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I'm making a world that is 1/3 medieval fantasy, 1/3 pre-civil war American west, and 1/3 Mad Max.

The world underwent an apocalyptic scenario that destroyed the governing bodies at the time, but it has been a few generations since then, so city states and towns have started to rebuild. Since their old fiat currency system was destroyed in the apocalypse, they resorted to barter. Bullets are incredibly common, and gun technology influences the culture greatly.

My question is: Is it possible for bullets to be used as a standard system of currency? How would having money that could be expended permanently, by firing it, affect the economy? What kind of relationships would form between banks and bullet/gun manufacturers?

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    $\begingroup$ You should read the Metro Series. They use bullets as a currency $\endgroup$ – Sec SE - clear Monica's name May 10 '17 at 13:57
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    $\begingroup$ It's worth asking: are you talking about bullets or cartridges (what modern firearms use, the bullet, case, powder, and primer all in one)? Bullets could work with a much larger variety of guns than a cartridge can, but simply having a bullet and a gun is pretty useless if you're out of powder. $\endgroup$ – thunderblaster May 10 '17 at 15:29
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    $\begingroup$ A problem with your situation is that the pre-civil war American west was large, varied and had lots of green and fertile regions, whereas Mad Max Australia... wasn't. If the two regions are near each other, people would start flooding into the good areas faster than you can say, "Wagons, ho!" $\endgroup$ – RonJohn May 10 '17 at 16:01
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    $\begingroup$ 1) What you're asking about is commodity money, and commodities you can make and expend don't make for stable currencies. 2) The gunpowder in a cartridge (the bullet is just the projectile) will only last a decade or so unless carefully sealed and stored. 3) There's many, many, many, many, many different kinds and sizes of cartridges, and few are interchangeable, meaning your bullets might be worthless to someone else. $\endgroup$ – Schwern May 10 '17 at 20:18
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    $\begingroup$ Could there be parallels to the way cigarettes were used as currency? $\endgroup$ – Martin Dreher May 12 '17 at 11:23

23 Answers 23

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Any "currency" that is useful as something else (cattle, beans, bullets, cigarretes) is only compatible with very limited markets. Pre-feudal, I would say, or politically repressed markets such as in the fSU or DDR.

In general, you can abide by the following law:

The usefulness of any given commodity as money is inversely proportional to its usefulness as anything else.

If your world is a violent one, which is what I get from your question, then bullets will be even more useful as bullets. You wouldn't like to trade away your basic defense against random violence.


But there is a way to turn bullets into proper currency. Use them first. Once already shot, they become useless as bullets, and consequently potentially useful as money. Just make them scarce (make lead scarce!) and they can even be quite valuable.

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  • $\begingroup$ "then bullets will be even more useful as bullets. You wouldn't like to trade away your basic defense against random violence" - you wouldn't? How would you acquire food? $\endgroup$ – ESR May 15 '17 at 1:25
  • $\begingroup$ Does this mean if I figure out how to melt nickles into bullets I can crash the US economy? $\endgroup$ – candied_orange May 15 '17 at 4:30
  • $\begingroup$ @EdmundReed Once the system is in place, obviously you would have to use it, but people would always try to move away from it because they need bullets so much. They would try to use other forms of exchange, even if they're not "official." That would inevitably lead to the abandonment of the currency. $\endgroup$ – GregRos May 15 '17 at 9:45
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    $\begingroup$ @EdmundReed If you have a loaded weapon, just rob someone stupid enough to trade his bullets for food ...or you could just go hunting. $\endgroup$ – Sazanami May 15 '17 at 13:12
  • $\begingroup$ @CandiedOrange - No. Nickels are a small fraction of the circulating money. You could perhaps disturb retails commerce by making them unable to deal with small exchange, and you would make a very small deflationary impact (nothing that the US Treasure cannot solve by minting a few more coins), but otherwise you would just end up with an enormous amount of bad ammunition, that you would probably have to sell for scraps, at a huge loss as their enforced value is higher than their metallic value. $\endgroup$ – Luís Henrique May 19 '17 at 17:17
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You have a fundamental problem

Bullets are incredibly common

While they have intrinsic value, that value is going to be very low. It's like having a currency with only pennies. It could be fine and accepted, but it'd really hard to pay for anything high value due to the shear tonnage of bullets you need to haul.

Mad Max implies shortage of food and water, American west also often used a shortage of fresh water for plot points. It's going to cost you a truckload of bullets to buy a sandwich.

Let's make them less common so they become more viable as a currency.

Once they start to have higher value you hit the issue of them not being divisible. Something is worth half a bullet, but half a bullet is worthless.

Supply and demand will be hard to balance, if there's a conflict demand will rise, supply will rise a little behind it, so a currency value surge before settling, but after the conflict there are going to be too many bullets still being made for a while so risk of hyperinflation.

The thing with gold as a currency is it's otherwise largely useless. Minor industrial value, used for decorative purposes, but always it remains gold. It can be melted down and recast as coins when you need it. Silver has been used in much the same way. Using a consumable manufactured product whose consumption and manufacture you can't control is risky, and likely to be highly volatile. If you're trying to rebuild an economy based on a currency you need something more stable and another "currency" is required quickly to give economic stability.

