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[Miles_Umbrae]

A barter-based economy devoid of currency is built on the agreement of the two individuals on the value of the goods/services offered to each other.

No it isn't.  A barter economy is based upon the fact that neither side actually needs what they are trading.  It is very much quantity of surplus junk I have VS quantity of surplus junk you have. 

The 'value' of the two sides surplus junk is always exactly the same.  If I have 10 surplus tables and you have 1 surplus chair, your chair is actually worth 10 tables.

Excuse me?
Where do you get your information from?
If a blacksmith needs food in a barter economy he will either trade his goods or services to the baker, farmer or butcher in exchange for food, or he will do a barter-chain with other artisans in the town until he has something to trade for the food.

At one point in the evolution of society the barter-chain took too much time out of the day that some people found that they could make a living off of doing nothing but barter with people, they became known as traders.

[Rowanas]

Yeah, GC, you've ogtten it the wrong way around. A barter economy relies entirely on trading of actually useful good, while our decadent capitalist-pig-dog systems rely on trading value-tokens that we don't need, but which serve as a promise that we can get things we do need. The primary purpose of physical money is as a holder of value even more than a medium of exchange.

[GoblinCookie]

Excuse me?
Where do you get your information from?
If a blacksmith needs food in a barter economy he will either trade his goods or services to the baker, farmer or butcher in exchange for food, or he will do a barter-chain with other artisans in the town until he has something to trade for the food.

At one point in the evolution of society the barter-chain took too much time out of the day that some people found that they could make a living off of doing nothing but barter with people, they became known as traders.

I have a brain of my own and don't simply exist to be a mouthpiece for other's views.  I get my information by actually thinking about how I as the player am actually functioning economically VS how the AI with it's fixed value numbers is trading.  Basically, we the player screw over the AI because we actually understand the real economy of the game but the AI does not since it operates on anachronistic concepts.

If the blacksmith needs food then he will trade all the metal items that he has made on top of the metal items that he himself needs (quite a lot) for the total amount of bread that the baker has on top of the amount of bread that he eats.

If the blacksmith produced 10 excess hammers but the baker only managed to make 1 loaf of bread on top of the amount of loaves he eats, then the barter system would in effect have 10 hammers traded for a single loaf of bread.  The system works because in themselves both items are entirely worthless to their holders, all parties intend to trade all worthless items for items of value. 

Money works differently, with money there is always a demand and all items can ideally be exchanged for money.  The baker does not want to have more loaves of bread than they need, but they always want to have more money.  This is why you have to be careful with declaring random items that are traded money.  Money is something that is always in demand and is traded for as a result, random items are traded away in a barter economy not because they are in-demand but because they are redundant to their current holder.

Yeah, GC, you've ogtten it the wrong way around. A barter economy relies entirely on trading of actually useful good, while our decadent capitalist-pig-dog systems rely on trading value-tokens that we don't need, but which serve as a promise that we can get things we do need. The primary purpose of physical money is as a holder of value even more than a medium of exchange.

That is mostly what I am saying. 

[Dorsidwarf]

That’s... not at all how a barter economy functions as far as I’m aware. People only trade for what they need/want, at a rate that both parties involved agree is fair (or are willing to trade for at least), they don’t just accumulate vast quantities of crap as a pseudocurrency according o anything I’ve heard

edit: unless you're talking about DF merchants, who do want to obtain vast quantities of useless trash

[Egan_BW]

Why does the baker want ten hammers? Why is the blacksmith willing to trade ten hammers for one loaf of bread, when that's clearly an unfair exchange? He could probably find ten people who only really want one hammer, and could end up with more food as a result of dealing with all of them, rather than just the baker.
"Fairness" is something that's very firmly ingrained in human thinking. Even if you're trading only things you don't need for things you do need, you'll still try to think about if the exchange is equal. If it's not, you'll probably get upset and refuse to deal with the person who insists on an unfair trade.

