Chapter Three

The Economy: A Primer

In order to craft a method for making gold carry actual value in a D&D world, we need a baseline understanding of how an economy works.

Economics deals with how a society makes use of its scarce resources. Functionally, an economy is the cycle of goods and services being traded amongst a population or between populations. Our interactions with the economy are usually on the personal level, and based on money—how much does that thing I want cost? Can I afford it? Is it worth the cash? 

That said, an economy does not require money, as we think of it, to work. Money is only a resource, a medium of exchange, something we all agree has value in order to make getting the things we want or need easier. We use dollars and euros and yen today, and many societies used precious metal coins in the past, but we can theoretically agree that almost anything has value. That means we can use almost anything as a medium of exchange. The most noteworthy example of an alternative currency may be cowrie shells, which saw widespread use as money along the Pacific and Indian Ocean coastlines, and was used as legal currency in parts of Africa into the 19th century. As long as there’s enough of an item to go around, but still some measure of scarcity, that item can potentially be used as currency.

Indeed, as gamers, most of us are more familiar with making economic decisions than we realize. Modern games rely heavily on economic concepts, though we rarely think of any of those systems as an “economy”. But if you’ve ever played a game where you earned skill points for a character and had to decide what abilities to spend those points on, you’re interacting with the game’s economy (or one aspect of it). You look through the available skills and decide which ones are worth spending your skill points—your currency, your scarce resource, frequently earned through the experience your character has gained through their actions (and, by extension, the time you’ve spent playing). 

And you always spend your skill points, right? Even if you sometimes save the points for a while, you spend them when the skill you want becomes available. No one goes through the whole game without spending a single skill point (unless they’re trying to prove something), because the points do nothing for you until they’ve been cashed in for new abilities. Likewise, even though it’s often a good idea to save money, that’s only to make sure you can use it for something you need or want later. Money is intrinsically worthless; it has no value until you trade it in for a tangible good or service.

How This Relates to D&D

The core reward handed out in D&D is, and always has been, cash money. Usually it’s gold; when it’s other coins, we think about how they translate to gold; and if the party finds random valuables they don’t need for other reasons (e.g. as spell components), they want to know how much gold those items will sell for. No matter the form, however, that gold has no value until the party exchanges it for goods or services.

If you save a merchant and he gives you a magic wand, the wand is immediately valuable. If he gives you a thousand gold, that only matters when it’s spent. If the party has nothing to spend it on, they effectively did the job for nothing. And as D&D characters level up, there are fewer and fewer things of use for them to buy, which means the cash rewards frequently viewed as a core component of the game’s reward structure don’t inspire the players (or characters) much, if at all.

Other games get use out of gold (or their version of cash) by offering a way to spend it that players are highly incentivized to use. In games where combat is a core component (such as most D&D campaigns), this almost always means upgrades to gear or other ways to increase their combat power. Whether or not those upgrades are “magic”, per se, doesn’t matter. It’s the most logical way for an RPG party to spend their resources, and when done well it makes the player (often one player, e.g. single-player RPGs like Baldur’s Gate) choose between which of her characters are going to get upgrades now and which ones have to wait.

D&D, on the other hand, assumes a 1st-level character is already more capable than the average schlub and has, one way or another, come to own basic gear. The only characters with an obvious need for more are medium and heavy armor users, who have to save up for half-plate or plate mail to max out their mundane equipment. However, assuming they survive, it doesn’t take that long for the average group to get those suits of armor. Even if the whole party wears plate, at some point they’re back to piling up gold without anything necessary (or even highly useful) to spend it on.

There’s an easy way to see the issue at work which doesn’t even require theorizing what characters would earn during an adventuring career. Instead, let’s look at the table in the DMG (page 38) for characters starting at a higher level. An 11th level character begins with 5,250-7,500 gp, two uncommon magic items, and otherwise normal starting equipment. Let’s say she starts with 6,500 gp, and is a big strong fighter; that’s immediately 5,000 gp and plate mail. Then what does he take? A +1 weapon of his choice, most likely, unless he prefers one of the other uncommon weapon types. The second item would probably be whatever he thinks is most useful—Gauntlets of Ogre Power, maybe. If it’s a dex fighter, maybe he has a +1 longbow with Bracers of Archery, a Quiver of Ehlonna, or a +1 melee finesse weapon.

I’m using this as an example because, regardless of the exact items chosen, this freshly-made hero is just about the worst-equipped 11th-level fighter you’re going to find. The first thing that almost any player with some experience is going to think is, “How can I upgrade my gear? I’m 11th level, and all I have is this?” But the leftover thousands of gold pieces still won’t enter their thought process at all, because at that point the gold can’t do anything to make the character stronger. Unless the character decides to save up for a stronghold or a sailing ship, or buys out a city’s stock of healing potions, the gold will just sit there forever.

Let’s put that money to work.