Shakespeare the economist.

Beneath the poetry lurks a mind uncannily alert to the costs and benefits of every human transaction.

I am happy to bring you a guest post from the splendid Rohit Krishnan who writes Strange Loop Canon, all about Shakespeare and economics.

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Paid subscribers can join this chat thread about Pride and Prejudice. The book club meets on 16th February. The next Shakespeare book club is 23rd February. We are discussing The Comedy of Errors. I strongly recommend watching this version from the Globe.

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Moral money

Shakespeare was a very good amateur economist, for which he gets very little credit. He had to be, to bring his stories to light, to be a true observer of human nature, since human nature is inextricably tied up with the economy. From business dealings in Venice to fights over land in Britain, Shakespeare looks at themes like wealth, poverty, trade, debt, and the moral issues around money.

Even marriages and friendships are intertwined with financial dealings. In The Merchant of Venice, the bond between Antonio and Bassanio is not just friendship but also involves monetary loans. Bassanio seeks to marry Portia not only for love but also for her wealth, to resolve his debts.

He wrote in Elizabethan England, a time rife with changing financial concerns, social hierarchies changing as there’s the rise of the middle class, the rise of mercantilism and trade, and changes in land rights. Shakespeare sets his stories in Venice, Rome, Britain, and beyond, but his abiding preoccupation is the universal pull of money and how it shapes life’s romances and tragedies.

All times seem tumultuous when you look at them closely enough, but with Shakespeare you can see the impacts of the changes being made manifest in the stories he tells.

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Debt

The Merchant of Venice is famously about Antonio, a Christian merchant, and Shylock, a Jewish moneylender. It centers around the conflict between trade and lending money at interest—a big issue in Shakespeare’s England, where charging interest was often frowned upon.

In the late 1500s the usury laws were strict! There was a parliamentary act against usury in 1571 which legalised interest rates of up to 10%, but even this found strong moral and religious opposition. Christianity traditionally condemned the practice of profiting from lending money.

Shylock is an outsider because of his religion and his job. He lends money, which makes people dislike him, but it's how he makes a living in a society that doesn't accept him. When he makes a deal with Antonio, asking for a pound of flesh if Antonio can't pay back, it shows how serious debt can be.

In Act I, Scene III, Shylock says:

You call me misbeliever, cut-throat dog,
And spit upon my Jewish gaberdine,
...
Well then, it now appears you need my help.

The play criticizes the hypocrisy of people who hate moneylenders but still need them. As David Graeber wrote, societies decry moneylenders but exploit them anyway. And we’ve had the same conversations after the 2008 crisis!

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Trade

Let’s look beyond. In The Merchant of Venice, Antonio’s ventures represent the business spirit of the time, with international trade growing but full of risks. His success depends on luck and nature, showing the full breadth of early capitalism.

It’s part of the Elizabethan era, both in the rise of mercantilism and international trade. East India Company was chartered in 1600!

Or we can see how Antonio’s wealth comes from trading by sea, a dangerous venture. He has invested in many ships, hoping to spread the risk out. He invests in multiple ships bound for different destinations, spreading his risk, as portfolio diversification.

And then when his ships are lost, it shows how risky global trade can be. Also not a facet of life that’s untrue today.

Iago’s manipulation of Othello plays on insecurities about race, trust, and social status. The play subtly comments on how economic factors mix with personal relationships and societal biases.

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Wealth

We can go broader, look at the very root of the problem. At wealth. In Timon of Athens, Shakespeare tells a warning story. Timon was a nobleman who gives generously but ends up broke. His gifts and parties make people praise him, but when he runs out of money, those friends leave him.

In Act II, Scene II, Timon’s steward, Flavius, says:

What shall be done? He will not hear till feel:
I must be round with him, now he comes from hunting.
Fie, fie, fie, fie!

Flavius is worried because Timon is spending without care and not managing his money well, when someone ignores financial realities to gain social approval.

After losing everything, Timon becomes bitter and moves to the wilderness, where he finds gold. And instead of using it to rebuild his life, he funds a war against his city, showing how disillusioned he is with society's values.

Shakespeare also talks about property and inheritance. King Lear looks at how wealth, power, and family ties interact. Lear decides to split his kingdom among his daughters based on how much they say they love him, leading to a tragic tale. Montaigne’s essays, particularly “Of the Affection of Fathers to Their Children”, discuss themes like the folly of relinquishing control and the nature of authority, which may have influenced King Lear.

