How the hell does the economy even work?

[Kaeso]

I'm DMing a solo campaign for a character of mine, a dwarf warblade that travels around in human lands in hopes of joining a prestigious order of knights (though his end goal may change, it's mostly a sandbox game). Currently he's involved in a human city that's one of the most important centers of trade on the continent, the capital of a Duchy with the most fertile land in the continent as well as a city of merchants. It's where agriculture and commerce meet. The city is also very easy to reach through a vast network of rivers, and is relatively close to the two largest and most powerful kingdoms in the game world.

The thing is that this dwarf wants to buy a house in this setting. Of course I go to the stronghold builders guide and figure out the prices. But then I discover nothing makes sense at all. Owning even a small cottage of 10 feet by 10 feet is already OVER ONETHOUSAAAAAAND gp if memory serves me right. But a trained hireling, like a mercenary, is paid 1 sp per day (http://www.d20srd.org/srd/equipment/goodsAndServices.htm#spellcastingAndServices). So the price of a single house is enough to pay an army of 10,000 professional for a day? And a spyglass costs the same as either a house or a massive army's daily wage?

It's obvious the DnD economy is broken, but how do I fix it? My player seems to want his dwarf PC to get somewhat involved in the local economy, so I need to have prices that make sense. Is there some sort of economy fix handbook out there? Anything, even the most rudimentary help, would be of great use to me.

[Beardbarian]

10 GP for a small cottage seems fair to me

[HighWater]

Do not look too closely at the DnD economy. It will break from even the slightest bit of attention. This is because figuring out a realistic economy is excessively hard even without the presence of magic. For all intents and purposes, it is not exactly clear how our own economy functions...

The listed price lets the hireling pay off his house in just under 30 years, provided he has no other expenses or sources of income. This may be a bit steep.

If your player wants to own some property or somesuch and you think the prices are ridiculous, may I suggest handing out property as a quest reward instead? Nobody needs to know how expensive, or not, it was...

[Kaeso]

Do not look too closely at the DnD economy. It will break from even the slightest bit of attention. This is because figuring out a realistic economy is excessively hard even without the presence of magic. For all intents and purposes, it is not exactly clear how our own economy functions...

The listed price lets the hireling pay off his house in just under 30 years, provided he has no other expenses or sources of income. This may be a bit steep.

If your player wants to own some property or somesuch and you think the prices are ridiculous, may I suggest handing out property as a quest reward instead? Nobody needs to know how expensive, or not, it was...

As for magic being a problem, the campaign is E6. I love E6 exactly because magic, while still a potent force, doesn't mess up the real world too much. But handing out a house as some sort of quest reward is very tempting, especially considering the player's pc has already befriended two gnome merchants with more than enough wealth. One of them also has more than enough connections in the city. That could work for now.

[Ingus]

My suggestion is to never play economy.

My experience: when you start to do that, you're encouraging your players to play it more, forcing you to make calls on the spot and then stick to it for consistency's sake.

[ace rooster]

The 1000gp price is for a simple house of 1-3 rooms. What it actually means depends on location. It might be quite small in an urban area, but in a rural enviroment it could be a fairly large farmhouse that houses a family, and has been in the family for generations. The assumption that people should be able to afford to build a house in one generation is a modern one, and does not apply to DnD land. Remember that every beam and brick has to be made, transported and put in place by hand (doing it by magic is far more expensive). Assuming that craftsmen are asking an average of 5sp (3sp is the minimum, and some craftsmen will charge far more), then you are talking 2000 days work minus materials costs. That is only 6 craftsmen for a year... doing everything.

The 1 sp pay is for untrained hirelings, who would not expect to ever own their own property. Servants would mostly be provided with bed and board, and others would rent between large numbers, or inherit. The situation is no different from the reality of 'ye olden days'. I agree that they lost it a little on the telescope though.

I have to say I don't think the economy is broken at all. Life is just hard for those at the bottom.

