Is Littlefinger Getting Bankrolled?

[The Sleeper]

We know how he run the treasury. He paid the Throne's debt by borrowing and used its incomes to invest and speculate. Considering he probably invested in his own businesses or to people associated with him and that he could play fast and loose he had the potential to make loads of money. We also know that he sold offices. This practice also explains why there is massive debt much better than any tourney Robert organised. 

I'm not entirely sure what his duties in Gulltown entailed. If they included managing funds and or commodities he would have the ability to do the similar opportunities to make a lot of money. There should be plenty of Braavosi trading in Gulltown and these things wouldn't be particularly novel to them. That would be where he learned and made his connections. Some people would have lost some money or maybe not made as much as they could but for the most part he would have made people a lot of money including the Arryns. Trading and economics are pretty rudimentary in the Seven Kingdoms. By observing the Braavosi and employing their tactics he could have mad a real impact seemingly out of nowhere. 

[rotting sea cow]

19 hours ago, John Suburbs said:

So he goes to Gulltown and immediately ups the income to House Arryn, then goes to KL and does the same thing for the crown. The thing is, unless he was instrumental in increasing the actual trade coming and going from those ports, which would not happen instantly, then all that money had to come from somewhere. The two ways to do this are either more aggressive enforcement of customs and taxes, or, as mentioned in the book, LF himself becoming involved in the buying and selling of commodities. Either way, this results in someone, and probably many someones, not making as much money as they were before LF arrived, since they are either handing over a higher percentage of income to the government or they are not getting the normal price for their goods as LF buys low, causes a shortage, and then sells at the higher price himself. This could only serve to depress trade as word gets around that KL is not a great place to do business, which would lead to all sorts of complaints from local merchants and craftsmen and would in fact make LF one of the most hated figures in the government.

All the while, of course, the crown's debts are mounting, which would not be necessary if LF was making all this money wringing customs from traders and profiting on his own market manipulation.

So is it possible, then, that LF's ability to rub two coins together to get three is actually that he is being bankrolled by someone, perhaps a rich trader from across the narrow sea who is actively trying to topple the Baratheon regime to put his own puppet ruler in place? And wouldn't this explain this odd little exchange:

You need to read https://racefortheironthrone.wordpress.com/2017/08/28/by-popular-demand-who-stole-westeros/

it is very well written and very plausible explanation of Littlefinger shenanigans

 

19 hours ago, John Suburbs said:

So both Varys and Illyrio can see that LF is meddling in their plans in a major way, that he is the one bringing about the war faster than they want and is in a position to do great harm to the crown's finances, but neither of them, and Illyrio in particular, seem overly interested in learning "what game Littlefinger is playing", even though it is Varys' job to learn everybody's secrets, as he does with Renly and Loras. Might that mean that Illyrio already knows what our little MoC is up to?

 

I disagree that LF is meddling in Varys plans in a "major way". If this was the case Varys would have had him killed and because the low importance of LF in the nobility tree, nobody would have asked major questions.

Varys understands that LF is dangerous. It is even clear that Varys doesn't understand LF objectives. Varys and Illyrio have shown great adaptability in their plans (to the point to piss off GC officials) and there was nothing that LF did that couldn't be worked around. Certainly Varys wasn't happy with certain things but Varys is disciplined enough to not allow that his feelings obstruct his work. 

Also, in the dialog, it is clear that Varys considers - at that moment -  Ned Stark  as the biggest threat to their plans. Unlike LF, Ned Stark cannot be eliminated without raising question and precipitating the war that Varys was trying to avoid. And he is the biggest threat because the twincest revelation must be precisely timed with the Dothraki invasion led by Viserys. If it happens too soon, after dealing with the Lannisters, Robert reign is strengthen, specially with the addition of the Reach forces that Renly was planning

 

 

 

 

 

[John Suburbs]

19 hours ago, Colonel Green said:

No, because that goes against the whole point of the discussion, that it's something they're concerned about and which is an unknown factor.

The speculation in the OP about Littlefinger's customs methods is going into too much detail, I expect.  GRRM isn't an economist.  We're to understand that Littlefinger is very smart and was able to increase revenues through some combination of effectiveness, self-dealing, and, once he'd climbed to a certain point, outright fraud.