Act I, Scene I, has Lear saying:

Give me the map there. Know that we have divided
In three our kingdom; and 'tis our fast intent
To shake all cares and business from our age,
Conferring them on younger strengths...

By giving up his authority and dividing his wealth, Lear upsets the normal order. His daughters Goneril and Regan’s endless desire for power and wealth shows how economic ambition can corrupt.

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Economic Mobility

Shakespeare often shows the complexities of social hierarchy and the chances for moving up economically. In Romeo and Juliet, the feuding Montagues and Capulets are both wealthy families, and their wealth gives them power in Verona, full of lavish parties and extravagance.

Characters like labourers and artisans in plays like Julius Caesar and A Midsummer Night’s Dream offer a look into the lives of the working class. In Henry IV, Part I Prince Hal spends time with commoners at the Boar’s Head Tavern. His interactions with Falstaff and other lower-class characters show the fluidity of social boundaries and his ability to move between different social levels. This duality comments on leadership and the importance of understanding people from all economic backgrounds.

Falstaff himself struggles to survive economically. His schemes are driven by a need for financial security, often crossing moral lines. To be part of the upper class is to have the financial wherewithal to act like it.

In Julius Caesar, the opening scene shows common people celebrating Caesar’s return, only to be scolded by officials:

You blocks, you stones, you worse than senseless things!
O you hard hearts, you cruel men of Rome...

This shows the contempt the elite have for the masses and power of public opinion.

Coriolanus too describes tensions between the ruling class and the common people. The food shortages and the plebeians’ demand for fair prices, and the value of labor. The character Menenius uses the “fable of the belly” to argue that different social classes are like parts of a body, each with its role.

Shakespeare anticipates themes of class struggle and the labor theory of value, which would later be central to economic thought.

As Henry Oliver explained so well:

Indeed, the play focuses on the idea that Coriolanus has brought far more wealth to Rome through battle than the people have through labour. Indeed, one interesting question is why Shakespeare shows so little sympathy to the people in Coriolanus when their complaint is that the state has hoarded grain from them.

One answer is that Shakespeare was a grain hoarder himself. He was prosecuted for grain hoarding in 1598. Crops were unreliable in the late Elizabethan and early Jacobean period, and riots were thought to be a major risk in the early seventeenth century.

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Monetary Policy

And it’s not just about characters having concerns regarding money or trade, it’s the whole economy itself. Go broader. In The Second Part of King Henry VI, there’s a scene where Jack Cade leads a rebellion that includes the goal to eliminate money:

All the realm shall be in common, and in Cheapside shall my palfrey go to grass.

I don’t know if this is crypto-utopian or anarcho-socialist, but Cade’s utopian vision hints at abolishing private property and currency.

Cade’s rebellion is portrayed as misguided. As many of you reading would also agree. Shakespeare here talks about the complexities of economic systems and the challenges of managing a currency without causing social upheaval, a particularly modern idea that wouldn’t go out of place at Santa Fe complexity conferences.

He also is possibly making a note against Thomas More’s Utopia, noting that wanting something deeply enough, no matter how utopian, doesn’t get manifested. The same theme he discusses in the “island economy” in The Tempest. Economics is a science of tradeoffs.

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Coin and conscience

Shakespeare weaves economic themes into his plays, showing a deep understanding of how money influences human behaviour and society. His exploration of wealth, poverty and trade gives us a complex view of economic relationships. He shows how economics affects personal identities, social hierarchies, and moral choices.

The most interesting part is that the central role these theses play in his plays are not diminished at all by their introduction. In contrast with the current predicament that one can’t easily find a book that depicts economics better, or the modern economy better. Shakespeare wrote about the full society, not just a sliver of it.

It’s not just money but a broader thesis that he often explores. Iago’s deceit can be viewed as a form of information asymmetry, where he manipulates Othello by controlling the flow of information. That’s a wonderful exposition of a foundational piece of economic insight.

As You Like It includes the loss of communal resources and the effects of changing land rights. As in the feud between the Montagues and Capulets, it’s a struggle over social capital and influence, scarce resources still in an age of plenty, one apt for our coming future.

Many of the economic concerns of Shakespeare’s England—like the ethics of lending money at interest, the risks of trade, and rigid social classes—are still relevant today. Beneath the poetry lurks a mind uncannily alert to the costs and benefits of every human transaction, whether on the Rialto, the battlefield, or the throne. In that sense, Shakespeare was a dramatist of economics, a bard who knew that coin and conscience often diverge—and that the resulting conflict is timeless fuel for tragedy and farce alike.