How could Littlefinger raise so much money to buy the Vale Lords?

[Pib_Juju]

I think Baelish intentionally drove the debt up to destabilize the kingdom. He knew the Iron Bank would fund coups if they were owed enough money.

[Victor227]

It's true that Littlefinger loves a good crisis, but he also likes keeping his options open. Setting things up for a financial crisis? Sure. But in this case, it was because he made a system that was uniquely dependent on his knowledge and skills. What if Tywin had stiffed him on his reward for the Tyrell alliance and kept him as Master of Coin? He may have been stuck with the job for a couple more years. It wouldn't make sense for him to deliberately sabotage the Crown's finances, and likewise, it wouldn't make sense for him to directly steal money.

Thanks to Robert, and the war after, things were set up to reach a head anyway if he bailed out. His system was getting bigger and bigger and bigger, and he was the only guy who could manage it. In a sense, that's a form of manufacturing a crisis, but it's a crisis that only highlights to the Crown how useful and talented he is, and how no matter what happens, worst case scenario, they still need him to manage the money.

[Hypnomagica]

It's true that Littlefinger loves a good crisis, but he also likes keeping his options open. Setting things up for a financial crisis? Sure. But in this case, it was because he made a system that was uniquely dependent on his knowledge and skills. What if Tywin had stiffed him on his reward for the Tyrell alliance and kept him as Master of Coin? He may have been stuck with the job for a couple more years. It wouldn't make sense for him to deliberately sabotage the Crown's finances, and likewise, it wouldn't make sense for him to directly steal money.

Thanks to Robert, and the war after, things were set up to reach a head anyway if he bailed out. His system was getting bigger and bigger and bigger, and he was the only guy who could manage it. In a sense, that's a form of manufacturing a crisis, but it's a crisis that only highlights to the Crown how useful and talented he is, and how no matter what happens, worst case scenario, they still need him to manage the money.

Now, this actually makes sense and would be the sort of Machiavellin approach one should expect from Baelish.

[Jasta11]

Like I said, if we're supposed to take the Crown's debt at face value, it's a massive implausibility in the plot. States don't go bankrupt because the boss likes parties.

The very fact that Littlefinger can somehow make the Crown's revenues ten times what they were tells me everything I need to know about Martin's financial knowledge, IE not much at all I suspect. I mean, doubling revenues for a massive kingdom would be a stretch already, but times ten is ridiculously implausible. It's not like Aerys had a bad administration either, Tywin is explicitely said to be an excellent Hand. That and the thing about the Iron Bank hiring a friggin army to have its gold back (not sure that ever happened IRL) tells me we have to suspend disbelief a lot when it comes to Littlefinger's prowesses.

[Hypnomagica]

The very fact that Littlefinger can somehow make the Crown's revenues ten times what they were tells me everything I need to know about Martin's financial knowledge, IE not much at all I suspect. I mean, doubling revenues for a massive kingdom would be a stretch already, but times ten is ridiculously implausible. It's not like Aerys had a bad administration either, Tywin is explicitely said to be an excellent Hand. That and the thing about the Iron Bank hiring a friggin army to have its gold back (not sure that ever happened IRL) tells me we have to suspend disbelief a lot when it comes to Littlefinger's prowesses.

Umm, not so much as Baelish was not responsible for the finances of the entire kingdom, just of that of the throne itself. The classic way a hierarchy runs is as a pyramid, with the crown at the top, shit flows down and money flows up.

The crown probably relied soley on taxes and it revenues in King's Landing. That is all the gold Baelish has to take care of, and if you think of him as a bussiness man, it is entirely believable for an instution like the Crown which typically just lets the taces pile up and spends when need be, to have its revnues greatly increased when it starts being run like a corporation.

Baelish accomplished what he did by using a sytsem for earning money that the crown had never even though of.

Of course he would greatly increase the revenure. They went from depending almost entirely on taxes to a true merchant power.

[Universal Sword Donor]

The very fact that Littlefinger can somehow make the Crown's revenues ten times what they were tells me everything I need to know about Martin's financial knowledge, IE not much at all I suspect. I mean, doubling revenues for a massive kingdom would be a stretch already, but times ten is ridiculously implausible. It's not like Aerys had a bad administration either, Tywin is explicitely said to be an excellent Hand. That and the thing about the Iron Bank hiring a friggin army to have its gold back (not sure that ever happened IRL) tells me we have to suspend disbelief a lot when it comes to Littlefinger's prowesses.

And Tywin hadn't been his hand for almost a decade by the time, and his hand's primary skills after that were complimenting the king, losing battles*, setting things on fire, and being burnt alive. It's not really a stretch to think that the treasury might have gone a bit by the wayside at that point.

While I agree that 10x the revenue is a bit ridiculous, doubling it doesn't seem like that much of an obstacle. Aerys was clearly not in any position or condition to do much, the hands weren't capable of much either, and we have no idea who the master of coin was. We know Baelish massively reinvests what he brings in, so expanding a low revenue stream wouldn't seem to be too hard if you stayed out of risky investments.

On a separate note, if Robert was throwing around 100K in dragons for tournaments, rebuilt the Royal Fleet, and whoring all the time, I can see how he racked up a significant debt in 14 years.

* probably a bit harsh but we don't know much else about young JonCon

[juanml82]

We don't really know what else he might have put into motion that in that five-year gap we never got, of course.

Well, we go by the books as they are

[Archmaester_Aemma]

So I've been having a quick look at the well-known and reputable source of wikipedia. Specifically, the page on the history of the English fiscal system, since medieval England is broadly the basis of the Westerosi monarchy.

Adapted from the Sources of revenue heading:

Broadly, the sources of revenue (which I saw as relevant to Westeros, i.e. not exploitation of the Jews or sale of religious dioceses) fall under the following heads:

1. The royal demesne (i.e. estates managed by the crown), could be increased by confiscations following the rebellions and by the doctrine of escheat which stated that untenanted land reverted to the king. The royal forests, placed under special forest laws, yielded little revenue except in the form of offender penalties. Rural tenants at first paid rent in the form of produce from the land, but this was gradually substituted by cash payments. As the royal demesne was favourable to the growth of towns, the rents derived from urban tenants became a valuable part of the demesne's yield. The revenues of the towns were frequently farmed-out which resulted in the crown receiving a fixed and secure annual payment.
   
2. The "feudal incidents" were feudal rights of the king as the overlord of his tenants-in-chief, which included the claim to knight-service, the three regular feudal aids and payments on succession to a lordship, as well as the profits from wardships and marriages, together with escheats forfeitures.
   
3. The administration of justice was a lucrative prerogative of the crown. Suitors had to pay not only for the hearing of their cases but also fees for obtaining writs. Additionally, amercements (i.e. a non-voluntary fine - previously had no idea that) and compositions increased receipts from this source.
   
4. Direct taxation formed an extraordinary or occasional source of revenue. The Danegeld was succeeded by the carucage, and scutage developed from the commutation of the feudal tenure of knight-service from actual military service into cash payments.
   
5. Customs and dues claimed at the ports which were small in amount but which nevertheless contained the germ (which LF undoubtedly developed) of the fully developed customs system of later years.
   

LF also practiced the "new man" policy, of giving jobs to people that were from the lesser nobility but actually knew something about the job they'd been given or were clever enough to learn, so they probably improved the revenues in their assorted posts, which collectively would have totted up.

I'm really regretting not having my old history folders with me, because I've done stuff about this! Dang and blast!

[Wmarshal]

Like I said, if we're supposed to take the Crown's debt at face value, it's a massive implausibility in the plot. States don't go bankrupt because the boss likes parties.

A specially if they get a continent worth of tax money to spend.