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    $\begingroup$ So, bullets would need to be reasonably common, but not incredibly one. Still, what about deflation? $\endgroup$ – Mołot May 10 '17 at 14:41
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    $\begingroup$ The Metro games have a solution to this issue: High-quality pre-war ammunition in the Russian standard 5.45mm is the default currency, and is valuable because it works well and supply is limited. Lower-quality post-war-production ammo in various calibers is less effective and therefore less individually valuable, but can still be produced in quantity to equip combatants. $\endgroup$ – Catgut May 10 '17 at 15:30
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    $\begingroup$ "Once they start to have higher value you hit the issue of them not being divisible. Something is worth half a bullet, but half a bullet is worthless." Simple: have different bullets worth different amounts. A 50cal round might be worth six 9mm rounds, or something. $\endgroup$ – F1Krazy May 10 '17 at 15:32
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    $\begingroup$ @F1Krazy, Each becomes a separate currency with separate supply and demand curves. In a war 50cal might be more valuable, for day to day high street wild west gunfights it's all 9mm. A fixed exchange rate between the two can't hold together. $\endgroup$ – Separatrix May 10 '17 at 16:26
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    $\begingroup$ problem with making the bullets less common is that if you have to choose between eating for 2 weeks and shooting one bullet, you'll get a bow. $\endgroup$ – njzk2 May 10 '17 at 17:24
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No

Money, as we understand it, is essentially worthless, and it should be worthless. It serves as a medium for exchange, where a given amount of money is agreed to have a certain value, but the tokens exchanged are more or less valueless. There are good reasons for this. Bullets-as-currency would be a form of commodity money, a relatively primitive form of exchange which is essentially formalised barter.

Every time you shoot a bullet, you're upsetting the local economy - you're draining value from the economy and deflating the currency. A decent-sized zombie outbreak could upset the economy of the whole village - all of a sudden the farmer who sold his potatoes yesterday for twenty bullets can afford to buy the whole lot back again and still have bullets to spare! Bullets as currency are volatile, in a way that gold is not.

Bullets as currency would be relatively easy to fake - if I'm charging you one hundred NATO rounds for a sack of potatoes, I can't quickly check all 100 rounds to ensure that all the bullets are lead, all the casings are proper brass, all of them are filled with powder, etc, so you can pass of ten good rounds and ninety duds. I can quickly weigh five gold pieces and make sure they weigh what I expect them to. Bullets are too complex to be good currency.

Gresham's Law is in full force in a commodity currency, especially with something like bullets. This holds that in a financial system with both good (pure) money and bad (debased) money, the good money will disappear from circulation. Why? Well, after you fooled me with those duds, I'm going to want to get rid of the duds and hold onto the good ones, so I'll hurry out and buy some wandering trader's pretty daughter with as many duds as I can manage. Thus the number of good bullets in circulation will steadily drop, and the number of duds will increase, until everyone's just trading duds.

Different calibers would also make the currency that works in one place totally worthless in another. If I use a 9mm to keep the rabid were-weasels off my mushrooms, then I'll happily give you a sack of fungus in exchange for fifty silver 9mm rounds. My neighbour, who's tormented by vampire elephants, isn't going to put any value on those rounds; he'll only sell you a bag of apples in exchange for ten blessed nitro express rounds.

Now, a lot of this could be bypassed if your rising civilisation standardised what type of bullet could be used for currency, what caliber, material, etc - but if you're doing that, why not just go with a disc of gold instead?

Gold is really an ideal substance for a basic currency. It's easily identified, not that easy to fake, it holds its value indefinitely, and it has essentially no practical use, so the amount in circulation will stay the same. You buy a sack of mushrooms from me for five gold coins; I turn around and buy the merchant's daughter with those same gold coins; the merchant happily buys your useless nitro express rounds for five gold coins (while I was explaining this, the vampire elephants got to old Fred. Terrible shame). Now everyone's got something they value, and the money has even ended up back where it started, leaving everyone richer!

Bullets could still be used as a medium of exchange

If you happen to have one hundred NATO rounds, and I know that the merchant has a rifle that can use them, I might well trade you the mushrooms for the bullets, provided you can prove that they're all good (and provided you can check the sack first), and then I'd swap the bullets for the daughter later on; but that's not money, that's barter. Currency or money implies some universal standard, which 'bullets' as a group do not have.

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    $\begingroup$ Your neighbour will accept the silver 9mm because he knows they have value, they might not have value as a consumable to him but he knows that they do to you. This is fundamentally how a fiat currency works as well, it has value to you because it has value to the people around you with whom you may wish to do business, and as long as we all continue to accept that agreed upon value everyone is happy. $\endgroup$ – Separatrix May 11 '17 at 7:54
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    $\begingroup$ Is that not ultimately what money is? Something you know that someone else will also accept in a trade. $\endgroup$ – Separatrix May 11 '17 at 14:58
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    $\begingroup$ and I'm not going to accept US$ because they're administratively difficult for me to handle, but they're unquestionably money. It's not everyone who has to accept them, just a large enough subset of people with whom you wish to do business and it's likely that more than one of your neighbours has a vampire elephant problem. $\endgroup$ – Separatrix May 11 '17 at 15:35
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    $\begingroup$ @Joe No, silver and gold had no (practical) value at all, which was what made them useful as money. They were valuable because everyone agreed they were valuable, not because they could ward off vampire elephants. $\endgroup$ – Werrf May 11 '17 at 17:07
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    $\begingroup$ During Sarajevo siege, people used cigarettes as currency. Though not bullet, that example seems to go against most of the arguments you give against bullets as currency. $\endgroup$ – spectras May 14 '17 at 11:12
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I thought it might be worthwhile fleshing out a comment I made on another answer here.

