Welcome & General Introduction

Following a successful Dr Who adventure in which the player started to see how a number of plot threads intersected, my head is currently full of the strange environment in which the next adventure is to occur.

I mean, this is the homeworld of his current companion – a psionic sentient ball of ionized blue gas. What is the right environment to produce such an unlikely ‘creature’ (using the term loosely)? Fortunately, I think I have a handle on the answers, but my mind keeps adding in nuances and details regarding social structure and activities within the culture that derives from such a life-form.

Hint: there are more similarities (with nuanced unusual differences) than there are differences – but some of those differences are doozies.

Since I wanted to give that subject as much time to percolate through my gray matter as possible, I’ve delayed starting this article until the last minute. Hopefully, I’ll still get it finished in time.

— UPDATE: Well, I didn’t quite make target. But readers get an extra 3,000 words for their patience!

Related articles

This series joins the many other articles on world-building that have been offered here through the years. Part one contained an extremely abbreviated list of these. There are far too many to list here individually; instead check out

the Campaign Creation page of the Blogdex,

especially the sections on

• Divine Power, Religion, & Theology
• Magic, Sorcery, & The Arcane
• Money & Wealth
• Cities & Architecture
• Politics
• Societies & Nations, and
• Organizations. and
• Races.

A disclaimer: I am not an economist and I’m not trying to turn anyone else into an economist. An awful lot of this content will be simplified, possibly even oversimplified. Bear that in mind as you read.

A second disclaimer: I’m Australian with a working understanding, however imperfect and incomplete, of how the US Economy works, and an even more marginal understanding of how the UK economy works (especially in the post-Brexit era). Most of my readers are from the US, and number two are Brits. Canadians and Australians fight over third place on pretty even terms, so those are the contexts in which what I write will be interpreted. And that means that the imperfection can become an issue.

Any commentary that I make comes from my personal perspective. That’s important to remember. Now, sometimes an outside perspective helps see something that’s not obvious to those who are enmeshed in a system, and sometimes it means that you aren’t as clued-in as you should be. So I’ll apologize in advance for any errors or offense.

I’ll repeat these disclaimers at the top of each part in this series. Right now, I’m expecting there to be three parts – but it might be more or it might be less.

Today’s Article

The scope of today’s discussion is to look at the economics of Limited Monarchies (and if you don’t know what I mean by that term then you need to read part 1 before continuing), and then to talk about handling the in-game economics of most Fantasy Games.

I say ‘most’ because there are some that are fairly accurate in taking their frameworks from one or the other historical periods. The majority, like the world of the Forgotten Realms, are a loose compilation of elements from different eras with little regard for how they come together coherently.

The Economics of a Limited Monarchy

Choices made in search of security and convenience in an early medieval period, as detailed in part 1 of this series, inevitably bring about the transformation into a Limited Monarchy, which characterizes the late medieval period.

There is a general principle revealed in the process: Economic structures are far more heavily linked to social structures than most people realize. Sometimes, this is obvious, as when a particular technology like steam drives change in both spheres, but even without a technological engine driving the changes, the relationship is there – it’s just harder to see.

In particular, the principle of only claiming a balance owed and leaving the rest of a sum of money where it is brings so many benefits and advantages that it seems (in hindsight) an inevitable development – and that one change, more than any other, starts the dominoes falling.

Responsibility

Successfully accepting and handling responsibility for money leads to responsibility over other aspects of the individual’s life becoming plausible. Instead of a genuinely ignorant serf, what we have is a peasant who is capable of making reasonable choices, especially if the alternatives are spell out for him or confined to only those that are generally reasonable.

A peasant knows that he needs to produce a certain amount of food or goods for his dues to the nobility, a certain amount of his product for his own use, and a balance that can be traded to other peasants at a market for their product, diversifying his menu and enabling investment in his accommodations and lifestyle.

Sometimes, this can lead to hard choices – new clothes may make you look great, but better cookware will make you feel great. Of course, you are far less likely to invest in home improvements if the home belongs to a landlord – so the opportunity to purchase home and land from the noble (while preserving the obligation to pay mandated taxes) instead of paying rent on top of those taxes gives the nobles another way of extracting money from the grassroots, but ultimately benefit everyone.

