In light of the stock market news today (who else is grabbing AMC puts?) I thought it be fun to speak on the macroeconomics of Middle-Earth. Where does money and trade play in to the various kingdoms and communities spread across Arda, and how does this play a part?
Well… the short answer is, it doesn’t have much of a space in the stories of LotR or even in the known history of Middle-Earth. We hardly have much to go on, and instead would take heavy liberties with the text to piece together a financial market. And because each race tend to keeps to themselves, we can’t in a surefire way determine what is fair trade. Hobbits practice some type of libertarian socialism – each family more or less tends with their own dealings. A small “police force” is mostly out catching lost livestock or handling petty-quarrels. Dwarves only sense of currency might be gold and other treasures mined deep in the earth. They have a love of Mitril and war-axes, but a dwarf has not much need for any other goods (that I know of). As far as Elves go, we know more about their trade practices and less about currency. Perhaps it is because of Elves that bothering with economic matters for forfeit for Tolkien. Gold for example – we do not know whether the value diminishes or increases over time (due to their immortal lives).
That is not to say that money is unheard of in these books. The hoarded gold of Erebor is a major plotline, and inevitably succumbs Thorin, King of Durin’s Folk no less, to death. The governing body of Laketown is clearly based on some Feudal system. But we have no history of the Master of Laketown, and how he came to be in power, since in the city of Dale it was governed by the ‘Lord of Dale’. And even that title we know nothing of, only that it’s hereditary, and Bard the Bowman, being a descendent of the last and only known Lord Girion.
All of this said, we do not know what roles currency, Feudal systems vs free market trade, or largely agricultural economies should have in these respective races. It is within dwarves’ nature to be drawn to rare gems and treasures of Arda, so where is the line between healthy habit and hoarding obsession? I’m not sure. I would assume digging deep enough that you find a Balrog is a pretty good starting point.
Does this change how we feel about Tolkien’s legendarium and mythology of his works? In my opinion, certainly not. If I were to have to listen to the different option strategies a Hobbit might place on their version of the NASDAQ, or the Forex rates between Ents and Elves, I’m not sure if I continue to read to be completely honest! No, the Professor’s skill is in his imagery with the landscape, the maps he has drawn in his head and his mastery of linguistics. It’s one of the rare aspects that Game of Thrones excels in where Tolkien does not go, and while an in-depth look at an medieval agricultural economy is not exactly must-see-TV, it offers a better idea of the Feudal system that high-fantasy works like these model themselves after.
I would like to give credits to this work by Jethro Elsden, who takes things so much further in regards to Tolkien and his stance on anti-socialism: