What would a real "infinite money" cheat do to a Dungeons & Dragons economy?

Ask an Economist
Question: 

If I had a magical cup that could produce infinite quarters, $20 bills, and $100 bills, and I kept using it on spending splurges, what would that do to 1) my local economy 2) my state economy and 3) the national economy? Assume that this magical cup printed real bills on official paper.

I'm running a Dungeons & Dragons campaign, and my players found such a magical cup. I want their spending sprees to create a major conflict, but I want it to slowly unfold.

Answer: 

An interesting question that I’m not sure there’s a precise answer to, especially given my limited knowledge of Dungeons & Dragons, so I’ll try to unpack some of intuition around money supply.

I’ll start with some assumptions and what happens if we relax them:

1) This magical cup can print unlimited quantities at the snap of your fingers, without any storage constraints. If this were to take a non-negligible amount of time, then the authority in (2) may be able to react and adjust the supply for the whole nation or fight the players and take the cup (if that’s possible).

2) There is a central authority—outside of your control—in charge of the national money supply who can react to increases and decreases in circulation, albeit imperfectly. Supposing the money supply is fixed, and no such authority exists, then whoever has the cup effectively controls the supply. If the authority exists but can’t rapidly change the supply—frictions due to printing time, shipping, etc.—then there may be localized, short-term inflation.

3) You’re trying to start a civil war for the purpose of fragmenting the existing social structure to make the game more interesting.

4) You can measure the money supply and distribution in a locality/state/nation. Without this, you run the risk of over- or under-inflating. Also, if everyone has the same income, then cost transmission to individuals will be different than if the distribution is normal, for example.

The purpose of the above assumptions is to highlight the hidden complexities of this topic, particularly since it’s subject to unknown constraints. In general, if you have unlimited money, you can spend amounts vast enough to cause immediate hyperinflation, which could lead to destabilization. This too, however, isn’t guaranteed to spark a conflict, e.g. Weimar Republic.

The dependencies of local, state, and national economies are important to consider when choosing where to spend. If, for instance, the local economy produces all food for the state, and you double the local money supply, making corn roughly twice as expensive for purchase, then other localities may attack to take the corn. However, from the sound of things, you want to start a national war. My recommendation would be to isolate the localities and states that have an effective monopoly on producing essential goods (lumber, food, water, weapons, etc.) and increase the money supply by a large multiple, e.g. 5x. The idea is that areas producing other goods will have to eat the cost, and since lower earners have relatively less ability to pay, it will be more profitable to attack and take the expensive goods.

Answered by:
Ezra Butcher
Ph.D Student
Last updated on January 14, 2021