[HPforGrownups] Wizard Economics

[manawydan]

No: HPFGUIDX 78535

Anna:
>Regardless of what their salary is, I wonder where the money comes
>from.  Do Hogwarts students pay tuition?  I find it difficult to
>believe that the Weasley family could afford to send seven children
>to Hogwarts if it is expensive.  At one point Percy, Fred, George,
>Ron and Ginny are there at the same time.   Maybe children of
>Ministry employees are given a discount. Maybe Hogwarts is Ministry
>funded.  Who pays Ministry employees?  Do wizards pay income taxes.
>How is Azkaban funded?  Is St. Mungos a private hospital or is it
>publically funded? Who develops wizard fiscal policy? Just Curious.

Although death and taxes are supposed to be the two things you just can't
avoid, so far the books have only mentioned the first one!

There have been previous threads about whether Hogwarts is a fee-charging
school, though personally, I don't think that canon establishes it - it's
certainly never mentioned explicitly (and I would have thought that if it
was, then it would have been, especially in the Weasley context. JKR
includes numerous conversations where their difficulty in managing is
mentioned.

An alternative theory is that there are two methods of wealth creation in
the WW. The first is the regular way: people make things and sell them. The
second is that a vault at Gringott's has some sort of magical growth spell
on it: if you leave your money there, it grows year by year. So that if your
holdings are large enough, then the interest on them earns enough for your
needs without you needing to work or anything. Therefore if Hogwarts has,
over the years (and perhaps since the Founding) had a large enough lump sum
in the vaults, its day to day running costs for salaries, food, supplies,
etc are always covered without needing to dip into the capital or raise
funds by any other means.

St Mungo's appears to follow the pre-Health Service UK model for hospitals.
They used to have to raise their own funds by collections, donations,
legacies, and so on. Notice that Lucius Malfoy has given them sizeable
donations. Also the collection point at the MoM.

For the Ministry itself, the question is a bit more interesting. The size of
the bureaucracy is large in terms of our own societies (and if you assume
that the number of wizards is fairly small, it's absolutely _huge_) - OoP
mentions "hundreds" of civil servants arriving for work when Harry and
Arthur are going in (and Arthur's come in a bit early). The MoM is a _very_
big place (because keeping the WW hidden at all times is a very big job). A
lot of wizards are likely to be outstationed at more distant locations as
well, plus possibly some at Azkaban dealing with the administration (I think
Azkaban is run directly by the ministry, a bit like the Home Office running
the prisons in our world).

So where does the MoM get funds to pay its employees? Certainly the wages
aren't very high (one way in which the WW is absolutely identical to our own
(yes, I am a civil servant IRL!)) - Arthur is pretty senior in his own
department but his family have a struggle to get by: Newt Scamander wrote
his book to supplement his wages; Ludo Bagman can't pay his gambling debts
despite being a Head of Department. But you still need a lot of cash. I once
wondered whether the MoM also had some sort of endowment (possibly by
confiscating the funds of those sent to Azkaban (attainder, as it used to be
known in our world) but clearly that can't be so, because Sirius still has
access to his vault and the family house despite having been imprisoned as a
DE.

I really don't think there's enough in canon to establish whether the MoM do
levy taxes, though I can't see a clear alternative. But the informal nature
of the WW economy makes it difficult to see how and where they'd be able to
do it (I can't see Mundungus Fletcher staying still long enough to be
assessed for income tax, for example!) Direct taxation is fairly recent in
our world - just 200 years - and universal direct taxation is less than 100
years old so possibly there is some sort of indirect taxation. On property
perhaps? Though if so, why hasn't the Black home been repossessed for 10
years of back taxes? On sales? But it's quite possible that a lot of
transactions take the form of barter rather than sales for cash.

So many questions...

Cheers

Ffred

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