What makes a currency viable?

[CaptainPatch]

I know that currency has been discussed in umpteen places in the forums, but I didn't discern any in-depth discussion specifically on HOW currency works in Real Life, and how it should be modeled in a Wasteland environment. So I thought some people might want to have that discussion.

Awhile back I was on Eric Flint's Research team for the "1632" series. We had a HUGE discussion of how money worked in 1632 Europe, 2000 USA, and what would happen when those two economic systems collided. What was ultimately concluded is that for convenience's sake, it would be ASS-U-MEd that in 1632 Europe, people would automatically trust the uptimers' paper currency. (In literary terms, this is called deus ex machina: It's that way because the author said so!) And I would bet my last bottlecap that the Fallout economy was predicated on caps to likewise simplify the designers' economic concerns in Post-Apocalyptia rather than work out something more _realistic_.

So, anyone want to chat about this?

[Shadowless]

Honestly I believe that it would be much less a specific currency type and more along the lines of a barter economy. The only thing I would see as something worth value that everyone would agree on would be ammo/food/water.

[Woolfe]

Honestly I believe that it would be much less a specific currency type and more along the lines of a barter economy. The only thing I would see as something worth value that everyone would agree on would be ammo/food/water.

I always liked Salute of the Jugger (thats Blood of heroes to all you crazy Americans )
The used old gears and cogs and bolts and similar type stuff as a form of coinage. Essentially anything that could be used to build something.

But yeah, if you don't have a coherent group stabilising the money in some manner, then pretty much the only thing of worth would be stuff that people value. Bottlecaps is a very bad way of doing it in my opinion

Ammunition could be used, as could food and water etc. I'd like to have a barter type system going, but it might be quite difficult to manage gamewise.

[Drool]

But yeah, if you don't have a coherent group stabilising the money in some manner, then pretty much the only thing of worth would be stuff that people value. Bottlecaps is a very bad way of doing it in my opinion

Cash in Wasteland and Bottlecaps in Fallout are really no different than modern day fiat currency. Everyone agrees it's worth X, so it works. As long as it's difficult to counterfeit and not something exceedingly common (like, say, sand), it'll suffice. If everyone agrees that a box of 9mm ammo is worth 50 pieces of paper with George Washington on them and a piece of fruit is worth two pieces, then you don't really need a central government assuring everyone that it's the case.

Now, having groups of far-flung people all agreeing that Bottlecaps are the way to go is pretty silly, but I was willing to suspend disbelief on that. People putting faith in old US currency in Wasteland made sense because everyone's would have been used to doing so. Or been the children of people who were used to doing so. Also, it's a lot easier to program than a realistic barter economy.

[Woolfe]

But yeah, if you don't have a coherent group stabilising the money in some manner, then pretty much the only thing of worth would be stuff that people value. Bottlecaps is a very bad way of doing it in my opinion

Cash in Wasteland and Bottlecaps in Fallout are really no different than modern day fiat currency. Everyone agrees it's worth X, so it works. As long as it's difficult to counterfeit and not something exceedingly common (like, say, sand), it'll suffice. If everyone agrees that a box of 9mm ammo is worth 50 pieces of paper with George Washington on them and a piece of fruit is worth two pieces, then you don't really need a central government assuring everyone that it's the case.

Now, having groups of far-flung people all agreeing that Bottlecaps are the way to go is pretty silly, but I was willing to suspend disbelief on that. People putting faith in old US currency in Wasteland made sense because everyone's would have been used to doing so. Or been the children of people who were used to doing so. Also, it's a lot easier to program than a realistic barter economy.

Agreed it is easier, and probably the best way at this point. But it is very wrong.

Simply saying it is so, doesn't work, and anyway I thought part of the point was that the Rangers had been somewhat isolated, so they wouldn't know what the rest of the area was using.

In theory it would be doable. You just have a bunch of different currencies and then apply exchange rates between them. Then assign certain towns one of those currencies. Maybe that could be a quest. Trying to unite the currencies of the land.

[Drool]

I thought part of the point was that the Rangers had been somewhat isolated, so they wouldn't know what the rest of the area was using.

