Four Fictional Economies That Don’t Make Sense

Dax and Quark play tongo, a Ferengi game.

Presumably that's gold-pressed Monopoly money.

In real life, we are always part of an economy. We exchange currency for goods and services, and we work in exchange for currency. Most of us understand the basics of economics, but even so, it’s easy get the details wrong in our worldbuilding. When that happens, audiences realize something isn’t right, even if they can’t quite name what it is. Let’s take a look at some fictional worlds that didn’t do a great job so that we can avoid similar mistakes in our own work.

1. Worthless Central Currency, Star Wars

Qui-Gon and Wotto. The mind trick here is on all of us.

As you may remember, in Episode 1: The Phantom Menace* the main characters end up stranded on Tatooine because a vital piece of their hyperdrive is damaged. Qui-Gon Jinn* goes into town to buy a replacement part and says he’ll pay for it with Republic credits. Watto the parts dealer then declares, “Republic credits are no good out here,” and that he needs “something more real.” This necessitates the zany plan involving podracing that we all know and love.*

The logic here is that Tatooine is at the ass end of the galaxy, outside the Republic’s borders, and so the central currency is worthless. Except that’s the exact opposite of how it should have worked. Currency from a strong, stable nation is worth more in impoverished or developing nations, not less. In real life, dollars and euros are often preferred over the local currency because the US and the EU are stable enough to always ensure their money has value.

Even if we ignore that Watto should have been salivating at the chance to get his hands on that stable central currency, it still doesn’t make any sense. Money changers always exist, even if they’re just freighter captains who sometimes fly into Republic space. They’d be happy to change out Qui-Gon’s money,* taking a healthy profit for themselves of course. 

This would be bad enough if it were contained in the Phantom Menace, but the idea of credits as worthless has spread throughout the Star Wars canon. Though never mentioned in a film again, it’s common enough in books and video games to have its own section on Wookieepedia. And all this because Lucas couldn’t figure out a real reason for his characters to be trapped on Tatooine.

2. Universal Bottle Caps, Fallout

A huge bottle cap in Fallout 4. Hmm. That’ll be hard to make change for.

In Fallout 1, the protagonist makes their way into the post-apocalyptic wasteland only to find people using old bottle caps as currency. That’s kind of strange, but there’s actually a good explanation. The merchants of a California town called the Hub needed something light to facilitate their trade, and so they went with bottle caps because there were lots around and they weren’t being used for anything else. Bottle caps don’t make great currency since they’re easy to forge and can suffer massive inflation if someone discovers a hidden cache, but the Hub’s merchants couldn’t afford to be choosy.

By the time of Fallout 2, the powerful New California Republic has started minting its own currency. Currency backed by a strong government will be far more stable than an ad hoc system by a collection of merchants, so this makes sense.

Fallout 3 is where things fall apart. This game takes place several years later and across the country in the ruins of Washington DC, but for some reason everyone is using bottle caps as their currency. This is really puzzling, because the people living in the DC Ruins had no contact with the Hub or anyone on the West Coast, so how did the idea spread that far?

More importantly, bottle caps would never work as a currency in the DC Ruins. Most currencies work because they’re intrinsically valuable, like gold and silver, or because a powerful authority declares them valuable, like paper dollars. In Fallout 1, the Hub was economically powerful enough to get others to use bottle caps. There’s no equivalent to that in the DC Ruins. Even the largest settlement, Rivet City, doesn’t work because it’s tucked away in a corner of the map and really difficult to reach.*    

Since the DC Ruins have no central authority to speak of, currency would need to have some intrinsic value, or wastelanders would never hand over their hard-earned salvage. Bottle caps are worthless on their own, so no one would use them.

As if this wasn’t weird enough, when we return to the West Coast in Fallout: New Vegas, the New California Republic is also using bottle caps. There’s no immediate explanation for why, but the deep canon explanation for this* is that the Hub merchants intentionally brought the bottle cap back because they didn’t like how the NCR was handling its fiat currency. That’s nonsense. Even a badly devalued fiat currency would be better than bottle caps. Bottle caps become worthless the moment someone learns how to make a metal press!  

3. Zero Transfer of Goods, Harry Potter

Harry Potter first seeing his vault of gold. Maybe spend some of that on a few grenades for old Voldy.

Harry Potter takes place in a world where magic people and non-magic people* live side by side and yet in separate worlds. The exact relationship is unclear, but we know that magic people can cross over to interact with and occasionally marry non-magic people and that the reverse occurs when a magic child is born to non-magic parents.

