Das Silmaril: Tolkienian Economics Part I – Replies to Elfonomics and Jethro Elsden

This is one of those subjects that, on paper, I should have got to sooner. After all, I like Tolkien, and I like economics, so why not mix them? Sure, Tolkien himself was a philologist, not an economist, and it shows, but one can still draw inferences about the economic framework of Middle-earth, right?

Easier said than done, dear reader. A look at the economics of Middle-earth is less about filling in the gaps, and more about revelling in the glories of unfounded speculation. We really have very, very little to go on. On the other hand, that hasn’t stopped a couple of recent commentators from trying: Youtuber Elfonomics and right-winger Jethro Elsden. So before jumping into my own guesswork interpretation of Tolkienian economics, which for length reasons I shall look at in a subsequent post, let me first look at the efforts of these gentlemen…

(i) A Reply to Elfonomics

There is a disappointing lack of meat to this one. Yes, it may be excused for being the first of what appears to be a series, but it gets side-tracked by Silmarillion backstory, rather than treating it as a given. With that criticism out the way, Elfonomics makes the following points:

  • Ents versus Saruman is a critique of industrialisation.
  • Orcs understand money.
  • Valinor – during the time of the Two Trees – is a post-scarcity economy, with the Elves facing scarcity after Melkor and Ungoliant mess with things.

Elfonomics is correct in seeing the Ents/Saruman story as a comment on industrialisation, but it is handled way too briefly in economic terms. Specifically, the video fails to note the concept of externalities – there are negative “side-effects” associated with Saruman’s industrialised production process, namely environmental destruction and pollution. This process – which does cost Isengard, even if only in the expense of feeding and housing slaves – does not factor in these side-effects, so Saruman gets away with an artificially low cost of production. He is passing the “true cost” onto his neighbours, the Ents.

There are, of course, multiple solutions to this. Standard economics would envisage Saruman compensating the Ents for the damage, perhaps via the planting of trees, or, if one were to go off the free-market deep-end, have Saruman buy Fangorn Forest itself, with the Ents quietly retiring on the proceeds to Lothlorien or Mirkwood. That Tolkien suggests a different solution, one where the victims of the externalities literally bust-up the offending production process, shows that he isn’t one for standard solutions to market failure…

Image result for mithril coat book

On the second point, yes, Orcs understand money. Fighting over the hoard of Erebor, or over Frodo’s mithril coat literally makes no sense, except insofar as Orcs understand precious metals as stores of value (yes, Frodo’s mithril coat is treated as a store of value. It’s not as if Shagrat, complete with monocle, dressing gown, and pipe, aspires to add the item to his drawing room for its aesthetic value). The biggest fault on the part of Elfonomics is to omit the evidence from The Hobbit – which makes it clear that Orcs are not mindless savages. Orcs are talented miners, and their armour and weapons do not come out of nowhere, which implies that Orkish manufacturing may be less classy and renowned than dwarvish, but it is still clearly a thing. Orcs even invent sophisticated technology (wheels, machinery, explosions…), though where they get their food is trickier. Sauron (and probably Saruman) have some degree of agricultural slavery, but the Orcs of the Misty Mountains? Do they all subsist on fish and moss, or do they grudgingly trade their manufactured produce with other peoples, in exchange for food? Quite the mystery (don’t get me started on Angband, but that is for another time).

Elfonomics’ third point, I think, is debatable, primarily because the notion of post-scarcity itself is fuzzy. Valinor is an extremely luxurious place, and is, in a very real sense, Heaven on Earth. No-one starves, and everything is plentiful. Elves are immortal, so they have less of a dreaded opportunity cost to their actions than we do. The problem is that we know vanishingly little about the Elven economic framework – the most detailed depiction is the Wood Elves of The Hobbit. For all we know, there is an entire servant class of Elves (again, much like our friends from The Hobbit) whose labour sustains the aristocrats at the top. Who mines coal, cuts down trees, and transports the result to keep Feanor’s forge lit? Celegorm hunts for sport and food, but I have a difficult time seeing him cook his own dinner. Et cetera. Elfonomics assumes that the Elven leisure class is representative of Valinorian society, rather than a potential outlier – and if there is a servant class, such Elves would need to be paid, either in currency or in kind. That in itself opens questions about whether Feanor and Sons have bona fide feudal estates, which they use to fund their lifestyles. Or maybe Feanor is just the Noldorin William Morris, and does everything himself. We have no idea.