[Victor227]

Littlefinger definitely would have smoothed out the bureaucracy with his installation of more capable lesser nobility and commoners, but apparently the real power of his tenure as Master of Coin was his ability to turn the Crown into a simultaneous investment bank, and use it to hoard goods and artificially inflate values. He basically turned the fiscal power of the Crown into a part of the common economy, and made use of the massive power of its wealth to... beget more wealth.

[Rhaegars Heir]

And Tywin hadn't been his hand for almost a decade by the time, and his hand's primary skills after that were complimenting the king, losing battles*, setting things on fire, and being burnt alive. It's not really a stretch to think that the treasury might have gone a bit by the wayside at that point

we're specifically told Areys left the royal treasury over flowing with gold

[The Kinkslayer]

There's a reason why the crown pays for 30+ jailers for the red keep but only had like 4 real jailers, Littlefinger's purse is the reason.

[Universal Sword Donor]

we're specifically told Areys left the royal treasury over flowing with gold

Yes did he spend any of the gold he brought in? Revenues and existing treasury are two different things.

[Jasta11]

Umm, not so much as Baelish was not responsible for the finances of the entire kingdom, just of that of the throne itself. The classic way a hierarchy runs is as a pyramid, with the crown at the top, shit flows down and money flows up.

The crown probably relied soley on taxes and it revenues in King's Landing. That is all the gold Baelish has to take care of, and if you think of him as a bussiness man, it is entirely believable for an instution like the Crown which typically just lets the taces pile up and spends when need be, to have its revnues greatly increased when it starts being run like a corporation.

Baelish accomplished what he did by using a sytsem for earning money that the crown had never even though of.

Of course he would greatly increase the revenure. They went from depending almost entirely on taxes to a true merchant power.

No way the Crown only has revenues from King's Landing. We are told Robb stopped the North's tribute to the Iron Throne and told Manderly to build his fleet with it instead. If it goes for the North, it certainly goes for all of the realms. The IT takes money from all its dominions. King's Landing is only a fraction of the continent's population, and not even the only big city. The crown gets its revenues from far more than taxing merchants in KL.

Aerys did not spend that much (it's said that the treasury was flowing with gold when he left) but that just proves the Seven Kingdoms can be run, and run economically well if nothing else it seems, with 1/10 the budget of what Robert had, which is patently absurd. Tourneys and feasts are a money sink, sure, but to drain ten times the wealth an entire continent can produce in tribute to a central authority? That's utterly ridiculous.

LF doubling or tripling crown income would be been OK. 10 times is just silly. Robert making the realm poorer is one thing, creating a massive debt solely out of parties and jousts is silly when he had 10 times as much money as his predecessor. It's not like the Targaryen were famously thrifty or anything like that. They had secondary residences, tourneys, made great projects like King's Landing, the Kingsroad and a royal fleet, and were seemingly able to do that with a tenth of Bob's budget somehow. Either all of them were administrative wizards or Martin is off in his numbers. Considering he thinks banks go to war when they require unpaid debts, I veer towards the latter.

[Jasta11]

The curse of the double post stroke me!

[Maester Pedant]

I think the Crown has a cash flow problem. The Crown probably has huge amounts of wealth invested, but the revenues from those investments are not enough to cover the enormous expense that a war on multiple fronts and overall political turmoil cause. So the problem is they don't have cash on hand to honour their debts, but they probably have more than enough assests to cover them and more. If anyone could make sense of Littlefinger's financial schemes besides Littlefinger himself, they'd probably be able to pay at least the Iron Bank, even if at cost of giving them some of the Crown's assets as collateral. Of course doing this would be very damaging to the Crown, since it would lose the ability to generate more wealth in the future. A financial genius like Littlefinger would find a negotiated solution with the Iron Bank that would satisfy their demands for payment and still keep at least the most profitable and strategic of the Crown's assets.

That being said, I think it's pretty obvious that part of the money was embezzled by Littlefinger, though almost certainly not to the extent of being able to cause a massive debt problem.

[Yukle]

Taxation in Westeros is modeled on historical taxation, not taxation like now. Even if Littlfefinger significantly increased revenues, they would still be extremely small by our standards. Taxes in history were a tool that allowed specialised labourers to work on behalf of a ruler without tying them to farms. They are on a much smaller scale to what we're used to.

