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I asked some questions about creating a stable economy that uses mana as currency.

I'm stuck on a new problem trying to use it, why is there so much mana circulating in the economy already? I want mana generation vs use to have reached a roughly even level, nearly as much mana is being used by mages as is being added to the economy, possible with some slight fluctuation or minor inflation. I also want this to be the sole currency of a country, meaning that there is enough mana out there to be being used for trade and barter between non mages. This implies a huge quantity of mana in reserve within the economy being used primarily as currency instead of as spell fuel. Finally I want the total amount of mana that a human produces in a day to be worth noticeable less then the cost of room and board, ie one still needs to work to earn money not just fill up mana coins to cover the cost of their survival.

The question is how did we get so much mana in the economy? At some point in the past people would have figured out how to store mana and trade it, at which point you would expect mages to start buying it up and using it. At some point supply and demand should have equalized with mana used as fast as it was created, and it seems like that point would have happened long before we had such a huge excess of unused mana stock piled in the economy.

In short mana seems more like it would naturally become a commodity, to be bought and sold using some other currency. If there was enough unused mana available it could have been used as a currency, but it doesn't seem like that large an excess supply should have been created for there to be enough available to meet the demands as a stable currency. Why weren't mages buying up and using all the excess mana before we collected such a large economic reserve?

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    $\begingroup$ is this a game of some sort? and does the 'currency' have a fixed value or dos it fluctuate with market forces, you've not provided any details by which any answer could be attempted. $\endgroup$
    – Pelinore
    Feb 3, 2023 at 16:43
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    $\begingroup$ (1) For a very long time gold and silver were used as currency, and yet they were (and still are) ordinary commodities. (2) Which prompts the question, why do you think that currencies are not commodities? (3) How huge the huge amount of gold needs to be in order to satisfy the needs of the economy depends on the velocity of money in the economy, does it not. And finally, (4) the vast majority of money is not in the form of currency; the money circulating as currency is a tiny tiny minority. $\endgroup$
    – AlexP
    Feb 3, 2023 at 18:25
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    $\begingroup$ I'll rephrase, how can anyone answer this when they don't know what you have done, you have not detailed how your economy works or any of the mechanisms you have chosen to use .. VTC lacking detail. $\endgroup$
    – Pelinore
    Feb 3, 2023 at 22:32
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    $\begingroup$ @Pelinore: Currencies are commodities which can be bought and sold as any other commodity. There is no way, not even in theory, to have a currency of which the value does not fluctuate with market forces. (Think like this: when you buy one ton of wheat with one gold dollar, the other party is buying one gold dollar with one ton of wheat.) $\endgroup$
    – AlexP
    Feb 4, 2023 at 19:49
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    $\begingroup$ VTC: I'm confused. One of your previous questions (and, to a degree, both of them) sought answers to the basic question, "can I use mana as a currency and have a stable economy?" You accepted answers to both questions. Ae you now saying that, despite accepting answers to the previous questions, you don't have a stable economy? Without explaining how the previous two questions failed you, we can't possibly answer this question reasonably. You appear to be asking the question for a third time. $\endgroup$
    – JBH
    Feb 5, 2023 at 18:28

5 Answers 5

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If you're talking about something that is durable, portable, uniform, can be earned, and can be expended, then you have an economy. Chime in if I missed something.

Economics is an old problem in computer game, first studied in the ancient Multi User Dungeons. If your monsters are hemorrhaging money every time someone takes a whack at them, but the things they buy with the loot don't cost as much as the loot they get, then the leftover money piles up, creating massive devaluation.

The key is that you always have to balance your sources and sinks. It's preferable to scale your sinks so that, when people have more money, they can get progressively better tools.

However, your tools need to be expendables. Either they have to be recharged or repaired, consuming resources. This is the primary sink for money, and this is why planned obsolescence was invented. It's why all of the big software companies are selling subscriptions instead of licenses. If mana is like software in your world, then that's the source of your problem.

Here's a great article that can help you understand how and why this works:

https://imperium.news/the-counterintuitive-economy-of-eve-online/

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  • $\begingroup$ Subscriptions are to prevent 'competition' with previous software versions and thus turn a little more consumer surplus into producer surplus (or, alternatively, take more of the return to capital generated by the software). $\endgroup$
    – user86462
    Feb 7, 2023 at 9:18
  • $\begingroup$ The competition perspective works if you consider the new version to be a "better" version that has to overcome the incumbency effect of the users already owning a lesser version of the software. If you break it down by features, however, you wind up making the users purchase new features in order to continue using the features they already own. If you're going to invoke capitalism, then competition is the force that makes software companies produce features worth upgrading for. It's all that stands between you and unusable bloat. $\endgroup$ Feb 7, 2023 at 17:22
  • $\begingroup$ Agreed. The subscription model is often bad for consumers. $\endgroup$
    – user86462
    Feb 7, 2023 at 17:39
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Limited capacity

Equilibrium between use and creation and a large amount of mana already in the bank seems a tall order. There is no reason it should be stable. The solution can be very simple. Limited capacity.