Image result for william morris

(Elfonomics also errs by treating the Trees as a source of perpetual power. The Trees light up Valinor, but they don’t power it, and if their demise does create a scarcity-of-light problem, that problem is solved via the Sun and Moon. As it is, the Noldor presumably burn wood and coal, with perhaps local waterwheels and windmills. Where the coal comes from originally, Eru can handwave).

In summary then, I feel the video could have been better, and more in-depth, but we shall see how Elfonomics’ series progresses – I see the next target is the Dwarves, which should offer rich material for analysis. Also, to Elfonomics’ credit, he at least avoids using Tolkien’s work to push a particular ideology. Which is more than can be said for Jethro Elsden.

(ii) A Reply to Jethro Elsden

Elsden’s piece is a very blatant and very sad attempt to hijack Tolkien’s work in the name of a particular ideology. My distaste isn’t simply because I disagree with his right-wing worldview (though I do), it’s because The Lord of the Rings is such an idiosyncratic work that fitting it within any modern ideological framework requires taking extraordinary liberties with the text. Sure, by all means, find stuff in there that appeals to you – there’s something in there for everyone – but that’s a very different thing from using the book to whack people you don’t like. Elsden isn’t trying to shed light on The Lord of the Rings – he’s virtue-signalling to his fellows.

Anyway…

Take, for instance, the kingdom of Gondor, once so resplendent, now slowly waning. For hundreds of years there has been constant war with the forces of Sauron. This has drained the resources of Gondor, not only in terms of money and capital, but more importantly in sheer numbers of fighting men. By the time Sauron’s war reaches its climax, when his forces besiege Minas Tirith, there are barely enough soldiers to defend the city.   

No. Gondor has not been in constant war with Sauron, largely because Sauron was moonlighting in Mirkwood until comparatively recently. Gondor was a decaying Empire long before Sauron resumed normal service in the Dark Tower – sure, they were fighting his proxies for a long time, but Gondor’s decline (in both population and power) came from within. But such complex (and dare I say, Spenglerian) questions of civilisational decline are beyond the present discussion.

Meanwhile the areas of Gondor that Sauron conquers are left enveloped in a dark cloud of deprivation, slavery, and the sort of centralised planning of the hard left’s wildest dreams. It’s clear from the dialogue of the Orcs that their every action is centrally directed and there is a clear dearth of decentralised decision making: It’s the orcs on the ground that have the local knowledge, but without the approval of the Politburo (or in this case, Sauron and his lieutenants, such as the Nazgul) no one can use their initiative, and make independent decisions. 

Elsden is confusing leftism with centralised control. Yes, Sauron is a control freak dictator (more specifically, an immortal God-King), and he’s like that because he literally wants to run the world, but there is nothing remotely leftist about him. Sauron’s message is, at heart, a spiritual one, based off rejecting Eru and embracing himself as a replacement (by the Third Age, he was claiming to be Morgoth returned). He does not engage in materialist political arguments about economic systems, and certainly does not talk of “liberating the downtrodden,” after the manner of the political Left.

I’d also point out that the Soviet Union borrowed central planning from Imperial Germany. Does Elsden consider Kaiser Bill a red?

Image result for barad-dur book

The War of the Ring might have gone very differently if Sauron had only got his hands on the works of FA Hayek and learnt how much information centrally planned systems miss out on compared to the decentralised free market.

Except that modern market economies are planned economies. The number of shoes in Dunedin (and their prices) are not set by on-the-ground actors. Such decisions are made in an office in Wellington, Auckland, or Sydney.

