The Bowser Financial Crisis
We’ve all seen the pictures. The Italian plumber and the Princess stand outside the castle. Fireworks explode above and Toad applauds below. But no one ever looks at what lies behind.
No one stays past the credits to see the true ramifications of Mario’s adventures to rescue Peach from Bowser.
A shell-throwing, bob-omb exploding, toadstool-trampling economic catastrophe.
Let me back up…
Games have a unique place in our cultural environment. We spend hours and hours playing as characters in a story. We likely spend more time with these characters than we do with those of any other (I’ve never watched any YouTube videos of people doing speed runs through readings of War and Peace). Yet we give them far less consideration than we do to Romeo, Gatsby, or Elizabeth Bennet. Literature makes us wonder about characters’ motivations and ultimate fates. Games make us play again to get a higher score.
This post emerged from my work as an political analyst. I spent my days talking about liquidity in the markets, monetary policy, and governments’ fiscal outlays, and then would leave the office and argue about who was the best driver in Mario Kart. At one point when it hit me that this cartoon-y, digital landscape was shaped by money (the coins collected by Mario denotes your score) just as much as our own. I started to wonder what would happen if the consequences I studied at my desk applied to the world I entered in front of my TV.
This booklet has three purposes. First, I hope it is an enjoyable thought experiment. If you’re a fan of Mario, read away and be (at least mildly) amused. Second, it serves to explain complicated economic and political topics with a setting that is more stylized, simplistic, and less partisan than real life.
Finally, there is a purpose more selfish than the others…
The world I describe is one of intrigue, despair, Machiavellian maneuverings, and sports as an opiate of the governing classes. It is 8-bit Game of Thrones. House of Cards with a controller.
I want to play a game set in that world.
If anyone from Nintendo reads this, please make that game. For all of us who grew up stomping goombas, and want to do so again in a morally ambiguous and politically fraught way, that would be a reason to buy a Wii U.
Level 1–1: Money Crunch

As Mario and Luigi run and jump through levels, they collect coins. You may see that as a fun way of keeping score.
You’re wrong.
Those two are severely contracting the money supply in Bowser’s kingdom, perhaps worse than the global economy witnessed in 2008 that the world is still recovering from.
Level 1–2: Coins
It’s hard to know how much each coin Mario collects is worth. Some analyses (or, at least, this YouTube video) suggest that each is worth tens of thousands of dollars. This would mean that Mario’s adventures — at least in the new Super Mario Bros 2, which holds the promise of 1 million coins — could net the plumber $80 billion.
Today, the Federal Reserve estimates that the M1 money supply in the United States (cash, plus easily accessible checking accounts) is about $2.5 trillion. In other words, if Bowser’s kingdom were the modern US, Mario would make off with about 3% of the primary source for ready currency. That’s a shock to the system, sure. But considering the M2 money supply, institutional holders, and other types of liquidity, Mario wouldn’t be taking too much out of the system and it would likely be able to bounce back.
But the modern United States has the most advanced financial system in the world, and so the above paragraph is a terrible analogy.
In pre-modern societies, money was a huge constraint on economic activity. The galleons full of silver that Spain’s empire provided were useful — not for the inherent value of the metal — but because more precious metal meant more coins. More coins meant more of Spain had easily portable and tradable stores of wealth.
Imagine how difficult buying a candy bar would be if all you had was a goat to trade. Sure, you could haggle over whether a goat was worth 50 Butterfingers or 40 Milky Ways, and so create a proto-market system, but unless you can cut off 1/50th of a goat or are willing to go home with a Halloween’s worth of Almond Joys, that trade will not happen. Neither the buyer or seller derive utility and the economy shrinks a little. Adam Smith cries.
Level 1–3: Shells shocked
We can deduce from the prevalence of the castles and cannon that Bowser’s Kingdom exists in late medieval/early renaissance period. In this time, the money supply was much less reliable and credit was much rarer than it is today, placing an emphasis on hard currency.
Mario travels through a sizeable portion of Bowser’s land (including its capital) and sucks up all the coins he sees. Even if gold does not have the same value there as it does today, Mario has to be taking a large percentage of the country’s total gold supply. And what’s more, he’s taking the coins that are out in the open. The coins that had been circulating in the economy are gone. Liquidity dries up, halting economic activity.
What’s more, Mario has just caused severe deflation and a loss in confidence. Every coin still around is worth more. Soon enough, prices will start falling as the system adjusts to the new balance. That coin that used to buy one koopa shell now buys two, so the price of a koopa shell has dropped from 1 coin to 0.5. And if Mario was really successful, the next week that price might be 0.25 as goombas discover how much gold is gone.
But, why would you buy that koopa shell at 0.5 when holding onto it for another week could see it double in value? No goomba with a brain (this is assuming they have brains). And who is willing to go to the market with a coin when Mario might show up at any minute to steal them again? It’s not like you can hope to beat that Italian. He can get extra lives.
The product of all of these trends is clear. Mario leaves behind an illiquid economy that is crashing. And that’s only the start, because in winning the Princess, Mario left behind a deeply destabilized market that may only begin to be tumbling downwards.
Level 2–1: Market Disruptor

