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TRANSCRIPT:
Paul Krugman in Conversation with Jared Bernstein

(recorded 8/20/26)

Paul Krugman: Hi everyone. Paul Krugman talking with Jared Bernstein, former chief economist, head of the Council of Economic Advisers under Joe Biden. Now a policy fellow at the Stanford Institute for Economic Policy Research and at the Center for American Progress, which is in DC.

Jared Bernstein: And I speak to you from Alexandria.

Krugman: Yeah, and the reason I want to talk with you is, you know, there’s a lot of headlines now about debt. Interest rates, particularly at the long end, are way up. You and I have both been Substacking about it. I think we mostly are on the same wavelength, but I’d like to go back and forth, and I want to talk about some work that you’ve done, particularly with Bobby Kogan. But what’s your take right now? I mean, we had all these headlines about forty trillion dollars of debt. This is very different from the way we were talking about debt a few years ago, so what’s your take?

Bernstein: Well, Paul, like you, for many years I was pushing back on those whose hair was on fire about the urgency of the federal debt. I thought that that overheating was overheated, and that as long as the growth rate surpassed the interest rate and we sort of kept our deficits within kind of a normal range, we could service our debt without breaking a sweat. But a few years ago, I began to become more hawkish and less dovish for a couple of reasons. One, the budget math became less favorable; the growth rate looked a lot closer to the interest rate, and that was before this recent bump up in bond yields. But also, you know, I’ve been in government a lot lately, and it looked to me like neither side really cared much at all. The reaction function, as we say these days, seemed to have been kind of dead in a way that I thought was problematic.

Now, this is not a pox on both houses. And by the way, here’s an area where you and I may have slightly different views. The Republicans’ tax cuts—and Bobby and I have done a lot of work on this—are public enemy number one here. Exhibit A, in terms of why we’re in the mess we’re in. But you know, Democrats have largely endorsed those tax cuts and, in my view, have done some irresponsible stuff, too. So that’s kind of my first take.

Krugman: Okay. You’re talking about r-g, but that’s kind of an important point, right? Why do we think about interest and growth and debt? Lots of people are out there saying, “Look, the interest on the debt is now so huge,” but that’s not quite the whole story, but it’s closer to the story. Anyway, your version of it...

Bernstein: Yeah. For me, a lot of this comes from paying attention to Olivier Blanchard‘s work. He has kind of wedged into a lot of our heads this notion that when the growth rate surpasses the rate of interest, it is possible to keep rolling over that debt and not get into a kind of debt spiral because you’re generating enough growth and revenues and incomes to sustain the debt or to roll it over. Meaning, you know, replace some old debt with new debt without worrying about the debt getting on an unsustainable trajectory. As soon as r is bigger than g, that’s when you have the threat of a debt spiral.

That’s not all the math. It depends on the size of your deficits as well. But broadly speaking, for many years we had pretty good growth and pretty low interest rates. We can talk about how that growth was distributed—a lot of it didn’t reach working-class people—but the fact that g, the growth rate, was higher than the interest rate was one reason why I was less wound up about all this.

Krugman: Yeah, one of my favorite things is talking about the question of “How did we pay off the debt from World War II?” And the answer is we didn’t. The debt when John F. Kennedy was elected was about the same as it had been on V-J Day in dollar terms, but it was just vastly smaller as a share of the economy because we outgrew it. As long as debt doesn’t rise relative to GDP, it’s not a problem. That means if the economy is growing and interest rates are not too high, not only don’t you have to pay off the debt, you can actually keep it growing as long as it just doesn’t grow too fast, right?

Bernstein: Exactly. So the problem we face is when our debt grows faster than our economy, when the debt ratio, or the debt-to-GDP, just keeps going up and up and up.

Krugman: Basically for much of the period when everybody was going on and on about debt, the arithmetic there was actually pretty favorable, right?

Bernstein: This is precisely why I kind of did a bit of a flip. I have an Op-ed in the Times—it’s from at least a year ago—where I managed to actually get them to put a graph in, which, you know, they don’t always do in there, which portrays this problem. It shows how the growth rate used to just reliably be well above the interest rate, where the economy grows faster than the debt, and so your debt-to-GDP ratio sort of glides along in a way that’s not particularly worrisome. But it looks like it’s starting to flip and starting to change.

And then if you look at the CBO forecast, they actually have the interest rate on the debt falling below the growth rate numerous years out. And their estimates actually are kind of optimistic in debt terms because they assume a number of things: they assume tariffs continue to generate a bunch of revenue, which doesn’t look to be the case; they assume that some of the Trump tax cuts would fade, but now they’re permanent. So yeah, the budget math has gotten less comfortable.

Krugman: Okay. I want to get to the interest rates in a minute, but the deficit that we’re running right now is just incredibly large. I mean, we used to run deficits to fight wars, and then we started to have big deficits when you had severe recessions. But now we have neither. I mean, there’s a war, but it’s not like World War II, right? It’s a fraction of a percent of GDP.

Bernstein: Right, but it’s not free.

Krugman: Yeah, but it’s not forty percent of GDP. It’s something like six percent of GDP now, right?

Bernstein: Exactly. It’s a little north of six percent of GDP. And according to the kind of numbers that I run on this, with the macroeconomy doing pretty well—and again, I know it’s not reaching a lot of folks; affordability concerns loom large—but you know, GDP is growing around trend, which is about two percent real. The unemployment rate is close to four percent, which is in the neighborhood of full employment. And the stock market’s booming. We should have a deficit that’s closer to three percent than six percent.

And what’s happened here, Paul—and you’ve written about this extensively—is that the constant ratcheting down of tax policy. All those tax cuts introduced by Republicans, too often kind of kept in place by Democrats, have really broken the linkage between solid economic growth and revenue flows to the Treasury. And what Bobby and I show is that if you take the Bush and the Trump tax cuts out of the mix, our fiscal scene would look fine. So, you know, that’s important.

What you can do is simulate what the debt ratio would be—by debt ratio we mean debt-to-GDP—or what the deficit would be (either one), or what the interest payments on the deficit would be. You can simulate those if you take the Bush and the Trump tax cuts out of the system, which means taking them and not just the original cuts, but all the following-on legislation that made those cuts permanent.

You know, when I say Democrats have played a role here: I was in the Obama administration when we essentially made permanent 80% of the Bush tax cuts. That’s not a hundred percent, so I’m glad that we let at least 20% at the top end revert back to what they were. But that’s the exercise we did.

Krugman: The blue line in that chart is the projection for debt on the current trajectory, and up to the point where it gets dotted, it’s the actual debt-to-GDP. And it’s really three rounds, right? It’s Bush, which were very much tax cuts for the one percent; then Trump 1, more tax cuts for the one percent; and then Trump 2, even more tax cuts, not entirely for the one percent. Where we are now is not at all where we would be if we hadn’t had all of these tax cuts.

Bernstein: Yeah, and let me say something about this. First of all, I know you do a lot of economic history, which is just really great work in my opinion, and I just don’t want our viewers to not note that that graph started back in, I think, the late 1700s. So that’s some pretty good economic history there.

Remember, those figures, including the one that showed a much lower, much more sustainable debt path, include all the spending that is in the system. The only change we’re making is the tax cuts didn’t happen. And so this is important, because there are always going to be people who say, “You know, it’s all spending,” and “It’s all taxes,” and that’s a common fight. But that figure keeps the spending precisely where CBO says it is. So that’s not a judgment on whether we have the optimal amount of spending—we can argue about things that should be cut or expanded—but those are the numbers; those are the facts.

Krugman: One of the things that strikes me about this is that often if we’re trying to understand what it would take to be able to pay for even what we have, that we would have to have something like European levels of taxation or something radically different. And actually, all we really need for that is Clinton-era levels of taxation.

