I hate to say it, but “Matt Yglesias”:http://www.slate.com/blogs/moneybox/2013/04/22/economics_of_ice_fire_iii_the_market_for_dragons.html has just gone too far this time. If you want to apply simplistic economic arguments to complex social situations, you can’t just wave your hands and suggest that the market for dragons in Westeros and neighboring lands is riddled with Akerlof style information asymmetries and complementarity problems. Instead, you should be waving your hands and arguing that under reasonable assumptions, there isn’t a market for dragons in the first place. The problem isn’t an Akerlof-style one, where there are unobservable variations in quality between dragons. The actual qualities of dragons for plunder and conquest appear to be highly visible – the bigger your dragon, the better they are at toasting enemy armies (the slavers in the TV series know this, and go for the largest of the litter). The problem is that the actual good being bought and sold is not the dragon-as-a-physical-entity, but the _loyalty_ of the dragon-as-a-physical-entity. And this simply isn’t a salable commodity, as best as we can tell from George R.R. Martin’s books and the television series. Daenerys can’t sell a set of affections which appear to be rooted in a quasi-maternal bond, based on the Targareyn bloodline, or some combination of the two. Dragons don’t seem to vary in this quality.

Furthermore, even if George R.R. Martin’s world was one in which Daenerys were somehow able to transfer the loyalties and affections of a dragon to another, this problem would still be insuperable, because dragons are so powerful. The buyer of the dragon’s loyalty could never be sure that Daenerys had actually ‘sold’ it, because loyalty is unobservable. Perhaps Daenerys and the dragon were simply waiting for the right moment to turn on them. And since dragons mature, and fully grown dragons can more or less do whatever the hell they want, Daenerys and the dragon are “essentially too powerful”:http://www.henryfarrell.net/distrust.pdf (PDF) to make bargains that they have a long term incentive to keep. This is a classic form of Thomas Schelling’s credible commitment problem – Schelling remarks in _The Strategy of Conflict_ that the right to be sued is very valuable, because it allows one to make credible commitments. Daenerys, with her dragons, is too powerful over the longer term to be able to make credible commitments.

Hence, the sale of the Unsullied could never occur in equilibrium. The slavers are offering a military asset whose loyalty is unimpeachably transferrable – once the Unsullied have a new master, they obey that master unquestioningly. This is why they are supposed to be so valuable (lots of dubious implications in there of course …). Daenerys is offering a military asset whose loyalty is at best unobservable. Therefore, it can’t be readily sold or exchanged. The exchange should never happen.

Ten Years of Krauthammer Days

by Henry on April 22, 2013

It’s now been exactly a decade since Charles Krauthammer “told us that”:http://www.aei.org/events/2003/04/22/iraq-what-lies-ahead-event-3/

Hans Blix had five months to find weapons. He found nothing. We’ve had five weeks. Come back to me in five months. If we haven’t found any, we will have a credibility problem.

Charles Krauthammer has not only had that five month period, but twenty-three other five month periods after that first one, for weapons of mass destruction to be found. It’s news to no-one that no weapons have been found. It’s news to no-one that the reason they haven’t been found is because they weren’t there in the first place. It’s news to no-one that Charles Krauthammer is still a columnist at the Washington Post, a syndicated columnist across the US, and a regular talking head on TV. It’s news to no-one that Fred Hiatt, his then-boss and fellow Iraq bullshit artist is still the editor of the Washington Post‘s editorial page. Or that Jackson Diehl, who I heard at the time from Washington Post people was even worse than Hiatt, is still there too.

In short, it’s news to no-one that Iraq War related “credibility problems” aren’t really so much of a problem if you’re Charles Krauthammer. Or Fred Hiatt. Or any of the multitudes of journalists or pundits who flagrantly pimped for this disastrous war and hasn’t even gestured towards publicly admitting that they committed a gross dereliction of duty. I think it’s worth remembering Krauthammer day on this blog as long as Krauthammer and the people around him continue to pollute public discourse. I can’t imagine that it’s particularly efficacious, but the alternative of succumbing to the general amnesia seems even less attractive.