Wednesday, June 24, 2015

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). 

4 comments:

  1. Dragons' effect on capital is an interesting question and it matters significantly why Dragons horde. I'm going to start with the presumption that Dragons do not horde for the standard reason a human would amass wealth, that is Dragons do not horde gold and other riches because they can be converted to things the Dragon desires. This seems pretty clear as Dragons do not appear to be economic actors, they don't pay other beings for goods and services. European Royalty was constantly seeking gold because it would allow them to pay their debts in an inflationary manner which allowed them to pay off their creditors faster. (they generally had creditors because war is an expensive business). Dragons don't do that. They don't buy goods and services. So with the introductory point out of the way, let's start thinking about why a Dragon might horde.

    1. There's something innate about gold and gems that attracts them. (note if this is the case you would not find deeds or notes of debt as Nick suggests in a Dragon's horde unless it was gathered incidental to the collection of the horde). If this is the case you would find societies near dragons rapidly discovering alternative forms of currency unattractive to Dragons. A particularly strong kingdom might even be able to create fiat currency (although a backed currency might be the best). Given the low status of serfs I could see a kingdom having a currency backed by serf labor hours.

    2. There is something inherently valuable about gold/jewels that is not true in real life. I frequently have spells be powered by gold in settings for this reason. In such situation, Dragons are rational actors who seek gold as a form of military power and to channel their own arcane inclinations. Unless magic is fairly ubiquitous, I imagine gold in such a setting is actually too valuable to be used as a currency most places and something else would take its place. Exalted actually has a similar set up where the Empire uses Jade (which is inherently magical) as a currency, while the Merchant Guild that dominates much of the rest of the world operates in Silver to avoid drawing spirits and other magical creatures to their dealings.

    3. Dragons are just evil monsters who are inherently drawn to take sources of wealth whatever the source. This fits most in line with what Nick has proposed so far (such as taking deeds which are utterly worthless to the Dragon). In such a case though, the "Good" Dragons who horde aren't really all that good as they are causing deflation due to their own hording (which is bad for debtors everywhere).

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  2. I think #3 is most in line with what I have in mind. Most of the literature around dragons views them as outlandishly greedy by nature. This is related to the idea, prevalent among dragons and constantly reinforced by them, that dragons are the superior species on the planet, rivaling Gods at their most powerful. They see everything that has value as theirs by right. Gold is useless to them (so not 1 and 2, at least in this incarnation of HOTDQ) as deeds or shells or rocks. But they want to take things that others value just because they view anything valued as belonging to whoever can take it. The viewpoints of Dragons are alien and horrifying to humanoids. They view useful industry and trade as the providence of weaklings.

    "Good" Dragons, in as much as they exist, might justify their hording (If they bother to justify it at all) as encouraging saving and thrift among the lesser races. Better to be a creditor or a saver if you know a dragon might quickly enforce a negative interest rate. This might correlate with their known but somewhat heavy handed morality.

    I do love the idea of serf labor hours as a form of currency, this could be really good for another campaign. Imagine all the serfs life hours are tallied up at birth (hours expected based on average life expectency) and given to their lord, with a small remittance for their own personal time. Leisure and worship time must be purchased with SerfBux.

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    1. I do think 3 poses a problem for a setting like Forgotten Realms where good dragons are an integral part of the setting and are generally paragons of virtue (their sense of superiority in setting is Justified). Further given that good dragons in setting are frequently social creatures, this would push them into causing active harm to mortal society as they acquire possessions and remove them from commerce into their lair. This leads to an unsatisfactory paradox.

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    2. To be honest, I'm not super familiar with Realmslore, but I certainly think it should be malleable by the DM.

      Metallic Dragons, being born of blood from the Renegade (accurate in universe to my knowledge) , are different from Chromatic Dragons and are not fundamentally evil in the same way. They care about the societies they inhabit, but they are still driven to horde items they acquire fairly.

      They do not think about the consequences of removing capital from a society. Economics is not a discipline anyone has more than rudimentary knowledge of, and the dragons are not omniscient. The effect of any one piece of treasure removed from the economy is minimal, and it's difficult to see the long term effects, especially since there is turnover in hordes. As dragons die, their hordes are taken, sometimes willed to humans, and that value comes back into the economy. The wealth that has been taken out due to metallic dragons remains roughly constant in normal circumstances, as the death of metallic dragons due to natural causes or predation by chromatic dragons roughly balances out the loss of wealth due to young dragons. Adveturers perform this role for Chromatic Dragons under normal circumstances. The problem in HOTDQ is not related to Metallic dragons, who are more or less sustainable, but that Evil Dragons are on the rise, so the amount they are removing from the economy is rising and rising, as seen in Greenest. This is what is driving the negative changes.

      Also, in #1 as long as the economy is on the gold standard (I've never seen a dnd world except for Dark Sun that wasn't) you run into the same problems with Metallic Dragons as with #3. Their hording, which is a feature of the dragons, is deleterious to human society, no matter what drives it. In #2 you might make the argument that the dragon, being virtuous, is a better holder of such power.

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