Bernstein: Precisely right. Yeah, in fact, under the Clinton regime was the last time we had an annual surplus, so the debt-to-GDP was starting to come down, which is what happens when you have a surplus. Now, a lot of that had to do with a big bump in capital gains, and that led to more revenue flows. But that’s precisely the channel that I think we’ve shut down with this endless ratcheting down of tax policy.

Krugman: Yeah, it’s an amazing thing. And you and I both remember the nineties, and I didn’t feel that we were living in a regime of oppressive taxation that was stifling entrepreneurship. Those were the roaring nineties.

Bernstein: No question. The extent to which the political class, particularly Republicans, has convinced so many people and so many media writers that taxes are always bad and must always be cut is one of the reasons we’re in this mess.

Krugman: Okay. Now, clearly the deficit is so big because of, again, another round of tax cuts and the legacy of the past tax cuts. But also, the arithmetic of debt used to basically kind of melt away relative to GDP because of growth exceeding the interest rate, and that’s not the case anymore. Although the gap is not that large even now, right? It’s sort of like a four percent average interest rate on federal debt and maybe three percent nominal growth, three to three and a half. But still, it’s very different now. But the thing that is really striking is that interest rates are way higher than they were not very long ago, especially, of course, at the long end. So I’m actually not fully sure myself what I think is happening, but why do you think interest rates have gone up so much?

Bernstein: You know that old movie—I think it’s called Murder on the Orient Express—where it turned out, spoiler alert, that they were looking for one perp, but there were like 17 perps?

Krugman: Yeah.

Bernstein: I think there’s a bunch of reasons. To me, it seems credible and plausible, so I don’t feel particularly confused about what I’m seeing, though I may be missing something, but I would put at the top of the list that there are two very large demanders of credit right now in both the US and other economies as well. Those are the AI build-out and all the picks and shovels therein. Those folks are now leveraged, meaning they’re borrowing somewhere between six, seven hundred billion and a trillion this year.

Krugman: Right.

Bernstein: I’ve seen plausible estimates that they’re going to borrow a trillion dollars. By the way, a lot of those AI companies used to invest using cash flow. They weren’t leveraging; now they’re borrowing. And they’re borrowing hand over fist. A lot of investors are confident about those returns. I personally think it’s kind of bubbly, but they’re confident about those returns, so they’re certainly buying that debt.

The other big competitor is the US government, and I just mentioned maybe the AI bros will borrow a trillion this year. Well, we know that the US government’s gonna borrow twice that, a little bit north of two trillion. That’s thing one.

Cause number two, is the Trump-induced inflation concerns. So look, if you think that inflation is going to be high and sticky and you’re about to lock up some of your money for a while in a bond, you might want an inflation premium. You might want a little bit more compensation on that interest rate to account for the fact that this is all a nominal deal, and so you want to be compensated for higher expected inflation.

Then there’s the fact that Kevin Warsh has gotten off to a bit of a shaky start, and I think that’s spooking markets a bit, and that kind of uncertainty also calls for a higher risk or term premium.

And then there’s the fact that the country’s being run by an orange maniac. I think that is kind of a long-term risk premium that any investor is concerned about. Some foreign investors, who have often bought a lot of our debt, are saying, “Huh, maybe not so fast given the way this country is governed right now.” So if you put those all together, to me they tell a pretty compelling story.

Krugman: Okay. I think I mostly agree with that, except I have a couple of questions. One is that this is global, right? Interest rates are up all around the advanced world. They’re more or less moving on parallel tracks in Germany, with their famous, slightly insane fiscal discipline, and in Japan, where we used to say nothing ever seemed to matter. I mean, the AI boom is mostly here, and the orange maniac is only here. He would like to be elsewhere, but he’s only here right now. So—

Bernstein: I think he spills over into some other places, but yes.

Krugman: Yeah. So, is there kind of a common story?

Bernstein: I mean, it’s a great question, and I should have said: I don’t think anybody can explain 100% of this variance, but my R2 gets up there pretty good, I guess. I think the problem is that the fiscal accounts of other countries are looking a little bit more like ours than they used to, and that they also seem to be facing a borrowing crunch.

Japan, as you just mentioned, would make our debt-to-GDP ratio look very, very tame, because of course they’ve been north of 200%. And for years, nobody really thought that was too big a problem. But I guess because of some of the global risks—you know, we have geopolitical dynamics; when energy is stuck in the Strait of Hormuz, that is a much bigger deal for Europe, for Japan, for China than it is for us. And so I would argue that the combination of geopolitical tensions and unbalanced fiscal accounts is probably pushing up long rates in other countries as well. But there’s probably more to it.

Krugman: We have a couple of financial indicators that are supposed to capture some of these risks. There’s breakevens, right?

Bernstein: Yeah.

Krugman: The US government sells bonds that are supposedly protected against inflation, and the spread between those and regular bonds should give you an indication of what Mr. Market thinks is going to happen to inflation. And that really isn’t showing anything, right?

Bernstein: Right.

Krugman: And then there are credit default swaps; insurance that will pay out if a company defaults. And there are credit default swaps on the United States government, although I always wonder a little bit what good any contract is if the US government goes into default. But anyway, those are just not flashing red at all.

Bernstein: Yeah, I can speak to that. There’s a couple of points here, one of which I think is very important that you made in your post this morning, and I’ve been trying to stress as well. I really want to make sure we get into it, which I will here.

The first point is that a second ago I said there’s an inflation premium in some of these bonds, meaning that credit investors want to have a slightly higher return because they’re worried about expected inflation. I think that’s a pretty small part of the puzzle; I think it’s more on short-term than on long-term loans. And this is clear if you look at where you really see the increase—for example, the 30-year bond is in the inflation-protected version, and that tells you that it’s not just inflation; it’s making the breakeven point a different way. And that tells you that there’s some nervousness about the long-term prospects of the US project.

The important thing that I wanted to nail here is that I think of this as much more of a slow burn than something that’s going to explode this week or next week. I don’t think the US is going to have a Liz Truss moment. I’m referring to the case in the UK where creditors engaged in what’s called a sudden stop: they looked at her fiscal plan and said, “That’s it, we’re out. We’re not going to invest in that country anymore.” I don’t think that happens here, for a variety of reasons that you and I can tick through.

But that doesn’t mean that everything’s fine and happy-dappy or we’re out of the woods. It’s more of a slow burn, this upward pressure on rates, which folds into affordability—mortgage, auto, credit card loans, and so on—that is a problem for American households and consumers. And that is less of a “what’s inflation going to be next week” story and more of a “higher for longer” problem, where rates look to me and to many others like they’re going to stay up for a while because these problems are structural.

Krugman: Yeah. There’s a lot of crisis talk, as there was, by the way, back in 2010 when there was really no problem at all. And my problem with that has always been: explain to me how that happens. You say people will go on a buyers’ strike and try to sell all of their US government debt, and my question is always, “And buy what?” I mean, it’s not like there’s an obvious place. Even for Britain, the Liz Truss moment was much more limited than people claim. And for the US as a whole, it’s not like Greece, where people were demanding euros and the Greeks couldn’t print euros. As someone said, it’s that we should be thinking about termites, not a tornado.

Bernstein: Yeah, and here’s why I think this is so important, and you and I have both been circling around this point: It’s very important for human welfare—not just American, but for human welfare—that the current thugs running the government be banished and held accountable. I’m sorry if that sounds partisan, but I don’t think it is.

