Peculiar and Premodern Economies

[DShomshak]

Many Fantasy games follow the pattern set by D&D, where people buy and sell using variously-valued coins of different metals. It's all pretty familiar and suits the quasi-Medieval/Renaissance models of many Fantasy settings. But there are other possibilities. Here are a few.

 

THE HOMERIC ECONOMY

(based on W. L. Finley, “Wealth and Labor [Archaic Greece],” in Tribal and Peasant Economies, ed. by George Dalton)

 

It’s possible to reconstruct many aspects of Bronze Age Greek life from the Iliad and Odyssey, including the economic system. Here are the major traits:

 

* Rigid Class Structure: Aristocrats (like Odysseus, Agamemnon, etc.) on top, then freemen, serfs and slaves. Thetes, or hired laborers, are lowest of all – with no fixed abode or master, they can be exploited or abused with impunity.

 

* The Oikos, or household, is the basic social and economic unit. The patriarchal head of the household is nearly all-powerful over his family and tenants.

 

* Subsistence from farming and herding cattle, sheep and goats. There are no significant differences in the basic commodities available to people, either by region or by class: The aristocrats just have more. Thus, there is no basis for trade in utility goods.

 

* Luxury Gifts are the only trade: Aristocrats give each other presents to cement alliances, obtain treasures and slaves, divvy up loot from pirate ventures and wars, show friendship, create obligation, etc. Every gift obliges the recipient to, at some point, offer a gift of equal value in return. There is no intent for profit, as such (though it’s a way to gain things you lack, such as giving ingots of iron and getting ingots of copper in return).

 

* Treasures matter a great deal to aristocrats. These include weapons and armor, ingots of precious metal, tripods, bowls, jewelry, fancy cloaks, etc.

 

* Booty is the other source of new treasures. You call together your tenants and friends, and go rob some other aristocrat. Afterward, you call it a “war” and have a poet turn it into a myth.

 

* Who Makes This Stuff? Somebody has to. Among the gods, it’s Hephaistos. Presumably, some kings have their own artisans on staff, but these lower-class individuals were not considered worth mentioning. (Though there’s the example of Daedalus, but he isn’t in Homer.)

 

* Cattle act as the standard of value. Example: For a special slave, Laërtes gave goods worth 20 head of cattle. Treasures have a customary value in cattle, but they were not a medium of exchange (people did not actually drive herds back and forth to buy things).

 

Dean Shomshak

 

 

[DShomshak]

GIROBANKING IN EGYPT

(Based on A History of Money from Ancient Times to the Present Day, by Glyn Davies)

 

First I had to look up what a ‘giro’ is, since I’d never heard the term before. Wikipedia tells me it’s more used in Europe than the US. It refers to fund transfers by direct deposit, in which the recipient does not need to approve the exchange.

 

For instance, suppose I want to repay my friend Segev’s postings on banking and money by paying him $5. The usual American method would be to write a check to Segev and send it to him. He would then endorse the check and give it to his bank, signifying his approval of the transfer, and my bank would then transfer the $5 from my account to his bank and his account. In a giro, I would tell my bank to transfer the money directly from my account to his, and Segev wouldn’t need to do anything.

 

So that’s a giro. My apologies to Europeans and banking geeks who already know this.

 

* Egyptians had a long history of centralized storage of grain. Farmers sent all their grain to the local Royal Granary and the quantity was recorded. This made it easy for tax collectors to take their cut.

 

* Most common Egyptians didn’t use money and didn’t need it, because they were tenant farmers or laborers and their master doled out grain and other necessities. If they didn’t like it… tough.

 

* Egyptians also had a long history of using grain to buy and sell (when they did so at all). People could withdraw quantities of grain from their “account” at the granary with which to buy stuff, or deposit it. It was only a short step to just do the paperwork of recording that Amenhotep paid 5 bushels to Thutmose, without anyone needing to physically pass any grain around. By the 3^rd millennium BC, these banks already took deposits and made loans.

 

* “The separate crops of grain harvested by the farmers were not separately earmarked, but amalgamated into general deposits, except that the harvests for separate years, and therefore of different qualities, were stored in separate compartments.”

 

* “Vagaries of the weather, though on occasions disastrous, were of course much less of a hazard in the Nile Delta than with us: so that inflation or deflation could to some extent be controlled and the monetary scarcity of one year be compensated by the bounty of the next.”

