Wednesday, 20 July 2016

Mischief Managed?... The role of government in the Potterverse

Towards the ‘business end’ of the Potter series, Rowling greatly expands upon both the institutions and actors involved in the whole good versus evil thing. We are introduced to functionaries at the Ministry of Magic, robber barons in Voldemort’s Death Eaters, and lackeys aplenty on both sides. The existence of developed institutions, with their nuances and inconsistencies, begs us to consider the impact of these institutions on the denizens of the Potterverse. This is part of what makes the Harry Potter story interesting from a socioeconomic perspective; that a well-developed society with long standing (albeit not democratic) institutions is essentially subverted by terrorists.

So how does the Ministry of Magic interact with the wizard economy? And how does the government’s failure aid and abet Voldemort’s rise to power? Let’s look at these issues in more depth…using something like a Pensieve, of course.

It is our choices, Harry, that show what we truly are.

Public Choice theory is the branch of economics charged with assessing the impact of large institutions on the economy and its actors. The underlying concept of public choice is that an institution paid for by the state is required when the private sector underprovides or fails to provide this service adequately and competitively to individuals. A commonly cited example of this is national defence; it would be unreasonable (not to mention medieval) for individuals to run their own armies. The rich would dominate, presumably using their armies in self-interest, and they could charge extortionate prices for ‘defence services’.

Other areas of the economy are also managed by the government to a greater or lesser degree, depending on the above assessment. Of course, such government intervention is also inevitably informed by political beliefs on the level of state economic activity. We will try to avoid such pitfalls here!

In the Potterverse the Ministry is a significant player in the economy, employing a large number of the workforce in a variety of roles. Its area of largest impact that we know of is education, as Hogwarts is state-funded, however there also appear to be a myriad of government departments such as the Muggle Liaison Office and the Regulation of Magical Creatures Department. It therefore seems likely that the Ministry feels the need for greater state intervention in the economy. Perhaps this is because, as we discussed in article 3 (Weasley’s Wizarding Wheezes), there appears to be a distinct lack of competitive market activity in the wizarding economy, something which should generate a level of self-regulation through appropriate pricing. For example, there would be presumably higher prices for dangerous dragons.

However, although we said the Potter economy was stagnant due to a lack of innovation, we can’t say that it is uncompetitive. For example, the Ministry felt the need to regulate cauldron thickness due to an influx of cheaper foreign equivalents, thus leading to higher leakages (Percy Weasley oversees this in Book 4). This is an example of the wizarding government intervening in a competitive market to ensure fair standards and hence the public good. Conversely, an entrepreneur is barred from importing magic carpets as an alternative to brooms as transportation in an attempt to reduce the cost of flying (Book 4). The Ministry prohibits this as carpets are deemed to be too similar to ordinary Muggle carpets, however this clearly has a distorting effect on the market for transport. Similar to real-world governments then, the Ministry engages in direct economic management with varying degrees of success.

The Office of Magical Debates?

Yet over and above basic economic intervention, the Ministry undoubtedly fails in a key area, that being defence against external threats. The menace of Voldemort is so great that eventually vigilantes, in the form of Harry and chums, are required to dispatch the Dark Lord, the latter having neutralized the government’s effectiveness.

Part of this is pure obstinacy; the government refuses to recognizes Voldemort’s return until very late in the day. The Ministry has the tools and resources to at least mount an effective resistance against the Dark Lord, despite the latter being ‘the most dangerous wizard of all time’. After all, it employs a good proportion of the population and (we assume) must levy taxes either directly or indirectly to finance its activities. Given the vast resources at its disposal, it seems hard to believe that it was rendered completely incompetent.

The Ministry could perhaps benefit from a dose of internal review and separation of powers, something for which there is no spell that we know of. The wizarding government has no body charged with independent scrutiny, either elected or unelected, such as a House of Lords or a Senate. Additionally, its legal system is intertwined with government through the Wizengamot, whose judges both make and exercise the law in a pre-modern mishmash of the judicial and legislative functions. This means that there is no effective debate of current and proposed policies, something that even your average totalitarian state does a bit of nowadays, even if it is just between the oligarchs. A capacity for debate increases the likelihood of effective decision-making, even if it is achieved through a more protracted process. The argument that a unified judiciary, executive and legislature would achieve a policy response to a crisis more quickly than a separated equivalent is flawed, as the Ministry demonstrates through its stasis when confronted with Voldemort.

So had the ministry been more accountable to wizarding society, Fudge and his successors might not have needed Harry to do battle with Voldemort, and the 'Boy Who Lived' could get down to some actual schooling in sixth form!

Daniel J Editor