The Westeros Economy: A Financial FAQ for GoT Fans

"Game of Thrones" is fantasy. The eighth and final season of HBO's adaption premiering April 14 promises to be chock-full of dragons and ice zombies. However, often overlooked is the fact that author George R.R. Martin’s fictional medieval world is driven by cold, hard economic realities. The characters are constrained by limited resources, low productivity and the laws of supply and demand. Here are seven questions answered that explain the economics of the Seven Kingdoms. 

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For all its magic, Martin’s world is rooted in plain dirt: Simple agriculture and the extraction of raw commodities like gold, silver or iron drive the Westerosi economy Much like Europe in the Middle Ages, Westeros is essentially a pre-industrial economy operating within a rigid feudal social structure with little upward mobility.

The Master of Coin, a member of the administrative body known as the small council, advises the king on financial matters and heads the treasury.

The peasants – or smallfolk, as they’re called in the Seven Kingdoms – farm land owned by the nobles who collect taxes from them. Looking at medieval history, we can assume they pay their taxes either in the form of currency, produce or labor. In exchange, smallfolk receive some measure of protection and stability.

However, not all of Westeros runs on an agrarian basis. On the Iron Islands, which have iron ore, harsh weather and poor, rocky soil, the native Ironborn scoff at farming (their motto: "We do not sow"), mining and even at the concept of lawful commerce. In addition to fishing, a considerable percentage of Ironborn support themselves by piracy, raiding neighbors and passing ships.

In general, manufacturing plays a very small part in the economy of Westeros. The few well-known manufactured products are rather simple and include wines, nutmeg-scented candles and linen.

The extravagant spending habits of the powerful, constant infighting and the resulting disruption of trade routes, all threaten the economy and wellbeing of the commoners. On top of the supernatural threats they face, winter has arrived, and the need for fiscal responsibility and building up stores of grain is more urgent than ever.

After the last season of the television show, most of Westeros was left ungoverned, which raises the question of what happens to the social and economic structures in these regions. George R.R. Martin has said his series was inspired by the Wars of the Roses, a series of civil wars fought by two noble families with claims to the English throne in the 15th century. Many historians say the bloody power struggle eroded the power of the feudal lords, strengthened the monarchy and paved the way for the rise of capitalism a few centuries later. It's interesting to consider this may be what the future holds for the people of Westeros.

As anyone in the Seven Kingdoms can tell you, “A Lannister always pays his debts.” The richest region in the Seven Kingdoms was generally recognized as the Westerlands, home to House Lannister and its gold and silver mines. But that was before House Lannister lent millions to the crown (King Robert Baratheon) and then found its gold mines had tapped out.

In season 4 of the television show, Tywin Lannister tells his daughter Cersei that the Lannisters need to form an alliance with House Tyrell because they "are our only true rivals in terms of resources, and we need them on our side." Tywin believes the Tyrells would help the crown repay its debt to the Iron Bank of Braavos.

The Reach, historically ruled by House Tyrell, appeared to be fast eclipsing the Westerlands in both wealth and power until (spoiler alert) the last season when House Tyrell was extinguished, its fortress Highgarden was sacked and the considerable gold in its posession was sent to King's Landing.

But the Reach, a fertile and temperate region, is the bread basket of Westeros. In the world of “Game of Thrones,” seasons are unpredictable. Winters may last for up to a generation, which would surely mean widespread famine. But even during winter, it rarely snows in the Reach. That means the region would likely be able to grow at least cold weather crops and support some livestock. When most of the Seven Kingdoms is blanketed in snow for years, the supply of food will be low and the demand for the Reach’s agricultural products will be very high, which will drive up prices. With winter here, the Reach stands to grow in wealth and power (for whoever ends up ruling it) dramatically.

Fine Myrish carpets, sumptuous fabrics, intricate lace and priceless Valyrian steel blades – the finer things in Westeros all seem to come from Essos, the continent across the Narrow Sea. Westeros seems to lag both technologically and economically behind its eastern neighbor, which may partially explain how all seven kingdoms came to be ruled over by the Targaryens, a minor family from Valyria in Essos.