 

* When the Ptolemies took over, they linked all the granaries in a national system. Then, people could not only buy and sell using grain locally, but nationally, by sending fund transfer orders through the central bank in Alexandria, which kept copies of all the regional granary records.

 

* In fact, international business was conducted this way. “We have unmistakeably clear records of such transactions between Babylonians, Assyrians and other nations of Asia Minor.” (Heichelheim, 1958)

 

* These payments were done as giros. (Probably necessary, but not what I would consider the most important feature of the system. Whatever.) While they didn’t have double-entry bookkeeping, the banks had a system for marking credit or debit accounts.

 

* The Ptolemies found the Egyptians’ stubborn adherence to grain-banking and suspicion of metal coinage useful. On the one hand, they were short of precious metals, which they needed for foreign exchange and foreign military ventures; but OTOH they knew that to stimulate economic activity they needed more money. (There were also private banks, dealing in precious metals and money made from it, but they were chiefly used by Greeks and foreign traders.)

 

“Thus the giro system in Egypt had come about because of the need to economize on coins and the precious metals, by the need to supplement the existing private banks with a state bank system, and above all by the desire to spread the banking habit throughout the community. It also gave to the rulers a closer control over the economy for fiscal purposes, while providing a general stimulus for trade more widespread than had previously been possible, particularly among the poorer classes… Grain may have been primitive money -- but the world's first giro system transformed it into an efficient medium of payments partaking of many of the most desirable features of modern money.” (Davies, p. 54)

 

(This is just too good. I have to find a way to use it somewhere, somehow.)

 

Dean Shomshak

[DShomshak]

Here is perhaps the strangest monetary system ever devised IRL:

 

ROSSEL ISLAND MONEY

(Adapted from W. E. Armstrong, “Rossel Island Money: A Unique Monetary System,” in Tribal and Peasant Economies, ed. by George Dalton)

 

The people of Rossel Island, near New Guinea, invented their own system of money that’s like nothing else in the world.

 

* There are two kinds of money: Dap and Kö. Dap money consists of thin pieces of polished shell, variously shaped (though usually a rounded triangle), perforated near one corner. Colors range from white through shades of orange and red. A “coin” of Kö money consists of a string of 10 identical shell disks.

 

* There are 22 main values of Dap money, each type having its own name. The names are “somewhat clumsy,” but the system can adequately be described just by using numbers from 1 (the lowest value) to 22 (the highest). Each coin of classes 15 to 22 also has an individual name; there are only 81 such coins in total.

 

* There are 16 values of Kö money, whose names are the same as the higher 16 values of Dap money, with a suffix to show the difference.

 

* The god Wonajö made the original stock of Dap and Kö money, which are still in use. New coins have been made of the lower values of Dap money, but none of the higher values, and none of Kö money at all.

 

* Dap and Kö moneys are only partially equivalent. Some commodities can be bought only with Dap, or only with Kö. Tradition holds that Dap is “men’s money” and Kö is “women’s money,” but this has little effect on actual use.

 

* The values of different coins are not related numerically: You cannot say how much one type is worth in terms of other coins (the way you can say “100 pennies to a dollar”). You cannot take, say, a type 20 coin and exchange it for an equivalent value of lower-numbered coins. To buy something, you need a coin (or coins) of the correct type and rating.

 

“…commodities are price in terms of particular Dap and Kö, and not in terms of any Dap and Kö which add up to the required value.”

 

* Don’t have the right coin? Borrow one and pay it back later… and this is how the values are related, for the Rossel islanders have monetized time. To wit:

 

* Values are related by the time you take repaying a debt. If you repay within a few days, you repay with the coin of the next-higher value. Within a week, a value two grades higher. Within the next time increment, three grades higher, and so on. (After 22, the system rolls over and you must repay with a 22 plus another coin, whose value increases with time.)

 

* Thus, any commodity’s value can be given in terms of the particular coin used to buy it, or of any lower-numbered coin plus a certain interval of time. Conversely, the value of any coin can be given as a #1 plus a certain length of time loaned.

 

“A wife costs a year, a house two years, a basket of taro a week, and so on.”

 

* Rossel Islanders have professional moneylenders who keep track of all these grades and debt-times, and know all the coins by name. If a moneylender lacks the particular coin you need, he knows who has it and can borrow it to lend in turn to you. These brokers are particularly important for transactions involving the very limited number of high-value coins.

