Thorin’s Deal

For the past few months, I’ve been memorizing The Hobbit as part of a project of mine to have a look at how (my) memory works. So far I’m towards the end of Chapter 2. The poetry is the hardest to work with, with some remarkably lame lines–“the fire was red, it flaming spread.” Maybe that’s a Tolkein commentary on dwarf song-writing ability. But onward. The Hobbit is a story about a contract between a company of dwarves and a small foot-furry human-like creature that lives in a very comfortable hole in the ground built by his father.

The Hobbit begins with Gandalf the wizard choosing the unsuspecting, adventure-averse hobbit Bilbo (about half our size, smaller than the Bearded Dwarves) to join thirteen dwarves, led by no other than Thorin Oakenshield himself, in an expedition to recover their treasure stolen by the greedy, strong, and wicked dragon Smaug. After an unexpected party that depletes Bilbo’s supply of seed cakes and much of his alcohol, Bilbo sleeps in while the dwarves create havoc in the kitchen getting their own breakfasts before taking off. Gandalf shows up after Bilbo has cleaned up the dwarves’ mess to point out to Bilbo that the dwarves have left a note in which they accept his offer to join them, and that he has only ten minutes to huff and puff a mile or more to get to the Green Dragon Inn on time–which he does, but without his hat or a pocket handkerchief.

The arrangement by which Bilbo comes to join the dwarves’ expedition is rather convoluted. Biblo eventually chooses to go along, but at the outset, it is a matter of Gandalf the wizard’s choice. “In fact I will go so far as to send you on this adventure–very amusing for me, very good for you–and profitable too, very likely, if you ever get over it.” For Bilbo, it’s a matter of being chosen, almost (but not quite) randomly, rather than making a voluntary promise in exchange for a consideration.

Bilbo at first will have none of Gandalf’s proposal, but when he overhears the dwarves questioning whether he is up for the task, he decides that he is–or, rather, the adventurous Took side of him decides–and he confronts the dwarves with an unconditional offer: “Tell me what you want to have done, and I will try to do it, if I have to walk from here to the East of East and fight the wild Were-worms in the Last Desert”–and thus Bilbo’s adventure and the locus of Dune were created in the same moment.

After Gandalf makes it clear that his choice of Bilbo is the right one–“And here is our little Bilbo Baggins, the burglar, the chosen and selected burglar”–Bilbo asks for details on the deal:

“All the same, I should like it all plan and clear,” said he obstinately, putting on his business manner (usually reserved for people who tried to borrow money off him) and doing his best to appear wise and prudent and professional and live up to Gandalf’s recommendation. “Also I should like to know about risks, out-of-pocket expenses, time required and remuneration, and so forth”–by which he meant: “What am I going to get out of it? and am I going to come back alive?”

Thorin launches into a history of the dwarves and the dragon and never does get around to answering Bilbo’s questions. Thorin’s history provides indications that the dwarves are, well, let us say, somewhat compromised. Thorin goes out of his way to explain that he just happened to be close enough to the mountain that he could watch the dragon land on the mountain and spread fire everywhere but far enough away that he could not help the other dwarves fight it off. Then his father and grandfather, the King under the Mountain, show up, having escaped the mountain through a secret passage–but without saving any of those also trapped inside as the dragon routed everyone out. Thorin fingers the gold chain around his neck, another of the “desire in the heart of dwarves” for things made by hand, by cunning, and by magic–jewelry, armor, and toys, especially.

But clearly, Bilbo expects there to be some sort of deal. And that’s what Thorin’s note addresses. Let’s have a look.

Here’s the key part of Thorin’s note:

Thorin and Company to Burglar Bilbo greeting! For your hospitality our sincerest thanks, and for your offer of professional services our grateful acceptance. Terms: cash on delivery, up to and not exceeding one fourteenth of total profits (if any); all traveling expenses guaranteed in any event; funeral expenses to be defrayed by us or our representatives if the need arises and the matter is not otherwise arranged for.

Bilbo’s offer to do whatever needs to be done is accepted, and Thorin states some terms. So in a sense, there’s still no deal until Bilbo accepts those terms. And they are interesting terms. Bilbo is to burgle the treasure from Smaug, and he gets paid when he has done so, plus his traveling and perhaps funeral expenses whether he gets the treasure or not.

