Economics in my Fiction

Some years ago a correspondent pointed me at a blog post with the intriguing title "Sci-fi needs economists." None of my three novels is science fiction but two are fantasy and the third, which I describe as historical fiction with invented history and geography, was marketed by Baen as fantasy.

All were written by an economist.

Harald

The protagonist of my first novel is a leading figure in the Vales, a semi-stateless society loosely based on saga period Iceland. The Vales are allied with the kingdom of Kaerlia, from which they were settled a few centuries back, allied against the Empire, an expansionist power loosely based on Roman, Byzantine, and Abbasid models.

Harald’s economic problem is how to raise an army without either taxation to pay troops or a feudal system with liegemen obliged to fight for him. The examples that that I had in mind were the Norse armies that ravaged Britain, not national armies but entrepreneurial projects organized by a leader with a reputation for winning, funded by loot, danegeld and conquered land.

Harald, fighting a defensive war, has no conquered land to offer his men but does have loot from Imperial forces he defeats and a share of the ransom paid by the Empire to get back the soldiers he captures. That, plus excitement, glory, the opportunity to train under the best general around and a patriotic desire not to have their homeland conquered, have to suffice.

"You think your pavilion is a pain to lug around, should have seen His Imperial Majesty's. Damn thing took its own pack train."

Faces turned to Harald. It was the King who asked the obvious question.

"How did you happen to get a look at the Emperor's pavilion?"

"He wasn't using it at the time."

The voice out of the dark was Caralla:

"After the battle, Father talked one of the cacades into taking charge of it. Their remounts and the Emperor's pack mules lugged the thing over the pass. Took the whole family two days to get it set up in the back meadow."

"Just what every meadow needs." That was one of the cats; listeners, king included, responded appropriately.

"Don't laugh. Silk hangings, tent poles banded with gold. By the time the story spread a bit, every highborn in the Imperial army had gold tent poles and chests full of silver and jewels. Made it easy to raise troops the next time." Harald fell silent.

Near the end of the book Harald’s allies sell cavalry mounts captured in the defeat of an army loyal to the Emperor to an imperial faction loyal to the Emperor’s younger son — which needs them because Harald, in the previous campaign, forced their cavalry to surrender and auctioned off their horses to the local nomads.

A conversation between Harald’s son and the Emperor’s grandson:

"And you came along to …  "

"Just now, to sell some horses. Thought your father might be interested; heard he was a few short. Cavalry mounts. Trained. Even have the right brand."

"How many horses — trained cavalry mounts with the Imperial brand — are you prepared to sell us? Assuming we can agree on a price."

Niall looked at him, considered.

"Sure you want to know?"

Kiron nodded.

"Four thousand. Don't expect you'll want all of them. Give you a good price, though. Market, this end of the plains, not what it used to be."

It occurred to Kiron that raising and supplying an army off the resources of a mountain farm presented difficulties to which Harald, being Harald, found his own unique answers. This one had a certain wild logic to it.

Harald has to be very stingy with the lives of his men; if too many of them get killed in one campaign nobody may show up for the next. His solution is logistical warfare, maneuvering the enemy troops into a situation where the choice is either to surrender or die of hunger or thirst.¹

The same issue arises on the other side as well. The Empire has legionaries, professional soldiers paid by taxes, and auxilia, mercenary forces hired to fill roles that the legionaries do not. From the standpoint of each individual commander it is the legions, the elite heavy infantry, that matter; as long as the legions get safely home the army has not been defeated. Getting auxilia killed is a cost but you can always hire more;

The problem, as becomes clear in the final campaign, is that you cannot always hire more. Having gotten quite a lot of auxilia killed in the earlier campaigns the Empire finds mercenaries in short supply, not because most of them have been killed but because the ones who are alive would prefer to stay that way. As a legionary officer puts it:

Recruit two thousand savages, only a thousand come home, makes it hard next time.

The economic constraint.

The story is about economics in another sense as well; central to the plot is the conflict between two views of human society. James, the young king of Kaerlia, sees society as hierarchy, tables of organization, subjects in allegiance to lords, lords in allegiance to him. Acting on that vision, he tries to convert his father’s allies to subjects

We needed cats, Ladies, you. How could I hold for a lifetime when the best third of my army could stay home if it felt like it?"

and sets off a civil war.

