Follow the Money

Today’s post, was unfortunately supposed to be last week, but due to some internet and scheduling difficulties, it got bumped back. Apologies. This post is going to wrap up the discussion about finances and economics for your fictional world. We previously talked about types of currency, as well as some considerations about items produced and sold. Today we’re going to discuss economic models.

But before that frightens you off, let me explain!

Economic models can be as simple, or complex, as you want to make them. They are a way of showing how money moves through society. Now, once more, I’m a writer, not an economics guru type person, so please keep that in mind. While I believe the more complex models can also help predict how an economy is going to perform, that is a bit beyond the scope of what I am going to talk about.

So a general type of economic model is like this:

EconMod

It shows money moving from consumers to the market, and from the market back to the consumers through the use of labour. It also shows goods/labour and how it mirrors the flow of money (as in, goes in the opposite direction) Obviously this is very simplistic, but it’s a good example of how you should think of your fictional economy. There needs to be a give-and-take of money to keep things moving. I don’t want to get too caught up in the little details, so let’s move on to what you need to be doing/thinking about. The image above links to an explanation of the Circular-Flow Model, and you can check out What Are Economic Models? for a fairly straight-forward explanation.

Depending on where you are at in terms of your world building process, you may or may not know what items have been produced within a country/community. Perhaps you said that the only thing produced in a particular country is wood. They have an abundance of fast-growing trees, and no room for any farms or other food-producing type place. You need to figure out what kind of economy this would create.

A good place to start is by figuring out what your base financial unit (referred to as “fu” from now on) is. 1 fu is going to equal the minimum amount paid to a worker in a particular community for a day’s worth of work (so 8 hours). This could be a legal minimum (as in, minimum wage), or it could simply just be the lowest amount paid to anyone within the community. Ideally, 1 fu will be enough to sustain 1.5 people for a single day. This isn’t always going to be the case, and you may have reasons to make 1 fu worth more or less.

Generally speaking, an unskilled labourer is going to earn 1 fu a day.

You can figure out how much people earn based on the industry they are part of. In a modern, 1st world country, that looks something like:

  • Goods-producing
    • Agriculture = 2.06fu
    • Forestry & fishing = 1.93fu
    • Mining, quarrying, oil & gas = 3.66fu
    • Utilities = 3.23fu
    • Construction = 2.11fu
    • Manufacturing = 1.89fu
  • Services-producing
    • Trade = 1.27fu
    • Transporting & warehousing = 1.79fu
    • Finance & insurance = 2.18fu
    • Real estate & leasing = 1.64fu
    • Professional, scientific, & technical services = 2.38fu
    • Educational services = 1.74fu
    • Health care & social assistance = 1.52fu
    • Information, culture, & recreation = 2.15fu
    • Management services = 2.47fu
    • Administrative & support services = 1.35fu
    • Public administration = 2.15fu
    • Accommodation & food services = 0.65fu
    • Arts, entertainment, & recreation = 0.98fu
    • Other services = 1.33fu

In the above list, you can see that there are actually a couple of industries that earn below 1fu (minimum daily wage). This is going to be because of the much higher tendency in those industries for individuals to work part-time rather than full-time.

Obviously, the amount each industry earns is going to depend on the technological level of your world, how stable that community is, how/what goods are produced and/or prepared there, how/what goods are imported, and half a dozen other variables. Knowing what the average wage for each industry/type of job is an important step in creating your fictional economics. As a general rule of thumb, a job should earn more for higher education, high skill, and high experience requirements. High risk occupations tend to (but not always) have a higher wage. Some “no education, skill, or experience required” type jobs may have higher than 1fu wage because they are such shitty jobs. They may be high risk, but they could also just be unpleasant or there could be a preconceived notion among the general populace that working such a job is degrading. Thus, the only way to attract workers is by offering more than 1fu.

When you know what the relative fu earned for each industry and/or job is, you can start to figure out what that fu equals. How much does it work out to be per day? What all can that buy? How much of that goes towards food? Shelter? Clothing? etc.? What are the denominations of currency so that individuals can buy such basic items? A “measurement” I’ve heard many times is, how much does a loaf of bread cost? This is a way of looking at the cost of labour and materials, how much the average worker makes each day, and whether 1fu actually works to live on. It might be a good measurement for you to include as you create your own fictional economics.