This is only one of the clear similarities that Mordor shares with the Soviet Union. In a sense this is unsurprising – after all, Tolkien was strongly opposed to both socialism and central planning in general and was writing the Lord of the Rings in the 1930’s and 40’s, the same time as Communism was near the height of its power. The Soviet authorities’ fear of the anti-socialist ‘hidden allegory’ meant that it wasn’t until the fall of the USSR that a full translation could officially be made

To quote the man himself, to ask whether Orcs are Communists is as meaningless as asking whether Communists are Orcs. The Soviet hostility to The Lord of the Rings (only relaxed in 1988) was actually less about Mordor, and more about the Scouring of the Shire – and speaking of the Scouring, it was also interpreted as a potshot at the socialist policies of Britain’s 1945-1951 Labour Government. Tolkien rejected such a reading at the time, and I believe him.

As for the Mordor/Soviet analogy, let’s ignore the ideology for a moment, and look at the mechanics of the state. The Stalinist regime (in modified form) outlived its creator by decades, whereas Sauron’s regime literally collapsed with him… does that not alone suggest a point of difference worth investigating?

Sauron’s Soviet-style kingdom is in direct contrast to the free peoples of the West. While kingdoms such as Gondor, Rohan, or Lothlorien, couldn’t be described as paragons of liberty, there is nonetheless a large degree of freedom. People have duties to fulfil, and must ride to the aid of their king or chief if they are called (as the Rohirrim are by King Theoden). But apart from that people seem to mostly follow a ‘live and let live’ philosophy, at least with regard to their own communities. 

I’ll give Elsden credit for noticing that classical liberalism is a poor fit for Middle-earth, but there’s a gap in the spectrum between totalitarianism and ‘live and let live’. Denethor, for one, is as much a control freak as Gondor’s technological level will let him, which ties back to the general idea that applying modern political ideologies to this archaic and fictional world is facile.

While the Shire does have a Mayor and a Thain, it has little other forms of official authority, and is mostly a voluntarily ordered society. In many ways it epitomises the minarchist fantasy state, with the only government services being a post office, the Bounders (a sort of unofficial border control), and 12 ‘Shirrifs’ who act as a quasi-police force (but mostly spend their time rounding up stray livestock rather than chasing hardened crims). Not so much a Night-watchman state then, as a heavily sedated, emasculated, can’t-really-be-bothered Night-watchman state.

If The Shire is such an amazing example of libertarian minarchy, why does Tolkien take such a dim view of such capitalist go-getters as Lotho Sackville-Baggins? It is almost as if there are various unwritten social conventions (many of them class-based) that govern The Shire, rather than a commitment to free-market liberalism.

It’s not just in the direct cost of constant war that the free peoples are harmed. There are also indirect costs, such as Sauron’s forces disrupting the lucrative trade networks across Middle-earth. From the giant spiders and forces of Dol Guldur making travel on the Old Forest road through Mirkwood hazardous. To the Great East Road, and the Greenway near Bree falling into disrepair. Traders no longer travel in the numbers or regularity that they once did.

A valid point, were it not for the problem that Eriador does not really have sufficient population to justify the maintenance of such roads. Eriador (with the exception of the Shire, Bree, and Rivendell) is basically empty. One would expect most trade in the setting to take place along waterways (Lake Town), or seaborne (Pelargir).

Kingdoms like the Shire rarely interact or trade with those outside. This is despite the fact, that the Shire produces pipe weed (and appears to be a monopoly supplier), a clearly valuable and desirable commodity. In a more interconnected ‘globalised’ economy, where the roads were safe and secure, pipe weed could be sold by hobbits in the Shire, and the money used to purchase commodities that they lacked. For example, an enterprising hobbit could travel to the Iron Hills, or to Erebor, and trade pipe weed with the dwarves for gold. Or get the dwarves to use their estimable skill to craft bejewelled gold buttons, to go on his waistcoat.

Or how about an enterprising hobbit decides to sell pipe weed to Isengard. What could possibly go wrong with that…?

Image result for lotho sackville-baggins book

(Elsden is bright enough to spot that the underlying assumptions of economic liberalism don’t hold in Middle-earth, and points out areas for economic enterprise. It’s fair enough, but ignores the elephant in the room, namely that Tolkien’s world is not the world of the free-market precisely because Tolkien wasn’t an economic liberal. If he was, Lotho Sackville-Baggins would have been the hero).

