Building a Fantasy World XI: Economics

This article drifts into an esoteric aspect of worldbuilding. Some articles in this series are neutral in regards to Bottom-Up or Top-Down worldbuilding, applying equally to both. Then there’s trade and economics, a subject that quickly gets finicky and OCD even when building a Top-Down world for mass consumption.

Regardless, it can be handy to know some of the major trade routes of the region as well has how towns and nations support themselves. It’s also useful to keep in mind the economics of the world and the game.

As this is such an esoteric topic, I’ll be covering a couple topics at once to keep things short.

Table of Contents

This blog is part of a series on Fantasy Worldbuilding. The other parts are listed below

Part 1: The Hook
Part 1.5: Variables
Part 2: Conflict
Part 3: Geography
Part 4: Races
Part 5: Nations
Part 6: Monsters and Dungeons
Part 7: Deities
Part 8: Cities
Part 9: Organizations
Part 10: History
Part 11: Economics
Part 12: Culture
Part 13: Starting Zone
Part 14: Player’s Guide
Part 15: Other Realms
Part 16: Miscellaneous

Scarcity Economics

The basics forces of economics are supply and demand: the value of an item is determined by both the ease of its availability (supply) and the number of people who want the good (demand). High demand and low supply mean high prices while low demand and high supply mean cheap prices.

Excluding monopolies, price fixing, and artificial scarcity. Economics is complicated.

Most D&D and fantasy worlds have currency economics based around precious metals. Rather than barter using goods of equivalent value coins are used. Coins had an inherent value, being made of rare metals that many people want (high scarcity and high demand). Incidentally, this is why many minted coins have ridges along the edges, so they cannot easily be shaved for precious metal filings.

The rarity of metals can vary depending on trade routes and available mining. In the early days of Egypt, silver was more valuable than gold due to its scarcity. After a few hundred years and as trade expanded, more silver crossed into Egypt and the price of silver dropped to half that of gold. While the value of goods is based around the availability of a precious metal, as it is not a closed system it is possible to increase the quantity of said metal. Returning to Egypt, silver is more common than gold yet fetched a higher price locally, so traders and miners were incentivized to mine and sell silver, flooding the market and eventually reducing the price.

In a nation that uses gold coins there will continually be more gold added to the system, decreasing the value of gold and devaluing the currency. This is an inflation of sorts.

Strong governments can prevent inflation through what amounts to denial. They just say their moneys is worth a set amount making the coins more valuable than the metal.  This is what leads to counterfeiting. Conversely, if the metal of coins have more value than the coins itself, people are likely to melt down coins for a profit. In response nations will add non-precious metals to coins, making them into alloys.

As hinted above, when coins can become debased, being less than pure precious metals, it’s the implied value of the coin that has worth. There’s often an unspoken a promise that the coin has value and could be exchanged at any time for precious metals of the appropriate value. This is the basis for paper money – also known as promissory notes – which are basically a formalized I.O.U. system. At any time you could take the note to a bank and exchange it for gold, but you don’t as the paper is lighter and more compact than several kilograms of gold.

Things get even more complicated in the modern world which has largely abandoned the gold standard, where money is more akin to stock in a nation having value tied to the status of the nation.

Did I mention economics is complicated?

Services are also subject to supply and demand. If only a handful of people can perform a certain task their skills have limited supply. However, this has a different dynamic than resource scarcity as skills can be trained. This can be artificially limited through strict apprenticeships and trade secrets, but trade secrets are notoriously hard to keep hidden and highly sought. There’s an additional wrinkle in fantasy worlds of potentially untrainable skills, such as the flavour of magic in some worlds and bloodline powers.

Alternative Economics

A simple way of tweaking a world is to change the currency from the assumed copper/silver/gold coinage. Dark Sun did this with ceramic coins as metal was scarce: the value of silver was so high that a coin had too much purchasing power for common use. Dragonlance also did this by saying the Cataclysm devalued soft, unusable metals such as gold and silver so that only metals that could be used as weapons and tools had value, and the reigning currency was the steel piece.

