questions. Thank you so much for your time!

The way that medieval coinage would generally work is that a decision would be made about how many coins would be struck from a given weight of metal, which would therefore indicate the value of the individual coin.

So to take the pound as an example, starting with King Offa of Mercia, the Anglo-Saxons established that 240 silver pennies would be struck from one pound weight of silver, and further than one penny was worth four farthings and twelve pennies were worth 1 shilling (which meant that twenty shillings were worth one pound). Offa in turn was borrowing from Charlemagne, who established that one pound of silver was equal to one livre, which was worth 20 sous/sols, which in turn were worth twelve deniers. Keen eyed observers will note that the notations for the different currencies – l, d, s – are the same in the British and Frankish systems. The reason for that is that Charlesmagne and his copiers in England, Italy, Spain, etc. were in turn copying Roman currencies: the “l” stands for “libra,” the “d” for “denarius,” and the “s” for “solidus.”

In other words, tradition and culture matters. Rome was associated with a commercial, currency-based economy and even after the fall of the Roman Empire, the memory of that economy was still strong, so associating your coins with theirs went part of the way towards ensuring that people thought your currency was good.

So for gold coins, you’d figure out how many coins would be struck from how much gold. Again, to take the English example, the “noble” was the first English gold coin to circulate widely. Originally, the noble was 138.5 grains or 9 grams of gold, so that one pound of gold would produce 453 or so nobles.

However, one thing to keep in mind is that, with a metallic standard, the government has to be careful that the cost of the coin doesn’t exceed its value (which means you’re actually losing money by making it), and there’s always an incentive to exercise the right of seignorage by declaring the face value of the coin to be greater than the actual metallic content of the coin (which means you’re making money by making money). Combined with the constant problem of private individuals producing counterfeit coins by clipping, sweating, or plating, the actual weight and purity of the currency in circulation tends to change over time.

Piggybacking of the recent ask on coins, do we have examples of periods of inflation or, bettered yet, hyperinflation in westeros’s history? If we don’t why do you think that is? Thanks

Follow up to inflation question on further thinking: it seems especially strange if there are no periods of crisis level inflation on a third century Rome level given the rudimentary knowledge, lack of financial governing (esp. between kingdoms pre-conquest) and the need to outbid rivals for swords given the very regular inter- and intra-kingdom violence. I admit to being no financial expert but that seems like a nice mixture for devaluation and inflation. Thanks.

As people have pointed out, GRRM is not super-consistent on this stuff. For example, in a time of plenty, Dunk sells his horse for 2.3 dragons; in the midst of bloody civil war, with people increasingly unwilling to take coin (which you can’t eat) for horses (which you can), Brienne buys two horses for 1.5 dragons each.

On the other hand, at times, GRRM is better at depicting the impact of the War of Five Kings on prices. For example, when Tyrion arrives in King’s Landing just as the Tyrells have cut off the city from the south (a major supply shock) and the city has become swollen with refugees (a major increase in demand), we see hyper-inflation in action:

“The markets were crowded with ragged men selling their household goods for any price they could get … and conspicuously empty of farmers selling food. What little produce he did see was three times as costly as it had been a year ago. One peddler was hawking rats roasted on a skewer. “Fresh rats,” he cried loudly, “fresh rats.” Doubtless fresh rats were to be preferred to old stale rotten rats. The frightening thing was, the rats looked more appetizing than most of what the butchers were selling. On the Street of Flour, Tyrion saw guards at every other shop door. When times grew lean, even bakers found sellswords cheaper than bread, he reflected.”(Tyrion I, ACOK)

“Muddy Way was crowded, but soldiers and townfolk alike made way for the Imp and his escort. Hollow-eyed children swarmed underfoot, some looking up in silent appeal whilst others begged noisily. Tyrion pulled a big fistful of coppers from his purse and tossed them in the air, and the children went running for them, shoving and shouting. The lucky ones might be able to buy a heel of stale bread tonight. He had never seen markets so crowded, and for all the food the Tyrells were bringing in, prices remained shockingly high. Six coppers for a melon, a silver stag for a bushel of corn, a dragon for a side of beef or six skinny piglets. Yet there seemed no lack of buyers. Gaunt men and haggard women crowded around every wagon and stall, while others even more ragged looked on sullenly from the mouths of alleys.“ (Tyrion IV, ASOS)

So there you go.

In terms of devaluation, you have the example of the Gardener coins that Olenna uses to cheat merchants with, which are small and thin compared to post-Conquest dragons.

Is there a copper to stag, stag to dragon ratio that’s known? Traditional fantasy rules is an easy 10 copper to 1 silver, 10 silver to 1 gold but that doesn’t hold up with the way the value of a gold dragon has been worked out. (sorry if you’ve answered this, link plox)

Decimalized currency is something of a modern convenience, and it’s not an accident that it spread rapidly about the same time that the metric system, a decimal system of measurement, was being spread by the French Revolution and its belief in human perfectability through reason.

