Wednesday, January 13, 2010

Dragons and Economics: Part 2

Furthermore, if the dragon is hoarding all that gold, effectively taking money out of the economy, wouldn’t that cause a recession? And then, if the adventurers actually killed the dragon and then started spending all that money, wouldn’t that then cause inflation?

NOTE: I have only a loose understanding of recessions and inflation. Please don’t write angry comments about how I’m an idiot and your average kindergartner knows more about economics than I do (which is probably true).

What am I trying to say here? Dragons would just wreak amazing havoc on the economy. It’s not as bad as Star Trek economics, but still pretty bad.

Here’s a more likely scenario:

The ancient dragon, asleep on his hoard, the bones of his slain enemies scattered around him, stirred.

“Who dares?” he says suddenly, its eyes snapping open like the door on a cuckoo-clock. “Who dares challenge Arcticus the Destroyer?”

Someone cleared his throat and a man stepped into view. He was small, mousey even, but the royal crest on his immaculate robes suggested a man of means. “That would be me.” He bowed. “Milver, Royal Treasurer.”

“And what would the Royal Treasurer want with Arcticus?”

Milver adjusted his glasses. “Well, it’s more about your hoard.”

The dragon laughed. “You? A mere scribe is going to take my hoard?” Arcticus laughed as it reared up to his full height, winging stretching out behind it.

“Actually, I want to add to it.”

“Hah!” boomed the dragon. “You th- err . . . what?”

“You see,” said Milver. “According to my research, you are both the oldest dragon in the land and the one with the greatest hoard. If you were ever defeated, the adventurers who did so would most likely immediately spend your gold on all manner of things. While this would make the merchants happy, it would drive up prices and inflation would be the inevitable result. And then we’d have to do all manner of things to fix it and the merchants would complain and there would be paperwork, etcetera. So, to make a long story short, we would like to make you part of the royal treasury.”

Arcticus slowly relaxed, its forelimb coming up to scratch at its chin. “And this would benefit me how?”

“For one thing,” Milver said. “We’d provide guards to help, well, guard your hoard. And we’d also occasionally add treasure, though,” he said quickly. “We would need to occasionally take some away as well.”

“So,” rumbled the dragon. “No more adventurers trying to kill me?”

“Not as many, at least,” said the scribe. “I’m sure some will still try. We are also prepared to offer cattle, regular music, chess masters, casks of fine wine, whatever you wish to amuse yourself.”


Milver coughed. “Princesses are a rather limited resource. We can provide the odd one here and there, but we can’t allow the royal lines to die out because all the princesses were eaten.”

“Eat?” said Arcticus. “Who said anything about eating?”

“Beg pardon?”

“I just want someone around for some girl-talk and maybe some claw painting.”

Milver frowned for a second and then brightened. “Oh, you’re a girl dragon!”

“Well, duh!”



Tomas K. said...

Oh, I just think You found a solution for Europe economic problems (I´m from Czech republic). With a dragon guarding a state treasury, I´m quite sure that the budget will always somehow be in profit. I cannot imagine some of our politicians trying to convince the dragon to borrow 10% of the treasury, with promise that their children after 50 years will return it :)

Dont You know about any ancient dragon with quick availibility? :)

TX_Val said...

*laughs* I thought this was going to be a poke at big banks and bail out plans. There's definitely a joke, if not maybe some truth in there somewhere. :p

That would probably work, but most myths about dragons say they're to greedy and/or paranoid for that to work.

Would be funny though.

Silver said...

The thing about economy is that it works on a much larger scale.

If there was only a single dragon out there, in an isolated kingdom, then yeah, these problems would arise. But, if we have hundreds, or thousands of dragons, all running around, all with their own hoard, then considering the big picture, a dragon being killed, and the hoard distributed, that's a bit like striking gold. For a short while, there's a lot more cash flowing around, in one area, but it evens out. And when the gold vein has run out, the settlement normalises.

Considering the amount of adventuring parties getting killed by, and killing dragons every day, and the staggering amount of cities, worls, nations, planes, demi-gods and demons they trade the hoard away with, it's just a small drop in the pond.

It's a bit like pay-day, but on a nation-wide (or larger) scale. There's celebration and partying for a few days, then everything returns to normal, and then just before the next one, it's stale bread, water and food samples at the local grocery store for food.

Your idea is a good one though, it couldn't do anything but stimulate the economy. A dragon has enormous spending power, but also rather big needs. A dragon that needs a backrub, for example, could keep numerous massaging studios occupied for days. If it needs a manicure, that's a lot of people employed for a long time. The dragon itself could provide services as well. Adventurer coaching. Writing books. "Dragon hunting - My side of the story.", "How to decorate your hoard like a true dragon.", "Adventurers - Why you should always eat the rogue first".

They'd also make great historians, bankers and lawyers.

Joel said...

Great post. :-) I would love to read a novel concerning the economics of Tolkineesq worlds. I think it would be a kick to consider specialization and division of labor in terms of a wide group of intelligent species that are really truly different.

That being said, I know far too much about economics so I must answer this:

> Furthermore, if the dragon is
> hoarding all that gold, effectively
> taking money out of the economy,
> wouldn’t that cause a recession?

No because money isn't valuable.(1) Money is a medium by which we represent value.

