'The ECB with hereditary leadership and the right to employ an army'

April 19, 2013 11:14 PM

"All this gives us one way to understand the Lannister zeal for power in King's Landing. In effect, Tywin is attempting to execute a debt-for-equity swap since his debts aren't actually recoverable. But that simply underscores the extent to which the loans to the Iron Throne are, themselves, worthless as financial assets." Economics of Ice & Fire, Part I and Part II (minor dialogue spoilers for S03E03)

An interesting comment from Steven (scroll to near the bottom)

posted by Chipmazing (16 comments total)

I agree the comment from Steven. Westeros's inability to function without loans could actually make the Lannisters far more powerful. They could strong arm the Iron Throne into almost anything by putting conditions on further loans which Westeros needs just to meet its operating costs, just like the Troika is doing in Greece.
posted by Pseudology at 12:15 AM on April 20, 2013

That only works if there is no alternative. The Throne could simply borrow from, say, the Iron Bank of Braavos instead. They already own an order of magnitude more of the Throne's debt than the Lannister's do.
posted by Justinian at 12:24 AM on April 20, 2013

Slight spoiler:

In Dance With Dragons Cersei defaulted on the Iron Bank of Braavos's debt leaving the Lannisters as the only remaining major lender.
posted by Pseudology at 12:35 AM on April 20, 2013 [1 favorite]

'The ECB with hereditary leadership and the right to employ an army'

I can see the future....
posted by cthuljew at 12:43 AM on April 20, 2013 [1 favorite]

This seems an extreme response to drawing against New Zealand.
posted by howfar at 12:53 AM on April 20, 2013 [2 favorites]

In Dance With Dragons Cersei defaulted on the Iron Bank of Braavos's debt leaving the Lannisters as the only remaining major lender.

And that decision is going to bite them in the ass. Nobody defaults on the Iron Bank of Braavos.
posted by Pendragon at 3:00 AM on April 20, 2013 [5 favorites]

Nobody defaults on the Iron Bank of Braavos.

There is only one god, and his name is Debt. And what do we say to Debt? Not today.
posted by spaceman_spiff at 9:07 AM on April 20, 2013 [12 favorites]

All this to say nothing of the fact that Lannister actually has no more leverage on the Iron Throne to ever get its debts repaid, if that were even possible. If the Iron Throne defaulted to Lannister the consequences would look like exactly the current situation. There's nothing they can do.

Oh, and I loved in the latest episode when Tyrion was going over Littlefinger's books. After all of this time where Baelish is talked up as a wizard of coin, his only real secret was acting mysterious while borrowing recklessly and not giving a fuck about the consequences. It was just such a perfect GOB-sinking-the-yacht moment.
posted by Navelgazer at 10:22 AM on April 20, 2013 [1 favorite]

There's always gold in the banana stand.
posted by cthuljew at 10:32 AM on April 20, 2013 [6 favorites]

Oh, and SPOILERS FOR THOSE WHO HAVEN'T READ THE BOOKS-

I'm eager to see how this and next season play out, with Tywin always appearing to be calculating and shrewd and unquestionable, and every move he makes turning out to have been pompously ill-advised and self-destructive. It's going to be fun, but this analysis just helps further prove that Tywin is better at appearing to know what he is doing than actually knowing what he is doing.
posted by Navelgazer at 10:43 AM on April 20, 2013 [1 favorite]

I would imagine with proper magic coming back and all, traditional economic analyses wouldn't be of much use? I mean, if you can icezombie-up an army from your local and well populated cemeteries, that's a huge item off the gold and food expenses list. (Not an economist, didn't read the books.) Just a "for instance" I can think about...
posted by Iosephus at 11:53 AM on April 20, 2013

I'm not totally caught up with the books (towards the end of Feast for Crows currently) but magic is generally portrayed as rare, risky, and of dubious application. Melisandre can make her shadow-assassin-baby but not exactly on-demand, and her "blood of a king" rite has all the hallmarks of a confidence scheme. Mirri Maz Dur's magic is worse than useless for Dany and everyone around her knows it will be. The warlocks of Qarth aren't even particularly respected by their own fellow citizens. And even the faceless men use simple muggle tricks for the most part and only turn to their special powers as a last resort.

All this to say that magic exists and doesn't affect the economy too much, simply because it doesn't affect anyone's day-to-day lives particularly. Using Clarke's Third Law, imagine that somewhere on earth there was an academy where you could go and get trippy, vague, 100% accurate predictions about your life, but you wouldn't be able to interpret them particularly well and it's clear that the scholars are trying to exploit you and screw you over. Or perhaps you learn of an order of spies so good at disguise that they could literally be anywhere. As interesting as these facts may be, your day remains pretty much the same.

The only exception to this is the Dragons, and it sets up a nice third point of comparison to the Lannisters and Tyrells. Dany is in some respects the wealthiest person in the entirely world of ASoIaF. Her three dragons are immeasurably valuable. But they are nonfungible, nontradable. The reason that everybody wants her dragons is the same reason that she can't sell them, so she and her khalasar can be at constant risk of starvation while holding onto the three biggest game-changers on the planet in terms of wealth and politics.

As for White Walkers, well, we shall see if anyone successfully attempts to use them for his own purposes, but that sounds like a ridiculously foolish move to me.
posted by Navelgazer at 1:26 PM on April 20, 2013 [5 favorites]

One of the things that always bugged me reading the books is that there's a lot of mention about how important agriculture is, but no mention of what weird plants can survive the messed up seasons.

Mind you, I guess the reason the seasons are like that is magical and will be revealed at the end of the series (a point that more and more seems a zeno's distance away), so maybe the plants are all magiced up too.
posted by lumpenprole at 7:42 PM on April 20, 2013

Navelgazer: "It's going to be fun, but this analysis just helps further prove that Tywin is better at appearing to know what he is doing than actually knowing what he is doing."

I've not read the books, but I have read synopses, and I watch the show, and to be fair, it seems that Tywin is actually pretty decent as a military commander.
posted by Joakim Ziegler at 9:19 PM on April 20, 2013

Navelgazer: "As for White Walkers, well, we shall see if anyone successfully attempts to use them for his own purposes, but that sounds like a ridiculously foolish move to me."

Not that that will necessarily stop anyone. I seem to remember this corporation called Weyland-Yutani...
posted by Joakim Ziegler at 9:20 PM on April 20, 2013 [1 favorite]

And Matt Yglesias now turns to what I was saying re: the Liquidity of Dragons.
posted by Navelgazer at 5:14 PM on April 22, 2013