Quite often, a hybrid model would arise – for every acre the peasant worked, he might have to spend so many hours a week working a common lot belonging to the whole village, and so many hours working one still owned by the noble. This simply taxes in units of time instead of cash; the principle is the same (and that also eventually leads to the concept of a pay rate equating money and time).

Rights

Responsibilities demand the opportunity to carry them out. Sounds obvious, doesn’t it? Especially when those responsibilities are often thrust onto the individual whether they want them or not: “From [date] on, the state will no longer be responsible for [x]. Failure to correctly handle [this responsibility] will be a criminal offense, resulting in fines and/or prison”.

But the other side of the coin is that this gives rise to the concept of individual rights as a fundamental principle – especially the right of self-determination – because it gives individuals the right to choose. “If I’m to be held responsible for something, I demand control over it” – or the more-common corollary, “If I have no control over something, I cannot be held responsible for it”.

This is still a valid defensive argument except in circumstances where the individual is deemed to have control over something, in other words that society would expect the individual to have such control if they were conducting themselves professionally.

Common Law

If not centrally administered, every region will develop its own laws and system of penalties for infractions. This quickly leads to total confusion and anarchy, especially for those who travel from one domain to another.

Inevitably, responsibilities and rights will end up codified into a Common Law. It doesn’t matter how unfair or unbalanced this may be, at first – time will erode privilege, if necessary through protest, force, and disruption. That’s a good thing, because the people formulating and codifying this body of Law are one of the parties to it, and they wouldn’t be human if they didn’t shade things in their favor, given the opportunity.

Restrictions

From the grass-roots upwards, the principles of codified rights and responsibilities imposes obligations and responsibilities, both to themselves, upwards, and downwards.

A peasant’s Rights are all about what services he can expect from the Noble who commands his property, how that Noble is required to treat the peasant, and what choices he can make of his own accord. His responsibilities are to behave civilly, to accept a summons to arms if one comes, to pay his taxes, and otherwise be a credit to the community of which he is a member.

The Noble is responsible for providing the services and goods expected by the peasant, being fair-minded and just and honorable, for collecting his due from the peasants who work on his behalf, and for discharging his obligations to the crown and/or any superior Nobleman, which includes raising troops on his behalf. Outside of the common law, he has the right to decide legal questions, dispense justice, the right to command troops, and the right to collect what he or his superior Nobles are owed. Beyond the edicts of the throne (and any superior Noble above him), and the mandates of common law, he is pretty much a completely independent entity.

And this progression continues up the Noble hierarchy all the way to the throne. That’s what makes a Monarchy Limited, and not an Absolute Monarchy. Restrictions on Crown powers are the defining trait of this type of monarchy.

These trends and changes can be resisted, in the manner of King Canute and the rising tide, but historical trends are hard to buck, as King John (I think it was) discovered when the Magna Carta was imposed upon the English Nobility.

Sidebar: an extremely abbreviated tale of King Canute

Canute was actually a very wise King who knew his limitations. This is directly contrary to the expectations generated by the legend which has created his fame.

When he came to power, his Court began making all sorts of demands of him, asking him to do this or that, sometimes with good reason offered, more commonly with the ,em>appearance of a good reason, and sometimes with no reason offered at all. Most of these were way beyond reasonable in one way or another; the Court was trying to take advantage of his youth and perceived naivety.

Canute responded to them by pointing out (heavily paraphrased) that he could go down to the water’s edge and order that the tide stop rising, but it wouldn’t make the least bit of difference; he could not command nature to his bidding, and wishing it otherwise would not make it so. Similarly, while the Court might think that he could do many things, he could not change reality to suit, and most of the things they asked for would not have the results claimed – or any results at all.

“King Canute ordering the tide to stop” is actually a story about knowing one’s limitations. But it’s been misrepresented so often that most people think it’s about opposition to the inevitable being foolish, and attribute foolishness therefore to the King in question.

The Magna Carta

The basis for the Common Law in England, which in turn is the basis of law virtually everywhere that has ever been part of the British Empire (including the USA) is the Magna Carta.

It was drafted by Stephen Langton, the then-current Archbishop of Canterbury, in order to “make peace between the unpopular King and a group of rebel barons”, ending the English Civil War.

The Magna Carta “promised the protection of church rights, protection for the Barons from illegal imprisonment, access to swift justice, and limitations on feudal payments to the Crown, [all] to be implemented through a council of 25 Barons. Neither side stood behind their commitments, and the charter was [later] annulled by Pope Innocent III, leading to another war.

“After John’s death, the regency government of his young son, Henry III, reissued the document in 1216, stripped of some of its more radical content, in an unsuccessful bid to build political support for their cause.

“At the end of the war in 1217, it formed part of the peace treaty agreed at Lambeth, where the document acquired the name ‘Magna Carta’, to distinguish it from the smaller Charter of the Forest which was issued at the same time.”

It was rewritten and reissued a couple more times in the years that followed. It was the 1297 reissue that was most significant as it also confirmed it as part of England’s statute law, leading to it becoming an ongoing part of English political life.

— quotes from Wikipedia.

I can’t let this section end without referencing the Magna Carta in one final way – it was so pivotal an event that I made it the point of divergent history that led to the game world named “Earth Regency” in my superhero campaign. At least half the time, this is the home base for the superhero team at the heart of the campaign.

You can read the divergent history – well, the relevant part of it – in The Imperial History of Earth-Regency, Part I: The Middle Ages – 1189-1220, part of a very long series that details that history through to 1998. More than half of that article tells the tale of ‘real’ British History, and places a lot of context on the above brief retelling of the story.

Legalities

One of the critical pieces of the Magna Carta dispensed with the notion of High Justice except for crimes directly against the Crown. In practice, this simply recognized, and forced the Crown to accept, a reality that was already in place to some extent.

Circuit ‘judges’ traveled from community to community dispensing justice, often through a jury of the accused’s neighbors. Sometimes, a local mayor heard more petty cases in a similar fashion, but for anything important, they had to wait on a suitable jurist’s availability.

This was the beginning of the distinctions between misdemeanors and felonies that remains part of our legal system throughout the western world to this day. Much of our legal framework orients around the concept of stratification of offense, with different legal rules to ensure fairness at each level.

The risk to the Judiciary

Someone traveling from place to place to hear cases and dispense punishments for some (and not for others) is going to make enemies. Furthermore, they are someone for whom a ransom can readily be demanded from someone with the capacity to pay it. These traveling judges were always under threat.

Bodyguards were expensive, and could be unreliable, and could easily be outnumbered. But such judges generally only heard the petty crimes and the equivalent of small claims – disputes between neighbors and the like; the worst offenders were handled higher up the legal food chain. In part, this was to help protect those traveling judges.

Nevertheless, it was a dangerous occupation at times.

Regional Nobles as jurists.

Any passing Noble with rights over the land could be called upon to dispense justice. If warranted, he could order an offender remanded to another noble’s court, especially if he was not directly responsible for the lives or livelihoods of the peasants concerned.

Some made it a practice to tour their lands, ostensibly for other reasons, but part of the justification was to keep an ear to the ground and pick up on any grievances (like traveling judges who were possibly being bribed) before they became major issues. This also gave them an opportunity to hear any of the more serious cases without disrupting the lives of those who were to give evidence (and who were supposed to be earning him money) too much.

With the formal stratification of offenses under the law came the formal stratification of judicial responsibility. If a case was serious enough, either the Noble had to make a special trip (having been summoned for the purpose) or had to send guards to remove the prisoner and witnesses and bring them to him (or her), wherever he or she was, if other responsibilities precluded a local hearing.

There is a natural trend that results – the inconvenience involved acts to push criminal acts of lesser severity to the lower courts, and sparing the “Judge” the inconvenience by entering an acceptable plea bargain was obviously going to be well-regarded.

Only when severity overcomes the inconvenience will a type of crime remain in the higher bracket, a Felony; at all other times, the trend will be to place a crime in a lower strata. Stratification of offense, once established, becomes self-sorting; it can simply take a while for rare and obscure offenses to be tested.

