The Economy of Martin World

[Rakka]

In a pre-industrial society, I'm not sure what the North has to trade besides timber (possibly for sale in Bravos?)

Iron, furs, tar, and I think there's mention of silver mines near Whiteknife. Iron is everywhere - and since they don't have modern mining equipment bog ore and lake ore are far more practical than trying to mine for magnetite and other iron ores. It takes insane amounts of energy to mine and crush and refine ore into iron, unless you let the water do the work for you. Additionally, making iron takes lots of coal... also readily available in the North, where the low population density doesn't lead to devastating deforestation.

[voodooqueen126]

The Lannisters know the importance of merchants in the economy just as much as anyone, in the real world, the nobility encouraged trade and commerce, it was one of the reasons for building towns and cities. Traders include everyone involved in trade such as the nobles who collect taxes on trade, and the transportation of grain and other commodities is reduced in cost and time with a Grand Canal. The Grand Canal in China was built in a country with a quite similar feudal socio-economic system yet it proved to be a major economic benefit, especially in transporting grain that was collected in taxes to the capital.

Sure, rational medieval lords encouraged trade and knew the importance of commerce.

But I think Tywin is not completely rational (do you think the Tysha incident was the product of a rational mind), and in his pride he looks down upon earnt wealth and favours inherited wealth.

Which is a pity for him, since gold mines run out but banks never do.

[SeanF]

Sure, rational medieval lords encouraged trade and knew the importance of commerce.

But I think Tywin is not completely rational (do you think the Tysha incident was the product of a rational mind), and in his pride he looks down upon earnt wealth and favours inherited wealth.

Which is a pity for him, since gold mines run out but banks never do.

Actually, I think that like many lords of his type, Tywin is a hypocrite. He despises trade, but conveniently doesn't include gold mining as trade.

And, there are hundreds of Lannisters in the Westlands. I imagine that many of them must have been involved in trade.

[AzureOwl]

Sure, rational medieval lords encouraged trade and knew the importance of commerce.

But I think Tywin is not completely rational (do you think the Tysha incident was the product of a rational mind), and in his pride he looks down upon earnt wealth and favours inherited wealth.

Which is a pity for him, since gold mines run out but banks never do.

There’s also the possibility that the Westerlands are suffering from a textbook case of the “Dutch disease”. From the books it looks like the whole of the economy of the Westerlands revolves around the gold mines, attracting all the labor to the exclusion of everything else. The region is overspecializing in gold production to the exclusion of agriculture, manufacturing and commerce.

The Lannisters are in the same position as Spain was when it started getting massive quantities of silver from the mines in Peru and Mexico. For centuries, as long as the silver from the Americas kept on coming Spain was the preeminent power in Europe, but when the silver dried out, the Spaniards discovered that their overreliance on the American silver had left all the other areas of their economy far, far behind their peers in other European countries. When the riches of Peru and Mexico stopped coming Spain went on a centuries long decline.

We have already seen it happen in the books with the Westerlings. Their mines dried out years ago and the family was incapable of coping. We don’t know for how long the Westerlands have been relying on the gold mines, but theoretically it could be for a long time. For example, it took three centuries for the mine at Potosi to run out of silver.

When the gold mines do run out, the Lannister are in for a really hard fall unless they start to diversify. At one point the city of Potosi had over 150,000 people living in it, and was a very wealthy city. After the mines failed the population dropped to less than a sixth of that. Depending on how much gold the Westerlands have left. I can see the same thing eventually happening to Lannisport. Of course this could still be centuries into the future from the series.

[voodooqueen126]

Actually has anybody read Thomas Sowell's "Applied Economics" because he has this really interesting argument about what economic factors tip slavery from "merely inhuman and slightly inefficient and prone to retarding technological development in the long term in ways you can't imagine" to "this is the most ghastly system imaginable and why has our economy gone backwards?"

So it's been awhile since I read the chapter, but he basically makes the case that when the owners are far away from the slaves, or the slaves are owned by the state, and therefore the slaves are directly supervised by overseers (or prison guards as in the case of a gulag), and this leads to both monstrous inefficiency and monstrous inhumanity.

