I've recently been having a brainwave or ten about the eventual economy of my story's world, which after the first book devolves into a modern-day post-apocalypse with magic powers, and I've decided I really need to get some advice and feedback regarding the idea to iron it out and make it believable. Since I'm going to be asking for advice about economics, you're all probably going to need the context of the system this is based in, so here's that context: One Saturday in early September of 2017, at 12:00 PM EST, a magical tattoo, called a brand, suddenly appeared on the right arm of every human who was over the age of 13. This brand goes from the palm to the elbow along the inner forearm and has six circles on it. From that day forward, every week at that exact same time, a glowing rune appears on the hand of everyone with a brand, and anyone who's now old enough to have a brand gets the rune and the brand. Every week brings a different rune, but everyone gets that week's rune. And each rune gives you a superhuman magical ability, like the ability to cling to walls, summon magical familiars, or never need to sleep. Once all six circles on the brand are full, whichever rune is in the last circle (and you can move them around with your mind so you can decide which rune will be there) will be replaced by the next rune to arrive. So basically, everyone on Earth has their own set of six magical abilities, and crucially to the subject at hand: the only requirement for having a power is valuing it enough to keep it. The thing is, human society was never built to withstand humans being able to do all sorts of crazy magical things, and eventually the strain (combined with some suspiciously well-timed powers being given out) causes society to completely collapse. Due to the machinations of one of the main villains, the world spends several months, bare minimum, in a state where nothing electrical works at all, which obviously means the infrastructure completely breaks down, everyone fights over dwindling resources, and people are forced to survive in what is basically the world of The Walking Dead, except with magic instead of zombies. Now, this post-collapse world is going to need a currency, and I thought it would be fun to try and tie that currency to my magic system. Here's what I thought of: One of the runes that was given out pre-collapse is a rune called Crystaltree. It's what's called a tribute rune, which means that it lets you summon a creature, item or structure in the world by disabling access to some of your other runes for as long as it's sustained. As the name suggests, it summons a tree made out of what looks like crystal, in exchange for disabling 3 of your other runes (so a total investment of 4 runes when active). The tree grows to full size in five days, and then from then on, for as long as its creator sustains it, it starts growing crystal fruits at a rate of three (subject to change) per day. These fruits are the size of tangerines, split neatly into ten pieces when given a firm knock against something, and despite looking like they're made out of hard crystal, are entirely edible. Thanks to a magic coating over each individual slice, these fruits repel dirt and germs with extreme ease and, until they're bitten into, have an infinite shelf life. And a single 1o-slice fruit has enough calories and nutrients to serve as an entire well-balanced meal. A person could survive entirely off of the fruits of a crystal tree without suffering any nutritional deficiencies of any kind. The idea is that before the power goes out, these fruits are more of a novelty/curiosity item that the average person doesn't consider to be worth the huge rune investment to keep it running, at least in the developed world where food is plentiful. Once the power goes out and society collapses, however, these slices of magic fruit wind up being used as post-apocalyptic currency, since they're essentially precious stones with value backed by your own stomach rather than any government. These things are never not going to have value with anyone, which combined with their infinite shelf life, makes them prime bartering material. The issue is that I feel this concept needs some tweaking to make sure that "slices" will be plentiful enough to be used as currency but not so plentiful that it'll kill all of the resource-scrambling drama of living in post-collapse USA. Can anyone here give me their assessment of any problems they see with this system, advice on how to tweak it, or even just anything that strikes you as notable about the concept that I might want to think about? One major thing right off the bat jumps out at me: At least when it first appears, this is going to end world hunger. Nobody struggling to feed themselves or their family is going to turn this down, which means that in famine and poverty-stricken parts of the world, these crystal trees are going to be absolutely everywhere. Which gets me to thinking about what that'll mean for them when society collapses, and if these places might actually fare better in some ways than the more prosperous nations, and perhaps be major sites of trade once society starts making major headway in rebuilding decades down the line. One more thing: The first power given out (and this was a permanent power that doesn't take up a rune slot, it's just something everyone who was old enough when the runes first appeared has) is a healing factor that lets you recover from any injury that doesn't kill you and makes you immune to aging and disease (They still need food though). So while as far as I currently have planned this crystal tree rune is never going to be "re-issued" to the world, and there's no way to pass it on to your children or anything, the rune and the trees won’t be going extinct any time soon because the people who have this rune can only die violently. I'd appreciate any feedback or advice anyone can provide!
I was really hoping to see feedback on this. Sorry I have no knowledge whatsoever on economics. I don't even know how to work it out for my own story. But I just wanted to say how amazing your story sounds. Love the concept ^.^
Speculating here (if you'll pardon the pun) but I would reconsider the above. Government is a can of worms, and each worm has its own little can with even littler worms-with-cans inside. Suffice it to say we use a 'paper' substitute currency that is, or rather should be, backed by gold. Your crystal fruit has a couple of favourable aspects which you've identified: it's a broadly desirable commodity that holds its value well. Less favourable is the limited divisibility. E.g. how would you buy something that is worth two and half segments? At the wealthier end of the scale it would become impracticable to transact with ever-increasing quantities of fruit. E.g. how would you secure or transport 10,000 pieces? Possibly, then, a banking enterprise would arise as soon as conditions allowed. Crystal fruit would be held, as gold is held currently, in return for a more convenient substitute. This substitute would become the everyday currency - backed not by stomach but by 'crystal fruit reserves'. Nice idea btw, good luck with it.