Unlike unified Westeros, Essos is composed of many independent and powerful city states, each with its own government, language and culture. Westeros has the most international trade contact with the so-called Nine Free Cities of Essos. Each of the townships has its own bank, but by far the most powerful is the Iron Bank of Braavos. This mysterious financial institution has operated in the black for thousands of years, accountable only to approximately 1,000 shareholders and the bottom line. It is, in fact, something like a modern-day corporation.

In contrast, Westeros does not have a single bank; its kings must borrow from the Iron Bank.

The Iron Bank of Braavos combines the power and reach of the International Monetary Fund, the ruthless cunning of the de Medicis and the ethics of Goldman Sachs (GS). Its representatives cannot be negotiated with, and its motto is, “The Iron Bank Will Have Its Due.” The monolithic institution is also the most powerful kingmaker by virtue of its business model. Once the Iron Bank thinks a borrower may default, it simply funds a rival power and collects both loans from the rival after it emerges victorious. As explained in the fifth book of the series, “A Dance with Dragons,” “When princes defaulted on their debts to lesser banks, ruined bankers sold their wives and children into slavery and opened their own veins. When princes failed to repay the Iron Bank, new princes sprang up from nowhere and took their thrones.” Thus, for those in power, convincing the bank of their ability to repay is of utmost importance.

King Robert Baratheon ran the Seven Kingdoms on a huge deficit by first spending down the budget surplus left by the Targaryens and then borrowing millions from House Lannister, the Iron Bank of Braavos and the Faith of the Seven. 

After his death, the crown passed to Queen Cersei Lannister and her sons Joffrey and Tommen. Having placed a line of golden-haired Lannisters on the Iron Throne, patriarch Tywin Lannister found himself holding three million golden dragons (the largest unit of currency) in uncollectible debt against the throne and also suddenly liable for the millions the throne borrowed from the Iron Bank of Braavos.

The bank then provided a loan to Stannis Baratheon, throwing its "support" behind his campaign to become king, but he was killed by Brienne of Tarth.

As we saw in season 7, Cersei informs the Iron Bank that she will be repaying the crown's debt in full with the gold plundered from the Reach. This pleases the institution, and it informs her that more credit will be available if she needs it.

Fans of the series have speculated that repaying the debt may have been a crucial misstep on Cersei's part. As one Reddit user pointed out, "Tywin was no fool and he knew that while the Lannisters were in debt to the Bank, the Bank had a vested interest in their success. By paying the debt in full Cersei has allowed Tycho to wash his hands of the Lannisters altogether. After what we saw on the battlefield we have a good idea whose position is strongest and who the Bank would like to back."

The Iron Bank tends to invest in a side it believes can win, and after Daenerys Targaryen unleashed her dragon and the Dothraki army on the Lannister army led by Jaime Lannister, it would be apparent to the bank who has a stronger force.

Cersei, who secretly plans to be a freerider and let the other Houses fight the White Walkers, is going to hire a large mercenary army known as the Golden Company using a new loan from the Iron Bank.

Westeros may blame its lack of technical advances on its unpredictable winters and its faith in magic to solve problems (fire-breathing dragons obviate the need for inventing nuclear bombs). However, the Nine Free Cities of Essos have a thriving artisan and small manufacturing sector, while facing the same unpredictable seasons and also embracing magic. The real reasons Westeros remains technologically backwards is its lack of a financial services sector, the reluctance of the ruling class to invest in infrastructure or business.

Without a single bank on the entire continent, would-be entrepreneurs and small artisans can’t obtain the capital to either start or grow a business. The lack of a financial sector also removes an important stabilizing pillar of society – a class of wealthy and influential lenders, merchants and business owners who do not want their interests disrupted by constant war. In the Free Cities of Essos, military attacks (for example, by marauding Dothraki hordes), are routinely met with negotiations and payments for peace instead of war.