The other problem is if the slaves are very cheap (Dothraki raiding people and capturing them in vast numbers could be at work in Essos) for instance slaves were treated worse in Brazil and the Carribean (though in the Carribean the owner was in England and the plantations were managed by overseers) since the trip from Africa to the Brazil and the Carribean is shorter than the trip to Africa to America, also by the slave got to America had already been in the Carribean (which was difficult to survive) where he would have been taught English and whatever skills needed to pick cotton.

So it seems like Astapor gets most of the slaves from the Dothraki directly, and therefore invented the Unsullied (a monstrous, non reproducing inefficient practice). Which other people then buy at great cost.

Sowell also argues that in a capitalist system, where people allow their slaves to work a second job and therefore buy their freedom (as they did in Ancient Rome), slavery would collapse since, eventually freedman would outnumber the original population, end up powerful and abolish slavery (thus making it a perfectly capitalist system)

But since governments can't allow this (because slaves are usually from a target population like Africa, or the part of Europe that we call Slavic, or Gauls etc) they therefore place restrictions on manumitting slaves or encourage freed slaves to move elsewhere (this was the case in Virginia I think, that a freed black slave had to move to a non-slave state).

Either Volantis has a huge number of freed slaves (like the Widow of the Waterfront) or they have a huge number of slaves, on whom they place legal restrictions, preventing their manumission, which leads to even more instability. ie these slaves have even less investment in Volantis than freedman (atleast freedman are invested in Volantis as a city, because they might decide that living in Volantis is better than being raided by the Dothraki), because well their slaves...

This could cause the Volantene slaves to side with Daenerys (despite the fact that she will most likely be accompanied by evil Dothraki).

Actually, I think that like many lords of his type, Tywin is a hypocrite. He despises trade, but conveniently doesn't include gold mining as trade.

And, there are hundreds of Lannisters in the Westlands. I imagine that many of them must have been involved in trade.

[Ser Lepus]

Sowell also argues that in a capitalist system, where people allow their slaves to work a second job and therefore buy their freedom (as they did in Ancient Rome), slavery would collapse since, eventually freedman would outnumber the original population, end up powerful and abolish slavery (thus making it a perfectly capitalist system)

I haven´t read Thomas Sowell's "Applied Economics", but I´m not sure about the rebellion part; many systems encouraged exactly that kind of arrangement, and none ended because of a rebellion: The romans, the arabs (who were compelled by the law to give some free hours to their slaves so they could have a paid second job) and the spaniards (the spaniard had a kind of arrangement, the esclavo a jornal, in which a slave was essentially set free, but he would have to periodically pay a set amount of money to his master until he managed to pay him his original price), and in all those societies the freedmen usually kept working for their former owners as paid workers and sometimes became slave owners themselves.

The problem of slave economies that set many slaves free was that, since the children of the slaves were free (their parents bought them. or they were born from already freed parents), slaves couldn´t be bred, only captured or purchased from other countries.

The romans had a problem to get enough slaves to keep their economy working once they stopped conquering and enslaving more countries, but the arabs, turks and european just started buying from Africa, and slavery kept working for them until the slave trade was forbidden.

Antebellum America is a bit of an oddity because of the stark division between black and white; almost everywhere else the freed slaves (both black and white) joined with the lower levels of free society (sometimes even with the middle class) and eventually the descendants of the slaves merged with the descendants of their masters: Spain´s population used to have an 8 % of black slaves or freedmen, Portugal, up to an 13 %, but the descendants of those slaves have completelly merged with the rest of the population and are no longer recognizable.

I guess since technically America had not a division in classes like Europe (Spain and Portugal, for example, had outcasts, commoners/pecheros, honored commoners/gentes honradas, hidalgos/gentlemen, caballeros/knights, landholding nobility, titled nobility, peers of the kingdom and royal family) besides black/slave or white/free, the importance of that unique division became greater.

