This was written before DH came out, but it is, I think, even more relevant after it did. I do liked the book, but I think there were several flaws, and I thought this was an interesting take.

The Grauniad

Harry Potter: the economics
by Megan McArdle

Successful magical worlds depend on basic economic principles, and that's where JK Rowling's Harry Potter falls short.

July 20, 2007 4:40 PM | Printable version

Why are books about magic so exciting? The lure is almost tautological: magic is compelling because it allows us to imagine doing the things we cannot ordinarily do. Sure, romance novels may let you envision a world full of hot, sensitive men who want to cosy up to your wounded inner child, and do the dishes afterwards. But only in magic books can you make them disappear and reappear at will.

But this actually presents a problem for authors. If magic is too powerful then the characters will be omnipotent gods, and there won't be a plot. Magic must have rules and limits in order to leave the author enough room to tell a story. In economic terms, there must be scarcity: magical power must be a finite resource.

JK Rowling is not, to put it mildly, known for her seamless plotting or the gripping realism of her characters, most of whom spend the latter books pointlessly withholding information from each other that, if shared, would end the installment somewhere around page ten. But for me, there is another problem with the books, one that has kept me from looking forward to the seventh volume as keenly as I might. I am an economics reporter, and the books are chock full of terrible economics.

There are two ways, I think, that one can present magic: as something that can be done, but only at a price; or as a mysterious force that is poorly understood. So in Orson Scott Card's Hart's Hope, women who perform magic must pay the price in blood, their own or that of others.

Those prices provide the scarcity needed to drive the plot forward. In the Narnia books and the Lord of the Rings, on the other hand, magical power has no obvious cost. But we don't need to understand the costs of magic, because the main characters can't perform it. There is nothing intrinsically wrong with having a deus ex machina in a story; your average fiction writer does not need to explain the operation of the law of gravity, or provide a back story for running out of gas at an (in)convenient moment.

But there have to be generally accepted rules. Characters can't get out of the predicament the author is sick of by having the car suddenly start running on sand. Similarly, if your characters will be using magic, they must do so by some generally believable system.

Yet in the Potter books, the costs and limits are too often arbitrary.
A patronus charm, for example, is awfully difficult - until Rowling wants a stirring scene in which Harry pulls together an intrepid band of students to Fight the Power, whereupon it becomes simple enough to be taught by an inexperienced fifteen year old. Rowling can only do this because it's thoroughly unclear how magic power is acquired. It seems hard to credit academic labour, when spells are one or two words; and anyway, if that were the determinant, Hermione Granger would be a better wizard than Harry. But if it's something akin to athletic skill, why is it taught at rows of desks? And why aren't students worn out after practicing spells?

The low opportunity cost attached to magic spills over into the thoroughly unbelievable wizard economy. Why are the Weasleys poor? Why would any wizard be? Anything they need, except scarce magical objects, can be obtained by ordering a house elf to do it, or casting a spell, or, in a pinch, making objects like dinner, or a house, assemble themselves. Yet the Weasleys are poor not just by wizard standards, but by ours: they lack things like new clothes and textbooks that should be easily obtainable with a few magic words. Why?

The answer, as with so much of JK Rowling's work, seems to be "she didn't think it through". The details are the great charm of Rowling's books, and the reason that I have pre-ordered my copy of the seventh novel: the owl grams, the talking portraits, the Weasley twins' magic tricks. But she seems to pay no attention at all to the big picture, so all the details clash madly with each other. It's the same reason she writes herself into plot holes that have to be resolved by making characters behave in inexplicable ways.

This matters. If the cost of magic isn't well defined, how do we know what resources, other than plucky determination, Harry needs to defeat Voldemort? We certainly can't rely on his mental acumen; he's spent the last two books acting like a brain-damaged refugee from The Dirty Dozen.

