The Incredible Economics of a Game of Thrones — A Brief Observation
Published: 13/February/2017
The reason Game of Thrones is fantastically great is not only due to the narrative being highly detailed and easily readable, but also it speaks to the daily economic processes of decision making we have in life that we do not realise is based in economic ways of thinking, like opportunity costs as to whether we should buy one good at the expense of the other or vice versa. Game of Thrones also not only keeps to the cause and effect immediate horrors and lingering atrocities of war, it also shows the economic impacts of war, and how the economy that comes with war, not only end up resulting in some incredibly detrimental knock on effects for the population at large, but if an individual was positioned right in the hierarchy of society while possessing a decent level of intelligence in order to understand the realities of the world around them, then it could make for a serious seismic shift in an individual’s wealth, power, and future standing in the world. The time frame to be covered will be the period over which the books and TV show have covered thus far.
The Political Scene — Route to Power
A monarchy system is the established staple of the world that does little to nothing in regard to social welfare in an attempt to improve education or health systems of the realms peasants. However, slight value is placed in a select few people who show to have meritocratic capabilities and a natural aptitude to play within the great game. Yet, merit aside, there is more value placed on family lineage. That said, every so often a player of the great game rises up from the common stock to ascend to fantastic heights. Petyr Baelish shows meritocracy in his ability to climb the social ladder through pure Machiavellian cunning and guile. Another proverbial Icarus, yet not dumb enough to fly to close to the sun as he prefers the cool shade of the shadows, is Varys the Spymaster. His ability to listen anywhere within the realm of the seven kingdoms, and indeed beyond, to acquire information to be used in what ways he sees fit is where his value lies.
In Westeros, another path to power is the ability to manipulate those through religion. With the majority of the civilians being followers of the New Gods known as The Seven, Septums and Septas hold a perceived social standing in society that can be used to great effect, depending on the person that is. Attaching itself to the Crown when Aegon conquered Westeros was a smart move to solidify the religions place in world, but the relationship with The Seven when the Conqueror was beginning his reign was symbiotically beneficial. The most effective user to achieve power recently through this avenue would be the High Sparrow and his manipulation of those in the seats of political power to use for his own purposes.
These political stages are so intertwined with the Westerosi economy that they must be mentioned in order to grasp the mind-set of the people in charge and those who are not. Papers could be written about the previous two paragraphs with correlations to the real world, but this is just a glance as to how this system has a symbiotic relationship with the economy, and the delicate balance this feudal system teeters on. This can therefore lead us to understand more about the actual inner workings of the economy in Westeros.
Supply and Demand — Curve Shifts, Necessity, and Knock-On Effects
· Weapons and Armour: Armaments like swords, shields, bows and arrows will have increased production demand due to the necessity of having well-armed soldiers to fight the battles of their lieges in order to win wars and inflict as much damage to the other side as possible. This is to not only to put strain the enemy soldier numbers with the end product to increase the likelihood of winning the war, but to also stunt post war production in defeated enemy or occupied territory to increase the need of trade and move much needed goods to these areas, that will obviously come at a price.
Increased manufacturing of armour due to demand will also be needed to limit allied casualties and reduce the maximum loss of life, so once the war is finished, strains on hospitals are minimised, folk can return to their labouring jobs if not a soldier by profession, and replenishment of resources like food can be focused on. All in the effort to have the region back working as efficiently and harmoniously as possible, which in turn keeps the status quo in check. Happy subjects have no need to rebel. The post war supply to meet these increased demands during peace times will shift and eventually equilibrium will be met in such a post war economy.
Agriculture: With increases in the mass movement of people across and back the continent of Westeros, with the constant fighting of battles for economic resources to feed the war machine, fuel to keep everyone going and the growing of food on the lands in which these armies are destroying through war and setting up encampments, and everything else that comes with a caravan of armies, the meeting of such demand with necessary supplies are of such high necessity to gain an advantage over another. It could be argued that during war, it’s a good time to be a non-drafted soldier in the likes of bakeries, breweries, and farming areas that are not in the immediate proximity or on route between meeting armies. This is because the need for food will drive prices up through increased consumption of food and beverages, and as the quantity can’t be increased quickly without a time lag being accounted for, price increases can only be afforded to those that can actually pay the premium for the agricultural strain a war will have on a region. Without reinvestment of the funds from this price squeeze back into the agricultural process, a mismanagement of the time lag can lead to potential famine or indeed severe rationing to help the war effort. A great exhibition of this would be the ‘Bread Riots’ in Kings Landing due to the ‘War of Five Kings’.