Limiting capacity can fulfill all your requirements after a fashion. With a limited capacity it doesn't matter if too much is created. It can be stored to a limit, after which each extra generated needs to be used immediately or thrown away. This creates the equilibrium you desire.

This imposes all kinds of limits and makes sure a lot of mana is in the system. A storage device is created, via a company or a magician it is filled with mana, it is used as currency, being repeatedly filled and drained over time. People are likely to stockpile some currency, so at home and banks a reserve of the mana is stored. Just like real currency this can be loaned, traded, moved and whatever more you want. If if it is used, it needs to give something good in return. Otherwise you're near literally burning money that you need to earn from somewhere.

'Inflation' can happen through two sources. Mana storage break or leak over time, or thanks to technology cheaper replacements are fiund. For example, why heat your food with expensive mana (gas) when you can spend cheap electricity?

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  • $\begingroup$ I guess I am guilty of the same thing here, but @Pelinore what does this comment have to do with this answer? I think your question is valid, but if we want to discuss the question, it is more appropriate to use the comments for the question, right? $\endgroup$
    – Zwuwdz
    Feb 3, 2023 at 19:28
  • $\begingroup$ @Zwuwdz maybe you could read my comment again .. "as an answer is consequently impossible how is this an answer?" .. it has to do with the fact that this is not an answer because an answer is impossible, ergo it can't be one [shrugs], I thought that was perfectly clear. $\endgroup$
    – Pelinore
    Feb 3, 2023 at 20:59
  • $\begingroup$ @Zwuwdz "it is more appropriate to use the comments for the question, right?" which is what I was telling him, odd that you didn't grasp that .. discussing an answer as I have definitely belongs in theat answers comments, which is where mine is. $\endgroup$
    – Pelinore
    Feb 3, 2023 at 21:02
  • $\begingroup$ @Pelinore I don't really see how "an answer is impossible" could be the starting point for a conversation that ends up with improvements to the answer, which is, I think, the point of these comments. $\endgroup$
    – Zwuwdz
    Feb 3, 2023 at 21:47
  • $\begingroup$ @Zwuwdz there can be no improvement to the answer because the question can't be answered, he asked why have I got so much of this particular type of 'cash' in my economy and failed entirely to detail anything about how his economy works, so there isn't even a question to answer, how do you not understand that? .. the only improvement possible to any answer is for it to not be an answer, a question that can be answered has to be asked first. $\endgroup$
    – Pelinore
    Feb 3, 2023 at 22:26
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Thoughts:

1: Mana is never truly 'used' - it is merely transformed (basically treating Mana like Energy) - In an economy where there is an 'infinite' supply (that is, new mana is being generated by Humans all the time) this should lead to inflation... but if the Mana is transformed e.g. cast a spell to make a chair, the Mana used in the spell transforms into the Chair - No Mana is lost, but it's now in a different form and not used for Currency - This fact means that there is a huuuuuuge baseline of Mana, just in different forms.

2: Mana 'production' has variables to how quickly it is produced. Take for example Hard work vs Meditation. You could have a system where Mana recovers significantly faster when people meditate, however this would break your idea about people needing to work to help cover the costs of existence, so how about:

Hard Work stimulates the mind, body and soul which generates Mana faster, before the advent of the technology to capture or use consciously use the Mana, this extra Mana 'seeped' into the environment, causing a large baseline to be accrued. Once the advancements of capturing and using it became a thing, this surplus provided the baseline for the Economy.

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Because mana coins are a good form of money, it's popular

Your previous question says:

"There are coins in various denominations that act as mana batteries that you can charge with your ambient mana."

Simple. At some point a government wanted to save up for the future, or import lots of foreign goods. They made loads of mana coins and had people fill them up using various incentives and/or coercion.

Your society either a) saved for the future and found that having more liquidity in the financial system assisted commerce (i.e. that having mana coins as money was often more useful than using up the mana in them). At that point, mana coins had real value and were produced with the intent of them being money, not batteries that you actually want to use.

Real life gold is like your mana coins in this scenario; 50ish% of it is used for industry, but the other 50% purely sits there to back financial assets.

Alternatively b) Your society was a country that had a lot of exports, paid for in mana coins. Maybe it exported tea for 2 centuries in exchange for mana coins, just like China did in exchange for British silver (before opium). Look it up; the British had serious silver shortages because the Chinese refused any other form of payment.

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Energy from the planet. To me, mana should be like energy such as oil or natural gas. There should be some sources that exist in a form of untapped energy or an inert state. On top of that, energy can change states so there might be some excess 'natural' forms of mana in non-living states or living creatures that are hard to reach that make it difficult to reach or use excess sources of mana. On top of that, many magicians might have a limited capacity for certain containers or their own body, so even if they can get to these untapped energy sources, there would still be the question of how they are going to carry & store all of it.

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