The Tip.It Times

Issue 199gp

Inflation and the Runescape Economy

Written by and edited by Tip.It

I know, this is a topic that's come up before. It will probably come up again as the RuneScape Economy is something that your Editor finds endlessly fascinating (your Editor, in case you hadn't noticed, is a genuine Nerd!). The RuneScape Economy has been designed to be inflationary, and short of a major overhaul of gameplay will continue to be so. Sorry about that, but inflation is here to stay, whether you, or I, like it or not.

Let's start at the beginning with the causes of inflation. Quite simply, when the money supply increases faster than the supply of goods there is inflation, and the prices of goods and services goes up. If the supply of goods and services outpaces the money supply, then there is deflation and the prices of goods and services go down. In an ideal world, the money supply and the available goods and services would be pretty much equal and prices would remain stable. That's it in a nutshell.

In the real world, up till the 1920s, the USA was on the gold standard. People could own gold coins, and a dollar had a fixed value in gold (the dollar was originally defined as 371 grains of fine silver, and if you come across an old dollar coin - not the new gold-like ones - it should weigh pretty close to that depending on the condition it's in). You could save money under the mattress or under the floorboards and 10, 15 or even 20 years later, you could buy pretty much the same amount of stuff for that dollar as you could have when you first stashed it. When the US went off the gold standard, inflation started. Now, every time the government gets short of cash, it buys some from the Federal Reserve (a private bank, not part of the government despite its name). This extra money coming into circulation unbalances the relationship between goods and money, so prices go up and we have inflation. Some people have called inflation an "invisible tax" -- because it's how the government gets "free" money from Mr. & Mrs John Q. Public. In other words, from regular, everyday, Americans.

The other thing that can drive prices up in the real world is amount of goods available. If there is a bad year for the coffee harvest for example, the cost of coffee goes up. A bumper crop means lower prices for the consumer. The price of oil is currently going up almost on a daily basis because of the war in the Middle East. Not so much because it's a war zone, but because of the damage done to the infrastructure by the war - broken pipelines, disabled refineries, etc. have reduced oil production by about 50%.

So what is the unbalancing factor in the RuneScape Economy? High Level Alchemy. High Level Alchemy allows players to make hundreds, or even thousands of items, then convert them into gold at the high-end of the shop price range. Any player who gets to level 99 Fletching has probably made enough yew and magic bows to outfit every other player in RuneScape. The same with crafting. I recently levelled up my crafting by making about 1,000 pairs of blue vambraces. I haven't finished high-alching them yet because I need more Nature runes. I'm too cheap to buy Nats and too lazy to make them, so I'm perpetually short of them. Though with the addition of the Fairy Ring Network, I just might make a few. Yeah, I know, "it's quicker through the Abyss", but Your Fearless Editor has an intense dislike of the Abyss, or rather the approaches to it. Something to do with those PKers that are always hanging around. I admit it, I'm a chicken. But I digress...

So back to inflation and the economy. High Level Alchemy is necessary to the game. OK, we could all sell our piles of crafted gear to the shops for a lot less money, but alching them not only gives us more money, it also takes the goods out of the game, thereby ensuring that mid-level players who want "the good stuff" have to do a little work to get it. The mechanics of the game require that a player make initally dozens, then hundreds, then thousands, and ultimately, hundreds of thousands of items to level up a skill, whether it's cooking, fletching, crafting, smithing, or construction - it's all the same. Do it and do it again until you can't stand it any more. Then do it a whole lot more. Something has to be done with all the stuff we make. Food is pretty much a steady supply and demand situation. Most people will eat a large proportion of the food they make while in various combat situations. Some people such as PKers who focus on combat to the exclusion of pretty much everything else do buy food, but I believe they're the exception rather than the rule.

However, as with many things in life (and RuneScape) it's not all inflation. The cost of rare items dropped by monsters (whips, dragon armour, etc.) is falling - slowly to be sure, but still falling. As more players reach the skill level that will enable them to get these items, more will come into the economy. Last time I checked, there were only a couple hundred players capable of crafting full rune armour, so there's unlikely to be a glut on the market. But again, as more players reach level 99 smithing, more armour will be made.

Where inflation is still rampant is in the cost of irreplaceable rares - the special one-off drops that can't be replaced: party and santa hats especially. These will always tend to go up in price as no more of them are coming into the economy, while a few are being destroyed (yes, if you die with your santa hat on and no one picks it up, it does disappear!). They are always going to be more people wanting them than there are items available. Especially when they become status symbols. Inflation in this area is unavoidable.

That wonderful money-pit, Construction, has taken some of the heat out of the economy. A lot of people have dropped a lot of money on building very nice mansions. This will, I think, be a good thing for the economy in the long run, as it will continue to counteract some of the inflationary pressures. Unlike the rares market, which simply acts as storage for large numbers of gold pieces, Construction actually takes large amounts of money out of the game, in sawmill fees and staff wages as well as the cost of items like cloth, marble and gold leaf.

I'm not sure that it's possible to design a game like RuneScape, where skills require so much repetition to earn experience, that isn't inflationary in nature. It might be fun to try though. In the meantime, I guess we'll all have to live with it and, just as in real life, the rich will get richer and the rest of us will struggle to keep up.

Now if you'll excuse me, I need to make a few hundred Nature runes so I can high alch these blue vambraces and go pay my cook. At least she can make a good pizza!

Do you have any thoughts or comments about what you've just read? Want to discuss this article with your fellow Runescapers? We invite you to discuss the article in this forum topic.

Do you have any thoughts or comments about this week's articles? Want to discuss these articles with your fellow RuneScapers? We invite you to discuss them in this forum topic.


Will you use Menaphos to train your skills?

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