Even fictional economies have their structural issues. While the TV series Game of Thrones is best known for wars, violence, and nudity.  It is just as much a story of economic woe and the suffering it can bring about.

Benefits of a diverse economy

The Seven Kingdoms of Westeros is a basic feudal economy centred on agriculture and the extraction of precious metals like gold, silver & iron. Not at all diverse. The finer things in Westeros like fine carpets & fabrics, intricate lace and priceless Valyrian steel blades all seem to be imported from Essos, a continent across the sea.

The looming threat of an impending long winter is very likely to bring mining and agriculture to a standstill and not only reduce economic output, but the means to feed its citizens. Surely the King could import food and ration it out during the hard times? Good idea in principle, except the Crown is broke…

Government Spending Problems

Upon conquering the Iron Throne by force, King Robert Baratheon inherited a large budget surplus left by the Targaryens.  King Robert not only spent this surplus, but borrowed 3 million gold dragons from The Iron Bank (a ‘too big to fail’ lender) and a further 3 million gold dragons from House Lannister. (N.B: A gold dragon is the highest unit of currency in Westeros).

Very little of this money was invested in public works, infrastructure, or skilling up the workforce to help reduce the trade deficit. But rather on lavish parties and fighting civil wars.

The Seven Kingdoms was running at a huge budget deficit upon the death of King Robert. It is Cersei Lannister who now sits on the Iron Throne and, although ‘a Lannister always pays their debts’, she can’t repay herself the money lent to the Crown as she currently is the Crown. A more problematic issue is that Queen Cersei has suspended all debt repayments to the Iron Bank of Braavos with a touch of animosity.  Sounds like the Lannisters will need a new catch-phrase.

What about Tax Increases?

The Crown raises revenue in a number of ways, such as harbour fees, import duties, as well as taxes passed on from the Lords of each of the Seven Kingdoms. With the labourers, farmers and lower class citizens already feeling discontent and while there’s a hint of rebellion in the air, an increase in taxes in order to pay the Crown’s debts is out the question.

How citizens respond to tax increases is a question of perceived benefits. Paying down old debts racked up by a wasteful leader probably won’t be well received.

What happens if the Crown does default on its debts?

The Iron Bank of Braavos is the most powerful financial institution in the Game of Thrones world. Renowned for ruthless debt collection tactics, the Iron Bank has been known to fund the enemies of its creditors, kill lords and noblemen and install puppet leaders in their place to collect its due. Whether or not they would try any of these tactics on Queen Cersei remains to be seen.

When all else fails…

The Iron Bank isn’t happy and the people aren’t happy either. However, these issues are minor when it comes to retaining control of the Throne. The newly appointed monarch of a feudal kingdom Queen Cersei must, above all else, keep the military happy if she wants to hold onto power.

As a last resort, angry creditors and citizens can all be subdued if you have a big army. The only downside being that armies need to be paid and fed. Fail to do this and they may leave, open the castle gates to angry mobs, or defect to the enemy if they have deeper pockets.

The Outcome?

Aside from all the economic issues, a coalition of enemy forces led by Daenerys Targaryen is making its way across the sea from Essos to fight for the Throne, so armed conflict is unavoidable in any case. Might as well direct the limited available resources into the military and fight the angry citizens and hostile creditors as well.

Can it be done? Maybe we’ll find out when the next season starts. Maybe it all could’ve been avoided if the economy was more stable and the ruling class managed public finances better? But where’s the excitement in that!

Might as well direct the limited available resources into the military and fight angry peasants and hostile creditors!

A collaboration by

Antony Monaldi – SNR ACCOUNTANT

Andrea Allen – ACCOUNTANT