Centralized Justice

Prison time was a serious sentence; not only was the noble obligated to feed and ‘care’ for the prisoner, and pay the costs of restraining him and sheltering him, it removed him from the ranks of citizens earning wealth on the Noble’s behalf. Inevitably, a legal structure relating seriousness of offense to severity of punishment comes into effect simply by restricting the authority of punishments that can be handed down by lesser courts (i.e. traveling Judges).

Centralized prisons have two big advantages that tip the balance in their favor: they could be made more secure, and they could be made more efficient.

• Let’s say it costs $X per prisoner confined to pay for that confinement, not counting any lost productivity.
• That means that it will cost $100X per 100 prisoners confined. If X is, say, $20 a year, that’s $2000 a year for 100 prisoners.
• Obviously, there will be a tendency to want to get people out of prison as quickly as possible, if it’s possible at all (given the offense), and a tendency to push for capital punishment if someone can’t be safely released.
• Of the $100X, Y% of it will be spent on security. Again, let’s use X=20 as a simple example; for a single prisoner, that means you have Y% of $20 a head to keep them locked up. If Y is 10%, that would be $2, which won’t buy you very much in the way of a prison. If you are housing 100 prisoners, though, you have $200 a year to spend, and that buys a lot more prison for your buck.
• A% spent on administration and B% on actual prisoner care make up the balance – so A + B + Y = 100.
• Centralized records might reduce A by 5%, say. That’s 5% that can either be spent elsewhere within the prisons system or simply withheld from the budget by the ruling Noble, effectively giving him a pay raise (guess which one is more often chosen?)
• But the bigger savings come from B. Caring for 100 prisoners doesn’t cost 100BX – it might only be 90BX. Caring for 50 prisoners might cost 95BX. Doing both could save $300 of that $2000, each and every year.

Centralized Justice

If you have a centralized prison, it starts to make sense to hear the important cases somewhere nearby – but that requires the transportation of prisoners and witnesses to the court, with attendant costs and loss of productivity. Empowering someone to take sworn witness statements means that those statements can appear in court in place of the witness, who can thus continue to work for the Noble with minimal disruption

Once again, the costs involved mean that this would only be employed for the most serious of offenses, like stealing from the Noble, or worse. It can be suggested, rather cynically, that the primary motivation for making murder such a heinous offense was that it cost the Noble a productive worker – two, if you count the prisoner!

The answer: regional prisons, with regional Judges who stayed put, hearing cases regarding the second stratum of offense, those not against the Crown itself, and not attracting the death penalty. If jail time were a possibility, this is the court that handles it.

As you can see, there were a great many forces pulling the justice system this way and that, and the stratification of offense and of punishment was an inevitable outcome – hence the reality that was recognized officially in the Magna Carta.

Traveling Professionals

Judges weren’t the only professionals to travel around a circuit of regional markets. There might not be enough work in one village for a skilled blacksmith who specialized in locks or strongboxes, for example, but by dividing his time amongst four markets – staying in one for five days or so and then moving on – enough work might be sourced to support him.

On the sixth day, he would travel, and on the seventh, he would rest (anyone else see the beginnings of the concept of the “weekend’ here?)

Of those who were best-equipped to handle the new responsibilities, such professionals would clearly number amongst them, simply because they were being trained and educated by someone who already knew what they are doing.

Professional Establishments

If there was enough demand, these professionals didn’t have to travel, they could set up a permanent establishment. This not only enabled them to work on the Saturday (earning them more money), but it meant that mobility was no longer a restrictive factor, permitting greater investment in non-portable equipment like furnaces – and apprentices.

Once again, there is an inevitable consequence – multiple tiers of professionals, from the less-skilled itinerant who makes nails to the more-skilled itinerant who makes horseshoes (and is often a functional veterinarian to the animals that he shoes) to those who can make a living staying put and having customers come to him to the elite who provide personal services to the nobility.

When one of the lower-skilled workers stiffs a customer or does something else not up to the ethical standards of the upper-skilled toffee-noses, it reflects badly on the whole profession. Usually, it would be those in the middle who bore most of the brunt.

The equally-inevitable result is the establishment of Guilds to set standards, enforce them, license operators, provide resources and professional networking, represent the profession at the Royal Court, and collect fees to cover administrative costs (and potential future administrative costs) as “Guild Fees”.