If this is just a barter tool, is there any reason people would use only this tool for barter? I can see the appeal of having a useful, accessible item as a frequent barter tool, but I don't really see why it would function as currency. Like, if you have a horse and I want it, I could offer to trade you three sheep, or whatever. I don't think I'd bother converting the value of the horse into magic fruit, then selling my sheep to someone for that same value of magic fruit, then giving you the magic fruit so you could go buy the sheep back... Without some sort of centralized power structure, I think you could realistically present the fruit as something that is often used for barter. But I would also expect other items to be used as convenient.
Isn't that already the case though, even when we have money, where sometimes we just trade things rather than breaking them down into monetary value, usually in small scale personal transactions? I'm having trouble understanding what you're trying to say here.
I think the line between barter and currency is, essentially, that there's an element of state support to currency. It generally comes in denominations, etc. So your magic fruit doesn't seem like currency, to me. Possibly this is just a semantic issue... I don't think there's anything wrong with using magic fruit as a generally accepted tool of barter. But with no government regulating their production, I imagine there will soon be a problem of oversupply, in which case their value would plummet. And then maybe people would stop growing them, in which case their value would rise quickly... just as their value might be significantly more in areas suffering a famine, and very, very low in areas with adequate food production. So then maybe people would start shipping the fruit from areas of high food to areas of low food, but this is the fruit acting as a commodity, not a currency...
The difference between a commodity and a currency is that a currency is state issued explicitly to be used in transactions. Beyond that, the fact it's a limited power means that only those with that power have the means of producing said currency, which means they have the ability to in effect print money and destroy any economies by producing too much or too little. Beyond that, there are various logistical issue in terms of how large scale transactions would work. E.g buying something for ten thousand fruit would take many days to transfer.
Sounds like Socialism to me where people are just given every week. What ever happened to people having to earn what they want? It's like a command economy where the powers that be control everything. It's not like a free trade economy which promotes competition.
Your magic fruit, it's finite right? Or, can magic fruit seeds grow more magic fruit, making it infinite? This effects the value of the fruit.
At risk of stating the obvious, this would work well only if the horse-seller was in need of three sheep. There need not be a difference. The OP's commodity currency is exactly that: commodity currency. It does not require State involvement, it just needs to be a sufficiently desirable commodity to become a common medium of exchange; hold its value well; and ideally be of convenient divisibility, size, weight, etc.
Your story should work better with a barter system. The thing with money is that its not supposed to have much intrinsic value and is simply agreed upon as a mode of exchange. Other than that money should not be easily replicable and should be recogniseable. Your currency sound a much more like a precious item than something that functions as a currency.
Yes. That is obvious. But the magic fruit would only work well if they both agreed on the approximate value of the magic fruits, and since there is no control over the production of fruits it seems likely that the value would fluctuate wildly and it would be difficult to find agreement on their value at any given time. There would also be the issue of portability. If there are a lot of fruits available at a given time so they aren't worth much, it could take a lot of fruit to pay for one horse. Each fruit is the size of a tangerine, so they'd be at least bulky, and probably heavy. Someone who sells his horse for a thousand tangerines might very well wish she hadn't just sold her horse, because how the hell is she supposed to transport all these tangerines now? And if someone was selling, say, ten horses? She'd need wagons to carry all the tangerines, and then where would she store them that they wouldn't be stolen, etc. etc. I think the term "commodity currency" usually refers to a state currency that is closely tied to the value of a given commodity. Like, if a country's chief export is oil, the value of that country's currency will be closely tied to oil. This would be more the value of the currency in the world market, not the internal value. But there's still a currency, with state production, etc. Do you have an example of a country where "commodity currency" actually refers to using a commodity for currency in daily life?
I remember reading a paper by an economist that was basically a thought experiment on how the economy would function if our currency was backed by chickens rather than gold that seems like it might be helpful Unfortunately, for the love of God, I can't remember what it was called or who wrote it and a half an hour of Google has basically turned up nothing, so hopefully someone else here knows what I'm talking about. It happens on occasion.
They don't need to agree on the value of the fruit, just the value of the horse - which'll be valued by the quantity of fruit each party are willing to give/receive in the exchange. I was speaking of the exchange medium, rather than specific commodity currencies. Gold and silver have been used historically, grain even; not greatly different to @Simon Price-brand crystal fruit.
“Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich.” Ford stared in disbelief at the crowd who were murmuring appreciatively at this and greedily fingering the wads of leaves with which their track suits were stuffed. “But we have also,” continued the management consultant, “run into a small inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying one ship’s peanut." Douglas Adams, The Restaurant at the End of the Universe
When things like this were used as true currencies in the past, it was still due to state involvement. For something to function as a currency, it needs to be all-but-guaranteed that someone else is going to be willing to trade you things for it - historically, this was the case because states were going to demand it in taxes. If a large group of people KNOW they're going to need to pay 100 bushels of grain to the state in 3 months, grain is effective as a currency. When the value's just based on what you can do with the thing - like here, the value is that it's a a reliable foodstuff - then as @BayView says, it's going to fluctuate. Group A had a drought, so they really want the fruit. It has a ton of value to them. Group B have full warehouses and enough grain to last the next 6 seasons - they don't want the fruit because they've got enough food. You can't trust its value the way we can trust the value of a dollar.
But the quantity of fruit each party is willing to give/receive will obviously depend on their perception of the value of the fruit. Like, if the horse-owner already has a lot of fruit and thinks everyone else already has a lot of fruit, she's going to require a lot of fruit in order to give up her horse. Maybe she says the horse is worth a thousand fruit. But the horse buyer doesn't have a lot of fruit, or thinks everyone else is also short of fruit, so she thinks fruit is really valuable, so she's only going to want to pay, say, fifty fruit. They both agree that horses are useful and/or yummy, but they don't agree on how much magic fruit is worth. This is the problem with barter in general, of course. They could run into the same problem if they were trying to trade sheep for the horse. The strength of a state-supported currency is that, generally speaking, its value is more stable. There are obviously exceptions to this (rapid and disastrous deflation or inflation) but they tend to be the exceptions rather than the expected state of affairs. In addition to @NigeTheHat 's comment, these elements are also fairly inelastic... grain is more flexible, but gold and silver are finite and quite rare, and even grain requires adequate land, growing time, etc. Every person in the magic world has the ability to produce magic fruit quickly and relatively effortlessly. If I think a horse is only worth fifty fruit, I plant a tree and 22 days later I have enough fruit for the horse. But if everyone else ALSO wants that horse, they've all planted their own trees and also have 50 fruits. So the horse owner will say Actually, the horse is now worth a hundred fruits, or whatever. It's a barter system, not a real currency, and because the supply of magic fruit is so elastic, it wouldn't even be a stable element to barter with.
It's awesome that so many people have decided to chip in on this discussion! Thanks everyone! Just wanted to make one correction I noticed: Sorry if that was unclear, but it's not a situation where everyone has every power. Everyone had the option to have any set of 5 (technically 6, but the 6th one is constantly changing so you can only count on having 5 continuously). And this rune was given out before people knew food was going to be a major problem a year or so down the line. So the only places where the majority of people have this are the places where feeding yourself is already difficult in real life.
That's the current plan. However, the first batch of people given powers when this started were also given eternal youth, so these trees will be around for a while. And also I don't intend on these being currency forever, just for the initial post-apocalyptic recovery period, however long that winds up taking. Civilization will eventually rebuild in some capacity. They'll eventually graduate from money to just a commodity.
So now my concern is that there wouldn't be enough of the fruits. If the only people who would have been making them were the people in countries with starvation, then there weren't that many people making them, and presumably they wouldn't have made more than they needed, since they had no extra value at that time. So unless you've dramatically reduced the population in the hungry places, or dramatically increased their ability to grow other kinds of food, all available fruit will still be needed to feed the population. So maybe the population has been dramatically decreased, or the ability to grow food has been dramatically increased... but then the magic fruit really don't have any intrinsic value anymore, right? Because there's enough food to go around? If people aren't hungry, the magic fruit has no intrinsic value, and if people are hungry, they're going to need to be eating the fruit, not using it as currency. If there was some sort of reversal of fortunes, so that the people in the previously hungry areas somehow got the ability to grow more food and retained the ability to produce the fruit, and the people in the previously well-fed parts of the world were now hungry, then there might be potential for one-way trade of the magic fruit to the newly hungry regions, but one-way trade really isn't the same as being currency.
That's the main issue I have, and what I most need advice for: trying to set up a plot justification for these to be plentiful enough in America post-collapse to be plentiful enough to use as currency after the initial die-off from the scramble for resources in the anarchy, but not so plentiful that survival would be a given and resource gathering/harvesting wouldn't be necessary, and also to get a better concept of how plentiful that would be.
It's true that governments have spent much effort trying to control monetary systems, and it's true that government coercion may compel the use of a certain commodity as an exchange medium, however government coercion isn't a necessary factor. A commodity that scores highly in areas such as marketability, value retention, divisibility, portability etc., is a commodity that will compel acceptance as an exchange medium by virtue of those characteristics. I.e. It isn't necessary for a government to force people to embrace an exchange medium that is already found to be a desirable commodity. So, for me, you have the cart before the horse: Historically it's not government coercion that drives the use of a certain exchange medium, rather it's the inherent value of the commodity used as an exchange medium that drives government to take control of it. If the fruit is valuable to Group A then it is also valuable to Group B, because the market value of the fruit to Group B is determined by what Group A are willing to exchange for it.
You're welcome to think that if you want. Economics and history disagree with you. Only if Group A have anything they want that they can't get from other sources, and only if they can guarantee Group A are going to want the fruit at the point they want to trade stuff. Which isn't possible, if the value of the fruit is as food. Lots of things are food, so demand goes up and down.