 

“These brokers derive their income by keeping their capital in motion and by a process somewhat analogous to the activities of a London bill-broker – by borrowing at a lower rate of interest and discounting at a higher – and practice a magic by means of which they claim to act on the minds of debtors, making them repay within the customary time, while the minds of their creditors are effected [sic] in the reverse direction.”

 

* Plus various further complications: collateral (sometimes goods, sometimes higher-value coins than one borrows), periodic interest-payments of lower-value coins, and various complex schemes for groups of people to make purchases.

 

“In conclusion, it may be pointed out that Rossel Island money is money in the strict sense of the term. It serves as a medium of exchange and a standard of value, and it is not desired for its utility for other purposes, even for ornament or display. Indeed it is considered ‘bad form’ to make any sort of display of one’s wealth of Dap and Kö. How such a peculiar monetary system came into being it is difficult even to conjecture. The concept of “interest” is rare in Melanesia and New Guinea, though it occurs in simple form in parts of the Bismarck Archipelago. This would point to some exceptional cultural influence which reached the island of Rossel but no other of this extensive region, unless we suppose that a ‘higher’ culture, containing the germs of the peculiar features of Rossel, once extended over a large area, throughout which it has since degenerated, leaving a vestige on Rossel in the shape of its present fantastic monetary system.”

 

It’s the money of lost Lemuria!

 

Or whatever. In a Fantasy setting, some utterly idiosyncratic monetary system really could be the work of a god.

 

Story seeds: It’s not the details that matter, just that the people of this one island have a complex monetary system that no other human society shares.

* Have fun breaking into such a strange and self-contained monetary system.

* A merchant frustrated by the islanders' refusal to trade in anything but their own money steals a bunch of the higher-value coins in hopes of wrecking the system. The islanders offer a reward to get them back.

* Or a natural disaster removes many of the coins. If the islanders are your friends, convince them to accept your replacements.

* Hey, the coins and system really did come from a god. Who is now angry that the islanders have started using the simple money of outsiders. Cope with the resulting temper tantrum.

* You should have seen the warning signs! The monetary system comes from the Deep Ones (or your setting's analogous fish-people who serve an ancient evil power)… because these “simple islanders” with the incongrously intricate monetary system are the Deep Ones' slaves and front men, and in coming to the island you’ve fallen into their trap!

 

Dean Shomshak

 

[DShomshak]

A NOTE ON MESOPOTAMIAN BANKING

 

When I copied pages from Davies’ book, I incidentally obtained the last bit of the section on banking in ancient Mesopotamia. In brief: It goes waaay back. By 1750 BC (or so), banking by temples and landowners was so common that standard rules were inscribed on a 7’ high block of diorite (now in the Louvre).

 

The 7^th century BC “Grandsons of Egibi” are the first bank of which we know the name. “Their headquarters were in the city of Babylon, whence they carried out a very wide variety of business activities combined with their banking. They acted as pawnbrokers -- and in case anyone objects that this is hardly banking, perhaps one should be reminded that the original charter of the Bank of England empowered it to act as a pawnbroker. The House of Egibi also gave loans against securities, and accepted a wide range of deposits. 'Customers could have current accounts with them and could withdraw the whole or parts of certain deposits with cheques... The ships of the firm were used in trade expeditions exactly like those of the royal and temple households. Speculation and investment for secure income were combined in the business pattern of this bank' (Heichelheim, 1958, I, 72). After having flourished for some hundreds of years this bank seems to fade from the scene some time during the fifth century BC.”

 

The Sons of Maraschu, based in Nippur, carried out an even wider range of financial activities. “As well as carrying on the same kind of banking functions as the Grandsons of Egibi, they specialized in what we would call renting and leasing arrangements. They administered, as agents or tax farmers, the royal and larger private estates; they rented out fish-ponds, financed and constructed irrigation canals and charged fees to farmers within their water networks; and they even had a partial monopoly on the sale and distribution of beer. They also acted as jewellers and goldsmiths.” (Davies, p. 51)

 

Dean Shomshak

[DShomshak]

A NOTE ON CHINESE MONEY

 

Again, from a slop-over bit of Davies. Just because people have money doesn't mean they rely on it.

 

Chinese money was all made of copper or bronze. Early coins were made in the shape of cowries or spades, knives or other tools. Coins always had a hole in them. In the first place, this made it easier to carry large strings of coins: Since none of the coins were worth much, you could need a lot of them to make large purchases. But the hole also played a role in the minting process: “…In the process of manufacture, a rod would be inserted through a number of coins which could then have their rough edges filed or be otherwise finished in a group of fifty or more coins together.”