Property plays a key role in the works of Tolkien, not only in terms of the epic fight for ownership of the ring, but also in terms of Aragorn’s claim to the throne, and the tension this creates with the Steward of Gondor. Property rights are pretty well developed, and legal contracts exist to protect the rights of property owners. So, despite the Shire being a mostly voluntary society, with little official authority, hobbits respect the rule of law, and the property rights of other hobbits. This is why Bilbo can safely transfer his property to Frodo, and the only way the Sackville-Bagginses can get their hands on Bag End is to buy it.

Elsden is again ignoring the role of unwritten social conventions. Libertarian “it’s my property, I can do with it as I please” philosophy is a poor fit here, precisely because (with the exception of Lotho) no-one in Middle-earth actually acts with regard to profit maximisation.

However, we can still draw inferences from some of the events in Tolkien’s works. For example, in The Hobbit, Smaug’s attack on Dale and Erebor and seizure of its vast treasure hoard would have had a devastating economic impact. The destruction of property and people in the attack would severely depress demand, as people cut back expenditure to replace lost necessities such as housing and food. Many businesses would have been destroyed, as well as a vast amount of accumulated capital. This hit to supply would take years to recover from. 

Well, Smaug’s attack on Dale and Erebor would suppress demand via the simple fact that no-one (bar Smaug) lived there any more. Dead people don’t have demand – including for food and housing. I am not sure what Elsden is talking about here.

(As for what happened elsewhere, presumably Lake Town went into steep recession as it lost its best customer literally overnight. It’s why the Lakemen get quite excited about the prospect of Thorin’s return).

However, perhaps the most damaging impact of Smaug’s attack would be the severe monetary tightening that would occur. 

Elsden needs to elaborate on this point. As it is, he makes it sound like Dale was still a thing after the dragon attack, rather than a burnt-out shell.

It wouldn’t be quite so bad if Smaug was willing to buy stuff with the gold, since this would be a monetary injection and would provide coinage to lubricate trade. But sadly, as a rational ‘draco economicus’, Smaug maximises his utility by hoarding the gold and going to sleep. While they have nothing to sell, and no money to buy goods, trade with the woodland elves would dry up. The Elves would thus have to switch to alternative providers, who presumably would supply goods that are lower quality, or more expensive, or both. While these suppliers would obviously be better off, the Elves and the people of Dale would definitely not be. And it would be a big hit to the overall welfare of Middle-earth.

Again, confusion: is Elsden confusing Dale (no longer there) with Lake Town (just lost its best customer, but otherwise still standing?). Until this situation is clarified, it becomes impossible to address this point. I would note though that in the next paragraph, Elsden has an irrelevant little rant about central banking – as though that, rather than wider systematic breakdowns, were somehow the inherent cause of hyperinflation.

Image result for smaug on gold

 Tolkien’s story is fundamentally an anti-socialist tale, criticising greed yes, but not property or the Bourgeoisie.

Tolkien’s story examines misuse of property (Lotho) and makes the bourgeoisie out to be broadly ridiculous (hobbits generally, and the respectable, boring Bagginses in particular). Tolkien’s no socialist, but he’s no free-marketeer either.

It’s a tale which says that what the world needs is not to be remade in violent revolution, as Wagner implies, but for each of us as individuals and communities to build incrementally on what we already have. It’s a tale which argues that societies will only flourish when power is limited not arbitrary, when each individual can be secure in their property, and when even the humblest of hobbits, like Sam, has the freedom to build a life for themselves free from tyranny and coercion. So, if you’re in favour of freedom, property and against untrammelled government power and looking for a story that embodies these values, put down that copy of the Fountainhead, or Atlas Shrugged and pick up some Tolkien instead. 

Elsden knows very well that Tolkien is a poor fit for the values of economic liberalism – he spends half his essay pointing out that Tolkien’s world and characters do not fit the framework, to the point where he invents enterprising hobbits and globalised trade by way of improvement. Sam’s world – an extremely humble one – is not centred around being enterprising, or maximising his return from pipe-weed futures. It’s about, well, pottering around in the garden, raising a family, and having the occasional beer down at the Ivy Bush.

