As someone who’s very very interested in the intersection between ASOIAF and public policy, I’m kind of amazed I haven’t gotten to this topic before, so many thanks to Joanna Lannister for reminding me.

I’ve been interested in Tywin’s tenure as Hand for a long time, and I was quite pleased to see that the WOIAF gave us a lot more detail, which has allowed me to revise and extend my thinking. 

The Origins of Tywin’s Economic Policy

Tywin Lannister’s views of economic policy are obviously greatly shaped by his understanding of his father’s failure. Tytos was known for basically having a loose financial policy: “some borrowed heavily from Casterly Rock, then failed to repay the loans. When it was seen that Lord Tytos was willing to extend such debts, even forgive them, common merchants from Lannisport and Kayce began to beg for loans as well.” (WOIAF, p. 201) While the political shortcomings of this strategy are quite clear – especially in the case of Lady Ellyn Tarbeck née Reyne – it’s interesting that they may well have been very beneficial for the economy of the Westerlands, given the tremendous importance of access capital for economic development, especially in an unusually industrial economy like that of the Westerlands. 

Nevertheless, Tywin seems to have taken a strong lesson from his youth – being in debt is bad, being a creditor is only good if people pay up on time, having lots of gold on hand is best. In other words, he became a classic mercantilist when it came to monetary and financial policy, focused on building up a large monetary reserve as best for the health of the state and the economy (although as we’ll see, Tywin’s economic policies in other areas were not mercantilist in any way shape or form). Tyrion’s quote that “the gold of Casterly Rock…is dug from the ground,” (ASOS, p. 271) speaks to Tywin’s conception of money as a physical object to be safeguarded. And Tywin’s insistence on repayment in full, even when the debt is owed by his double-grandson, and the emergence of the Lannisters’ alternate motto, speaks to his obsession about never going back to the days of Lord Tytos.

Also, note that Tywin’s conception of debt is entirely political – loans are for gaining political support from lords, not for funding commercial ventures. Thus, Tywin’s career in economic policy begins with setting himself up as a debt collector:

Ser Tywin began by demanding repayment of all the gold Lord Tytos had lent out. Those who could not pay were required to send hostages to Casterly Rock. Five hundred knights, blooded and seasoned veterans of the Stepstones, were formed into a new company under the command of Ser Tywin’s brother Ser Kevan, and charged with ridding the west of robber knights and outlaws. (WOIAF, p. 202)

A credit crunch of this kind is hardly good for the economy of Lannisport, but may have had some salutatory effects on the Westerlands as a whole. Firstly, it improved House Lannister’s balance sheet, which meant that the Lords Paramount of the Westerlands would not go into debt or need to tax heavily – fulfilling Machiavelli’s maxim that:

“a Prince of a liberal disposition will consume his whole substance in things of this sort, and, after all, be obliged, if he would maintain his reputation for liberality, to burden his subjects with extraordinary taxes, and to resort to confiscations and all the other shifts whereby money is raised. But in this way he becomes hateful to his subjects, and growing impoverished is held in little esteem by any…through his parsimony his revenues are sufficient; that he is able to defend himself against any who make war on him; that he can engage in enterprises against others without burdening his subjects; and thus exercise liberality towards all from whom he does not take, whose number is infinite, while he is miserly in respect of those only to whom he does not give, whose number is few.” (Il Principe, Chapter XVI)

Secondly, by accompanying it with a marked improvement in law and order, Tywin allowed for an improvement in the volume of trade, as merchants and farmers and travelers would no longer fear robbery. 

Tywin as Hand

Tywin brought these conservative tendencies with him to King’s Landing when he was appointed Hand in 262 AC. From the beginning, Aerys II:

“was full of grand schemes…he announced his intent to conquer the Stepstones…he hatched a plan to build a new Wall a hundred leagues north of the existing one…he spoke of building a "white city” entirely of marble on the south bank of the Blackwater Rush…after a dispute with the Iron Bank of Braavos regarding certain moneys borrowed by his father [no doubt to pay for the War of Ninepenny Kings], he announced he would build the largest war fleet in the world…during a visit to Sunspear, he told the Princess of Dorne that he would “make the Dornish deserts bloom” by digging a great underground canal beneath the mountains…“ (WOIAF, p. 113-114)

Tywin’s policy here was one of restraint, no doubt solemnly promising to study each new proposal and then shelving it until the king had moved on to the next fancy, preserving the royal finances. At the same time, Tywin was willing to use the gold of Casterly Rock to put the King of Westeros in his debt, "settl[ing] the crown’s dispute with the Braavosi…by repaying the monies lent to Jaehaerys II with Gold from Casterly Rock.” We can see the lessons of his childhood here – debts must be repaid to prevent war, either with Braavos or with himself, but gold should be used to build political capital.

