Would this work in a society?

[LonewandererD]

Hello to all, I'm in the middle of building a small world of my own, or at least a small corner of it and wanted to know if you minded if I ran some ideas past the Guild. I know it's direclt map related and so i'm prefectly fine with this thread being deleted.

My idea directly relates to currency and trade and wanted to know whether my concept would create a society that is sustainable or not. The Dal people are at a stage in society similiar to medieval japan or pre-rennosciance europe (whichever was more advanced, my history of ancient times is a little limited), their technology has developed far enough that all the needs of their society are met and that new developments and inventions are slow as there is no real need for them at the current time. In Dal society an item's/object's worth is determined by it's practical value rather than a form of monetary (check spelling) value. So steel would have more value than gold as, even though the gold is rarer and desireable in most cultures, it has more practical uses e.g. if you're looking to outfit an army or a labour crew your not going to give them golden equipment with is heavy but soft when you can give them steel or iron equipment which is more readily available and more durable; gold is still are nice commidty amogst the high nobility who can afford it. So in Dal culture the more common raw materials, including food, have more worth. Trade in such goods is governed by weight, the goods are divided into units (each unit is about 20 pounds) and units are traded on a like-like basis, so 20 units of rice would get you 20 units of wood and so on. Haggling is a common practice as traders try to get more for their goods by bringing aspects like quality, work required to get the goods, importance and immediate practical use of the goods and so forth. So far my society can trade and deal without a currency system.

However this where I hit a snag, the whole trade of material and goods without money works well amonsgt people whose proffesional would actually bring them into a supply of such stuff but it does no good for people who have other professions like soldiers, labourers or house servants. So, in this case some form of currency would be required. I decided to go with a form of commodity currency instead of fiat currency as the Dal would lean towards having a form of currency that actually has some value, a farmer won't trade in his crop for some paper bills. The form of a currency in this case are small bags of rice or small coins made of iron or bags of iron sand, both are common in Dal society and have the most practical use, the rice can be eaten and the iron can be melted down into other objects. A emplyer would pay their employees in this form of currency, how much excatly depends on the job and is often negotiated before employment in the lower class. Employers can also be payed in food and shelter. Items can be bought with this currency by trading an equal weight of currency for the desired goods, so a sword would be really expensive while a new shirt might not be so expensive. Non-item services can be bought in this manner for a negotiated cost, or if possible services can payed in other services. Again, haggling is the norm.

So in Dal society, when dealing with large amounts of material and goods the unit system is used and when dealing with smaller goods or services the commidity currency is used. Trade offices are also located in each settlement with substantial trade activity to regulate these dealings and to help people convert raw goods into commodity currency and vica-versa. Would such a system seem feasible?


-D-

[mearrin69]

I believe there's precedent for this in the real world. If I'm not mistaken, the Roman Empire used to pay its soldiers in salt (the origin of the word "salary", I believe). Currency comes about because it's difficult to carry bags of commodities around...and because it's prestigious to be able to mint coins with your face on them.

Edit: AND, in societies where the local currency has gone to pot, people still trade in commodities - during the Russian fiscal crisis several years ago people converted their paychecks to vodka because it held its value better than cash. I don't know, but I expect that people accepted vodka and other goods in lieu of cash during that time for the same reasons. The same situation has, I believe, occurred in many other parts of the world that have experienced runaway currency devaluation.

One suggestion: if units are related to weight I would suggest that x units of wood would not be equivalent value to x units of rice or x units of iron. Either there should be an exchange rate (20 units of rice = 1 unit of iron) or the weights should be different (1 unit of rice (20lbs) = 1 unit of iron (1lb)) for each kind of commodity. Services should have a value in commodity terms, e.g. one hour of blacksmithing is worth 0.25 units of iron, etc. This could all get pretty complicated because you'd need a big table showing the relationships between the various forms of commodities, services, etc. (another reason for creating currency).
M

[Yandor]

Wow, good stuff if you ask me, but a few ideas popped into my head and maybe might point you in the right direction.

1. Soldiers - The city or who ever either A. are volunteers, or B. the town has a Tax of goods meaning for ever 20 units of rice 1 rice goes to the city storage kind of a deal, thus they get a supply for defending the city etc etc.