Perhaps, as some friends have argued, I am expecting too much from a children's book. But I don't think that is right. Children are great systemisers, which is why they watch the same shows and read the same books over and over again: they are trying to put all the details together into a coherent picture. "I could do things no one else could do!" is a great thrill; but so is "I know how this works". You can't say that about Harry Potter, because Rowling doesn't seem to know herself. To the extent that there is any system at all, it is the meanest sort of Victoriana, the fantasy world of a child Herbert Spencer. There is a hereditary aristocracy of talent, and I am secretly at its apex. There is an elite school almost nobody can go to, and I am one of the chosen. People fall quite neatly into the categories of good, bad, or clueless, we are the good ones who get to run things in the end. That's powerful fantasy stuff, which is why it's so common.

But the best children's fantasy does something else: it gives one the illusion that the magical world is as consistent and real as one's own world - that it exists, just barely out of reach. Even at eight, or 11, I could not have believed that of Harry Potter. The arbitrary ham fist of Ms Rowling is everywhere too evident - changing the rules, and then making the characters tap dance, like marionettes, to distract you from the enormous potholes in the plot.

I am prepared to be charmed by the seventh book. But oh, how I wish it were convincing enough to consume my imagination as Narnia and Middle Earth once did.

 

Well, duh. This might as well have been written five years ago. Too bad JKR never took the hint.

 

Everything I believe in a simple, easy-to-read essay.

 

Judging by the number of little kids writing to 'Headmaster of Hogwarts' they believe alright.

I read it somewhere, I'll see if I can find it.

Economics wise, I didn't even notice it, because honestly I don't care. There are limitations, such as pronounciation and wand movement (remember first book, wingardium leviosa?) and other wizards and witches who might be more skilled. To prevent them from being omnipotent gods, all you need is a lot of conflict, and JK presents that in spades in the form of other people, not situations like your car is out of gas, and you need to use sand to run it (yeah that's realistic). Since JK has a lot of conflict already, its realistic enough and the way she presented the magical world, like its hidden from our world, it seems like a possibility and everyone knows kids are gullible as hell (Just ask the magic school bus).

 

I agree, BP. Maybe someone should mail this to JKR?

 

It's a bit too late for that, don't you think?

 

I always did think it weird that the Weasleys didn't just make their own robes, or use reparo like no one's business. And, why don't wizards--especially muggleborns--just conjure up muggle money to use in the muggle world? To deposite it in a nameless bank account, to be withdrawn at their leasure?

 

I have seen somewhere (not sure canon or fanon) that magic can wear off proportional to the power, skill etc of the wizard who cast it. That will explain why they never try it on clothes.

As for muggle money, it maybe that noone can picture all the details on a note while conjuring it. There are lots of fine scripts, lines, hidden codes, watermarks what not. But if someone can do it, then I don't know whats stopping them

 

The power of the allmighty plothole stops them. And if that's not satisfactory any semi-reasonable excuse you can think of. Maybe goblins/magic's involved in the state printing of money somehow prohibiting copying. Just like how magic books are copyright protected (are they even?).

 

I too have questioned the economy of the Harry Potter World. Questions such as How the Ministry of Magic makes money (do they tax?)? How can the Weasley's be poor? And how can there be an international market, when the value of everything is weighed the same in every country?

These are questions that while irksome in fanfiction, I don't think are so much so in canon. Yes I would like to know all these answers but I don't think it affected my reading so much. Though the identical monetary value did bother me.

 

Here's one; why would a death eater trying to kill you use any spell but AK? Why didn't Voldie use it against Dumbledore at the DOM? It's unblockable, and even a near miss is still a kill...

Why is the PS guarded by games, games FIRST YEARS can easily win? Why not just keep it in Dumbledores pocket?

Why didn't Sirius go to Dumbles demanding truth potion? Why didn't Peter escape for 13 years? What the hell are they doing in classes? Seriously, how long can it take to learn swish-and-flick? If it's a spell a week, how come they all have such limited arsenals?

Too many plot holes. The universe and the conflict are just rich enough that we all love it.

 

Because if they get caught (and they will be, eventually), they go to prison for a very long time for Counterfeiting?

