Game of Loans

By Carolyne Larrington

As Queen-Mother Cersei undertook her walk of shame through the streets of the capital at the end of the last season of “Game of Thrones”, she was surely plotting vengeance on those responsible for her humiliation. But she was probably also wondering exactly how she found herself in such an unfortunate situation. One reason unlikely to occur to the embattled queen is her financial naivety – namely, her failure to grasp the catastrophic nature of her fiscal policy for the Seven Kingdoms.

In a 2014 interview with Rolling Stone magazine, George R. R. Martin, the author of “A Song of Ice and Fire” (the series on which the HBO show is based), complained that fantasy authors often fail to engage with economics. “As much as I admire Tolkien, I do quibble with him… What was Aragorn’s tax policy?” Martin – unlike Cersei – has thought deeply about the economic systems underpinning his imagined world, so it’s worth taking a closer look at how they function. For Cersei’s predicament, it turns out, largely derives from her failure to understand the nature of international credit.

Across the sea from the capital King’s Landing, in the Free City of Braavos, is the Iron Bank of Braavos, the dominant financial institution on the continents of Essos and Westeros. Martin modelled the Iron Bank on medieval banks controlled by powerful families from the cities of northern Italy. They provided credit, deposit, loan and foreign exchange services all across western Europe. Bankers from Florence and Lucca worked with the English crown under Kings Edward I, II and III, financing the kingdom’s wars on various fronts (especially France) and offering both current account and overdraft facilities. Edwards II and III even agreed to turn over all their revenue to two particular banking houses; they paid the kings’ budgets and, in return, were allowed to exercise a monopoly over the country’s most important export, high-quality English wool.

The saying, “The Iron Bank of Braavos always gets its due”, is on the lips of every politician in Westeros and Essos – except Cersei. She decided to default on the crown’s enormous debt to the bank in order to concentrate on rebuilding her navy, which had been destroyed in battle. Hoping to secure the resumption of repayments, the Iron Bank now supports a rival to the throne, Stannis Baratheon; whoever rules the Seven Kingdoms is responsible for the Iron Throne’s debts. Meanwhile, the other Free City banks, taking their cue from the Iron Bank, are refusing Westerosi merchants credit. International trade has ground to a standstill.

It helps that Cersei’s father has died; Tywin, the formidable patriarch of the Lannister clan, won’t be calling in the sums he loaned her. Not that Cersei can resort to the family coffers for much longer. The Lannisters’ gold mines have been exhausted, and the family motto, “A Lannister always pays his debts”, is rapidly losing currency. More directly implicated in Cersei’s downfall is the Faith, the Seven Kingdoms’ main religion, which is loosely modelled on medieval Christianity. The crown had borrowed heavily from the Faith to finance – among other luxuries – the 77-course wedding feast of Cersei’s son, Joffrey. Later, in talks with the new religious leader, the fundamentalist High Sparrow, Cersei would carelessly concede the right of a new, highly zealous branch of the Faith to bear arms, as long as the crown’s debts were forgiven. This is how the Faith Militant, an armed brotherhood, emerged. A cross between the religious police and the inquisition, their rule of terror tips the balance of power in their favour. That, in a nutshell, is why Cersei finds herself walking naked through the streets of King’s Landing, taunted and tormented by her disloyal subjects.

Meanwhile, over in Slaver’s Bay in Essos, the Dragon Queen Daenerys Targaryen is busy abolishing slavery in every city she conquers. It’s a controversial policy, to say the least. “This arrogant child has taken it upon herself to smash the slave trade, but that traffic was never confined to Slaver’s Bay. It was part of the sea of trade that spanned the world, and the Dragon Queen has clouded the water,” observes Qavo, a customs officer in the Free City of Volantis. Since Volantis has five people in chains for every person who’s not, Daenerys’s ideological challenge to slavery is deeply disquieting – at least, to freeborns like Qavo. A coalition of Essos-based mercenaries, hired with the aim of resurrecting the trade in human beings that underpins the continent’s economy, is on the march against Daenerys’s city of Meereen. Interfering with globalised capitalist forces is a dangerous business.

Will Daenerys’s generals manage to hold the line against her enemies? Will the Iron Bank gamble on yet another new claimant to the Iron Throne? Can Cersei’s underwhelming Small Council contain the mounting crisis in King’s Landing? Not only has the loss of international credit bankrupted the capital’s merchants, the Faith’s imprisonment of two leading members of the Tyrell family has jeopardised agricultural imports from their lands. Plus, the ravaging of the Riverlands has destroyed the city’s usual source of food. Now that, undoubtedly, winter is coming, the common folk of King’s Landing will not take kindly to starvation. As season six begins, revolution is in the air. The rulers of the Seven Kingdoms would do well to get some better economic advice.

Game of Thrones HBO Season six begins April 24th

ILLUSTRATION JONATHAN ALLARDYCE