A very quick example of how this might end up looking is:

Industry Job

FUs

Wage/day

Agriculture Farm-owner

3.4

8sp, 5cp

Farmhand

1.0

2sp, 5cp

Sr. Farmhand

1.8

4sp, 5cp

Forestry & Fishing Lumberjack

1.7

4sp, 3cp

Millwright

2.3

5sp, 7cp

Sawmill worker 1.1 2sp, 7cp
Lumber processor

2.1

5sp, 3cp

Fisherman

1.2

3sp

Sr. Fisherman

1.6

4sp

Boat owner

2.2

5sp, 5cp

Mining & Quarrying Miner

1.8

4sp, 5cp

Sr. Miner

2.5

6sp, 3cp

Quarry worker

1.6

4sp

Sr. quarry worker

2.3

5sp, 7cp

Maintenance

1.3

3sp, 3cp

Construction Roads

1.1

2sp, 7cp

Labourer

1.0

2sp, 5cp

Architect

2.5

6sp, 3cp

Plumber

1.8

4sp, 5cp

Carpenter

1.8

4sp, 5cp

Mason

1.8

4sp, 5cp

Trade Salesperson

1.0

2sp, 5cp

Shopkeeper

2.1

5sp, 3cp

Marketplace seller

1.2

3sp

Merchant (travel)

1.6

4sp

Transportation & Warehouses Land labourer

1.0

2sp, 5cp

Land merchant

1.8

4sp, 5cp

Sea labourer

1.1

2sp, 7cp

Sea merchant

1.9

4sp, 7cp

Guard

1.2

3sp

Warehouse worker

1.0

2sp, 5cp

Warehouse owner

2.1

5sp, 3cp

Finance Banker

1.9

4sp, 7cp

Money-lender

2.3

5sp, 7cp

Currency exchanger

2.1

5sp, 3cp

Real Estate Landlord

1.8

4sp, 5cp

Realtor

1.4

3sp, 5cp

Professionals Lawyer

1.9

4sp, 7cp

Judge

2.8

7sp

Researcher

1.9

4sp, 7cp

Mage

2.3

5sp, 7cp

Court Mage

2.9

7sp, 3cp

Translator

2.2

5sp, 5cp

Diplomat

2.5

6sp, 3cp

Educational Services Teacher, youth

1.3

3sp, 3cp

Teacher, adults

1.8

4sp, 5cp

Professor

2.4

6sp

Health Care Doctor

2.6

6sp, 5cp

Medic

2.1

5sp, 3cp

Nurse

1.8

4sp, 5cp

Apothecary

1.6

4sp

Alchemist

1.4

3sp, 5cp

Herbalist

1.1

2sp, 7cp

Culture & Recreation Actor, Extra

0.8

2sp

Actor

1.0

2sp, 5cp

Actor, Main

2.1

5sp, 3cp

Singer

1.6

4sp

Artist

1.4

3sp, 5cp

Professional fighter

1.8

4sp, 5cp

Dancer

1.3

3sp, 3cp

Sr. Dancer

1.7

4sp, 3cp

Theatre/arena owner

2.4

6sp

Public Administration Mayor

2.2

5sp, 5cp

Minister of ….

1.9

4sp, 7cp

Administrative, Management, & Support Services Supervisor

+1.1

+2sp, 7cp

Clerical/clerk

1.0

2sp, 5cp

Cleaner

0.7

1sp, 7cp

Servant

1.0

2sp, 5cp

Sr. Servant

1.8

4sp, 5cp

Butler

2.3

5sp, 7cp

Accommodation & Food Services Waiter

0.9

2sp, 3cp

Bartender

1.0

2sp, 5cp

Cook

2.1

5sp, 3cp

Innkeeper

2.7

6sp, 7cp

Tavern-keeper

2.3

5sp, 7cp

Chef

2.6

6sp, 5cp

 

Item

Cost

FUs

Half-loaf of bread, fresh

4cp

0.16

Half-loaf of bread, day-old

1cp

0.04

Wedge of cheese

2cp

0.08

Vegetables, fresh

4cp

0.16

Vegetables, un-spoiled

1cp

0.04

Meat, poor cut

2sp

0.80

Meat, average cut

5sp

2.00

Meat, good cut

8sp

3.20

Meat, rare

2gp

8.00

Ale

1cp

0.04

Wine, cheap

3sp

1.20

Wine, fine

1gp

4.00

Cloth, simple

2 – 6cp

~0.16

Cloth, average

4 – 9sp

~2.60

Cloth, fancy

3 – 8gp

~22.0

Clothes, simple

10cp or 1sp

0.40

Clothes, average

15sp

6.00

Clothes, fancy

15gp

60.0

Jewellery

2 – 12gp

~28.0

Furniture, simple

8cp – 6sp

~1.36

Furniture, average

6sp – 1gp

~3.20

Furniture, rich

1 – 8gp

~18.0

Inn room, per night

1cp

0.04

Apartment, per month

6sp

2.40

Theatre ticket, cheap seats

3cp

0.12

Theatre ticket, average seats

3sp

1.20

Theatre ticket, box seats

3gp

12.0

Like I said, it’s just a quick one. My currency is the “standard” used in D&D (10 copper to 1 silver, 10 silver to 1 gold). It could use some tweaking, but it gives you an idea of how you might start your own approach.

There’ll be a second post later this week (I’m hoping Thursday or Friday) to make up for the missed one last week.

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