 

Avada Kedavra is a long incantation compared to Stupify or even Crucio. In addition, in combat situations you're going to use the first spell that comes to mind, not spend your time mulling over the posibilities. And Voldemort did use it against Dumbledore in the DoM, several times. Dumbledore blocked one with a statue, Fawkes blocked another, and I believe he apparated out of the way of a third.

The games are just there to slow you down on the way to the true test: the Mirror of Erised. Had Harry not turned up, Voldemort would never have got his hands on the stone.

Truth potion can be fooled by Occlumency, and a variety of other means, according to JKRs website.

Because he was in hiding and perfectly comfortable where he was.

Learning the why and what of magic, as well as just the how. Plus, it seems that the key part of mastering a spell is practice. Until you are familiar with a spell, it doesn't work for you.


Anyway, back to economics...

The Harry Potter world is interesting in that the government actively tries to ensure the continuance of the basic economic problem. For those not in the know, the basic economic problem is thus: That we have unlimited wants, yet limited resources to fulfill them with. Economics is all about trying to solve this problem.

However, in the magical world, they do not have this problem. Through magic, they have an infinite resource that doesn't run out and can do almost everything (everything minus resurrecting the dead, returning souls to Dementor victims, and conjuring things permamently). However, through the use of money and the introduction of legislation banning the conuration of items such as clothing*, the government has tried to make the economic problem exist where there need be done.

*This is got from an interview quote with JKR:

 

Legislations are well and good, but how do they ensure everyone follows them? I mean Ministry can't well send out Aurors to check if anyone is wearing conjured clothes or not.

 

If finite incantatem works on clothes that'd be one damn good reason why people don't wear conjured pieces.

And in regards to economy, fics have been made where you exploit the non-existant economy in this world. Galleon -> Pounds -> Gold -> More galleons = Profit. (Underpants free equation) She created a world where the worth of a galleon is less than it's gold worth in the non-magical world. Her currency itself is flawed, I wouldn't expect much realism/logic.

 

Where does she say the galleon's worth in pounds? How do you know the galleons are pure gold? I would think the goblins or the ministry would do something to stop galleons from being sold to muggles. And I would also suppose that the exchange would be limited, to not only prevent rich muggles from becoming rich wizards, but to prevent rich wizards from exploiting the system like that.

 

Why not simply use magic to rob muggle banks? Take 20 million dollars, exchange it for galleons, and voila! Instant riches. The magical government wouldn't pay attention to a Muggle crime spree, and a wizard could easily take down all Muggle security.

 

I was under the impression that it took a lot out of you to cast it, so using it like crazy wouldn't be smart. Like so many other useful details in the HP world though, that's probably fanon.

A more sound answer: Using any one tactic constantly makes you predictable. If you are predictable you will eventually lose; probably sooner rather than later.

Predictability gets you killed. I'm sure Moody would agree with me on that.


EDIT:

Haha! Anyone who thinks JKR's characters are bad about this should try reading Robert Jordan's Wheel of Time series. Oh my god, senseless information hoarding is a rampant epidemic in those books. If the characters pulled their heads out of their collective ass for two seconds and actually speak to each other, there would be world peace (or a close facsimile of it) within a week.

 

I guess there is no reason not to. The magical world apparently only communicates with the Prime Minister/president, but I suppose that someone in the know about magic (like the Prime Minister) could tell that it was magic that was used, and then tell the magical world. You could probably get away with small notes though.

 

http://www.accio-quote.org/articles/2001/0301-comicrelief-staff.htm

A galleon is about one pound says the overlord herself. This doesn't make any sense considering some of the pricings she's done but then again she was an english teacher and not a math teacher.

True it might not be pure gold but then again we don't know either way. The fic I was refering too just used the 5 pound conversion, her hubcap sized galleons and some creativity.

Regarding the banking, using any form of spell on or in front of muggles would make it a felony if not the actual robbery. So a notice me not charm (fanon?), disillusion charm or just an invisibility cloak would probably do if you were to sneak into the vault somehow and then apparate out.