The market economy of the wizarding world is a disaster

DThe wizarding world of Harry Potter books is an economic catastrophe. Certainly not for the author JK Rowling, who got rich from novels about the school of wizards. In this study, economists at Bar-Ilan University take a closer look at the economic system of the magical world. And this, as they write in the Oxford Open Economics magazine, has many disadvantages.

Johanna Kuroczek

Editor of the “Science” section of the Sunday newspaper Frankfurter Allgemeine.

The question arises why scientists economists publish austerity and the certainty of the heroes’ market in novels at all, and in addition a story in which cars can fly and potatoes peel themselves. But people get a lot of their economic knowledge from books or newspapers, the authors explain. And with about 7.3 percent of the world’s population having read Potter books and many millions more watching movies, the world of the Hogwarts School of Magic has shaped the basic economic understanding of an entire generation.

And that’s a big problem – even in the basic structure of Harry Potter’s economy, conflicting models and worldviews have been mixed up. On the one hand, it is “critical of market systems”, on the other hand, the government has little power. Moreover, it is corrupt and still recognized among wizards.

However, economists especially struggle with magic currency. The golden galleon is the tallest unit there. This is equivalent to 17 silver sickles, one sickle to 29 bronze knuts. This system, which Rowling has built nicely on prime numbers, is practically completely useless – an overly complex exchange rate makes it difficult to flexibly set prices. “The lack of divisibility forces retailers to apply round pricing.” After a thorough search of the text, you can answer economists: Despite this impressive inefficiency, magic wands and biting boomerangs sell out fantastically.

Technical progress only exists with brooms

Wizards, witches, and goblins aren’t greedy enough for economists either. Even the “greedy most” of magic bankers do not seem to think that a golden galleon can be melted down and sold to Muggles as gold, thereby yielding a clever mage a much higher profit than simply depositing it with Gringott, the mage bank. Such “efficiency-enhancing deals” and “arbitration opportunities” are simply ignored by magicians. Besides, Gringotts has a monopoly! JK Rowling was accused of concealing her readers about the market position of the magic bank and the magic antitrust law.

Moreover, there is no technical progress in a magical society. They are denied the joy of a constantly squeaking smartphone. While we Muggles have moved from carrier pigeons to TikTok, wizards still use owls to send mail and light candles instead of fancy energy-saving bulbs. The only technical advancement, economists say, can be found in the racing broom industry, “where new models are presented every year.” In fact, the economists are right, the technical superiority of Harry’s Blyskawica’s broom is repeatedly emphasized. and accelerates from 0 to 250 km / h in just ten seconds.

So much separates the economics of the Harry Potter world from Utopia. In addition, political processes are not transparent, a corrupt government controls the media, wealth counts more than anything else, and the rich are mostly mean, there are no interest rates, officials stay at work regardless of their position. efficiency. Does it feel familiar to you? Haven’t you heard about similar terms in the news yesterday? “The shortcomings outlined above characterize many real economies,” admits study author Daniel Levy. “Perhaps this explains why the economic model seen in the Harry Potter novels resonates with people.” Of course, another advantage of this economic model is that you can use your hard-earned money in this world to buy a racing broom that will allow you to fly the road air – instead of just using it to pay the gas bill at the end.

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