And for that to happen, I don’t think candidates can run on—I remember the John Kasich platform, which is, “Vote for me and I’ll lower the debt and the deficit. We’ll all eat our spinach.” And I think that’s a mistake. I think it’s a mistake politically, and I think it’s a mistake economically. As you wrote this morning, don’t panic. I agree with that. This is a structural problem that’s not going away anytime soon, but we can chip away at it by reversing some of the high-end tax cuts, which I think would be both progressive and send a signal to markets and investors that we’re actually back in the business of having a reaction function to our unsustainable path.

But first and foremost, we have to meet the very basic, urgent needs of households that have been left behind for too long: health care, child care, housing, energy costs. That, to me, is the first demand on fiscal policy. And so I think the fact that neither you nor I see a pending sudden stop or credit crisis—we could be wrong about that, in which case we’ll have to reconfigure—but based on history, I think we still have time to get this right, and we should do both. We should walk and chew gum.

Krugman: Okay. At the risk of delaying a moment until we get to what to do, there’s one thing that kinda bothers me intellectually: during the era of low interest rates, we had a really good story—secular stagnation—basically that largely because of low birth rates and a stagnant working-age population, there was just going to be lots of savings and not enough places to spend it on. And that’s kind of what we thought had happened to Japan. And now here we are.

Just six years ago, I would have been a full-on secular stagnation guy, and now we have, whatever it is, 5.3% interest rates on the 30-year. Were we all wrong about that, or did something really radically change?

Bernstein: I think that we were over-torquing or over-indexing a bit on a period where interest rates were uniquely low, and we built a big story about secular stagnation that I sort of believed at the time. But I look back now and I think that perhaps that wasn’t as believable as we thought.

I think what might have been happening instead was we just had what Ben Bernanke called a global savings glut. We had excess savings, and there are a lot of reasons for that; it doesn’t have to be a lack of investment opportunities. A lot of it had to do with international imbalances, which you’ve written a lot about. And so these excess savings found their ways into U.S. Treasuries because it was the safest debt you could buy, and the U.S. looked like a going concern, so a lot of those resources flowed here. And that glut of savings, often coming out of Asian trade surpluses, led to rates that were really quite depressed for a long time. But as those dynamics changed, I think the savings glut is in the rearview mirror and the dynamics are more like those we’re talking about today.

Krugman: Yeah. If I can say, one intellectual trap that I fall into far more often than I should is the lure of a beautiful model that seems to fit the facts for a while. The secular stagnation model was lovely, and it all fit together, and there were the low interest rates. And then all of a sudden, it wasn’t really that solidly grounded. But the fact that a model seems to work for a while doesn’t necessarily mean—

Bernstein: Well, it may have been the right model for the time. And look, you’ve made a career and won a Nobel Prize for beautiful models, so I wouldn’t—I don’t want to wave you off of that.

But I think there’s another dynamic to this—see if this resonates with you. One of the foundational principles behind secular stagnation is the idea that there’s more savings than there are credible investments, or places to put it; there’s just an absence of investment.

Krugman: Right.

Bernstein: And by the way, when Larry Summers raised this issue of secular stagnation, Ben Bernanke stood up at the IMF conference and said, “Wait a second, there’s lots of places to invest.” I’m not sure that was exactly right at the time, but it sure is not the case now, right? And that’s the AI boom.

There’s this tremendous investment opportunity going on now. Again, I think those guys are over their skis because there’s so much more investment than there is profitability right now that I have bubble worries, and Ryan Cummings and I have written numerous pieces on this. But secular stagnation, or the absence of investment to absorb the excess savings, may have been a fact for a few years there, but as this new technology came along, as is often the case, you now have an investment absorption mechanism.

Krugman: Right. And it’s probably worth saying, just going back, that it’s not just that the hyperscalers are borrowing money when they used to not have to, but also presumably before, all of these huge profits being generated off our social media addiction were effectively being parked in places where they could then be lent out. And now, instead of pouring water into that pool, they’re drawing water out of it, and that adds to this pressure.

Okay, big question: hopefully January 20th, 2029, President—name your favorite—with majorities in both houses comes in. And aside from needing to go after all of the legacy of corruption and all of that, they’re going to come in during what looks like it’s going to be a less forgiving financial environment than we might have hoped. What do you do? What’s your agenda for how we address all this?

Bernstein: Well, first of all, from your lips to God’s ears, as we used to say. If we find ourselves in that situation, I will be partying in the streets and not worrying about the interest rate, at least for a few days.

I’m sure you’re right, and it’s an important question and an important framing of the question. I think there’s a path forward, though. First of all, we should definitely hold the Trumpies accountable and in a big way. I’ve written about that, and I think we have to Trump-proof our government because other authoritarians will come along. But if that’s all we do, we’re falling short. We really have to attack with the affordability agenda. And there, I think we should look at not just Mamdani and some of the others on the left who are making delivering the absolute key plank of their political project, but so is Abigail Spanberger and Mikie Sherrill from the center. So it’s not just a left-center thing; it’s just about rejecting the status quo and delivering to American households who’ve been not just abandoned, but abused for so long, especially under this administration.

And in terms of the context of what we’re talking about now, how do you do that if you’re in a high-rate environment and you have this budget outlook? Well, we have to reverse the high-end tax cuts. We have to close investment loopholes. We have to close the tax gap. We have to fund the IRS enforcement mechanism, because for every dollar you invest in IRS enforcement, you collect something like nine or ten dollars in taxes that are currently being evaded almost exclusively from the top of the scale. Closing the tax gap is a project that could yield five, six, seven hundred billion per year.

Krugman: Let me, by the way, explain again for listeners: “the tax gap” is a term of art. It’s not just hand-waving; it’s speaking specifically about money that people owe that we’re not collecting because the IRS doesn’t have the resources, and it’s overwhelmingly very high-income people. So you’re saying that’s like two percent of GDP.

Bernstein: I recently heard Natasha Sarin talk about this and she used, I think, that exact figure. I’m colorblind, so I’m not sure what color it was, but the chart that Bobby Kogan and I used—I think it was green—that could get us closer back to that debt-to-GDP line that’s much more sustainable. And they rest largely on applying taxes to where income and wealth have exploded at the top of the scale, so they neither hurt middle-income people nor compromise the affordability agenda.

I don’t want to be too Pollyannaish about this: a dollar spent on childcare is a dollar that’s not available for debt reduction. But what I really don’t think we should do is say we have to come in here and clean up the Republicans’ debt mess as our first priority. Anything we do that stops digging us into a deeper fiscal hole—even if we’re digging more slowly, or even better yet, stop digging, not necessarily filling—would be, I think, not only good fiscal policy, but probably welcomed by the markets as a sign that the congressional reaction function to the fiscal outlook isn’t dead.

Krugman: I regret to inform you that the good debt scenario, if we hadn’t had all of these irresponsible tax cuts, the line is orange, which is kind of an unfortunate choice given where we are in America right now.

Bernstein: Whoops.

Krugman: But anyway, I think you may have partially answered my question. When I look at that “if we hadn’t had those tax cuts” line, that would be great. If that was where we were, then I certainly wouldn’t be worrying at all about debt. But although those tax cuts were very heavily tilted to the top, with something like thirty to forty percent going to the one percent, reversing all of them would hit a number of people who at least think of themselves as middle class. And so the question is: what is within the realm of the politically possible that we can actually do?

Bernstein: Great question. And I definitely have argued and tried to stress that the right place to start and to linger is at the top of the scale. I don’t think we should raise taxes on middle-class or middle-class-adjacent people; they’re having a hard enough time already and don’t need an extra tax burden.

But the extent to which income and wealth have accumulated at the top of the scale—I’m sure you’ve seen the factor share data showing that the labor share of national income is kind of uniquely low and the profit share is uniquely high. And so I think we have to be pretty aggressive in that regard, but we can do so without dinging the middle class.