 

“A further consequence of the base-metal composition was the ease with which such coins could be imitated and counterfeited. The raw material costs were low, the method of manufacture was simple and the superficial inscriptions easy to apply. Consequently imitation was endemic particularly at the periphery of the authorities' power.”

 

The Chinese used gold and silver to make large purchases, but up until recent centuries they continued to do so in the most archaic way, by weighing the metal. They also sometimes fell back on using cowry shells as money. When you look at the proportion of humanity that used cowries as money, accumulated over hundreds or thousands of years, cowries are among the most popular and successful currency of all time.

 

Dean Shomshak

[megaplayboy]

Agriculture is really the starting point for economics. Before that, with hunter/forager/fisher communities no larger than 150 people, land really had little permanent value. Communities could just move on down the road. Once you are planting and growing food and raising livestock, land becomes important. Communities settle down and gradually become larger, losing some of their communitarian ethos in the process. When different communities interact and trade with each other, eventually some standardization of exchange (i.e., currency) becomes a good idea. I'm grossly oversimplifying, but it's good to know how currency systems originally came into being.

[Markdoc]

One point that can easily be of general use - you made the point above about banks/pawnbrokers. This particular system, where banks made loans against specific items flourished for thousands of years, until the commodification of money by modern nation-states. Wealthy landowners could take loans against their land (this gave them special privileges in countries such as England, since land had special legal status and could not easily be seized for debt) but other people had to take loans against physical treasures or income.

 

So, for example, banks gave loans against jewellery, against dresses, against political appointments that conferred income, against slaves ... against pretty much anything that could be sold. 

 

Why is this relevant? Because like most pawnbrokers, even today, the loan was usually for a fraction of the purchase price. A silk dress encrusted with a thousand seed pearls might have cost 12000 royals when ordered, but it can probably only be sold on for a quarter or a third of that price. The bank wants to make a profit so they are going to offer a tenth or a fifth of the original price. We have plenty of examples of medieval/renaissance banks acquiring things for a tenth or even a twentieth of the buying price - because if you really needed money, what was your other alternative? And just like many pawnbrokers today, many of those early "loans" were made in the foreknowledge by both parts that the loan was never going to be redeemed and that it was actually a sale.

 

This explains a) who actually buys all that crap hauled into town by adventurers and b ) why they buy it for a fraction of what it costs new. In the premodern era, it makes sense to think of banks not as place where you keep your money (though they did that too) but as merchants who specialized in loans. 

 

cheers, Mark

[mhd]

It also helps to think of them as Chaotic Evil (with a Lawful veneer).

 

Not necessarily just in the premodern era, though.

[Christopher R Taylor]

I think its important not to be too rigid and strict in your historical accuracy with fantasy settings.  Mixing and matching what you like and don't like is perfectly acceptable in a fantasy setting, even if it doesn't make historical sense.  Once you add magic and alternate races and cultures into a setting, its changed enough that you can get away with quite a bit.

[megaplayboy]

I think its important not to be too rigid and strict in your historical accuracy with fantasy settings.  Mixing and matching what you like and don't like is perfectly acceptable in a fantasy setting, even if it doesn't make historical sense.  Once you add magic and alternate races and cultures into a setting, its changed enough that you can get away with quite a bit.

Heck, throw in extradimensional entities and realms--angels, gods, demons--and the medium of exchange could be almost anything.

("Hey, Ba'l'z't, what's the current exchange rate on souls to gold?")

[Lucius]

Heck, throw in extradimensional entities and realms--angels, gods, demons--and the medium of exchange could be almost anything.

("Hey, Ba'l'z't, what's the current exchange rate on souls to gold?")

"Bottom's dropped out of the soul market, mortals have been breeding like rabbits and they're just not rare anymore."

 

Lucius Alexander

 

The palindromedary has four soles but isn't interested in selling any off.

[Markdoc]

"Bottom's dropped out of the soul market, mortals have been breeding like rabbits and they're just not rare anymore."

 

Lucius Alexander

 

The palindromedary has four soles but isn't interested in selling any off.

 

There's a story arc in Hellblazer like that, where a group of flash barrow-boy demons who are trading souls get their just comeuppance when Maggie Thatcher is re-elected and the bottom drops out of the soul market.

 

cheers, Mark