Most importantly, we learn that Tywin pursued a policy of promoting commerce through (relative) free trade, as he “reduced tariffs and taxes on shipping going in and out of the cities of King’s Landing, Lannisport, and Oldtown, winning the support of many wealthy merchants.” (WOIAF, p. 114) This shows an impressive level of sophistication – lowering statutory rates in order to generate higher levels of traffic and raise aggregate income, promoting commerce on the principle that economic growth would rebound to the benefit of the state. At the same time, there’s a political angle here – Tywin is benefiting the crown, his own kingdom, and broadening his coalition by helping out the Hightowers, but all of this would come at the expense of other ports like Gulltown, White Harbor, Plankytown, and Duskendale. And note that Tywin moves to benefit the merchant classes only after he’s placated the nobility by repealing Aegon V’s reforms.

Notably, Tywin’s pro-trade agenda became a point of contention with King Aerys once their relationship soured, as 

“the king doubled the port fees at King’s Landing and Oldtown, and tripled them for Lannisport and the realm’s other ports and harbors. When a delegation of small lords and rich merchants came before the Iron Throne to complain, however, Aerys blamed the Hand…whereupon His Grace restored port fees and tariffs to their previous levels, earning much acclaim for himself and leaving Tywin Lannister the opprobrium.” (WOIAF, p. 116)

Clearly Aerys preferred a bigger slice of a smaller pie than a smaller slice of a bigger pie. On the other hand, there’s some method to the madness – Aerys hurts commerce overall but raises royal revenue, but still preserves an advantage for the capitol (and Oldtown – possibly at Mace Tyrell’s bequest?) and tries to push Lannisport into comparative disadvantage. And once again, the economic serves the political – the point here is to damage Tywin’s standing among the merchant classes more than to enact permanent policy. 

In terms of public works, Tywin and Aerys differed less than one might think. While Tywin clearly looked askance at Aerys’ thoughtless ambition – wars on the Stepstones or with Braavos or with Volantis are expensive, a new Wall would involve both huge construction expenditures and a war with the wildlings for land that’s not arable, and a canal through the mountains would be prohibitively expensive in an era before dynamite, jackhammers, and steam shovels – he  wasn’t opposed to public works per se. We’re told that he “built new roads and repaired old ones, held many splendid tournaments about the realm to the delight of knights and commons alike,” (WOIAF, p. 114) but I’m sure that Tywin made damn sure that expenditures did not exceed budgetary estimates through any means necessary, and that overall expenditure remained under control. 

I would like to know more about Tywin’s Pure Food Act, in which he “sternly punished bakers found guilty of adding sawdust to their bread and butchers selling horsemeat as beef,” because of the interesting contrast to his stern opposition to the regulatory intervention in politics by Aegon V. Again, I think politics trumped economics – Tywin’s regulations affected small merchants and artisans, not the privileges of the nobility, whereas Aegon V meddled with the “rights and liberties” of the highborn.

A final and most important area of economic policy was the question of charters. Lord Denys Darklyn wanted a “charter for Duskendale that would give it more autonomy from the crown…and with it, lower port fees and tariffs to allow Duskendale once more to vie for trade with King’s Landing,” and Tywin as Hand “firmly rejected his proposals, for fear that it might set a dangerous precedent.” (WOIAF, p. 118) Now there’s something of an irony in this – the slump in Duskendale’s trade was probably influenced by Tywin’s trade policies that favored the royal capitol (which would improve royal revenues without raising taxes) and his own city of Lannisport. A charter for Duskendale would lower royal revenue; if it became a trend, it would mean dangerous competition for Lannisport. 

At the same time, I think there’s also a strong political edge here as well – charters mean more than tariffs and port fees, they mean political power for the smallfolk, especially the merchant classes, as city charters often come with the right to form municipal governments, trade guilds, and city militias. And this is political power at the expense of the nobility, who lose the absolute authority they normally have over their territory in favor of a bounded, constitutional authority. It’s not an accident that city charters are common in Essos, where republicanism holds sway. I would not be surprised in the slightest if one of the reforms of Aegon V done away with were city charters for Lord Harroway’s Town, Maidenpool, Rainy Town, Plankytown, and other would-be city-states. 

Tywin liked trade as much as the next man, but he was not about to allow a bunch of common merchants – the kinds of men his father had unwisely associated with – get above their station, let alone aspire to political power, like the “cheesemongers” of Essos. Then again, maybe it was all an excuse to replace King Aerys with King Rhaegar…