Finance in Fiction

More than a few times, I’ve commented on how important it is for a fantasy or science fiction writer to understand basic societal economics if that writer wants to portray a workable and realistic fictional society.  In recent years, more and more writers have become clearly aware of this, and their books reflect this.  More recently, however, the comparative absence of finance and banking has struck me, yet some form of banking, whether it be counting houses, money-lenders, or the like, has existed in virtually every human civilization that became sophisticated enough to have iron tools. Any form of wide-spread trade requires at least a rudimentary financial system, and a financial system allows what one might call an oligarchical concentration of power and wealth, which in turn feeds intrigue and scheming.

One of the problem with portraying stock exchanges and banks is that few writers really understand them enough to portray just how much they can multiply either evil or good…or how quickly they can turn what seems to be good into total disaster. And, of course, the usual depiction of the banker/financier ranges from Shakespeare’s Shylock, to Dickens’s “early” Scrooge, to Mr. Potter in Capra’s It’s a Wonderful Life,   to, more recently, the bankers and brokers in Wall Street and The Wolf of Wall Street. The problem with such one-sided depictions is that they actually understate the impact finances and financiers have on society and government.

The key role a financial system plays in any economy is to provide liquidity, because without liquidity transactions and trades become almost impossibly difficult.

I recently read an incredibly detailed massive fantasy epic, one that depicted almost all aspects of society – traders and their formal and informal associations, rulers and their bureaucracies and sycophants, military types, barbarians, entertainers, crafters, laborers, merchant princes, even authors – but not any financiers or bankers, despite a welter of trade and conflict between adjoining lands.  A great story – but I kept wondering what financial structure was behind it all, and why the bankers, or their equivalent, didn’t put the brakes on some of the idiocy, because successful bankers do tend to be conservative [except in today’s USA], sometimes foolishly so.

So… for better or worse, don’t forget the bankers… or their equivalents.


4 thoughts on “Finance in Fiction”

  1. JakeB says:

    One of the very few novels I’ve read where a banker is not the one-sided villain is Dick Francis’s _Banker_. A genre piece but from a different genre. Of course the character shows Francis’s characteristic optimism about what he’s doing and about the world itself, but it made clear how necessary finance is for the world to function at a more-than-primitive level.

  2. D Archerd says:

    An excellent point, and one thing that I’ve always enjoyed about LEM’s novels, though I did wonder about the apparent stability of the exchange rate between copper, silver, and gold coinage across the centuries of history in the Recluse series. Yes, prices fluctuate in response to conditions, but it always seems like the basic 10 coppers-to-a-silver ratio remains constant. In real life, those would tend to vary in response to variations in the relative supply of the respective metals…or else the variation would be dealt with by official means (minting new coins of different weight) or unofficial (nicking edges or otherwise debasing the coinage).

    And the point about liquidity is an excellent one; when I was getting my MBA, one professor made the analogy that money is to the economic system what blood is to the body – both are responsible for the rapid and easy transport of value from one place to another in response to requirements and conditions.

  3. Grey says:

    Check out “Neptune’s Brood” by Charles Stross. The lead character is a forensic accountant and the subject (sort of) is interstellar finance in a universe where interstellar travel is possible, but not faster-than-light travel.

    He introduces the concept of ‘slow money’ – currency backed by the wealth of entire star systems (as opposed to fast money, i.e. cash) with a speed-of-light transaction clearing speed as a mechanism for exchanging funds across interstellar distances without worrying (too much) about your money inflating or deflating while you are cryo-frozen in transport between star systems.

  4. John Prigent says:

    I have also wondered about the ratios of coppers to silvers to golds. Not so much that they remain stable, as that at 10 coppers to 1 silver and 10 silvers to 1 gold there seems too small a gap – if 1 gold equals 100 coppers I’d expect either that working people were less able to afford beer, or conversely prices in high-end restaurants to be in multiple golds not just a few silvers. On the other hand, I’ve been in places in Africa where American tourists complained that a beer cost them 5 dollars each though I knew that the waiter who served them couldn’t afford to buy that beer for himself.

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