Yes, The Hunger Games is secretly an economics field-guide.

I just finished reading the Hunger Games (book one). I enjoyed it for a reason that might be unusual. It brought back vivid memories of my first-year economics textbooks. To me, the Hunger Games is clearly a secret primer in basic economics.

Incredulous? Look at the title of the book.

Economics is the study of systems of rules that manage scarcity. What is Hunger if not scarcity? What are Games if not systems of rules?

[spoiler alert: spoilers below]

LESSON 1: Free Markets are powerful

The free-market lessons kick in on page five, when Katniss – the heroine of the book – ducks under a fence to go hunting, in defiance of the rules that govern her district, which is both starved and ruled with an iron fist.

Most of the peacekeepers turn a blind eye,” she explains, and we learn that a thriving black market – the Hob – is what keeps Katniss and family alive. Every time she hunts and then sells her kill Katniss defies a death penalty that prohibits trading.

LESSON 2: Central planning and colonisation are bad

The district itself is run as a sort of colony of the Capitol. The Capitol is the centre of a future North America torn apart by climate change.

The district where Katniss lives specialises in coal-mining. The citizens of this colony have no control over the coal production. They are forced to mine and send the coal to the Capitol.  They are prohibited from engaging in commerce or choosing their fates.  The result of their lack of freedom of choice is made clear in the first part of the book:

Starvation’s not an uncommon fate in District 12,” says Katniss on page 28.

The parallels with the colonisation era of the 1800s are clear. The lust for cheap raw materials and labour makes the keeping of colonies highly advantageous. But the citizens have to be oppressed for colonisation to work. Katniss can’t bring her bow and arrows inside the District, because the powers that oversee it fear an uprising. The trade between the district and the capitol is anything but free. You know who else opposed colonialism? The famous economist Adam Smith.

Few services are provided from the capitol back to the colonies. Colonies get some supplies of oil and grain , a few hours of electricity a day, and TV broadcasts that are more like propaganda. When Katniss gets on a train to go to the Capitol to compete in the Hunger Games, it is the first time she has been on any motorised vehicle.

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Then, for a while the economics lessons of the Hunger Games become less about the virtues of free markets, and zeroes in on a particular micro-economic concept:

LESSON 3: Game Theory.

The dynamics of the Hunger Games are brutal. The Capitol forces 24 children from 12 districts into a gladiatorial battle to the death.

Lesson 3.1 Go to the cornucopia?

To start the game, the contestants enter the arena simultaneously, but at a distance from each other. Then they face the first complex and interdependent choice. The centre of the arena (the cornucopia) is filled with useful items. Weapons, food, shelter.

In the short-run, nobody is armed, so going into the centre is risky. It may be worth it if you can defend yourself, so the biggest, strongest players have the incentive to head in to the centre. But it may also be worth it if you think you have no chance without supplies.

Of course, if the weak players yield the advantages of the stash to the strongest players, it makes their job even harder. So some take the risk. Even Katniss. In the end the stash of items is the scene of several quick deaths.

Lesson 3.2 Form an alliance?

The stash of supplies is too big for one player to control, and so the biggest players form an alliance.

The existence of an alliance among the strongest players in the Hunger Games may seem surprising. Any alliance must eventually break down – it is after all a battle to the last man standing. Game theory suggests breaking an alliance earlier rather than later will always be advantageous. But the presence of a stash of food binds them together. They need to be able to have some people sleep while others defend the stash.

If the alliance between the strong breaks down before the stash of food is depleted, the one remaining owner of the stash will be unable to so much as sleep, or risk becoming a target of remaining outsiders. The stash itself is an x-factor that binds that alliance of the strong together, so long as it lasts.

Social factors can also influence the outcomes of prisoners dilemma-style interactions, which can explain a couple of alliances Katniss enters into, especially the one with Rue. Katniss simply likes Rue.

She likes Peeta too, but he is less useful as an ally. As if aware of the implausibility, the alliance of Katniss and Peeta is maintained by a steady stream of rewards that arrive. The payoffs to staying together are higher than the payoffs of moving apart.

Lesson 3.3 Run and hide?

The Hunger Games reward survival, not killing. The optimal strategy at the start of a game is obviously a defensive one. Let everyone else try to kill each other and just wait. It’s only optimal to choose to enter a battle later, when there are fewer than 24 opponents, so as to minimise the chance of stumbling upon someone whilst sneaking up on another.

For that reason it is no surprise the “Gamekeepers” unleash a massive fire on the unsuspecting players very early on. This makes sure hiding is very difficult. The action cannot be allowed to ebb, after all.

Lesson 4: Prices.

Contestants can obtain items from “sponsors”, which are delivered to them in the Game. Later in the game, the price of items goes up dramatically. If we assume sponsors want to help the eventual victor, this makes sense.

Gifts delivered late in the game when few survivors remain are likely to be more effective in securing a win than those delivered early on. So gifts delivered in the last phase of the game are most valuable .

Problems

The book is a sci-fi fantasy and I do not expect it maintain perfect adherence to economic incentives. Two examples stand out.

1. Tesserae. Children from Districts can increase their chance of being selected as a Hunger Games participant in return for a year’s supply of grain and oil.

From the kids’ perspective I understand it wholly. But where’s the upside of this to the Capitol? It doesn’t yield more participants, or more interesting Hunger Games. It probably just costs them more in oil and grain. We are told the point of the Hunger Games is to keep the residents of the capitol amused and the residents of the districts poor and weak. The Tesserae don’t really achieve either of those.

2. Careers. The book wants us to believe that the Hunger Games are dominated by “career” competitors that volunteer to enter and almost always win. But it doesn’t seem plausible.

In the Hunger Games of book one, there are around six “careers.” Each must have an eighteen per cent chance of winning, assuming the rest of the contenders have no chance. For each of them, the risk is too high and the rewards too low. Especially when you consider that the reward of winning is supposedly food and housing, and the “careers” are described as being from “wealthier districts … fed and housed throughout their lives for this moment.”

Given the chances of winning are so low and the upside is slight, the optimal solution for any one district would be to send their weakest, least valuable members.

Big questions about the merits of economic growth.

The Hunger Games also raises very interesting questions about the end-point of economic development.

When Katniss first arrives from the districts, and meets the surgically altered citizens of the Capitol, and eats the endless supply of bountiful food, she asks an important question

“What must it be like, I wonder, to live in a world where food appears at the press of a button? How would I spend the hours I now commit to combing the woods for sustenance if it were so easy to come by? What do they do all day, these people in the Capitol, besides decorating their bodies and waiting around for a new shipment of tributes to roll in and die for their entertainment?”

Katniss wonders what her identity would be without having to provide for her most basic needs. I think that question haunts a lot of people in the privileged parts of the world. We have all the food we need and much much more. Our lives are about comfort, not survival.

I suspect this sense of meaninglessness is why some affluent people seem to spend a lot of time on their vegetable gardens.

The question of giving life purpose is likely to become only more relevant as production of food, clothing and shelter become more efficient. When people’s economic contribution is less and less crucial to survival – making ads, doing graphic design for t-shirts, doing accounting, they may begin to wonder what the real point of wealth is.

I am eager to get into Economics 201 – by which I refer to Hunger Games book 2. Will we see a process of revolution and decolonisation that allow market forces to deliver the districts into a state of freedom? Will there be a surge of immigration to the capitol? Will the book explore the macro-economic implications, including on prices and wages? I can hardly wait to find out.

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thomasthethinkengine

Thomas the Think Engine is the blog of a trained economist. It comes to you from Melbourne Australia.

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