Sunday, 10 February 2013

Dragon economics or “Dragonomics”

On the Chinese New Year’s Day, we decided to focus on Chinese culture and traditions, trying to evaluate them from the economist’s point of view. Here is where the idea of writing about “dragon economics” emerged.
Dragon economics (or “dragonomics”) is a remarkable research topic that no one has ever considered developing. Well, you might ask: how do dragons and economics match together? The answer is quite simple – we are talking about commercializing the dragons and using them as popular figure in all fields of entertainment industry. Billions of dollars are made on dragon books, films, stories and legends, not to mention the video games and online quests.

Chinese dragons: symbol and tradition

According to the Chinese tradition, dragons are very old and very respectful creatures in China. They symbolize wealth, prosperity and good luck. One can find images of dragons virtually everywhere in China: jewellery, pottery, cloth, decorations. Dragons are known in China since ancient times and are central to Chinese mythology. In contrast to the evil and bloodthirsty Western Dragons, Chinese dragons are peaceful, generous creatures and protectors of the people. The Chinese loved and honoured their dragons - among many titles of the Chinese Emperor, the most honourable one was the "living dragon" and the imperial throne was often called "Dragon’s throne." The coat of arms of the old China also depicted a dragon.
According to one legend, one of the Chinese emperors introduced titles and ranks for his officers by appointing a special dragon protector for each class. Thus, the higher officials of the seventh rank were given the emblem of five-clawed dragon Loong, while less senior officials carried the emblem of less noble dragons with only four claws or less.
In ancient China, dragons were divided not only by the number of claws. At the highest step of the dragon hierarchy were those dragons who could fly. They were subordinate to the spirits of dragons. At the lower steps in the hierarchy were the earth dragons who could fly once but, due to various reasons, lost their ability. The lowest in the dragon hierarchy were underground dragons whose duty was to protect hidden treasures.
Ancient Chinese scholars took the existence of dragons very seriously.  Many of them believed in this kind of monsters and could even prove it logically. For instance, one respected scientist and philosopher reasoned the possibility of the existence of dragons by the following words: "The dragon has a shape. If it has a shape, it can move. If it moves, it should eat. If it eats, it has a material nature. If it has the material nature, it exists".

Dragons in Europe

The mentioning of dragons can also be found in many European legends. According to one Polish medieval legend, there once was a dragon which lived in the cave below the castle Wawel in Krakow. The dragon was a fire-breather, had a taste for young maidens and was fooled and killed by the local cobbler’s apprentice.
In medieval times, when global travel was still centuries away and crocodiles were virtually unknown to the common folk of Europe, a crocodile’s skull brought from Africa or Middle East was often passed for the dragon’s. In such a way, people had the living proof of dragons’ existence. One known example if the Dragon of Brno (today’s Czech Republic): the stuffed mummy of the Nile’s crocodile served well as the fearsome dragon from the legends.
Popular fantasy book series called “Temeraire” and written by an American author Naomi Novik presents an alternative history setting of the world in the 19th century where dragons lived amongst humans and were widely used for transportation of goods as well as for war. Many of them were trained as battle dragons and were able to manoeuvre in flight better than WWI propeller-driven airplanes while spitting fire and spaying acid at the enemies. The world co-inhabited by humans and dragons did not differ from the one we used to read about in history books, however the existence of dragons shifted the balance of world power and made the dragons very valuable and expensive creatures. Because they were quite scarce and meant a lot for the warfare, huge sums of money were exchanged for dragon eggs that could potentially contain the future warrior.
Tolkien’s “The Hobbit, or There and Back Again” which was used as the story for recent Peter Jackson’s movie “The Hobbit” is largely about finding and retrieving the treasure from the dragon Smaug who apparently was an underground dragon and the protector of the treasure he managed to amass (mostly steal and plunder).
Dragons are not just the domain of old legends and tales. Recently (and thanks to the revival of fantasy genre) they found their way into popular culture becoming the central figures of books, films and computer games. “Dungeons and Dragons”, the 1974 role-playing fantasy game that set a base for all role-playing games as we know them today. The game lived through numerous modifications and updated, became a popular computer and on-line game and made millions of dollars among fantasy fans.

How to meet a dragon?

The question is whether one can see the dragon? According to Lev Grossman’s book “The Magician King” (the second book of the series about modern-day magicians which is considered by many critics to be the “Harry Potter for adults”), today’s dragons mostly live in large rivers all around the world and hide themselves from humans. One can relatively easy set up an encounter with the dragon of Venice who lives in the Grand Canal: it is enough to come to Ponto Rialto at night carrying a raw steak and a daily newspaper. At the stroke of midnight, the person should jump from the bridge into the Canal and if the dragon would find the person worthy of chatting, it will invite her or him to his hidden underwater chambers.
However, one does not need to travel to as far as Venice to see the dragons. There is one mighty dragon rising in the world and this dragon is China's economic policy. PricewaterhouseCoopers estimated that in 2012 China's economy constituted about 80% of the US economy (based on GDP converted by purchasing power parity). It is very likely that in 2013, the Dragon will continue to beat the Eagle at all fronts and will soon make a significant strategic leap that would breaking the hegemony of the American currency in the world. According to some predictions, by 2030 China will take the title of the world’s largest economy away from the United States. The mighty dragon is flying high gaining height and speed.