To Harald, society is a network of relationships. Nobody is in allegiance to him but he has a lot of friends, including some of the lords James views as his and expects to do what he tells them. As Harald puts it, about the most powerful of the provincial lords:

Stephen's a fine man for failing when it suits him

The tension between centralized and decentralized institutions appears again in the contrast between Harald’s vales and the Empire he is fighting. The Empire is organized; imperial generals fighting Harald can read accounts of all his previous campaigns, forcing Harald to invent a new trick each time. Commander Artos, the Empire’s best general, is in most dimensions of command Harald’s equal.

But an imperial officer with Harald’s approach to warfare, inventing a new solution for each problem, would have gotten hanged, at best fired, for violating doctrine or his superior’s commands long before he reached high rank.

Salamander

[Spoiler Alert]

My second novel is a fantasy with very scientific magic.² When I started writing it, the theme was the fantasy equivalent of the central planning fallacy, the persuasive idea that if only some sensible person had control of all the resources of a society wonderful things could be done.

Magic is weak, a fire mage more like a match than a blowtorch. Coelus, a young magister in the kingdom’s only college of magic and one of the best theorists in the kingdom, is working on the Cascade, a spell to let one mage pull in magical power from many others, funnel it through himself, do the sort of things that mages have always dreamed of doing. He invites Ellen, his star student, to help him with the project.

"Think how much we could do with the pooled talent of fifty mages and five hundred, or five thousand, or fifty thousand ordinary people, each adding his trifle of talent to the pool, pouring it through a trained mage. Almost unlimited power to end a plague, to heal even someone at the point of death, to build a road or monument, to do things that no single mage, whatever his talent, could do before. And since the pool would span the whole range of magery, the power could be used for anything.

"Half the courses in the curriculum are a waste of time for you; you already know them. That has been clear for months. I could set up a course of independent study to teach you the theory behind the Cascade Effect, get your help with the research. Maridon thinks it would be proper to have one of the College servants present as well; I don't see the need, but doubtless some here have nothing to do but gossip, about me by preference. So he is probably …"

She interrupted.

"The people you pull in; must they give their consent to lend you their magery?"

"How could they? We are not talking about a group of four or five mages but about hundreds or thousands or tens of thousands of people. I could not possibly arrange things in advance with all of them. And besides, most of them are not mages, and even the mages are mostly half trained; you must know that not one mage in ten is a graduate of the College. How could they understand what I was asking them to do?"

"I thank you for the offer, Master Coelus. If you wish to instruct me in theory, I will be happy to learn. But I will not aid you to take what is not freely given."

"You will not … ."

"I will not help you to take from mages their power or from common people the magery that aids them in growing their crops, hunting their game, without their consent, whatever purpose you propose to use it for."

He looked at the girl in astonishment, felt for words to explain.

"You don't understand. There is so much to be done, so little power to do it with. A river floods; with enough magery in the hands of a water mage with proper skills we could divert the water to where it would be harmless. A plague kills hundreds, mothers and fathers"--his voice faltered--"leaving behind orphaned children. Enough power in the hands of a healer could see the plague when it first struck, cure all before the sickness spread further. So much to do, and we are so weak."

"You are young, sheltered. If you had seen … . I cannot make you aid me. But consider the needless deaths and misery that might happen if you do not."

She shook her head.

"My mother is a healer; I have seen sickness enough. Also men with gaping wounds that she has closed. When you have seized her power to shift a flood, on whose hands will be the blood of those she cannot heal?"

There was a long silence. Ellen nodded to the mage, turned, left the room.

There are three things wrong with the central planning fallacy. The first is forgetting that all of those resources are already in use by their owners for their own purposes — Ellen’s point. The second is the assumption that the person in control of those resources will be wise and benevolent, not someone who wants control for his own purposes. That is demonstrated  when a colleague takes advantage of the first experimental implementation of the Cascade to seize control of it. The third, the assumption that figuring how the society’s resources should be allocated is a simple problem when it is in fact an almost impossibly difficult one, does not come up in the novel.

The central planning fallacy was the theme when I started but no plot survives contact with the characters. By the time I finished a second theme had appeared, somewhere between economics and moral philosophy: Ends and Means.

Prince Kieron is the royal official in charge of dealing with magery. One of his subordinates, Fieras, in the process of doing what the Prince wants him to do, uses illegal magery on Ellen, who is both a student and a very accomplished mage. She defeats his attempt and provides clear evidence of what he was doing to several of the magisters, professors in the kingdom's only college of magery. She then accuses him to his boss, whose job includes arranging for the punishment of people who break the laws that restrict the use of magic.

