I'm Too Dumb for Spice and Wolf

The first arc of Spice and Wolf: Merchant Meets the Wise Wolf sees Lawrence investing in a rumor that silver trenni, the most valuable currency in the kindgom of Trenni, will increase in purity. As a 21st century person watching a series set within a pseudo-European world still governed by kingdoms and the church, I was confused. What does purity have to do with coins? Why are there competing currencies? I really enjoy the dynamic between Lawrence and Holo, the titular wolf, so I'm eager to understand the economics that drive the plot along. The rest of this post covers my investigation into how economies work overall and how these principles apply to Spice and Wolf. 

Spice and Wolf: Merchant Meets the Wise Wolf. Passione. 2024.

Let's start with our current economy as a baseline. We use fiat money, or money that doesn't rely on a commodity to determine its value; printed money is intrinsically worthless. The United States Dollar, for example, is valuable because the U.S. is a nation with political stability and high Gross Domestic Product (GDP). Our government assigns the denominations, prints the money, and allows citizens to use it. The money can be traded on international exchanges between nations that have their own currencies. This is a web of relationships that's necessary for the current global economic system.

Now, commodities are goods that can be exchanged at particular rates. In a fiat system like the U.S. economy, I could offer X amount of grain for a particular rate and receive Y amount of dollars in exchange; money would serve as the medium of exchange, or the thing that allows people to participate in the buying and selling of goods. Without dollars serving as the intermediary, I'd resort to bartering, or offering my grain for another commodity of equal value as determined by the traders or a third party. Value varies based on the intrinsic worth of these commodities (whether they are useful in and of themselves or parts of a larger product) and what value people arbitrarily assign to them. Grain, a product people rely on for survival, is literally consumed. Metals, on the other hand, are often constituent parts in a larger production processes like making armor and such.

Image by DevangshuNandi1540630. Used under Creative Commons Attribution-Share Alike 4.0 International license.

The intrinsic value, or melt value, of a coin is determined by the ratio of silver to base metals in its composition; this is the definition of purity. In Spice and Wolf, the silver trenni's face value, or its denomination, should not change due to a new minting. If the purity of silver in newly minted coins increases, this might translate to increased desirability because a currency with more silver is a mark of a powerful nation with rare assets. The face value of a U.S. penny, for example, is always one cent, but there are prohibitions on the exportation, melting, or alteration of pennies because of the need to keep them in circulation, as well as consideration of the melt value of its copper and zinc. Such prohibitions are also the case for currency like the trenni in Spice and Wolf.

The reason for increasing the silver content in a trenni coin, according to Spice and Wolf, is to manipulate this desirability and increase the coin's circulation compared with coinage from other nations. As Lawrence explains in the light novel I bought to supplement my viewing of the anime: 

"Nations do not always fight through strength of arms. If your country's currency is overwhelmed by a foreign coin, you've been just as thoroughly conquered. All the foreign king needs to do is cut off your supply of money, and your marketplace will die. Without money, you can neither buy nor sell. They control your economy." 

It seems several nations in the real world use multiple currencies. In the case of Ecuador and Zimbabwe, this is because their native currencies suffered from inflation, or the devaluing of a currency because of its abundance, which then causes an increase in the price of goods as businesses struggle to make more profit using the weaker currency. As a result, Ecuador and Zimbabwe rely on USD to stabilize their economies but cannot print USD on their own. To pay for USD they're using, these countries enter trade agreements with the United States for items like bananas or other commodities. 

In Spice and Wolf, Trenni would be able to command the local money supply if more people use its native currency; this is possible if its currency is more desirable in the local market due to a purity increase. Internationally, desirability is judged by frequency of trades on the exchanges, but I won't dare venture into those geopolitics. In both instances, anyone's interest in silver trenni is heavily based in how much the citizens trust Trenni's economy and political stability.

I'm gonna stop here, as this plot unravels into something far more complicated than I care to dive into. There are many, many Spice and Wolf Reddit posts and forums dedicated to explaining this first arc. The barrier to entry on this franchise is unusually high--and that's coming from someone who loves Ghost in the Shell: Stand Alone Complex. I hope you've learned a little about economics, though!