Imperial crowns and other currencies in “Flat Black”

Most colonies issue and use their own currencies. On worlds that are politically united and economically integrated there is usually a single currency. Politically fragmented worlds, especially those with several recognised colonies on them, usually have one currency for each colony. But of course there are bewildering arrays of exceptions. In some colonies there are multiple competing private currencies, or multiple competing currencies issued by different parts of the government. Some colonies that are poorly globalised and do not constitute economically optimal single-currency areas issue multiple currencies for different areas and allow free exchange between them at floating conversion rates. Some use a circulating specie (currency made out of precious materials) and some use a bullion standards (currencies “backed” by government reserves of precious commodities). Many of the poorer colonies use commodity money, or credit economies settled in specified commodities. On Tau Ceti each of the eight colonies issues écu as a fiat currency: the cash has an obverse specific to thecolony that issued it and a reverse specific to the denomination, but there is no distinction made in accounting balances or financial instruments, issues of cash are controlled by a single inter-governmental board, and all the notes are “printed” in the same factory. No-one else can figure out why Tau Ceti does it that way.

From all that confusion, what a relief to turn to the simple sanity of Imperial crowns.

The currency issued by the Empire is the Imperial crown. The Empire doesn’t collect taxes, so Imperial crowns are effectively backed by the fact that they are what you need to pay interstellar fares and freight, and to buy land on new worlds. Fares and freight rates are set by the board of Imperial Spaceways, land prices through auctions — the steady growth in interstellar traffic (driven by population growth, economic development, and spatial expansion) has combined with technological improvements lowering the cost of spaceship performance in such a way that freight and fares have actually fallen over the last century, but Imperial servants’ salaries and the price of consumer services and commodities in Imperial Direct Jurisdiction have been kept constant.

Exchange rates between the Imperial crown and various colonial currencies varies for all the usual reasons, but the general trend is that the the Imperial crown is at purchasing-power parity with the Tau Cetian écu One crown exchanges for about 2.65 écu, and €2.65 will buy about the same bundle of consumer commodities and services that ₢1 will buy. Iteran exu are another currency at purchasing power parity with the Imperial crown. For other currencies, the trend is for the real exchange rate¹ to fall exponentially with development level²: each +0.5 to DL reduces the exchange rate¹ by a factor of 0.84, +2 to DL doubles the exchange value of one hamburger-worth of the local currency.

SNIPPED: Digression on the small-country model of international trade and the prices of imports and local products in Flat Black, and the importance of the transport being provided by a DL 8.5 economy, snipped.

The Empire issues Imperial crowns and uses them to buy colonial currency and financial instruments. It then spends the local currency on the colonies where it is current, buying components and supplies for its spaceships, buying things to ship to other colonies and use in its aid programs, and buying local materials and hiring locals to work on its aid programs. Imperial servants are paid in Imperial crowns, and with part of their salaries they buy imports, or buy foreign exchange to pay their expenses in the colony they live and work in. That’s the supply of Imperial crowns to the foreign exchange markets.

Colonials buy Imperial crowns on the foreign exchange markets, and use it to pay freight and fares, to buy land on new settlements, and to use as a reserve and store of value³.

Some colonies use Imperial crowns as their local currency. New settlements start out using a lot of crowns, because immigrants bring spare value in cash and tend to be initially suspicious of the local valuta that the provisional governments supply. Other colonies where either Imperial aid expenditures are a large proportion of the economy, or where the monetary authorities⁴ are too inept to provide a functional medium of exchange Imperial crowns become the de facto medium of exchange⁴ or even de jure legal tender.

Most Imperial crowns exist only as accounting balances. Imperial servants expenditures in IDJ are paid by digital funds transfer, financial institutions buying crowns for use in international trade accept credits to their balance at the Universal Bank. Imperial Spaceways and Eichberger Realty accept digital funds. But cash is printed.