[spazyak]

You know what I want to see, the coin shot guns that will result from a minter profession

[GoblinCookie]

Why does the baker want ten hammers? Why is the blacksmith willing to trade ten hammers for one loaf of bread, when that's clearly an unfair exchange? He could probably find ten people who only really want one hammer, and could end up with more food as a result of dealing with all of them, rather than just the baker.
"Fairness" is something that's very firmly ingrained in human thinking. Even if you're trading only things you don't need for things you do need, you'll still try to think about if the exchange is equal. If it's not, you'll probably get upset and refuse to deal with the person who insists on an unfair trade.

The baker does not want to have 10 hammers and that is what drives the barter economy to become more complicated that just a few people trading with eachother.  Because the blacksmith's extra hammers are of no value to him, he wants to get rid of them and will give them away to anyone who offers the blacksmith ANYTHING that he wants.  The key thing is that the abstract value of the items is irrelevant, if you have anything at all to offer that the other part wants, they will happily give everything that they don't need to you in exchange. 

In a cash economy things are different.  Because every hammer has a monetery value, it therefore represents a given amount of money and money unlike hammers is always *in demand* as it were.  This means that if someone does not give the blacksmith an equal or greater amount of money (or items equal in money-value to the hammers) he will sit on his entire stockpile of surplus hammers, while in a barter economy he would give the whole lot away for a loaf of bread if he was hungry and the other party wanted the whole lot. 

This is why we should be wary of thinking of any surplus junk people trade as money.  The game however presently does just that, it confuses barter economies (what the game mostly has) with how barter works in societies that are financialised.

[LMeire]

Why does the baker want ten hammers? Why is the blacksmith willing to trade ten hammers for one loaf of bread, when that's clearly an unfair exchange? He could probably find ten people who only really want one hammer, and could end up with more food as a result of dealing with all of them, rather than just the baker.
"Fairness" is something that's very firmly ingrained in human thinking. Even if you're trading only things you don't need for things you do need, you'll still try to think about if the exchange is equal. If it's not, you'll probably get upset and refuse to deal with the person who insists on an unfair trade.

The baker does not want to have 10 hammers and that is what drives the barter economy to become more complicated that just a few people trading with eachother.  Because the blacksmith's extra hammers are of no value to him, he wants to get rid of them and will give them away to anyone who offers the blacksmith ANYTHING that he wants.  The key thing is that the abstract value of the items is irrelevant, if you have anything at all to offer that the other part wants, they will happily give everything that they don't need to you in exchange. 

In a cash economy things are different.  Because every hammer has a monetery value, it therefore represents a given amount of money and money unlike hammers is always *in demand* as it were.  This means that if someone does not give the blacksmith an equal or greater amount of money (or items equal in money-value to the hammers) he will sit on his entire stockpile of surplus hammers, while in a barter economy he would give the whole lot away for a loaf of bread if he was hungry and the other party wanted the whole lot. 

This is why we should be wary of thinking of any surplus junk people trade as money.  The game however presently does just that, it confuses barter economies (what the game mostly has) with how barter works in societies that are financialised.

But conversely, if the baker doesn't want or have a use for the hammers any more than the blacksmith does, then why would he trade for them? Even in a cash economy, having the hammers would require the baker to find a market to make good on his investment and he already knows the blacksmith wasn't able to find more than a gullible/merciful baker. It would make more sense for the blacksmith to offer maintenance services rather than prepared goods in your example, because surely the baker has some dull knives or whatever that could use professional care more than he could use a pile of hammers.

[AceSV]

So basically, the early idea of currency is that it's an extension of the barter economy with a universal middle-man good.  The hammersmith needs bread, and he's got hammers.  The baker has bread, but doesn't need hammers.  The hammersmith might be able to trade his hammers for fish or flour or tar or something that the baker actually needs and then trade that to the baker, but he's a hammer smith, he doesn't have time for that.  So instead, there's a good that basically everybody wants or needs, or at least considers valuable.  And thus, the hammersmith actually trades his hammers for gold, and then trades the gold to the baker so he can finally eat some breakfast. 

To my knowledge, making a coin with the face of your king or whatever on it didn't add any value.  The coin was worth the metal it was made from, and the point of stamping it was basically the king's seal of approval that it was a specific amount of gold so you didn't have to weigh it for every transaction.  Bankers would get in trouble for shaving gold from the edges of coins, because that decreased their worth. 