Anything can be used as money. It's tempting sometimes to believe otherwise, but there is only one thing that is necessary for the creation of currency, and that is mutually agreed value. If everybody believes/agrees that something has value, then it has value purely on the basis of that agreement/belief.

What separates some currencies from others is their effectiveness for the purpose. If you google "what are the strangest things that have been used as currency", you can find lots and lots of bizarre examples. My personal favourite is this-

Rai stones

Also known as stone money, the gigantic circular limestone disks weigh around 8,800 lbs. (4 metric tons) and generally have a diameter of 12 feet (3.6 meter). Used commercially in the Micronesian island of Yap, the owners didn't bother about moving the heavy rai stones physically after a transaction was over and relied on an oral commitment to settle the question of ownership. Although the origin of stone money is not yet known, they still retain their significance as a cultural emblem, being used in marriages, inheritances, political deals, or even in exchange of food.

source

If people can use stones weighing 4 metric tons as money, and they don't actually transfer them from person to person (understandably) but rather rely on each others word as to who owns what - you can literally use anything as money. And I do mean, literally. You could use stars as money - exactly like you would use the massive rocks. Clearly they're going nowhere, you have to rely on oral or written information as to who owns what.

However, these more unusual examples of currency obviously have their flaws. They're not suited to the kind of sophisticated economy we have these days - can you imagine if we took each others word on how much money we had, and never actually exchanged the money?

Bullets would clearly be a "bad" currency, but this doesn't mean you shouldn't use it - it might make the story more interesting to incorporate examples of the bullet currency failing, and why exactly it would fail. The other answers have done a pretty good job of describing why bullets would be a currency with flaws.

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    $\begingroup$ I upvoted your comment, but "Accountants and financial professionals/experts would like you to believe otherwise" is... dubious. $\endgroup$ – RonJohn May 10 '17 at 19:04
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    $\begingroup$ @RonJohn good point- I didn't mean to come across quite so much like accountants etc are part of some money conspiracy. Only that it can be tempting to think money actually has objective value outside mutual consensus (especially to people whose careers are all about money- although as you said, this claim is dubious)- I've updated the post to generalise and weaken the statement, hope that's better $\endgroup$ – danl May 10 '17 at 19:11
  • $\begingroup$ And that encompasses the dreaded "fiat" money. I'm perfectly happy acknowledging that the US$ has value because we all agree that it has value... $\endgroup$ – RonJohn May 10 '17 at 19:18
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    $\begingroup$ Upvoted. When writing a story, realism can take a back seat to drama, and while bullets aren't a good currency for all the reasons mentioned in other comments, they aren't as implausible as some of the things people have used for money, and they can certainly add to the post-apocalyptic wasteland imagery (wealth equals the ability to defend that wealth, a "rich" warlord sitting upon a throne made of bullets). Other worldbuilding methods can improve the other issues - standardized guns, constant warfare, and a lack of other things to use as money can make them more plausible. $\endgroup$ – IndigoFenix May 11 '17 at 10:09
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You can use anything as money. Money is just a measurement for services.

If you believe something has value, it has that value. Paper money (for example the dollar) is not coupled to any hard value (like gold) anymore, so it just has the value people give it.

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    $\begingroup$ As long as people give a thing value, it has that value. Doesn't matter if it's destructible or not $\endgroup$ – Fl.pf. May 10 '17 at 14:40
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    $\begingroup$ But if it is losing value on it's own, like food that spoils or bullets that are manufactured poorly and can go bad aster some time, it can't be money. If it is easy to turn away from something, it can't be money. You are over simplifying things to the point of being wrong. $\endgroup$ – Mołot May 10 '17 at 14:43
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    $\begingroup$ Not really - they do not deteriorate to the point of being unuseful if they are just lying there, and if they are in circulation they are replaced periodically, and that counters deterioration. Yet again, you simplified it to the point of being wrong. $\endgroup$ – Mołot May 10 '17 at 14:46
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    $\begingroup$ @Fl.pf. Paper money does have an intrinsic value on the institution facing end. You can give it to the government to pay your taxes, banks can give it to the government in currency exchange, banks can get loans of it from the federal reserve. Because of all these institutional real-value transactions, consumers and consumer facing businesses place a real value on it as well. $\endgroup$ – kingledion May 10 '17 at 14:50
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    $\begingroup$ @Molot I think you're confusing "not everything can be used as currency" (which is not true) and "some things are better suited to the purpose of being currency than others" (which is definitely true). This article alone describes a few currencies which have historically been used which do not meet your strict criteria: msn.com/en-us/news/offbeat/… arguably, their unsuitability as worldwide currency is why they never made it to the lofty status of the dollar - BUT they were used as money. $\endgroup$ – danl May 10 '17 at 15:51
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While a society could use bullets as money if there were for some reason no other options, one must ask if they would while other potential currencies are available. And the answer to this question is definitively:

No

Gold or silver will almost certainly be used instead.

To be effective, money must have 5 properties:

  1. scarcity
  2. fungibility (each unit is just as good as any other)
  3. divisibility
  4. durability
  5. transferability

1) Bullets may be scarce, especially if the raw materials are scarce. But nothing like gold or silver.

2) They are not fungible, because they come in different kinds (calibers, features, etc.). It is possible that one standard type of bullet would win out over others as money, but quality would likely still vary. Compare to gold or silver coins, which generally trade at a very slight markup over their melt value, and can of course be melted into smaller or larger units.

