Possibly the most unrealistic thing about money in fantasy is that it almost always just works.
Early in the novel Quicksilver, Neal Stephenson — who has a gift for turning damn near anything into a scene — has a scene wherein a merchant, the protagonist Daniel Waterhouse, and Isaac Newton (who would later go on to head the Royal Mint) bargain over a purchase. But this is not your typical fantasy bargaining scene where the merchant asks for twenty and Newton offers ten and they agree on fifteen: no, first the debate is over the currency in which Newton will pay (French, German, English), and then over the actual shillings Newton produces from his pocket.
Because in the world of pre-modern coinage, money is anything but simple and straightforward.
Stephenson’s scene is a guided tour of some of the problems. In theory, coinage solves one of the core problems of commodity money: if someone pays you with silver, how can you be sure how much silver you’ve received? You can weigh it . . . but that requires reliable scales (which is a hurdle all on its own) and fairly sophisticated metallurgical knowledge to be sure whether the volume and the mass line up as they should. Coinage was supposed to be a solution to that problem: stamp out regular objects of known value, and everyone can take them at (quite literally) face value.
Except it isn’t that simple. When were those coins minted? Waterhouse, bargaining in 1665, has in his pocket a shilling from the reign of Elizabeth I, who died in 1603. Newton’s are mostly from James I, her successor, but he also has an Edward VI shilling (died 1553), which might have been issued during the final Great Debasement, when the precious metal content of coinage was greatly reduced. This is an economic tool used by governments to increase their own revenue; after all, if they can produce coins more cheaply, they benefit. But it means that the value of a given denomination suddenly becomes a matter for debate, fluctuating depending on when it was minted. Ditto coins from different countries, which may not follow the same metallurgical standard, even if they’re theoretically minting coins of the same type.
This same principle drives some types of counterfeiting. With modern fiat money, the issue isn’t that a fake twenty-dollar bill has less inherent value than a real one — it’s hard to go lower than nil — but rather that it’s creating value out of thin air. If you’re counterfeiting commodity money, on the other hand, you need to pass something cheap off as valuable instead . . . using the exact same methods as the government, just illegally. Sometimes this means coating a brass disk in just enough silver to make it look good; the merchant in Stephenson’s scene scratches one coin to see if it changes color, and current U.S. pennies are actually copper-plated zinc. Sometimes it means making coins out of some admixture that will look more or less right, but is worth far less; the merchant also bites one of the “silver” shillings, and declares it “not above fifty percent lead.”
Doing this successfully isn’t easy. If you want your coins to pass muster for any length of time, you again need sophisticated metallurgical knowledge, to make your counterfeits both cheap and realistic. You need an engraver capable of copying the design used to stamp out real coins — since those designs are, after all, partly an anti-counterfeiting technique. And you need a way to feed your coins into the economy without them being traced easily back to you, because counterfeiting is an incredibly serious crime, and one that could often lead to execution.
Why? Because it has the potential to destroy a nation’s economy. Official debasement is problematic enough; it leads to inflation, because the purchasing power of the debased coin has been reduced. But counterfeiting? That destroys confidence in the coinage entirely. The value of an officially debased coin is at least known. When fakes circulate among the real, the inherent value of any given coin is uncertain, at least without testing. Merchants may stop accepting that type of coin at all, preferring other denominations or even foreign money, which are seen as more trustworthy. The knock-on effects of this can be huge — and the only novels I’ve personally read that take this into account at all are Stephenson’s Baroque Cycle (of which Quicksilver is the first book) and Tamora Pierce’s second Beka Cooper book, Bloodhound, where counterfeiters play a large role in the plot.
And other than Stephenson, I’m not sure I’ve seen anyone bring up the issue of “clipping,” even though it was quite widespread. Ever wondered why the edges of some coins are milled, i.e. have tiny incised lines? It’s because milling is an anti-clipping measure. Take a typical sixteenth-century English shilling, stamped by hand out of a disc of (more or less) silver. Its edge is blobby and irregular. Nobody will notice if you shave just a tiny bit off, right? That tiny bit isn’t worth much . . . but if you shave the edges off enough coins, pretty soon you have a pile of (more or less) silver, in addition to your original pile of shillings. Take those shavings to an unethical silversmith, and he’ll pay you for them, then melt them down for his own use. Illegal as hell, of course, but it’s an easy way to profit. The result is a bunch of coins in circulation that have been pared down to a ludicrous degree: the merchant in Quicksilver declares that Edward VI shilling to be “nearly triangular.” The reasons why a shilling may not be worth a shilling just keep piling up.
This is why Isaac Newton, the renowned scientist, was appointed to head the Royal Mint. Ensuring the value of money is a really complicated task, and one that’s vital to the health of the nation. You need systems for controlling the production process, for discouraging clipping, for tracking down coiners, i.e. people making counterfeit money. Without those measures in place, you get conversations like the one Stephenson wrote, where bargaining is as much a debate over the value of a coin as the value of the item it’s being used to buy.
Most of us are not going to write out those conversations in full, because most of us aren’t writing novels where such economic matters are a central concern. (I welcome recommendations of others in the comments: Daniel Abraham, I suspect?) But the issues are still good ones to keep in mind, because the problems they present may come up in passing. Rather than the boring and cliched “meet in the middle” approach to bargaining we’ve seen a thousand times, have the merchant agree to drop the price if the buyer pays in coins from a more recent minting, or in the currency of a neighboring country instead of the local one. Have a character take the desperate measure of shaving the edges off their cash to stretch it just a little further. When you need political scandal, have the Master of the Mint be caught embezzling from his job; when you need a throwaway reference to the queen meeting with some official on a matter of business, drop in a reference to potential debasement or the annual Trial of the Pyx. It all lends that extra touch of reality, for not a lot of effort.