If you listen to some budget hawks, they say we have to get back to that orange line. To be clear, I’m not saying that. I don’t think we do have to get back to the orange line. By the way, Danny Yagan has some nice papers on this, saying that we can be really gradual about getting back to some version of fiscal responsibility, but we have to move in that direction. We sort of have to change the sign, even if the magnitude is tiny.

Krugman: Yeah, I think the post-World War II story is actually kind of helpful here because people talked for a long time about, “How are we going to pay the national debt? How are we gonna pay off the war debts?” And we never did. In fact, by sometime in the sixties the debt was higher in dollar terms than it had been, but the trajectory of all of the ratios was down, and we probably don’t even have to do that steep a descent, right?

Bernstein: Yeah. Some people want to say that AI is gonna save our bacon because it’s gonna generate so much growth. In the piece with Bobby, we have a section on it, and my view is kind of like: hope for the best, plan for the worst.

Krugman: Yeah.

Bernstein: I’m kind of stuck on the fact that the internet really did eventually have a strong productivity impact, and then it went away.

Krugman: Yeah, things can go into reverse, but there was only about ten years of good growth.

Bernstein: Yeah, exactly, and then we kind of got back to where we were. So a lot of the AI productivity discussion assumes that not only will AI boost the level of productivity, but it’ll just keep getting better and better and better so that it improves the growth rate. And you know, I hope that’s true, but I certainly wouldn’t bet on it.

Krugman: So, what are you hoping for in the spring of 2029 as our hypothetical virtuous government comes along?

Bernstein: I am hoping for the following: I spend a fair amount of time scratching my aging noggin with the question of how much of the damage done by the Trump regime is temporary and can be quickly repaired, or is long-term and will be with us for a while.

If a good Democrat takes over and we have some legislative power, can we restore good relationships with Canada and Europe? Or are they gonna be like, “Screw you, we’ve seen what you guys do. You’re okay, but we don’t know who the next guy’s gonna be. We might be looking at President Vance around the corner.”

So I guess what I’m hoping for and looking for is that the damage can be reversed in my lifetime, which isn’t the longest span of years. And that’s an open question.

What about you? You answer that question.

Krugman: Well, okay. When you ask me about the economics—can we restore, can we even significantly reverse the drift to oligarchy—I’m actually fairly optimistic that it’s within the realm of the doable. When it comes to our international relations, when it comes to our military credibility, I don’t know. I think we’re talking about a generations-long project, and that really upsets me quite a lot.

At some level, you know, I talk about Iran or something like that and I say, “Okay, this is Trump’s failure and we should wrap it around his neck.” But in the end, it’s my country, too. And my God, we are not the country we were in the eyes of the world, and I don’t know when we ever will be again.

Bernstein: I agree with you, Paul, and I share that worry. I’ll only say the following: it may be a generational project, but if it is, it’s a great generational project, and generations should be anxious to undertake it.

Krugman: Well, on that happy note, thanks so much for talking to me.

The system that conked out that in turn prevented the feed generation script from seeing new content has conked out once before in recent memory — last October. But when it conked out in October I noticed within a few hours, because readers kept complaining about the same typo that I had fixed, in my CMS, but which was still visible on the home page, because the home page only gets updated from the feed content. I never previously considered adding some sort of alert to check on this, because I always presumed I’d notice if new items I published weren’t appearing on the home page or in the feeds. ↩︎

This is the second half of the final part (I, IIa, IIb, III, IVa, IVb, Va, Vb) of our apparently five-part series laying out some general guidelines for how pre-modern armies are organized, with fictional worldbuilding and historical patterns in mind. Last time we started checking some fictional militaries against the general patterns we’ve laid out and we’re going to continue doing that this week.

This week, I want to turn to some of the more complex militaries structures we’ve discussed and I found they were more common in my repertoire of video games than film or literature, perhaps because the ultra-long-form structure of many video games provides a lot more space to explore complex institutions. So this week, we’re going to look at an example of a professional standing army in the Imperial Legion of The Elder Scrolls series, some private enterprise war through the Vailian Trading Company of Pillars of Eternity II: Deadfire and the finally try to untangle the military system of Baldur’s Gate from the broader Forgotten Realms constructed world (including but not limited to Baldur’s Gate 3).

But first, as always, recruiting and maintaining large pre-modern armies is expensive! Much like many of those pre-modern armies, this project is supported by devolving the costs of my ruinous book-buying habit on to ~~recruits~~ readers. You can help by spreading the word to new readers and by supporting this project over at Patreon. If you want updates whenever a new post appears or want to hear my more bite-sized musings on history, security affairs and current events, you can follow me on Bluesky (@bretdevereaux.bsky.social). I am also active on Threads (bretdevereaux) and maintain a de minimis presence on Twitter (@bretdevereaux).

The Imperial Legion

Now I should start by noting one of the obvious quirks of discussing any sort of worldbuilding when it comes to video games which is that video games are the product not of a single vision but of many hands, even more so than film or tv. After all, even just the dialogue of a single game is the product of more than one writer (Oblivion credits six ‘Quest Designers’ and two more for ‘Additional Writing,’ for instance) and of course a lot of the creative decisions are also made by artists, level designers and so on. And of course that team might be very different from one game to the next: there’s a lot of turnover from Morrowind to Skyrim.¹ So it shouldn’t surprise us that there may be some inconsistencies or contradictions; nevertheless there is enough continuity here to proceed.

We can begin by sketching out our civilian society. I really think the society of The Elder Scrolls is something we should come back to in more depth, because while it often models itself as the most generic ‘generic fantasy world,’ it actually isn’t in some interesting ways. But we’ll have to stay brief here.

Tamriel (the world of The Elder Scrolls) is, like our previous examples, a complex agrarian society, but it is different in important ways: Tamriel is substantially more urban than either Westeros or Middle Earth. That isn’t just reflected in it having larger cities – these games city sizes are invariably products of graphical limitations, rather than direct one-to-one expressions of worldbuilding – but in the organization of society: in the places we’ve seen mostly clearly (Cyrodiil, Morrowind and Skyrim) the Cyrodiillic Empire (from here on, just ‘the Empire’ for short) is able to organize its administration entirely through urban centers. Castles – fortified private homes in the countryside – exist in this world, but local administration is urban, even in a relatively under-developed province like Skyrim, where each of the administrative divisions (‘Holds’) has a capital in an urban settlement, be that a major city for the larger holds (Riften, Windhelm, Whiterun, Markarth and Solitude all seem to be intended as major cities) or smaller towns for the lesser holds (Falkreath, Dawnstar, Morthal and Winterhold). This is a society organized around cities, rather more like the ancient Mediterranean world than medieval Europe in that regard (and given the frequent Roman theming of the Empire, this hardly seems like an accident). Still agrarian – most of what is going on is still farming – but meaningfully more urban.

The Empire is in turn organized into provinces (nine of them) roughly corresponding to the historic areas of settlement of its constituent fantasy races. Cyrodiil is the capital province and by far the largest (only Morrowind comes close and much of it is thinly settled) and most populous – it is the imperial core and its size and population helps explain why the government in Cyrodiil is able to more-or-less (mostly less, by the time of Skyrim) hold the rest of Tamriel. Each of the provinces has its own internal customary local systems of government. That may seem strange but pre-modern territorial empires often left local ruling systems in place when they could and Cyrodiil does as well. In Cyrodiil proper, we see the province is divided into sub-regions (Counties) with a local ruler (a count) who is strongly subordinated to the center. While the position of count is hereditary, the position has very limited authority (as the wiki notes). in practice, Cyrodiil itself is a state with one legal system dictated from the capital and local ‘rulers’ reduced mostly to functionaries who implement that system, rather than independent powers in their own right.