Illyrio can't be playing a double-game here? Plotting with Varys to do one thing while simultaneously plotting with LF to do another? And it isn't like LF planned on Catelyn running into Tyrion and jump-starting the war, so this could very well be two sides of the same plot: LF's moves inadvertently pushed things along too quickly, now he needs Varys to slow them down. But that doesn't mean he wants Varys to know that he is also working with LF, and vice versa.

Sure, GR isn't an economist, but he is smart enough to realize that there must be some plausible way for one rather impoverished young man to increase the customs of a busy port like Gulltown ten-fold. Whether this is through better enforcement or increasing the rate, this represents a 1000 percent increase in the cost of doing business at Gulltown, which is certainly not something that will go over well with either the local merchants/tradesmen or ship captains. So this could just be a major fudge on GRRM's part or this is yet another case in which he hides the truth in plain site: that this income is coming from an outside source who is looking to destabilize the realm.

[Lord Lannister]

His family is Bravossi. I guess it's possible he has a connection to the Iron Bank and one of his tasks was to run the crown's debt up as much as possible. 

[John Suburbs]

19 hours ago, btfu806 said:

Well in Gulltown he just did customs or something? Right? So a position that he excelled at and then his dad died, giving him Baelish Tower in the fingers so his son was now a lord. So now he has some status. So then Jon Arryn brought in little finger to be master of coin. At this point, he doesn't necessarily have, or need, a ton of wealth/coin. You can argue that he did some shady stuff on the side to make himself rich while master of coin. Used that money to invest in brothels, and made even more money. 

If I remember correctly LF would take out huge loans in the crown's name and controlled where that money went, I am sure he could fudge things on paper and make himself richer.

In ACOK Tyrion makes a comment that LF would sell official positions or gave them favors or something.

OK, but the point is that he is now collecting ten times the amount from the merchants and traders in Gulltown than his predecessor was. Not only would this piss off a whole lot of people, it would likely depress trade. Imagine if your taxes were suddenly increased 1000 percent.

Then he goes on to repeat the process at King's Landing, which is orders of magnitude more wealthy than Gulltown, and he is able to produce similar results in three years before being named MoC and is able to start borrowing in the king's name. I'm having a hard time imagining the number of brothels he would have to own in order to subsidize a significant increase in the customs haul at KL.

[Blackfish Tully]

18 hours ago, Makk said:

Pretty much this although I'm completely convinced he was embezzling, and doing so in large amounts. The crown couldn't get into so much debt given so much income even paying Roberts excessive tournament prizes. It went somewhere.

Littlefinger would not need to  embezzle to make a ton of money from his position as Master of Coin , practicing different  forms of insider trading would be all he would need to make a a lot of money off the crown and it would be practically untraceable . We know from Tyrions quote that Littlefinger got the Iron Throne into commodities and lending which  effectively turned the Iron Throne into an investment bank and by knowing what and when the Iron Throne will be purchasing commodities he and his partners can buy the commodities ahead of time and sell to the Iron Throne at a higher price and also by his controlling the harbormasters , tax farmers, customer sergents, wine factors etc.. he could pretty effectively control what was coming and going in Westeros and could create demand by causing certain commodities to be held up at the ports or in the warehouses .  Littlefinger would have silent partners all across Westeros and Essos and they would be making a fortune by controlling the trade going in and out of Westeros and making a profit on anything coming or going .

Getting into the commodities business also explains a good bit of the Iron Thrones debt , it would take tremendous capital to buy the ships , warehouses , wagons , shops to handle all the commodities he was buying and selling and any profit he was making was either loaned out or put back into the commodities business so the treasury was always empty , he was massively leveraged and just like the US banks in the 2000s things were going great into it all went to hell , with the US banks it was the housing market crashing but with Littlefinger it was a civil war that he helped start . In effect he created an economy that was very vulnerable to a civil war and then started that war but got out of the job right before it all went to hell so his hands are clean and he takes none of the blame , it was a masterful plan .  

 

Within three years of his coming to court, he was master of coin and a member of the small council, and today the crown's revenues were ten times what they had been under his beleaguered predecessor . . . though the crown's debts had grown vast as well. A master juggler was Petyr Baelish.

