With the last Harry Potter novel out on
the shelves over 4 years ago and the first installment of
the final two movies in theaters last month, I thought now
was a grand time to discuss the serialization.
Everyone on the
planet by now capable of reading knows Harry defeats He Who
Must Not Be Named, marries Ginny Weasley, and sires two sons
and a daughter.
That's old news.
There's far more compelling stuff to discuss that, to
my knowledge, no one else has seriously addressed.
Like how does Hogwarts School of
Wizardry and Witchcraft stay in business?
Hogwarts is a boarding school.
The books never specify whether it's a public school
or a private one.
Public here is referred to in the American sense of
the word, as a school funded by the public at large through
taxes imposed by local, state, or federal governments.
In the real world, the muggle world, there is no such
thing as a public boarding school.
Anyone attending a boarding school would be paying
tuition for the education plus additional expenses for room
Why would Hogwarts be any different?
In the wizarding world, people still use money to buy
the goods and services they desire.
The wizarding currency, at least in the UK dominion,
is the galleon and is fully convertible with muggle
Hermione's dentist parents at one point are in Diagon Alley
swapping pounds sterling for galleons.
The galleon should technically be illegal.
Legal tender in the UK is defined as Bank of England
notes, Scottish and Northern Irish promissory notes, and
various pound and pence coins, and gold sovereigns.
While it's never specified in the books, I assume
that the galleons are minted from gold or other precious
metal that has a clearly definable value in the muggle
There are wizard banks -- or one bank,
Gringotts -- to store wizards' and witches' money and
Gringotts generates revenues isn't made clear.
Does Gringotts create money out of nothing and lend
it out with interest, like muggle banks magically do through
the fractional reserve lending system?
Does Gringotts pay out account holders with interest
on their deposits?
Does Gringotts earns its fees by an annual or monthly
charge on deposits in exchange for the safekeeping of funds?
According to the Hogwarts' groundskeeper, Hagrid,
Gringotts is "the
safest place in the world for anything you want to keep
safe." The bank
utilizes state-of-the-art enchantment technology, dragons,
and biometric wizarding software to keep valuables where
they belong. The
safe storage of Hufflepuff's cup, the Philisopher's Stone,
and other priceless possessions must have incurred their
respective vault holders very sizeable fees from Gringotts.
The point to be made here is that
Gringotts appears to be run on a profit model just like any
muggle bank. The
only branch of Gringotts ever mentioned in the books is the
one in Diagon Alley.
Diagon Alley is also home to pubs, a wand shop, a
furniture store, and, I venture, restaurants, theaters, and
other outlets catering to wizarding needs, wants, and
Later, Fred and George Weasley rent a store in Diagon Alley
to open up their own joke shop, Weasleys' Wizard Wheezes.
All of this suggests that business in the wizarding
world works under a freeish market capitalist system, and
that some in the system succeed more than others, breeding
rich wizarding families like the Malfoys and poor ones like
the Weasleys. Such a
system seems to support the idea that the First Law of
Thermodynamics holds in the wizarding world as well, that
energy can neither be created nor destroyed, but only change
form. For if
things like money, new broomsticks, a house, and new head of
hair could be conjured out of nothing, a free-market
capitalist system wouldn't exist.
Every wizard would have all he needed without having
to work a job for it -- and bald wizards would be a thing of
The laws of bureaucracy remain
inviolate in the wizarding world as well:
wherever a society forms, a bureaucracy forms around
it to administer rules, taxes, certifications, and
ultimately enrich itself at the expense of the people it's
supposed to help.
Instead of a corrupt and inefficient central
government, there's the Ministry of Magic.
The magical ministry is not powerful enough to disapparate Pournelle's Iron Law of Bureaucracy, which
bureaucracy, the people devoted to the benefit of the
bureaucracy itself always get in control and those dedicated
to the goals the bureaucracy is supposed to accomplish have
less and less influence, and sometimes are eliminated
Pournelle's Law is always evident to
some degree in the books, but most obviously in The Order
of the Phoenix, when the bureaucratic ministry imposes
so many rules and restrictions that Harry and his cohorts
must practice their defense against the dark arts via their
secret club, Dumbledore's Army.
With a bureaucracy, banking, and
economy organized along real world lines, we would not be
assuming too much to figure that Hogwarts, too, would be
organized in like fashion.
Professors, custodial staff, cooks -- all must be paid
elves and other undesirables for menial tasks and disdained
squibs like Argus Filch as a caretaker for low or no wages
helps to reduce costs significantly, even better than if the
work could be outsourced to China, but there are still
enormous expenses associated with maintaining Hogwarts and
its grounds, heating it during the icy cold winters, feeding
three all-you-can-eat daily buffets of dairy, meat, and
pumpkin juice, and providing comprehensive medical, dental,
and life insurance to all students plus liability insurance
for the school should a student be killed there by Voldemart
or a death eater and the grief-stricken parents attempt a
Dumbledore and the senior tenured
professors would be at least as well compensated as deans
and top professors at MIT, Caltech, Stanford, and Ivy League
institutions, probably a damned sight more. The books never
mention another magical educational institution in Britain.