Via the Unofficial Elder Scrolls Page wiki, the map of Tamriel released alongside Oblivion, which has been the standard map of the whole empire since that game. You can see that Cyrodiil is **much larger** than any other province, which is remarkable because it is also more densely peopled than any other province as well.

Outside of Cyrodiil, local communities are organized by local laws under local leaders: Morrowind is still ruled by its Great Houses, each with their own territory, while Skyrim is ruled by its Jarls. These entities retain their own local militaries independent of the Empire and so we ought to understand the periphery here as consisting of vassal polities. In short the state part of the Empire is Cyrodiil (and perhaps small parts of the other provinces), but much of the area it rules is non-state client rulers. That also shouldn’t be surprising: this was the normal structure for a lot of large empires – the empires of the Late Bronze Age come to mind especially. Notably though – and we’ll come back to this – the Imperial Legions (the military force of the Empire proper) maintain pretty obvious ‘escalation dominance’ over Cyrodiil’s vassals (at least until things get pear-shaped in Skyrim).²

So we have a fairly well-consolidated state in Cyrodiil which provides the imperial core for the Empire and then a periphery of vassal state- and non-state polities (mostly non-state, as we see them) which the Empire very much controls. How does the military system map onto that?

Surprisingly well, actually, so long as we account for the limitations in scale imposed by the genre (an RPG cannot have 90,000 men on the screen or it will crash) and the requirement for things like ‘town guards’ (so they player doesn’t murder-hobo entire towns).

The political structure (an imperial government with a core territory that also rules over vassal polities) is mirrored in the military structure: there is both the Imperial Legion but also local military forces. In Oblivion, these local forces (commanded by the counts) are little more than constabularies, something that actually is expressed pretty well in-game by how immediately out-matched they are by the Oblivion Crisis compared to the heavier forces of the Imperial Legion. In Morrowind and Skyrim, the forces of the local governments (the Jarls in Skyrim, the [dissertation on the wonderfully complex government of Morrowind here] in Morrowind) look to be quite a bit more substantial: particularly in Morrowind, one gets the sense that the armies of the Great Houses and of the Tribunal Temple are quite formidable (heavier, more expensive equipment, more magic, and so on), even if not a match for the Imperial Legion itself.³ That makes sense: in order to maintain control, the Imperial Legion has to maintain ‘escalation dominance’ – the ability to win at higher levels of escalation (thus dissuading potential foes from escalating) – over the many regional armies of the empire’s provinces.

Via the Unofficial Elder Scrolls Wiki, a selection of Imperial Legion soldiers, with rank descending from left to right. You can see quite clearly that this is n army with relatively uniform, rank-stratified equipment. The largest difference is gender-based (some armor looks different on women and female legionaries tend to wear skirts in addition to their armor), but by and large the legion is uniform apart from very low ranking recruits.

The major problem with the local military forces is that they appear to be standing forces to a substantial degree. We see a lot of ‘guards’ standing around on duty and such. But in practice, such local rulers aren’t going to have much need for a standing military force on duty all the time: most communities have sporadic security needs and small communities generally do not even require much of a permanent, standing constabulary. Instead, we might expect the permanent force to be a small retinue around the local ruler (we actually do see this in Skyrim with the concept of thanes), but beyond that, we might expect a ‘raised for the moment’ form of military organization: some sort of levy or militia, possibly with a standing component that is just a rotating period of duty among those liable to be drawn into the full militia in an emergency (a select levy to go with the general levy). In that case, ‘guard’ wouldn’t so much be a career as it would be something like a two-week shift every year that you had to do, effectively as part of your taxes.

The Imperial Legion (or legions) itself is also a recognizable structure: it seems pretty clearly to be a professional army. Members of the legion are very clearly deployed far from home (a point often exemplified by the legion’s multicultural recruiting) on a permanent basis and are full-time soldiers. Recruiting seems to be done through volunteers. While we see some recruitment of local auxiliary forces in Skyrim, these tend to be lighter troops and might be local auxiliaries: the clear nucleus of the force, we’re told, arrived with General Tullius from Cyrodiil. The legion is most often stationed in permanent fortifications (we see a lot in Morrowind) or key cities (like the Imperial City in Oblivion) – it is not a local militia and makes no effort to be ‘everywhere.’ Its equipment is remarkably (though not perfectly) uniform even in regions where its styles are distinctly foreign such as Morrowind or Skyrim, suggesting that equipment is state-issued and somewhat standardized. It also seems to be a long-service professional organization: we see quite a few ‘old soldiers’ still serving, both in desk-jobs and in combat roles.

A pair of Imperial Legion soldiers from Oblivion. While they retain some of their Roman theme (including an out-of-place Corinthian style helmet that I think is supposed to give Roman vibes, even though it is Greek-inspired), it is striking how much **heavier** the armor’s design is here than in either Morrowind or Skyrim. It makes the distinction between the plate-armored Imperial Legion and mail-armored town guards very visually striking.

And this is a structure that actually makes a fair bit of sense for a state like this: vassal rulers retain smaller local forces and the Empire largely lets them deal with the day-to-day work of order and administration. Meanwhile, the imperial center, with its greater resources, maintains a large, professional, well-equipped standing army that enables it to coerce those local rulers as well as engage in large-scale warfare. One imagines that, in the event of a major security threat, we’d see the Imperial Legion forces form the core of a field army, probably supplemented by non-legion local forces. The amusing thing is, while I think the developers imagine this structure as ‘Roman-ish,’ the state it actually recalls to me most clearly is the Neo-Assyrian Empire (fl. 911-626) which maintained a core professional army of full-time infantrymen (in matched pairs of archers and shield-bearers) who were then supported by levies drawn up from the empire’s vassals.⁴

The Imperial Legion in Skyrim. It is interesting that the legion seems a bit lighter in terms of equipment in Skyrim as compared to previous entries (although the pseudo-Roman theme remains clear). I wonder if this was an effort to more clearly express that the Empire is ‘on the ropes’ in Skyrim’s time period as compared to previous games, or simply a product of the decision to almost evenly divide the Legion between heavy and light armor troops (whereas Stormcloaks and town guards are mostly light armor types).

What I think is somewhat underdeveloped – especially in Oblivion and Skyrim – is the apparatus to pay for all of this. While other kinds of military systems can have their costs effectively devolved, a state-equipped professional army has to be paid out of the treasury, which in turn demands a state with the ability to raise a lot of revenue. Because it is a volunteer professional army, these soldiers would have to be well paid in order to recruit and retain them. Notably, we do not see in The Elder Scrolls, any indication that these costs are being defrayed by private enterprise war – the Imperial Legion is not a contractor-based army and commissions in its officer corps are not purchased, but awarded based in merit and internal promotion.

Now that’s not to say we don’t see any of that apparatus. The Empire clearly raises revenue both through taxes and through state-chartered monopolies. One of the first things we see in Morrowind is the Syda Neen Census and Excise Office, suggesting both head and excise taxes (excise taxes are taxes on specific goods) and there is a quest related to local tax collection. That said, the tax infrastructure in Morrowind is relatively minimal and that makes sense: most of the game takes place on Vvardenfel, which is only in the initial stages of having imperial control established. Notably, what collection we do see is in ports, suggesting customs and excise taxes may be central here, which also makes sense for a region that is only slowly being brought fully into central administration: port duties and excise taxes on luxury goods (I recall, but cannot find the line of dialogue, where we’re told that the excise taxes are on alcohol) are easier and quicker things to set up.