Either Volantis has a huge number of freed slaves (like the Widow of the Waterfront) or they have a huge number of slaves, on whom they place legal restrictions, preventing their manumission, which leads to even more instability. ie these slaves have even less investment in Volantis than freedman (atleast freedman are invested in Volantis as a city, because they might decide that living in Volantis is better than being raided by the Dothraki), because well their slaves...

This could cause the Volantene slaves to side with Daenerys (despite the fact that she will most likely be accompanied by evil Dothraki).

You are right; Volantis is unsustainable as portrayed; they say that there are 5 slaves per every free man, but that would mean that almost nobody is ever freed, so the slaves have no hope of bettering their lifes and would be very unhappy and prone to rebel.

On the other hand, if Tyrion and Quentyn were wrong, and there are many freedmen, those freedmen and their descendant would make a majority of the free population, and would end demanding political power and rebelling, like the roman plebeians or the athenian thetes/diacrios.

The only way the system could work is if the slaves were no real chattel, but just a low worker caste with less rights that lived mostly as free people but with some special restrictions and obligations, but the tattoo thing seem to contradict that idea.

[Independent George]

The problem in Volantis seems related to Varys' riddle: as long as the slaves view themselves as slaves, life will continue as it always has. Once the slaves realize that the masters only have as much power as the slaves allow them to have, the entire society will burn. The masters realize it, too, which is why the Dany's slave revolt is such a threat to them.

The Volantene problem actually reminds me of the Lannister problem - they have great wealth, but no capital. Where the Lannisters depend on extracting their wealth from the ground, the volantenes depend on extracting their wealth from slaves. The minute they can no longer derive a surplus through artificially cheap labor, they are doomed.

[Ser Lepus]

The problem in Volantis seems related to Varys' riddle: as long as the slaves view themselves as slaves, life will continue as it always has. Once the slaves realize that the masters only have as much power as the slaves allow them to have, the entire society will burn. The masters realize it, too, which is why the Dany's slave revolt is such a threat to them.

The Volantene problem actually reminds me of the Lannister problem - they have great wealth, but no capital. Where the Lannisters depend on extracting their wealth from the ground, the volantenes depend on extracting their wealth from slaves. The minute they can no longer derive a surplus through artificially cheap labor, they are doomed.

Many of the slaves were born free and were enslaved while already adults; they know there is a life beyond slavery, and they know they are too many for the slavers to control. They should be able to start a revolt by themselves, without external influence.

[Independent George]

Many of the slaves were born free and were enslaved while already adults; they know there is a life beyond slavery, and they know they are too many for the slavers to control. They should be able to start a revolt by themselves, without external influence.

True, but they've never questioned the legitimacy of the institution itself. They've always assumed that slavery was a lawful state of affairs. They might hate being slaves, and seek to escape or even take revenge on their masters, but they've never thought to overthrow the entire system itself. That is new.

[Torben]

The Lannisters are in the same position as Spain was when it started getting massive quantities of silver from the mines in Peru and Mexico. For centuries, as long as the silver from the Americas kept on coming Spain was the preeminent power in Europe, but when the silver dried out, the Spaniards discovered that their overreliance on the American silver had left all the other areas of their economy far, far behind their peers in other European countries. When the riches of Peru and Mexico stopped coming Spain went on a centuries long decline.

I think this is not fully accurate since in other cases of the Dutch Disease the mined resource is normally something which is useful to someone whereas gold and silver have no intrinsic value. The Spanish therefore double-hurt their economy by not only neglecting manufacuring but by additionally creating inflation that diminished the very value of the gold and silver they mined.

[AzureOwl]

I think this is not fully accurate since in other cases of the Dutch Disease the mined resource is normally something which is useful to someone whereas gold and silver have no intrinsic value. The Spanish therefore double-hurt their economy by not only neglecting manufacuring but by additionally creating inflation that diminished the very value of the gold and silver they mined.

You're right. But I think that reinforces my original point that the overreliance in gold mining is setting up the Westerlands for an epic economic collapse once the gold deposits that can be mined with medieval/renaissance level tech run out.

[darrylzero]

Sure, rational medieval lords encouraged trade and knew the importance of commerce.