Denominations less than one crown are produced as round tokens similar to coins, in values of one mill, five mill, one cent, five cent, one dime and five dime. The tokens are built up of layers of hard transparent material with different and varying refractive indexes⁵ and tints, producing distinctive and striking appearances through interference effects: the tokens are three-dimensional holograms that present different three-dimensional images in different directions. One side shows a sequence of busts morphing from the face of Tomitomo Eichberger through the succeeding emperors to the current emperor as you tilt it up and down, the image turning as you turn it side to side in such a fashion that it looks as though the bust is staying still as the coin turns. There is a bit of text that counter-rotates out of the plane of the token, and changes colour as the token is tilted. There is a background pattern at optical infinity: red in one mill tokens, yellow in five mill, green in one cent, cyan in five cent, blue in one dime, and magenta in five dime coins. The other side shows a golden acorn when seen front on, that grows into an oak tree that blossoms⁶ and sets golden fruit as you tilt the coin, but differently as you rotate the angle of view. The denomination is superscribed so that it appears to be in front of the face of the token. At optical infinity behind the image is a background coloured the same as the other side, with the text of the Imperial Currency Act section on the penalties for forgery written on it. The tokens are all different sizes ranging from the one mill (16 mm wide and 1.2 mm thick) to the five dime (32 mm wide and 2.5 mm thick) in successive 9% increases in linear scale. The edges are not upset, but they are milled, with a palpably different milling on each denomination (for the convenience of users with visual impairments). The surfaces of the two faces are embossed with the denomination in Braille. These tokens are difficult to forge convincingly at low tech levels.

Denominations of one crown and above are issued a rectangular notes of a tough composite film with a palpably distinctive surface texture that makes, faintly, a distinctive sound as you rub it between your fingers. The notes have transparent sections and white-light-hologram sections, and are printed with intricate designs that change depending on the viewing angle through being printed in inks that reflect various colours at different angles. (These look weird when the notes are bent; schoolboys make jokes.) They have fluorescent inscriptions that are characteristically different under different illuminants. They have optical fibre logic embedded in the material that can be cryptographically interrogated by “fake-meters”. When you gently tug the ends of a note it produces a flash of luminescence of a colour characteristic of the denomination. The notes are 66 ⅔ mm wide; their length ranges from 135mm for the ₢1 to 161mm for the ₢100 in steps of 3%. Each note is 1/1000 times as thick as it is long (contributing to a distinctive feel of the denominations between the fingers). Denominations are distinguished by a tactile feature near the edges, for the convenience of users with visual impairments.

The artwork on notes of the Imperial crown is intricate, with patterns at different scales limned in subtly different tones, shades, and hatchings. Each denomination of notes has a very obvious and distinctive main colour, as follows:

denomination length predominant colour luminescence
₢1 135 mm red & maroon red
₢2 139 mm cyan & teal orange
₢5 143 mm orange & tan yellow
₢10 147 mm blue & navy green
₢20 152 mm yellow & olive cyan
₢50 156.5 mm magenta & violet blue
₢100 161 mm green & bottle green violet

The purchasing power of one crown in Imperial Direct Jurisdiction is called one Standard Value Unit (¤1). It is approximately the price a a meal at a fast-food restaurant —say, of a Big Mac, regular fries, sundae, and regular drink at McDonalds. The purchasing power of ₢1 in a colony can be considerably higher owing to real exchange rate effects: eleven times as much on Surikate, for example.


¹ Like all economists, I do exchange rates backwards. The exchange rate on a colony is the price of foreign exchange (i.e. Imperial crowns) in the local currency, not the value of the local currency in foreign exchange.

² In my hidden modelling the development level is a continuous variable.

³ Imperial crowns are only a good store of value because interstellar freight rates and fares are slowly declining. Their exchange values tends to rise in declining economies and fall in advancing ones.

⁴ Or standard of value. There are some economies with low development and high trust where Imperial crowns are treated as the commodity currency in a credit economy with settlement in crowns.

⁵ I think of it as variously-doped corundum, but I’m not going to stand by that if it turns out to have technical shortcomings.

⁶ Artistic licence.

