Stack Of CashMost of us don’t know a lot about money. We might know how to spend money, we might even be able to handle our own finances well (… well, you might: I kind of suck at it), but I find relatively few authors who double as economists and really understand how money works in the broad strokes. This is true for modern authors as well as for fantasy and science fiction authors. However, modern authors have the advantage of never having to create their own economic systems… fantasy and science fiction authors don’t. So, one question that you need to answer in your writing is: How does money work?

There are a lot of lesser questions involved in this, and I’m probably going to take a few posts to treat them, or at least the one’s that I actually understand. However, the single most important question, and the question that most of us would never think to ask (I actually just realized this myself… I’ve been listening to a course on Chinese history that deals heavily with their economics), is: how do the people of your world think about money?

turkey_market_goodsGenerally there are two ways that a culture conceives of money. Either money is an abstract entity that does not necessarily have a physical existence (the American economy is a good example of this), or money is tied directly to some physical product. Steven Erikson and George R.R. Martin give us good examples of each of these concepts in a fantasy setting in the Malazan Book of the Fallen series (Midnight Tides  and following) and the Song of Ice and Fire series.

Until fairly recently (historically speaking up until the past two hundred years or so) money has generally been thought of as physical wealth. For instance, trade was done in goods (i.e. gold, silver, food-stuffs, etc), and bartering was fairly common. While many nations had ‘money’ it was often restricted to mercantile classes, and other population groups would trade in goods (essentially a barter system). Even government taxes where historically paid in goods (for example, China didn’t begin collecting taxes in money until the 14th-15th century, and even then taxes were paid in silver). Thus wealth was an inherently physical entity. This physicality of wealth placed certain controls on how property changed hands (for instance, you couldn’t sell 100 bushels of wheat if you couldn’t transport 100 bushels of wheat), and on how money moved (The dominant currencies in China were silver and copper, although they did experiment with paper money in the 11th and again in the 15th centuries, but there was only so much silver and copper available, and thus wealth was limited). The concepts of debt and credit existed, but they did not dominate the civilizations, they were a relatively minor part of the economic system.

(Photo Credit)
(Photo Credit)

Martin effectively expresses this kind of system in his Song of Ice and Fire series especially well in the debt of the crown to the Lannisters. The debt of the crown is measured physically, and, because it is essentially unpayable, the Lannisters are able to use that physical debt to manipulate the crown.

Many modern economies have an abstract concept of wealth. Money is not an inherently physical entity, and thus spending and value also become abstract. Instead of directly selling goods or services the majority of people are employed by large corporate entities that pay a set wage and demand varying services in exchange. Both the wage and the services demanded are variable, but they are no longer truly dependent on one another. The abstract concept of wealth also means that debt and credit take on a much greater place in society. Debt becomes expected, instead of an extreme, and the amount of debt, and the manner in which it is handled, determines how much credit an individual is allowed. The more debt you have, the less credit is available, and the worse you handle the debt you do have, the less credit is available. This is important because credit becomes the primary source of purchasing power in an abstract economy. Instead of physical goods and wealth, an amount of credit is afforded to an individual depending on what how the individual can be expected to handle the debt that the individual accrues.

Erikson effectively embodies this abstract notion of wealth in his Letherii empire. By giving the Letherii empire an abstract concept of wealth, Erikson is able to build a believable society built on the concept of debt and credit in a fantasy setting. This is quite an achievement, but it also helps the reader to understand the importance of how we think about money in the first place, and of how we then act on those thought.

10 thoughts on “What Should a Fantasy Economy Look Like?

  1. A great article Tobias, as economics is a glossed-over topic for the most part. The Fantasy nobles have the Treasury, and their villainy hinges on their method of filling the coffers. The Sci-Fi worlds revolve around credits, with greedy industrialists, militant arms dealers and space pirates getting the brunt of it.

    I’m a qualified accountant, but a good economist would be extremely useful to the SF/F genre =)

    1. I agree completely, James. Unfortunately that isn’t me. I’m just now starting to learn about economics. I will say that Steven Erikson’s Midnight Tides is the first novel I’ve come across that successfully implements economic commentary in its story. Erikson uses the Letherii, that I mentioned in the article, to take apart the debt-based economic model and reveal it’s problems one by one. Very interesting read.

      1. Thanks for the suggestion. I will keep ‘Midnight Tides’ in mind when I need to replenish my bookshelf =)

        I will put a link to this article on my next post, as it a great read, and I enjoy getting people thinking on understated or overlooked aspects of the SF/F genres.

    1. Caronlynn, this isn’t a bad way to set up a fantasy economy. However, the question that I think a lot of us need to be asking is: ‘why do they do this’? As I point out in the article, we often gloss over the basics of what makes an economy function and focus on terminology. What kind of currency a culture uses is less important than how they view that currency.

  2. There are a great many ways to imagine and explore economic systems, especially where it comes to the genres of fantasy and science fiction. Something that does strike me is that most of the time people explore terminology, relations, enablement and consequences where it comes to economics.

    For some reason it tends to go by the foundations of it all. Economics is human behaviour. There are many coins, but the foundation is always trust.

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