Despite this, there seems to be almost no transfer of goods between magic and non-magic societies. Arthur Weasley is the only native of the magic world we see who’s interested in non-magic stuff, and he’s considered an extreme oddball. This makes sense at first, since magic society is supposed to be so advanced that there’s nothing it could want from non-magic society, but that falls apart the moment fighting breaks out.

Simply put, guns are better for killing an enemy than any wand. Guns can be used by anyone, are impossible to dodge, don’t require years of study, and don’t announce the name of their attack before firing. That’s not even considering how useful close air support would have been to Voldemort during his attack on Hogwarts. But it’s not just guns. Cell phones and computers provide services that can’t be easily replicated through magic.

At the same time, magic people can do a lot of things non-magic people can’t. Magic health care is far superior, for example, and the ability to teleport instantaneously would be of great use to non-magic travelers.* There are also raw materials to consider. We know magic people value gold and silver; why not go and get some from non-magic people in exchange for some easy spell-work?

In a rational world, there’d be all kinds of cross-society trade, but in the books there’s none. Some of this could be chalked up to the Ministry of Magic deciding to forbid any trade with non-magic people,* but that would only stamp out official trade. Black markets would be everywhere, facilitating the exchange of iPhones for polyjuice potions. Instead, we have two completely segregated societies. This is made even weirder because we know that non-magic parents of magic children can convert non-magic currency into gold Galleons at banks. What do the bankers spend that non-magic money on?    

4. Scarce Post-Scarcity, Star Trek

A replicator from Star Trek. Computer, give me a giant pile of gold.

In Star Trek, the Federation is often referred to as a post-scarcity economy. That is, the Federation’s ability to create goods outstrips demand so much that anyone can have as much as they want of almost anything. This is accomplished through matter-replicators powered by antimatter and fusion reactors. Thanks to the holodeck, services can be produced as easily as goods.*

This assertion is backed up by statements from numerous characters about how humanity* no longer seeks to acquire material possessions and how the Federation no longer uses money. This makes perfect sense. You don’t need to seek material possessions when you can replicate anything with a word, and money would have no point in a world where everyone is unimaginably wealthy.  

And yet, the Federation still acts like its resources are very scarce. In the episode Ensign Ro, the Enterprise visits a world where Bajoran refugees are living in deplorable conditions. The Bajorans are so bad off that when Picard gives them some blankets, it’s a major improvement. So why are people living in such poverty right on the Federation’s doorstep? Why has Starfleet not offered some tiny fraction of its limitless output to make sure none of the Bajorans freeze to death at night?

Another example comes from the Ferengi, whose entire civilization is based on a caricature of capitalism. The Ferengi travel the quadrant looking to buy low and sell high, but that would never work with the Federation pumping out endless amounts of high-quality commodities. Why should anyone buy from the Ferengi when they can get the same product at cost from the Federation? And that’s not even considering that most spacefaring civilizations in the Alpha Quadrant seem to have roughly the same technological capabilities. Any of the Federation’s neighbors could easily reach post-scarcity themselves.

Even within the Federation, people act like they’re still in an economy of scarcity. The Enterprise is often sent on missions to secure trade deals or mining rights, but what would the Federation want with those when it can generate everything it needs internally? Perhaps there’s some vital material like dilithium that can’t be replicated, but if so, that’s all the Federation would ever need to acquire. If the Federation isn’t actually post-scarcity, in which case trade deals would still matter, how are goods and services transferred internally without money?

Economics are a tricky thing to portray in stories. Unless you’re also a world-class economist, you probably won’t get everything right, but it’s still important to look at the basics. Money is an aspect of your world that real people have far more experience with than swords, armor, or spaceships. If characters in your story spend money in a way that’s obviously illogical, audiences will notice.

(Psst! If you liked my article, check out my magical mystery game.)

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  1. Adam Reynolds

    For the Star Wars example, a junk dealer unwilling to take the equivalent of a credit card is hardly surprising, as is the problem of a Jedi on the run being somewhat careful about where he tries to use it.

    • Cay Reet

      Actually, a junk dealer not taking money (the currency is called ‘credit’ … it’s not a credit card) is strange. At that time, Tattooine seems to be under the influence of the Hutt who have a far-reaching criminal empire and surely would trade official ‘inner core’ currency for something used more often in the Outer Rim.

      It doesn’t really make sense … neither does it make sense the Jedi Order or the Republic don’t have some equivalent of a banking system which would allow people to get local currency wherever they need it. I mean, the Knight Templars invented the first traveller’s cheque around the 1300s.