Oh, he was clever. He did not simply collect the gold and lock it in a treasure vault, no. He paid the king's debts in promises, and put the king's gold to work. He bought wagons, shops, ships, houses. He bought grain when it was plentiful and sold bread when it was scarce. He bought wool from the north and linen from the south and lace from Lys, stored it, moved it, dyed it, sold it. The golden dragons bred and multiplied, and Littlefinger lent them out and brought them home with hatchlings.

And in the process, he moved his own men into place. The Keepers of the Keys were his, all four. The King's Counter and the King's Scales were men he'd named. The officers in charge of all three mints. Harbormasters, tax farmers, customs sergeants, wool factors, toll collectors, pursers, wine factors; nine of every ten belonged to Littlefinger. They were men of middling birth, by and large; merchants' sons, lesser lordlings, sometimes even foreigners, but judging from their results, far more able than their highborn predecessors.

[John Suburbs]

19 hours ago, hodorisfaclessman said:

Not  out of his own pocket just increased them...we literaly see how meagre his begginings are in sansas pov

No he replaces largely incompetent low level nobles with  commoners who merit their role not get it by birth(of course that means they are forever indebted to lf too) etc ..men who can handle accounts and will trouble with all the 'coin counting' that someone of high birth would be bored/un interested in doing right!

When it was noticed how hed boosted gulltowns revenues jon arryn brought him to kl partly on his wifes henpecking him and partly as he couldnt control roberts excessive spending!

If he increased the customs haul at Gulltown ten-fold, this means the cost of doing business there is now ten times what it was before. Don't you think this would piss off a lot of people and would actually depress economic activity at the port? I can see where he can squeeze a little more from the till by getting rid of corrupt or incompetent collectors, but a ten-fold increase? Neither Jon Arryn nor his castellans ever noticed that they were only getting one-tenth the revenue they were entitled to? I find that hard to swallow.

Then he goes on to repeat this same process at KL, with nary a complaint from the traders who now have to pay the full custom or the merchants/tradesmen on the docks who are suddenly presented with inflated prices because the crown has upped its take by 1000 percent?

Maybe Martin just fudged all these details, or maybe he left yet another clue in plain site that all is not as it seems, especially when it comes to Littlefinger.

[Blackfish Tully]

16 minutes ago, John Suburbs said:

OK, but the point is that he is now collecting ten times the amount from the merchants and traders in Gulltown than his predecessor was. Not only would this piss off a whole lot of people, it would likely depress trade. Imagine if your taxes were suddenly increased 1000 percent.

 

actually Littlefinger was collecting 3 times as much taxes as any of the other customs officials . He was very good at his job or was smart enough to work the system and get higher customs then anybody else and still find a way to keep the merchants happy . 

Ten years ago, Jon Arryn had given him a minor sinecure in customs, where Lord Petyr had soon distinguished himself by bringing in three times as much as any of the king's other collectors

 

16 minutes ago, John Suburbs said:

Then he goes on to repeat the process at King's Landing, which is orders of magnitude more wealthy than Gulltown, and he is able to produce similar results in three years before being named MoC and is able to start borrowing in the king's name. I'm having a hard time imagining the number of brothels he would have to own in order to subsidize a significant increase in the customs haul at KL.

Littlefinger did not increase the taxes in Kings Landing 10 times , he simply added new revenue streams by buying and selling commodities and loaning out money , it's all in Tyrions quote 

 He paid the king's debts in promises, and put the king's gold to work. He bought wagons, shops, ships, houses. He bought grain when it was plentiful and sold bread when it was scarce. He bought wool from the north and linen from the south and lace from Lys, stored it, moved it, dyed it, sold it. The golden dragons bred and multiplied, and Littlefinger lent them out and brought them home with hatchlings.

[John Suburbs]

19 hours ago, Dorian Martell's son said:

holdings are not coin, and from all outward appearances, his house is as minor as they come, but in KL as in gulltown, he possesses businesses like whorehouses, which are a great way to hide coin pilfered from royal coffers, not to mention keeping tabs on important people. 