Competition for the limited headmaster and
professorial spots would be fierce.
Snape has unsuccessfully tried to snag the Defense of
the Dark Arts position for years and only acquires it in
Harry's sixth year.
In any intensely competitive market, in securing the
top spots the victors win all the lucrative spoils.
Think of how much star athletes in professional
sports leagues or A-list Hollywood celebrities get paid
after besting out the numerous competition.
Hogwarts' coffers are
full enough to pay what I expect to be the equivalent of a
six- to seven-digit 1992 U.S. dollar salary to celebrities
like Gilderoy Lockhart in The Chamber of Secrets.
Lockhart, while a sham, is still a famous
bestselling author, handsome, popular, with lots of options.
He wouldn't work for an average teacher's salary any
more than Harrison Ford would star in the next Indiana Jones
flick for Screen Actors Guild scale.
Hogwarts' significant expenses require some cool
hard galleons to keep the engine running.
Who pays for it?
If the school is modeled like an elite
muggle boarding school, as it appears to be, the tuition
fees and room & board would be shouldered by the students'
Scholarships or partial scholarships might be offered to a
few in need, those costs absorbed by higher tuition fees
from those who can afford to pay in full as well as wizard
taxes paid directly to the Ministry of Magic.
In 2007, Britain's posh Eton College charged students
£26,490/year, about US$40,000 at the time.
Hogwarts would have to cost at least as much per
average British muggle couldn't afford to send his children
to schools with that kind of price tag.
So another reasonable Potterverse question is:
how can the average British wizarding family swing
Hogwarts' tutition fees?
Is the standard of living in the wizarding world
take a look.
Harry Potter's best friend, Ron Weasley,
comes from what looks like a Catholic wizarding family.
Birth control is another one of those areas where
magic has no impact.
During Ron's and Harry's second year, the Weasley
family have five kids enrolled at Hogwarts simultaneously.
How can patriarch Arthur Weasley, working in a lowly
government position with the Ministry of Magic, foot these
if he gets a 50% discount at Hogwarts for working with the
Ministry, that's still US$100,000 post tax he has to come up
with each year.
Do Ministry jobs pay magical amounts of moolah?
Securing limited spots in the Ministry
would be harder than landing a civil service position with
one's own government.
In the muggle civil service, even if you are a
certified idiot, you could probably land a job as a postal
worker. In the
wizarding world, those jobs have been outsourced to owls.
There are only a few
ways I can think of that the Ministry of Magic generates
revenues to pay its employees.
The first is by renting out prime Diagon Alley real
estate to merchants, only possible if the Ministry actually
owns the land and/or buildings there.
That could generate some serious revenues. As a point
of comparison, the Thai royal family earn over US$100m in
rents each year from central Bangkok real estate.
However, the books offer no evidence that the
Ministry is in possession of any lucrative Diagon Alley real
The second way is by taxing the wizard citizenry the
Ministry presides over.
The book never alludes to this, but if my theory is
correct, the British Ministry of Magic, through some tax
scheme probably as equally incomprehensible as any muggle
tax code, extracts some kind of cut from all the profits of
British magical businesses.
Using the real world as a blueprint, this magical tax
code was likely drafted so that rich wizards like the
Malfoys pay little or no tax while poorer wizards, like the
Weasleys, incur marginal European tax rates of 50% or more.
Tax evasion would be near impossible
with goblins and other magical technology tools at the
Ministry's disposal. Even if Arthur Weasley were earning
US$200,000/year in galleons, a sky high salary for a civil
service job, after Ministry taxes, paying Hogwarts' fees
would still be out of his reach.
The cap on a wizarding civil servant's
salary comes from the tiny tax base available for the
Ministry to secure its funds.
The series' author, J. K. Rowling, stated in a year
2000 interview with Scholastic.com that about 1,000 students
attend Hogwarts each school year.
Some web sites have debated this fact by showing
footage from the movies, suggesting that the Hogwarts'
student body numbers only 300 students.
I'll accept Rowling's figure as the definitive
It's her universe.
With seven grades in attendance at one time, this
leaves 140-45 students per grade, 35-40 per house.
Each year, there are only 140-45 eleven year olds in
the whole of the United Kingdom with wizarding skills worthy
of Hogwarts' expert instruction -- assuming again that
Hogwarts is the only wizarding institution in the UK and
that every child with magical skills gets accepted.
How many eleven year olds are there in
the UK at any one time?
That's not a very easy figure to come by, so we'll
use some quick and dirty math.
In 2008, the approximate population of the UK was
60m, and the life expectancy, 80 years.
Though birth rates vary by period, sometimes
significantly, and much of the UK's population growth over
the last 80 years is due to immigration, we'll presume the
same number of people were born each year over the last 80
years to yield this 60m population today.