The Rangers were isolated, but they aren't by the time the game starts:

The citizens of Ranger Center, after first believing that they were the only ones who survived the nuclear malestrom, soon realized that communities beyond the desert's grip had also survived, Because they had such success in constructing a new community, they felt compelled to help other survivors rebuild and live in peace.

The Rangers were just in a prison, not a vault

[BubbaBrown]

All a currency requires is trust in the ability for it to be appropriately exchanged it for goods.

I've had to delve into economics when designing a homebrew game. I wanted to avoid using some universal cross-culture/cross-government fiat currency. Historically, the main factor anyone needed in any currency was the ability to exchange it for goods consistently.

One method to maintain that consistency is to have the currency be hard to acquire or produce. This is why you get precious metals as currency in many civilizations. But, it doesn't have to be precious metals as anything can be used: Bottlecaps made sense in the Fallout world, since no one really could produce bottlecaps to any effective degree with new fakes easy to spot. Old paper money worked, since the ability to produce it wasn't to be found in any functional condition and any new, fake bills would be easy to spot. Even Tally Sticks were used in the past. They took a stick, put notches in it, and halved it longways. One half was issued to the public, then other half was stored at the government bank. This way any stick could be checked for authenticity by matching it with it's other half.

The other method to maintain consistency is some means of enforcement. This is the bias of fiat currencies. You have some entity that'll enforce the ability to exchange the currency for goods. This is how company script in mining towns worked. The companies issued it, the locals accepted it. (To some degree if the company wasn't that great.) Then it was traded around. As long as the company honored it when it came back to them, it worked. Governments of the world use fiat currencies with the simplest enforcement of exchange being to pay government levied taxes. As long as that currency can start with the enforcing organization and be able to flow back to it eventually, the system works well enough.

So... A new post-apoc currency could come into play given the right factors. In my development, I created 4 main currencies that flow around regularly. One is a massive trade organization credit system that is fiat, but very well supported by places that have any business with them. Another is a fiat currency supported by a high-tech socialist government that is impractical to counterfeit, if not impossible. This allows its use widespread since many have learned how to spot fake bills and the currency itself is ridiculously durable. One precious metal currency system was a byproduct of industry. One civilization had access to deposits of precious metals and were skilled enough in smelting and refinement to set the standard that traders got accustomed to. The final is a fiat currency used by a widespread criminal organization. It was created to hide transactions from police and governments. Hence, it isn't regarded by proper merchants well, but quiet accepted by not-so proper ones.

So... All you need is enough trust the currency will exchange into some good or service for it work.

[Shadowless]

Why would it be harder to program a realistc barter system? You remove the caps and both the fallouts had one.

[Woolfe]

I thought part of the point was that the Rangers had been somewhat isolated, so they wouldn't know what the rest of the area was using.

The Rangers were isolated, but they aren't by the time the game starts:

The citizens of Ranger Center, after first believing that they were the only ones who survived the nuclear malestrom, soon realized that communities beyond the desert's grip had also survived, Because they had such success in constructing a new community, they felt compelled to help other survivors rebuild and live in peace.

The Rangers were just in a prison, not a vault

Yeah I know.. I quoted that at someone else at one point

But the way it all reads is that they survived with just the local area for a while, helping the smaller communities nearby, but not venturing far, until they realised there was more out there. So fair enough they might now the very local currencies, but not necessarily all of them.

[BubbaBrown]

Why would it be harder to program a realistc barter system? You remove the caps and both the fallouts had one.

In a true barter system... Nothing has value quantified so easily. The principle reason currency was created was to buffer the whims between seller and buyer. There are too many factors in a strict barter system to easily simulate properly. Supply and demand on a few different levels gets a bit complicated. Without some form of currency, you'd find that half the places around the wastes wouldn't take most of your stuff for any kind of trade. If they can't easily trade it later for what they need or use it in the immediate to near future, why the hell would they give you anything for it.

[Woolfe]

All a currency requires is trust in the ability for it to be appropriately exchanged it for goods.
<SNIP>

Trust is a very nebulous thing. Especially in a world where everyone is trying to get ahead, and a lonely traveller might break in and smash all your pots and take all your stuff.

