by Geoffrey Hart
Grimhelm ran at the troll and at the last possible instant, zigged left, jumped atop a small rock, and redirected his momentum upwards behind the troll’s clumsily swinging club. This maneuver carried him just into reach of the troll’s exposed head. The Dwarf’s heavy axe buried itself to the eyes in the troll’s skull, dropping the beast like an iceberg calving from a glacier. Grimhelm leapt clear just in time, smiling cruelly at his foe’s corpse.
The smile faded, replaced by a frown and curses, when he found that even with Dwarfish strength, he had to struggle to retrieve his axe and when he did, the finely honed edge had crumpled until the weapon was more war-hammer than axe. Not that there was anything wrong with war hammers—Grimhelm was not the kind of Dwarf who was quick to judge—but he was a traditionalist, and only axes were truly Dwarfish weaponry in his opinion.
Sighing, he bent to loot the troll. To his surprise and delight, he found its pouch crammed full of gold coins. Usually you found a double handful of copper, or maybe a few silver if you were lucky. If he couldn’t get his axe replaced under warranty, at least he could buy a new one.
Later, he arrived at the forge and slapped his flattened axe down on the counter.
“You didn’t tell me you were planning to ruin my beautiful axe waling on trolls”, Strongforge grumbled. “I explicitly told you: no waling on trolls. I mean, who fights with trolls these days? Where did you even find one?”
Grimhelm growled at the smith, who held up a pacifying hand.
“All that’s to say that I can’t simply give you a new axe. But I can offer you a very good price on this one.” From beneath the counter, he pulled an even more beautiful axe and handed it to his customer. Grimhelm swung it in a circle, enjoying its weight and balance. Sensing victory, Strongforge named a price. Only years of rigorous practice prevented Grimhelm’s grip from slackening, as this would have released the axe to embed itself in a wall of the forge—or in the smith.
“Surely you jest.”
The smith shook his head. “Wish I were jesting, but you can’t imagine my costs. Iron’s gone through the roof, and don’t even start with me about mithril and adamantium. It’s all I can do to keep the forge lit. Anyway, that’s my price. Take it, or stick with your new”—he frowned and pushed the ruined axe across the counter—“war-hammer”.
Well, at least he’d been wealthy for a few moments, he thought to himself. Grumbling, Grimhelm tipped out the troll’s pouch, counted out the requisite number of coins, and pushed them towards the smith, who handed over the new axe.
#
It was a truly lovely axe, but as he passed it around the table to be admired, careful not to knock any of the ale mugs to the tavern’s floor, he bemoaned the price.
“You’ve been away adventuring,” smirked Rockhewer, making room for a tray of full mugs and letting the waiter remove the empties. “Wait until you see the price for the ale!”
The waiter turned his back on the Dwarfish frowns and sped off to serve another table.
“He’s right,” Grimhelm observed. “Everything’s more expensive. I’ve no idea how anyone copes. What’s going on? Is it another plot by the Dark Lord? I thought we’d beaten some sense into him the last time?”
Sharpaxe, who was fondling Grimhelm’s new axe in an acquisitive sort of way, looked off into space. “Maybe,” he mused. “It’s something subtle and it has His stench. But honestly? I’ve no idea what’s up.”
The waiter had returned. “Blame the humans,” he observed. He rolled his eyes at the Dwarfs’ incomprehension. “Oh, it’s a Dwarfish problem too. After all, it’s mostly our fault for mining so efficiently.”
Grimhelm frowned. “Come again?”
“We flood the markets with fresh-minted coins, not to mention older ones hoarded by vermin like trolls. Merchants, not being fools, raise their prices to absorb some of that newfound wealth. Everyone else raises their prices so they can afford to pay the higher merchant fees. This cuts into merchant profits, so they raise their fees again. Then kings and other defilers of currency melt down the gold and mix it with lesser metals, forcing merchants to raise their prices to ensure they receive the same amount of buying power as before. And so it goes, prices steadily spiraling upwards—sometimes by great leaps and bounds when you fellows strike a particularly rich vein of gold or some king needs to finance a war.”
Dwarfish heads nodded. “That makes sense,” Grimhelm agreed. “But what can we do about it? If we mine faster, we exacerbate the problem, but if we mine slower, prices still increase because now the merchants want more of the smaller supply of coins. Either way, we’re buggered.”
“Not necessarily,” the waiter replied, eyes glowing with secret knowledge.
“You have a solution?”
The waiter held out an empty palm and grumbling, Grimhelm deposited a gold coin. After biting it to ensure it was real gold, the waiter pocketed it and began speaking.
#
Grimhelm tipped back his heavy iron helm to reveal sky-blue eyes set deep in a craggy face. Steam rose from where the dragon’s fiery breath had baked off a thick layer of sweat, leaving salty rime behind.
“I said, Dragon, that we need to talk.” He raised his shiny new battleaxe. “Unless you’d prefer that I lop your head off at your shoulders and make it into a table ornament?”