Westeros’ currency is not decimal at all. One dragon is worth:

30 silver moons.
210 silver stags.
1470 copper stars.
2940 copper groats.
5880 copper halfgroats.
11760 copper pennies.
23520 copper halfpennies.

This is a rather bizarre system:

you have two separate silver coins, which is a complication to the minting process (you now need two sets of dies for the silver coins, and you also have to cast the blank planchets in different sizes and/or purities), and probably means you’re losing money that you could have made through seignorage of the more valuable silver coin.
you have no less than five separate copper coins in circulation, which as with the silver means additional sets of dies and different planchets, all for the least valuable of coins and therefore the least possible amount of profit.
the conversion rates are not particularly intuitive. At first I thought the fact that it’s seven stags to a moon and seven stars to a stag was a bit of religious symbolism, but that breaks down quickly because it’s two groats to a star and four pennies to the groat, and so on.
Also, because of the large amounts of smaller coins that go into a larger coin, I imagine it’s easy for vendors to cheat people while making change because it’s pretty difficult to eyeball whether you’ve been given 49 stars for a moon and so forth.

GRRM is absolutely borrowing from the pre-decimalized British currency of pounds, shillngs, and pence, where you had 12 pence (i.e pennies) in a shilling and 20 shillings (or 240 pence) in a pound. If that wasn’t confusing enough, you also had coins that were smaller than a penny (farthings were worth ¼ of a penny, halfpennies were eponymous) and coins that were more than a penny but less than a shilling (groats were worth two pennies and there were also half-groats, threepenny bits existed, as did silver sixpence coins), and coins worth more than a shilling but less than a pound (florins were worth two shillings, crowns were worth five and there were also half-crowns, there were half-sovereigns worth ten shillings, and a half-guinea coin as well). And to cap off this insanity, in addition to the pound, you also had guineas worth one pound one shilling so that gentlemen could pay people with their own special currency.

Reading your Anguy question, how much money was 10,000 gold dragoons actually worth? Was it a realistic pot for winning a contest?

See here for my estimates on the value of a gold dragon.

As for whether it’s a realistic pot, it’s a bit tricky, because medieval tourneys don’t seem to have given out prizes in cash, but instead gave out prizes in jewelry, plate (hence why so many modern sports tournaments have “cups” as trophies), and the like. And without these objects to hand, it’s a bit hard to value how much a “gold vulture” or a “very rich ring” should be valued at, or (given how popular diamonds were in medieval tourneys) how to appraise precious stones in the abstract.

However, I can say that 10,000 dragons work out to something on the order of 6,000-7,000 English pounds (in 1300 CE pounds, that is), which is far, far bigger than any tourney prize I can find an example of.

So I think this another example of math being GRRM’s Achilles’ heel.

How do royal mints work? Like how often do new ones need to be made and why? Sorry if you have been asked this before.

Just to show how much I care…I did research on numismatics for you, and that’s something I once swore I would never do.

Medieval coins were “cold-struck” which means that the planchet or blank were allowed to cool before they were imprinted. They were made by hand, by sticking a planchet in between two dies (the one on top called the trussel die, and the bottom die called the pile die) upon which the design of the coin had been engraved and then hitting the trussel die with a hammer to imprint the planchet with both the obverse and design side at the same time.

The coining was actually the simplest part of the process. Producing the dies took up a lot of time, because the action of smacking them with a hammer inevitably damaged them – to take the Venetian mint as an example, they had to make one trussel die every day and one pile die every other day, because when you’re punching out 20,000 coins a day, the dies are going to get damaged in a hurry. Making the blanks was also a rather complicated process and took up a huge amount of time:

melting and casting the ingots,
annealing, or heat treating, the ingots to soften them,
hammering the ingots,
another annealing,
cutting the ingots into blanks,
annealing the blanks,
hammering the blanks thinner,
another annealing,
another hammering of the blanks,
another annealing,
another hammering of the blanks,
rolling and
hammering the edges to make the blanks rounder,
another annealing,
blanching to clean the blanks
and then finally coining.

In terms of how often the coins were made and why…part of it had to do with custom: new coins would be minted to celebrate the coronation of a new monarch in order to spread the word about who the new monarch was, new coins would also be minted to celebrate major military victories or weddings or the birth of royal children, or certain religious holidays. But a good bit of it had to do with supply and demand: i.e, when the monarch needs cash to buy stuff or when various vendors bring in royal ious and request payment in cash or when the royal paymasters need to make payroll for the army or the navy, etc.

Speaking of supply and demand, one of the long-term problems with metallic currency is that, over time, they have a deflationary bias – as people hoard coins, money falls out of the system, and prices start to drop in ways that become very dangerous to profit margins and thus economic viability. Thus, you have to mint coins just to make sure that there’s enough coins going around for economic transactions to take place and for the economy to grow. And the problems don’t end there: because metallic coins are easily counterfeited by clipping or sweating or plating, mints were constantly battling Gresham’s Law, which is one of the reasons why medieval punishments for forgery and counterfeiting were so legendarily brutal.