3) They are not divisible, because half a bullet is worthless; compare this to gold or silver coins, where you can just cut off (or melt off) a slice of the proper weight.

4) They are (to my understanding) not durable. As far as I know, bullets may lose their functionality due to exposure to extreme temperature/moisture conditions as well as aging. Correct me if I'm wrong. Compare this to gold or silver coins, which are (for the most part) not vulnerable to corrosion by moisture (silver tarnishes eventually, but detracts little from melt value), and even when heated to melting, do not really lose value, only change shape.

5) They are not very transferable. Yes, you can exchange bullets with someone, but do bullets have the value density needed to carry out large-ish transactions without an impractically large amount? No. Compare to gold coins: one gold bar (400oz troy or about 25lb) is currently worth almost 500k USD. That's some serious value density.

My recommendation would be to assume that your post-apocalyptic society will use gold or silver (or both) as money instead of bullets. Don't fall into the trap of assuming that "[some good] is valuable, and so will be used as money".

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  • $\begingroup$ I think that this is probably the best answer, especially for referring to the properties of good money. $\endgroup$ – EJoshuaS - Reinstate Monica May 12 '17 at 18:37
  • $\begingroup$ Paper is not scarce at all, yet our currency is made from it. Even our nominal money is currently available in abundance (due to practically 0 % interest), yet retains its value. Scarcity is (from my perspective) only of relevance if you require counterfeit protection and don't have other means for that. In all other situations, money is a representation value of goods that you could buy with it. So, as long as you use bullets primary as a notation of wealth (rather then actual coins) it works great as book-money. $\endgroup$ – Angelo Fuchs May 15 '17 at 7:36
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The value of money depends on supply

Without doing a super deep dive into economics, the value of a currency depends on the money supply. A currency that is stable for long periods of time must have a stable volume in circulation.

Examples:

  • Gold was very rare and mined at a reasonably constant rate for long periods of time. Therefore, it had a high relatively fixed value and was a stable useful currency. It also has the nice property of being to soft to use in expendable items, and highly resistant to corrosion, meaning it was rarely taken out of the money supply (i.e. it only left circulation by being lost)

  • However, the discovery of the New World dramatically increased the available supply of money. This was partially counteracted by generally increasing population and commerce across Europe in the same time period which tended to increase demand along with the supply.

  • Cowrie shells are a great example of how a thought-to-be-stable currency can go awry. The cowrie is originally from the Maldives, and is relatively rare. With a near constant supply, they were a useful currency on the African continent. However, the ring cowrie from Zanzibar is much more common, and traders on the Indian ocean used this species as a 'counterfeit' currency. The money supply rapidly increased causing the equivalent of hyperinflation, destroying the value of the currency.

Bullets are a bad currency because they are not stable

The long and the short of it is, bullets are not a stable currency. First, they are produced by a devolved manufacturing process. Fiat currency in the modern world is controlled by central banks. But anyone can make bullets in your post apocalyptic world, so there is no way to control the money supply. Since making a bullet 'creates' money sui generis, everyone will be doing it, which will destroy the value of the currency.

As if that isn't bad enough, bullets have a demand decoupled from its demand as a currency. If a war breaks out, people are going to need a lot more bullets, and presumably manufacturing capability will go down since there is a lot of destruction and plundering. This will have the opposite effect as hyperinflation: the price of bullet will be so high that any commercial systems depending on them will collapse. If a trader in the city exchanges bullets with farmers to feed that city, then a scarcity of bullets will cause either a. starvation or b. the bullets will no longer be used as currency.

All in all, bullets will not work as a currency.

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    $\begingroup$ "Since making a bullet 'creates' money sui generis, everyone will be doing it, which will destroy the value of the currency." Modern cartridges require jacketed bullets (hard to improvise), swaged brass cases (extremely hard to improvise), and smokeless powder (impossible to improvise). Even cast-bullet, rolled-brass, black powder alternatives are fairly complex. If the raw materials have value, and non-negligible labor is required to produce the item of currency, I struggle to see how this is any more of an issue than with raw metals being pressed into coinage in the pre-modern era. $\endgroup$ – Catgut May 10 '17 at 15:23
  • $\begingroup$ @Catgut Pre-modern raw materials (Gold, silver) were rare. The components of a bullet (steel, copper, lead, zinc, nitrocellulose, nitroglycerin) are not rare. Plus, you should go online and check out the off-the-grid make-your-own ammo types. They can do a lot. I know people that do a lot of those things you think are hard to improvise at home. $\endgroup$ – kingledion May 10 '17 at 16:14
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    $\begingroup$ The off-the-grid, make-your-own-ammo types stockpile the materials I listed, because things like swaged brass and smokeless propellants cannot be made without a massive industrial base. Even if the raw materials are common, if the formed configuration of 'ammunition' is difficult or impossible to replicate then there is scarcity. $\endgroup$ – Catgut May 10 '17 at 17:37
  • $\begingroup$ To put it another way: You can make aluminum oxide in your garage, yet the complex configuration of aluminum oxide that we call a 'ruby' is still valuable. It's not the material that drives value, it's the scarce, desirable, not-easily-replicated composition of that material. $\endgroup$ – Catgut May 10 '17 at 17:41
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    $\begingroup$ @Catgut the real off the grid make your own types use black powder which you can make. Use a flintlock and no percussion caps needed. Heck even an air rifle could be very useful, Lewis & Clark had one with them... $\endgroup$ – ivanivan May 11 '17 at 23:42
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There is another issue that just adds to the "bullets are bad as money" posts. I haven't seen it listed here but how do you know if the bullet is good?

