Economy, Taxes, and Feudal Structure

WARNING NOTE FROM ARCHMAESTER NORRIN – ARCHMAESTER OF THE VAULT 201 AC.

This treatise includes a number of unsupported conclusions and makes wild assumptions and should not be taken as valid. Further, it contains a number of heretical and treasonous implications, with allusions to even more treasonous works that have been destroyed. This treatise will be contained within the Archmaester vault, only accessible to Archmaesters. This will not be removed from the vault for any purpose and may not be discussed outside the vault. Violations of these rules will be punished harshly by order of the Council. This treatise is kept to be a teaching tool, so that Archmaesters may recognize incorrect lines of thought and the dangers associated with them.

Westerosi Economics: The Money of the People

Written by: [Stricken from record] in 200 AC

Many of my fellow Maesters have done studies on the flow of money and how it interacts in the Seven Kingdoms. Some have even done studies on Essosi economics. There is a wide variety of information available to the aspiring Maester, but I personally have found it to be lacking. Most of the treatises are simply the same as their predecessors, but with a few words changed. They quibble over minor things and definitions, but never once reassess their thoughts. This treatise is to open up the discussion on economics and to help gain a fuller understanding.

To start, I wish to restate the common understanding of economics. Those this view is not inherently wrong, it is wrong in the sense of it's scope. The common understanding of economics is that it is resource driven, and that wealth is and always will be tied to resources and the land on which it originates.

The first point I wish to make is that economics typically refers to coinage. That right there, I believe completely disproves that economics is tied to resources. I concede, copper, silver and gold are resources, but they are a currency and so they are beyond that. There is much more to be said on the topic of coinage, but I will leave that to the excellent works of [Redacted by order of the Council. No references are allowed to outside works to reduce treasonous lines of thought].

However, resources themselves do drive an economy. We can see this quite easily as a farmer will sell his grain and may purchase wool from another. This exchange of resources makes up a majority of the economy, especially for the smallfolk. Where I differ from most, is that this resource economy is not an actual majority of the economy based on total coinage exchanged. When others refer to resources, the typically point to things like gold, grain and wool. However, they also implicitly recognize things like wine, silk and glass as resources as well.

I believe that these 'resources' are not and should not be recognized as resources. They should instead be called products, because of the work done to them. A grape would be a resource, but wine is a multitude of grapes that are further processed into a new product. This creates an added value for these products and are sold at a much higher price. This is what I believe drives an economy. Of course, without exchanges of grain and wool the Westerosi economy would collapse, but these 'products' are what drive the economy to truly flourish. Look at how the Arbor's wealth compared to the Vale's.

This concept of value-added products, leads me to my next point. These products are made by people, putting in further work and time. Basic resources are also created through work and time by the people, and the more work and time is required the more the price it is to buy. This I believe leads me to the ultimate point of this treatise. People are what truly brings about the economy.

The more work the people do, the more money there is. The more skilled a people are, the more wealth they have. Myrish glassmakers are fabulously wealthy because they provide an unrivalled service and product, that goes beyond their competition. If they only sold the sand that the glass is made of, they would only earn a small portion of what they make now. This is value-added.

So, by extension I believe that the wealth of a people, or their economy, can be further maximized by their organization. The slavers of Slaver's Bay are quite wealthy, and they do so by organizing their people so that most become slaves and hold no wealth themselves. Besides being an abomination and against the Faith, this type of organization only works for the most basic of tasks.

The Free Cities, while using slaves, have a slightly different organizational method. Using councils, they organize their people to create wealth. They use no concepts of honor, just of wealth and power. This has I believe allowed them to create massive cities and wealth for themselves. Slaves are used for the most basic of tasks, while freemen are used for the complex parts of tasks that add the most value to a product.

Braavos, by contrast, is run by mercantile interests and holds no slaves. However, they are amongst the wealthiest of all cities and their Iron Bank is the largest bank in the World. For more information, see the works of [Redacted by order of the Council. No references are allowed to outside works to reduce treasonous lines of thought], though I personally find some of the assumptions about the applicability of a Westerosi bank to be flawed.

As we can see, the structure of their people allows them to utilize their resources and products in different ways, creating different levels of wealth. We can see that even on a resource to resource comparison, that the wealth generated for a people varies between these organizations. With Essos having so much conflict and political change, it has brought about such a wide variety of different organizations which can give us Maesters an opportunity to theorize about this topic.

By contrast, Westeros and the Seven Kingdoms have been relatively stable with little major political changes. Before Aegon's Conquest and the rise of the Targaryen dynasty, the political landscape has stayed the same for the most part for thousands of years and with it the levels of wealth have remained stable as well. It is important to remember, that I refer not to a specific person's wealth (as this does indeed fluctuate), but towards a people's entire economy.

Before Aegon's Conquest, the people's organization for the Andal society was as follows: Kings were the ultimate authority, followed by the Lords of the land who answered to the King, followed by minor lords sworn to other Lords, followed by landed knights, followed by smallfolk. The smallfolk were comprised of two categories, merchants and peasants. Merchants were allowed to move about the land, and build wealth for themselves, but were forbidden to own land. Peasants on the other hand were tied to the land, and owned very little. Slavery was forbidden by the Faith, and so many Lords got around this by allowing the peasants the ability learn different jobs (blacksmith, farmer, shepherd, general labourer) and they were free to do so. In reality, this 'right' was not chosen and not well known. Some peasants were granted an informal 'freemen' status, in which for exemplary service they were granted the right to rent land from the lord. This allowed them freedom of movement and they were able to keep a higher portion of their crop. Money in this system typically flowed upwards, and never downwards.

