economics Archives - Andrew Knighton Writes

Pirates and Human Motivation

“Follow the money.” It’s not a new idea in understanding motivation, but it’s an important one.

The Golden Age of Piracy (a real thing that happened between around 1650 and 1730) was all about following the money. I don’t just mean guys with guns chasing guys with gold, though there was a chunk of that. I’m talking about the bigger economic picture.

“Come back! I want to talk about some exciting opportunities in cannonball futures exploration!”

I’m talking about why the Golden Age happened, and why it happened when it did.

When Peace Means Unemployment

The Golden Age of piracy had three main phases, and two of them began when wars ended*.

In 1648, and again in 1714, wars ended in Europe. I’m not talking small wars that were only horrible for people in the local area. I’m talking huge wars that drew in nearly all the nations of Europe – specifically the 30 Years War and the War of the Spanish Succession. These were sprawling conflicts at land and sea between nations with far more guns than sense. They employed a lot of people, turning them into soldiers and sailors.

So yay for employment prospects, at least?

Well, yes and no. Because military employment in a continent-spanning war isn’t a sustainable career. Such massive conflagrations of human life are mercifully limited. Sooner or later, the combatants run out of resources or the will to fight. The war ends. The poor populations who’ve seen their homelands torn apart start picking up the pieces. And the governments start laying off troops, because they don’t need massive armies and navies any more, and they’ve spent all their spare cash on cannonballs and coffins.

Yargh For Opportunity!

Imagine you’re an English sailor in 1715. For the best part of a decade, you’ve been fighting at sea. It’s what you know best. It’s what you’re comfortable with. It’s pretty much the only way you can see of making a living.

But now your nation won’t employ you, so you need to go freelance. And just across the Atlantic is your opportunity. Because in the Caribbean, the governments have less control, and there are places were a seafaring bandit can hide out. Piracy starts looking pretty appealing.

Then you get there, and sure there are a lot of people in the same boat as you, literally and metaphorically. But that’s not a problem because trade is picking up. The end of the war means safer travel, which means more commerce. There are all these ships loaded with cash and luxury goods. You’ve lost your job, and suddenly the rich merchants and ship owners are making out like bandits. Well screw them, you’re a proper bandit, and you’re going to take your share.

Your big, watery share of pieces of eight.**

Need and Opportunity

In both cases, there was a big upswing in piracy. Big name pirates like Blackbeard and Anne Bonny strutted their stuff. For years, the seas of the Carribean weren’t safe, because this was the best way some folks could see to make a living.

This is what leads so much of human behaviour – a need and the opportunity to address it.

It’s also why economics, the social science of meeting material needs, is so important in understanding motives. The flow of money and opportunities shifted, so people did too.

In the FantasyCon panel on fantasy economics, the panellists talked a lot about real examples like this. They show how economics isn’t just about exchange rates. It’s about human behaviour. And whether you’re trying to understand history or create a fantasy world, human behaviour is what matters. So it’s worth paying attention to the economics.

Follow the money. Even if it’s pieces of eight.

* The other phase also had economic drivers, as opportunities in the Caribbean started to dry up.

** Pieces of eight were high quality Spanish silver coins which became a popular global currency.

The Best Panel of FantasyCon 2017 – Economics. No, Seriously…

I attended several great panels at this year’s FantasyCon. But the best was on a subject I never expected to be so engaging – fantasy economics. Chaired by Peter McLean, the panel also featured authors Jeannette Ng, Shona Kinsella, Vic James, who’s also a political journalist, and Stewart Hotston, who’s an investment banker with a degree in economics.

Going Wrong

Peter’s first question was what economic pitfalls people found in their writing and how they got around them.

Stewart talked about how wars have to be paid for – this was something that constantly stopped Henry VIII going to war. Wars have economic consequences for hundreds of miles around, as horses are taken and farms burned.

Shona pointed out that, in a prehistoric setting like the one she writes about, everyone has to work to support the community. The value is in time, not money, and if someone doesn’t pull their weight that has consequences for everyone.

For Vic, the inspiration for her writing came from looking at the failures of an economic elite. If you have a magical aristocracy, that will shape the economy. It can lead to things like indentured servitude.

Jeannette pointed out the difference between building a plausible fantasy economy and using fantasy as allegory. The allegory doesn’t necessarily need to be economically convincing, but you have to know where it’s going.