The Kingsroad in Westeros runs the length of the entire continent. It would have been especially difficult to manage, as would any bridges. Most of the time the Iron Throne would expect that the various Lords of Westeros would administer their own holds, of course, but the Kingsroad suggests that the Iron Throne has at least some continent-wide project. The Night's Watch, poor though it is, is another expense.

Wars are extremely expensive, which is why the lords wait until a war actually begins to call their banners. The Iron Throne, however, has a permanent guard of Gold Cloaks. Tyrion laments their expense, and with good reason. While they might seem small, Robert's tourneys and melees would be extravagant expenses that the crown cannot sustain. Their revenues are not enormous - how could they be? The vast majority of people in Westeros work on subsistence farms. They earn just enough to eat and have a little surplus to pay their lords. The Iron Throne lost considerable parts of its fleet in the Greyjoy rebellion (as did the Westerlands) and building ships costs money. The Crownlands would not have enough resources to supply its own needs entirely and so would need to but them from other regions.

It seems ridiculous to us that a series of lavish parties could leave an entire continent with financial problems but it's only because we're used to much more efficient taxation. For a primitive tax system, any project of any kind that requires expenses but doesn't return profit (and in the case of tourneys, doesn't return anything) is a diabolical problem.

[TheSnape]

Does anyone think his dirty dealings will be his undoing? Will the Iron Bank just let him off & place all blame on the Crown or will they take out a hit with the FM on LF for his roll in the fraud? Could be a way to reunite the Stark sisters.

Place all the blame on the Crown of course.

Cersei was the one who stopped paying them back on behalf of the IRON THRONE.

Therefore, in their mind, she forfeits her right to said throne.

[Wmarshal]

I never got how he kept his job. Jon only knew him because he banged his wife, and ass actually bragged bout it so much that Tyrion, a guy who spent his life in CR heard of it. His, oh he makes money, makes no senses. Aerys made medieval nukes, had money out his ass. Bobby parties, one poor son of a gun. The amount this does not make sense is amazing. His butt should have been fired along time ago.

[Blackfish Tully]

No way the Crown only has revenues from King's Landing. We are told Robb stopped the North's tribute to the Iron Throne and told Manderly to build his fleet with it instead. If it goes for the North, it certainly goes for all of the realms. The IT takes money from all its dominions. King's Landing is only a fraction of the continent's population, and not even the only big city. The crown gets its revenues from far more than taxing merchants in KL.

Aerys did not spend that much (it's said that the treasury was flowing with gold when he left) but that just proves the Seven Kingdoms can be run, and run economically well if nothing else it seems, with 1/10 the budget of what Robert had, which is patently absurd. Tourneys and feasts are a money sink, sure, but to drain ten times the wealth an entire continent can produce in tribute to a central authority? That's utterly ridiculous.

LF doubling or tripling crown income would be been OK. 10 times is just silly. Robert making the realm poorer is one thing, creating a massive debt solely out of parties and jousts is silly when he had 10 times as much money as his predecessor. It's not like the Targaryen were famously thrifty or anything like that. They had secondary residences, tourneys, made great projects like King's Landing, the Kingsroad and a royal fleet, and were seemingly able to do that with a tenth of Bob's budget somehow. Either all of them were administrative wizards or Martin is off in his numbers. Considering he thinks banks go to war when they require unpaid debts, I veer towards the latter.

Increasing the crowns revenue 10 times is not silly if you remember what Tyrion said about the way Littlefinger changed the way the crown handled it's revenue. Before Littlfinger the crown behaved in a typical manner for a medieval kingdom. They collected taxes and spent those taxes on the crowns debts and put the rest into the treasury. Littlefinger took the money from the treasury and invested that money in all manner of commercial enterprise. He turned the crown finances into a JP Morgan type of business and borrowed a ton of money to have enough capital to fund the increases in revenue.