Imaginary Worlds - Economics of Thrones and Starships

Episode Date: April 21, 2016

Whether you're running the seven kingdoms of Westeros or flying to Mars -- you have to figure out how to pay for everything. Many economists are fans of sci-fi because those worlds take economics models to an extreme, especially when its comes to the issue of scarcity vs. abundance. Sarah Skwire looks at what happens when strawberries are precious like gold, or when hot Earl Gray tea can materialize instantly. And Matthew McCaffrey explains why we should all worry that "Winter is Coming." Special thanks to Matthew Hollow. Featuring original music by Alexis Cuadrado. Learn more about your ad choices. Visit megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

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We've never smelled so good. Shop Old Spice Total Body Deodorant now. You're listening to Imaginary Worlds, a show about how we create them and why we suspend our disbelief. I'm Eric Molenski. So sometimes listeners will send me ideas for episodes, which is great because, I mean, I've taken a few of them. And even if I don't, I really like knowing what people are into, what's interesting out there. And recently, a few people suggested that I look into the economics of imaginary worlds. And one of them was an economist, Matthew Hollow, who's a professor

at the University of York. I just kind of noticed that you had made one on that. I thought that might be the kind of thing that would, you know, be relevant. He says whenever economists predict the future or create an economic model, they're basically dabbling in science fiction. In fact, he thinks they should read more science fiction. You know, people often criticize those involved in economics exactly because they don't, you know, kind of think about how these economic systems or shifts will actually affect how people live. Economists and fantasy writers are often asking the same questions. Like, how would the world be different if we changed one or two factors? I sort of accidentally learned a lot of economics by drinking with economists,

which is a great way to learn economics. Sarah Squire is a senior fellow at the Liberty Fund, which is a think tank. And she says another thing that fantasy writers and economists have in common, they're the kind of people who don't take the world for granted. They realize that what most people consider normal was artificially constructed for very specific reasons. Economics is about the choices that we make as humans, the things that we want as humans, and what we're willing to exchange for those things, right? And how we decide to make

those exchanges. It's a very human science. It's about how we decide what we want and how we decide how to go after it. She actually had an aha moment when she realized all of this. She was studying economics in grad school, and this new show came on Fox called Firefly. It was Joss Whedon's space western about a group of misfits skirting along the edge of an intergalactic society. And she was particularly struck by this one scene in the first episode between the ship's mechanic, Kaylee,

And this here's Serenity, and she's the smoothest ride from here to Boros for anyone who can pay. And a passenger named Shepard Book. Can you pay her? Well, I got a little cash, and, uh... And he pulls out a little box and he opens it and he flashes the contents at Kaylee and her eyes just light up. Ooh, grandpa. and he flashes the contents at Kaylee and her eyes just light up. Ooh, grandpa.

And later on, you see her quietly in her bunk, opening the box and enjoying one perfect, beautifully ripe strawberry. And that's when Sarah realized that fantasy writers often play with an idea that is one of the foundations of economics. Scarcity versus abundance. Now, the golden age of science fiction was all about abundance, because in the future, we're going to have all these amazing,

wonderful gizmos and gadgets. Or a more recent example would be the replicator from Star Trek. Tea, Earl Grey, hot. Which can make any food, drink, clothes, or even tools materialize instantly. Tomato soup. There are 14 varieties of tomato soup available from this replicator.

One of the things that economists like to talk about when they're drinking is what happens if you completely eliminate scarcity in terms of material goods, right? Does anything else become scarce? material goods, right? Does anything else become scarce? So maybe the products that become valuable, maybe the things that have value are the things that take an enormously long time to produce. And so is it time? Is it human capital? Is it personal attention? Is it having a person in a room with you? If everything's being done sort of mechanically and by robots, right? Is the real value actual faceTime. So all of a sudden we don't pay to go see movies, but maybe we'll pay to go have dinner with the great actor. Although you could recreate them in the holodeck. Well, yeah. I mean, right. So if you

can recreate them in the holodeck, then the really special thing is I didn't have to recreate that person. Now compare that to The Martian, the best-selling novel, which was turned into a movie starring Matt Damon, as the astronaut Mark Watney. And The Martian turns that fantasy entirely on its head by taking Mark Watney, the astronaut, stranding him on Mars where there's nothing. Everything is scarce. Let's do the math. Our surface mission here was supposed to last 31 souls. For redundancy, they send 68 souls worth of food. That's for six people. So for just me, that's going to last 300 souls, which I figure I can stretch to 400 if I ration. So I got to figure out a way. And so the question then becomes not how do we, what do we do with

