure coins by their goods value.
An Actual DnD Transaction
Let’s now look at two different transactions in our DnD world. One takes place in a rural community, the other in a city.
In the rural community a farmer needs his hoe repaired. He goes to the local smith and says ‘Can you fix this? I’ll give you a bag of apples.’. The smith reckons the work is worth more than just the bag of apples so he says ‘Can you throw in anything else?’. The farmer says ‘I’ve got a Shim and a couple of Flats. I could put in 3 Flats.’ The smith thinks it over. ‘I could probably use those Flats when I go to get firewood from the woodcutter’ he thinks. ‘Ok, it’s a deal’.
See that critical moment there? The smith thought about the currency in terms of what else it could help him acquire. He wasn’t thinking ‘3 Flats are worth 8 more pounds of firewood’. He was thinking ‘These will help when it comes time to barter with the woodcutter’. The coins were only worth whatever the smith felt they were worth, which is in turn defined by whatever transaction he reckons he could later use it on.
In a city a noble wants a family heirloom repaired. He goes to the local smith and says ‘How much to repair this sword?’. The cost of his labour is much more clearly defined, so the smith says ‘Two and Four.’ Which means 2 Shims and 4 Flats. The noble agrees and pays. Later, the Smith will use the 4 Flats to buy the coal for his furnace so he can make the repair and the remainder is his profit, most of which will go toward paying taxes and buying food.
Players Gotta Pay
So how does this actually affect our DnD games? Well the PHB has this great big list of prices and if you’ve ever used it it’s fucking bonkers. The cost of stuff relative to what wages supposedly are is insane.
That PHB price list is more like what the government says stuff is worth. That’s the whole ‘A sack of grain is 3 Shims’ thing. In actual terms, out there in the real world, that sack of grain is worth a bag of apples and a few copper.
By remembering that value is relative and established almost entirely by the parties involved in a transaction we now have a framework for making up costs of goods on the fly while maintaining a broad economic integrity. In short, we don’t break our economy by charging our players just one gold piece for a horse. In that village one gold goes a long way since they mostly just barter. That one gold piece is actually spent as 100 copper pieces and the stud farmer thinks ‘Excellent, now I have 100 coins with which to sweeten deals for years to come’.
In cities we have to maintain something a bit more rigid, naturally, but to that end we’re mostly just interested in things players will actually look to do. We don’t really care that much about wages, because when was the last time your adventuring party worked for wages? We just care about things like the price of a room and meals, the price of supplies, and how much the party will be rewarded with for quests.3
Help! My Players Have Too Much Gold
And this is where we come full circle. If you’re still not quite understanding what I’m getting at with this piece then think about this. Have you ever had a game where your players get paid out for various quests and it gets to a point where gold is completely fucking meaningless? They already have full plate, they have a bunch of magical weapons, they can easily buy horses any time they need them. The problem is they have nothing worthwhile to spend their money on.
And so the money has become worthless to them, because money is only as valuable as what it can buy you. If there’s nothing left to buy, the value of a given unit of currency is functionally 0.
A starving villager does not give any kind of fuck how much you’re willing to pay him to repair your hoe. He needs grain. He needs meat. That money only matters to him if it can buy him food, and if there was food available he would have already found a way to acquire it.
Money Is Not The Only Form Of Currency
I’ll end this piece off by discussing a couple of other quick concepts that become easier to understand now that we’re viewing money through the lens of relative value.
Large sums of gold are seldom, if ever, represented by huge piles of coins. Instead they’re represented by other more tangible, concrete goods.
What is a beautiful ruby worth? Well see it’s not about the actual mathematical gold value. A big ruby in good condition is rare, so it’s inherently valuable due to its scarcity. It also takes a highly skilled craftsperson to cut and polish the ruby well. We know a ruby is worth a lot. A noble would rather have a room full of rubies than a room full of coins of the same monetary “value”. Why? The value of the coins might change. The value of the ruby as represented by the coins will change with it, but the real value of the ruby will not change. Provided rubies remains scarce and expensive to cut and polish, the ruby will continue to be worth a lot.
