bottle caps by ~avspoisoner on deviantART

On the surface, Fallout’s bottle-cap currency is a clever gimmick, that seems to lend realism to the world in which the games play out. Dig deeper though and you will find its very existence is logically unjustifiable.

The best science fiction out there has the double trait of being both an engaging piece of literature and a credible prediction for the future. Will currently existing systems and social features endure? How will they be transformed by future circumstances? What will be lost, what will be gained? The Fallout games look like they are attempting to answer those questions. But they ultimately fail to provide persuasive answers, as the example of the flawed monetary system in the game world indicates.

Money generally falls into one of three categories. There’s commodity money, which derives its value from being useful or treasured for itself. Gold and silver coins are such money, as can be cigarettes, grains, animal skins, etc.

Representative money has no value of its own, but is valuable because it can be exchanged at a fixed rate for an underlying commodity, such as gold or silver. This is an extension of the commodity money system. In effect, the commodity continues to be the unit of value, and money is only valuable because it represents that commodity.

Fiat money has no intrinsic value and is not redeemable for an underlying commodity. It is valuable because a government or some other authority has declared it valuable and is backing it up.

What kind of money are Fallout’s caps? They are not commodity money because they don’t have a value of their own. In order to make them easier to lug around, the wasteland’s residents flatten the caps so that they cannot be re-used in their original function. In theory, the metal they are made of is valuable because it can be recycled. However, there is no evidence in any of the games that the technology, or indeed the need, to do so exists.

Nor do caps represent a valuable commodity. Nowhere in any of the games is there a mention that caps can be exchanged at a fixed rate for something of value.

It follows that they should be fiat money, a mere instrument of payment without an inherent value. Yet they aren’t that too because there is no government or authority to back that currency.

Fiat money is valuable in places where there is taxation, because the authority that levies the tax accepts the money as payment of the tax. It is not clear who in the wasteland has the kind of power to enforce a unified taxation system that uses a universal method of payment.

People have no other reason to use bottle caps as currency but their utility, as paying in a unified currency makes it much easier to set prices than barter. However, with no one to guarantee the value of the currency, the advantages pale away when compared with the risk of sudden devaluation.

The only authority backing the bottle cap currency and setting its value is the developer of the game. The game’s code contains instructions as to how much one or another good should cost. The equivalent in real-world terms would be if the US dollar was backed by God and most Americans did not even know He existed.

There are other currencies across all games in the series, and bottle caps are only used for payments in four of the six games. Some of the other currencies actually make sense.

NCR dollars are initially a representative, gold-backed currency, until the Brotherhood of Steel destroys the NCR’s gold reserves. Later on, NCR dollars are backed by water. They would also make sense as fiat money because the NCR is a nation in its own right and has the authorities and structures necessary to uphold such a system.

Legion money resurrects an ancient commodity monetary system, in which the currency is made out of the commodity that makes it valuable (gold and silver).

None of those more realistic currencies symbolises the Fallout universe as distinctly as the Nuka-Cola bottle cap, so their credibility doesn’t go a very long way into making up for the flaws of the bottle-cap system.

Yet, as in the case of mind-numbingly stupid but awfully effective advertisement, one cannot but respect the genius who managed to create an icon out of an ultimately unconvincing concept. Well done.

bottle caps by ~avspoisoner on deviantART

This article owes an awful lot to The Vault, the Fallout wiki