On some colonies, for example where they use specie currency and private mints, or where they use other private currencies and trust in them is not good, the Imperial residence sets up a mint and pays locals in its own specie. The Imperial Treasury grumbles about that a bit, and the Residents evade its strictures by a rigid pretence that they are dealing in bullion. The usual practice is to make silver and gold coins 920 fine for hardness, with 1% of geranium in the silver coins for tarnish resistance.

The obverse is stamped with a bust of the current emperor, with an encircling inscription including the Emperor’s name, the date, “IMPERIAL RESIDENCE ON”, and the name of the colony. The reverse has an inscription denoting the fine metal content in grams, surrounded by an oak wreath (on silver) or alternating stars with acorns slipped and leafed (on gold). The edges are upset and milled with chevrons

Coin sizes follow local standards. Where the circulating currency is below the local official standard, the official standard is followed. In some colonies local custom or law requires fineness standards other than the Empire’s habitual .920, or particular marks and inscriptions. In such circumstances the Resident complies. For example, on Nahal the Imperial Residence issues silver coins .925 fine, and the obverse has a bust of the Resident and the inscription <resident’s name>, IMPERIAL RESIDENT ANSWERS FOR THIS COIN.

“Germanium”, I hope. :slight_smile:

My stock answer to “what about better 3d printers etc.” is “whatever technology criminals can get hold of for forgery purposes, the Mint can get hold of a better one for anti-forgery”. I don’t see a note of serial numbers on the notes, but I assume they get logged when the note goes in or out of a bank.

Is it really useful to have mill-denomination coins? What roles aren’t served by “here’s a cent, keep the change” or “it’s free”? Even on Surikate?

I trust that there are currency reformers who want to have the Imperial notes rearranged into colour rather than luminescence order.

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Very much so. I’d like to blame autocorrect, but I don’t think I can.

My stock answer to “what about better 3d printers etc.” is “whatever technology criminals can get hold of for forgery purposes, the Mint can get hold of a better one for anti-forgery”.

Exactly so.

I don’t see a note of serial numbers on the notes, but I assume they get logged when the note goes in or out of a bank.

I merely forgot to mention them.

Is it really useful to have mill-denomination coins? What roles aren’t served by “here’s a cent, keep the change” or “it’s free”? Even on Surikate?

Probably not. A mill is worth about 1¢ Australian, and we withdrew those over 20 years ago. On Surikate it’s worth 11 times as much: small change that you’d at least bend over to pick up.

Consider the mill and five-mill coins statutory but not issued.

There are all sorts of nutters out there.

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The Imperial crown started out as an instance of ForeSight’s SVU (standard value unit). That is defined in ForeSight first and best edition as approximately the purchasing power in consumer goods of US$2.50 in 1985 “or the price fo a decent meal at McDonald’s, if such a thing is possible”.

Turning to the invaluable Measuring Worth currency converter I find that US$2.50 (1985) is something like

  • US$4.95 – US$5.70 today, depending on whether you favour the CPI or the GDP deflator.
  • £3.20 – £3.99, depending on whether you favour the RPI or the GDP deflator
  • A$9.60 – A$9.99, depending on whether you favour the CPI or the GDP deflator.
  • G$3.88 – G$4.39, assuming that the GURPS 4th ed. dollar is US$1.00 (2004).

So what if I were designing Flat Black on a clean slate, and forgetting about all the ForeSight conventions and Vancecisms? I might then aim at making the Imperial crown about the same amount of money as a pound sterling was to a British colonial official in about 1889. That would be about

  • 23.6 SVU
  • G$104
  • in current money
    • £109
    • US$140
    • A$206

Or, for a very obscure joke, I could make it exactly one quarter as much.

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Are there any cryptocurrencies?

Very likely quite a lot. I suppose that most highly-developed economies would use cryptographic features to secure the ledgers of their digital currencies. But the signals latency of weeks to months between systems probably precludes decentralised control and record-keeping from spanning more than one system. What there are probably not many of is private currencies.

