The D&D 3.5 Economy
From my Weblog, March 4th, 2005

          (Note: This is more of a collection of random thoughts as I tried to explore how the economy works in D&D 3.5.  It is not, by any means, an explanation of how I'd do things in my own game, nor do I get into how historical economics and craftskills worked...there are many, many obvious holes that D&D makes no attempt to cover.  I just wanted to see how big those holes were).

          Okay...this is more for my own benefit than anyone elses (thus why its here), and I suspect what conclusion I'll come to, but here goes.

Objective

          Determine how viable the economy is in D&D 3.5, based on the Craft rules and prices for a few select items.

Methods

          To try and provide a broad range of items, eight items of various types will be chosen as examples. Semi-randomly, those items are: Backpack (2gp), 10 ft of Chain (30 gp), a Water Clock (1000 gp), a Scholar's Outfit (5 gp), a gallon of ale (2 sp), a Galley (30,000gp), Chainmail Armor (150gp) and Masterwork Chainmail Armor (300 gp).
          We will assume an average craftsman to be a 5th level Expert with maximum required skill rank of 8, a +1 from the appropriate attribute modifier and a +3 from Skill Focus, for a skill bonus of +12.
          According to the PHB, minimum wage for a skilled hireling is 3sp per day.
          To secure accurate results, we'll be using the Craft rules by the day (instead of by the week) in all instances.
          We also assume a ten-hour workday, where necessary.

Results

          The Backpack: There isn't anything specific in the rules for the Craft Skill for a DC for making a backpack. Unfortunately, a judgement call must prevail. I'm assuming a backpack is more complex than a wooden spoon, less complex than a bell. Thus, a typical item with a DC of 10. The item costs 2 gp, or 200 cp. The craftsman must pay for 1/3 of the item's cost in materials, or about 6 sp, 7 cp. With a skill rating of +12, the Craftsman will roll an average of 22. We multiply this result by the DC, getting 220. Thus, he'll complete a bag on average once every 9 hours. So after less than a day, our Craftsman has created his Backpack worth 2gp. Thus:

          Materials Cost: 67 cp
          Time taken: 9 hours
          Craftsman wages: 27 cp (2 sp, 7 cp)
          Total cost: 94 cp
          Profit: 106 cp (or 1 g 6 cp)

          Assuming our Craftsman makes a career out of backpacks, he will be able to make approximately 381 backpacks a year (accountin for a 5% chance each Craft roll for failure). The cost to create the Backpacks (materials and wages) would be about 364 gp, 7 sp 7 cp (36,477 cp). Assuming all our backpacks sold, it would bring in 762 gp (76200 cp), for a total yearly profit of 397 gp, 2 sp, 3 cp. Handy.

          10 ft of Chain: Again, this item seems more complex than a wooden spoon, less complex than a bell. So another DC of 10. The item costs 30 gp, or 3000 cp. The craftsman must pay for 1/3 of the item's cost in materials, or 10gp. With our DC of 10 and skill rating of +12, we end up with a production value of 220 cp per day again. Assuming average rolls, it'll take our Craftsman 13.6 days to complete the ten feet of chain. Thus:

          Materials Cost: 1000 cp
          Time taken: 136 hours
          Craftsman wages: 408 cp (4 g 8 cp)
          Total cost: 1408 cp
          Profit per unit: 1592 cp (15 gp, 9 sp, 2 cp)

          Assuming our Craftsman makes a career out of chains, he will be able to make approximately 25 chains a year (accounting for a 5% chance each Craft roll for failure). The cost to create the chains (materials and wages) would be about 35950 cp (359 gp 5 sp). Assuming all our chains sold, it would bring in 750 gp, for a total yearly profit of 390 gp, 5 sp. Hmmmm...