      • SunlessNick

        An economist friend of mine interpreted the other way round, taking it as a signal that the Republic was already not stable and economically safe (coupled with the Trade Federation vs Naboo being roughly analogous to a US corporation attacking a US city).

        But the films certainly didn’t follow that thread.

  2. Quinte

    Another problem with Harry potter (and any story where the ability to do magic is partially genetic) is why isn’t everyone a magician given how significant a genetic advantage magic clearly is.

    • Cay Reet

      Just as there are children of non-magical parents born with magic, there’s the other way around – people called squibs who come from a magical family, but don’t have magic. In addition, since the magical and the non-magical world are very clearly separated, it’s easy to explain why there still are many people around who don’t have it.

      I should guess that children like Hermione or Lily are relatively rare, otherwise they wouldn’t take that much flak from the pure-bloods for being what they are.

      My guess is that Gringotts as the only bank in the magical world has mechanisms which allow them to exchange the non-magical money, either with a non-magical bank or, perhaps, with the ministry which uses the money when they need to interact with the non-magical world.

    • 3Comrades

      Not so sure that is true. Harry risks his life every year, in recent times there were death eaters murdering people for any reason. Muggles do have guns and lots of stories about Witch killing all over the globe. In some ways it seems more harmful to be magical as magical things only seem to go after muggles who are unlucky to notice them as opposed to actively against Wizards.

      Also, Evolutionary Biology is super complicated and often very poor genes are passed on due to various conflicts, which makes it hard/nearly impossible to predict.

      I also think Harry Potter suffers the Star Trek problem. What do they even need money for, really when magic can do so much it often seems like a weaker replicator.

    • Katie

      Why isn’t everyone a genetically gifted elite athlete?

      • Cay Reet

        Because a society only made up of genetically gifted elite athletes couldn’t survive. A society needs people with very different talents, too much specialisation leads to extinction.

        • Tee

          That’s not how evolution, or people work. Nothing stops someone from being a gifted athlete (at least in potential) and having other talents. Most brain specializations (i.e. most other talents than raw physical ability) don’t have a significantly increased cost that would pull against physical prowess in an evolutionary sense.

          Being a gifted athlete isn’t a specialization that stops you from specializing in other talents, basically.

  3. Ethan

    The Shoddycast did a very interesting episode on why the bottle cap as currency makes sense. If you are interested check out their YouTube channel.

  4. Bryony

    Idea George Lucas could have used: Sorry, but around here there’s only one of the super-special-part that you want for your ship. It’s really sought after, ’cause it’s super special and makes stuff go fast, so it’s part of the prize in this pod race. You can’t buy it, ’cause if we don’t give the prize we promised, our regular racers will get pissed and find somewhere else to race. Without our best racers, no one will come watch the race and business will be impossible.

    • GeniusLemur

      That still leaves the possibility of chartering a flight on another ship. I understand there are cantinas on Tatooine where you can charter a spaceflight with no questions asked for two thousand up front and another fifteen when you reach Alderaan, uh Coruscant.

      • Adam Reynolds

        The Empire won’t pay smugglers, the Trade Federation would. Remember what Qui-Gon said when they went to Tatooine in the first place. That if the Hutts discovered that Queen Amidala was there, they would immediately sell her to the Trade Federation, but that it was superior because the Hutts aren’t looking for her in the first place.

        Hiring a smuggler would change that dramatically.

        • JakeS

          Assuming you don’t withhold the destination until you’re in orbit and then seize the ship.

          It’s not like that would be any less morally questionable than the stuff they do to get their spares.

          – Jake

  5. shakil

    you know the harry potter books take place during the 90’s right?

  6. Bob Collins

    Re: Star Wars

    This is dependent on if the Republic is enforcing a Bretton Woods style trade system upon the rest of the galaxy. If the galactic economy was operating as a globalized (galax-ized?) system, then the Republic Credit should’ve had value on Tatooine in the same way that the US Dollar does in a place like the Congo. Wato’s reaction to an offer of credits seems to indicate the opposite of that, which makes me think that the galaxy is functioning closer to something like the age of colonialism, where empires are more closely guarding their trade (mercantilism, protectionism) to ensure that if you go to war with your neighbor, your economy doesn’t tank because it’s tied into trade with that neighbor.

    Another direction we could go is to assume that the Galaxy does have a highly globalized (again, galax-ized?) economy, but Tatooine doesn’t figure into that system. Could be there’s no resources there worth anything, or is too far away to expend the energy to get them if there are. Might also be that the Hutt Cartel is powerful enough to prevent anyone from simply coming in and taking stuff off the planet without their say-so, and the price is too high, while not having the resources to pull those resources out themselves. In any of those scenarios, if there isn’t a sufficient enough presence of trade connected to the empire, republic, or other organized entity that you’re attempting to use the currency of, you may as well be trying to pay with monopoly money.