In “A Dance with Dragons,” Tyrion Lannister recalls that his implacable (and now dead) father Tywin held the Free Cities in contempt for fighting, “with coins instead of swords.” 

Another factor that Moody's Analytics economist Adam Ozimek pointed out is the "closed, hierarchical and elitist system of science and knowledge in Westeros." He wrote, "Overall, even with abundant energy and high wages, it seems unlikely that we’d see an industrial revolution in Westeros without a major reform to the culture of knowledge and science."

The brotherhood of the Night’s Watch guarded the Wall for 8,000 years. It is meant to be independent from the Seven Kingdoms and politically neutral, like Switzerland or a United Nations peacekeeping force in Antarctica. To truly be neutral, the Night’s Watch requires its own income, and it once had that. The Watch owns and administers a huge tract of land just south of the wall called the Gift, which the brothers farm and which also contains several tax-paying villages. Over the years, raids by the Wildlings have driven villagers south and out of the Gift, thus reducing the Watch’s income. It's uncertain what will happen to the organization and what it owns now that there is a giant hole in the Wall and White Walkers have begun their invasion.

In the past, the Night’s Watch boasted 10,000 men in black and 19 castles along the wall, but the force has now dwindled to about 600 "crows" with only three of the 19 castles manned. By the time of “Game of Thrones,” the Night’s Watch is nearly broke. With a dwindling smallfolk population and few brothers to farm the land, the Gift probably produces very little income.

It’s unclear how the Watch supports itself or how individual brothers pay for brothel trips to Mole’s Town. Like any nonprofit, it probably derives a good deal of its operating budget from cultivating wealthy donors. In the first book of the series, Night’s Watch First Ranger Benjen Stark, who is Ned Stark’s younger brother, visits Winterfell essentially on a fundraising mission, and Ned gives him many horses to take back to Castle Black and likely some currency as well. Ned later implores King Robert to financially support the Night’s Watch.

The Watch also partially funds itself by membership recruitment. Many of the brothers are lowborn criminals who join to escape punishment for their crimes. As the Watch is a lifetime commitment, and they don't draw salaries, they are sources of free or slave labor. Others are the younger sons of highborn families, disgraced nobles or bastards like Jon Snow. Recruits from such wealthy families likely come with a donation for the organization as well as assets like horses and quality clothing, armor and weapons. They may also receive regular remittances from their families and some or all of this may contribute to the Night’s Watch operating budget. 

As Lord Commander, Jon Snow recognized that the organization desperately needs to produce more income and to do that, it needs laborers and tax-paying citizens. He embraced the Watch’s age-old enemies, the Wildlings, as a perfect immigrant tax and labor base. Much like one of the great noble families, the Night's Watch is engaged in a battle for its survival. And just like these families, it must adapt or perish — a fact which Jon Snow instinctively understood.

In the book "A Dance with Dragons," Jon Snow is trying to transport the Wildlings across the Wall when he encounters Tycho Nestoris from the Iron Bank of Braavos. Jon takes advantage of the chance meeting to negotiate a loan to support the Wildling refugees over the winter. His plan is to populate the nearly empty Gift with the rescued Wildlings and generate enough revenue from their farming and collected taxes to pay back the Iron Bank as well as fund the Night's Watch.

On the television show, Jon Snow has retired from the Watch after his death and resurrection. He is now King in the North.

Westeros faces many challenges, but one of its main problems is its low productivity and an underdeveloped economy. Rulers like King Robert Baratheon, who once said, "Laws are a tedious business and counting coppers is worse," lose at the game of thrones by failing to understand that it is those lowly coppers (pennies), and not steel, that girds the throne.

To improve its economy, Westeros needs new leaders who prioritize productivity and sustained economic development over lavish jousting tourneys and wars for title, land or honor. The kingdom must also develop a more open educational system, invest in manufacturing and technology, and introduce basic financial services.