2. Healers, and other non material creators, along the same lines as a Soldier, but for their services they receive a payment of goods, its not like someone would want to screw a healer out of their payment if they are going to be dying =D. But also to address the servants, they should have lodging on the homes they work on, and because of the service they provide, the master of the house feeds them and lodges them, where on their own they probably wouldn't get anywhere (lack of skills maybe?) So in turn thats their payment unless they do some type of labor on the side or service to gain other materials for their needs/wants (outside of the masters stuff)

3. Has to do with the Iron, or bags of Iron etc. If its suppose to be equal or more than gold, and the area has a decent amount of it to be mined, those prospectors and miners are going to be your nobility. Cause if its fairly common, and super expensive, that means weapons and other trinkets are going to cost a fortune. You did express this, but I find it would still be hard to have a more "common" material be more than gold. But however if its scarce in the land and they must import it, now thats a totally different story.

Anyways just my 2 cents, might help might not... but good luck!

[jfrazierjr]

What mearrin69 said.... regardless of if you use paper(dollars, trade notes, etc), metal(gold, silver, iron, etc), salt or whatever, you really should consider some form of currency as a standard index for trading. Even if two people are trading goods vs goods, it's still nice to be able to put a "price" index upon the things being traded have equal value by weight/volume. As suggested above, 20 lbs of rice should not be worth the same as 20 lbs of wood or 20 lbs of silver. While the rice takes a long time to grow, the time invested vs the harvest is very small (assuming an abundance of "seeds" and growing habitat as there would be here on earth.) Also notice that while rice is fairly inexpensive anywhere(thinking in our world) in most cases, it should be worth far more the further you get from the origination source. I would expect that you could make very little money selling rice in a city where there are hundreds of acres of it around and far more in a more arid region where there is not enough moisture for growing it.

[mearrin69]

You know, you might end up with a de facto currency in any case:
1) If units of the same weight are the same value (as I noted above this isn't probably realistic), then people will carry whatever's less bulky. I'd rather carry 20lbs of iron (which is a small brick) than 20lbs of belly-button lint (which would, I imagine but do not know, fill several large sacks).
2) If units of the same value are different weights, then people will carry whatever is most valuable (and therefore lightest). My ounce of iron is worth a pound of rice so why would I carry several pounds of rice around for trading when a pound of iron would do?

Of course, if all you've got is rice (or if you're even more destitute and all you have is belly-button lint) then I guess you'd carry that - but I imagine folks would spend a lot of time trading for things that are durable (don't spoil) and light if they're planning on having "cash on hand".

Just my 2lbs of belly-button lint worth. (ewww)
M

[tilt]

yep.. agree with mearrin ... a good example could be - 20 lbs of firewood would be a lot easier to make than 20 lbs of wooden boards. Same material but a lot more work to get the latter. Even though a lot of civilisations use barter they mostly use some sort of currency too. Even the vikings had silver as a currency, they carried a necklace from which the could break a piece of silver to pay for stuff (when they didn't just raid that is *lol*). It was also important for them for the more long range trading... they were quite the travelers

[Seretur]

In Dal society an item's/object's worth is determined by it's practical value rather than a form of monetary (check spelling) value. So steel would have more value than gold as, even though the gold is rarer and desireable in most cultures, it has more practical uses e.g. if you're looking to outfit an army or a labour crew your not going to give them golden equipment with is heavy but soft when you can give them steel or iron equipment which is more readily available and more durable; gold is still are nice commidty amogst the high nobility who can afford it.

This is the only objection I have. You say that worth is determined by practical value, which would work, if your culture is very Spartan and doesn't care for beauty. However, if gold is a nice commodity, and is expensive, as the underlined portion indicates, then your culture does value things based on beauty as well as worth.

So in Dal society, when dealing with large amounts of material and goods the unit system is used and when dealing with smaller goods or services the commidity currency is used. Trade offices are also located in each settlement with substantial trade activity to regulate these dealings and to help people convert raw goods into commodity currency and vica-versa. Would such a system seem feasible?

Absolutely. As mearrin said, the Romans did it for hundreds of years, with salt.

[Wannabehero]

A very interesting idea for a fantasy society, I can definitely see this as being fun to use in a RPG-type setting.

I do agree with the other posters here though, a 1 to 1 exchange for any and all goods just doesn't make sense in any logical scenario. Some goods have an inherently greater value based on primarily two factors:
1) Rarity (scarcity), materials that are useful but rare are inherently worth more.
2) Labor, materials and goods that require more effort to make or acquire are inherently worth more.

I'm sure others who are more schooled in economics could break that down into greater detail, but those two guidelines work pretty much all the time.