So... A new post-apoc currency could come into play given the right factors. In my development, I created 4 main currencies that flow around regularly. One is a massive trade organization credit system that is fiat, but very well supported by places that have any business with them. Another is a fiat currency supported by a high-tech socialist government that is impractical to counterfeit, if not impossible. This allows its use widespread since many have learned how to spot fake bills and the currency itself is ridiculously durable. One precious metal currency system was a byproduct of industry. One civilization had access to deposits of precious metals and were skilled enough in smelting and refinement to set the standard that traders got accustomed to. The final is a fiat currency used by a widespread criminal organization. It was created to hide transactions from police and governments. Hence, it isn't regarded by proper merchants well, but quiet accepted by not-so proper ones.

Didn't I just suggest something like that

[Woolfe]

Why would it be harder to program a realistc barter system? You remove the caps and both the fallouts had one.

In a true barter system... Nothing has value quantified so easily. The principle reason currency was created was to buffer the whims between seller and buyer. There are too many factors in a strict barter system to easily simulate properly. Supply and demand on a few different levels gets a bit complicated. Without some form of currency, you'd find that half the places around the wastes wouldn't take most of your stuff for any kind of trade. If they can't easily trade it later for what they need or use it in the immediate to near future, why the hell would they give you anything for it.

What he said.

You could program it to a degree, by using various conversions etc, but it is not as simple as a straight money value, and if you don't make it complex enough it might make it easy to work the system to have unlimited cash or something without including real world effects.

I'd personally like to see it, but I wouldn't want too much focus on it, as I want other aspects more. But certainly if they can do it in a manner that is not too complex, I would love to see it included.

[BubbaBrown]

Trust is a very nebulous thing. Especially in a world where everyone is trying to get ahead, and a lonely traveller might break in and smash all your pots and take all your stuff.

Indeed it is. That's why it would be interesting to have certain local or regional currencies not be accepted by places that have had problems using the currency or dealing with the principle users of the currency in the past. Sounds like a good enough hook for a quest for the perceptive players.

Didn't I just suggest something like that

Of course. Just wanted to recount my own experiences when designing stuff for my own projects. It's one thing to use an economic system, but it's a whole different ballgame when you have to feasibly create one from scratch. Delving into those topics really shakes your perceptions on many real world systems. People do a lot of crazy stuff for a bunch of paper.

[TNZ]

An economy based on bartering would make the most sense, though some settlements, probably the more advanced ones, may have some form of currency.

I think the exchanging of currency is a bit too advanced for that kind of economy. But in saying that, you might be able to exchange currency through a caravan company or at least sell goods and receive whatever currency you like.

Along with bartering and limited use of currency, you could also add lines of credit in individual stores. Instead of receiving goods or currency for selling something, you would receive a line of credit at that store.

[Ekaros]

Multiple currencies with changing rates might be most realistic idea. New Vegas had 3, but 2 was kinda just there as items...

You get 1:1 rate in areas which uses the currency and in other you get different rates based on relations, distance and other factors. So rates change between locations, maybe even allow arbitrage if player feels like it. Of course word should go around that player is carrying huge amount of cash and there should be people who come after them...

[BlackGauntlet]

I dunno, the 1st paper currency traded across borders in the European & Middle-Eastern area were traveler's checks issued, encrypted and vouched by the Knights Templar.

Why can't the Rangers emulate this and do the same?

That's how I imagined Wasteland's economy to be.

[Bloodshard]

Money is just a measure of time-worked. it sounds too simple but it is true. someone who is making $10 an hour, in the eyes of society, is working "more" than some one that is making $7.50. So curacy is just an inbodyment of that time-worked. so in simple rare metals systems are based on the work needed to extract the metals, say 1 oz of gold takes 100 hours of work to extract, than one oz of gold equals 100 hours of work.

For the usage in Wasteland 2 a Barter system would be better, as long as the vendors have a constantly rotating stock, unlike fallout where the stock is constant. Paper money would be next to useless in the Wasteland unless it was a redeemable banknote.

fun money fact - 1oz of gold has always roughly equaled a tailored suit.

[Brother None]

And I would bet my last bottlecap that the Fallout economy was predicated on caps to likewise simplify the designers' economic concerns in Post-Apocalyptia rather than work out something more _realistic_.