The primer caps are probably the hardest part to make. So, when reloading the brass, why use a real primer cap? Just sell the bullet off to someone and you are good to go.

It would be as if the only way to test to see if a $100 bill was real is to burn it.

In the end, it all relies on if you trust the person. If you trust them, then you can use their signature instead.

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  • $\begingroup$ Guns, and consequently bullets are considered a divine form in my world. Anyone making bullets that didnt work would be called a blasphemer and stonned to death. $\endgroup$ – highpriestofpie May 10 '17 at 19:10
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    $\begingroup$ @highpriestofpie, only if he's still around in that town. $\endgroup$ – ShadoCat May 10 '17 at 19:21
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    $\begingroup$ This issue suggests to me that there should be a distinction between pre-collapse and post-collapse ammo. Pre-collapse ammo is factory-manufactured, high-quality, visually distinctive (especially if it's lacquered like Warsaw Pact ammo), and trustworthy, making it a good currency. Post-collapse ammo is improvised, less effective, and could be fake- and consequently less valuable as a currency, and subject to inspection and testing before use. $\endgroup$ – Catgut May 10 '17 at 19:31
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    $\begingroup$ @Catgut, Yep. Maybe, with new rounds, the seller picks one round at random to test fire. That would make shopping a bit noisy. It might also have the effect of discouraging people from firing pre-collapse ammo. $\endgroup$ – ShadoCat May 11 '17 at 17:13
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Yes

I game a RPG where we have that setup, and it works like this: Bullets are common (so relatively worthless, but good for small change). Value of objects is usually expressed as amounts of bullets, but usually you don't pay in bullets.

So, you still have a barter system (you exchange two goods) but there is a value behind that. Like this:

  • "I want this axe, how much?"
  • "300 Bullets"
  • "The other vendor offered me 350 for this pack of t-shirts that are still wrapped in plastic foil from before the apocalypse. So that and you give me 50 back?"
  • "I'll give you 20 back."
  • "Ok, Deal."
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Bullets are common but "Will they fit"? So for example in the NATO region the 5.56 mm bullets could be cheap but the .45 could cost food for 7 days as they are not so common but pack more punch.

On the other hand it's not the bullet or case but the primer. You can cast a new bullet, fill the case with powder but remaking the primer would impose the problem.

I think the closest to what you are describing is the wild west. I've read stories about people using bullets as currency because for example Indians didn't need money but they liked to hunt with rifles.

Also Banks can exist in a situation where there is a common agreement of payment. In a postapocaliptic environment I don't think there would be enough trust.

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  • $\begingroup$ In a postapocaliptic environment ... How long after the apocalypse? $\endgroup$ – RonJohn May 10 '17 at 15:55
  • $\begingroup$ A couple of generations. Society is coming back, just slowly. $\endgroup$ – highpriestofpie May 10 '17 at 19:45
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The thing with bullets as currency is that they have practical value, but are a complementary good. They have sufficient value if you have a gun that fires them, and very little otherwise. This becomes a large issue with the sheer number of calibers out there.

Consider an example: I am thirsty and come across someone with water. I have ammo for a .30-30, .45, .357 and .40 S&W. He only has guns that fire .308, .30-06, 9mm, and 12 gauge. My ammo would have some potential value as he could maybe trade it to someone else in the future, but he runs the risk he couldn't. Maybe he won't run into someone who needs that caliber any time soon. Most likely, he wouldn't want to trade his valuable water for ammo that has an unknown value to him and may be risky to trade to someone else down the road.

Unless your world has significantly fewer calibers than this one does, you'll be left with bullets that are valuable to some people and worthless to others, which makes for a poor currency.

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"Yes" in the very short term. "No" in the long term, because bullets are made of lead. Very, very heavy. And cheap, and easy to fabricate.

Look up the history of banking, and you'll see that they developed as a way for people to "carry" lots of money long distances without having to carry lots of gold and silver. Banks are just a natural development, and if printing exists in your world (1/3 antebellum West + 1/3 Mad Max implies that the technology is available), "gold certificates" will be developed.

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  • $\begingroup$ There are bullets that are not made of lead. $\endgroup$ – a CVn May 10 '17 at 15:19
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    $\begingroup$ In fact, silver is a classic solution to werewolves, even. $\endgroup$ – The Nate May 10 '17 at 16:10
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    $\begingroup$ Lead isn't really that heavy...its only about 44% denser than iron; 26% denser than copper. $\endgroup$ – kingledion May 10 '17 at 16:40
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    $\begingroup$ I'm guessing the question isn't talking about the bullet proper, but rather functional cartridges as a whole. (It's very common for "normal" people to use "bullet" as a synecdoche for cartridge.) Depending on the tech level, the manufacture of functional cartridges is not necessarily cheap or easy. $\endgroup$ – R.M. May 10 '17 at 17:17
  • $\begingroup$ Even cartridges are common. Lots of gun owners have reloading equipment, collect your brass after a fight, barter with the urchins who "harvest" lead from bodies and the ground where missed shots landed, and barter for gunpowder (it's not that hard to make). The only real hard to get item would be primers, but mercury fulminate and "cottage industry" would do the trick. $\endgroup$ – RonJohn May 10 '17 at 17:30
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Bullets are very heavy compared to their current value. I would expect a "Mad Max" world would also use up bullets rather rapidly, so they are probably low value in your world as well.