Let's focus on the micro-case of cobblers: they would still have leather and string, they would still know how to make shoes. Therefore, they would still make shoes and they would trade those shoes away for the things they needed such as food and whatnot. Even if every speck of gold in the kingdom was gone, they would plug happily away making shoes as would all the other people making all the other things. They'd just have to trade those things directly or find something else to represent value - something dragons didn't care to collect.

That being said I would love to see a dragon installed in the US treasury(2). Maybe we wouldn't be countless billions in the hole. Though we might have to elect new idiots more often....

(1) Well, gold has a lot of practical uses as well.

(2) Our money isn't actually backed by gold these days so I have no idea would it would Gard. But it could still eat our idiots.

Jason Janicki said...

Hi, Thomas K! You're the first person from the Czech Republic to respond to a blog (or at least, the first to mention it).

Unfortunately, no, don't know of any dragons. My friend has a vicious cat, will that do?

I think greedy and paranoid are perfect qualities for a treasurer, don't you :)

Darn it, Silver, quite ruining my blogs with reality :) Though I do like the idea of a 'dragon service' industry popping up. Adds a whole new layer to 'meals on wheels :)

Interesting, Joel. So without money, we'd just go back to a barter situation. Though buying things with goats would probably be cumbersome (especially making change).

But you did hit on a great idea. With a dragon in the treasury, we could just feed them the idiots. The whole banking fiasco could be solved with 'See that dragon? Do it again and you get eaten.' Of course, a couple would get consumed before the rest figured out you weren't kidding ;)

Silver said...

I resent that! Which part of my post is based in reality, hmm?

See, the word verification agrees with me! It calls you a dommer! I don't exactly know what that means, but it sounds appropriate. Or maybe it's calling me a dommer. I don't know, it's a little vague...

"gunner" said...

actually there is a dragon already firmly installed in the u.s. treasury, its name is irs and it is always hungry.

Lurklen said...

You forgot one of the Dragons main sources of income. You see they don't just take money from adventurers, for starters alot of the time the ancient hall the dragon now lives in wasn't empty to begin with. It either ran out/ate the original inhabitants, to whom which a large amount of the gold originally belonged to. And if all they did was wait around for more adventurers to come and bug them then no one would have a problem with them. So they must leave to gather food and whatever shiny thing takes their interest. Surely haveing dragons attack and take over the palace would effect the economy.

It'd be funny though if you wanted to take a trip somewhere but it had to be cancelled due to dragons takeing over the treasury.

Jerron said...

Oh, I love this thread. Except, we would need *lots* of dragons. Politicians, lawyers, bankers- a dozen dragons eating full time couldn't take care of all the idiots we got.

But yes, I actually saw an article on this. Might even still have stashed somewhere. Anyhow, the gist was there's a few things you can say caused this. Examples such as the place used to be lots richer, but is now in a dark age, were quite popular.

I personally think all adventurers should be milked for their money anyhow, and if they didn't spend it for gear on the way in to the dragon lair, the villagers are idiots. So the money *must* come from the dragon going around raiding villages, since all the dragon gets from the mostly-broke adventurers is their magic weapons.

Citarra said...

Dragons have big bellies too. We probably would only need to hire one to take care of all the politicians, lawyers, and bankers.

Actually, we couldn't default to goats as trade items once the dragon is guarding all the money because dragons would eat them pretty quickly, too. In this case, the meat industry collapse will lead to spiralling food prices, which would leave little room in the average household budget for consumer goods. The service industry may be the only one left afloat, being occupied in the care of a mammoth dragon and paid well for it. Hiring opportunities in the service and meat farming industries would result in a significant restructuring of the economy. Overall standard of living would decrease when manufacturers of non-dragon consumer goods go bankrupt. You'll be left with a country of farmers, goat-herders, and dragon-manicurists.

Rebellious individuals of the younger generation, whose politician parents were eaten by the dragon, will then attempt to defeat the dragon or, failing that, will set up ultima weapon and armor shops for passing adventurers in the hopes of vengeance.

Oh my, I think I've stumbled upon the origin of end-game towns.

Ed said...

Player: "Horray, we've made it back to the town after defeating the dragon. We go to the tavern for a beer."

GM: "Innkeep says, 'That'll be 1 gold per beer.'"

Player: "'But it was 1 copper per beer yesterday.'"

GM: "'You're covered in dragon blood. And you didn't claim you couldn't afford it, so it'll be 2 gold per beer.'"

For what it's worth, I was one of the non-speaking players in the above scene. And, yeah, we could afford it. At least for the first week. It's pretty quick how a little local inflation, combined with a sudden tax increase takes care of a little dragon horde.

Jason Janicki said...

All very good points, though doesn't list the word 'dommer.' Now I want to know what I'm being called (in case I want to use it on other people).

Silver said...

Apparently, it's Danish for "judge". That's a bit boring. But google suggested domkapitular, which is german, and a very cool-looking word. It means canon though, so no gold there either.

I was hoping for some cool dutch insulty things.

(No luck this time either. Just a ping.)

Jason Janicki said...

Well, when you finally do find a good insult, let me know! :)

Sinai_WinterWolf said...

I heart you, Jason. This made me giggle for quite some time, and on many levels. This is why I should check back here more often. ^_^

Jason Janicki said...

Thanks, Sinai! Please do! And tell your friends! And acquaintances! And random people on the street! :)