          The Water Clock: A water clock is easily one of the most complex standard items, so we'll call this a "Complex or Superior Item" with a DC of 20. The item costs 1000gp (100,000 cp), so the craftsman must have 33333 cp (333gp, 3 sp, 3 cp) worth of materials to start. On average, the craftsman will progress at a performance value of 440 cp a day. He has a 40% chance of failure, so we can reduce that to 264 cp a day. He'll have a complete failure 15% of the time, so we'll knock the initial material cost up to 38,295 cp. So, on average, it will take our erstwhile craftsman 378 days, 8 hours to complete the item.  Thus:

          Materials Cost: 38,295 cp
          Time taken: 378 days, 8 hours
          Craftsman wages: 11,364 cp
          Total cost: 49,659 cp (496 gp, 5 sp, 9 cp)
          Profit per unit: 50,341 cp (503 gp, 4 sp, 1 cp)

          Assuming our Craftsman makes a career out of Water Clocks, he will be able to make approximately 0.96 clocks a year. The cost to create the clocks (materials and wages) would be about 47713 cp (477 gp, 1 sp, 3cp). Assuming our clock sells, it would bring in a yearly average of 800 gp, for a total yearly profit of 322 gp, 8 sp 7 cp. Okay...this is getting funky...

          The Scholar's Outfit: Again, no specific DC, so we'll have to default to a typical DC of 10. The item costs 5 gp, or 500 cp. The craftsman must pay for 1/3 of the item's cost in materials, or about 167 cp (1 gp, 6 sp, 7 cp). With a skill rating of +12, the Craftsman will roll an average of 22. We multiply this result by the DC, getting 220. Thus, he'll complete an outfit on average once every 2 days, 3 hours. So after two plus days a day, our Craftsman has created his outfit worth 2gp. Thus:

          Materials Cost: 167 cp (1 gp, 6 sp, 7 cp)
          Time taken: 23 hours
          Craftsman wages: 69 cp (6 sp, 9 cp)
          Total cost: 236 cp
          Profit: 264 cp (or 2 gp, 6 sp, 4 cp)

          He will be able to make approximately 150 outfits a year (accounting for a 5% chance each Craft roll for failure). The cost to create the outfits (materials and wages) would be about 36,000 cp (360 gp). Assuming all our outfits sold, it would bring in 750 gp (75000 cp), for a total yearly profit of 390 gp. Huh.

          Ale by the gallon: Yet again, no specific DC, but I'm going to say ale's pretty easy to brew (assuming a lack of modern sanitary practices and being unconcerned with silly things like bubbles), so I'll set the DC at 5. The item costs 2 sp, or 20 cp. The craftsman must pay for 1/3 of the item's cost in materials, or about 7 cp. With a skill rating of +12, the Craftsman will roll an average of 22. We multiply this result by the DC, getting 110 cp/day progress. As this is greater than three times the amount needed, he'll finish it in a third of the time. Therefore, he's making about 3 gallons a day. So in one day, he has 6 sp worth of ale (3 gallons). Thus:

          Materials Cost: 21 cp (2 sp, 1 cp)
          Time taken: 10 hours
          Craftsman wages: 30 cp (3 sp)
          Total cost: 51 cp
          Profit: 9 cp

          He will be able to make approximately 876 gallons a year (accounting for a 5% chance each Craft roll for failure). The cost to create the ale (materials and wages) would be about 18,615 cp (186 gp, 1 sp, 5 cp). Assuming all our ale sold, it would bring in 219 gp (21900 cp), for a total yearly profit of 32 gp, 8 sp 5 cp. Woah...

          A galley: Guess what? No specific DC, but I'm going to say a galley is pretty damned complex, so I'll set the DC at 20. The item costs 30,000 gp, or 3,000,000 cp. The craftsman must pay for 1/3 of the item's cost in materials, or 1,000,000 cp (10,000 sp). On average, the Craftsman will progress at a performance value of 440 cp per day. He has a 40% chance of failure, so we can reduce that to 264 cp a day. He'll have a complete failure 15% of the time, so we'll knock the initial material cost up to 1,300,000 cp. So it'll take our boatwright 11,363 days, 6 hours (about 31 years) to complete the item.  Thus:

          Materials Cost: 38,295 cp
          Time taken: 11,363 days, 6 hours
          Craftsman wages: 340,908 cp
          Total cost: 379,203 cp (496 gp, 5 sp, 9 cp)
          Profit per unit: 2,620,797 cp (26,207 gp, 9 sp, 7 cp)

          Assuming our Boatwright makes a career out of galleys, he will be able to make approximately 0.03 boats a year. The cost to create the galley (materials and wages) would be about 12,180 cp (121 gp, 8 sp) per year. Assuming our galley sells, it would bring in a yearly average of 96,360 cp (963 gp, 6 sp), for a total yearly profit of 84,180 cp (841 gp, 8sp). Wow.