But what we don’t see is a more focused and intense extraction system in Cyrodiil or especially in Skyrim. By the time Skyrim takes place, the Empire is no longer at peace, but is recovering from a large war and trying to rapidly prepare for its seemingly inevitable sequel, which should demand high revenues and thus that taxes would be high as well. Yet ‘tax revolt’ is nowhere in the Stormcloak rebellion’s motivation (they’re focused more on religious persecution and ethno-nationalism) and we see almost none of the apparatus of extraction that we ought to see for a province that has been long-held by the Empire. The same is broadly true for Cyrodiil, though there are a couple of quests in Oblivion related to things like port taxes in Anvil and such.

Alongside that fairly minimal taxation apparatus, we have another major revenue source, which is the East Empire Company, a fairly obvious riff off of the British East India Company (even borrowing the ‘East’ despite appearing in places like Skyrim that are…not in the East), a massive vertically integrated company with a bunch of state-chartered monopolies on luxury goods. That is a very historically rooted way for a state to raise revenue, of course. The problem is that it isn’t enough. Recall, Tamriel is a complex agrarian society: we see no hint of even early mass manufacture, much less industry, so the overwhelming majority of economic activity is going to be in agriculture and pastoralism. That in turn necessarily means that the revenues generated from something like the East Empire Company are going to be somewhat marginal to the state itself. The Roman Empire had, for instance, a slew of state monopolies (on things like silver mines) as well as rents on state-controlled lands and resources which the Romans collectively called vectigalia, but it is very clear that the large majority of Roman taxes were what the Romans called tributum: taxes assessed on agricultural land or produce.

So what we ought to see in order to complete the Imperial Legions is the infrastructure, particularly in Cyrodiil and Skyrim, for substantial tax collection on the common folk, particularly on agriculture. Now that could be structured in two ways: we could see (as we do in Morrowind) direct imperial taxation, with imperial officials in each settlement assessing taxes themselves. Now those officials might be direct employees of the Empire, but an equally likely solution (which we do seem to see in Morrowind in Caldera, as I recall) are tax farmers: private businessmen who have contracted to do tax collection in an area.

Alternately, the Empire might do what the Romans eventually did: assess taxes on communities and leave it up to local leaders and governments on how to collect those taxes. Given how visible and important local ‘vassal’ rulers are in the Empire, this seems to me the more likely solution: tell the local Jarl or Count or Great House that it is responsible for raising a specific amount of money (or revenue in kind, so a specific amount of grain or recruits or whatever else) and then let them sort it out with their own local administrative apparatus. That said, if this was the system, we ought to hear about it more, especially in Skyrim where the local revolt against the Empire ought to mean that imperial taxes are being collected in some places and are not being collected in others.

All of that said, the fact that the Empire in The Elder Scrolls has a somewhat fragmented structure and then has a fragmented military apparatus – with a professional army enforcing imperial power over a bunch of much smaller local militaries which do the day-to-day work of maintaining law and order – works as a reflection of the society we’re shown. What is missing is mostly just the apparatus of empire itself, which has really been neglected in the setting’s worldbuilding since Morrowind.

The Vailian Trading Company

That said, bringing up the East Empire Trading Company of the Elder Scrolls games highlights one odditiy: the EEC lacks its own military force, instead relying primarily on the Imperial Legion (something we see clearly in Solstheim) and only occasionally on local goons. But of course a massive, state-chartered trading company of this sort is frequently going to have to operate far from the center of imperial control and potentially with local communities that object quite loudly to being so obviously exploited. As a result, these sorts of ‘mega-corps’ tend to operate their own independent military forces: the societates of Roman publicani that managed the tax-farming system (prior to Augustus’ reforms to the largely community-centered tax system mentioned above, though some taxes remained farmed) maintained private security forces we can see clearly in documentary evidence from Roman Egypt, while early modern trading ‘mega-corps’ like the British East India Company or the Dutch VOC maintained full-on private militaries, complete with armies and warships.

But we do see that structure in Pillars of Eternity II: Deadfire. And let me also just say: if you are a fan of classic computer role-playing games (BG3, Wrath of the Righteous, Rogue Trader, Solasta, that sort of thing), you really ought to give Deadfire a spin. It is very good and very tightly written (and the stronger of the two Pillars games). It’s also, I think, a better introduction to Eora than the more recent Avowed and I really liked Avowed.

Here the setting is the Deadfire Archipelago, a smaller region in the larger world of Eora, with three principle military powers along with a fourth minor power (the Principi sen Patrena, a very loose pirate confederation that survives to a significant degree in the shatter-zone created by the other three that we’ll leave aside here) and all three are actually pretty well realized. The actually indigenous local power are the Huana. They are significantly fragmented: the strongest tribe (the Kahanga) are a complex agrarian society with a large capital city (Neketaka) that exert an imperial overlordship over smaller tribes and communities in their periphery. Their society is a caste-based one and their military structure follows that: the priests (including ‘Shapers’ who wield powerful magic) and the warriors both are drawn from the highest caste, the Mataru, which thus acts as a hereditary military-and-religious aristocracy which also – not by accident – controls most of the wealth. Their military is thus drawn primarily from this upper-class, drawing its cohesive principle from the exclusivity and strong social expectations for that class, financed by the wealth of its role as the ruling elite (that is to say, wealth extracted from the lower, worker classes). But of course that system imposes strong limits too: the military cannot be readily expanded beyond those classes effectively and the entrenched class interests of the elite render the Huana military static and unresponsive to new technology – though formidable, their position relative to rivals is deteriorating. As a result, the player’s interactions with the Huana are always contextualized by the Huana leadership’s own sense of growing military vulnerability to incursions from foreign colonial powers, of which they have two.

From Pillars of Eternity II: Deadfire, the Huana capital of Neketaka. The vertical structure replicates the class structure: the military and religious castes are at the top and their trash and refuse **literally** flow down to the artisan and eventually worker castes at the bottom. It is a neat visual expression of the society made all the more striking by Queen’s Berth (controlled by the VTC) and the Brass Citadel (controlled by the RDC) strangling the city economically from the bottom up. The player can side with the Huana, but their rulers are not interested in changing their culture and it is hard to see how their rigid, unchanging social system can hold out against the dynamic, predatory invaders for long.
Deadfire is a **really good RPG** and I really encourage you to give it a try if you haven’t.

The first is the Royal Deadfire Company, which represents the distant maritime kingdom of Rauatai in the Archipelago. The name is something of a euphemism: the institution began as the Rauatai Trading Company, but was brought under the direct control of the ruler of Rauatai (the ranga-nui) and converted into the RDC, which in practice isn’t really a trade company anymore, but an expeditionary force, an army of the government of Rauatai which aims to conquer the region – albeit gradually, because the Huana are still strong enough to make a direct war of conquest a risky proposition. The RDC is thus effectively an expeditionary force of professional soldiers, funded and maintained by Rauatai (itself a large maritime empire) doing ‘ports-and-forts‘ imperialism. Consequently, what we see of them are fortified staging posts (notably Hasongo) to support their navies and channel goods back to the homeland and nearly all of the people we see are military personnel more or less directly employed by the Rauataian state.

Via the Wiki, the Rauataian main base at Hasongo (which has been better days). While there is a port and storage here, you can very visibly see this is a military outpost first and barely a civilian settlement at all. The contrast with the VTC outposts, which almost invariably have a large local population and lots of civilian economic activity, is marked. The RDC is a predatory, exploitative army of conquest, whereas the VTC is a predatory, exploitative company.

Notably, as an aside, we don’t get as much information about the rest of Rauatai’s military that I recall. Honestly, I’d think something like a core army of conscripts might make sense (given how militarized the society is described as being), with only the forces deployed permanently abroad (like the RDC) being composed of professional ‘long-timers.’