Other than their weight, they are remarkably similar to Cacao beans, which were used by the Inca as currency. We even have enough information from their era to understand what things cost (a chicken might cost 2 cacao beans).

The market never flooded because the rich would drink their Cacao beans as hot chocolate!

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It's iffy. Definitely not a "no", but the stars would have to be aligned correctly for "bullets" to become money.

Why? That gets a little complicated, but it's not beyond the ability of the average person to understand, so I shall endeavour to explain.

Money has three attributes that give it its usefulness. These attributes are:

  • Measure of value
  • Store of value
  • Medium of exchange

So, let's look at how well bullets meet the objectives:

Store of value

This one is actually pretty good. The lead will always be usable as lead. The brass will always be usable as brass. Both materials tend to keep a fairly consistent value, all other things being equal. The powder and the primer (assuming these are modern cartridge "bullets") will last several years as long as they're not abused. If it's military-grade ammunition that's formulated specifically to be stockpiled, it may well last decades.

So, in terms of every-day commodities that could be used to store accumulated wealth, bullets aren't that bad. There may well be better choices, but choosing bullets won't result in your wealth rotting away like it would if you chose something like apples.

Measure of value

If you want to do any kind of budgeting or other monetary planning your money needs to be quantifiable in consistent units. This means that "fungibility" is an important quality. Fungibility is how interchangeable the units are. A particular ounce of 24 karat gold is functionally identical to any other ounce of 24 karat gold, so gold has good fungibility.

"Bullets" don't score quite so well as gold does, or even as well as the lead and brass they're made of do, because their chemical components decay, so newer ones are inherently more valuable than older ones. But it's not enough completely disqualify them. Mass-produced bullets for mass-produced guns are otherwise quite fungible. If they weren't, then you'd be likely to blow up your gun at some point, and that would be bad.

You do run into an issue though where not all guns shoot the same bullets, and obviously a .22 bullet isn't worth the same amount as a .50 BMG bullet. Keeping track of the exchange rate between .22, .44 magnum, and .50 BMG would be headache enough, and that's only three. There are thousands of varieties. If you live in the United States, go down to Wal-Mart at some point and peruse their ammunition section. Then keep in mind that Wal-Mart only bothers to stock about the top 2% most popular varieties, which brings us to:

Medium of exchange

This is where it kind of falls apart. Firstly, you said that bullets are very common. Well, they're also very heavy. They need to be common enough that everybody is willing to accept them in trade, even if they can't use them themselves, because they know they can resell them later, but not so common that you have to carry around 20 pounds of brass and lead just to buy dinner.

The big thing though is the previously-mentioned wide variety in modern ammunition. If your gun is a .30-30, shells for a .30-40 are useless to you, even though visually they appear almost indistinguishable. If you want it to work out, you're going to have to cut down on the variety. Otherwise tracking the exchange rates between the different kinds rapidly becomes a nightmare.

There are a couple of ways you could do this: First, you could decree that somehow, in the economic collapse say, most of the variety was eliminated and, say, only NATO standard weapons still exist. Alternatively, you could kick the tech level back down to the end of the muzzle-loading era. At that point a bullet is nothing more than a chunk of lead, and you effectively have a society that uses lead as a currency and, by custom, mints its coinage in a fashion suitable for launching out of a gun. That's unlikely to happen given how common lead is and how many things substitute for it, but it wouldn't be impossible. Also, most people in that era carried their own bullet molds so converting from one size to another would be relatively trivial, thus eliminating the variety problem entirely. So you're mostly just left with the fact that lead is really quite common, and really quite heavy, so hauling around the quantities necessary to buy things could easily become impractical. People would be highly likely to switch away from lead to the more traditional copper, silver, and gold. Those three have much better value/weight ratios.


You also had a question about how well consumable currency works. Consumability actually has little impact on whether or not something makes a good currency. To the extent that it does have an impact, it tends to make the currency more desirable because it increases the likelihood that you will be able to pass it along for something else you want, since people will actually use it directly.

If you've ever heard the phrase "worth (his/her) salt," it comes from the fact that a long time ago, in certain places, salt was used as currency. You can't live without a certain amount of salt, so everybody was willing to trade for it. In the areas in question, it was scarce enough that its value per pound was high enough that reasonable quantities could be used to complete transactions. So it met the Medium of Exchange requirement. Salt is completely non-perishable as long as you don't let it get washed away, so in areas where the production of salt is roughly equal to its consumption it was a good Store of Value. And finally salt is easily divisible into small units and pretty well completely fungible, so it made a good Measure of Value.

Of course, if you accumulated your wealth in salt, and then moved to an area with a nearby salt-mine, you'd rapidly discover that your wealth wasn't worth all that much. Which is why salt was not the only thing used for money. Things that are in universally consistent supply make much better money when dealing with large geographic areas, which is why refined metals have been a common choice throughout history. They're still not perfectly consistent, but they're better than regionally scarce commodities since they're relatively scarce almost everywhere.


So, overall, I wouldn't expect bullets to become the major currency of a society unless they are both in short supply and the variety of guns available is severely curtailed.