The origin of modern paper money comes from bank vouchers or "bank notes".  The idea is that your gold is in the bank, and you have a paper receipt that allows you to go to that bank and reclaim your gold at any time.  So if you want to use your banked gold to buy bread, instead of going to the bank, withdrawing your gold and bringing it to the bakery, you can just hand your baker the receipt for the gold, so that he can go to the bank and withdraw the gold whenever he wants. 

So unless the coin is valued as a work of art, the original post idea that minting them badly devalues them is bunk.  Maybe the merchants will want to weigh these coins themselves to be sure, but they are still worth the metal they are made of. 

[GoblinCookie]

But conversely, if the baker doesn't want or have a use for the hammers any more than the blacksmith does, then why would he trade for them? Even in a cash economy, having the hammers would require the baker to find a market to make good on his investment and he already knows the blacksmith wasn't able to find more than a gullible/merciful baker. It would make more sense for the blacksmith to offer maintenance services rather than prepared goods in your example, because surely the baker has some dull knives or whatever that could use professional care more than he could use a pile of hammers.

The trade would not happen and the blacksmith would melt the hammers down into scrap metal.  That however is not how the game economy currently works, under the game mechanics we currently have the hammerer would hoard his hammers because they are abstractly worth more as a hammers than they are as scrap metal. 

To my knowledge, making a coin with the face of your king or whatever on it didn't add any value.  The coin was worth the metal it was made from, and the point of stamping it was basically the king's seal of approval that it was a specific amount of gold so you didn't have to weigh it for every transaction.  Bankers would get in trouble for shaving gold from the edges of coins, because that decreased their worth. 

That isn't true.  Kings commonly devalued their coins by alloying the gold with increasing amounts of other metals.  This did not effect what they were worth on the market, the effect of doing so on the economy was probably beneficial since it meant there was more coinage as the population increased and economy grew.  The market worked on the number of coins, not the amount of metal in each coin. 

The only situation in which the relative metal content was actually taken into account was when you were exchanging coins of one kind for another kind. 

So unless the coin is valued as a work of art, the original post idea that minting them badly devalues them is bunk.  Maybe the merchants will want to weigh these coins themselves to be sure, but they are still worth the metal they are made of.

I agree, the coins that are flawed should simply be worthless altogether.  That is because they literally appear to be forged, the exact specifications are important.  It might be best to simply have any flawed coins auto-recycled down into the metal they are made of.

[AceSV]

To my knowledge, making a coin with the face of your king or whatever on it didn't add any value.  The coin was worth the metal it was made from, and the point of stamping it was basically the king's seal of approval that it was a specific amount of gold so you didn't have to weigh it for every transaction.  Bankers would get in trouble for shaving gold from the edges of coins, because that decreased their worth. 

That isn't true.  Kings commonly devalued their coins by alloying the gold with increasing amounts of other metals.  This did not effect what they were worth on the market, the effect of doing so on the economy was probably beneficial since it meant there was more coinage as the population increased and economy grew.  The market worked on the number of coins, not the amount of metal in each coin. 

The only situation in which the relative metal content was actually taken into account was when you were exchanging coins of one kind for another kind. 

I'd have to study medieval economics much more than I want to get this absolutely right, but my understanding of the alloying is that this is either a secret, so that the people using the coins still think that the coins are as valuable as if they were pure gold, taking the king's stamp of approval that it is, OR, this was done to create smaller divisions of wealth, so if a coin's worth of gold is equivalent to 5$ and you want to pay someone 1$ for an ale, then you make a coin that is 20% gold alloy instead of 80% smaller. 

[Rowanas]

To my knowledge, making a coin with the face of your king or whatever on it didn't add any value.  The coin was worth the metal it was made from, and the point of stamping it was basically the king's seal of approval that it was a specific amount of gold so you didn't have to weigh it for every transaction.  Bankers would get in trouble for shaving gold from the edges of coins, because that decreased their worth. 