This is interesting but should be pulled off carefully. Dark Sun is a world of sand and deserts, so ceramic should be easily procured, so the value of a ceramic piece is akin to that of paper money: it only has value as long as people claim it has value. Which works because of the rigid governments in charge of the city states. The Sorcerer-Kings say the bits of ceramic are worth a certain amount and so they are. This didn’t work as well in Dragonlance as the intent of steel pieces is that settlements are isolated and there is no central authority assigning value, yet most items in the game are made of more steel than their cost: a pound of steel was worth 50 steel pieces yet a 4-5 lbs  longsword cost 15 steel, so you could make 180-odd steel pieces in profit by melting your sword. So steel pieces were worth more than the actual metal.

Other options might be equally rare items. A world could have the frequency of metals flipped, with gold being more common than copper which is much more rare. Gemstones make a viable alternate currency, as might volcanic obsidian. Currency could be organic, such as clam shells or dragon scales. It could even be something manufactured, such as relics from a forgotten age, like how the world of the Fallout video games use bottle caps as the currency.

For civilized of widespread nations that can have a representational currency, this is an interesting way of distinguishing the world. You can imagine Khorvaire in Eberron having a form of paper money prior to the Last War that still might be used in some cities or nations.

In wilder worlds, money might be less commonly used with barter being the standard method of exchange. In worlds with many rival nations, money from opposed countries might be rejected or have lesser value, or be suspect and treated to extra verification such as weighing. Money changers might be required to convert coins to the local currency, likely for a fee or percentage.

Just changing the denominations is one option, although it does require changing all the prices in the rulebooks. But if you have the time, it can have an interesting effect. Naming coins is also fun and makes currency much more interesting than just the metal. I’m personally fond of the innumerable coins from pre-decimalization British currency where you had the farthing, ha’penny, penny, tuppence, groat, sixpence, shilling, florin, half-crown, crown, half-sovereign, and sovereign and find the names have an interesting effect.

The Cost of Living

When designing a world, it’s a good idea to try and remember that the world is populated by millions of nameless NPCs who all have to earn a living while buying food, clothing, and housing.

Of versions of the game, 3rd Edition D&D had the most solid economic foundation; prices were based around the silver piece, which was established as the amount of money an untrained labourer could earn in a single day. The prices of food and lodging were based on that, expanding upward to more expensive goods.

Adventurers tend to distort the perceived price of goods. Because they have access to vast stores of forgotten treasure – thousands of gold pieces – it’s tempting to price everything in gp, to set the prices based on what a PC could afford. But this quickly makes mundane items staggeringly expensive. A single gold is a week’s salary to a common labourer. As such, most common folk pay with copper coins, nobles might throw around silver, and gold is the coins of the truly wealthy (and dragon hordes).

As a ballpark number, I equate a silver piece with $50, which is close to a day’s earning at minimum wage. A copper is a reasonable $5 while a gold piece becomes $500. The average longsword, priced at 15gp, costs roughly $7500. Getting a sword is an investment not made lightly.

Trade and Trade Routes

Goods have to come from someplace. Few settlements have ample food and water and ore and lumber and livestock. It’s a lot like a more complicated game of Settlers of Catan. Sometimes a player will have all the resources they need at all times but more often trading is required.

Trading and natural resources are a lot more complicated than in Settlers as climate determines if fields are better suited for animals or crops as well as what crops are available, while geology determines if rough terrain is better suited for metal ore, precious stones, or quarried stone. Regardless, Settlers of Catan makes for a handy inspiration and baseline for needed materials. Nations need to have ready access to rough and flat terrain for ore and food respectively, or they need to have a monopoly on something that allows them to trade for what they need, or they need to be able to make do with what they have. While you can’t build roads out of surplus herds of sheep you can opt to build cities out of available materials (stone, wood, clay adobe, sod, dragon bones, etc).

In addition to trade for the goods necessary to survive and grow, trade also occurs for luxury items: fabrics, spices, drugs, exotic foods, precious minerals and stones, magic reagents, slaves, and the like. This is where supply and demand comes in; some nations with have a greater supply of some goods, while other nations will have a lower supply. Thus, it’s very profitable to move the goods from one nation to another. And the farther away the nation, the greater the profit. This leads to trade routes: long roads that lead from one part of the world to another that goods travel along. There are a number of real world examples, such as paths across the Sahara, the Silk Road, the Amber Road, Via Maris, etc.