The Prince, after agreeing to prosecute Fieras: 

"I apologize. ... and I concede the justice of your point. The King is not above the law. Nonetheless, I will not promise never to violate bounds or law myself, nor will I promise to instruct my servants never to do so. Law-breaking is a bad thing, whether by the King's servants or anyone else, but there are worse things, some of which it is my responsibility to deal with. I will promise not to violate bounds or law save in the most extreme circumstances, and to do my best to see that my servants will not, so that incidents such as the two you have described do not occur again. If my people are charged, as Fieras was, I will do my best to see that they get an honest trial. I am sorry, but that is the most I can offer." 

Later in the book, Prince Kieron tricks Ellen and Coelus into his power and threatens Ellen in order to force Coelus to complete the Cascade and make it available to him. The prince is not a villain; he has, after all, warned Ellen in advance that he will break the rules if enough is at stake. He believes, reasonably although perhaps not correctly, that if he cannot get Coelus to do what he wants the likely consequence is that someone else will complete the research and use the result to kill the king and seize the throne. When enough is at stake people will be, should be, willing to use means they would ordinarily disapprove of.

If the Prince is making a mistake it is not believing that the end justifies the means but being too confident in his own opinion about what should be done. He knows more than Coelus or Ellen about kingdom politics but less about magery. And at the end Ellen and Coelus, acting on the same principle, trick Kieron into implementing their solution to the problem posed by the Cascade — at the risk of getting all of them, and some hundreds of other people, killed if things go wrong, as they almost do.

Another element of my academic interests woven through Salamander is my interest in historical legal systems.³ There are two different mechanisms for enforcing the rules on magery. The old one is a decentralized system controlled by the mages, a procedure under which one mage can accuse another of violating the bounds of magery and assemble a jury of nearby mages to judge the matter. The new mechanism gradually replacing it is enforcement of the bounds by royal authority.

Prince Kieron on the delicacy of the transition:

“So, if a jury of local mages found you guilty, you would be banned forever from all use of magery. You would be subject to be killed, by any mage, for first violation of that ban. Not an attractive outcome.”

“Would anyone outside the college take such a procedure seriously? So far as I know, nothing of the sort has occurred in my lifetime.”

“That is because the mages have, on the whole, trusted the verdicts of the courts that I and my predecessors have established. The longer this is true, the less likely it is that anyone will revive the older procedure. But considering that Magister Hal is the leading authority in the kingdom on the law and custom of magery and that quite a large fraction of the more important mages have, like me, sat in his classroom, I think that if it did happen it would be taken seriously. That is why I intend to make sure that it does not.

Brothers

The sequel to Salamander also started with an economic theme: the industrial organization of the magic industry. Esland, where the previous book is set, has a traditional mage/apprentice system supplemented in recent decades by the College. The adjacent polity of Forstmark has a guild system. Helgi, a Forstmark mage, explains:

“There are four divisions to magery, four quarters of the Guild, based on what you use your talents for. Kenners use magery to get knowledge — what I do. Not just using the simulacrum to watch for people with ill intent but sensing the mood of a man or a dog, and truthtelling, and lots of other things. Smiths — galdrasmithur — embed magic in objects. The simulacrum is the work of a smith, probably more than one, and so is the amulet you are wearing. I can see a little of what it does — mostly protect you from magery — but I couldn’t make one.”

The third, and much older, society is the Dorayan League:

The boy nodded. “I was going to ask you about that. He doesn’t seem to think much of either the Guild or the system in Esland. He said that mages should be servants, not masters, then went back to correcting my translation and explaining about Doray tenses.”

“He doesn’t mean servants. The Doray spot talent early, earlier than we know how to; it’s one of the things they are good at. Once they are sure, they put a geas on the child, binding him to service of the Magistrate or one of the local authorities, the archons. Their mages dress well and eat well, but they’re slaves. It’s different from how we do it, different from how your people do it, and worse than either.

“I’ve studied the history of magery — not just Forstmark but other places too. The Doray were the first people to figure out how to train mages; before that it was all wild talents with no control, mostly doing more damage than good. That was what turned them from a city-state to an empire. Diplomacy works better when you know whether the other side is telling the truth. Having inconvenient people conveniently drop dead helps too. They started by inviting other city states in as allies; by the time they got to their full size, all that was left of the Doray League was its name. The City ran things; everyone else did what they were told.”

“They never got to here though, did they? That’s why things are different on this side of the pass.”

