Pangaea does not have a modern economy. When Pangaeans trade gold coins for a cow, it is not because the gold coin has an arbitrary value which the government recognizes when collecting taxes (which is what makes paper or digital money inherently valuable – you can pay your taxes with it, which means everyone needs it for something). In a pre-modern economy, a gold coin is valuable because it is made out of gold. The coin itself is a valuable commodity. You can melt it down and make fine jewelry out of it. Gold is used as currency because the ratio between its market value and its weight and volume is more favorable than almost any other commodity (precious gems have it beat, however, and those can also be used as currency). A gold coin might have its value stamped on it for easy reference, but it derives that value from the fact that it is made of gold, not from a government’s mandate. It is completely legal for a private individual digs some gold out of the ground and uses it to mint their very own coins with their very own face on them, so long as those coins are made out of real and pure gold (merchants checking for counterfeiters test for purity, not accuracy – they do not care who minted the coin or how well they followed the standard pattern).
The Mango Economy
Farmers do not generally speaking buy or sell anything, except when their harvest comes in and they sell it, then immediately spend that money on buying other things. The other 51 weeks of the year they rely on barter to get by, and the bedrock of barter is the mango. Everyone needs to eat, which means a mango is valuable to anybody who doesn’t have several weeks’ supply of non-perishable food already. Mangoes aren’t suitable for use by merchants because they rot too quickly to store longterm and are too big and heavy compared to their value to be easily transported, but this is a bonus for the peasant farmers who rely on them, because what merchants don’t want, bandits don’t want. Just like merchants, bandits generally want both to transport their ill-gotten gains across long distances and store them longterm, so they’re unlikely to ambush someone for a dozen mangoes. So, a single mango is worth a copper coin, but unless it’s harvest season and the farmer plans on being in town soon, he probably does not want to sell you a mango (or anything else) for coins, especially not if it’s a very large amount of coins that will attract trouble.
Since farmers are also bartering (again, except at harvest time), they won’t necessarily trade a one-copper mango for a one-copper sling. If they, personally, are all out of sling-making materials or cannot justify the time to craft a new one before they’ll need it (say, to protect a herd from predators), the actual price of that sling could end up being orders of magnitude higher, entire baskets of mangoes. They don’t live near enough a market that they can just go find someone else to make a new sling. The value of a sling isn’t one copper to someone in the mango economy. It’s whatever amount of time, effort, and material will be required to replace it.
Even if a farmer is willing to trade with you at market value, another major drawback of the mango economy is that you don’t actually need more than maybe a dozen mangoes a day, and they spoil in less than a week. Any purchase of more than a single basket of sixty mangoes just can’t be made with the standard unit of currency. If you happen to have some more valuable stuff to barter that the person you’re talking to also needs, great. Otherwise, you are out of luck. If you want to buy a hunting bow, those have a value of 80 copper (or 8 silver), so assuming you find someone willing to sell it to you at market price (they probably have a back-up bow or else the price would be much higher), you’ll have to trade them something else. Maybe you can give them a backpack and twenty mangoes or something. Want to buy a farmer’s trusty telmatosaurus? Well, that’s four thousand mangoes so you can pretty much forget anything even remotely resembling currency trade here, and while your compsognathus has pretty similar market value, unless the farmer has a serious pest problem he needs a small hunter to control, the value he puts on your loyal compy is probably negative, since it needs to be fed meat and does almost nothing in return.
The Gold Economy
So the mango economy sucks. The gold economy is much better and it is thankfully where caravans spend almost all of their time. It’s still less helpful than a proper modern economy because there is a cap on the maximum value of a coin at whatever the most valuable metal around is, and a cap on the total amount of coins at however much of that metal there is to go around. If you have eight stone of gold coins that you’re lugging around on your giant dinosaur, you can’t just exchange those coins for a much smaller number of coins that have identical weight and materials but have a two extra zeroes printed on them. Your giant dinosaur just has eight stone of currency stuck to it, and anything you buy with that currency is very likely to be heavier. Gems are lighter for their value than coins, but the reason they’re so valuable is because they’re rare, so generally speaking you can’t exchange eight stone of gold for half a stone of rubies, and even if you could, you’d only be delaying the point when your wealth is kept entirely in whatever the most valuable thing per pound is. Sooner or later you are going to need to start keeping your wealth in a vault, and transporting it to distant lands to make exotic purchases is both difficult (because it weighs enough to eat into your giant dino’s weight limits, and because if you don’t happen to be in the same place as your vault right now you have to go and fetch the gold instead of going directly to where you’d like to purchase the item) and dangerous (because you must physically transport gobs of gold a very long distance instead of just sending a letter from your bank to theirs notifying them to adjust the ledgers on your respective accounts appropriately).
Besides these limitations, however, the gold economy works exactly the same way as the economies that modern people are familiar with. You bring an amount of currency to a shop that has a thing you want, you optionally haggle over exact price, and then you exchange the currency for the thing.
