About Gold (DM Advice)

I tried to rationalize the cost of gold and magic items once. Here's what I came up with:

About X years ago a wizard was making a magic item and said, "ya know, I wonder why it always takes up EXACTLY the same amount of THIS material, and yet the same amount of THIS material.

I wonder what a single unit of magic is.

So after some research he came up with what turned out to be, The Gold Piece. The single unit of magic. Turns out you can directly melt down gold for magic and same with most "valuable" materials. Then he did a bit more work, hired some people to "adventure" and measured them over the years and took samples and used spells and eventually discovered the XP as well.

Well, gosh darn it if the guy didn't want to publish his life's work.

Suddenly wizards, clerics, everyone really, was figuring out EXACTLY how much it took to make a given potion, or a +2 sword. In fact, some other wizards worked off of HIS calculations and discovered what a +1 actually WAS. Well, after a few short years this info trickled down to the merchants who learned how much they were being ripped off.

I paid HOW MUCH for a plus +1 dagger and it only cost WHAT???

Well, being a free market people started taking business elsewhere. Low level apprentices started under cutting higher level wizards. Suddenly there was a rebound. For a short few years there, you could actually buy some magic items for less then the cost to create them.

Well, that didn't last long. I might be a holy crusader and you might be an evil necromancer, but we each got bills to pay. And so an informal "agreement" was made. It was never written down, it was never made into a treaty or anything so formal. There was no single date. It just sort of... slid into the current state of affairs.

Magic items are made for X GP and X/25 xp and sold for 2X. Originally it was a compromise that just was "common" sense. Then it became tradition. And now it's just how things are done. Oh, from time to time you get someone who gouges the prices or someone who floods the market, but that doesn't happen often. Why?

Because GOLD ITSELF IS MAGIC.

And it's a magical world. Since the value of gold is not based on rarity, but on the actual usefulness of the material itself.

If you flood the market with a million gold pieces in the real world, inflation goes crazy. If you flood the market in the fantasy world, a great deal of the gold becomes stock piled in wizards's towers/cleric's churches/dragon's hoards. What isn't stockpiled is used to make or trade for materials to make magic and actually leaves the supply FOREVER.

Now, there's only so much gold, and gold's heavy and gold isn't that effective for making magic. Wizards usually use something else when actually making items. A healing potion made from gold is kinda hard to carry around on an adventure. Still, gold is useful as a means of trade and works just fine when its used as lubrication in the gears of commerce.

So why is there Magic Mart? Why are the prices fixed and inflation never gets out of control? Because unlike the real world where money isn't backed by anything, the money in the fantasy setting is. You can't eat money. You can't wear it. You can't live in it. Our money in the real world is a form of faith, even gold, silver, and other "hedge" forms of investment. You can't eat those.

But in D&D, you CAN make a house out of a gem. You CAN make food out of gold. You CAN wear silver. And it always takes the same amount of gold/silver/gemstone dust/whatever.

And since everyone knows what a unit of magic is, and what an experience point is, and what a +1 is and what a level is, they know the "value" of a magic item, and thus, the price, is usually the same wherever you go.

So the next time your player starts complaining that the economy doesn't make sense, have him read this then tell him, "it's called game balance." and move on.