Sometimes, the nations that solely provides a much desired trade good can become wealthy and potentially survive despite lacking necessary goods, or they might be ready targets for conquest and occupation. Nations and cities on trade routes can also flourish, becoming extremely wealthy . The Islamic Caliphate of around the 10th century flourished in part due to its central location and use as a trade hub (the Islamic empire controlled the tail end of the Silk Road for almost a thousand years until sailing around Africa became viable sometime around the 15th Century).

Economics in War World

As always, when making a world, you must decide if a change will add atmosphere and differentiate the world or if it will only add complexity and detract from the world. I’m not convinced changing coins or currency will help the tone of perpetual warfare.

I already have one form of alternative currency: the nation of Firaxies uses enchanted glass beads to denoted accrued debt. But that works best in addition to a familiar currency.

Instead of changing the type of metal or value of coins, I’ll instead change the presentation and assumptions of the coins.

Gold and silver are useless in a time of war: they’re soft and make poor weaponry. So mines producing precious metals are rare in War World, as nations far prefer to mine iron or the metals needed for bronze. But the coins retain value as gold is still a precious metal but few new coins are minted each year. Instead, most nations are still using the thousand year-old dwarven coins, now worn and dented.

This aids the tone of a world weary from continual war, a world where nations don’t even bother minting fresh coins and everyone is using coinage worn smooth from continual transactions. And it helps justify why nations might share a currency despite being at continual war, so there’s no need to derail an adventure by having the PCs continually visit a moneylender or be considered spies for having a rival nation’s money in their purse.

This also helps justify the other lesser-seen coins: electrum and platinum. These coins might not actually be made of electrum and platinum but be silver and gold respectively but in much better condition and so worth more.

I can justify little trade in War World. It’s hard to trade with someone when you plan on invading eventually, and asking for needed goods exposes a weakness that might be exploited.

The one neutral nation of Firaxies helps with this bringing some trade and justifying how some nations receive their goods. The lack of trade does help push nations to continue their wars, occasionally out of a necessity to capture rarer yet need goods.

This is actually a small benefit. With limited trade this means there is a very limited supply and high demand for non-local goods, which means trade is a profitable albeit risky business. This is the sort of work that attracts adventurers.

A lack of regular trade helps justify the need for PCs. There might be small independant trade caravans crossing between nations that desperately need protection, as the governments cannot get involved. Trade is handled by private merchant companies that have to swear neutrality in the larger wars. This might also be racial, with kenkus, dwarves, and halflings regularly acting as neutral traders.

There might be small satellite communities hidden away that ferry needed resources back to the capitals, but the long supply lines are vulnerable and need additional protection. Reversing this, vital trade lines are a good attack point for elite squads of soldiers like the PCs, and banditry is very profitable for evil parties.

There are the four major regions in the world, one for each of the cardinal directions: north west, east, and south. Each would likely have some trade with each other quarter, being slightly less openly hostile (at the moment).

Brainstorming a few rough trade routes, they might look like this:


I drew some trade routes along the major rivers and roads and along the coastlines, stopping at major ports or at the midpoint between major ports. There are a few places traders would stop where there were no cities, so now knowing there would need to be a supply settlement there I can add cities (or large villages).

From there I opted to graphically illustrate the goods being traded. While I could have used text, I opted for a visuals and pulled some clipart from Microsoft Office.


I placed a variety of trade goods across the map including ore, stone, grain, lumber, livestock, gemstones, a couple types of spices, slaves, fruits, and silk. I could also have added things as mundane as salt, sugar, narcotics, and weapons or as exotic as magic, adventurers, or even dragons.

This all isn’t incredibly useful for the word, especially as far as adventurers are concerned. But knowing the trade routes and economics can help add details. When the party is guarding a caravan crossing through dangerous shifter lands it’s handy to know that they’re carrying gemstones, which are rare in the north. Or when the nobleman talks about their silk tapestries, it’s not just silk but Thiraxian silk from the far south.


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