So high amounts of money often move through an economy in the form of stable-value goods. Those goods could be gems, relics, artworks, or even deeds to land estates.
This is precisely why gold is often used as the basis for currency rather than grain. Though the value of grain may be more intuitively understandable to a villager, it is also less stable. A bad harvest doesn’t do much to change the value of gold that has already been extracted from the ground.
Let’s say now your home gets conquered and the new lords set up taxes, tithes and replace the currency entirely. Your rubies are still pretty darn useful in representing your actual level of wealth. The smith meanwhile has to establish the value of his labour once again in the context of the new currency and new economic system. It will mostly stay the same, but the coins he had been trading in before are pointless for paying taxes.
Let’s also remember that a currency is actually set by the people more so than by the government. The government might say ‘We no longer use Shims, we’re issuing a new gold-backed currency called Stones’ but the people with coffers full of Shims will continue spending them because that’s what they have. As long as the actual individuals they’re making transactions with still see Shims as useful and valuable they will continue accepting Shims as payment.
Lastly we have the concept of multiple currencies in a world. I may yet do a separate piece on how to handle this more deftly if you want to have campaign settings with multiple currencies, but the gist is that again each currency is only worth what the person you’re trying to give the coin to believes it is worth. You may well be able to spend Shims in a Duchy where Kraits are actually the given form of currency because the town you’re in is on the border and they regularly do business in both currencies. They know full well that some other traders will come by and be more than happy to accept those Shims as payment as they make their way into Shim-land.
Multiple currencies do introduce the idea of relative values, which means we need to think about currency conversion, and this is where it becomes prudent to expand on this concept in a separate piece.
Whew that was a lot to get through, and a lot of it was dense and conceptual. We didn’t hit the tangible, actionable part until quite late, so if you made it through and found this useful then you have my gratitude.
Please don’t think this a rug-pull but I Am Not An Economist. I may not have represented or explained some of these concepts as well as I could have, and no doubt there will be experts on historical economies who could provide deeper and more accurate insights than I. At any rate this piece is more about understanding these concepts for the purposes of having something functional you can use at your table.
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1.The reality here is that a coin isn’t worth a certain amount of a good, it’s worth that amount plus or minus the convenience (or inconvenience) of using a coin to buy a good rather than acquiring that good directly. If it is more important to have the grain immediately then the coin is inconvenient, because it represents a barrier to you acquiring grain (since you still need to go and find somewhere to buy the grain). The grain becomes more valuable in actual terms than its equivalent coinage. If you’re travelling a long distance then the coin is more convenient since it won’t spoil like grain will and you can spend it at your destination for more grain. The coin becomes more valuable than its equivalent grain.
2.The core point here is that seeing the value of things through the lens of currency is a very modern thing. When we go back to anything pre-industrial the view of value is reversed. We assess the value of a thing directly, then consider the value of currency relative to that, and the value of the currency is seen as the secondary, less-important metric of actual value.
3.By the way, get rid of Electrum for coins. 5e puts the value of an electrum piece as being between silver and gold, so 10 silver to 1 electrum, 10 electrum to 1 gold. The problem is electrum is an alloy of silver and gold, so unless you have a stupidly specific ratio (which would mostly be silver) the actual metal in the coin will be worth more than the coin itself. Let’s say a coin is 50% of each and all your coins are the same size, 2 electrum coins would contain the same amount of gold as 1 gold coin and the same amount of silver as 1 silver coin, so coins that are meant to be worth 2/10ths of a gold coin are in fact worth exactly 1 gold coin. Fucking absurd. To make this alloy work 10 electrum coins would need to be the same amount of gold as 1 gold coin plus the same amount of silver as 100 silver coins. These coins would have to be fucking huge.