In contrast to the RDC which is almost an army of a foreign state, the third power really is a trading company first: the Vailian Trading Company (itself a pretty clear echo of the Dutch VOC, down to the similar acronym). One oddity worth noting is that the VTC is not attached to one state, but several, representing the combined efforts of the Vailian Republics, a loose confederation of city-states. The nearest historical parallel here may actually be something like the historical Hanseatic League. But where the RDC is essentially an arm of the Rauataian state, the VTC is doing something different: private enterprise war. The VTC is a company, run by a board of directors, answerable to investors in the Vailian Republics under a charter sanctions by their confederation.

From the Wiki, the banner of the Vailian Trading Company. The five stars are meant to indicate the company is recognized by all five of the major constituent Vailian Republics.

And (unlike the EEC of the Elder Scrolls series), it has its own military to secure and advance its operations, every bit as predatory as the RDC. And what we see – and I think this makes sense for the society being presented – is a contractor-based military. Indeed, we meet one of these contractors, Atello Valera, who the VTC has contracted to provide a pretty large security presence, including a number of warships. What I do think is missing here is a greater array of contractors and sub-contractors. Realistically, we might expect the regional heads of the VTC (Ignato Castol and Lueva Alvari, who split maritime and land-based operations between them) to have a few key contractors (whatever the Vailian equivalent to colonels or condottiere is), who would then have sub-contractors running individual ships or companies, with basically everyone in the chain effectively functioning as a sort of ‘military entrepreneur.’ We do get a real sense of that entrepreneurship from the Valeras, but they ought not be the ‘only game in town’ on the military side.

From Pillars of Eternity II: Deadfire, some VTC troops. There’s actually neat visual storytelling here. The soldier on the far left is a company guard and by far the heaviest armed. Next the three fellows in the one picture are Valera family soldiers, their lighter equipment fitting with the fact that Valera is a **naval** military contractor. Meanwhile the two figures on the far right are soldiers contracted under the Bardattos and resemble more closely the ‘average’ VTC soldier we see throughout the game.
The VTC, in short, has a bunch of different people contracting soldiers for different tasks, so while there’s a clear cultural similarity in their equipment, it isn’t uniform (unlike the RDC, which is quite uniform!)

That said, I think Deadfire actually does a good job of correlating militaries and societies: the Huana, Rauatai and Vailians have quite different societies and thus quite different militaries: a warrior-class military with devolved costs that fits the caste-based Huana society, a professional military with standardized state equipment and regular pay that fits the very centralized Rauataian state and finally a private enterprise warfare military using military contractors that fits the decentralized structure of the Vailian Republics.

Defending Baldur’s Gate

Now we turn to the unusual military structure of Baldur’s Gate, drawing not just on the recent Baldur’s Gate 3, but more broadly on the lore of the city as part of the Forgotten Realms setting. We’re picking one city to focus on in part because it has become the most visible part of the Forgotten Realms’ setting and also because, to be frank, the military, social and economic structures of the Forgotten Realms are kind of a mess. That’s not necessarily a harsh criticism – this was a setting built for specific purposes (facilitating D&D gameplay) rather than worldbuilding verisimilitude. But that still makes them interesting to talk about from this perspective because they often test public assumptions about what pre-modern societies look like.

(Note that in BG3 one of the major plot-points is an effort by one of the villains to unbalance the city’s military system by adding on an army of evil metal golems to it, in a bid to take over. I’m going to leave that part out here, because the Steel Watchers aren’t part of the stable military system of Baldur’s Gate. Ironically, if Gortash had succeeded, the military system of Baldur’s Gate would make a lot more sense: you’d have a tyrant monarch who ruled the city by virtue of controlling its military.)

Via the Wiki, a screenshot of Baldur’s Gate as it appears in Baldur’s Gate III.

Baldur’s Gate, in the setting, is a major seaside mercantile city with a large population, clearly part of a larger complex agrarian society. Its upper-class are wealthy burghers (rather than large landowners) and it is ruled by a council of four ‘grand dukes’ who are elected for life.⁵ It is also a big city by pre-modern standards: the wiki figures a population around 120,000 or so in the urban area.

Now one thing in the lore is that because the city has a natural defensive position (it is located on an inlet) and because it has a very strong outer wall built by the heroic figure Balduran, for whom the city is named, that it is generally peaceful and does not necessarily require a large army. The problem here of course is that Baldur’s Gate doesn’t just need to defend the city core, it needs to defend the agricultural hinterland that feeds it. This is a common problem in fantasy worldbuilding – cities divorced from the agricultural lands they require to survive. Nor can this issue be salvaged by saying the Baldur’s Gate is a city that lives on trade and such. These are agrarian societies, which is to say that food production (via farming) makes up the lion’s share of the economy, with textile production (also via pastoralism, agriculture and peasant labor) making up quite a lot of the rest. Consequently, in the absence of industrial production, there’s no amount of economic activity you can be doing in the remaining small slice (think 10-20% at most) of the economy that is going to allow a city to import all of its food and fabric. The only activity that can manage this feat is empire: the (violent) extraction if someone else’s food and fabric, in which case you still have a hinterland, it is simply held by force and coercion.⁶ The city needs a hinterland and it needs to be defended.

That said, Baldur’s Gate does have an army – indeed it has one-and-a-half armies, in practice. Order in the upper city is kept by an armed constabulary called The Watch which, according to the Wiki, has about a thousand members, of whom perhaps 300 or so are on active duty at any given time, making this effectively a civic militia. What keeps the Watch from acting fully like a military is that they are not empowered to operate outside of the city walls. Amusingly to me, this force of – at any given moment – 300 active soldiers and 700 or so reservists, somehow rates a high command with six major generals and two more senior generals despite being no bigger than a battalion (which would normally by commanded by just one major or captain in our world).

Instead, the main force of Baldur’s Gate’s defense is the Flaming Fist, a mercenary company kept essentially on permanent retainer by the city. It is a standing, effectively professional force, organized on the employment principle, consisting of – according to the wiki – approximately 2,000 soldiers (with a peak strength of 6,000). The Flaming Fist was founded by a grand duke and it seems like its leader (the marshal) is generally one of the four grand dukes that governs the city.

Via the Wiki, the Flaming Fist doing some recruitment.
It is striking how heavy and expensive their equipment is. Maintaining this organization on a permanent basis would be **extraordinarily expensive**, which if I was a citizen of Baldur’s Gate would get really frustrating, because as far as I can tell the Flaming Fist’s job is to spend the first two acts of every story about the place losing until the heroes show up and save everyone.

And there are a few problems here. The first is a problem that afflicts a lot of Forgotten Realms armies which is this is not enough army. A city-state with more than 100,000 people in the core urban area certainly ought to be able to muster up a much larger army. Medieval Ghent had a population by the late Middle Ages around 50,000 and was able to put something on the order of 8,000 men on the field to fight against the city militia of Bruges in 1382 and they were outnumbered by the Bruges militia. Baldur’s Gate is well over twice the size and yet has a far smaller total force. Indeed, its fairly close in size to Classical Athens (especially if we account for the missing rural countryside a city of that size must have), which was able to deploy more than 12,000 men against Syracuse, supported by roughly 200 triremes (so around 40,000 rowers) and was able to recover from the total loss of that force.

But that size problem gets us to an underlying problem in matching up this type of society, its resources and security needs with the kind of army it has. If we put the Watch aside for now, the primary defense force for Baldur’s Gate are the Flaming Fists and while the lore describes these fellows as a mercenary company because they sometimes take jobs outside of Baldur’s Gate, they’re really a standing army. No one is going to mistake your mercenary company for an independent outfit if it is also traditional that the marshal of the company is also one of the four elected leaders of the city. That’s not an independent mercenary company being hired, that’s a political alliance with Baldur’s Gate enabling another community to gain the protection of its army.

