Economics is one of the bugbears of fantasy writing and gaming. There has been a general lack of attention to the differences in market-construction between the medieval economies of Europe and the burgeoning economies of pre-modern, modern, and post-modern Europe. This article will attempt to address a number of misconceptions about the medieval world which can (and should) trickle down into fantastic representations of that world. Of course, the closer to the Renaissance you go, the more different this will be, but if your society strongly resembles medieval Europe, you might want to think about this with some depth.
Misconception #1: Everything is for sale
This, being the very foundational thesis of our modern consumer society, is often the hardest misconception to shake. In the postmodern world, it is very much true. Literally everything is for sale if you can come up with an obscene enough price to buy it. The very structure of society is predicated on that fact. Purchasing power is equated, in many cases, with moral rectitude.
Why is this a fantastic medieval misconception? Well, the grounds that invalidate this precept can be found below in section #2. In many fantastic depictions of a medieval-style setting, money (gold, generally) can be used to overcome hurdles in much the same way as it is in the postmodern marketplace. It can be used for bribes, it will guarantee a place to sleep, hell, it can even ensure you get the best medical treatment.
This is a FLATLY WRONGHEADED approach to the medieval marketplace. Money, since it is not the root of power, is not seen as a panacea. There are things that people simply will not sell. Interpersonal relationships are much more important in this calculus. Whether or not the local baron likes you or the local populace like you is much more likely to weigh on the factor of whether you can get a place to sleep. What your relationship is with the local churches or temples will weigh on whether or not you receive care.
Essentially, the mode of transaction is personal and not mercantile. Because...
Misconception #2: Money is the root of power
In the medieval marketplace, money is not the all-powerful icon of status and might that it has become in our every day existence, mostly because of an almost tautological reliance on #1, namely: Money can't purchase the really important things.
MANPOWER is the root of all medieval power. The right and ability to command others is the root of power. People don't work for you because you pay them. They work for you because you are the lord. You protect them. The social contract means that you have a duty to your laborers, and they a duty to you in return.
Monetized economies with merchant classes may have a burgeoning market in mercantile exchange methods. Mercenaries, for example, may be hired. This puts the land/right system on notice that a new power is emerging. Mercenaries are a way to translate money directly into power, much like land ownership is a way of translating social position into power by calling up levies.
That being said, lords have no need of money in the medieval period, or very little need. They rely primarily on their powerful legal rights and the payment of taxation-in-kind.
Misconception #3: Merchants are political players
As a result of sections #1 & #2, merchants have much less to say in politics than they do today. Its absurd to imagine a merchant "buying" a lord or a king. If the lord or king needed that merchant's money they could simply seize it. They have the legal right to do so, or can justify it in times of war anyway.
Merchants have very little political power. Until the advent of the credit economy and the spread of merchant-dynasties (in the Renaissance), merchants are a very small and maligned class. They supply the real powers with luxuries, but accomplish little else.
Misconception #4: There is an advanced corpus of contract law
The Roman corpus of contract law continued uninterrupted in the Byzantine East. Likewise, in my own setting, there is a thick and heady contract law available in most places that are descended from the First Milean Empire. But, in general, contract law was a pastiche enacted by merchants from different lands and jurisdictions and arbitrated in the sort of pilgrim-courts I described last week.
When approaching the issue of money in the medieval milieux, it should be (MUST be) done very differently from a modern tale. It behooves one to take the pains to realize that we don't live under the same type of regime as the medievals did, in any sense of the word.
Money mattered much less because there was less of it, less trade in general, and because the marketplace was not an assured stable one, but rather one subject to the whims of powerful princes and battling warlords.
The middle ages were a tough time.