This comes to 750,000 people in each age group.
The percentage of eleven year old wizards to all
eleven year olds in the UK is slightly less than
two-hundredths of a percent.
For every 10,000 people born in Britain, slightly
less than two wind up a wizard or witch.
That translates to just 11,600 people with wizarding
skills in all of the UK.
It's an invisible market even without being shielded
by Harry's invisibility cloak.
Standards of living only went up in the
muggle world as specialization of labor became widespread.
The costs of production then went down and more
people could afford to buy products that were once
The Model T's sold in 1909 dropped by 85% in price 15
years later from specialized labor performed on an assembly
With 0.019% of the world population
being a wizard or witch, there would only be 1.3m witches
and wizards on the planet, a miniscule market place by any
it's quite possible for a country with this sort of
population or less to have a decent standard of living.
Estonia (1.3m), Luxembourg (500,000), Iceland
(318,000) spring to mind.
But they're exceptions.
Most of the countries with populations near to the
estimated world wizarding population -- Trinidad and Tobago,
Gabon, Swaziland-- are poor.
The rich ones are only rich because they have a
valuable natural resource or, more importantly, because they
actively trade with other countries who have the natural
it's possible to have no natural resources at all and become
rich from international trade through labor specialization.
Japan, Singapore, and
South Korea did it. Seeing
the world wizarding community of 1.3m as a country is
1.3m constitute the entire wizarding world.
Outside these 1.3m, there is no one to trade
wizarding services and skills with.
Remaining within this super small community, separate
from muggles, guarantees
a lower standard of living for most wizards and witches
based on accepted Ricardian economic analyses, and yet in
Rowling's universe, completely cut off from the muggle
society and economy is how most of the wizards and witches
Weasley, who has a fetish for muggle things and is therefore
seen as peculiar by much of the wizarding community, often
asks questions to Harry about the muggle ways.
If Arthur, working in the Misuse of Muggle Artifacts
Office, has very little firsthand information on what it's
like to live within the muggle world, the majority of
wizards and witches possess no muggle knowledge whatsoever.
The ticket to wizarding wealth for the
majority of the enchanted would be to join and live in the
muggle world after graduation from Hogwarts (or even
before), integrate with the larger world economy, and use
one's magical skills to improve efficiencies in order to
lower costs and undercut the muggle competition. For
example, in the wizarding world, broken noses and bones can
be magically healed with the flick of a wand or application
of some magical poultice.
Why couldn't a wizard attend a muggle medical school,
obtain a medical degree, and then practice magical medicine
on the sly within his conventional medical practice?
He could call it new-age reiki or ayurvedic medicine,
and no one would be the wiser.
His quick and
successful healing sessions would cause his reputation to
soar, he could command higher fees, get rich, then convert
some of that wealth back into galleons at Gringotts and
build a second palatial home in the wizarding world.
It's a win-win for him and the patients.
Arthur Weasley knew how to cast a
magical spell on a muggle car so that the car could drive
itself in The Chamber of Secrets.
Imagine if he setup a pizza delivery service in the
muggle world, but was spared the expenses of having to hire
drivers and insure them and their cars for deliveries,
instead using his magical driverless car?
Customers could order pizzas at magically low prices
which would be prepared and baked with wizardry instead of
wood-fire ovens and costly employees, and the pizzas would
be delivered mere seconds or minutes after they came out of
the magic oven.
Arthur Weasley gets rich, customers get amazing pizzas.
What's the harm?
Frankly, there just doesn't seem to be
enough space in the tiny wizarding world for every
graduating wizard and witch to secure a job in the native
exactly like many an African economy of the past and the
American economy today.
How many aurors (parallel: lawyers), aspiring pro
league quidditch players (NBA basketball players, golf pros,
soccer stars), and Gringotts consultants (investment
bankers) does the world really need?
What if a wizard wants to pursue a more mundane
activity, like act on stage, work as a gay prostitute, or
write the next great novel?
To become noted in any of those vocations involves
magic, but a different kind of magic, one not taught at
Hogwarts and available to any mere mortal with the right
gifts or practice.
There are more and better opportunities for those
jobs and experiences in the muggle world.
Wizards and witches are still humans in
They age, mate, and die just like any human.
They can get fat from overeating and presumably
suffer from heart disease, diabetes, cancer, and other
debilitating diseases, although magical medical care may be
more successful in treating the ailment.
If I were a powerful wizard, I'd want the entire
world as my easel on which to draw, not two hundredths of a
percent of it.
Hogwarts has large fixed expenses.
Any serious drop in the wizarding fertility rate
means less future enrollees and subsequent tuition rises
well above the rate of galleon inflation.
Harry Potter's grandkids wouldn't be crazy to
consider enrolling in muggle community colleges instead and
attend magic classes at night school as Hogwarts gets
converted into a magical bed & breakfast.