In King’s Shield — book three of the Inda Series and an entertaining but otherwise unremarkable sword-and-sorcery fantasy novel by Sherwood Smith — I was very pleased to see that the existence of economics was not merely recognized, but used to advance the plot. Too often in fantasy novels, money is assumed to conveniently exist. Kings can declare wars, and they absent mindedly cover the costs “out of the treasury.” And everything is paid for in ubiquitous gold coins. Need to stay at an inn? Here, have a gold coin. Need to raise an army? Here, have some more gold coins.
But in King’s Shield, the king goes broke fighting a war and is facing the possibility of his kingdom turning to anarchy if he can’t pay for anything. That alone earns the series some points — far too many books simply gloss over the fact that wars are, well, expensive. So the King’s busy fretting over his empty treasury, and in typical fantasy fashion, the main character — who has spent most his life as a pirate — announces he has a solution to the problem. To paraphrase, “Not to worry! There’s a big old treasure trove full of pirate gold out on an island I know of, let’s just go and fetch that.”
Then the king’s cousin informs him, “That won’t work.”
“Why not?” The pirate asks, dumbfounded.
“Because treasury isn’t treasure.”
“Treasury isn’t treasure?! What the heck is it then?”
The king’s cousin launches into an explanation of how finances work in the land. The pirate is appropriately baffled when he is informed that the “letters of credit” they often use are not actually referring to piles of gold, but are themselves used as money — there’s no gold standard in Iasca Leror. “So you’re telling me,” the pirate says, “we’re just trading letters all over the place? Just pieces of paper with writing on them?” Welcome to fiat currency, Lord Inda.
In fact, the character’s dialogue sort of suggests that in this world, the monetary system operates under Chartalism. The king accepts payment of taxes from each nobleman in the form of established rates of men, horses, supplies, etc., and these taxes of soldiers and supplies can also be measured and paid in ‘kind’ — fantasy-speak for trade between two different goods of equal value.
And in Iasca Leror — where King’s Shield takes place — it turns out that a pirate’s treasure trove has very little value in kind. Because of the years of wars that they’ve been through, interkingdom trade has grinded to a halt. And gold and jewels are useless to Iasca Leror– you can’t eat them, live in them, or ride them, after all.
And thus economics becomes a plot point in high fantasy. As a result of the conversation, the king’s cousin jaunts off on his next adventure — a quest to re-establish interkingdom trade in the world, so that they might export their gold and jewels and turn them into new ships and letters of credit.
Maybe he’ll accomplish this by gathering all the other kingdoms’ representatives together in a place called the Brettonska Woodlands.