But you may recall as we discussed recruitment and payment principles that the state-supplied (the Flaming Fists have standardized equipment), full-time, long-service professional army is almost exclusively a creature of large, well-administered empires and there’s a reason for that. For one, only such a large and complex state is capable of mobilizing the resources necessary for such an expensive system and equally only large empires have the kind of round-the-clock security needs to justify one. That is, after all, the feature that makes professional armies so expensive: they have to be fed, paid, housed and equipped in wartime as well as peacetime – there is no option to simply send the men back to their homes and jobs. Thus, while smaller states might maintain a small standing force – a prince’s retinue, a small elite unit or a constabulary force – their military is not built around that force, it is built around forces which can be expanded and contracted to fit changing security needs.

As an aside, this is part of why we can’t just say the Flaming Fist function basically as a condottieri force. Italian states raised condottieri in response to specific military threats – they did not maintain them continuously in peacetime. Indeed, one of the key advantages of condottieri was precisely that: you could pay them in war time and not pay them in peace time, though of course they were also famously untrustworthy.

The Flaming Fists also do not fit the political structure of Baldur’s Gate. There is a reason that states which do use standing armies tend to have a unitary power structure, like a monarchy, because the very nature of a long-service standing professional army is that whoever wields that army is the state. Baldur’s Gate is ruled by four high officials who serve for life, three of whom collectively share control over a gendarmerie of 300-part timers and one of whom has control over and the loyalty of a standing for of at least 2,000 professional full-time soldiers. That is a system that becomes a monarchy very fast. Political power here is fragmented, but for some reason military power is not, which is hardly a stable structure.

And finally, the Flaming Fists do not fit the social structure of Baldur’s Gate either. This is a city dominated by a class of wealthy burghers (the ‘patriars,’ a clear riff off of Roman patricians), whose wealth mostly comes from trade or non-agricultural business. That’s fine – there really should be a landholding aristocracy somewhere too – but the problem is that this class is nowhere represented in the military structure. It’s the ruling class, whose interests the military system is intended to protect yet these families do not make up the elite of the military, nor its officer class.

We can effectively go in two directions ‘fixing’ Baldur’s Gate: we can make the society fit the military or the military fit the society. In the first direction: a city which has a professional military force that answers to just one guy (the marshal of the Flaming Fists) isn’t going to be an oligarchic quasi-democracy. It is going to be some kind of autocracy: the marshal is going to be the autocrat who sets the rules, de iure (as a monarchy) or de facto (as a tyranny). In this case, the weakness of the Watch makes sense: this was the city’s old militia, now sidelined because it would threaten the power of a tyrant-marshal, who is probably also busy breaking the power of the old ruling class (the patriars) and consolidating their wealth into his own political network. Alternately, we might get a sort of monarchy-within-bounds as we see in Venice and to an extent (with its two kings) in classical Sparta: a single leader does have command over the military, but the rest of the political system is heavily focused on constraining that leader, to the point that they have officials whose sole job is to watch their every move and there are other political institutions empowered to unilaterally remove a marshal who behaves badly. Even then, a purely professional force seems like a recipe for a self-coup in which the marshal sidelines everyone else because he alone commands the loyalty of the Flaming Fists, whatever the political system may say.

The alternative is to come up with a military system that fits the society we see: a somewhat representative oligarchy (with some democratic elements) primarily lead by a handful of elite families that wield outsized wealth. That kind of society has little need for a large standing army at all: the people with goons are also the people who wield political power and so the system they need is one that catches petty thieves and resolves disputes between each other, not a system to garrison whole districts of the city. The Flaming Fists are unnecessary for such a society (though the Watch as a gendarmerie which serves the collective interests of the patriars might survive).

Now those elite families could tax themselves extremely harshly in order to maintain a meaningful standing army but why would they? Instead, we ought to expect that Baldur’s Gate would defend itself with a civic militia that mirrors its own social structure: the very poor are excluded (and probably don’t vote), while the bulk of the burghers fight as infantry (and have some token political participation) and the patriars serve as officers and cavalry (and have maximum political roles). Because the patriars – or the middling burghers – would rather not tax themselves, they’re going to devolve military costs: everyone buys their own kit and serves based on wealth. That system might take the form of the sort of conscription-based civic armies we see in Greece and Rome or it might take the form of medieval civic militias, like the aforementioned schuttersgilde. If the latter, we should expect those military guilds to be major political actors in the city’s governance, either de iure (they have fixed places on the ruling council or whatever) or de facto (their members just tend always to get elected). Crucially, unlike the Flaming Fists, they wouldn’t be external to the city’s class system, but tightly integrated into it.

Conclusions

This series has ended up rather a lot longer-winded than I intended, but what I hope it has served to demonstrate first is that not all societies have the same sorts of armies. My critiques here have focused mostly on complex agrarian societies, because this was a series for worldbuilders and that is most of what fantasy worlds get made out of, but of course the armies of nomadic pastoral peoples or hunter gatherers are really different as well.

Importantly, societies do not pick their military structures at random, nor are they necessarily free to pick and choose whatever military system they like. Instead, military systems, which are defined by the interaction of principles of recruitment, methods of mobilization, systems of equipment, payment and supply and sources of cohesion are generally long-standing legacy institutions that emerge alongside larger social structures. Individual leaders are rarely at leisure to change or redefine these systems (though it does happen sometimes).

Perhaps most importantly, these systems are invariably tightly connected to the structure of a society and its political organization. No army can help but recreate its civilian social structures on the battlefield. So a society in which the dominant political and economic force is a mass of middling farmers who elect their leaders are likely to form armies composed of a mass of infantrymen who elect their generals. A society in which a handful of elites lord over the disenfranchised and largely impoverished peasantry is likely to have armies centered on mounted elites, with infantry that is limited and unreliable at best. More complex forms of organization, like private enterprise war with military contractors or standing, long-service professional armies, demand states with matching levels of revenues and complexity as well as a set of security needs which demand these expensive, complex and difficult solutions to the problem of raising military force.

While those rules may feel constraining, I think – and I hope in this post and the last, I’ve shown – they can also, for the worldbuilder, offer storytelling opportunities. After all, if armies reproduce their society’s social structures – often more explicitly than the civilian society itself – that means any time an army is ‘on screen,’ it provides an opportunity to say something about the underlying society. An observer who noticed, for instance that British military leadership in the early 1900s was generally drawn from the same handful of schools would have learned something about the structure of power in British society. The same might be said if the person glanced at Europe and noticed that despite its modern industrial economy, most of the high military command of early 1900s Germany in the first World War continued to be drawn from the old Junker class (visible because of the ‘von’ in their names), a trend which continued into the second.

And indeed, someone who glanced at the modern American military and noticed that American officers functionally always have college degrees, that high ranking officers generally have advanced degrees and that American enlisted personnel generally do not have either will have learned something about the structure of class, power and wealth in the United States: our ruling class is defined more by where you went to school and for how long than by your last name or hereditary titles (which we do not have). And the military cannot help but replicate that structure.

The same is equally true in fictional worlds. Of course one shortcut to producing these kinds of interesting linkages is to adopt a historical pattern wholesale by imitating a real polity and making modest changes. That said, it can be equally interesting to think about the implications of odd combinations, especially for societies in transition. Because, of course, societies are never static things and as they change – be that change swift or slow – their military structures will be forced to change with them, or else will be bent and deformed by the attempt not to change. In fiction, civil-military failure can be as interesting as success.

And in the end, a society whose institutions are interwoven and interlinked – as all real societies are – is just more interesting to read about than a fictional society which is a mere jumble of tropes.