That isn't true.  Kings commonly devalued their coins by alloying the gold with increasing amounts of other metals.  This did not effect what they were worth on the market, the effect of doing so on the economy was probably beneficial since it meant there was more coinage as the population increased and economy grew.  The market worked on the number of coins, not the amount of metal in each coin. 

The only situation in which the relative metal content was actually taken into account was when you were exchanging coins of one kind for another kind. 

I'd have to study medieval economics much more than I want to get this absolutely right, but my understanding of the alloying is that this is either a secret, so that the people using the coins still think that the coins are as valuable as if they were pure gold, taking the king's stamp of approval that it is, OR, this was done to create smaller divisions of wealth, so if a coin's worth of gold is equivalent to 5$ and you want to pay someone 1$ for an ale, then you make a coin that is 20% gold alloy instead of 80% smaller.

Yup, it's my understanding that alloying and other sneaky ways of devaluing the use value of money without affecting the perceived value was part of what led to the development of fiat currency, with the advantage that if you minted copper coins worth the same as a gold coin, you could keep the gold, spend that instead and as long as you never actually had to give anyone the gold that the copper coin was tied to, you were... golden!  That's the entire principal that our modern economic system works under -  There's far more digital money than real money, so when people all decide to trade their digital cah for real notes, the banks are suddenly buggered, everyone realises that the digital money isn't worth anything, and it drops it value to reflect this knowledge.

[FantasticDorf]

Help, i just wanted dwarves to specialise in forging and be able to brag "i think you'll find Elf, that's legal Tender!" in a broad scottish accent.

Specialists making dinky little coins and a few other trinkets, maybe fill dwarven minds full of pride after successfully destroying a spherical space wizard flying fortress in the face of impossible odds with a gold medallion each. Something along those kind of lines.

The Elf doesn't get a medal though, for explicit purposes the elf doesn't wear clothes not woven out of twigs and their hair has become scruffy, long and and unkept after travelling with dwarves for so long. Shan't bother the coin minters to bother making one for them.

Spoiler (click to show/hide)

https://www.youtube.com/watch?v=iH6a1iYQ0GA

[GoblinCookie]

I'd have to study medieval economics much more than I want to get this absolutely right, but my understanding of the alloying is that this is either a secret, so that the people using the coins still think that the coins are as valuable as if they were pure gold, taking the king's stamp of approval that it is, OR, this was done to create smaller divisions of wealth, so if a coin's worth of gold is equivalent to 5$ and you want to pay someone 1$ for an ale, then you make a coin that is 20% gold alloy instead of 80% smaller.

I hardly think that people were that stupid and nobody has any pairs of scales at hand.  One of the kings of France had as his policy-goal the restoration of his silver coin to it's previous purity and do that he needed to get his hands on more silver.  So he purged the Jews and stole their silver, then when he found the Jews did not have as much silver as he was led to believe he arranged for the annihilation of the Knights Templar with his friend the Pope.  So the devaluation of coins by reducing their metal content was very much an established and accepted fact of life; there is also no point in doing that simply to create smaller units of value.

Yup, it's my understanding that alloying and other sneaky ways of devaluing the use value of money without affecting the perceived value was part of what led to the development of fiat currency, with the advantage that if you minted copper coins worth the same as a gold coin, you could keep the gold, spend that instead and as long as you never actually had to give anyone the gold that the copper coin was tied to, you were... golden!  That's the entire principal that our modern economic system works under -  There's far more digital money than real money, so when people all decide to trade their digital cah for real notes, the banks are suddenly buggered, everyone realises that the digital money isn't worth anything, and it drops it value to reflect this knowledge.

No fiat currencies is only about a century old, all money was backed by precious metals up until the 20th century. 

[Dorsidwarf]

What does your first paragraph mean? First you disagree that minters might have used an alloy to mimic the proper make-up of coins so that they can make more money from the same stock , then you tell an anecdote about a king reversing his predecessors’ adulteration of currency?


Aso there’s talk of modern fiat currency and medieval gold-weight currency, but not so much discussion of bullion-backed reperesentative currency here and I wonder why