A potential dent will be made in the labour force and take businesses out of commission as competition will be decreased due to drafting of men from their normal professions into these armies, allowing for market shares to be increased among a smaller number of individuals lucky enough or deemed too precious to be used as cannon fodder. Taking the seasonality of Westeros into account and with a long winter coming up, the war efforts are battering the efficiency of food production and storage for a harsh winter ahead, especially with the inevitable war with the White Walkers, who are literally on the other side of the wall.
· Job Prospects: Taking into account the state of volatility across the continent and that there is a differential in the necessity of goods and services in comparison to times of war versus times of peace, there are clear winners like Lord promotions, clear losers like loss of house status or feudality, and a highlighting of those professions that will be kept busy during and after the war without much change to be deemed a winner or loser.
Soldiers: Increases in the quantity of soldiers needed during war times will have knock on effects across other professions. The very nature of soldiering sees a high mortality rate and by extension becoming a job vacuum thanks to a high turnover rate through deaths. The job application will enrol people, willing or not, to fight for their liege lord and to protect family either living or yet to be.
Criminals: With more items becoming luxury through rationing, increases in taxation to support the war effort, and security being depleted through movement of redeployment from the likes of city watch guards to front line soldiers, increases in criminality for financial gain or other motives is a certainty. Pricing will be determined by product elasticity based on supply and demand, and how hard it is to source with the incurring risk that comes along with it.
Blacksmiths: War needs soldiers, and soldiers need steel. Furnaces will be working around the clock to turn minerals that have been mined into weapons and armour. The supply chain to get from unrefined mineral to tempered steel will need protection to prevent missing shipments and battlefield exposure.
Mercenary: Sell swords with no allegiance to a realm will fight for those who will pay them most for their services. The better the sword fighter, the wealthier an individual can become. Bronn is an example of a mercenary who profited hugely from this line of work when helping out Tyrion and house Lannister.
Prostitutes: The services that can be acquired from those in this profession can bring in a lot of money. Littlefinger owns brothels and they are not only lucrative money machines, but they are houses of information acquisition from people that stand on every rung of the social ladder. When playing the Game of Thrones, or indeed life, correct information is pivotal.
There are many other jobs that can benefit or suffer, like Farmers, Maesters, Ship Builders, Undertakers, but the supply and demand of these jobs is dependent on the political outcomes of the ruling families, the relationships they have between each other, and the consequences these interactions have.
Four Factors of Production: The four factors of production in economic theory are Land, Labour, Entrepreneurship, and Capital. In the modern world, the main political-economic ideologies for how best to use these factors can be found in capitalism, socialism, and communism. All aim to answer the question as to how these resources are to be used in the most effective and efficient way to deliver a better standard of living. However, seeming as we are in the fictional fantasy world of Game of Thrones that based itself off of history, the political-economic system of monarchy and feudalism will be the lens at which the factors of production are viewed.
In feudalistic warfare, the rapid movement of these resources from the peaceful, stable everyday production and massively diversified job market, to the highly centralised and volatile war machine, will cause strains on the Westerosi economy due to the bloating of the armies, the shrinkage of other industries and job markets, destruction of land, diversion of capital away from social welfare usage like sanitation and security in cities, increases of taxation to fund these war efforts, and finally the movement of entrepreneurial opportunity that adds to an economy, to just focusing on opportunist raider like tactics for survival.
With everything geared toward war, the economy is only beneficial to very few, while being incredibly detrimental to the vast majority of the populous. When it comes to the PPF of the seven Kingdoms, there is an inefficient use of specialities within the Kingdom to fight wars and not keep productivity at maximum capacity to bring the best social and fiscal outcome for everyone.
Trade Status of the Seven Kingdoms: Trade within the Kingdoms can be looked upon through the lenses of comparative advantages, mercantilism, and globalisation to a degree. Each Kingdom has its own culture, economy, and political style. These factors determine the trade programmes each Kingdom undertakes and with whom they engage in trade with.
Dorne: The southernmost region of Westeros, the equatorial climate gives them the advantage in production of tropical agriculture produce and spices that cannot be found anywhere else in Westeros, giving them a monopoly on luxury goods on the continent. Their close proximity with Essos, and the short sea trade routes, can help bring in items like silk, ivory, and other luxury goods that can’t be found in Westeros. They can then sell these items on with a nice margin which reinforces the Dornish in their luxury good monopolies.