our time and our intellect and our curiosity in a world of complete abundance? The question in the case of the Martian is in a world of absolute scarcity, how do we turn the few resources that we have into an ability to survive? Now, this is a big generalization, but most of us living in the developed world live in a world of abundance with supermarkets packed to the ceiling and sites like Amazon that can deliver anything to your door in a matter of days or hours. And when Sarah looks at fantasy stories, she can detect that people have mixed feelings about that. In times when resources are scarce, people fantasize about worlds of great abundance. And in times when we have a lot of stuff, like we do now, we fantasize about scarcity and about pioneering new territories and about how to get along on less and less stuff. And during times of scarcity, like the Great Depression, we're fantasizing about Shangri-La. Yes, exactly. And in the medieval period, right, people are fantasizing about a place called the land of cocaine, where the houses are shingled with pies and roast chickens fly through the air

and land in your mouth, right? You don't even have to do anything. Pigs run by with forks already stuck in them. That's why she thinks post-apocalyptic stories are so popular right now. And one of her favorites is Battlestar Galactica, where the last few surviving humans are fleeing an army of robots called Cylons. Now, when the show first aired in the 1970s, the Cylons were these clunky metal thugs. But when the show got rebooted in 2004, the Cylons were reimagined as synthetically grown humanoids run by artificial intelligence. The most precious commodity on Battlestar Galactica is human life. Every episode starts in the credits with the number of humans who are left alive. And you can watch it drop episode by episode by episode, right? And one of the things that's

enormously important to understanding economics is understanding the importance of human capital. human capital. Capital is not just money that's used to invest in businesses. It's not just the machines that are used in order to allow businesses to operate. Capital is the human beings, their skills, their capabilities, their talents. And so every lost life on Battlestar Galactica, I think, is thrown into high relief because they're so few and they're so precious. Right. And then, but meanwhile, the Cylons can replicate themselves endlessly. Exactly. And so one of the interesting questions that I think remains an open question for much of that show is how different are each of the Cylon models or do they change as they go through

life? Do the Cylons, in other words, have a kind of human capital that they develop over time? So, you know, there'll be like many, many, many versions of Cylon number eight, all of them played by Grace Park. One of the number eights named Boomer becomes a dangerous foe while another one who's called Athena decides to join the humans and she becomes a dangerous foe, while another one, who's called Athena, decides to join the humans, and she becomes a very valuable pilot. I made a choice to wear a uniform, to be a person.

You were a person before you put on that uniform, okay? You were a person before I fell in love with you. You don't have to prove that. I have to prove it every day. And one of the debates the characters keep having on that show is how different are these models anyway, right? Is it just another frackin' toaster, right? Or is this Boomer versus Athena? So when economists go out drinking, do they really talk about this kind of stuff?

Oh my God, yes. Really? Yes. That's why they're so much fun to drink with. Oh yeah, no, and then the graphs come out and it's like all over. Coming up, what economists can learn from a world where dragons are scarce and ice zombies are abundant.

Yes, if you haven't watched Game of Thrones, I did say ice zombies. There are lots of them. Last year, I did an episode about how foreign policy experts are obsessed with Game of Thrones and the books they're based on, A Song of Ice and Fire by George R.R. Martin. But politics is not the only way to understand the world of Westeros. Matthew McCaffrey teaches economics at the University of Manchester, and he's fascinated by the way Game of Thrones depicts different economies coexisting at the

same time. There are hunter-gatherer tribes. There's a renaissance city-state where trade is very lucrative. Although, for the most part, it's a feudal society where nobles duke it out and the common folk are cannon fodder. It's not a surprise that in a system like this, there wouldn't be much economic growth or change, you know, for centuries at a time. But he thinks economists can learn a lot from Game of Thrones because the different economies in this world were not designed by economists. They're developed around cultural values, which is really common in the real world. And each of the warring clans has its own motto or house words. One of the really good examples of this would be the Greyjoy. So the words of House Greyjoy are, we do not sow.

