I should be working on my writing. Procrastination has set in. This is merely done for the fun of it. I enjoy Ms. Rowling's imaginitive writing, but I get these questions in my head and want to answer them (writing practice and mental exercise is my excuse). So to get the formalities out of the way: Disclaimer: All Harry Potter names, characters, places, incidents et al. herein are the property of J.K. Rowling and her legal licensees, including but not limited to Bloomsbury/Scholastic, etc. No copyright or trademark infringement is intended and no money is being made.
Muggle-born Orientation Lecture (MOLe) #22,
presented by Prof. Amelia Tillywig, answering the question,
“Do wizards need money?”
Professor Tillywig: “Most wizards have a large stockpile of gold, silver, and bronze metals in the bank. Some of the most powerful wizards and witches in history are said to have had the powers of alchemic transmutation –the ability to turn base metals into precious metals. All magical folk have the power to feed, to clothe, and to shelter themselves without the need of money. Magical folk can exist without money or an economic system, yet we choose to use the gold Galleon, the silver Sickle, and the bronze Knut everyday. Why do we bother with a system of money?
It happens that gold, silver, and bronze have the unique characteristics of being incredibly powerful conductors and intensifiers of magic. Rarely are wands made using gold, silver, or bronze due to their power potential; when one of the precious metals is used in creation of a wand it must be used in small amounts by a powerful wizard using other substances able to subtlety balance the effects of the potent metal. Any spell using these metals should be considered very forceful and extremely effective (and should only be attempted by accomplished magic folk). Charms, amulets, and other magical items made of one of the precious metals has the magic of the item amplified many, many times over. A witch and wizard can successfully use magic without ever using the precious metals; however, the metals remain an extremely strong cultural symbol of increased magical power and potential.
The symbolism of the metals is actually the basis of the wizard ‘monetary system’. Magic folk could easily swap needed items or use a simple barter system, yet they prefer to use a system of ‘power exchange’.
When a magic person offers the owner of The Three Broomsticks Pub two sickles for a pint of butterbeer, he isn’t offering money –he’s offering power. He’s saying, in effect, ‘Take this small representation of potential magical strength in exchange for the butterbeer’. It is an exchange of power having nothing to do with economics.
Old wizarding families that sit upon outrageous uncountable fortunes would look wealthy by Muggle standards but to magic folk they are powerful –powerful enough to give away bits of potential magical power in exchange for grand finery without worry. Magic people with more limited stashes of the precious metals must be a bit more conservative.
Why not just make more precious metals using magic? The alchemic transmutation of base metals into precious metals is difficult for even the most experienced and powerful wizards using huge amounts of magic; and even then, it has its limitations. Most available precious metals have been secured into family vaults and are passed on to following generations.”