Guild Responsibilities

Most of these services can be sold to potential members or to the Nobility on the grounds of Responsibility. The Guild will take certain obligations off the hands of the Nobles and promise a better yield of quality goods to fatten his bank account in exchange, but he also has to accept the Guild acting to protect it’s own reputation and the integrity of its membership, and back the Guild up by recognizing and being bound by the authority that they have given the Guild.

Some Guilds may well demand services from their members in addition to fees. Attending meetings, sitting on committees, and other such obligations, for example.

With a standardization of costs and expenses, comes a standardization of fees for service. This predictability – and always subject to negotiation – forms the basis of a professional subclass, comprised of the membership of Guilds in general. These are the wealthiest of the peasant class, soon so much so that they form an entirely distinct middle class.

New Opportunities

Even peasants benefit from these changes. They always had a level of leisure time, however limited; but the obligations imposed by the inefficiencies of an Absolute Monarchy meant that they frequently had to work in that leisure time just to try and make ends meet.

Now, they have a small amount of leisure time plus a pittance of personal wealth in their pockets – but there are a lot of them. In our history, it was many centuries before these factors reached levels where it mattered, but most Fantasy Games preempt this historical element.

Leisure time plus coins in the pocket creates a new opportunity for income generation (which leads to taxable incomes) – locally, inns and taverns; regionally, tourist attractions and sporting activities. Some of the Leisure time might be invested in relieving children from labor in order to educate them. This sort of social trend will bubble away under the surface until later in the Renaissance, but the early seeds were sewn in the Late Middle Ages.

Taxes and Tax collection

The big downside of giving people responsibility is that you have to make sure that they are discharging those responsibilities in a fair and accurate manner. Enforcement requires professionals, and there is still going to be some movement of cash necessary.

These tax collectors are part of a system of checks and balances that accompanies the new Rights and Freedoms, whether those subject to them like it or not. They are bookkeepers and accountants to the illiterate, at least at first; as time passes, they simply relieve those busy earning money with the responsibility of tracking this information.

Most people would be incompetent to file a formal tax returns, in this era. These days, they serve as audits on the fiduciary behavior of the individual, but in medieval times, that simply didn’t happen. They weren’t on the side of the public, they were the Crown and Nobility’s enforcers, there to make sure that they got the fair share owed to the peasant’s social superiors.

Actual reality of circumstance frequently vanished from their considerations because it was easier and simpler to assume that competence would yield a minimum outcome. Thus, each plot of land could be deemed to earn a certain amount in produce or coinage, and if it didn’t, it was a failure on the part of the peasant to live up to his end of the social contract, usually by spending more time looking after his personal plots than he should. The remedy was obvious and simple – demand the taxes due for the land use, whether the peasant earned enough to pay them or not. If they were short, they had to make up the difference from their personal production.

Persistent Inequities

This should make it clear that not all the old inequities had gone away; they were just better disguised, and often enforced by different social, legal, and political mechanisms.

The biggest differences were in the relationship between Nobles and Crown, in which absolute authority had been taken away from the Crown and redistributed.

The peasantry exchanged a life of hard certainties for a life of uncertainty – but the freedom to earn a better social position within that uncertainty. They would certainly have felt better off than under the previous regime, unless the Noble to which they were beholden was overly strict or greedy – but many of the latter were strict, and greedy, and authoritarian.

In the best cases, the relationship was a paternalistic one, in which the Noble cared for his peasants as children, sheltering them from the harms that they were ill-equipped to deal with on their own. But life was rarely perfect.

Centralization Vs Decentralization

This was the central debate of the age. In modern times, we’re used to using hard data to make such decisions; back then, this was a vigorous philosophic debate. Centralists looked to the Crown for protection and authority; decentralists assumed that they now had the power and acted accordingly, paying attention to the Crown only in matters of import to the nation as a whole.

The reality is that both positions are right (sometimes) and wrong (sometimes), depending on the particular aspect of society being discussed. Even the dispute between Henry VIII and the Catholic Church can be interpreted through the matrix of this debate; it persists to this day in discussions concerning “Small Government” and “Federal Overreach”.