    I don’t know enough about the Star Wars Universe to pull information to back any of that up with canon, but the exchange in that scene would lead me to think that the galactic economy isn’t the same as what we have here on Earth with our highly globalized and integrated energy, raw material, and manufacturing chains.

    Your credits also aren’t of value because we need to have a Pod Race.

    • Oren Ashkenazi


      So from various hard and soft canon sources, we know the Republic is THE government in the galaxy. There are other factions, but the Republic is the largest and most powerful by far.

      You could be right, and the Hutts might be engaged in some economic warfare with the Republic, but even then it makes no sense because we know there’s lots of spacetravel between Tatooine and Republic worlds.

      It’s like, if you go back to Paris in 1700 and offer a shit ton of English currency for the thing you want, you’ll probably be able to find someone who’ll take your money because they can gouge you on price, then send the money to England and buy goods or what have you.

  7. Kat

    The Harry Potter example forgets two important things: culture and law. The wizards are a subculture with different values than Muggles. That’s made perfectly clear in the very first chapter of the very first book. Harry’s non-magical aunt and uncle are very concerned with having a mass-produced, bland, consumer life — pretty much the opposite of the wizards, who value the handmade, using old things until they absolutely wear out, and individualism. And the wizards *do* take items from the non-magical world, all the time — they just don’t usually use said items for their original purpose often (public toilets as a secret entrance to the Ministry of Magic, or an old boot serving as a portkey).

    As for why wizards don’t cast spells to gain gold and silver from Muggles — the books spend quite a lot of time going over how that’s illegal. Casting spells for or against non-magical people in general is illegal except for very minor charms. The witch persecutions of the Middle Ages and Renaissance still exist in the Harry Potter universe, and there are strict taboos, both legislative and societal, to encourage wizards to keep their magical powers a secret.

    • Alex Lund

      You also forget that while witches are angry at humans for the persecution during the middle Ages the witches themselves are still culturally living in the middle Ages.

      According to the Declaration of human rights brainwashing is forbidden. But if you look at the Quidditch Worldcup and other things the witches have no problems erasing or changing memories of muggles.

      And as the Declaration of human rights is a Thing of the present and the witches disregard it they are still living culturally in the middle Ages as then it was who has the power decides what is right and what is wrong.

  8. Hunter-Wolf

    About the Star Wars case, Federation credits are obviously a currency with no inherent or universal value (like paper money in real life), so if Tatooine is outside Fediration borders and jurisdiction it’s highly likely its currency has little to no value there.

    To make it more understandable think of the first traders and explorers who wanted to trade with the governments and locals in far away lands, the ones who first reached China and traded with it couldn’t possibly give them anything resembling paper money of today cause they have no use for it, instead they traded goods and materials with universal value like gold and silver (specially silver for opium) which everyone had some use for, but if the British tried trading with the Chinese using paper money back then it would have never worked cause British paper money would have had ZERO value in China at the time.

    Even taking this further, if you go to a tribe in the middle of a jungle who still trade by barter they would laugh at you if you try to give them paper money, you need to give them something they value in the tribe in order for any trade to happen, you need to give them grain, cows, pottery, jewelry, .. etc etc in return for what you want, because these are the things that they can use to barter with the other members of the tribe and with other tribes.

    So it’s clear anyone on Tatooine will have nothing to do with Fed Credits, unless you want them to wait every time they get Credits for some trader to land and happen to accept federation credits, if they aren’t lucky they just can’t do anything else with that currency, hence why it’s not favored, which is clearly further imposed by the Hutts who don’t want to tie their economy to the federation’s.

  9. Nick Husher

    The Economics of Star Trek by Rick Webb is a good alternative understanding of the Federation economy:

    In short, of course the Federation is capitalist, it’s just a weird mutant form that doesn’t experience scarcity for all day-to-day concerns. The quickest analogy is that every Federation citizen has the equivalent of an enormous trust fund, and the details of currency transfer is handled behind the scenes.

    • James

      While the people may have all their wants met, that doesn’t mean that they aren’t wasteful. And the Federation doesn’t have limitless raw materials. They are no doubt trading large amounts of raw materials in return for the service of processing a tiny fraction into a finished form. The Federation is running an economic empire.

  10. Adam J. Thaxton

    As for Fallout, metal crimpers don’t exist, and the machinery needed to make the caps no longer functions, or is in the control of the caravans. Personally, I subscribe to the Jet Road Theory in regards to why they’re everywhere.