So he's is increasing the crown's income by stealing from the crown, laundering it through his brothels and passing it back to the crown disguised as increased customs -- and he is able to do all of this even before he becomes MoC at a scale that would produce a significant bump at a major port like KL?

18 hours ago, Dorian Martell's son said:

There are more ways to increase revenue. 
1: efficiency at the docks. hiring more workers, getting rid of or buying out any mafia that controls the docks, Improving infrastructure or otherwise  streamlining the moving of goods from boat to city. No losers there. 
2: Information. He is on the small council and has whorehouses and bars. He can hear info from ship captains about conditions in the free cities, ships that may have sank or the state of pirates. He also has a good idea about the state of the 7k.  With the right info LF can predict shortages and price accordingly, and with the crown's coffers as ballast, he can afford to buy on margins large enough to get a good deal no matter what the current price is. 
3:  good old intuition. He is a smart guy. 

A ten-fold bump through intuition and better efficiency? Rumors of sunken ships? Random shortages halfway across the realm? He is able to capitalize on all of this to such an extent within a few years?

Getting rid of the mafia that controls the dock? Is that an easy thing to do? Buying them out? Again, with what coin? These men must be fabulously rich by now skimming 90 percent of the customs revenue -- would they be willing to just walk away when it would be much easier to just slit LF's throat?

Sorry, but all of this leaves me a little incredulous.

[Dorian Martell's son]

5 minutes ago, John Suburbs said:

So he's is increasing the crown's income by stealing from the crown, laundering it through his brothels and passing it back to the crown disguised as increased customs -- and he is able to do all of this even before he becomes MoC at a scale that would produce a significant bump at a major port like KL?

He increases revenues while skimming some of that profit to increase his wealth. where would he get cash to buy whorehouses? with the buying power of say, the house of Arryn, and later the crown, he has more capital to work with. Nobody is going to look too hard at the coffers in Gulltown  if they are full. 

8 minutes ago, John Suburbs said:

A ten-fold bump through intuition and better efficiency? Rumors of sunken ships? Random shortages halfway across the realm? He is able to capitalize on all of this to such an extent within a few years?

 Yes, a 10 fold increase. Management can do some amazing things if they are engaged. Banks may offer you a 3.5% interest rate on a long term savings account but those banks are making 25% on that money you put in. 

11 minutes ago, John Suburbs said:

Getting rid of the mafia that controls the dock? Is that an easy thing to do? Buying them out? Again, with what coin? These men must be fabulously rich by now skimming 90 percent of the customs revenue -- would they be willing to just walk away when it would be much easier to just slit LF's throat?

Breaking mafia control can be very difficult, but there is no american style legal system in Westeros to entangle them. You don't like who runs the docks? kick them out of have them killed. We have seen how ruthless LF can be.  Just look at how people get replaced in the book. Slynt is a prime example, and he was lucky enough to get sent to the wall. 

16 minutes ago, John Suburbs said:

Sorry, but all of this leaves me a little incredulous.

Why? This is a fantasy novel with fire and blood magic, networked trees, dragons, people who inhabit animal bodies, not-elves, ice demons and a dwarf that takes to battle and kills multiple men and horses despite his miniscule stature. 
How is having an economic genius as master of coin so hard to accept?   

[The Sleeper]

44 minutes ago, Blackfish Tully said:

Littlefinger would not need to  embezzle to make a ton of money from his position as Master of Coin , practicing different  forms of insider trading would be all he would need to make a a lot of money off the crown and it would be practically untraceable . We know from Tyrions quote that Littlefinger got the Iron Throne into commodities and lending which  effectively turned the Iron Throne into an investment bank and by knowing what and when the Iron Throne will be purchasing commodities he and his partners can buy the commodities ahead of time and sell to the Iron Throne at a higher price and also by his controlling the harbormasters , tax farmers, customer sergents, wine factors etc.. he could pretty effectively control what was coming and going in Westeros and could create demand by causing certain commodities to be held up at the ports or in the warehouses .  Littlefinger would have silent partners all across Westeros and Essos and they would be making a fortune by controlling the trade going in and out of Westeros and making a profit on anything coming or going .

