The wizarding world is a divided society.
Rowling is clear about this from the start of her seven book narrative, when
Hermione is bullied by Slytherin students for being a muggle (someone who has
no wizard blood). The existence in the Potterverse of social stratification and
its ugly offshoots, discrimination and prejudice, give the books a darker
element than simple ‘goodies and baddies’. Certainly, one of Rowling’s aims was
to make us question the existence of a status quo that permits arbitrary
discrimination, suppresses meritocracy and distorts justice. After all,
although Voldemort imposes a new rule of law, it is undeniably founded on
preexisting prejudices that were already latent in the wizarding world.
Why do wizards, an educated breed, allow this
system to be maintained? Why do they seem ignorant of the economic consequences
of social stratification; wealth inequality, suboptimal investment,
rent-seeking and cronyism? What impact do these issues have on the wizarding
world if left unaddressed, Voldemort or no Voldemort?
The
Potterstrata
Wizarding society is a semi-market driven,
semi-liberal society. ‘Sort of but not quite there’ would probably be the
assessment of its liberal democratic peers if it were a real country today. Indeed,
given recent events in Europe, consequences of the Potterverse’s divisions seem
particularly pertinent to us. So let us begin.
There are three main classes of economic
participant; wizards, goblins
and elves. Wizards are primus inter pares,
Goblins are essentially second-class finance managers with no real political
power, and Elves exist as a type of servant underclass
with no autonomy. Added to this, there are squibs and muggles; wizard-born
persons who have no magical ability, and human-born persons who do
respectively.
There is active discrimination against
elves through indentured labour laws, and against Goblins through regulatory
oversight from the Ministry of Magic. The status quo in regards to these social
groups is so embedded such that any agitation for change is resisted even by supposedly
liberal wizards, a prominent example being Mr. Weasley’s advice to Hermione to
abandon her Elf Rights campaign.
It’s
difficult to levitate your position
Unfortunately we can’t learn much from
looking at cases where social discrimination is codified in law, aside from a
general observation that of course Goblins and Elves have skills of benefit to the
wizarding society that would be fully realized under a more liberal regime.
Both are talented magical beings in their own rights, with unique skills such a
financial acumen and home management skills that wizards have chosen not to
develop.
Instead, we can look at the economic impact
of discrimination against those unofficially marginalized; lower-class wizards,
muggles and squibs.
The salient point of labour economics in
the Potterverse is that upward mobility seems very hard. There are few examples
of people ‘moving up the ladder’. Notable examples are the successes of
Voldemort and the Weasley twins, albeit via very different strategies (a
naked power-grab and a joke shop enterprise respectively). The difficulty of upward
mobility in the wizarding world is strange, given that there is universal
provision of standardized education through Hogwarts.
Education is generally considered a ‘human
capital enabler’; in other words it allows those who put the effort in to
develop life-long skills of innovative thinking and analytical rigour, to
generate ideas and to challenge them. The logic then follows that any wizard,
muggle or squib who attends Hogwarts (and they are all permitted to enroll) is
capable of developing themselves and achieving their long-term aims, regardless
of their socio-economic background. In turn such personal development, known in
the jargon as ‘human capital accretion’, should stimulate the overall economy
by encouraging investment through the application of creative thinking; witness
Fred and George’s joke shop.
The wizarding education system fails in
this regard, given that the above examples are exceptions rather than the rule.
Hogwarts seems calcified, the syllabus unchanged for centuries and, aside from
some maverick analytical training imparted by Dumbledore to Harry, focused on
rote-learning for academic achievement. Harry’s poor results in certain
academic subjects, for example, significantly impede his chances of pursuing a
career as an auror, a type of wizarding detective.
This does not benefit those who fall
outside of the system; squibs and more practically-minded students. If you
can’t do the spells, then the system rejects you. No spells means no job in the
ministry, viewed as the pinnacle of professional achievement, and it’s not as
if start-ups are commonplace as a fallback option; Mr. Weasley considers Fred
and George’s endeavour highly risky.
Wingardium
Leviosa – raise that economy?
Between the Philosopher’s Stone and the
Goblet of Fire (4 years), the price of a Daily Prophet newspaper remains 1
Knut. This tells us something interesting about the wizarding economy; it is
stagnant. Textbook economic consensus generally states that an economy should
grow at roughly 2% per year, evidenced by a 2% growth in the money supply (i.e. inflation). This
is why most Central Banks target an inflation rate of 2%.**
You don’t need to be an economist to
conclude that if, all things being equal, the Daily Prophet has earned the same
total revenue for 4 years on the trot; they can’t possibly have improved
anything at all. Where would the extra money come from? And if they haven’t
improved anything, how would they entice more customers, and thus raise
revenues.
A dose of innovation would help the
Prophet, and the economy, recover from its torpor. Innovation boosts
productivity by raising the number of outputs per unit of input, which in turn
reduces the price of goods. This makes everyone better off and simultaneously
frees up more cash for future productive investments. But innovation comes
through encouraging creative and analytical thinking… sounds like a job for
Hogwarts!
**I
know, I know, current economic growth theories are open to a great deal of
debate! I’m just using the consensus here as a yardstick.
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