    New Vegas has a bloody basement that contains the remnants of a bootleg bottlecap operation, though.

  11. Jeff

    For Fallout NV. I was under the impression that NCR money was being devalued due to the war but was still worth more than bottle caps due to being backed by water (since their gold got stolen by the legion).

    Investing in caps is basically their version of hording gold. A last minute failsafe currency for if it all collapses in on itself.

  12. Richard

    Any “reputation” based “moneyless” society (as in Cory Doctorow’s “Down and Out in the Magic Kingdom”). These seem to be favored by people who want an economy truly free from government regulation, er, interference.

    There are two problems here.

    First, there are always going to be jobs that no one wants to do. Cleaning sewers, for example. In order for that necessary work to be done, you’re going to have to artificially inflate the amount of “reputation” (or whatever) that the worker is “paid” – and that means some sort of government regulatory agency to handle that.

    Secondly, a reputation is a very fragile thing. Institutionalized paranoia, knee-jerk reactions to incomplete or erroneous information, or even insane overreactions can ruin lives and destroy careers. Even things outside a person’s control (guilt by association) can affect a reputation.

    Good name in man and woman, dear my lord,
    Is the immediate jewel of their souls.
    Who steals my purse steals trash; ’tis something, nothing;
    ‘Twas mine, ’tis his, and has been slave to thousands;
    But he that filches from me my good name
    Robs me of that which not enriches him,
    And makes me poor indeed.

    – Othello, Act III Scene iii

  13. JakeS

    In Fallout 3, the bottle caps are enforced by the Brotherhood of Steel (who presumably collect protection fees from the various settlements).

    In Fallout: New Vegas, the caps are the currency of the water merchants, who presumably by that point have become a state within the state, not unlike the assorted East India Companies of our history. So also not implausible. Counterfeiting would be an issue, of course, but none of the three factional currencies in New Vegas seems particularly robust against that anyway.

    In Star Wars, I always read Watto’s line as indicating that the Republic really is coming apart in the seams, to the point where most of the galaxy no longer considers it a credible central government.

    For the Federation, well, there’s a difference between “post-scarcity” and “no resource constraints.”

    The Potterverse, I’m drawing a blank for. That really is a remarkably silly economic system.

    – Jake

  14. Dave L

    From “Harry Potter and the Methods of Rationality”
    Chapter 4: The Efficient Market Hypothesis

    So not only is the wizarding economy almost completely decoupled from the Muggle economy, no one here has ever heard of arbitrage. The larger Muggle economy had a fluctuating trading range of gold to silver, so every time the Muggle gold-to-silver ratio got more than 5% away from the weight of seventeen Sickles to one Galleon, either gold or silver should have drained from the wizarding economy until it became impossible to maintain the exchange rate. Bring in a ton of silver, change to Sickles (and pay 5%), change the Sickles for Galleons, take the gold to the Muggle world, exchange it for more silver than you started with, and repeat.

    Wasn’t the Muggle gold to silver ratio somewhere around fifty to one? Harry didn’t think it was seventeen, anyway. And it looked like the silver coins were actually smaller than the gold coins.

    Then again, Harry was standing in a bank that literally stored your money in vaults full of gold coins guarded by dragons, where you had to go in and take coins out of your vault whenever you wanted to spend money. The finer points of arbitraging away market inefficiencies might well be lost on them. He’d been tempted to make snide remarks about the crudity of their financial system…

    But the sad thing is, their way is probably better.

    On the other hand, one competent hedge fundie could probably own the whole wizarding world within a week. Harry filed away this notion in case he ever ran out of money, or had a week free.

    • Cay Reet

      Please tell me this is at least a fan fiction somewhere.

      • Bronze Dog

        I’m pretty sure it is. I see the name referenced a lot on TV Tropes.

      • Dave L

        Not sure the url will make it past the filters, but the original is at

        Don’t know if anyone made an additional fanfic where somebody actually tried the arbitraging.

        • JakeS

          The immediate practical problem with that arbitrage trick (which Rational!Harry doesn’t realize) is that Her Majesty’s Revenue and Customs would take an interest, and shortly come down on Gringotts like a ton of bricks. (Which means the Ministry would probably interfere with you before you drew that kind of attention.)

          There actually is a fanfic (Harry Potter and the Natural 20, sadly defunct) where the masquerade slips a bit and a muggle who is in the know sets the tax man on Lucius Malfoy. Hilarity ensues.

          – Jake

        • Cay Reet

          Thank you … I’ll definitely give it a read when I find the time.

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