# Basic Hobbit Economics



## HLGStrider (Jun 12, 2003)

All right. . .I was thinking about the scene where Frodo meets Strider and there is that reference to him thinking how he has very little money, not enough to statisfy a rogue. . .And I paused in my thinking. . .

Now, I know the hobbits weren't socialists, so they obviously would have some sort of trade going on (free trade). In fact, I always saw them as some sort of ideal, free trade market with a few basic laws and little government. (This is starting to sound political, but it isn't going to end that way. . .I'm just using the terms to set the mood). 

However, while I know money or curency isn't always set by a government, it just didn't seem likely to me for a few reasons . . .

A. to be recognized as an item of value in both Hobbiton and Bree (which, in this context, it would've had to have been), this money would have had to have some sort of backing or value. It had to be something wanted fairly universally. .. not some sort of paper credit marks. 
B. Coins are what obviously comes to mind. . .but do hobbits mine? Where would they have gotten gold? I sincerely doubt all of the money in Hobbiton had once been part of Smaug's trove. If gold was that much of an oddity, they would've found something more common to use as a means of exchange. 
C. I can't see them having a mint.
D. I can't see the mayor of the Shire issuing money. 
E. I can't see Hobbit money being recognized by humans. 
F. I forgot what I was going to say. ..

Where was I?

Now, Gondor would obviously be in a position to have a Steward authorized currency. I don't see it being used that far north however.
Rohan I see as trading with horses, but they probably had their own coins as well as using Gondors.
The Dwarves would obviously have something like that. ..

Did everyone else use trade goods? And if so, how could Frodo have money?

Was it left over from Arnor? How many coins could last that long?

Also, when precious metals are mentioned in the books, it is normally as jewelry. I cannot remember a reference to coin. I'm sure someone else can find one. .. please!

So, what was this mysterious money?


----------



## HLGStrider (Jun 13, 2003)

Guess I didn't hit on a winner discussion. . .I'm still curious, however.


----------



## Niniel (Jun 13, 2003)

I guess there just isn't enough in the book to say anything usefula bout it. My guess is that Frodo's money was either left over from Smaug's treasure, or that the Hobbits indeed did have a mint, but that it wasn't mentioned.


----------



## HLGStrider (Jun 13, 2003)

It just seems odd to me. . .the idea of a mint where gold is obviously a little bit scarce. . .

I think I like the left over from Arnor idea better. . .or foreign coins filtering in from somewhere else.


----------



## YayGollum (Jun 13, 2003)

I don't see anything especially crazy about those people having a mint thingy. oh well. You don't have to make coins out of gold all the time. Nasssty hobbitses burrow. Is thinking that they must run into metals for coinses especially unintelligent?


----------



## Niniel (Jun 13, 2003)

Well, they must have traded with 'foreign' parts of ME; Bree for one, and to do that they must have needed some kind of money. Or maybe they payed in kind and were payed in money, so that money came into the Shire that way.


----------



## HLGStrider (Jun 13, 2003)

It's possible, but it also seems inefficient.

They used metal for tools and such so there would have had to have been blacksmiths. . .

What really confused me about the idea of money was the politics of it. . .Who is issuing it? Is money just lumps of metal or are we talking coins that have been stamped by some official coin stamper and the mayor swears are a certain weight?

Is this a government business? Or are they just issuing their own money?

That's where it just seems odd to me. I don't see the hobbits having a treasury. However, for money to be recognized it needs to have some sort of security (so that people know it is really gold and not just one of those chocolate coins wrapped in foil). 

Normally this is accomplished either by the money being isssued by a bank and having them back it for value or having the government regulate the value of the coins. 

I can't see either a government institution or a large bank in my image of Hobbiton.








Edit: 
Posted over Niniel . .. the second theory makes sense to me: foreign coins. From Bree or even farther. ..


----------



## YayGollum (Jun 13, 2003)

So those Bree people doing all of the craziness you're talking about makes more sense than the Shire people doing it? Huh. I don't see such a huge difference. oh well. I also don't see how this is especially interesting or confusing. The Shire people having mintses and people to deal with money type security and all of that doesn't sound especially crazy to me. Ack!


----------



## Annushka (Jun 13, 2003)

> _Originally posted by Niniel _
> *Well, they must have traded with 'foreign' parts of ME; Bree for one, and to do that they must have needed some kind of money. Or maybe they payed in kind and were payed in money, so that money came into the Shire that way. *



I don`t think hobbits had money at all within Shire. They were trading with Bree, didn`t they? It might have been barter. Goods for goods. They didn`t need money. They were just exchanging whatever they could suggest with everything they needed. In that case Frodo`s money might have been left by Bilbo who obviously could have had it after all his adventures. I don`t know if this makes any sense though.


----------



## Eriol (Jun 14, 2003)

Many of your questions have been raised in this thread. 


As for a coin reference, Frodo and Barliman used silver pennies.

My own guess about the Shire is in that thread, and can be summarized thus: The hobbits would be acquainted with coinage, but they would not _require_ coinage in a transaction. Barter would be accepted. Coins would come from dwarves, or old coins from Arnor, BUT the "standard" of a coin was probably set by Arnor in its heyday. Any dwarven coinage would follow those standards, as a matter of convenience. And in this way we can talk about "pennies", "gold coins", etc. Their weight and size was a matter of an age-old standard, followed by all. 