In-Game Economics: Fantasy Games

That’s a good thing, because the historical foundations that underpin a fantasy campaign have to be interpreted by a modern-day player. Most of the time, unless you have an actual student of history amongst them, that is going to require some concessions of historical accuracy in favor of accessibility and ease of comprehension.

That’s a major source of the simplification that blends these two quite different eras together, with not regard for the resulting incompatibility.

In general, these can be summed up as a late middle-ages society with some later social development thrown in because the society is well-established, but with an absolute monarchy still in place.

There are a number of key questions that need answers before the incompatibilities can be resolved into a unified view of the society, and these tend to be sufficiently profound that they will impact on the PCs from word one.

What are adventurers?

This is one of the most important questions of all.

Are adventurers all (or generally) the lesser sons of Nobles (those with the leisure time to be reasonably well-educated)?

I’ve played in a Traveller campaign in which this was the presumption – it gave access to limited resources, but still offered a head-start on life, plus an imperative to make your own way in the world.

Are adventurers members of something akin to a professional Guild?

This is the Fumanor Solution, explained at greater length in other posts here at Campaign Mastery. Specifically,

• Ask The GMs: Some Arcane Assembly Required – Pt 2: Sourcing Parts – this article asks the extremely profound question, “How Industrialized Is Adventuring In Your Game World?”, which seems innocuous but has the potential to tear game worlds apart. After an overview of some of the consequences, I provide a concrete example from the Fumanor campaign, providing some background information that I don’t think has appeared anywhere else. This isn’t the main thrust of the article or the series, it’s delivered along the way as an offshoot of the primary discussion. And,
• Inventing and Reinventing Races in DnD: An Introduction to the Orcs and Elves series part 2, which presents – in its first few sections – more detail on the “Last Deity” Fumanor campaign.

I’ll demonstrate why this question is so economically important a little later.

Who’s In Charge Of What?

Counts, Barons, Dukes, Earls, Kings & Queens – and other ranks? Something every GM should do is sit down and list the hierarchy of noble ranks in their game world, what each rank is in charge of, and where they get their money from – all in general terms, of course.

An example might be:

• Counts – command cities and large towns. Sometimes awarded by the Crown for direct services to the Throne.
• Barons – command regional estates or significant defensive outposts. Several Counts usually report to a single Baron.
• Earls – awarded to those who distinguish themselves in senior positions in Court, or to successful Battlefield commanders of merit. Usually accompanied by a reward and a pension. Nominally between Counts and Barons in rank, but the authority and wealth that derives from their positions elevate them, and an Earl can give commands to a Baron in relation to military matters.
• Dukes – command a number of regions, with a special responsibility for roads, waterways, trade, and diplomacy. Several Barons and a dozen or more Counts usually report to a Duke. A Duke can tell an Earl what to do but not how to do it.
• King & Queen – the pinnacle of command and responsibility, everything happens in the name of the reigning Monarch and that Monarch exercises responsibility over the conduct of the other Nobles. Can ratify treaties and trade deals at a national scale, but the details are usually negotiated by Dukes. May or may not command troops in the field on a regular basis.

– though this example doesn’t go into the economics. Additional ranks might be mentioned such as Peasants and Freemen.

The Magic Factor

Equally profound, and also dealt with in the above references is the impact of Magic on the economy, so it doesn’t bear more than a brief mention here.

If Magic makes value faster than it incurs costs, the impact is as profound as the industrial revolution. If it makes value slower, it’s economically unviable and needs to be subsidized by patronages, guilds, or others. So the key to a sustainable economy is to ensure that costs are reasonably commensurate with the wealth generated; in which case practitioners can be treated as just another skilled profession, perhaps with their own Guild, or perhaps as a specialized membership within other Guilds.

The Religious Element

I’ve written a number of articles about Religion in fantasy worlds. In our world,. religious authority bypasses the secular and commands all levels of society – or tries to. In practice, it was often regarded as a secondary secular hierarchy, but all that changes when priests can literally work miracles on demand.

In particular, the economic relationship between secular authority and the Church needs close scrutiny. If the church is largely parasitic, taking in more than it provides its membership in capacity for greater productivity, it is a drain on the coffers of society, and eventual conflict with those secular authorities is certain. If the Church is a positive benefit, it is another factor comparable to the industrial revolution. As with mages, if the benefits and the drains are roughly equivalent, the situation is relatively stable.