The dragon was frankly bemused. None had ever survived a direct hit from his flame, but then again, he’d never faced one of the Dwarf elders, equipped with enchanted mithril armor. “All right, Dwarf. You have five minutes.” Looking at the axe, the Dragon resolved he’d be long gone by four minutes if the Dwarf hadn’t persuaded him to stay by three. One didn’t live for centuries taking chances with fireproof, dangerous-looking Dwarfs.
Grimhelm smiled coldly. “Wise choice, oh mighty Wyrm. Here’s the problem we face: We Dwarfs delve in the world’s deep places and return, bearing gold and platinum—” he patted his armor “—and even mithril sometimes. Then, there are the gemstones.” Deep in his eyes, a ruby spark kindled. “I don’t think I have to tell you how exciting that is.”
The Dragon nodded. “When I must perforce leave my cavern, I dream until my return of the hoard I left behind. Were it not for those dreams, you’d never have taken me by surprise.”
“Be that as it may,” Grimhelm continued. “We face a problem: we’re victims of our own success.”
The Dragon’s brows furrowed. “How can it be possible to have too much gold?”
One side of the Dwarf’s mouth twitched upwards. “Attend, and I shall enlighten you. May I sit? It’s been a long walk to reach you.”
“And you with such short legs.” The dragon held up a paw to indicate it was joking, then nodded its head towards a flat-topped rock.
“My thanks.” The Dwarf sat with a clinking of armor. “The problem lies in a balance between supply—the gems and precious metals we extract—and demand—the merchants who sell the things we need. When it’s perceived that we have too much gold, the merchants raise their prices to lighten our burden. To maintain a satisfactory supply of gold with which to warm our halls, we must therefore mine more gold, which leads the merchants to raise their prices further. And so it goes, in a never-ending vicious cycle. The humans have a word for it.” The Dwarf spat copiously on the ground. “They call it inflation.”
“I can see that would be tiresome,” the dragon replied, keeping a careful eye on his mental timer. “But what has it to do with me?”
Grimhelm paused a moment to draw a mithril flask from his belt pouch. He took a long sip, hesitated a moment, then offered it to the dragon. When the dragon raised a single skeptical eyebrow, he shrugged sheepishly and put away the flask. “What it has to do with you is this: if you were to withdraw large amounts of the gold from circulation, the quantity would then decrease and each coin would become proportionally more valuable, which means we’d need less of it for our purchases.”
“Which reverses the cycle and restores balance to the Dwarfish—and Human and Elven and Hobbit—economy?”
“Until the Humans decide to defile the coins again,” the Dwarf replied. “Which they do with dismaying frequency. But a little persuasion and zealous monitoring should solve that problem. All we need is somewhere safe to store the gold.” He gestured at the mounds of gold only partially concealed by the Dragon’s bulk. Noticing the acquisitive look that had entered the Dragon’s eyes, he hastily continued. “And by safe, I mean temporarily. That is, no Dwarf should casually undertake to liberate the coinage to support some foolish purchase or other.”
“Enlightenment dawns,” the dragon exclaimed, a cupiditous expression spreading across his face and kindling a fire in his eyes. “And where could be safer than a dragon’s lair?”
“Precisely. There’s one catch: no one must ever hear of this arrangement. If the word gets out, others would sabotage our idea by taking advantage of their knowledge to wager on the currency’s value.”
The dragon mused a moment. “Keeping silent will be no problem; it’s not like I get a lot of traffic here, and most… visitors… aren’t here to gossip.” The dragon licked its lips with a thin, forked black tongue. “And what would my share of the proceeds be?”
Grimhelm grinned, face relaxing. “Ah, that would involve some negotiation.”
“Let us first begin by redefining temporarily as semi-permanently.”
The Dwarf snorted. “I see this may take some time.”
“Fortunately,” the dragon replied, “we are both long-lived beings who have ample time to reach a mutually satisfactory conclusion.”
~
Bio:
Geoff Hart works as a scientific editor, specializing in helping scientists who have English as their second language publish their research. He’s the author of the popular books Effective Onscreen Editing and Write Faster With Your Word Processor. He also writes fiction in his spare time, and has sold 78 stories thus far. Visit him online at www.geoff-hart.com.
Philosophy Note:
Money-supply inflation is Milton Friedman’s idea; there are other possible causes, and in real-world economics, nothing’s ever as simple as this tale. This story arose from a discussion with Darrell Schweitzer of a blog article by historian Bret Devereaux on the economics of fantasy coinage. Darrell noted: “I have yet to see a fantasy world deal with the concept of hyper-inflation. Inflation can also happen when too much currency floods the market… If all that gold hoarded by Smaug ever got into circulation, Middle Earth would have to switch to the turnip standard. It may be that the fantasy dragon sitting atop the hoard of gold is a device for controlling inflation, a sort of Ft. Knox, whose function is NOT to let that gold get out…”
