Trading land for coin isn't unthinkable. It happens a bit. Actually trading the right to profit from land for coin is an anchor of the banking system slightly later, and is not considered ursury, much to the delight of ursurers everywhere.
Even monks in charge of their monastery's economy understood the working of their local market. So magi from highly political covenants like Blackthorn and Voluntas, or covenants like Burnham maintaining a castle and keen to maintain their status - all named as culprits of a magic-induced inflation towards the end of the 12th century in England by Heirs to Merlin - understood it as well.
A few - especially from Schola Pythagoranis and Voluntas - might later in the 13th century take notice of Thomism, and its ethical theory of just prices. In general, repeated laws and strongly presented normative theories tell an historian, that there was a need for them, and that the behaviour they discourage was rampant.
Note, that there was no significant amount of gold coins in late 12th century England - so no relevant gold-silver exchange rate either (see en.wikipedia.org/wiki/Gold_penny ). And I don't see any way to determine, just how much silver would have been needed to cause a change of silver value in England. But we don't know the amount of silver the English magi created and spent either. The politics of the Tribunal (see Heirs to Merlin p.23f and p.141) could easily have caused a bout of competitive spending at the end of the 12th century. This is similar to the spending bouts of mundane nobles and kings in times of strife and war - who, however, had to borrow the money they spent and later often resorted to coin debasement to pay their debts.
I should agree with you here. If Magi are better able to look after the well-being of their people than their noble neighbours, this first compensates for their generally weird personalities and uncertain status - hence stabilizes the local society, if done within reason.
Fortunately, historians seem to have a pretty good knowledge of the issue. For example, in  we read that: "In the latter half of the 12th century money supply in England increased by a factor of at least four, with perhaps £250,000 in circulation by 1205". It takes just three covenants, each with a Legendary Income Source (£1,000/year) stemming from magically created silver, to be responsible for the majority of the new silver in circulation (£150,000).
It's interesting to note that enforcing £2/magus/year, in a Tribunal with a population of the order of 100 magi, means an increase of the circulating silver over 50 years of only £10,000, which would have been pretty safe. At the same time, a limit like £20/magus/year (a Typical source of Income for a Covenant of 5 magi) would have yielded £100,000 over 50 years for the Tribunal, thus being beyond the safety margin. Some Stonehenge Quaesitor had a pretty good score in Artes Liberales!
Claughton, Peter, Production and economic impact: Northern Pennine (English) silver in the 12th century.
I picked up Transforming Mythic Europe yesterday and I read up on the Silver Consensus. It was interesting to see that magi aren't even supposed to sell products from anything that could have been tainted by magic. One example from the book was about the clearing of land with magic and then raising crops. Not even supposed to gain from selling those crops because the land was cleared with magic.
So with that in mind, can someone explain to me how a covenant is supposed to sustain itself without being able to use magic and profit from it? I know this applies primarily to interactions with mundanes, but this seems rather limiting, doesn't it?
Ezzelino, as I noted before (see https://forum.atlas-games.com/t/card-board-games-archive-links/116/1), this article from 2003 does not help a lot to determine the amount of silver needed to cause a significant change of its value in the England of the end of the 12th century:
I also already gave a quote of a more recent book containing similar data to Claughton's article before (see https://forum.atlas-games.com/t/the-break-room/102/1 ).
Now, once we know that we are handling lower limits here, that's a reasonable use of the article of Claughton.
I'm not sure how much to trust estimates of money supply like that, but at least we moderns can make such guesses. One thing to keep in mind is that contemporaries had no such statistics to work with.
In game terms, I'm more interested in the micro level than the macro level. Just what are a few Covenants spending money on at such a rate as to disrupt the economy of an entire kingdom? It's not as if we're discussing the King of Spain using the wealth of Peru and Mexico to dominate the continent, it's a few dozen magi living in remote areas. Either they're spending money like water for political reasons, bribing nobles, raising armies and the like, or prices and costs for local consumption are set very wrong in the rulebooks.
TME p.123 is describing an Order reacting to magi being economically far more active than current ones, and the Silver Consensus there is explicitly "an option for your saga rather than part of the canon setting". But the general idea is, that a covenant sustains itself by mundane activities of the covenfolk - supported most indirectly, but efficiently by the magi. Think of raising capital for a mundane business by having a magus talk to a mundane and making him an offer he cannot refuse.
One Shot, I disagree. The article (which has the advantage of being freely available on the web!) does help a lot to determine the amount of silver needed to cause a significant change of its value in the England of the end of the 12th century, by establishing lower and upper bounds that are within an order of magnitude of each other:
- £200,000 was sufficient to cause a lot of inflation, because less than that did cause a lot of inflation.
- £20,000 wasn't sufficient to cause a lot of inflation, because in the worst case (zero spreading of the extra silver to the rest of Europe, zero increase in the production of other goods and services) it would have increased prices by some 30%, which is not really significant over 50 years.)
We understand here inflation as a loss of buying power of money, do we? Then, where from do you take your claim? It is not the dubious Harvey inflation (from 1973) Claughton still quotes under , or is it?
That inflation, as you can see from articles quoted on this thread (see https://forum.atlas-games.com/t/the-break-room/102/1 ), was already contested around 2003.
Apparently, a lot of information comes from mint records. Silver coinage was regularly drained from circulation and re-issued, so we have a fair idea of how much was floating around. And so probably did a few well-placed officials of the realm.