The North at this time was slightly different, as they were of the First Men not Andals, though some Andal practices were adopted from the First Men over the ages. The North had a King, then Lords, then minor lords, then Masters, then smallfolk. In this organization, the Masters were the equivalent of landed knights, but they could have just as much power as a major Lord or a minor lord. These Masters had a few less rights, but that is beyond the scope of this treatise. Smallfolk in the First Men organizational model, were not tied to the land and much freer. However, they had no special class of merchants and therefore had less wealth than other organizational models.

There are other models, like the Ironborn and Rhoynar and Dornish, but it not included in this treatise.

By looking through history, we can see that these types of systems of the Andals and First Men led to a certain level of wealth. Many can decry this as folly, since everyone knows that the North just has fewer resources than everywhere else and is thus poorer. I caution readers from accepting common knowledge, especially knowledge that has no bearing on reality. The major differences between the Andal and First Men models was the lack of the merchant class. The merchants helped exchange goods for coin and therefore spread coin amongst the kingdoms and helped to convert the economic system from barter to coinage. This did not occur in the North, and they are the poorer for it, even today.

After Aegon's Conquest, he released the Andal smallfolk from being tied to the land. There was a myriad of political reasons for this and King Aegon certainly did not intend for it to become widespread, but it got away from him. See the work of [Redacted by order of the Council. No references are allowed to outside works to reduce treasonous lines of thought] for further political insights into this decision. This further stimulated the economy. The North, not being affected by this proclamation, did not see any changes.

That merchants are beneficial to the economy and that people in general drive an economy can be seen in the Kingsroad. After the Kingsroad was built, it saw a huge upswing in merchant traffic and the flow of goods (also helped by the lack of inter-kingdom conflict). However, since there are so few Northerner merchants the North was left further behind. Once again, people are driving the economy, not just solely resources. It is interesting to note, that most Northerners are proud of their self-reliance in that they don't need to trade for goods to survive, but they conveniently ignore that almost all products and luxury goods are imported.

Since Aegon's Conquest, there has been a slight shift in the economic power of the people, with an increase in wealth amongst the merchants and smallfolk. There has also been changes in the way that taxes are collected, which will be touched on later.

To summarize, since Aegon's Conquest Westeros has seen a period of huge economic growth for reasons such as, less conflict, increased merchants, increased travel, increased smallfolk power, and an increase in people in general.

This I believe sets the stage in my argument. With these adjustments, we have seen an increase in economic activity and wealth in Westeros. I believe this means we can go further and continue to see economic gains.

I will admit, that I also have arguments in order for the adjustment of taxes, but this relies much more heavily on supposition and guesswork than fact. Currently, taxes in the Seven Kingdoms is as follows:

· Royal taxes on Lords and Lord Paramounts. This amount is typically 10% (changes dependent on things like war) of all moveable goods. This is paid in coin.

· Lord/Landed Knight/Masterly taxes on smallfolk. This amount varies from region to region and depending on general increases due to things like war, but it is typically anywhere from 10% - 20% on moveable goods. This is paid in coin or more commonly in goods.

· Custom taxes and tolls. This is an amount charged by ports to merchants and is paid to the Lord that holds that port. There is also a toll charged for merchants for the use of the Kingsroad. This pays for the upkeep of the road and increases the wealth of the Royal family.

· Tariffs on certain goods for export and import. Things like fine wine have a tariff on them no matter where they are sold.

· Service taxes. For things like the use of a mill a Lord may collect a 10% tax on the grain grinded.

· Land taxes. A lord will pay taxes to their Liege Lord for the owning of their land. This fluctuates wildy, not only from region to region, but from Lord to Lord. For example, Lord Manderly would pay Lord Stark a tax based on the amount of land that Lord Manderly owns.

· Tithes to the Faith. A tax to the Faith is not mandatory but is certainly encouraged. There is no set amount.

This new order of taxes reflects the Royal family's acknowledgement of the importance of merchants as they specifically tax merchants in order to receive more taxes. They acknowledge that the Kingsroad is of a huge benefit to the realm, and tax it as such.

I believe it to be a failure of the Citadel, to have to acknowledged this sooner. This needs to be recognized and discussed so that we as a people can move forward.

For example, what would happen if all internal tariffs were removed? Would that not increase trade and consumption leading to more wealth? Would lowering taxes on smallfolk not allow them to retain more coin allowing them to purchase more goods, thus further driving the economy?

What type of organizations would allow for further economic growth? Instead of a royal family being the sole authority, would a council similar to Braavos being an additional voice help? Or would the additional layer of ruler's harm growth? Would the abolishment of Lords, but the strengthening of the Royal power help?

In conclusion, I believe that the definition of economics needs to take into account people, and that resources needs to be split into raw resources and value-added products. Further, economic activity is affected by the organization of a people and can be maximized for growth and that the current system is much more growth inclined than before Aegon's Conquest. Or it would be if there was a decrease in taxes to reflect the more peaceful times of the Targaryen dynasty. Changes and discussions need to be held for Westeros to begin to grow. I hope this treatise is the start of that process.