          Chainmail Armor: Alright...some hard rules on this one. The DC for making armor is 10 + the AC bonus, so in this case, 15. Cost is 150 gp or 15000 cp. Up front material cost is 50 gp. Average roll of 22, we get a production rate of 330 cp a day. He'll fail only 10% of the time, so we drop this production rate down to 297 cp a day. Thus, we get a suit of chainmail every 50 days, 5 hours. Therefore:

          Materials Cost: 5000 cp
          Time taken: 50 days, 5 hours
          Craftsman wages: 1515 cp (15 gp, 1 sp, 5 cp)
          Total cost: 6515 cp (65 gp, 1 sp, 5 cp)
          Profit: 8485 cp (84 gp, 8 sp, 5 cp)

          Assuming our armorsmith makes a career out of chainmail, he will be able to make approximately 7 suits a year. The cost to create the suits (materials and wages) would be about 459 gp, 5 sp (45,950 cp). Assuming all our suits sold, it would bring in 1050 gp (105,000 cp), for a total yearly profit of 590 gp, 5 sp. Nice...

          Masterwork Chainmail Armor: But really, who wants to make "bland" when you can make "masterwork"? The rules take this "masterwork" status as a separate item, with a cost of 150 gp (15,000 cp) and a DC of 20. Okay, so our material cost for the suit doubles to 100 gp. With the masterwork part, a DC 20 and an average roll of 22 gets us 440 cp of production a day. Taking into account that 40% chance of failure drops that rate to 264 a day. The 15% chance of complete failure increases not only the materials cost of our Masterwork part, but also the base materials cost of the suit, up to 115 gp. Alright, so doing the masterwork part takes our smith 18 days, 9 hours. This is in addition to the 50 days, 5 hours that it takes to make the base suit. Thus:

          Materials Cost: 11,500 cp
          Time taken: 69 days, 4 hours
          Craftsman wages: 2,082 cp (20 gp, 8 sp, 2 cp)
          Total cost: 13,582 cp (135 gp, 8 sp, 2 cp)
          Profit: 16,418 cp (164 gp, 1 sp, 8 cp)

          Assuming our armorsmith makes a career out of masterwork chainmail, he will be able to make approximately 5 suits a year. The cost to create the suits (materials and wages) would be about 684 gp, 5 sp (68450 cp). Assuming all our suits sold, it would bring in 1500 gp (150,000 cp), for a total yearly profit of 815 gp, 5sp. Not bad at all...alright, moving on..

Permutations

          Before getting to the conclusion, let's really try to break things. Let's assume the best craftsman possible, using the best tools. So he's a lvl 20 Expert, with rank 23 in his skill. He has Skill Focus, giving him a +3, Masterwork tools giving him a +2. His appropriate attribute is a 23, giving him a further +6. So his skill comes out to +34. He'll roll an average of 44 on any skill check.
          Alright...I'll pick one low and one high-profit item.
          If he were a clockmaker, he'd have a DC of 20, which he'll make easily, for a production value of 880 cp per day. The materials cost is down to 33333 cp (333 gp, 3 sp, 3 cp). So it'll take him 113 days, 6 hours to finish the job. Thus:

          Materials Cost: 33,333 cp
          Time taken: 1,136 hours
          Craftsman wages: 3,408 cp (34 g 8 cp)
          Total cost: 36,741 cp
          Profit per unit: 63,259 cp (632 gp, 5 sp, 9 cp)