In any case, for the Stonehenge Tribunal, dealing with the crisis a posteriori, it would have been pretty easy to a) determine how much silver they had put in circulation over the last few decades b) deciding that putting into circulation no more than 1/10th to 1/20th of that, from then on, would have been safe.
I think that it's not so much their "producing and spending wealth" that was disruptive, but producing and circulating silver (which is one of the reasons why the Stonehenge ruling was fair and sensible, the Silver Consensus is idiocy). Remember that a lot of the wealth around in the middle ages was not in coinage, so to disrupt the value of silver you only needed a small fraction of the wealth of a kingdom, if all that weath was concentrated in silver. Silver had two additional issues. First, it is essentially imperishable, so once on the market it stays on the market for a very long time (unlike, say, beets). Second, it's the commodity at the center of the trade web: everyone will feels a disruption of the levels of silver, because almost everyone uses silver to trade, whereas if you flooded the market with onions or silk you can disrupt at most a very specific sector of the market.
In microeconomic terms, what can a few dozen magi do with all that wealth? Pay servants and soldiers, bribe nobles, finance construction projects, live in the most crass luxury, buy exotic items for their labs etc. I'm not sure about the question. It's pretty obvious that with £3,000/year is not the cost of living for a few dozen "average" people - it's one to two orders of magnitude more than that. It's the amount of wealth needed to support 3000 peasants, or the households of 150 knights. But again, the key is that the amount of wealth used to support those people was mostly spent in kind, rather than silver, so that by moving that amount of wealth entirely in silver, you are easily creating a much, much larger footprint in the silver market. It's a little as if today IBM chose to pay all its bills in saffron. While IBM isn't large enough to make a dent in today's economy per se, its spending turning to saffron really would make the saffron prices go haywire.
Let me understand: are you claiming
a) that there wasn't a significant inflation (used as a short hand for "loss of purchase power of silver") in the second half of the 12th century in England OR
b) that there was indeed significant inflation, but that it was not due to the vast masses of extra silver in circulation?
Certainly magi can find ways to spend enormous amounts of money if they choose too. They're not presented as doing this in the tribunal book. An income of that level is enormous even by noble standards, and large wealthy nobles have huge footprints in society. None of the Stonehenge covenants, even the one with a castle, is anything like that.
If for some reason magi do start spending income on the level of England's greatest Earls, then I'd predict all sorts of "interfering with the mundanes" issues that are far more direct than causing national inflation. It would make much more sense for this to get a Covenant into trouble at Tribunal than for some proto-economist to start complaining that they'd raised the price of grain in Northumberland.
If on the other hand they stay in their remote sites with perhaps a few dozen armed retainers for security, then they're not spending money anywhere near the level that would cause economic disruption.
Are we talking about real Europe, or Mythic Europe? In (ArM4) Mythic Europe, there was a lot of inflation in England and Wales around 1200, caused by magi creating piles of silver. In real Europe, there may or may not have been such inflation, but if it did happen, it certainly wasn't caused by magi creating piles of silver.
When I wrote Heirs to Merlin in 1998, the historical texts I used as sources all agreed about the inflation, if they mentioned it at all (it wasn't relevant to all of them). The 2003 article was five years in the future. As a general rule, I don't expect authors for the line to be aware of historical debates that are only available in journal articles, and I give them a lot of leeway to ignore historical debates that have not yet been published when they are writing. Mythic Europe is not real Europe, and while we define it based on careful research into the current historical consensus at the time of writing, it is then defined and stays the same, even if the historical consensus changes. At least until there is a new edition that resets the background.
Given that Mythic Europe needs to rewrite some history anyways I have no issue with this- it is the conclusions that have apparently been lept to that are somewhat incredulous. The idea that mages made a lot of silver, prices rose and furthermore nobility took notice so they put a limit on the amount of silver that could be made is fine. The idea that they suddenly had innate knowledge of modern economic theory is 'huh?'
You can realize something is a bad idea without having to know in detail why.
It's a good job we don't say that, then.
The TME version of the Silver Concensus (as presented here, since I do not yet own that book), certainly implies a foundation in modern economic theory. However I certainly would assume it is not implicitly stated.
Geesh, if hermetic Magi start debating Keynsian counter-cyclical economic policy, I think a subset will be tempted to unleash unspeakable horrors just to put an end to it.
I think they know elements of it...the paradox of thrift, for example.
The 'Harvey inflation' is no longer referenced in Julia Crick, Elisabeth van Houts - A Social History of England 900-1200 - Cambridge University Press 2011, ISBN 978-0-521-71323-8 (see cambridge.org/us/academic/su ... ?format=HB ).
Reading this book online is possible via books.google.de/books?id=mM6OA8 ... er&f=false .
You find there:
So no inflation then.
Of course (see also https://forum.atlas-games.com/t/the-break-room/102/1 ) this was not the state of the art in 1999, when Heirs to Merlin was written. So Heirs to Merlin reacts to 'Harvey inflation' - or its discussion - by having Stonehenge magi cause their own inflation. This shows the research that goes into the ArM books.
Also (see https://forum.atlas-games.com/t/card-board-games-archive-links/116/1 ) Stonehenge covenants were indeed liable to 'political spending' at the very end of the 12th century, which - if excessive - could well have caused an inflation.
I certainly was led to talk about real Europe around 1200 here.
I am quite aware of this: see https://forum.atlas-games.com/t/the-break-room/102/1 .