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There’s a lot of interesting implications to the size of space. The standard currency will probably always remain, because you can’t tweak it. The minor grumbling over plastic notes encountered in the UK would be nothing to the danger of changing the colour of a coin in this system. Of course, it’s probably designed this way to reinforce the importance of a centralised government system, regardless of its actual daily functions.

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The possibilities for fraud (“oh, yes, these are the new notes, give me your old ones for secure destruction”) are small but not entirely ignorable.

In any communication-no-faster-than-ships setting, I think one has to assume that economies of solar systems are largely independent on a day-to-day basis, and one thing an empire can offer that people will really appreciate is some degree of safety when conducting a cross-system commercial venture.

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Pure safety against threat of physical destruction or misappropriation or also some form of administration around comparative advantage? Granted re-insurance of some kind could be both.

I was thinking simply of basic contract law enforcement: you do a deal with a company in another star system, with a completely different legal system, but (by some imperially-imposed system) if they don’t abide by their end of the contract you have some practical means of trying to get restitution without having to go to the time and expense of travelling there.

This doesn’t have to be perfect; it just has to work better than “the local law always favours the local” so that people are prepared to take the risks of engaging in interstellar business arrangements.

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Some kind of intergalactic rules of acquisition?

That’s right. It’s not just a matter of “people would really appreciate” — the experience of economic stagnation and poverty in countries without efficient commercial courts suggests that interstellar commerce would be straitly inhibited without some effectual means to ensure the timely delivery of inputs and collection of products. The smug bits of the Empire don’t care whether the rich colonies can specialise effectively to exploit potential economies of supra-planetary scale, but Spaceways is paying everyone else’s ticket, and burgeoning interstellar transport volumes mean burgeoning Imperial revenues.

In Flat Black I suppose that some advanced colonies have instituted alternatives to the allocation of factors and intermediate products by way of markets, prices, and contracts, and even that some of those work reasonably well. But no such system applies to interstellar commerce.

It would be a considerable advantage to any colony and its merchants if their commercial courts were trusted (and their currency accepted!) by their trading partners’ merchants. But most colonies are not well-governed enough to resist the temptation of stiffing foreigners on individual deals. So most interstellar trade is probably governed by contracts under Imperial commercial law, with contracts enforced by Imperial commercial courts and delivery in Imperial spaceports.

On one hand, as I understand the theory of the firm, large corporations do mostly operate by a form of central planning. On the other hand, each firm is an island of central planning in a sea of markets (just as each family is an island of communism in a sea of markets), and you need the knowledge of prices to keep the planning from becoming inefficient. On the third hand, I suppose you could have the interstellar economy as the sea and have some worlds as single huge islands, though that would probably work better with less populous worlds (see Haldane’s “On Being the Right Size”).

Now I’m thinking of the Opium Wars and wondering if there are any analogs.

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That’s about right. Theorists of Industrial Organisation hold that large firms may engage in horizontal integration to exploit economies of scale and to create market power, but that vertical integration is for ensuring supplies by command in an environment in which transaction costs are significant and external suppliers unreliable. There was a management fad in the Eighties for “internal markets”, “internal customers”, and “out-sourcing” of “non-core business”, but it was significantly misguided and had its failures. (They even tried it in the Australian Public Service in the Nineties. The results were poor.)

We both understand the Problem of Economic Calculation, and I believe that I have told you the joke about Khrushchev and New Zealand. But Flat Black’s purpose is neither didactic nor persuasive, and it is quite contrary to my intention with it to depict everything as being done well. I am prepared to admit that some colonies with advanced understanding might be able to run highly productive, technically efficient, command economies without even rationing by consumer prices, and I am more than happy to use such places as settings for my usual dystopian adventures without lecturing my players about Pareto-efficiency and the allocative role of the price system.