Assessing this question requires the GM to think about the economic losses due to sickness, disease, and rampant monstrosity. Finding hard numbers on which to make such a determination is really hard, but it would not surprise me to learn that it was on the order of 60% in our real history – which means that for every day’s work, a person would only achieve about 40% of the production of which they would otherwise be capable.

Once you have a number in mind, assume that society compensates by throwing more manpower at the problem – then take most of the problem away. Social and economic disruption are the inevitable consequence – but that can play into the answer to the first question. When there are too many farmers for the available land, you either get Kings using them as an army (ultimately, correcting the problem, one way or another) or you divert them into a new social band – adventurers. Or you end up with a massive unemployment problem – which, if the churches are charitably inclined, can alter the entire question back into balance.

They are all viable answers, and some can even coexist in stable configurations – but the economy and society will be affected profoundly by the answer.

A fixed economy

With wealth keyed to some commodity, a gold standard if you will, the economy is relatively fixed and stable. It will take a downturn in hard times following a war, and an even steeper downturn if that war is lost; at other times, it will be prosperous but not excessively so.

There is just so much money to go around – so if there are more demands on the royal purse, the only way to fund the increase is to add more resources to the income. So long as the increase is not excessively more than the demands, prices will remain relatively fixed and stable – and that means that the prices quoted in the rulebooks can be used fairly reliably.

Ensure that you take into account supply issues, however – most things still need to be transported from one place to another in order to be available. Some need to be taken to an intermediary point and refined, first. Such transportation should add to the cost of anything containing the resource in question.

Bartering

While I’m in the vicinity of the subject, you can either rule bartering to be permitted or not. If it’s permitted, you have to accept the principle that there are limits to how far a bargain can deviate from the rulebook-quoted prices, even if its for superior workmanship, and that the average (over multiple customers) will float around the vicinity of the book price.

If a merchant was talked into a generous deal with someone for a large order, they will need to be greedy with a great many smaller customers to break even. Any other course risks putting them out of business. On the other hand, if they gouge the seemingly-wealthy, this can subsidize generosity when dealing with those who are not as well-off. Social expectations can thus be that wealthy customers are expected to pay 10% or 20% more than quoted – and failure to do so should have social consequences.

If bartering is not permitted, it actually makes for a colder, harsher world. The merchant has to tell the peasant, “Sorry, that’s the price of that pot. I can’t discount it for you just because you need it.” Do that a dozen times, and you will get at least one attempt to steal a pot – not necessarily from that source. Replicate this for a hundred other goods and commodities, and crime rates will explode. It’s open season on Tax-men and Judges as a result, and security demands quickly eat up available workforces. This mild dystopia suits murder hobo campaigns.

A broken economy?

Let’s say there are ten Adventuring parties in the Kingdom, bringing in goods from outside the economy at a rate proportionate to their character level – a year’s worth of income every four weeks on average.

This immediately grows the economy by the amount of their expenditure, including taxes, gifts, guild fees, dues, and the like. Which is a win for everybody, right?

The economy grows, and expenditure rises to equal the new prosperity. Sounds wonderful! But there are a finite number of dungeons out there to be looted, and one day, the last one will be gone – then what? The economic disaster would be akin to the Great Depression, or even worse.

But income is more generally relatable to character levels squared. At low levels, this doesn’t make much of a difference – at high levels, it makes Adventurers one of (if not THE) dominant economic factor in the existence of a realm, with income equal or greater to that of the Crown or the entire Kingdom.

There are those who suggest that the discovery of higher-level magic items and the ‘discarding’ of old items (read ‘resale’) mean that the correct value is the cube of character level.

In order to separate an adventurer from his wealth, prices inflate – rapidly. Beyond the reach of non-adventurers. If such an economy isn’t broken already, it soon will be.

Every GM needs to confront this problem and devise a solution within their campaign worlds. One answer is for all earnings from adventuring to be paid directly into the Royal accounts – by confiscation, if necessary – in return for Adventurers to be pampered like prize race-horses.