But I think Tywin is not completely rational (do you think the Tysha incident was the product of a rational mind), and in his pride he looks down upon earnt wealth and favours inherited wealth.

Which is a pity for him, since gold mines run out but banks never do.

Well said, but I'm not so sure I would say never. I seem to recall a few running out a ways back.

[mor2]

Have we learned anything new on the currency of the Seven Kingdoms? One of the RPG book gave a list of coins and their values but I always thought it was wrong as they were not a multiplications of seven, which is a repeated theme.

[Chirios]

It always seemed to me that the North is less populous primarily because of the cycle of winters. If you don't know how long your winters will be, the tendency should be to spread out as far as possible, so that you have enough land to rotate your crops without depletion, while maintaining enough surplus to last several years. Spreading out also means fewer mouths to feed in a given area. Meanwhile, each winter seems likely to cause significant losses to population.

In a pre-industrial society, I'm not sure what the North has to trade besides timber (possibly for sale in Bravos?),

It's stated in text that the North sells wool, so they seem to have a fairly thriving sheep trade. With advances in technology, they could drain some of the more troublesome marshes and use that as extra farmland as well.

[voodooqueen126]

Well said, but I'm not so sure I would say never. I seem to recall a few running out a ways back.

Only because they lent money to people who couldn't pay them back.

[Ser Ponce]

Actually has anybody read Thomas Sowell's "Applied Economics" because he has this really interesting argument

Any Ph.D. in economics will tell you Thomas Sowell is a fool. Like Patchface-without-the-prophesizing-level fool.

Your statement is a contradiction in terms. If Thomas Sowell argued it, it is not an interesting argument. Unless he was quoting someone else, and was not given any choice over who or what to quote.

[Batman]

I've always thought Martin simply made a mistakes with the prizes in the Hand's Tourney, they are way, way too big. 10 thousands for an archery competition? Come on...

How the hell did Anguy manage to spend 10 thousand golden dragons on prostitutes and wine in about a year or less, BTW? It's a wonder he survived.

Good wine and good brothels are expensive, not that I would know

[Batman]

just for the heck of it I calulated what the hands torney prizes would be worth if a dragon was equal to a English noble note I used the year 1399 as the basic year

an Nobles is 6s/8d therefore 40,000 is 240000s/320000d since one pound equals 20s=240d 13333p/6s/8d in 2006 it would be £5,215,920.40 or given today exchange rate of 1.958 gives us $10,216,157.48 a good amount of money but not beyond all reason using the same data the crown debts are $2,298,635,432.9027 US dollars wich seems a little small

If that seems like a small amount i would like to congratulate you and ask for a loan. Certainly that isnt as a bad a situation as Greece find themselves in. The Iron Throne isnt crippled there is just a lot of debt.

[SeanF]

I've always thought Martin simply made a mistakes with the prizes in the Hand's Tourney, they are way, way too big. 10 thousands for an archery competition? Come on...

How the hell did Anguy manage to spend 10 thousand golden dragons on prostitutes and wine in about a year or less, BTW? It's a wonder he survived.

I agree. Lord Edmure offers 1,000 dragons as the reward for capturing Ser Jaime for example. Lord Selwyn offers 300 to ransom Brienne. Yet, Anguy blew 10,000! 10,000 dragons would surely have made Anguy as wealthy as quite a rich lord, or a very wealthy merchant.

If, as suggested, one dragon = one noble, then 10,000 would be £3,300. A skilled labourer in late fourteenth century England might earn £3 a year; a master mason about £7 a year; a physician about £15 a year; a knight's fee was reckoned at £20 a year; a rich knight might be on about £75 a year; a minor lord, about £150 a year.

[SeanF]

If that seems like a small amount i would like to congratulate you and ask for a loan. Certainly that isnt as a bad a situation as Greece find themselves in. The Iron Throne isnt crippled there is just a lot of debt.

6 m Dragons is about £2m Sterling.if one dragon = 1 noble.

The basic income of the English King was c.£100,000 in 1399. But, Westeros is much larger than England, so we can assume a much bigger Royal income, say £1m a year.