[Shinken]

According to Arms & Equipment Guide, trained hirelings get paid a lot more than 1 sp/day.

[Regissoma]

You can't forget that the 10x10 room you have is suppose to count towards a fortress that can be easily expanded on. If you are going to use the stronghold rules make sure to do the cost reduction modifiers. Or you could just find a spell caster and have them cast greater shape stone for around 250 gold, and just buy some windows, a few doors, and some furniture(aka pay a druid 40 gold to make you furniture).

[Pilo]

In D&D salary are higher. Someone with the craft, profession or perform skill can earn a few gold pieces a week. Half their skill check in fact, so a level 1 expert with 12 in intelligence and 4 skills rank in craft can earn about 6.5 GP per week by taking 10.
So he/she can pay the 1000 gp in 154 week, which may be 3 years.

A trained expert with skill focus, maxed rank and Artisan’s Tools, Masterwork will earn 12.5 GP a week and pay the house in 80 weeks.

[Dornith]

My world has a bank system and characters can take out loans...

Moreover, keep in mind that this isn't modern day. During the medieval period, peasants basically sold themselves into slavery in exchange for having a house.

[HighWater]

As for magic being a problem, the campaign is E6. I love E6 exactly because magic, while still a potent force, doesn't mess up the real world too much. But handing out a house as some sort of quest reward is very tempting, especially considering the player's pc has already befriended two gnome merchants with more than enough wealth. One of them also has more than enough connections in the city. That could work for now.

DnD economy is not just borked when it comes to Magic. It also has no supply/demand, cost/benefit or any other "grounding" of prices in "reality". The many ways you can calculate what a "normal" person would earn in a DnD world and what would be his daily expenses, alone signify that the numbers will be all over the place. It is best to stay away from the numbers and how they were established, unless you wish to rewrite all and every section on economy and prices.

Quest-wealth is the easiest way to avoid figuring out what a house should be worth, and instead focus on what it means in a roleplaying environment. :smallsmile:

[Bronk]

You might want to consider that, aside from possibly being all tied up in a feudal system or whatnot, the houses that are out there are probably either all ratty old cottages, not brand new, or if they are new they might be doing one of those barn raising things where the community all gets together to make a new house. Or, the rest might be better classified as shacks...

It's funny though, I remember reading a Forgotten Realms book a while back where a couple of the hidden lords of Waterdeep were talking about how hard it was to keep the economy running, and recalled the trouble they went through to fix an influx of gold from some adventurers who knocked over a beholder's lair. If I remember right, it was only 10,000 gold too! Heck, the great merchant houses of that setting throw around less than 100k... It doesn't make much sense.

[Darrin]

There are three "tiers" to the D&D economy:

1) Micro-economics. This exists pretty much only at 1st level, when you're equipping a character, and possibly for one or two levels afterward. This tier is characterised by pseudo-historical prices that almost kinda make sense for a medieval world, if you squint a lot and don't think about it too much. This is the only tier where you really care about copper pieces and silver pieces, and there are practical consequences to, say, buying a lantern and a few flasks of oil instead of a dozen torches.

2) Macro-economics. As soon as a PC has more than one magic item, copper pieces and silver pieces cease to exist. A single +1 weapon or minor magic item is worth more than the gross domestic product of a typical real-world medieval kingdom, but your PC now has several of these things taking up space in his backpack because he already filled his glove, feet, and earlobe slots. The DM is whining about how the PCs are overpowered and keep steamrolling his grudge monsters, but he "fixes" this problem by introducing a DMPC and taking the lion's share of the loot.

3) Gonzo-economics. As soon as spellcasters get access to stuff like wall of salt, planar binding efreet, candles of invocation, and other "infinite money" tricks, concepts like money and economics go out the window. The game can careen into all sorts of oddball directions, like "let's see if we can kill Tiamat seven times before breakfast" or "whoever can cast a quickened maximized time stop first wins", but there's no such thing as economics at this point. Mostly the game devolves into a convoluted narrative tug-a-war metagame between the players and DM.