Even though other ports could bring in the same goods, the Dornish tradition and long lasting business relationships, lower transport costs from Essos, and close proximity to Essos, allow for higher volumes to come in through Dronish ports and will give them the advantage in pricing out and eventually retaking market share from other Kingdoms trying to do this. The production and export of the famous Dornish red wines leaves them in competition with the Reach and the wine they produce in the Arbor.
They are specialised in luxury items so hold comparative advantage in that regard but also practice a small degree of globalisation as they trade with the free cities in Essos.
The Reach: Its strength lies in the fertile lands that make up the region. These lands can be, and have been, utilised to maximum efficiency to ensure that a huge bounty of food is constantly streaming from the land. This gives the Reach comparative advantage in the production of food items and a specialisation in agriculture. This might is shown when Tywin Lannister forges a relationship with the Tyrell’s by betrothing Joffrey to Margaery, all in an effort so he could bring in food from the reach to give to the starving people of Kings Landing, while having the benefit of ensuring political and military dominance during the war of the five kings.
The other regions like the Iron Islands have an economy of raiding and reaving coastal areas. They take goods while keeping trade to a minimum with other kingdoms. This practice mimics mercantilism with its hoarding nature. The Vale filters between trade and autarky, but the quick jump to autarky is practiced in times of political turmoil and is used mostly as a means to preserve itself until push comes to shove, until such a time as they need to pick a side. This allows for their armies to be fresh for battle while the other armies have expended much energy and resources in the months of fighting, giving them a distinct advantage.
Iron Bank: The Only Real Winner of War
The world’s bank, the Iron Bank is the main regulator of monetary policy to those in the perceived civilised parts of the world, like Westeros and the Free Cities. They control the flow of money by implementing tools like interest rates to dictate spending and saving patterns, but also have vested interests in politics as they are financers of the armies of those that they want power, those that wish to rebel, or those that simple like warring. All sides of every conflict are indebted to the bank, and become vehicles of debt collection against those that have lapsed and left their debt go into arrears for too long. Armies bring coin and power, the Iron bank know this and wish to finance anyone willing to sign a very advantageous contract.
Conclusion
To reiterate, the world that George R.R. Martin has created is dripping with economics and just a tiny scratching of the surface will bring it to light. To me it’s the economics of Game of Thrones, and the close ties between economics and politics, that make this epic story greater than the sum of all its parts. The impact that war has in the short, medium, and long term on the people of Westeros and abroad, really highlights the importance of not only winning battles, but how unnecessary and vile war is from and economic and social stand point.
This makes you think of the cause and effect from pre-war to post-war, and how decision making is vital for all those in the Kingdoms. Through losing a war, you are destroyed through severe losses of people. People who work fields, mend boats, clean streets, and protect villages. This leaves a Kingdom vulnerable and at a loss both socially and fiscally. By not producing to pre-war levels and the strains on post-war civil infrastructure (limited as it may be in the world of Game of Thrones), the Kingdom will be operating at a deficit and trade will ultimately be limited by extension. A Kingdom could get loans to make ends meet from either the Iron bank or perhaps from a Kingdom you lost in the war too, but then not only would you have lost publically in battle, now you are indebted to that Kingdom or institute with interest repayments on top of that. If you lose, you lose severely, but if you win, you win magnificently.
The topics touched upon in this piece can honestly be expanded upon into such fantastic and deeper detail, but I do not have time for that. Hopefully this can give you something to tie you over and ponder about before the new season starts in a few months. I sure hope after reading this that Jon Snow now knows something…
About Author
Jonathan McEvoy is an Irish based border control post inspector for the Irish Government and Europe Union who took up his role in 2019 in response to British withdrawal of trade agreements, which was a position taken up after time spent working within the financial services sector in Dubai. He is an economics and finance postgraduate from Waterford Institute of Technology and a community stalwart in his home city of Waterford having been elected to serve on many boards of directors around the city in a voluntary capacity. His love of writing has a deep theme of economics in every published article which talk about history, philosophy, finance, politics, and society. His writings are grounded in practical observations away from the theoretical hypothesis of hypothetical potentials. If you are looking for a modern digestible viewpoint on modern economic ideas with a focus practicality and no holding back, he is a writer for you.
Find Jonathan on the social platforms @jonathanmcev0y
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