We do not sow. We do not sow. We do not sow. We are ironborn. We're not subjects. We're not slaves. We do not plow the fields or toil in the mine. We take what is ours. And this is very much sort of an economic and a political philosophy, because what they're saying is we reap the fruits of what other people have

sown. In other words, we are a predatory society. And there are two family mottos that he's particularly fascinated by. First, the Lannisters, the wealthiest family in Westeros. Now, their official family crest is hear me roar, but they almost never use it. The real source of their power is their unofficial motto, a Lannister always pays his debts. Lannister always pays his debts. And by the way, I need to go into details about the story now, so spoilers ahead. Now, for most of the series, the books,

and the TV show, the Lannisters control the highly coveted Iron Throne. But the king, who is just a boy, is illegitimate. He is the result of the queen's incestuous relationship with her brother, which pretty much everybody knows about. So they're constantly under attack, politically and militarily. And defending their position is very costly. It does seem like they're really in trouble, and they might actually be on the verge of collapse. The only thing the Lannisters fear more than dragons, and they're not really that afraid of dragons,

is the Iron Bank. There must be someone at the Iron Bank you can speak to, come to some arrangement. The Iron Bank is the Iron Bank. There is no someone. Someone does work there it is comprised of people and a temple is comprised of stones one stone crumbles and another takes its place and the temple holds its form for a thousand years or more and that's what the iron

bank is a temple we all live in a, and almost none of us know it. Because at the end of the day, it's not about armies, and it's not about how many supporters you have. It's about the resources that you have. Because just by their decisions about who they lend money to, they can tip the balance of power in the Seven Kingdoms. I mean, if there's a moral at all to Game of Thrones, is it that endless warfare is expensive and depleting and ultimately pointless? That's exactly right. I mean, if there's one theme that just gets hammered home in the show and in the books over and over again, it's that this war and, you know, the kind of violence that we see as people contend for the Iron Throne, that this is completely and utterly destructive of human life and human welfare. But there's one family that Matt really admires, the Starks.

Their creed? Winter is coming. Winter is coming. But now winter is truly coming. Which goes back to the issue of scarcity and abundance. You know, the stark words about winter, you know, they're about being careful and preparing for the worst. And as opposed to sort of squabbling with your fellow nobles over control of the Iron Throne. And for me, this is more of the entrepreneur's creed than it is the creed of

politicians. You know, it's savvy entrepreneurs who plan for the future and who take great care to make sure that their enterprises last over time. It's funny to me that Matt has such admiration for the Starks because throughout the books and the show, they get royally screwed. I mean, they're very nice people, but they're the last family you want to be in this world. If you want to live very long. Like, it's an important point that if you try not to play the Game of Thrones, which is essentially what the Starks do, you know, they're geographically isolated. And unfortunately, that turns out to be an extremely dangerous

position to take, because one thing about the Game of Thrones is that it does tend to expand, right? It tends to sort of reach out and, you know, it wants to grasp everything. Which may be another valuable economic lesson. Even if you play it safe and stick to these great economic models you've created, the future always has a different plan in mind. At the end of the day, our societies and our economies are a lot more fragile than we might think. They can really only take so much abuse before you start seeing real problems. It's funny, the word fragile, that seems to really, for me, put your thumb on it. Exactly.

It's that it really is delicate. You know, we live, you know, we're surrounded by all these brick and mortar economic and social institutions that, you know, many of which have been around for hundreds of years. And so it's very easy to think that they've been around for a long time, so they're always going to be around. But the sad fact is that they might not be.

In other words, winter is coming. Exactly. Exactly. Winter is always coming. Well, that's it for this week. Thanks for listening. Imaginary Worlds is part of the Panoply Network. Special thanks to Matthew Hollow, Matt McCaffrey, and Sarah Squire, who does not limit her drinking debates with economists to science fiction or fantasy. There's horror, too. If you actually have actual vampires, do vampires inevitably have to take over the entire world because they're going to destroy their food source?

They'll over-farm us. Right, exactly. Overfishing of humans. It's a terrible tragedy. And if you have ideas for future episodes, let me know in the show's Facebook page. I tweet at Emalinski. This episode featured original music from Alexis Quadrato. Also, a musician called Sono Sanctus lent me his library of music a few months ago, and I've been using his stuff a lot too. I have links to both of their sites at imaginaryworldspodcast.org. Thank you. Panoply.