Getting into the commodities business also explains a good bit of the Iron Thrones debt , it would take tremendous capital to buy the ships , warehouses , wagons , shops to handle all the commodities he was buying and selling and any profit he was making was either loaned out or put back into the commodities business so the treasury was always empty , he was massively leveraged and just like the US banks in the 2000s things were going great into it all went to hell , with the US banks it was the housing market crashing but with Littlefinger it was a civil war that he helped start . In effect he created an economy that was very vulnerable to a civil war and then started that war but got out of the job right before it all went to hell so his hands are clean and he takes none of the blame , it was a masterful plan .  

 

Within three years of his coming to court, he was master of coin and a member of the small council, and today the crown's revenues were ten times what they had been under his beleaguered predecessor . . . though the crown's debts had grown vast as well. A master juggler was Petyr Baelish.

Oh, he was clever. He did not simply collect the gold and lock it in a treasure vault, no. He paid the king's debts in promises, and put the king's gold to work. He bought wagons, shops, ships, houses. He bought grain when it was plentiful and sold bread when it was scarce. He bought wool from the north and linen from the south and lace from Lys, stored it, moved it, dyed it, sold it. The golden dragons bred and multiplied, and Littlefinger lent them out and brought them home with hatchlings.

And in the process, he moved his own men into place. The Keepers of the Keys were his, all four. The King's Counter and the King's Scales were men he'd named. The officers in charge of all three mints. Harbormasters, tax farmers, customs sergeants, wool factors, toll collectors, pursers, wine factors; nine of every ten belonged to Littlefinger. They were men of middling birth, by and large; merchants' sons, lesser lordlings, sometimes even foreigners, but judging from their results, far more able than their highborn predecessors.

All of the above is why I believe that he wanted to avoid a civil war and mostly to keep Stannis from gaining influence, which is why he had Jon Arryn murdered. The letter to Cat was meant to throw off suspicion of the real culprit, but the dual attempts on Bran fucked it up for him, in that it made sure Ned and Cat would never drop it. After everything played out his only option would be to make his escape before the crash came. 

[John Suburbs]

18 hours ago, Damon_Tor said:

Or he's aggressively cutting customs and taxes. If you've got twenty different petty lords along a road or river, and each of them demanding 25% of whatever passes through their lands, that's going to hurt the business of the port at the start of that road/river, and it's not going to result in great income for the petty lords either, because traders aren't going to want to go down those roads. It's entirely possible he got Aryn to standardize tariffs, increasing the popularity of the port because it's now at the mouth of a much more profitable trade route.

Supply side customs enforcement. Not a bad idea.

The problem is that if he cuts the rates then he has to make up the gains in either volume or the value of goods. And that would mean the ports would be so crammed full of ships that it would be unworkable or there is a sharp increase in high-priced goods like Myrish lace or Arbor wine, which would only deflate their value in the market and, thus, as a source of revenue. Plus, we never hear about this adjustment in tariffs, either at Gulltown or at KL, where LF started out as just one of many customs officials.

Another problem is that there aren't likely to be very many routes out of the mountains to the port, so if a toll is high at a particular crossing there isn't much of a choice but to turn around and go home. And even when there is, lowering the tolls is not going to increase trade at the port because the land can only produce so much and the excess goods will get there one way or another. I know your example is illustrative, but I can't imagine a route where 20 lords are taking a quarter of the load each time -- you'd literally have nothing by the time you got to market.

Supply side doesn't work in the modern world, so it is highly doubtful that it would produce a 10x gain in the feudal one.

[John Suburbs]

14 hours ago, kleevedge said:

I believe House Baelish has connections in the slave trade, and Petyr was able to cut costs in Gulltown by utilizing slave labor. We also have to remember Lysa has access to plenty of wealth and he had control over her. Now in King's Landing he continues to replace more expensive workers with slave labor, as he does in his brothels. My theory is Littlefinger, Doran Martel, and Volantis have some sort of agreement involving the slave trade.

Slaves in Gulltown and in KL? I don't remember reading about that. In any case, slaves are usually more expensive than free labor. You have to buy the slave to begin with, then clothe him, feed him, pay for housing... Free labor gets a few coppers a week and the rest is on him.