This also led to some reflections on the reality of economics. Stewart argued that all economists are essentially fantasy writers, as they assume that people behave like rational actors to maximise economic utility. Vic pointed out that a plausible, functional economy isn’t always a sustainable one.

Money

Peter asked how we define an economy, given that it can be built on things other than money, like barter. One definition Stewart gave was that money is a way of storing desire and allowing access to value, and this is how an economy works.

This led to a discussion of debt and how it can work if there’s no cash. Jeannette suggested favours and Vic said labour, which raises the question of when to pay that debt – get it out of the way when young, or enjoy your youth and work later?

Jeannette discussed the case of gift giving cultures, where giving increases your status and places obligations on others. This is something that has appeared in various places around the world, including in medieval Europe. Debt, obligation, and economic dominance don’t have to work in the way we’re used to.

The Elite

Next on Peter’s question list was whether the magically powerful in a society would automatically become the super-rich.

As Stewart explained, the social elite and the most wealthy aren’t always the same in reality. Historically, merchants have tended to be a separate class from the aristocracy, who didn’t dirty their hands with trade. The wealth of the aristocracy came from debts and giving opportunities to merchants. So in a fantasy world, the powerful could channel magic where they want it to go and this would affect wealth distribution, but magic, wealth, and rank wouldn’t necessarily match.

Luxury!

In a question that would have got him burned at the stake five hundred years ago, Peter asked how we get to a point, as with medieval monasteries, where one of the wealthiest groups aren’t doing anything useful but are essentially a luxury. This led to a wider conversation about luxuries. Jeannette pointed out that we don’t appreciate what a luxury most clothes once were, as we get them so easily. Giving cloth had real symbolic power. Shona talked about how, in a society that doesn’t take excess resources from the earth, luxuries can take a different form – things made for each other.

This idea of the changing nature of luxury came up again as Jeannette discussed more egalitarian societies, in which anthropologists have seen people mocking the excessively successful. Stewart said that this fits a social difference between the UK and the US – in the US, people are more hierarchical and concerned with economic success, while in the UK we are more egalitarian in our outlook and celebrate heroic failures.

Vic described the aristocracy as a wealth-preserving mechanism – most early laws emerged to decide where property went.

Specialist skills are also important in directing wealth – Stewart explained how the creation of the specialist skill of double-entry book-keeping added to the wealth of book-keepers and their patrons.

Wacky Stuff

Someone in the audience asked the panel about the most out there economic ideas they’d seen.

Stewart said basic minimum income. Evidence is starting to show that it generates wealth and doesn’t create inflation, completely contradicting dominant economic theories. Its day is coming, but many economists, shaped by Hayek and American puritanism, will fight this.

Jeannette said China’s gift-giving culture, where it’s scandalous to game the gifting system for profit but this can be done.

As Vic said at the end, economics is a codification of human relationships. This was what the panel drew out – how economics ties to other relationships, how it is shaped by them, and how it can be used to build more interesting worlds.

Seriously. Best panel of the whole convention.

Bankers – the new daleks?

Doctor Who is going to face a villainous banker. Of course he is. Since the financial crash bankers have become a pop culture pariah, a go to baddie that guarantees an audience reaction. It’s fair enough – the creators of our culture have a duty to address current concerns, both for the good of public discourse and for the good of their own income. But are we really handling this issue right, in science fiction, fantasy and beyond?

A villain as old as pantomime

Lets face it, the banker villain isn’t a new trope. Despite the efforts of It’s A Wonderful Life, bankers have turned up as bad characters more often than good, whether they’re foreclosing on the hero’s house or corrupting the values of the young with their materialistic ways. Even Mary Poppins, that childishly bonkers work of fabulous fantasy, has banker villains and a character whose arc is about learning not to be such a banker.

[youtube https://www.youtube.com/watch?v=C6DGs3qjRwQ&w=420&h=315]

If Mary Poppins thinks you’re a bad egg then you really are in trouble. But bankers have hit a new cultural low in recent years, and that raises some complicated questions.

Not all banks are made equal

The cultural slum status of bankers undoubtedly has a lot to do with the financial crisis and the mechanisms that brought it about. The increasingly complicated and dubious techniques being used by hedge fund managers have rightly drawn criticism. When men in skyline offices are profiting from mechanisms that destroy years others’ hard work then something is amiss. Some of these people were literally living off the misery of others.

