merxa wrote:In a functioning economy gold can be exchanged for goods and services, but even in our modern world it isn't infinite.
As demand rises immediately the supply costs rise, and then there's a delay as new supplies become available to meet raising demand, and again no good or device is infinite, eventually costs rise to where demand drops to zero.
It is not clear that supply and demand curves are being modeled.
merxa wrote:
And there's plenty of examples of non functioning economies, a city under seige, port blockade, closing of borders, famines, epidemics, monster activity shutting down the major copper mine etc etc etc.
That's also true, but koku generated in rural areas is just as meaningless as gold generated in the urban areas (and gold generated in the rural areas would be similarly useless) in those situations. It's really more apparent that those are situations where
production is sabotaged, and it virtually doesn't matter what that production
is.
merxa wrote:
Even magic isn't infinite, and it's expensive. Create food and water a lvl 3 spell, at 10xspell lvlxcaster lvl that's 150gp for enough feed for 15 people, 10gp a day to eat will backrupt 90% of the typical d&d population.
If you're able to command exclusive use of force, you don't
have to pay market rates. If you're a cleric, saving the city in exchange for future favors to be called on in due course is probably worth more than the 'suggested tithe'. It's probably a good way to become the state religion if Wee-Jas is the only one that saved the polity. In D&D terms, casting
create food and water costs nothing. The suggested price is 100% profit and has more to do with allocation of scarce resources (preparing that spell means NOT preparing this spell), but that doesn't mean as much when you KNOW what spells you'll need. D&D also doesn't worry about taxation - we don't know if that 150 GP is entirely used for Succubus-Attended-Demi-Planes or taxed at 33 1/3% by the state.
.....
We know that people are eating food to avoid starvation, and we're generally assuming that surplus food can be converted into value via trade. The reason we don't use bartering is that money is a very convenient medium to figure out how to exchange two chickens for a car. Even though it takes a long time to ramp up cow production, we have
commodity exchanges so you can literally look up the gold value of cows.
Right now, beef is 216 cents per pound and gold is $1605.90 per troy ounce (or $51.80 per gram).
A pound of gold is 50 coins, so each coin is 9 grams. A troy ounce is 31 grams so is roughly equivalent to ~3.5 GP (3 GP 5 Silver). In any case, if we had 1 GP, it would be $466.20, which would buy us ~216 pounds of beef.
Which is a long way to say counting beef as gold is much easier than converting beef into gold (and vice versa). At virtually all levels of abstraction, it doesn't matter - as long as you have gold you can get beef - as long as you have extra beef, you can get gold.
Ultimately (and this is crazy) gold has value because people believe it has value. In domain management you don't really care about piles of gold - you care about GDP or some other theoretical value that represents the VALUE of everything. It doesn't matter if you trade chairs for swords and then a chair for two chicken; or chairs for gold and gold for swords, and then the person you bought the sword from turns around and trades gold for 2 chickens - the whole point of currency is to get to the point of abstraction. And if the Deep Gnomes don't value gold and instead exchange Amethyst crystals, the system STILL WORKS because you're only talking value and not actual piles of metal currency (or bags of rice). Nominally tying the currency to a fixed pile of metal does have value, but knowing that the system is measuring 'value' and that you can essentially swap things for other things of the same nominal value nearly indefinitely should be the key take away.
Edit - In the most basic terms, even a society
that doesn't have currency creates value, whether that's walrus tusks or lumber. The system should be able to calculate the value even when we're dealing with ice or stone age cultures.