March 20, 2026
(Here at Working Profit, you get stuff that you just don’t get anywhere else…)
Michael and I visited the movie set of the Shire on that beautiful farm in New Zealand. Just as the Italians have shamelessly pounded Pinocchio to sell a century’s worth of tchotchkes and souvenirs, so the Kiwis have co-opted the Lord of the Rings. Believe it or not, 500,000 people per year visit the set of the Shire.
So, the other evening, we watched the final movie in the Hobbit series (different than the Lord of the Rings trilogy), The Battle of Five Armies. We made pizza and we pulled the cork on a Vino Nobile de Montepulciano (as a nod to Pinocchio) and had a blast. Anytime you have a movie featuring incredible amounts of hair, and furry vests, and declaring and fierce stares and names like Torin Oakenshield, you’ve got high camp and entertainment. And it was. The movie got a 59 on Rotten Tomatoes but we disagree. We gave it a Pizza 100.
But as we were watching the movie, I was struck by the economic construct of the Shire and the Hobbits and the Dwarves and the Elves. And the Orcs. And here is my take on it…
The Hobbits live in an agrarian worker’s commune. They do not appear to import anything, nor export anything. Production is limited to food and simple garments. Mead is the drink of choice.
“Mead, often called “honey wine,” is one of the world’s oldest alcoholic beverages, created by fermenting honey with water and yeast. It typically ranges from 3.5% to over 20% ABV and can be dry, sweet, still, or sparkling. While traditionally just honey and water, it is frequently flavored with fruits, spices, or herbs.” Claude
Two things stand out. First, all we see is plain old Mead, none of that fancy stuff. Second, we did not see a single beehive the entire tour of the Shire. Odd…they’re widespread in that part of the world. I can only conclude there is a narco-honey cartel at work in the Shire…Samwise Gamgee, Frodo’s friend is my bet.
I am unaware of any currency that floats the Shire’s boat. If they had one it would be called the Acorn, I think. So it would appear that simple bargaining dominates commerce. But, there is no government either, so the Shire is presumably full of people who act in their own self-interest. They have evidently elected three squares and Mead as their self-interest.
The Elves are interesting. My question is this: Where do they get the money for, and where are their Armani and Gucci outfits purchased and manufactured?
Bloody fortune to outfit Elves!
Legolas: (sternly). I’ve got the credit card bill here!!!! (waves it in the air)
Galadriel: Oh. Ah…
Legolas: What do you think, we’re made of money?
Galadriel: OK. Well. Do you have any idea how much money I saved you?
Tolkien is silent on their source of wealth. They appear to do nothing, other than glide around and look ethereal. There is no worker class, no serfs or similars. Did you see any dry cleaners at all in the movies? Who keeps that stuff clean? What do they do when they need a seamstress?
Hobbits take note: Massive opportunity there for you.
So, I just don’t see any economic output to generate wealth. And yet, those clothes and the beautiful homes and the cool silver headbands. Where does it all come from? It’s a poser for sure! Narco-honey cartel? Hmmm?
Dwarves are easy enough. First, they have zero costs in regard to haircuts, hairdressers, razors, hair product and so forth. Unlike the Elves, their wardrobe costs are essentially nil…a furry vest, some Crocs for the feet.
Dwarf Son: Dad, I’ve finally made my career decision!
Dwarf Dad: (eagerly)I’m all ears!
Dwarf Son: I’m opening the first Dwarf men’s hairstyling boutique and spa.
Dwarf Dad: (Pauses, incredulous) What? Are you s***ing me?
Dwarf Son: (spreading hands in front of him) Ulfar’s Dwarf Cave! (smiles)
Dwarf Dad: Idiot!
Could have been worse Dad. He could have opened the first (and probably last) Gillette Razor store.
As much as I can surmise, there is no organized society and so there no economic input and output. It would appear they spend their time brawling, oathing, sharpening weapons, drinking Mead and looking fierce. I have checked, there is no economic value and so, no output value to that. Thus, I have to assume their entire source of income is derived from what they lift off their unfortunate opponents, lying prone, inert on the battlefield.
Helga Dwarf: Off to work my lovely?”
Harbeck Dwarf: (growling). Yep! Sharp work to be done today!
Helga Dwarf: Can you pick me out maybe a gold bracelet? Birthday!
Harbeck Dwarf: Never ends.
Finally, we get to the Orcs.
Initially, I found them difficult to analyze. Where do they come from, how do they spend their idle time? Certainly not at the dentist!
Azog: I’m thinking of switching to Colgate. What do you think?
Balzog: Probably beats using pebbles.
But then I thought about their two basic characteristics:
Physically brutish and violent by design.
Capable of speech, crude craftsmanship, and warfare.
And then, it hit me:
It is where rugby players go to toughen up. And who has more of them than New Zealand?
And so, it all came together. The Orcs are ruled by the fearsome Lord Morgoth. He’s got the franchise. He’s like the Richard Penske of Orcs. Makes serious coin!
Basic deal: Give me your players. We make war regularly. 60/40 split on plunder, less any weapons replacement costs. We have six-month, one-year and two-year courses. Our most popular, the One Year Platinum:
Classes in Effective Plunder (too many players are unfocused), Snarling, Diet. It takes time to learn how to be omnivorous but customers report food savings more than pay for the costs!
This entirely explains the lack of manufacture (other than anvils and hammers pounding weapons). It explains the Orcs wonderful espirt de corps…they always have the best spirit! The enthusiasm they bring to their work. It explains their seemingly endless appetite for mayhem, constant physical training and abuse, diet.
And so, the economies of the Lord of the Rings. Pretty basic, not too complicated. No taxes (!!!) no regulations (!!!) no heavy hand of government!!!
You might be tempted to say it explains the primitive nature of their societies. But I have to tell you, if you spend enough time down here in Florida, you will find Middle Earth echoing from time to time. Orcs, Elves, Hobbits…they’re all here, except we are much more particular about our diet: Landshark Lager and conch fritters are mainstays.
I mean, we’re not barbarians down here in the Swamp Shire.
Thoughts, questions, or reflections? I’d love to hear them. You can reach me anytime at anthony@workingprofit.com
