Barter System rather than Currency in Fantasy WIP?

If there isn't a central government like a monarchy or dictatorship, bartering would probably be the better way to go. In fact, right now, a lot of people are bartering for goods. You're simply exchanging services for goods or goods for goods.

Example: You grow corn. Your neighbor raises cows. You need milk and your neighbor needs corn. Therefore, you trade X number of corn bushels for X buckets of milk.

Very simple, I know, but bartering was always meant to be that way.

Barter economies can easily exist alongside monetary economies. Merchants who need to have fluidity would have access to coin, letters of credit, or some other trading option while farmers would simply haul their produce to the nearest market & trade it for whatever wants & needs they couldn't make themselves.

I don't think coin really came into widespread use until the Iron Age, yet Bronze Age societies had extensive trade networks, royal storage facilities, and detailed record-keeping. That suggest a fairly complex set of tools to resolve economic questions such as, eg, "King Agamemnon has lots of olive oil and he needs to trade it for high-quality bronze and get some guys who'll turn it into swords & armor."

Don't forget that you don't only exchange goods for goods, but also services for services. A traveller could pay his food and shelter with work if he or she is strong enough, for example.

I can only think of two examples, one is two classical (Thomas More's Utopia) and they don't really deal with outsiders and then there's the Eagle people, I forget their names, from Perdido Street Station which we really don't see that much. I wonder if there's some in The Iron Council. (Another book set in the same world by the same author).

Dave Hardy said:

Barter economies can easily exist alongside monetary economies. Merchants who need to have fluidity would have access to coin, letters of credit, or some other trading option while farmers would simply haul their produce to the nearest market & trade it for whatever wants & needs they couldn't make themselves.

I don't think coin really came into widespread use until the Iron Age, yet Bronze Age societies had extensive trade networks, royal storage facilities, and detailed record-keeping. That suggest a fairly complex set of tools to resolve economic questions such as, eg, "King Agamemnon has lots of olive oil and he needs to trade it for high-quality bronze and get some guys who'll turn it into swords & armor."

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It can be seen on the third world. Venezuela did not have a standard currency until 30 years after its independence from Colombia using French, British and American coins and even an imaginary currency to manage importation and business but having barter in their day-to-day life.

It doesn't even take a centralized government to issue coin. I believe I read/saw in a documentary one time that local Lords and or anyone wealthy enough, could issue coins, usually with the lord's face on it. The Catholic Church also issued coins didn't it?

So a combination of currency and barter is probably the most realistic. The poorest people would barter the most and the wealthy would pay in metal coin. Changing the currency would depend on the purity of the metal probably.

But unless your dealing with stone age tribes or perhaps a non-human species with a different sensibility a pure barter system may be unrealistic. Or at least feel that way.

The various Greek city states all issued their own forms of currency, and they had systems of weights and measures to determine equal value. This was also common in Europe during the Middle Ages, with various lords issuing coins in the form of precious or semi-precious metals. Also, pure metal in the form of ingots was often used.


As far as barter economies go, people occasionally caried jewels, spices, and other light, high-value items to use for trade during long journeys. Gold dust was common in the Old West as a barter material.

Many barter economies tended to be more local, although long-range trade did occur with regards to crafted items such as jewelry, or things like spice.

A very common form of barter in Africa was trading in salt, which in ancient times was often worth its weight in gold or silver. Rome paid its legions in salt quite often, provided from salt-mines and coastal salt-works.

Some groups used livestock as a form of wealth storage for bartering.

Ancient China had forms of paper currency much earlier than Europe did.

It's very unlikely to a culture would rely strictly on barter for its economy. They might rely on gift-exchange, or individuals deciding to make small trades, but a full "economy" in the way that most modern people think of it doesn't function extremely well with barter.

But even with some very imaginative methods, barter economies are not stable on a large scale, because if you have any sortof crafted goods available to the populace, there's going to be problems of your item being worth way more than someone can trade you for it. You might be able to trade enough milk to be worth a suit of armor, but a lot of it is going to end up spoiled. Barter works small scale for a village or a groups of villages, but the farther you get from raw material, the more difficult it is to maintain a stable and effective system of barter.

As described, you sound like you have a culture of city states, and it's perfectly reasonable that each of these states might issue their own currencies.