So no pay for any other services provided if he fails at the primary mission. But what is he looking at by way of remuneration? Thorin’s offer is problematic. First, it is based on “total profits”–not total amount burgled, but profit, presumably after the recovery of whatever expenses have to be incurred to pay for the expedition (and, say, the people of the town of Dale, who it turns out demand a share after the dragon, enraged by Bilbo’s initial burgling of a cup from his treasure trove, destroys the town). As Thorin points out–“if any.” So the dwarves might well arrange it for there to be no profits, or less in the way of profit than in, say, the current market value of the recovered treasure. Push this idea of “profit” further. Does all the treasure have to be sold for profit to be determined–income less cost of sale (perhaps including delivery to the buyer)? Or is “profit” just a loose word for “whatever we happen to get”?

We know that Thorin likes to use a “high style” of speech, with big words that don’t necessarily communicate anything. As gets into a speech on the occasion of setting out on their journey, he pontificates until he is “rudely interrupted” by Bilbo having a melt down at being called “audacious” and “fellow conspirator.” As the narrator describes it, “Thorin was an important dwarf. If he had been allowed, he would probably have gone on like this until he was out of breath, without telling any one there anything that was not known already.” So perhaps “profit” is just Thorin high style, and it doesn’t mean anything particular. After all, if Thorin’s offer is top-capped, then perhaps Thorin doesn’t mean anything by his terms other than to compose something that looks and sounds like terms.

Thorin’s terms do offer Bilbo a share of the loot–but it is top capped, not bottom capped: “up to and not exceeding one fourteenth.” Well now, “up to” implies it could be less than the cap, and how would that be determined? One would expect a bottom cap–no less than one fourteenth (and perhaps more if not all the dwarves make it back alive). But no–it’s the other way. Thorin might not have to pay a brass ring to Bilbo. Or he could just pay only in brass rings, and less than 1/14th of even those.

Smaug warns Bilbo about deals with dwarves, when Bilbo finally gets to meet up with the great dragon: “… don’t have more to do with dwarves than you can help!” warns Smaug.

And I suppose they are skulking outside, and your job is to do all the dangerous work and get what you can when I’m not looking–for them? And you will get a fair share? Don’t you believe it! If you get off alive you will be lucky.

Smaug goes on to point out the problem of getting all of the immense pile of treasure out of the mountain, and from there getting any of it back home:

“I don’t know if it has occurred to you that, even if you could steal the gold bit b bit–a matter of a hundred years or so–you coould not get it very far? Not muc use on the mountain-side? ot mucuse in the forest? Bless me! Hd you never thought of the catch? A fourteenth share, I suppose, or something like it, those were the terms, eh? But what about delivery? What about cartage? What about armed guards and tolls?

Bilbo begins to worry that Smaug is right and the dwarves had left out terms to his disadvantage on purpose. If nothing else, the lack of detail in the terms–and the failure to address all sorts of things–is a decent lesson in flushing out the details when one can.

But this dwarf-hobbit deal is not a contract in our usual sense, as there’s no mechanism to enforce it, and it’s so ambiguous that who could say what the understanding is, beyond Bilbo will get some share of something if he delivers anything. The paper, the words, are backed not by courts but by something akin to honor, and to whatever alternatives one might have, if one does get access to a dragon’s treasure. One could go on until out of breath with details and still have no recourse if something went south. Of course, as it turns out, Bilbo does decide on his own interpretation of the terms in his effort to stave off a war with the folk of Dale that has him defecting on Thorin–in a sense to save Thorin from his own dwarvish refusal to compensate the people of Dale for the damage they have sustained.

What’s our take-away from this deal? The terms are incomplete, the arrangements are not enforceable, the offer a share of the treasure doesn’t take into account that Bilbo is expected to take much more risk and yet get only as much as any dwarf that comes along and doesn’t do much of anything (Bombur, say). And yet, that share of a fabulous treasure is beyond any sort of reasonable compensation, even for taking great personal risk in dealing with a dragon (or any sort of existential risk). In a sense, then, the deal can’t possibly be judged based on a proposed 7% share (call it a royalty rate). And it is a deal that can’t be enforced–it’s a matter of honor, and for all that, it could be made up as things go. The articulated terms are merely a starting point, just enough to confirm acceptance–and it’s clear that Bilbo doesn’t worry the terms anyway. In the moment, at Gandalf’s urging, he chooses to go, for the adventure of it, despite his aversion to adventures.

How off is that? A suggestion: not really that far off at all. Perhaps the best deals of all are ones that depend on a choice without a deep focus on terms, knowing that things aren’t all that enforceable, and an expectation that there will be an honorable resolution, with lots of alternatives in play if there’s not. It’s a different way of thinking about deals. Maybe it’s worth considering how such things work, even in a world full of institutional demands for everything to be written out, reviewed by attorneys, as if that somehow doing so is prudent and professional, even if the outcomes don’t indicate that things are done any better than if there were still honorable deals, done, say, with a handshake, or even just by showing up on time to the Green Dragon Inn.