[Agincourt]

The thing is that this dwarf wants to buy a house in this setting. Of course I go to the stronghold builders guide and figure out the prices. But then I discover nothing makes sense at all. Owning even a small cottage of 10 feet by 10 feet is already OVER ONETHOUSAAAAAAND gp if memory serves me right. But a trained hireling, like a mercenary, is paid 1 sp per day (http://www.d20srd.org/srd/equipment/goodsAndServices.htm#spellcastingAndServices). So the price of a single house is enough to pay an army of 10,000 professional for a day? And a spyglass costs the same as either a house or a massive army's daily wage?


Your own link shows that professionals and mercenaries are paid 3 sp per day so 3 times as much as what you wrote.

The housing costs in D&D could be revised down, but I don't think they are that ridiculous. For example, in the United States, a days work at minimum wage would earn about $58 (before taxes, which I'm going to ignore to avoid complicating this too much.) Multiple $58 x 10,000 and you arrive at $580,000. Home prices are wildly dependent on where they are located. You would be hard pressed to find a shack in New York or San Francisco for $580,000, but for most of the country, you could buy a huge mansion for that cost. According to the U.S. census bureau the median price people pay for a new house is $270,000. I presume the median cost of all homes, new or used, would be lower, but I have not found reliable data in my 10 minutes of looking.

The bottom line is that if you think 1,000 GP is too much, I can see the argument that it should be 1/2 or 1/3 that cost, especially in a world where magic could build the house for less labor. On the other hand, doing an extensive economic analysis may be more trouble than it is worth. I could also see an argument that the PC should pay more than 1,000 GP if he wants the house in a big city where land is rare and wages are higher.

[the_other_gm]

http://t6.rbxcdn.com/60d0cf96d4f668595667c571a281db0e

PC: I HAVE A COMICALLY SPACIOUS MAGIC BAG FULL OF SHINY THINGS!
NPC : I HAVE A VERY SPECIFIC ITEM THAT FITS YOUR NICHE OF SPECIALIZATION AND COSTS MANY SHINY THINGS!
PC : ECONOMY!

And then the elven maiden rode off into the sunset on her unicorn to battle the tentacle monster with rainbows, and everyone lived happily ever after, except the Kender who got killed by the Fighter for nicking a magic ring or something, because "it's what his character would do".

or, in a less butthat-ery way:

D&D economy doesn't work as an economy. The devs eyeballed prices to keep some things out of the hands of lower level PCs because they might break the game more then it's already broken.

In D&D, money is simply a stat akin to HP, EXP or Wisdom, except you spend it in small bunches to get boons, be they one time, temporary or permanent.

[Firechanter]

Step 1: get rid of the idea that in a D&D world, anyone would work for, or could subsist off, 1sp/day.
This is the main and basic fallacy. Once you scratch that bit, a lot of the economy will start to make a lot more sense.

Actually, I once sat down and reworked the (mundane) economy in D&D worlds from scratch, working from historical pricelists and stuff. What it boils down to is that the typical, basic income should be about 4-5sp/day, then most of the PHB prices make more sense. This is for farmers and simple labour, even though farmers may make most of their income in natural produce. Trained craftsmen will make more.

Of course, this means precious metals aren't worth much in a D&D world. A standard D&D silver piece is about 9 grams, so the average simple labourer will make about 2 pounds of silver per month.
(This is because D&D coins are so freaking big. A historical English silver penny weighs 1/240 lb.)

Note that this still doesn't add up with the complete and utter nonsense lifestyle charts in the DMG, which talk of something like 1 pound of gold / 10 pounds of silver cost per _month_ for a "plain" lifestyle. Just ignore the DMG bullcrap.

[Slipperychicken]

It doesn't.

If you want a dnd-like low-fantasy game with a rational, functioning economy which holds up to scrutiny at all levels of play (yes, even high-level adventurers, emperors, and merchants), while taking magic and magic items into account, I suggest ACKS (Adventurer, Conqueror, King System).