I can think of one SF novel which used something ike a barter economy, but it was more of a gift-exchange economy than anything else, trading in obs (obligations based on previous gifts or services).

Basic fact was that, because most coins were valued on their metal content many goods and services were too cheap to be paid for by even a single coin. Coin were used for expensive things. You could cut a coin in half to get 'change' for cheaper things but generally people preferred to trade goods and services rather than coin in poorer parts. This is still the case in some parts of the world - the deeper parts of Tunisia (where tourists only go on safaris) are places where you may not be able to find change for even a small denomination note.

One thing to remember about barter - value is individual. There is no set exchange rate (five eggs = 1 goat) so people bartered (note what this word has become to mean in the modern world) and haggled. How much did you really need those eggs? How valuable is your goat to you? How many eggs are you willing to take for that one goat? Its a personal thing.

When it comes right down to it, coins are just another form of barter - one that's been regulated. Three chickens are worth an ounce of X metal(or half a pig or whatever price you haggle). Coins are just a way of making sure you're getting the right amount of X metal, and became popular because so easily used to buy what you want (because everyone takes gold, not everyone wants half a pig) and because they are easily transported.

Notes today have no value of themselves. They are a promise, that's all, that they can be cashed in for other goods. 'I promise to pay the bearer...'

So sure, make it make sense and go for it. Wasn't there a culture that used shells as their coins? Or was I dreaming that?

Honey&sugar, salt&spices, books, perfume, cosmetics, silver(can be melted and fashioned to something new) and other easy to carry goods that are pretty much wanted everywhere are good barter goods.

Barter and coinage can even work together. Silver coins were used in the Greek area pretty commonly, and those who didn't use the coins as such simply melted the silver in the coins and fashioned crafts from them. Thus the value of the coins themselves was never in question. There didn't have to be any centralized backing if the coinage was valuable. The problem is, of course, fake coins. Someone might have coins that aren't pure silver, but are half silver and half something else. This obviously affects their value greatly, and was pretty much always a problem in coin-based societies.

You didn't really need centralization to have coinage either. For example, the Ionian league had it's own coinage, despite being a loose coalition of city-states where the members came and went quite often. It was based on a mutual trust and a council of some sort, I believe.

On the whole, the value of a currency has much to do with the one backing it. If a currency isn't based on real value of the coins or bills in question, but more as a "trust", then those who use the coins must trust those who produce them. If a local lord is known for being trustworthy and stable, the people are likely to accept and use his coin. If he's known to be erratic or if his lands are in turmoil, the use of coinage decreases greatly. Stability is grounds of currency.

Later on, in 1800s USA, any local bank or even general store could make their own paper-bills. This caused problems in the nation as a whole, since there wasn't a real state-backed currency, so the exchange ratio between the different currencies caused great difficulties in trade. You might have some bills in your hand from a bank that has gone bankrupt, and they're effectively worthless. For this reason a currency usually needs a stable centralized faction that will verify it's worth regardless of problems.

Roughly, when a land is in turmoil and decline, people lose their trust in any currency and fall back to a barter based trade system. Also, widely traveling merchants will probably barter their goods if they intend to make a return voyage soon and have come from a strange land. The more a single trade route is used, the more likely it is that coinage from the other end will be accepted. Again, turmoil has a big effect on it. Also, for focal points in trade(an oasis city in the desert perhaps), where people come and go regularly, and chaotic marketplaces exist, barter is far more likely than actual coinage.

In your case, I would suspect that each city might issue their own coinage to be used within the city, probably based on what metals are locally available. A city is, after all, a place where a lot of trading is likely to take place each day, and as such there is likely to be a standardized practice for it. Coinage is a fairly good way of controlling the value of purchases, since smelting allows an easy way to create objects that are the same size and weight. They might have a council of city-states that decide the relative value of each coinage. Or they may have a substitute currency, such as salt or some other everyday item that everyone needs, the value of which won't decline easily. The problem with it is that the weight has to be checked each time. If a fish costs 10 grams of salt, the transaction might be a bit slow and a measuring tool would be needed, unless they have a standardized set of container sizes, which introduces a new problem, how are the containers made and so on.

Bartering is still in use today, even in the U.S. Go with what works.

The thread about Tolkien's economics touched on this. Thorin describes in The Hobbit how they bartered metals, finely crafted toys, and blacksmith training for food.