The Favor Economy
In a lot of cultures, it’s insulting to suggest that a price tag can be put on a good deed. Many people take offense at the idea that a bag of coins is sufficient payment for helping you hunt down your nemesis and avenge your family. They don’t kill for profit. They’re not mercenaries. They aren’t such a close friend that they’d fight strangers to the death for you, either. No, they did you a favor, because they think you’re a decent enough fellow, your cause seemed just and, most importantly, because they expect you to repay them some day when they need something. This is the favor economy.
In a favor economy, when someone does you a favor, you owe them for it, and you are obligated to do them a favor if they ask it of you. Comparing the value of the two favors is haphazard and usually kept between the two parties involved. If there’s a dispute, where one party claims a debt is repaid but the other does not, they may bring it before a higher authority like a king or they might just start a blood feud. Likewise, if someone in a favor economy does you a favor and you refuse to perform a favor in return when they ask, they might try to take your head instead. If you don’t even have any particular history with that person, if you refuse to do them a favor in return after they’ve done you a favor just because you don’t like the idea of the favor economy, everyone who is a part of that economy might become unfriendly or even outright hostile towards you – and whoever kills you is now owed a favor by the person you refused to repay.
A favor economy can easily handle several hundred and will not collapse completely with several thousand participants, but even a small city will have more than that, let alone entire kingdoms, so often the favor economy applies only to a small, elite group, usually some kind of noble class.
Curiously enough, despite the enmity that exists across much of Pangaea between spells and steel, wizard-lords are almost always in a favor economy with one another. Wizards of various sorts use ambient mana for the relatively minor magical effects they can call up at-will, but the most impressive, kingdom-spanning spells require construction of complex ritual sites, assistance from dozens or hundreds of acolytes, and most importantly, a leyline to tap. Leylines give off enough magical energy that even hundreds of miles away from the nearest one there’s plenty enough to supply the kinds of spells a lone caster can manage, but if you want something more spectacular or permanent, you not only need a large enough coven to harness the power of a leyline directly, but you’ll want to network several of them together.
This gives wizard-kings a bit of a problem, in that the only thing they really care about is mana, and that the smallest tradeable unit of mana is a giant temple built on top of the most magically potent site in a two hundred mile radius. Instead of giving away a temple entirely, a wizard will commonly trade the use of the temple for one season to whoever they owe a debt to. The wizard who owes the debt will still retain total control of the temple, but he will direct its acolytes to perform whatever rituals have been requested by the wizard who is owed. A general favor economy is built on this basic unit of exchange.
The Devotion Economy
In some places, all that matters is how much you contribute to the cause. This is like a favor economy except instead of tracking favors owed to specific people, you have an ability to demand favors from any member of a group based on how strong your reputation is with that group in general. Nominally this is about being a paragon of the virtues of the group, but in reality it’s about not having any effective rumors spread against you nor winning the ire of anyone who has enough clout to have you excommunicated while also making lots of friends (or at least allies) with other members of the group in good standing, preferably ones who are considered particularly devout and virtuous.
If you have more friends than someone else, you can demand almost anything you want from them, and if they try to turn you down, your advantage in numbers will make the will of the group appear to be on your side. When there’s a conflict, undecided members tend to gravitate towards whoever already has more support, and rather than risk a confrontation with someone who has the numerical advantage from the start, the other group member will probably comply. Of course, so long as less than half the group are willing to support you over any other member, there are enough undecided people in the group that it is possible to lose the confrontation.
In a devotion economy, rumors are the weapon of the lower class. Devotion economies are sustained on nothing else but demonstrations of virtue, and an easy demonstration of virtue is condemning someone’s vices, all the more so because the fall of someone previously seen as virtuous will create a power vacuum that you can step in to fill. This means that people who have no particular enmity with the target of a rumor are reasonably likely to spread it along for no other reason except that toppling those at the top is advantageous for them. Only those who are specifically loyal to the target have any incentive to try and shut the rumors down (or at least not propagate them).
Those at the top of these precarious economies have the unenviable task of trying to direct a group made up primarily of people who want to see them fall. If the group faces no external threats, the leader can dedicate themselves full time to quashing rumors, finding their originators, and retaliating against them with confrontations and accusations of their own. Generally speaking, however, heads of large and powerful organizations want to actually accomplish things, and often a strong minority of the group’s members (including several of the most powerful) will actually try to advance some kind of agenda. The more of these people there are, the more powerful the group tends to become, since it is actually accomplishing things. The fewer of them there are, and the more members who are dedicated fulltime to advancing their own interests at the expense of their nominal comrades, the weaker the organization becomes. If it’s entrenched enough, though, an organization running on the devotion economy can remain in power for centuries of corrupt mismanagement.
Devotion economies may formalize the confrontations and popularity contests that define its functioning with official inquisitorial procedures and having actual offices with authority over members which are subject to some kind of vote (usually, but not always, from some sort of college of cardinals rather than the organization’s entire membership) rather than a never-ending cavalcade of scandal whenever someone’s demand of someone else is refused. This formalization makes the organization more stable and predictable, and long-lasting devotion economies tend to have them.