To start this new series I would first like to welcome Garion to the Aeither.net crew. He is writing his first article with us and hopefully he will continue to write with us in the future.Without further ado here is our first installment of Economics in Gaming.
In the Fallout universe, the most commonly accepted means of exchange is bottle caps. While it makes a cool prop for a post-apocalyptic world, I aim to demonstrate why this would likely not be the case. In order to do this, I will begin by outlining what exactly money is.
Let me start off by saying that money is an amazing thing. Imagine having to wade your way through the Fallout universe (or any universe, really) without money. I’m not saying that everything would be free, people (even computer people) still have to eat. I’m saying imagine how much of a pain it would be to walk up to the Crimson Caravan and check prices on 10 rounds of 10mm ammunition only to find out that their offer is for 5 radscorpion glands and 2 bottles of rum. Now imagine the prices on more valuable goods like a sniper rifle or a shotgun. If you didn’t have these exact items to trade, you’d either spend all your time running around town looking for the appropriate trades for what you do have or you’d be SOL. In economics, this is called the “double-coincidence of wants.” In order for trade to take place, both people would need to want what the other person has. This is incredibly rare in a barter economy like the one I described. Money, as it is usually understood, is a commonly used means of exchange which makes things like trade quick and painless.
Some important aspects of money are that it is divisible, portable and is a store of value. Divisible means that it can be divided into smaller parts without damaging the value of the unit. This is why things like livestock don’t make great money because two halves of a cow are not as valuable as one whole cow. Similarly, livestock or giant boulders are not as portable as, say, small coins you can put in your pocket. One of the most important aspects of money is that it acts as a store of value, which means that you can expect it to retain its worth long into the future. This is why things like wheat do not constitute dependable currency because of how easy rot can set in and ruin your investment.
In order for something to emerge as money, it has to be worth something in the first place. This pretty much means that there must be a use for it aside from being passed around. For all intents and purposes, bottle caps are no better than any other pieces of garbage from the pre-war era. In most of the Fallout universe, there was no popular use for them (even with the existence of bottlecap mines) so there is essentially no reason for people to want to start trading for these items in the first place. This means that items that are valuable are more likely to enter into money status, such as guns, food, alcohol or jewelry.
A common argument in support of bottle caps as money is that they are short in supply because the machines that make them no longer exist. However, any experienced Fallout player will know that there are plenty of objects from the pre-war era that can no longer be reproduced scattered everywhere. You can’t walk five steps without tripping over various alcoholic beverages, posters, maps, books and toys that managed to survive despite the nuclear fallout. Any of these are just as likely of a candidate for money as bottle caps. That being said, the limited supply of something does not make it more valuable. I could scribble “Vault 8 4ever” on a napkin, and it would be the only one of its kind, but it would be a long time before somebody actually buys it. They probably wouldn’t offer me much for it either.
For a similar reason, caps are considered superior because they are almost impossible to counterfeit. But who would want to counterfeit something that was worthless to begin with?
As a caveat, the Fallout wiki describes that in Fallout 1 and 2, caps were backed by the price of water due to the unique structure of the Hub trading post. Theoretically, this would mean that bottle caps acted as certificates for a certain amount of water. This could pass for a representative currency, but it likely would not last due to how easy water is to consume. (Remember, money has to be a store of value.) Of course, the value of the caps is much worse the further from the Hub you are, which rules out their use in the Mojave or the Capital Wasteland.
In short, money is a pretty useful thing, so it’s probably a good idea to understand it. It’s the reason why we don’t have to juggle a variety of items just so we can buy some eggs. Money originates as a commodity that people value and trade long enough for it to become a commonly accepted medium. Caps don’t cut the mustard because, as far as I can tell, they have never been useful for anything but keeping liquids inside of bottles and the occasional mine. This means that nobody is likely to want to trade them over just about anything else that can be found lying on the ground. While caps make a fun and immersive story, I wouldn’t go keeping a box of them in your survival gear “just in case.” Save that room for bullets. You’re gonna need ’em.