As for the Opium Wars: I am trying to strip out the history from my presentation of the setting, but that is one of the examples that I used to use of the kind of pirate activity that motivated Eichberger to create his foundation. In the long version of the history I wrote that Seeonee, Tau Ceti and New Earth even went so far as to build interstellar warships. (To protect, it was said “their migrants, their merchants, and their missionaries respectively”.) Tau Ceti’s “protecting” its merchants consisted mostly of overbearing the customers’ import taxes and contraband laws.

I know of it a joke about Gorbachev, but I don’t think the essence had changed.

What I was wondering was more whether there were commodities where the Empire said, “Okay, this is legal under Imperial law, so you can’t stop people from importing it into the Imperial Freeport.” Opium seems to be a historical example. (The accounts I’ve read seem to say that the Chinese Empire’s concern was not so much protection of public health, as mercantilism—fear of having silver leave the empire and diminish its wealth, conceived as consisting in having lots of specie rather than in Smithian fashion as having productive labor—perhaps mixed with a little sense that foreign goods were inherently morally corrupting.) I suppose the Empire could say (a) these goods can be brought in and you have to let Imperial merchants sell to your people, or (b) these goods can be brought in and keeping them out of your people’s hands is up to your customs agents at the boundary of the freeport, or © we won’t let our merchants carry anything to your port that’s against your local laws; is there a fourth alternative?


(back when it was worth reading)

My own feeling is that, particularly in a game, you can make practically any economic system work if (a) you have enough people trying to make it work rather than ripping it off for personal gain and (b) you have some sort of external trade that can make up shortfalls of things you don’t produce, as long as you produce something tradeable.

In Lying for Money, Dan Davis talks a fair bit about cultural trust levels - the high-trust cultures like Greek shipping bosses who can do a huge deal on a handshake, but only with each other, compared with low-trust cultures like the ones most of us operate in, where you can do a deal with anybody because you have some hope of restitution if the other party turns out to be a bad actor. Low-trust gets you a lot more economic activity. (And the cost of zero fraud is way higher than most people think it will be.)

But I do wonder whether you might get something similar among planets in this setting – perhaps not to the extent of not favouring foreigners over locals, because that’ll always be a temptation, but perhaps a place that doesn’t do much trade itself, so can be regarded as a trustable dispute resolver at least by relatively local planets? That can then get you a small bubble of worlds which can trade readily with each other.

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Probably not, but it’s funnier about Khrushchev. I don’t think Gorbachev can have believed that the USSR was going to bury the rest of us.

What I was wondering was more whether there were commodities where the Empire said, “Okay, this is legal under Imperial law, so you can’t stop people from importing it into the Imperial Freeport.”

No, I don’t think so. They have heritage in the area of “preventing abusive trade”, and I don’t think the Senate and the Council could ever agree on any sort of goods that ought to be forcibly imported. The Senate is too much about protecting the interests of colonial governments.

I suppose the Empire could say (a) these goods can be brought in and you have to let Imperial merchants sell to your people, or (b) these goods can be brought in and keeping them out of your people’s hands is up to your customs agents at the boundary of the freeport, or (c) we won’t let our merchants carry anything to your port that’s against your local laws; is there a fourth alternative?

The Empire (well, Spaceways) already has to inspect cargoes because of its hard line against trade in arms and hard line quarantine standards. So (c) would be little effort and least trouble. It’s contrary to the Empire’s commercial interest to make colonies encumber trade with costly and delay-inducing inspections, and it’s contrary to its political interest to drive more colonies into the arms of the LRA or Feds. On the other hand it is also rather high-handed, so perhaps there are imaginable circumstances in which it might say “that ban is unconscionable, we refuse to enforce it for you”.

Perhaps Spaceways might be more relaxed about carrying illegal exports.

Well, I suppose if you have such restrictions, it also creates a place for covert missions of getting prohibited cargo to planets while letting the Empire maintain deniability. “If you get caught, His Majesty will disavow any knowledge of your actions.”

Then there are plots about illegal exports of people: The heretic, or the unwilling bride, or the escaped slave, trying to get onto an outbound ship. Bujold’s Shards of Honor has Cordelia Naismith doing that when she flees Beta Colony.