Do Harry Potter tales have lessons for central banking?

This blog pointed to this post linking Harry Porter to economics. It said Ministry of Magic was just antithetical to economic world where market exchange should allocate resources not some bureaucracy .

In a rebuttal on Mises Blog it says Potter world was not all that bad. It has some useful lessons for central bankers:

As Harry Potter fans are well aware, the wizarding world runs on atrimetallic standard of gold galleons, silver sickles and bronze knuts. There is no mention of any form of paper money in the magical world, with everyone handling their purchases with metal coins.

In a feature that would delight Murray Rothbard, there also seems to be no fractional reserve banking in the wizarding world. Instead, the goblin-controlled Gringotts bank holds their clients savings in guarded private vaults with increasingly elaborate security measures.

From an economic perspective, these features have very important significance for the wizarding economy.

First, all this means that wizarding money is completely independent from the wizarding government, which – given the body’s consistent incompetence – is a very good thing. In fact, it’s notable that in spite of all the chaos and disorder that arises throughout Harry Potter’s world during the book series, there is never an issue with widespread hunger or any signs of severe economic depression. Even during the seventh book, with Lord Voldemort having succeeded in taking over the Ministry of Magic, the market hub of Diagon Alley was still active. While many had fled the Alley out of fear of Death Eaters, economic activity was still present — with new stores even opening up selling items for the dark arts.

Since the money itself is a full metal standard, Rowling’s world also enjoys one of Ron Paul’s favorite pillars of prosperity: sound money.


Since the goblins of Gringotts are not the government, and therefore could not force wizards to use their money with threat of imprisonment or taxes, the only way they could make sure their coins were used throughout Britain was to ensure that they could not be magically manipulated. Their currency necessarily had to be stable and reliable.


Given the monetary dark arts being practiced around the world, I would much prefer my money in the hands of a Gringotts goblin, than at the mercy of our Federal Reserve Chairman Who-Must-Not-Be-Named. 


Again the blogger is completely ignorant of Harry Potter series so again no comments. But all this is pretty fascinating surely. ..


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