Tuesday, June 12, 2012

The economics of dungeon-delving

Everybody knows that adventurers who return from their expeditions bring back treasures beyond the wildest imaginings of the average peasant.  I don't know that anyone's ever bothered to hash out the economic consequences of this, though.  So here's my crack at it.

First, we need to know how wealthy the average peasant is.  The dominion income figures in the Companion Set and Rules Cyclopedia are so badly broken, it's almost hilarious.  Instead, I'm going to use the assumption from the designer's manual of the Champions of Mystara boxed set: that the productive output of the average peasant is about equivalent to the value of his military service, i.e. 1 gp per month.  In fact, for our purposes, let's be extra generous and say that a peasant working in his field of competency (which clearly isn't military service) generates 1.5 gp of value per month, and that it's only loyalty to his liege or fear of his wrath that impels him to serve in the army for less.

In a society like those of typical D&D campaign worlds, every able-bodied member of the family worked.  Obviously, the very old and the very young will pull the average down, but let's assume enough skilled tradesmen in the mix, who pull the average per capita back up to our supposed 1.5 gp per month. 

A town of 1,000 inhabitants will thus produce a total of about 1,500 gp worth of goods and services per month.  The quantity of coin in circulation in this town may be considerably less than 1,500 gp.  Many transactions will be bartered, and of those conducted in coin, the same coins may very well pass through several different hands in the span of a month, and so contribute to the incomes of several different people.  If the farmer sells 1 gp worth of wheat to the baker, who sells 1 gp worth of bread to the cobbler, who sells a pair of boots to the farmer for 1 gp, they could each be said to earn 1 gp of income, but only one gold coin has circulated between them.  In any case, it's highly unlikely that the coin in circulation in the town totals more than 1,500 gp.

Now, consider a party of five adventurers just starting out at first level.  Assume that the average XP requirement among them is 2,000 XP.  If they are to gain a level after five adventures, they'll need to earn about 2,000 XP total per outing.  If 25% of that is from defeating monsters, that still means they're dragging back 1,500 gp in valuables from each adventure.  That's equivalent to the entire productive output of the town!

 Dumping that much fresh coin into the local economy will wreak all sorts of havoc.  Peasants can't eat gold and silver, nor clothe themselves in it, nor thatch their hovels.  Adventurers bringing sacks of gold and silver into town doesn't magically call more wheat, ale, wool, and wood into existence.  It does skew the distribution of the existing supply.  Every ingot of iron that's used to make weapons and armor for the conquering heroes is an ingot that's not being used to make nails, cooking pots, or scythes.  Every gallon of ale they guzzle in post-expedition carousing is a gallon that isn't available to slake the thirst of a local farmer.

It doesn't end there, though.  The blacksmith and the innkeeper, flush with the windfall of serving the party, will indulge a little more heavily in consumable goods themselves.  They'll buy new clothes from the tailor, and lade their dinner tables more heavily.  The clothes and food they buy subtract from the supply available to the rest of the town.  The tailor and the grocer behave in similar fashion with their new-found pockets full of coin.  As the money disperses into the pockets of townsfolk, and the stock of goods diminishes, the prices are bid upward.  And so it goes, with each round of transactions benefiting a little less than the one before, as the supply of coin works its way through the economy and the supply of goods is drained.  The people at the bottom end up paying inflated prices for a diminished quantity of vital goods. 

If the adventurers stick around for a while, the local economy will adapt to cater to them, once again at the expense of the locals at the bottom of the food chain.  Resources are diverted away from producing the things the peasants want, and toward making the arms, liquor, and luxury goods demanded by the adventurers.  When the party eventually does pull up stakes and move on in search of new challenges, they leave economic recession in their wake.  The blacksmith is left with the new tools he bought to meet their demand for arms and armor, now sitting idle, and has to let his extra assistants go.  The tailor is left with an inventory of fine cloth, the innkeeper with a cellar full of expensive wines, and the farmer with extra fields of hops and barley for which the market has just dried up.  The capital structure of such a relatively primitive economy isn't complex, so the time for resources to be reallocated isn't as long as it could be, but it still hurts.  Emergency stores may well be depleted from the brief period of living like kings, promising hard times ahead if the current crops fail, and woe betide the community if in the delirium of the boom they've eaten their seed corn and left themselves with little to sow for the next crop.