Helgi nodded. “What’s now Esland was their northernmost province. It’s hard to keep secrets for long; by the time they got to us, we had had two generations and more to train our own mages with the help of runaways from the League cities. We had the advantage of the mountains, of course, but the same thing happened on their other borders as well. The League stopped gaining land, started to lose it. They had gotten too big, taken more land than they could hold, once they no longer had all the mages.”

“Which is why the Mage King…”

“Which is why Esland was founded by a mage king. He was one of the Doray mages who decided he didn’t like the orders he was getting from the City. Between mages he could trust and people in the province who didn’t like being bled white to put a gold roof on the main temple in the City or having their daughters made into playthings for the governors that the Doray sent out, he broke the province out of the league.”

“How could he? If he had been bound to loyalty as a child?”

“That was later. The rising in Esland and the rest of it were the reason. The Doray decided that if they weren’t going to lose everything they had to make sure that what mages they had were loyal to them. There isn’t a lot left of the Doray League now, just the islands and a few bits of coast, but one thing they don’t have to worry about is rebellion by the mages. I expect they think our way of doing it is even worse than the Eslandi way — mages not only free but organized.”

What spells a mage can use depends on his talents, different for different mages. As Helgi explains, arguing for the superiority of the Forsting system:

“In Esland, from what I hear, there is nobody to make sure that everyone with talent gets trained. And someone who has talent and wants to train can apprentice with any mage who will have him. I’m sure many of the mages do their best, but it’s a recipe for a kingdom full of untrained or half trained mages. And not just Esland — the other successor kingdoms, Dalmia west of you and Brenland east, do it more or less the same way, or so I’m told.

“All a mage can teach is what he knows. All he knows is what he can do. What spells he can do depends on what talents he has. If the apprentice has different talents than the mage he’ll never learn to use them properly. Even if he has the same talents — I’m sure Eslandi mages look for apprentices who do, as nearly as they can manage — he can only learn the spells that mage happens to know.

“The Guild library has every spell anyone in Forstmark has discovered for the past two hundred years. Once you apprentice to the Guild and join one of the Quarters — kenners in my case — your meistari tests your talents, figures out what magery suited to your Quarter you are capable of doing, and arranges for you to learn it. After you pass the tests that make you a full member you are entitled to charge your quarter’s guild rates for your services.

“I know practically everything a kenner with my talents can use. If I had had the bad luck to be born fifty miles farther south I would only know whatever spells my master could teach me — if I had the good luck to have been trained at all…”

His description is not entirely accurate because he does not know about the College, but it is a legitimate critique of the mage/apprentice system under which most mages in Esland and the adjacent kingdoms are trained. The disadvantage of the Forsting system only becomes clear later in the book when Helgi ends up in Esland attending lectures on healing in an inn near the College. He enjoys the lectures but is barred by his guild oaths from using what he learns, since he is in the wrong quarter for healing.

What I want to learn for myself is what the Magistra is teaching. It’s kenning — how to find out what’s wrong with someone — but I've never heard of that sort of thing being taught to kenners at home. I expect the life mages would object if it were.

Why the restriction? The division into quarters is, as signaled by Helgi’s reference to “your quarter’s guild rates,” market segmentation to reduce competition among mages.

The guild system has another disadvantage as well; it is in Esland, not Forstmark, that the old theory of how magery works is being replaced by the new, as demonstrated by Coelus’ research. That may be because Forstmark has, in the guild, a centralized mechanism for teaching — controlled by the senior mages.

What about the Dorayan approach? It, like the guild, provides a mechanism for locating and training those with talents. There is nothing in its rules that controls what sorts of spells a mage can learn. Scientific progress is unlikely to come from efforts by individual mages, as in Esland, but the system of control by the elite does offer the possibility for their equivalent of the Manhattan Project, although it doesn’t seem to have gone beyond researching new spells within the traditional theory of magery.

But the status of mages as slaves of the elite controls how their talents get used.

Again Helgi:

Their smiths can do amazing things, but most of it is toys for rich citizens — golden birds that sing, with jeweled wings, and the like. They have a lot of life mages, but they spend most of their time making noblewomen, or the mistresses of noblemen, look younger than they are and prettier than they would be without, or keeping their masters alive when they should have died of old age.

1. One of the people the book is dedicated to is Donald Engels, author of Alexander the Great and the Logistics of the Macedonian Army.

2. While my career has been as an economist I was trained as a physicist. The logic of the science of magery in the book was inspired by the logic of quantum mechanics, in both cases described by linear algebra.

3. The subject of Legal Systems Very Different from Ours.