This is the image of banking picked up on by Joe Abercrombie‘s Valint and Balk, the shadowy, manipulative bankers who occasional peak out from behind the scenes of his fantasy world. Even in a world where banking is far less commonplace, the bankers have managed to make themselves villains.

Just before the crisis I worked in a company that published data on investment funds. It was a spirit crushing job, our work completely divorced from the real, productive world. I didn’t stay there long, but I have to keep reminding myself that a lot of banking isn’t about those funds. There’s a wide spectrum from the micro-finance idealists bringing money to poor Indian villagers, through the helpful mechanism of high street banking, to the bloated leviathan of high stakes investment banking.

The problem is that our culture seldom reflects that variety or that nuance. The grasping investment bankers are a minority, but they dominate the way we portray modern finance, and that’s starting to undermine those portrayals. The banker as villain is becoming a cartoonish cliché, and much as I love Doctor Who I doubt it will avoid that trap.

The pantomime villainy is making the message less powerful, causing people to react against the demonisation of bankers and forget that there is a real problem here.

Money is power

It’s a cliché but it’s true – money is power. And right now that form of power is in conflict with political power. The power of finance is eroding state institutions, investment bankers taking over from the politicians. It is, in my opinion at least, a profoundly undemocratic trend. At the ballot box we all have equal power, in the market place our power depends on our wealth, whether earned, inherited, stolen, or otherwise acquired.

This is an issue that science fiction in particular is well placed to address. It’s a big feature of Richard Morgan’s excellent Market Forces. Whatever your views on this change, it’s one worth exploring, and science fiction’s capacity to look to the future is a great way to do that.

More variety please

If that exploration is to have any impact then we need a more nuanced approach to portraying bankers and finance, one that acknowledges and explores the difference between the helpful little guy and the huge corporate villain. Literature, TV, films, games – these all have the power to change views and so shape the world.

Even an episode of Doctor Who.

Lessons learned from Sandel’s What Money Can’t Buy

Michael J. Sandel’s What Money Can’t Buy: The Moral Limits of Markets might sound like an unlikely source of inspiration for a fiction writer. It’s a book about the influence of market values as they intrude into every corner of our lives, a challenge to accepted truths on the subject. There are no exotic locations or exciting events as you would get reading a book on history or mythology. And yet, having finished it this morning, I’ve found that it’s given me much to work with when writing.

Images of Money 2

The way we assign value

Often in books, especially those focused on action and adventure, objects and events are given much the same value by all involved. The Holy Grail is a thing of huge importance to all who encounter it because of its power. Not everyone might care about the core maguffin for the same reasons, but they value it in much the same way, and its value remains the same no matter their reasons for valuing it.

But something Sandel draws attention to is that the way we value objects changes their value. Once corporate boxes were put into football grounds they became less egalitarian places. High and low alike weren’t crammed together on the terraces, and the wealthy looked down on the masses from behind protective glass. People were attending who valued their status above the sport, and that changed the place.

The way we assign value changes our behaviour, and that can change our world.

Hidden ideologies

Sandel, like many other commentators, challenges the neutrality of certain assumptions. He argues that using market forces to assign services and goods changes those things. Modern economic assumptions aren’t the universal truths many treat them as – they are ideological assumptions.

Whether or not you agree with Sandel it gives you something interesting to ponder when creating a fictional world. What are the assumptions its inhabitants take for granted? What are the religious, social, political and economic ideas they never even mention because they are so fundamental to their lives? Taking that in new directions has potential for creating unusual fantasy and science fictional societies, like Iain M. Banks’s Culture.

The Dan Brown effect

There’s also an interesting lesson for those of us trying to work within creative industries. Sandel argues that placing a commercial value on something can squeeze out its other values in our minds. So a work of art with great merit might be far less successful than a mediocre one if the mediocre one is seen as easier route to profit and so pushed by big companies. This can warp our culture, and raises a challenge for both writers and readers in cutting through the business to put cultural value first.

Looking for the unexpected

As writers we need to be eclectic, to take lessons from all fields, to give our worlds depth. Sometimes that’s about basing a character on a real person or gaining inspiration from a painting. But sometimes it’s about reading books on economics.

So, any thoughts on this? Have any of you read books that became surprising sources of inspiration? Where have you got good ideas and new perspectives from? Leave a comment, let me know.

Picture by Images of Money via Flickr creative commons