The upshot of all this is that, unless the party keeps most of their loot to themselves until they hit the big city, they're not likely to be very popular, unless in the course of their exploits they're doing the locals a good turn by neutralizing some clear and present danger.  The blacksmith and the innkeeper might like them initially, but if they stick around long enough, they're going to wear out their welcome even with those folk who benefit most from their largesse.  It's the blacksmith and the innkeeper, after all, who are going to bear the brunt of the townsfolk's anger when they have only paltry inventories at inflated prices for their old customers.  If the adventurers are outbidding the local nobility for goods, and leaving His Lordship the baron with scant fare for his table, the situation might be even more touchy.

In the greater scheme of things, we might assume that the overall supply of money in the game world as a whole will be more or less constant, as the amount lost on sunken ships and added to the hoards of monsters balances the amount recovered by adventurers.  That doesn't mean those local bubbles of boom-and-bust won't cause pain and hard feelings, though.


  1. In my experience, adventurers just don't care about the peons in the local village/town. They'll be moving on soon anyway!

    On the other hand, if they ever come back, it would be interesting to see if they received the blame.

  2. Have you read the bit in the original DMG about inflationary economics?

    There is no question that the prices and costs of the game are based on inflationary economy, one where a sudden influx of silver and gold has driven everything well beyond its normal value. The reasoning behind this is simple. An active campaign will most certainly bring a steady flow of wealth into the base area, as adventurers come from successful trips into dungeon and wilderness. If the economy of the area is one which more accurately reflects that of medieval England, let us say, where coppers and silver coins are usual and a gold piece remarkable, such an influx of new money, even in copper and silver, would cause an inflationory spiral. This would necessitate you adjusting costs accordingly and then upping dungeon treasures somewhat to keep pace. If a near-maximum is assumed, then the economics of the area can remain relatively constant, and the DM will have to adiust costs only for things in demand or short supply--weapons, oil, holy water, men-at-arms, whatever.

    Page 90.

    I rarely award all that much treasure in coins, which means adventurers will need to sell their loot (art objects, jewels, etc), and few members of a small economy will have the resources necessary to purchase such objects (though barter for things like horses is possible). Thus, anyone they sell to must be a richer merchant or moneychanger that is part of a larger scale economy (and will probably pay in merchant house notes rather than hard coin for mid to high transactions). Such transactions will also draw the attention of authorities after not too long, unless you are dealing with shady merchants or fences.

    At least, that is how I explain it.

  3. I hadn't seen that before, since I've never read the original AD&D DMG. All that inflation would eventually crash the economy, though it's probably easier just to hand-wave it than to model it in-game. Well, I would, but it's a field of interest for me.

    Anyway, point being that it's already dodgy even at first level, and gets really absurd when the doubling XP charts require tens and hundreds of thousands of XPs to level up, and PCs are bringing back tens of thousands of gp worth of loot from each adventure. It seriously strains my credibility and feels wildly unbalanced. Again, though, that may very well just be my own inner economist pulling his hair out, while the average gamer sees nothing amiss at all.

    Definitely a fan of making it nearly impossible to sell really valuable things outside of a major trade or population center, and of making a hefty proportion of the treasure art, jewelry, and exotic goods rather than coins. Salvage is a far nobler enterprise than currency inflation!

  4. Brendan sort of alludes to it, but there's also the local lord, or even the king, to worry about. Historically, any treasure hoards found by peasants (or nobles) usually belonged to the crown. So why wouldn't the local lord show up with some men-at-arms to collect taxes...say 90%? Wouldn't be much fun for the PCs, though.

    -Ed Green

    1. Why not? Evading the tax collectors sounds like a great adventure to me. Also, maybe motivation to move on from the starting town, which is another adventure...