Well, early in the design stages they were thinking about a barter-only economy, but this makes it unduly hard on the player to determine value (this gun is worth 10 spoons and 12 cans of spam, but this gun is worth 9 plates and 5 bottles of water!) They decided on bottlecaps because it fits so well in the post-apocalyptic mindset, but they didn't just introduce it with no explanation. It's the main currency because the Hub water merchants and trading caravans back it as a currency, and they are the main trading hub of the entire area. Also, bottlecaps are somewhat rare and can no longer be reproduced in the post-apocalypse. So unrealistic? Sure, somewhat, but they gave it more thought than most do, definitely enough to retain verisimilitude, and that's all that really matters, as opposed to "realism".

Then Fallout 2 came and it added some more. Though it's not all that clear how or why the cap died, the main currency is gold coins backed by the NCR and used by New Reno and Vault City (and thus de facto universal), but they can be exchanged for Redding mine scrips. There's always more to add as you add independent powers, like New Vegas did with NCR and Legion money. It's all predicated either on the currency being rare and hard to reproduce and/or a major power (economic or military) backing its validity.

Wasteland 2 would have to work on the same basis. Barter is the main way to get things, but just because it's the post-apocalypse doesn't mean people lost the concept of money, especially with a major power like the Rangers available to offer scrips or notes that they promise to back.

[CaptainPatch]

Glad to see so many interested people! A substantial number chatting while I was sawing logs.

1) The primary determinant of currency is Acceptance: People have to be willing to part with their items of value in exchange for whatever the currency is. Acceptance in turn is largely affected by Confidence: Is something worth 10 Yahoos today still going to be worth 10 Yahoos tomorrow? Does something that sells for 10 Xybeks _here_ sell for 10 Xybeks **there**? Lack of currency Confidence causes things like "not worth a Continental", "Confederate wallpaper", and a bushel basket of German currency just to buy a postage stamp. Earlier examples cropped up every time a European ruler expanded his Treasury by "debasing" his kingdom's currency by diluting gold and silver coinage by mixing in _base_ metals (worth substantially less than the gold and silver they were displacing).

2) Next is Recognition: People have to see the currency as _money_, that is, "legal tender" for the exchange of goods and services. Currency from afar that doesn't look like the local idea of money is very probably not going to be accepted by the local residents. The Tally Sticks mentioned earlier would be a good example of a legitimate currency that most likely would not be accepted at face value outside of its own community/region/nation. "That stick is worth this here prime condition M-16? Pull the other one; it has bells on!"

3) Then comes Uniqueness: How easily can the currency be counterfeited? One of the failings of inherent-value currencies (gold or silver coins) was a practice called "shaving" -- literally scraping off a small amount of metal from each coin that passed through the counterfeiter's possession. Thereafter, he could take that raw material and sell it for new coins to be shaved, making a hefty profit for just the investment of some time. That left everybody else pondering "What is the true value of this gold coin now that some of its mass has been removed?" Paper currency is highly vulnerable to any counterfeiter that has access to a printing press, and the ability to accurately reproduce the design.

4) An often ignored consideration is Portability. (My complaint about currency schemes ever since D&D and its requirement that characters carry literally hundreds of thousands of coins on their persons, and yet not be encumbered by all that metal.) ALL currency has weight, whether it be the hardware in a computer transaction or pocket change. The amount of weight may be negligible on a per unit basis, but when the sum becomes HUGE, the cumulative total would be enough to crush the bearer. Just how mobile would a Ranger be, hauling around 70,000 bottlecaps? It is because of the Portability issue that fiat currency first became desirable: The transport of vast wealth becomes possible simply by adding zeroes to the value indicator. A thousand unit bill weighs exactly the same as a one unit bill. The same goes for ten thousand, a hundred thousand, or even a million unit bill.

Time to attend to Real Life. More later.

[BJAltman]

I agree that barter would be the most realistic way to go. I'll take the position that its not difficult to do either. Item can be assigned one to X values, that are really just "cash equivalent". You then hide any references to cash. I say one to X because that then allows different items to be worth different amounts to different people/groups.

You can also through in actual bartering, haggling over prices. The old Apple IIe game Odyssey had that. Where simplistic, it was also entertaining.