Or as Thorin Oakenshield once put it, “if more of us valued food and cheer and song over hoarded gold, it would be a merrier world.”

**

Phew. Another long one. With this couple of replies out the way, I will hopefully take a look at my own interpretation of Tolkienian economics in a subsequent post.

4 thoughts on “Das Silmaril: Tolkienian Economics Part I – Replies to Elfonomics and Jethro Elsden

  1. Economics? Again? Have some letters:

    “I am more conscious of my sketchiness in the archaeology and realien than in the economics: clothes, agricultural implements, metal-working, pottery, architecture and the like. Not to mention music and its apparatus.
    I am not incapable or unaware of economic thought; and I think as far as the ‘mortals’ go, Men, Hobbits, and Dwarfs, that the situations are so devised that the economic likelihood is there and could be worked out. Gondor has sufficient ‘townlands’ and fiefs with good water and road approach to provide for its population and clearly has many industries though these are hardly alluded to. The Shire is placed in a water and mounyain situation and a distance from the sea and a latitude that would give it a natural fertility, quite apart from the staed fact that it was a well-tended region when they took it over (no doubt with a good deal of older arts and crafts). The Shire-hobbits have no very great need of metals, but the Dwarfs are agents; and in the east of the Mountains of Lune are some of their mines (as shown in the earlier legends) : no doubt, the reason, or one of them, for their often crossing the Shire.”

    One thing you wrote:”Celegorm hunts for sport and food, but I have a difficult time seeing him cook his own dinner. Et cetera. ” Why not? After all Laws and Customs of Eldar mention:

    “Among the Noldor it may be seen that the making of bread is done mostly by women; and the making of lembas is by ancient law reserved to them. Yet the cooking and preparing of other food is generaly a task and pleasure of men. The nissi are more often skilled in the tending of fields and gardens, in playing upon instruments of music, and in the spinning, weaving, fashioning, and adornment of all threads and cloths; and in matters of lore they love most the histories of the Eldar and of the houses of the Noldor; and all matters of kinship and descent are held by them in memory. But the neri are more skilled as smiths and wrights, as carvers of wood and stone, and as jewelers. it is they for the most part who compose musics and make the instruments, or devise new ones; they are the chief poets and students of languages and inventors of words. Many of them delight in forestry and in the lore of the wild, seeking the friendship of all things that grow or live there in freedom. But all these things, and other matters of labour and play, or of deeper knowledge concerning being and the life of the World, may at different times be pursued by any among the Noldor, be they neri or nissi.” 🙂

    Jokes aside there are certainly elf crafts..people, just like there are ‘raft elves’, there are servants and workers (like elves moving those barrels in Elvenking’s halls cellars) or like Galion, the Elvenking Thranduil’s butler or Captain of the Guard, but I guess the roles in elven society could be less rigid ones than we think (plus those were Wood Elves, though servants are mentioned in Silm). Throughout the Hobbit, Lotr or even Silmarillion there are references to trade, money and commerce in general, there is market in Minas Tirith that receives goods from Lossarnach and other places:

    “‘Yes, lord,’ she answered; ‘but not enough, I reckon, for all that will need them. But I am sure I do not know where we shall find more; for all things are amiss in these dreadful days, what with fires and burnings, and the lads that run errands so few, and all the roads blocked. Why, it is days out of count since ever a carrier came in from Lossarnach to the market!”

    There is even reference to money lending in The Hobbit: “even the poorest of us had enough money to spend and to lend” even Bilbo was said to borrow money at times and had his “usual business manner” for the purpose of negotiation. Prices are mentioned especially in Bree (silver pennies are the currency, a gold piece is a very generous tip apparently), even one or two reference to tolls and taxes could be found or at the very least paid tributes. It’s not much maybe but I don’t think one needs to create some sort of ‘economical ideology’. At the start of Lotr we have this:

    “The purchase of provisions fell almost to nothing throughout the district in the ensuing weeks; but as Bilbo’s catering had depleted the stocks of most stores, cellars and warehouses for miles around, that did not matter much.”