However: I would expect them to be a commonly-traded item since they are commonly desired, reasonably fungible, and keep their value reasonably well. In fact, I'd expect it would be rather similar to the old salt trade where communities that were far away from the ammunition factories trade for ammunition with the more generally used currency (gold, silver, sea-shells, whatever rises to the top in the wider area) and then uses the ammunition as one of their local currencies internally, similarly to how cigarettes and snack foods get used for money in prisons.

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I'm assuming the OP means "finished rounds of ammunition" rather than bullets.

It would seem to work as an advancement over a barter economy, especially a violent one where high availability of ammunition was desirable and ammo was scarce. But it would have several obvious flaws:

Problems:

  • Is everyone using guns that use the same ammo? If not, you'll end up with several different currencies.

  • Prices (measured in rounds of ammo) will fluctuate as supply and demand for ammo fluctuates.

  • There will be a huge incentive for people to enter the market and supply low quality ammo, since presumably it would have the same value per round as higher quality ammo that actually works. Eventually the standard unit of currency would be a garbage quality "round" of ammo that isn't usable as ammo. Actual ammo would eventually be too valuable to use as currency and would be removed from circulation as a token of value.

Conclusion:

As a result of the above, every workable scenario ends up describing either

a) a barter economy in which high quality ammo is traded for other valuable goods
b) a traditional currency in which bullet shaped tokens of value are exchanged for goods and service, with some local political authority controlling the supply of this currency

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How would having money that could be expended permanently, by firing it, affect the economy?

There's a real world example. In prisons, it was not uncommon for cigarettes to be used as a form of currency. This has faded more recently as prisons have cracked down on smoking like everyone else. Now they apparently use Ramen noodles, which still get consumed.

In a real world, you wouldn't have just one denomination. As someone else points out, bullets are like pennies. They are the smallest denomination. You would also have pistol magazines (10?), rifle magazines (30?), and machine gun belts (100? 500? 1000?). Maybe you'd have packs (4 or 5?) to serve as an intermediate size. Or maybe you'd call them halves.

I would also add certificates to this. You have a certificate or coupon that is good for X bullets. Most people exchange the certificates rather than the bullets themselves. You keep your bullets. You use certificates to buy reloads. Or other supplies.

A problem with this in our world would be that not all bullets are the same size. But perhaps your world is different. Maybe they do have one standard size. You might be able to make this more believable if you switch from bullets to some other form of ammunition, e.g. charges. Then a pistol might shoot two charges at once and an assault rifle might shoot one. A sniper rifle might take three or more. An extra big gun might shoot ten or something (think of an anti-tank gun mounted on a jeep).

Charges could also work as gunpowder. So you reuse slugs, etc. but have to actually replace the gunpowder. Works better with more primitive firearms. For example, a flintlock or matchlock would make sense.

Don't forget to generate your currency. If you only expend bullets (as in the Walking Dead), you will have deflation. The currency will be worth more and more and you'll have less of it to go around. Currency shouldn't be plentiful, but it shouldn't be rare either. Otherwise people would hoard bullets and trade something else. Gresham's law. Better value stores are kept while inferior ones are traded. So make new bullets or charges or whatever.

Bullet manufacturers would be the banks. They would issue the certificates/coupons (paper money) because only they could actually fill them. Perhaps some enterprising person would corner the market on one of the bullet inputs and be able to act as a bank. But in general whomever actually produces the bullets themselves would be the bank.

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Your answer has been given multiple times, yet i haven't seen this one:

Yes. Ever wondered where the "shot" of licor came from?

"Legend has it that back in the Old West, cowboys would trade a bullet cartridge for a small amount of alcohol, and the shot glass proved the perfect size to do the trick. "

The following page can give you some insight: whiskeyscholar.com/origin-of-the-phrase-a-shot-of-whiskey

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  • $\begingroup$ Do you have any reference? $\endgroup$ – L.Dutch - Reinstate Monica May 13 '17 at 7:36
  • $\begingroup$ Don't recall exactly where I had heard it from. In regards to the quotation i got it from: jacobbromwell.com/old-west-shot-glasses Googling a bit more found: whiskeyscholar.com/origin-of-the-phrase-a-shot-of-whiskey answers.yahoo.com/question/index?qid=20080808072258AAbkSvI weknowtheanswer.com/q/… PD:sorry for so many edits, didnt shift+enter initially $\endgroup$ – DRP May 14 '17 at 0:18
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    $\begingroup$ @DRP You can edit your answer by clicking on the little grey "edit"-button at the end of your answer. Comments are temporary and can be deleted at any time for any reason, so important information, like extra information that was requested in comments, should be added to the post for future readers. $\endgroup$ – Sec SE - clear Monica's name May 16 '17 at 9:00
  • $\begingroup$ Dueling citations: en.wikipedia.org/wiki/Shot_glass says not until much later than the Old West. $\endgroup$ – RonJohn May 17 '17 at 1:20
  • $\begingroup$ @RonJohn many citations for the matter: some claim 'shot' as a measure (amount of liquor), shot as a bargain (bullet for liquor), shot as a sounding (when the person puts the glass back to table), etc. I do not want to fall in a logical fallacy in appeal to authority, the links were a mere 'down and dirty' answer for AT L.Dutch requesting reference. So I would take all answers with a grain of salt, however you must wonder...how do you think that legends appear if not due to unconfirmed stories ;) cheers $\endgroup$ – DRP May 17 '17 at 1:38
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Bullets in a post apocalyptic setting have instrumental value and are valuable in this sense. A limited supply of a needed commodity makes something valuable, this is why we back currency with gold, though gold isn't necessarily "Needed" it can be incredibly useful. Bullets would then be placed in the same category as food, shelter, and water, all things necessary for survival. Once bullets become scarce it will increase in value, so as time goes on and expenditures are greater than income the value of the bullet will increase and so too will the power of those who have them. So in time this "currency" will appreciate but at the start when they are all common food and water will be more valuable.