Lysa as the LF's bankroller? That's an interesting idea, but I doubt she has the means. Her dowry would not be enough to increase customs 1000 percent, and it isn't likely that she would have control of that money anyway -- it is a payment to her lord husband for her care and feeding. As far as I know, she does not have her own source of income either.

 

[John Suburbs]

6 hours ago, rotting sea cow said:

You need to read https://racefortheironthrone.wordpress.com/2017/08/28/by-popular-demand-who-stole-westeros/

it is very well written and very plausible explanation of Littlefinger shenanigans

Good read, and very plausible. But it is also plausible that rather than taking loans from others and then cooking the books, he is being bankrolled by someone very rich who is plotting regime change.

6 hours ago, rotting sea cow said:

I disagree that LF is meddling in Varys plans in a "major way". If this was the case Varys would have had him killed and because the low importance of LF in the nobility tree, nobody would have asked major questions.

Varys understands that LF is dangerous. It is even clear that Varys doesn't understand LF objectives. Varys and Illyrio have shown great adaptability in their plans (to the point to piss off GC officials) and there was nothing that LF did that couldn't be worked around. Certainly Varys wasn't happy with certain things but Varys is disciplined enough to not allow that his feelings obstruct his work. 

Also, in the dialog, it is clear that Varys considers - at that moment -  Ned Stark  as the biggest threat to their plans. Unlike LF, Ned Stark cannot be eliminated without raising question and precipitating the war that Varys was trying to avoid. And he is the biggest threat because the twincest revelation must be precisely timed with the Dothraki invasion led by Viserys. If it happens too soon, after dealing with the Lannisters, Robert reign is strengthen, specially with the addition of the Reach forces that Renly was planning.

Well, it's major enough that Illyrio has crossed the Narrow Sea to discuss it in person with Varys. Illyrio needs time, but Littlefinger's meddling has brought the war on too soon. In my book, that's major interference. It's not an easy thing to kill a lord, and, yes, the murder of the Master of Coin would generate major questions.

Yes, Ned Stark is the biggest problem in Varys' eyes. But why does neither he nor Illyrio think much of Littlefinger even though they both can see that it is his meddling that has brought things to a head much sooner than they anticipated? Beyond that, why do neither of them even recognize that LF is probably the only player in this game whose motivations are completely hidden? They know all the secrets of virtually everyone of note in King's Landing, but they aren't even slightly perturbed by the fact that they know nothing about Littlefinger. I submit that one likely explanation is that Varys does not want to admit that he is being out-played in the spy game, while Illyrio is already fully aware of what LF is doing.

[John Suburbs]

1 hour ago, Blackfish Tully said:

actually Littlefinger was collecting 3 times as much taxes as any of the other customs officials . He was very good at his job or was smart enough to work the system and get higher customs then anybody else and still find a way to keep the merchants happy . 

Ten years ago, Jon Arryn had given him a minor sinecure in customs, where Lord Petyr had soon distinguished himself by bringing in three times as much as any of the king's other collectors

 

Littlefinger did not increase the taxes in Kings Landing 10 times , he simply added new revenue streams by buying and selling commodities and loaning out money , it's all in Tyrions quote 

 He paid the king's debts in promises, and put the king's gold to work. He bought wagons, shops, ships, houses. He bought grain when it was plentiful and sold bread when it was scarce. He bought wool from the north and linen from the south and lace from Lys, stored it, moved it, dyed it, sold it. The golden dragons bred and multiplied, and Littlefinger lent them out and brought them home with hatchlings.

Yes, but contrast this with what LF and Lysa tell Sansa later:

Quote

First, LF:

"Your mother was a gentlewoman of Braavos, daughter of a merchant prince. We met in Gulltown when I had charge of the port."

Then Lysa"

"Jon gave him the customs for Gulltown to please me, but when he increased incomes tenfold my lord husband saw how clever he was and gave him other appointments, even brought him to King's Landing to be master of coin."