That is why, say, a tool made of wood and iron is worth more than the wood and iron it is made of, because it required labor. And that is why 20 lbs. of salt is worth more than 20 lbs. of loose rocks, salt is rarer (and requires more labor to obtain) than loose stones.

I would suggest that you can keep your non-currency society intact, but maybe mix it up a bit with some pseudo-currency standards, like the exchange rates mearrin69 suggested.

Think about your society. What are their most common goods? These could be used in place of the normal dollar/euro/gold type of value system.
"That little shack over on the hill? It'll cost ya ten hogs and seven chickens"

I'm reminded of the Bone comic book series, where in the little town of Barrelhaven the standard form of currency was the egg.

[Crayons]

Think about your society. What are their most common goods? These could be used in place of the normal dollar/euro/gold type of value system.
"That little shack over on the hill? It'll cost ya ten hogs and seven chickens"

I think Wannabehero has the basis for the solution. Your basic commodity is rice and was used in Japan as the basis for measuring "wealth" on a macroscopic scale at least.
The "koku" was the amount of rice 1 person needed for one year. (Look it up on wikipedia if you haven't already?). 1 koku has a volume and a mass which can be used for measurement too.
From an economic standpoint one koku represents a number of aspects of value.
Land, to grow it on.
Time to grow it.
Labour (people) to farm it.
The total represents essentially represents a calorific value = energy.
Provided you live where it can be grown it represents a "reasonably stable" monetary standard. It's a mathematical exercise, with some land/time/people conversions, then, to convert a cost in raw iron (say). How much land, time and people does it take to make one "thing" of pig iron.
In terms of "foreign" exchange, you look at direct conversion of rice to (for example) corn, or wheat, perhaps converted via "calories".....
I'm kinda "thinking aloud" here!

You might also look at modern exchange systems. I saw something on TV once where more local/isolated communities adopt a local "scrip" for exchange of goods and services. Two hours plumbing is worth 3 hours weeding the garden?

[Etheremis]

Fascinating discussion with a lot of excellent points brought up already. The Romans paying their soldiers in salt was the first thing to cross my mind reading the initial post. I would like to point out a few things.

1. The solution lies, I think, with a hybrid system. You espouse that a farmer won't trade in his crop for paper bills. A noble, however, is much more likely to. These bills would more than likely be be deeds and titles. Even if they were money then it stands to reason that is would be redeemable for a large quantity of silver/gold coin. Peasants would probably have a few coins but mostly deal via bartering. Even if the currency was not gold/silver portability is a must.

2. Most people would be ignorant to the exchange rate between between one unit of chickens and a half unit of iron. Most people only want to buy exactly what they need. (I just re-read some of the responses and it was pointed out that weight of unit should vary based on item in question)

3. Supply and Demand. The exchange rates are likely to fluctuate wildly depending on circumstances and location. A farmer in province A has a lot more rice than farmer in province B (because of the drought there). Since the people in both areas need to eat farmer B's yield (what little he managed) is actually worth considerably more based upon weight than farmer A's.

4. Multiple weight systems. Take a look sometime at all the differing weight systems employed http://en.wikipedia.org/wiki/Avoirdupois http://en.wikipedia.org/wiki/Apothecaries%27_system. Some of them were only used for metals and some only for pharmacological. Unless there is one fixed standard of measure it becomes a nightmare.

5. Are there neighboring countries to Dal? The lack of a currency is a barrier to commerce. This barrier is not insurmountable but does make a legitimate concern.

One thing many people fail to consider with regards to currency is that money is an abstract for wealth. Wealth is based on goods and/or services. A gold coin's value is not necessarily because gold itself is valuable. I can have a mountain of gold coins, but no actual wealth. It is because with this gold coin I can obtain x product or y service. The coin itself has no value until it is traded. Also, until it is traded the value of the coin is not fixed. It may say $1 on it, but if someone will give me X for it and another would give me X+Y it's value is not set until I make a deal.

All said and done your system can work but there are a lot of rough edges to it. Bartering is the earliest form of trade. I have some concerns though with this system and the nature of your project. If you are just mapping as a creative exercise and were curious, then the responses I have read are all enough to give you a good idea. If you are planning this as an rpg setting and intend to play it, then i foresee some problems. At that point you should probably list everything by it's value in X and then come up with some exchange rates. That set up is almost analogous with coinage anyway and personally i wouldn't go through the hassle because your players will probably get very frustrated when trying to buy things. It will be novel the first time but eventually it will be annoying.


btw, Hi everyone! I just joined the guild the other day and this is post #1. (I hate "introduce yourself" boards...)