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To stop arguing and instead use historical precedent, the British colony of New South Wales used rum as currency at one point, so yes, you can use something similar, like bullets as a currency if there is a demand for the item, although it may be temporary until something better comes along.

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    $\begingroup$ I don't see in what ways rum is similar to bullets. Could you edit to clarify just how they are similar? $\endgroup$ – a CVn May 15 '17 at 9:52
  • $\begingroup$ @MichaelKjörling Rum and bullets are both commodities. Rum was used as a currency, therefore, by analogy, bullets might be too. It helps if you're an Australian, because the historical precedent makes this suggestion quite obvious. $\endgroup$ – a4android May 16 '17 at 10:20
  • $\begingroup$ @a4android It would appear to me that it's a lot easier to divide a bottle of rum than it is to divide a bullet. $\endgroup$ – a CVn May 16 '17 at 10:36
  • $\begingroup$ @MichaelKjörling Your remark is puzzling. Certainly the divisibility of rum is much greater than that of bullets. Units of currency aren't divided, & if they are it's usually illegal. This latter aspect might not be a problem where bullets are currency. Generally dividing dollar bills doesn't seem like a good idea. Neither rum nor bullets seem like a good basis for a currency in the long run. They might be plausible stop gaps. You can, at least, drown your sorrows with rum. $\endgroup$ – a4android May 16 '17 at 12:09
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I hope I'm not being too late.
There was in fact a case in history where a civilization used another commodities as currency. The mayans and the aztec empire used cocoa as a trade good, even restricted its cultivation.
And about using gold and silver, the Aztec believed gold was deities' poop.
Sorry if the second source is in spanish. I didn't find any information in english.

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  • $\begingroup$ Welcome to WorldBuilding! It's never too late to answer a question. Future readers might be thankful for the extra input and if the OP likes your post he can always change his accepted answer. If you have a moment please take the tour and visit the help center to learn more about the site. Have fun! $\endgroup$ – Sec SE - clear Monica's name May 19 '17 at 7:16
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Modern national currency is expended at the point of final use, and traded around between first issue and final use, so using consumables as currency is not actually a crazy idea. Here's how currency works in most developed countries today:

  1. A central bank creates money by making an accounting entry in their books, and puts that money into circulation by buying something with it, usually a government bond (thereby loaning money to the government).
  2. The government pays for things with that borrowed money, such as salaries, road construction, and military hardware.
  3. The money gets traded around in the open market for a while.
  4. People eventually use the money to pay their taxes to the government.
  5. The government uses the money to pay back that loan from the central bank.
  6. The central bank destroys that money by making another accounting entry in their books.

There are a few extra steps when tokens such as paper bills or coins are involved, but the end result is the same; modern money is a consumable, manufactured by a central bank, and eventually destroyed. Modern money's value is founded on the fact that residents, both individual and corporate, need some of it to pay their taxes.

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Dmitry Glukhovsky in Metro 2033-2035 did it. Bullets was currency for all goods. Even there was two types of ammunition - normal (usually handmade) and military.

Economy founded on bullets as a currency should be still on shortage of materials or still using them really often. The currency shouldn't be too easy to acquire. In this world ammunition manufacturers will be like banks - only they have the means to produce high quality bullets.

Also you need to remember that this type of currency will make people more likely to use weapons.

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  • $\begingroup$ Bullets as currency wouldn't have a significant impact on the likelihood of someone using weapons. That's a matter of the cost involved in acquiring and maintaining the weapon and the cost of using it vs. the expected gain in value from doing so. It would, however, probably affect the type of weapons in common use since ones capable of using ammunition that people are literally carrying around in their pockets all the time anyway would have a significant advantage over ones for which a person has to carry a separate stock. $\endgroup$ – Perkins May 13 '17 at 0:17
  • $\begingroup$ It highly depends on the world. If world is dangerous and weapons are used really often to defense/hunting for food it will significantly increase it's value. People will know that having ammunition is the only way to survive $\endgroup$ – Michał Piątkowski May 13 '17 at 9:56
  • $\begingroup$ Yes, a dangerous world increases the usefulness and therefore the worth of weaponry. What I'm saying is that a dangerous world where everyone uses weapons all the time might drive up the value of ammunition to the point where it starts being used as currency, but ammunition being used as currency won't make the world more violent. The cost incurred by expending ammunition is the same whether the number used to write it down is expressed in units of bullets or of pounds sterling, or of hours of labour, and it is that cost which discourages the use of the ammunition. $\endgroup$ – Perkins May 17 '17 at 18:35
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As some others have said, there is a difference between something that represents value and something that has value. Printing numbers on currency solves the scaling problem, but only when society at large accepts that form of money.

Easy access to weapons is a special case, as it depends on a societies values about violence. In the Mad Max example, the folks on the school bus were most likely to "sit around and breed." If the other group had won, they might not have had enough people to sustain themselves, much less grow. In that case, money does not matter because your society becomes an evolutionary dead-end.

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  • $\begingroup$ i dont understand your answer. could you re-phrase it to be clearer? $\endgroup$ – highpriestofpie May 11 '17 at 23:34

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