Personally, I believe Tyrion's account of what happened rather than Lysa's. But from this I think we can conclude that LF went from chief customs officer in Gulltown to a "minor sinecure in customs" at King's Landing, where he tripled the performance of other officials. Yes, maybe he was able to do this without stepping on any toes, but in my experience, businessmen don't like paying one amount for taxes one day and then more taxes the next. So unless LF, from his minor customs sinecure, could triple the value of trade, then he must be taking the money out of the pockets of somebody.

The same goes for his buying and selling schemes. If he is just counting on dumb luck to buy low and sell high, then he's likely to get burned more often than not because there is no way to predict when or where a shortage will just happen. In the meantime, he has to front the money to buy the good, store it, transport it if necessary, with no guarantee that it will turn a profit on the back end. So the more likely explanation is that he is creating the shortages himself, which leads to all other kinds of problems. If he is hoarding goods right off the docks, this will most certainly be noticed, which means he is going to run afoul of every merchant and tradesman who first can't get the things they need for their livelihoods, then have to pay through the nose whenever LF decides the price is right. And he would have to do this on a massive scale, literally millions of dragons' worth every year, in order to keep this whole scheme afloat, which would certainly affect the local economy. And all of this would have been far beyond his capability until he became the MoC.

So I still contend that the most likely way for him to do this, particularly at the start, was to get a steady supply of gold from a rich benefactor, launder it through his customs position, and then start borrowing, buying, selling and all the rest once he has control of the crown's finances. In this way, he generates all this wealth for the crown and nobody is the wiser because no one's interests are being interfered with.

 

[John Suburbs]

1 hour ago, Dorian Martell's son said:

He increases revenues while skimming some of that profit to increase his wealth. where would he get cash to buy whorehouses? with the buying power of say, the house of Arryn, and later the crown, he has more capital to work with. Nobody is going to look too hard at the coffers in Gulltown  if they are full. 

 Yes, a 10 fold increase. Management can do some amazing things if they are engaged. Banks may offer you a 3.5% interest rate on a long term savings account but those banks are making 25% on that money you put in. 

Breaking mafia control can be very difficult, but there is no american style legal system in Westeros to entangle them. You don't like who runs the docks? kick them out of have them killed. We have seen how ruthless LF can be.  Just look at how people get replaced in the book. Slynt is a prime example, and he was lucky enough to get sent to the wall. 

Why? This is a fantasy novel with fire and blood magic, networked trees, dragons, people who inhabit animal bodies, not-elves, ice demons and a dwarf that takes to battle and kills multiple men and horses despite his miniscule stature. 
How is having an economic genius as master of coin so hard to accept?   

Sorry to belabor, but how does he just increase revenues? If he is taking in ten times more in than the last customs guy, that's ten times the cost of business for all the traders, merchants, craftsmen, etc. at the port. That's literally a 1000 percent increase in taxes. Somebody, surely, would complain about this, and LF would be a marked man.

I don't know what the flow of revenue is at Gulltown, but at KL it must be in the millions of dragons. Even the finest virgin whore goes for one dragon, and only one time at that. He would need thousands of whores working day and night to generate enough income to pass it off as a significant gain in revenues. Usury is an option, to be sure, but that also tends to produce enemies, and he has none that we can see.

A 20-year-old kid with no lands to speak of and no soldiers to back him up, and he's going to walk into Gulltown and tell these hardened mobsters and all their muscle to take a hike? Sorry, Dor, but this one is a non-starter. Did LF send Slynt to the Wall? I thought that was Tyrion, and he has the full might of Casterly Rock and the Iron Throne to back him up.

This is more than just economic genius. You don't just walk into a customs position and increase revenues by 1000 percent without causing a whole lot of disruption. But you can do exactly that if you have an outside source of wealth that you can use to augment your performance.

[Blackfish Tully]

29 minutes ago, John Suburbs said:

Sorry to belabor, but how does he just increase revenues? If he is taking in ten times more in than the last customs guy, that's ten times the cost of business for all the traders, merchants, craftsmen, etc. at the port. That's literally a 1000 percent increase in taxes. Somebody, surely, would complain about this, and LF would be a marked man.

 

he increases revenues because he is adding additional revenue streams , He doesn't have to be increasing taxes to increase revenue 10 times .

