Bargaining for Bubbly Pies

Pernese money is described, with worked examples, in Dragonsinger. It consists of pieces of wood (shape unspecified) with the value on one side and the mark of the issuing authority on the other.
The only named issuing authorities I can find are the Smithcraft⁽¹⁾, 'Farmers'⁽²⁾ and HarperHall⁽⁸⁾ The standard coin is a Mark. Dragonlover's Guide (DLG) has conveniently collected a 9th Pass price list (p118) extracted from the books which indicates that a Mark is worth something like $20 in present day US dollars. A 1/32nd of a Mark will buy 6 bubbly pies - 10 cents each⁽³⁾. 2 Mark and 1/2 Mark coins also exist.

In Dragonsinger AMC gives clear indications that she has grasped how money was used in medieval Europe:

Menolly at age fifteen has never seen coins before Piemur shows her his.⁽⁴⁾ At her isolated Seahold money was only used by one person, the Holder, to do deals with traders. Oddly, she can understand their values - they must be in a Teaching Song. <g>
There are no fixed prices, everything is subject to bargaining.
Quality of goods and thereby stability of prices is maintained by cartels - the Crafts, which act like the historical Guilds on Earth. The HarperCraft for example only allows its members to sell items they have made that have been stamped as being of acceptable quality. It charges a fee to its members of half a mark per item that it sells for them.⁽⁵⁾
Coins range in value up to our paper money and beyond.
Manufactured goods are relatively more expensive than in an industrialised society. Metal goods are also more expensive.
My only surprise is at the cheapness of runner beasts. I'd increase the value given by a factor of 5 at least.

There is one crucial difference between Pern and Earth: Pernese coinage is nominal, that is to say unlike silver or gold it has no intrinsic value. I'm not convinced AMC has thought out the implications of this.

The medieval world on Earth did not suffer from inflation because silver has an intrinsic value. If prices rise then eventually people will melt their coins down as the silver content will be 'worth' more than the coin. Result: no coins in circulation. If prices fall the issuing authority will be in trouble, as it will 'cost' more to obtain silver than can be recovered by spending the coins made from it. Result: the authority stops issuing coins.

You think this is theoretical? During the middle ages England made several attempts to establish a gold coinage. They failed because they got the gold:silver conversion rate wrong. It was not until Henry VIII's reign that a successful English gold coin, the sovereign, was minted.

With a nominal currency inflation can and will happen. Prices and wages tend to rise in parallel, but rise they will. It is in fact in the best interests of society for there to be low but positive inflation.

'Control of the money supply' is the basis of monetarism, a popular economic theory in the 1980s, but all modern economies use it. Consider: the potential amount of nominal money in circulation is unlimited. The Bank of England can issue as many pound notes as it likes. So why does the British Government not pay off all its debts by printing money? The answer is that nominal money is itself a debt. Printing too much money causes the value of each note to fall, and the result is inflation. Printing not enough money causes problems too of course. The trick is to print just enough money but no more.

Coinage was in use on Pern within 250 years. How it was introduced we don't know, but at that time Pern was still centrally controlled by a Weyr-Holder committee backed by Referendums⁽⁶⁾

Our problem lies with the issuing authorities. Are they acting autonomously, each minting and spending as much coinage as they think they can redeem? Imagine if Walt Disney paid its employees in, hm, Mickey Mouse money, spendable on its products of course but hopefully acceptable elsewhere - as did every major company.
But there is no need to imagine this. Companies do issue their own 'money' - shares. And, as you may have noticed, the value of shares varies according to how well or how badly the company is doing.
Spotted the next step? 'Money', in the modern sense, is Government shares. It too changes in value relative to the currencies of other Governments.

On Pern we have several authorities issuing money. By the normal laws of economics these currencies should diverge in value. Some do seem to better than others, but the only option seems to be to refuse to accept particular coins.

DLG seems to be aware that there is a problem, but unfortunately its author is confused about economics. She proposes (p118) a Pern-wide price fixing cartel, in flat contradiction to the books where barter and bargaining are the norm. She also suggests that the money supply is being controlled, but doesn't say by whom.⁽⁷⁾

If the money supply is indeed being controlled - and I can't see any other way of having a single value for the Mark - then the obvious candidate for controller is the Smithcraft, which makes the dies for the coins. Anyone who issues more coins than the Master Minter decrees has their dies confiscated.
Is this workable? Are Pern's villains going to nobly resist the temptation to stamp out a few more? How does the Master Minter decide how many coins to assign to each issuer to mint? This requires a lot of data, a lot of data processing, and a burning desire to be the most reviled person on Pern. At some point in Pern's >2,000 Turn history a Master Minter is going to say 'Shards to this!', withdraw all the dies, and have just one currency issued by himself, at which point he adopts a very low profile and becomes the Secret Master of Pern.

Conclusion

Pern's monetary system is unstable. The best way of avoiding economic chaos would be to centralise the currency. Since 9th Pass Pern is already abandoning autonomy, now's the time to do it!

Thanks

To people on alt.fan.pern, at least one of whom is reading the right book when I'm looking for quotes and references! The opinions expressed here are however all my own.

Footnotes

"Only thirty-seconds, but with four I got an eighth, and Smithcraft at that." - Piemur in Dragonsinger Ch8. [Back]
"Iantine counted out the marks, sixteen of them. Farmer-marks, but good enough since he would be using them in Benden which didn't mind Farmer-marks" - Red Star Rising, end Ch5. [Back]
Dragonsinger Ch9. [Back]
Dragonsinger Ch8. [Back]
Dragonsinger Ch9. [Back]
Several meetings of this committee are described in Red Star Rising. It included all Lord Holders, Weyrleaders and Weyrwomen plus apparently coopted experts such as the Chief Engineer. Presumably this committee spit into separate Weyr, Hold and Craft groups at some point between 2nd and 6th passes.[Back]
"Only so many Marks are issued per Turn, to balance the supply of goods or to replace old, worn-out mark pieces" - DLG p118. [Back]
"I have good Harper Hall marks" - Robinton in MasterHarper Ch10. [Back]