If you want a stable economy, the returns from adventuring should be commensurate with the costs. But you can’t inflate the costs – fixed economy, remember? – so the only solution is to limit the proceeds from adventuring. But this flies in the face of most game system fundamentals.

Hobbiton’s economy only survived Bilbo’s return with his chest of gold because he had been declared dead and had to spend most of it getting his possessions back.

Think about that for a while – long and hard.

Who has authority over adventurers?

This situation brings up a related issue – who can tell an Adventurer what to do, and how do they enforce those commands? Is there a guild leadership? Is there a particular Noble? Is it the Crown? Can adventurers buy their way up the social ladder?

The Inheritance Problem

But, back to the main problem. There’s one solution, and that’s to make something in the society a massive parasite. And the most readily-available candidate is the Church – in the form of pious people leaving their lands and Estates to the church in their wills.

While some of this legacy will be converted into cash, most of it will be kept as income generating property – which isn’t a problem unless churches are Tax Exempt, as in most of our world. In which case, the Kingdom is effectively shrinking, and the excess wealth is going into ever more elaborate displays of ostentatious wealth.

If you then factor in the charitable support of the lower classes, you can actually get an economy back to stable – if you don’t have too many adventurers in the world and too many magic giveaways.

Wars – Social, Economic, Political, Theological, and Arcane

But, let’s say that you don’t and the overall wealth of the Kingdom rockets up 500-fold – with no corresponding increase in population numbers and hence in military might. One of two things will happen – either the King will expend a chunk of money on mercenaries and pull a Genghis Khan, or one of this neighboring Kingdoms will look at this poorly-defended treasure-trove and say, “Mine.”

Others may try subversion and corruption. Some religious groups will see this as a ‘god-given opportunity”.

Get the economy wrong in respect of Adventurers and a perpetual state of war is the certain outcome.

Simulation

Okay, so here’s the bottom line: the economy should be, in any RPG, this shadowy force that never intrudes. Its consequences, those should intrude. The plot opportunities that it generates, those should intrude. The resulting society, and in particular, it’s flaws – those should intrude. But the economy itself? No way.

Keeping the economy itself under wraps reflects the fact that nobles are under no obligation to make their accounts and balances public. So far as the public is concerned, the King is made of money.

Ultimately, your choice is a simple one: you can have the world of the PCs overwhelmed by one of the many pitfalls described, or you can come up with some way of balancing the books. It’s not an impossible task, but your chosen methodology will reshape the society and the campaign world, and that change should be noticeable by the players.

Even in this relatively primitive economy, you can see some of the trends and practices evolving that we take for granted in the modern era, but the evolution of economic model in our history took a turn before those trends really manifested themselves, going from an Absolute Monarchy to a Limited Monarchy, and in the process sewing the seeds of both the Pre-industrial and Steam-age economies.

In part 1::

1. Introduction
2. General Concepts and A Model Economy
3. The Economics of an Absolute Monarchy

In this part:

4. The Economics of Limited Monarchies
5. In-Game Economics: Fantasy Games

Still to come:

6. Pre-Industrial Economies
7. Industrial Economies
8. Modern Economies
9. Inflation
10. In-game Economics: Gaslight-era
11. In-Game Economics: Pulp-era
12. In-Game Economics: Modern
13. In-Game Economics: Dystopian Futures
14. In-Game Economics: Utopian Futures

The plan is still for items 6 and 7 to be in Part 3, and 8 & 9 will either be in part 4 or broken into parts 4 and 5. The rest will follow in one or two concluding parts. But all is fluid conjecture and we’ll see what actually happens when I put hands to the keyboard.

I still haven’t decided whether or not to continue hard on this series without respite, or to break it up with some unrelated posts. One way or another, the decision will have to happen next week. While I found it a little hard to change gears for this post, as explained at the start, once I got started, everything flowed nicely. So the jury is still out – and it might come down to the quality of any alternative ideas that come to me in the meantime.

It may be noted that I still don’t have any entry for “In-Game Economics: Steampunk”. There are two reasons for this: first, there will probably be a lot of overlap between that and the Gaslight-Era entry, and second, I’ve never run a steampunk campaign nor delved into the genre too deeply, and don’t feel qualified to write such a section. If anyone would like to contribute a ‘guest section’ on the subject, get in touch!