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    • Oh, there is unquestionable evidence that Tolkien at least tried to make the economics of his world make sense (more on that when I get around to writing the follow-up post). His detail about Sauron’s agricultural slave-fields testifies to that. And, yes, The Hobbit is actually something of a gold-mine in terms of trading and class organisation.

      I’d stand by my suggestion that we are really in the dark (haha) about Valinor. Laws and Customs is a debatable text at the best of times (personally I take it with a mountain of salt), and in my comment on Celegorm, I was querying less about gender roles, and more about whether he had servants to do the messy stuff involved in preparing the game for food. If so, how are those servants paid?

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      • Well I did bring up the Laws and Customs of the Eldar in a more joking tone :). But the gender roles give some input in activities of Elves, their crafts and labor that they perform, so we have mentions of tending to fields and gardens (which also should be noted has another factor that so far I did not mention, the ‘elven magic’ when we have Galadriel being able to put such ‘blessings’ on the box of soil from her orchard that it can increase fertility of the entire land and caused famous Year of Plenty in the Shire, even if Galadriel powers would be exceptional, pretty sure they would be, other Elves could have some possibility of replicating her feats this would mean elven agriculture would be something far easier, examples of elven foods and drinks show they seem to have talent for growing crops and food production, often making stuff with amazing properties, like miruvor or that golden drink Gildor presented the Hobbits or ‘white mead’ Galadriel and Celeborn drink at parting with Fellowship), smiths, wrights, wood carvers, jewelers (in Middle-earth the example is even better for we have certain…trade organizations so to speak, in Eregion the craftsmen formed society or brotherhood of Gwaith-i-Mirdain which could be taken as an example of a ‘guild’ in a sense, other societies include scholars like the Lambengolmor or “Masters of (spoken) Tongues” that are named in the text “The Lhammas”, basically a linguistic society of elven scholars), aside from that Silmarillion mentions the ‘masons of the house of Finwe’, so Elves who were building and mining:

        “And it came to pass that the masons of the house of Finwë, quarrying in the hills after stone (for they delighted in the building of high towers), first discovered the earth-gems, and brought them forth in countless myriads…”

        So we have example of masons and builders and miners, stone quarry workers. The other peoples like Numenoreans (and so also Gondorians after them) had their own examples of guild like societies of specialists or actual guilds named straight like Guild of Venturers or Guild of Weapon-smiths, in Minas Tirith there is entire street Rath Celerdain, the Lampwright’s Street, if the whole street was named after them there must be lots of workshops of the lampwrights there. We know for sure that among mortals at least the workers get paid, well among Hobbits we know of the wealthy families employing other Hobbits not only as gardeners as our dear Sam (though we don’t know how much they were paid), but also for other tasks, we know that Sam’s cousin Hal “works for Mr. Boffin in Overhill”, and there were Hobbits “in the pay of the Bracegirdles and the Sackville-Bagginses”(UT). Elves are more elusive to figure out their economic situation, though even ‘magical race’ can be practical as Beleg aptly demonstrates:

        “…a king or the lord of a great host has many needs. He must have a secure refuge; and he must have wealth, and many whose work is not in war. With numbers comes the need of food, more than the wild will furnish to hunters. And there comes the passing of secrecy.

        Amon Rûdh is a good place for a few – it has eyes and ears.

        But it stands alone, and is seen far off; and no great force is needed to surround it – unless a host defends it, greater far than ours is yet or than it is likely ever to be.”

        This shows that even Elves are capable of practical outlook and know logistics, well Wood elves of The Hobbit show this as well in how well they organize help for Esgaroth’s Lake-men refugees, using skillfully resources and their knowledge of crafts to build shelters, organizing floating timber from the forest for their needs etc. We know about Wood Elves that there is some amount of wealth that individual members of society seem to have, kings usually have large treasure hoards and so on, but specifics of currency involve drafts in extended texts that did not went into appendices, but deal mostly with mortals again. There is a reference to currency of Gondor:

        “In Gondor tharni was used for a silver coin, the fourth part of the castar (in Noldorin the canath or fourth part of the mirian).” – HoME XII

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  2. Pingback: Das Silmaril: Tolkienian Economics Part II – Tolkien Elves Are Not Vegetarians | A Phuulish Fellow

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