Capital Flight in HOTQD, or, "Are there Economists in your world?"

I'm reading Capital by Thomas Piketty.  A very interesting book, the main thrust of which seems to be that we shouldn't be too attached to the high growth rates seen in the 50s and 60s in the USA.  That was a very unusual situation where the very rich captured a very small percentage of growth, as opposed to now where more and more of the gains from economic growth are benefiting the very rich. It isn't unusual, in fact he argues that throughout modern capitalism (starting in the Industrial Revolution) this has been the norm.  Only the traumatic shift in society resulting from two world wars gave us the temporary position of shared prosperity.  Now we are getting back to normal.  

The IMF recently released a report that stated income distribution matters for growth.  "If the income share of the top 20% increases, then GDP growth actually declines over the medium term, suggesting that the benefits do not trickle down.  In contrast, an increase in the income share of the bottom 20% is associated with higher GDP growth"

Who cares?  This this supposed to be a DnD blog.  You're right, invisible interlocutor.  But I think about these things a lot while writing campaigns.  My Breland campaign (set in the Eberron world and about rebelling against an unjust king) was underwritten by the idea of a rising merchant class and local labor councils challenging the hereditary nobility.  Before the players saw any evidence of evil acts by the king, they saw a nationwide labor strike, and learned about the ruling class from the perspectives of farmers who let their fields lie fallow.  I still like the idea that my DnD worlds are set before the Adam Smith equivalent, aka before economics is really considered as an economic discipline, so that it doesn't devolve into a market game.  I still want room for valor and dragonslaying and weird stuff.  Where does that weird stuff come and go from?  A consideration of economics helps me decide. 

ECONOMICS IN HOTDQ

I'll be taking over DMing our Horde of the Dragon Queen campaign next week.  Dragons are really interesting from a market perspective.  Obviously they depress investment in the area by increasing uncertainty.  Why should I expand my farm?  I might just attract the notice of the dragon, which would take all I own and burn my lands.  So in areas with dragons there are two options.  

Firstly, the humanoids create a strong government focused on making sure property rights are protected.  An aggressive military, men at arms and knights directly controlled by a lord and focused on dragonslaying, or at least keeping it at bay.  Highly nationalistic and xenophobic, the way that societies get when they have an ever present external foe.  See Spain in the Wars of Reconquista against the Moors.  A citizen's council with unchecked power that gives the dragon a  beautiful maiden every month also fits the bill.  This society has a lot of taboos based on contraceptives, virginity and selfishness, so that they can breed enough people to lose an extra each month (or year, or day) and still grow. That or they have a huge slave underclass to assume the burden of tribute. See the tribal society from Princess Mononoke.  A rough and patriarchal lot for the women. A Merchant's cartel that essentially pays a dragon tax, either in the form of direct tribute, or in hiring adventurers.  These people would have no other taxes the very idea of paying tribute leaves a bad taste in their mouth.  See the USA right after the war of independence, essentially ruled by a weaker version of the articles of confederation.   So even a government that can fend off the worst effects of a dragon is worse for it, more likely to be repressive, brutal and controlling.  

The other option is: the dragon wins.  After the stronger societies chase off or repel the dragon, it settles somewhere the natives will have a harder time getting rid of it.  Swamplands or Arid Mountains that prevent the kind of population densities required to form an effective governance.  And so Dragons lurk on the edge of civilization, ruling with fear and callous disregard for their subjects.  But it's worse than that.  Dragons are capital sponges.  In addition to their presence destabilizing the region and the threat of them taking things outside the rule of law and mentioned before, they physically take all the capital in a region and bring it to their lair and sit on it.  They'll take gold, jewelry, deeds, bills of credit, wooden carven statuettes to represent wealth.  Any portable store of capital will be quickly snatched up by the dragon, making efficient economies impossible.  Societies living under dragon's rule tend to be more equitable and smaller, as each person can only lend what they can remember. A mutual web of obligation and trust binds the communities together into a simple form of communism.  It almost sounds nice, except when your child freezes to death because you can't afford a wool coat.  And then a dragon eats you. 

A Dragon doesn't care if it's gold, only that it is a store of value for others

With the rise of dragons beginning in the Horde of the Dragon Queen, the dragons that do exist are getting more active and dangerous.  The societies that are meant to counteract them are going to get more disdainful of civil liberties, more violent and hateful.  The people living under dragon's rule will get eaten at an unsustainable rate.  But many societies on the sword coast aren't used to dealing with such an outsize threat, like the societies of Western Europe in the 1400s, they've always had border nations (Hungary) to deal with the dragon threat (Ottomans).  How will these previously equitable societies deal with the new and resurgent draconic presence?  Next Post I'll take a look at some changes you'll expect to see in civil societies on the sword coast (they are not good changes).