Ultimately it came down to how well things were going for the state. Remember, the coins are made of precious metals, which means you need the raw stuff on hand to mint. When things are going well economically and politically – trade is flowing, the harvest is good, people are paying their taxes – the king mints lots of coins both because he can and to show off his royal splendor and majesty. But when things are going bad – when the harvest fails, trade dries up, people are refusing to pay their taxes, foreign armies are rampaging up and down the countryside stealing everything shiny – first you start to adulterate your coinage with baser metals, then you cheat on the weight of the coinage, then you just stop issuing coins for a while. One of the ways that historians of the ancient world or the medieval period try to assess the strength and stability of various dynasties is just by looking at how frequently coins are being minted, how the weight and purity of the coinage is changing,

Is the golden Dragon a practical coin given its immense value? The vast majority of the population will never see one (ala Pate) and those who do use them, such as rich merchants and nobles, could they not more simply and safely use promissory notes or letters of credit backed by banking houses etc?

Sure it is. Let’s leave out the fact that we see plenty of people using gold dragons – Dunk, for example. Let’s just do a thought experiment.

A load of bread costs around three coppers. Assume that everyone in King’s Landing eats a loaf a day – which is pretty close to the statistics we have of ancien regime France, for example – that’s 1.5 million coppers that bakers are getting, which works out to about five thousand pounds of metal, on a daily basis. Trying to store that much metal is a giant pain, but it gets a lot easier when you can turn that 1.5 million coppers into 26,785 stags or 127 gold. I guess the point I’m getting at is that when you’re thinking about currency, in addition to thinking about different economic classes, you also need to think about different economic scales – even if most people aren’t throwing around gold on a regular basis, there’s a lot of economic activity in aggregate and having different denominations makes that easier.

Now, as for why those denominations are metallic rather than paper…well, let me recommend Extra History’s series on the history of paper money:

The quick version of a very long and complicated history is that it depends on social and economic organization and levels of trust. With regards to the former, it comes down to this: how many people are there for whom this given note is going to be useful? Yes, merchants and nobles might be doing enough business that they’d be able to use a letter of credit from a given merchant, but what happens if that merchant or noble needs to buy a horse from a farmer who’s never been to King’s Landing, let along Braavos?

With regards to the latter, before governments get into the business of printing money, you’re basically taking it on trust that the particular bank’s or merchant’s or nobleman’s notes are worth what they claim to be, and you run the risk that a bank failure or a bankruptcy or fraud (because the potential for fraud with letters of credit and other notes is huge) leaves you with nothing.

And it gets even more complicated, because there’s no standardization, and so you have to discount the value of the notes of this merchant or this bank, which makes valuing the notes or making change or basic stuff like that really complicated. When I was in high school, my family sometimes went on trips to Old Sturbridge Village, a living recreation of an 1830s New England village. One of the places you could visit in the village was their bank, and I remember being shown these massive ledgers where bankers would record the different bank notes they have seen and what they think the notes were worth, and it’s a huge undertaking.

Whereas gold coins have the advantage that they can be weighed and assayed to figure out how much the coin is worth, so you don’t have to do any of that. And as MMT theorists have pointed out, there was another advantage to coins: they had the government’s stamp on them saying what the coin was supposed to be worth, and they had a relatively steady value based on what the government would pay for goods and services, and how many coins they would accept as payment for taxes.

That being said, the gold standard is insane, fiat money is a huge advance in human civilization, but it took a lot of work to make it possible.

About the taxation calculations, you’d said average yearly incomes to be about 3-5 dragons for the average person. Could you tell me how you arrived at that figure? Given that a proper warhorse in times of war costs approximately 1 dragon (Jaime’s estimate in ASOS), annual income of 3-5 dragons seems rather overly generous.

I took it from here:

The stableman gave him three gold pieces and the rest in silver. Dunk bit one of the gold coins and smiled. He had never tasted gold before, nor handled it…the heft of all that coin in his pouch made him feel queer; almost giddy on one hand, and anxious on the other. The old man had never trusted him with more than a coin or two at a time. He could live a year on this much money. (Hedge Knight)

So according to Dunk, 750 silver or three and a half gold (which he got for selling one horse, btw) is a good year’s income for a smallfolk like himself.

And since we see that a heavy meal of “lamb…as good as any he had ever eaten, and the duck was even better, cooked with cherries and lemons and not near as greasy as most. The innkeep brought buttered pease as well, and oaten bread still hot from her oven,” plus four tankards of ale works out to a handful of copper (when a loaf of bread costs three coppers normally) less than a silver, we can begin to get a sense of what kind of standard of living one could have one two silvers a day.

The reason why I took five gold as the high end is that the Hedge Knight happened a hundred years prior to the present of ASOIAF, and you would have gotten some inflation over that period.

But let’s take Jaime’s example: a fine warhorse works out to anywhere between a third and a fifth of a yearly income for a smallfolk – taking the average income in the U.S today, that horse is worth about $9,000-15,000 – which is pretty high, considering that the “American Association of Equine Practitioners estimates the minimum annual cost of owning a healthy horse — not including stabling costs — to be at least $2,500.”