          As the best clockmaker in the world, he can make about 3.2 clocks a year. The cost to create the clocks would be around 117,615 cp (1176 gp, 1 sp, 5 cp). With a total of 3200 gp coming in if all 3.2 sold, he'd stand to make about 2,023 gp, 8sp 5 cp per year!
          But nooooo...our craftsman's father thought ahead! He sent his boy to the smithy's guild to train! And of course, our boy only makes masterwork chain mail! So, with a DC of 15 for the suit, his production value is 660 cp per day and 880 cp for the masterwork part (DC 20). The materials cost is 100 gp flat. It'll take our master armorsmith 22 days, 7 hours to make the mail and an additional 17 days for the masterwork part, for a total of 39 days.

          Materials Cost: 10,000 cp (100 gp)
          Time taken: 390 hours
          Craftsman wages: 1,170 cp (11 g 7 sp)
          Total cost: 11,170 cp (111 g, 7 sp)
          Profit per unit: 18,830 cp (188 gp, 3 sp)

          As the best armorsmith in the world, he can make about 9.4 suits a year. The cost to create the suits would be around 115,948 cp (1159 gp, 4 sp, 8 cp). With a total of 2820 gp coming in if all of them sold, he'd stand to make about 1,660 gp 5 sp 2 cp per year!
          Huh...guess he should of stuck to to clocks...

Results

          Okay, let's see what we've got. First, let's look at the yearly profits of our craftsmen:

          Bob Backpackier: 397 gp, 2 sp, 3 cp per year
          Charley Chainwright: 390 gp, 5 sp per year
          Clark Clockmacher: 322 gp, 8 sp, 7 cp per year
          Thomas Tailor: 390 gp per year
          Barney Boatwright: 841 gp, 8sp per year
          Arnold of Armorville, making chainmail: 590 gp, 5 sp per year
          Arnold of Armorville, making masterwork chainmail: 815 gp, 5sp per year.
          Abe of Armorville, Master Clockmaker: 2,023 gp, 8sp 5 cp per year
          Allen, Brother of Abe of Armorville, Master Armorsmith: 1,660 gp 5 sp 2 cp per year

          Okay...so we've got two basic classes of craftsmen...the Tailors, Clockmakers, Chainwrights and Backpackiers will earn a profit of about 320 to 400 gp per year. The Boatwrights and Armorsmiths will make about twice that. Being at the pinnacle of your field will net you 1500 to 2000 gp a year. Nice.

Conclusions

          What an interesting world this would make. Lets take a look at the life of Bob Backpackier...
          He actually doesn't do much work, but pays a "skilled craftsman" 3sp a day to work for him. He provides the craftsman with the materials. Before expenses, he brings in about 397 gp 2 sp, 3cp per year. He doesn't eat beyond his means, so a common meal every day (at 3sp a day, that's 109 gp, 5sp a year). He rents a common room, costing him 5 sp a day (182 gp, 5 sp). We'll also assume guild dues, gate taxes, various bridge tolls, etc. cost him about 10% of his income a year (76 g 2 sp). Alright...so he's left over with 29 gp, 3 cp a year. Not shabby...about enough to buy a 10 foot chain from Charley.
          On the other hand, let's check out Arnold and his Masterwork Chainmail Shop. He also just provides materials to a craftsman, who is paid 3sp a day. He eats as the same bar as Bob, and rents the room next door. His taxes are about 150 gp. So he rakes in around 373 gp 5 sp a year. Let's really get crazy and assume that's how much he brings in the first year...the second year, he reinvests some of that coin into the business, hiring on 9 new hands. At the end of the second year, he's got a cool 4,108 gp 5sp. That's around 300 mercenary soldiers he can afford to hire to set seige to his hometown and be crowned King Arnold, the Black Sword of Armorville.
          So yeah...there are some serious flaws in the abstract nature of the D&D 3.5 economy. The biggest of which is the complete lack of ale, despite it only taking three and a half hours to make a whole gallon (I know some brewmasters who would love to know that secret). It's just not profitable as, say, the backpack industry...