Let's say before Littlefinger arrived the Iron Throne was getting $100,000 in tax revenue and once Littlefinger arrived he started lending out money instead of keeping it in the vault and he starts buying and selling grain , wool , lace , wine etc.. . So what you would have after Littlefinger adds these income streams is 

                 $100,000 tax revenue 

plus          $100,000 interest revenue from loans 

plus           $800,000 revenue from selling wool, lace, grain , bread etc.  

equals     $1,000,000  total revenue under Littlefinger. 

 

 so he's increased revenue 10 times but has not increased taxes . 

 

[Blackfish Tully]

1 hour ago, John Suburbs said:

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The same goes for his buying and selling schemes. If he is just counting on dumb luck to buy low and sell high, then he's likely to get burned more often than not because there is no way to predict when or where a shortage will just happen. 

 

As Master of Coin he has control of what the Iron Throne is buying and when their buying so has has inside information that nobody else has ,  not to mention that as Master of Coin he would connections to merchants all over the world and harbormasters , customs officials and tax collector etc.. which gives him potential access to massive amounts of information that can be exploited by him and whatever silent partners he has . Information would be the most important resource any merchant would have if he wants to be successful so if Littlefinger has ties to a massive network of merchants he would have more information coming to him then even Varys would have . 

For example  If Littlefinger knows that the Iron Throne is going to buy a bunch of lace from Lys then he would have his partners buy all the lace first then they would mark it up 5 to 10 % and sell it to the Iron Throne (that would be the market rate at that time )  then he would have it stored , dyed , shipped all by his partners businesses making a small profit each transaction . The lace's final price would be 10 to 15 % higher then it would have been without Littlefingers manipulation but nobody would be able find out about it because each transaction is based on the market rates (which Littlefinger is manipulating ) and nothing is directly going into Littlefinger's pockets as he probably is the silent partner in dozens of companies across the world and their would only be a small group that know he's behind all of this as he would have partners  making all the moves . 

[Damon_Tor]

2 hours ago, John Suburbs said:

Supply side customs enforcement. Not a bad idea.

The problem is that if he cuts the rates then he has to make up the gains in either volume or the value of goods. And that would mean the ports would be so crammed full of ships that it would be unworkable or there is a sharp increase in high-priced goods like Myrish lace or Arbor wine, which would only deflate their value in the market and, thus, as a source of revenue. Plus, we never hear about this adjustment in tariffs, either at Gulltown or at KL, where LF started out as just one of many customs officials.

We don't hear about it, but we also don't hear anything else about how he increased revenue. Yes, if there's higher volume the capacity of the port would need to increase. Any growing business needs to... grow. Presumably Baelish handled this well.

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Another problem is that there aren't likely to be very many routes out of the mountains to the port, so if a toll is high at a particular crossing there isn't much of a choice but to turn around and go home.

Most likely they would take their tariffs in coin, not by physically unloading whatever goods were being moved. There's probably a whole song and dance about "this cargo is worth fifty stags!" "no, it's worth five and thirty stags at the most" "last year you got forty stags." and so forth. Plenty of room for bribery and kickbacks and other waste, too.

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And even when there is, lowering the tolls is not going to increase trade at the port because the land can only produce so much and the excess goods will get there one way or another. I know your example is illustrative, but I can't imagine a route where 20 lords are taking a quarter of the load each time -- you'd literally have nothing by the time you got to market.

It was an example. One particularly short-sighted lord might be demanding 50% while the others are more reasonable. The point is, it isn't standardized and those lords aren't necessarily considering how their tariffs are impacting traffic along the road, and one of the problems with inherited nobility is that there's no good way to ensure the people in charge actually know what they're doing. Maybe there just isn't a good way to convince Lord Thirty-Three Percent that his tariffs are discouraging traffic along the road, that he would be better off with a lower tariff, that he would make more money by demanding less. That wouldn't make sense to him because he can only process a few layers of cause and effect. Someone who COULD get him to lower his tariffs, or could convince Aryn to force him to lower his tariffs, would be in a position to make a positive change. And figuring out how to make money flow properly and convincing people to take actions against their own apparent interests are both in Baelish's skillset.

[Comrade Yurika]

He's been cooking the books the whole time. That's why Tyrion can't make sense of the documentation when he becomes Master of Coin.