If I'm remembering correctly, the country Mijak was mostly barter driven (Empress by Karen Miller).

Aww man. Now I suddenly wish I could barter for a toy made by Thorin Oakenshield. How cool would that be?

You can make a barter system work in any civilisation, if you write it well enough. A less cop-out answer would be: if the civilisation is pre-agricultural, barter might make more sense between tribes, who would otherwise be living hand-to-mouth.

Ardent Kat said:

In my own particular WIP, a non-human civilization has a more small-scale, socialist system where power is held in individual small cities rather than a single huge capitol city. Would barter be more appropriate in this case?

What might a person who travels a lot carry to barter with? (Since eggs would be too fragile, bushels of wheat too bulky, etc.)

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My thoughts, a barter system could be used in addition to some type of monetary or credit system. Barter systems generally work best on a small scale or closed society.

Still, even in a small city, a monetary or credit system would be needed to pay soldiers or militias, civil servants, etc. Also a small city may not have all the available services needed to barter. Steel mills, mines, etc, and those who work in them, would want compensation to buy or barter for what they need.

As to what a traveler would use to barter, many bards entertained for their board and meals. Priest use to sell confessions or give blessings for room and board. A blacksmith might shoe a farmers mounts for a night or two boarding and meal. But a diplomat traveling would need some type of monetary funds as I doubt they would have any other skills to barter with.

A barter system only works when the persons bartering have something that other wants to trade or barter for and there is always going to be someone who wants more than what their service or product is worth to the other person...

One general rule is that currency usually exists only where taxes exist. The fact that a government will demand coins (or shells, or whatever arbitrary item) at regular intervals means that the currency is useful to anyone living under that government. But without the government, it's likely to fall apart since most currency doesn't have any inherent value.

We could use more novels that use the barter system. But as an alternative, the world of Glen Cook's Black Company has coins minted by dozens of different cities and nations... but the cultures on the continent value the same precious metals, so the actual value of a given coin is set more by weight than by whatever value the government claims it has.

Someone mentioned shells. Supposedly stone aged people traded in sea shells as a form of currency as they are found in archealogical digs hundreds of miles from the coast. Salt is another form of currency (as mentioned earlier) and this is where the word salary comes from. Arrow heads is another. The sumarians recorded debts in clay tablets and trading these debt tablets became a form of currency. Ultimately societies make a currency for themselves that may not necessarily be coins (or even metal based). Certainly to move from coins (where the metal has a value) to paper money is a big leap in economics and technology. You need to move away from coins to notes you need a gold standard, and that takes stable government with a good ledger and legal system. Coins have always been useful as they can be turned into things, such as jewellery, utensils and weapons.

Good luck with barter, and don't think of currency in a limited fashion.

PS. Papua New Guinea and Solomon Islands still use the barter system for daily transactions.

Dave Hardy said:

Barter economies can easily exist alongside monetary economies. Merchants who need to have fluidity would have access to coin, letters of credit, or some other trading option while farmers would simply haul their produce to the nearest market & trade it for whatever wants & needs they couldn't make themselves.

I don't think coin really came into widespread use until the Iron Age, yet Bronze Age societies had extensive trade networks, royal storage facilities, and detailed record-keeping. That suggest a fairly complex set of tools to resolve economic questions such as, eg, "King Agamemnon has lots of olive oil and he needs to trade it for high-quality bronze and get some guys who'll turn it into swords & armor."

Click to expand...

Even modern accounting keeps track of barter transactions.

They would have currency, but generally speaking, the peasants do a lot of bartering and generally only have small amounts of coin with which to buy special goods from the merchants. It's the craftsman and their laborers that get paid in coin.

I just recalled an example of something that might be barter and might be currency. In the Aztec alliance cacao beans were common, yet valued. They were small, transportable, and not too readily perishable. I understand that cacao became a medium of exchange since you couldn't possibly carry every conceivable thing someone else might barter for.

There was even a clandestine trade in defective beans that had their flaws disguised. Some crooked types even filled bean hulls with mud, in effect creating "counterfeit" beans.

Of course the Aztecs also had an interesting approach to trade. Merchants were organized in "clans" (which might or might not have been blood-related). In addition to organizing long-range trading journeys and all that entails, they also were employed by the ruling monarchs as a spy corps to penetrate & report on other kingdoms.