This standard was probably the same one used in Gondor, since the two cultures were "twins". And therefore all through Western Middle-Earth a penny would be recognizable by "civilized" people.


----------



## YayGollum (Jun 15, 2003)

Makes all kinds of sense to me. Answers to questions would be nice, though. oh well. I guess my crazy questions about why you people don't think they'd have mintses and things don't get responses after everyone else says that it doesn't really matter?


----------



## HLGStrider (Jun 15, 2003)

I thought I answered that within my first post as part of the reason I didn't see it as likely. ..
To me, mints implies either a large banking structure or a larger (but not large) government than the Hobbits seemed to me to have.


----------



## Annushka (Jun 16, 2003)

I agree with that. In order to have any monetary system you must have a proper institute to control it. It`s very unlikely that there was one in Shire.


----------



## Eriol (Jun 16, 2003)

Although I tend to agree that the Shire had not its own mint, this does not mean that it had not a monetary system. That hobbits were acquainted with coins is a fact, as Frodo and Barliman shows. The essential feature of coinage is that the weight and size of the metal is standardized -- dwarves could do that quite easily for a profit. And, of course, both Arnor and Gondor are almost sure to have established the standards in use.

My position was stated above, but that is a minimum guess -- it is quite possible that the Shire was satisfactorily supplied by coinage from Dwarves and old coins from Arnor and therefore had little to no barter.

I don't think less than that guess of mine is possible... the exchange between Frodo and Barliman seems very matter-of-fact to me.


----------



## YayGollum (Jun 16, 2003)

Okay, I guess I just wasn't satisfied with that other answer. oh well. How's about this question ---> So those Bree people doing all of the craziness you're talking about makes more sense than the Shire people doing it? As in, having mintses and all of that security craziness. oh well. Maybe I'm just a crazy person for thinking that those two places were pretty equal. All of these other ideas I'm seeing make all kinds of sense to me. I just don't get why people don't think that the nasssty hobbitse would be able to do things themselves. *hides*


----------



## Annushka (Jun 16, 2003)

I don`t think they were equal. Shire was sort of isolated. Though Bree was some kind of trans-shipment point. Is that the right word? Anyway, this means that many people from different places visited it.


----------



## HLGStrider (Jun 16, 2003)

I would put your difference down to the difference of men and hobbits (though also the Bree folk seem to have little government structure). The dwarf idea seems sensible.

I thought Bree coins would come mostly from outsiders, which they had a decent amount of. They would have to have coins to deal with Rangers, who would have nothing to barter with.


----------



## Eriol (Jun 16, 2003)

I think the main point is that coinage does NOT need Central Banking -- as long as there is a known standard, anyone can do his own coins.

Yay for decentralized coinage!


----------



## HLGStrider (Jun 16, 2003)

Don't worry. I believe you, Eriol. . .I was just explaining why I doubted it in the first place because Yay wanted to know.


----------



## YayGollum (Jun 16, 2003)

Got it. So there is no definite answer to the question. just a lot of ---> Oh, I bet this is how it was even though I have no proof and just think that I have the correct feel of the Shire from what I've read.  oh well. Whatever you crazy people say. Anything else? Yay for me keeping the topic alive by disagreeing, right?


----------



## Eriol (Jun 16, 2003)

Yay, I found a quote supporting you:



> But there is no smith's forge in this Shire that could change it at all



Gandalf talking about the Ring, _The Shadow of the Past_

Well, it seems the Shire had smith's forges. So, we can imagine a mint... 

I still don't think it would be a centralized organization, though. Perhaps some hobbits made coins in their forges, following the standards set by Arnor centuries before. They would probable be just unmarked pieces of metal.

I can't really picture a coin in celebration of the Bullroarer .


----------



## HLGStrider (Jun 17, 2003)

The Bullroarer Buffulo Nickle? Yes that would be interesting. . .You can just see Samwise on a bill. . .


----------



## Tar-Surion (Jul 24, 2008)

It's nice to wake up a venerable old thread like this and say a few words. Hobbit coinage would have had to have been issued locally; coins get lost or wear out. If there was no local issue of coins within a few decades there wouldn't have been any.

It is likely that coins were issued as required by the Mayor, the Thain or the Master of Buckland, or possibly all three. The work could have been done by local jewel-smiths or blacksmiths and it is unlikely that many would have been required at any one time.

In the ancient world and Middle Ages money was not used among the general populace who lived locally off local produce, engaged in barter and had no use for money except to pay taxes with.

Hobbits apparently paid no taxes, though how they maintained their Shirrifs, Post Office, roads, bridges, ferries and so forth without some form of public finance is a mystery. Perhaps the gentry had some informal collective system based on public-spiritedness and Noblesse Oblige.

Other than that money was only necessary for foreign trade, foreign travel or long-distance commerce across the Shire. Such things as salt, wine and metallic ores were not available everywhere but would been needed everywhere might have been traded for coins.

Given the conservatism of the Hobbits it is likely that the coins issued were replicas of North Kingdom ones probably complete with the image of Arvedui the Last King of Fornost.


----------



## Annushka (Jul 24, 2008)

oh my god !!! i havent received anything from tolkien forum for 3 years !!!


----------



## HLGStrider (Jul 24, 2008)

hello again.


----------



## Annushka (Jul 25, 2008)

Hello to you too. )) it feels so nice to see all this again


----------