Let’s assume Bowser has heard from his advisors that the economy is seizing up. He shows boldness — the kind that few politicians in Europe have shown since 2008 — and he untethers his kingdom from a monetary system that would bring it down. He creates a new fiat money, maybe he calls it “Bowserbucks”, or “Mario, screwyouros”, and pumps liquidity into the system. Is everything back to normal?
Of course not. Mario doesn’t just steal coins. He steals everything he sees.
Level 2–2: Commodities
We don’t know what the economy of Bowser’s kingdom is built on since we mainly see the security apparatus and sewage systems (you go down a pipe to water, what else could it be?).
But here’s what we do know.
Buildings are made out of bricks. Koopa shells are used to patrol areas. Mushrooms confer health benefits, flowers provide fire abilities, and hats allow you to fly. All these objects offer value and therefore, in any kind of market, would have a price on them.
What does Mario do with them?
He destroys bricks, knocks koopas out of their shells, and uses every power up he can find — without paying for ANYTHING. He has flooded the koopa market and dried up the power-up market. Supply and demand dictate that prices adjust to this new reality. A post-Mario world would see winged hats skyrocket and koopa shells plummet in value.
The immediate impact would be that anyone needing a winged hat — perhaps as a convenient mode of transportation, or as the logistical foundation of a rapid courier service — would see profits drastically cut. Perhaps to the point where they’re out of business. A koopa, maybe one who inherited a shell when a loved one pass, would see that inheritance become worthless. Any plans he made based on that expectation, perhaps a trip to Koopa Troopa Beach, it’s lovely this time of year, would be cancelled.
Level 2–3: Investment planning
All commodity markets endure price changes, but shocks are far more damaging, because they are so unexpected. Producers and consumers make plans based on expectation of prices.
Mario, by changing the prices, would disrupt plans and hold back activity, akin to the drilling projects put on hold after oil lost dropped by 50% since June. If Bowser derived any tax revenue as a portion of the value of these commodities, as happens in most countries in the world, any government plans (like upgrading their security so little men can’t skip into their castles) would be wrecked. See the Russian rouble today, for an example of what happens to a commodity dependent economy when that commodity get destroyed.
Level 2–4: Stimulus
Of course, there is a silver lining in that hammer-throwing cloud. Most disasters are followed by an uptick in growth rates.
The need to rebuild all the blocks Mario destroyed requires infrastructure spending. Restocking inventories will require 1-up manufacturers to increase production. The need for new goomba soldiers will cause Bowser to pay higher wages, much in the same way that the Black Death led to higher wages for medieval peasants.
But that shows why headline figures like GDP growth rates are a substandard way to measure the economic health of a country.
Although in the months post-Mario, measureable activity will be growing, it begins from a lower quality of life and with many koopas, who have already suffered so much at the hands of the plumber, significantly poorer. Whenever you see an analyst on TV talk about the boost that will come to a local economy after a hurricane or typhoon rips through, imagine a fat Italian in overalls bouncing up and down on a helpless turtle and turn off CNBC.
Level 3–1: Bowser’s Magna Carta

There is one sure consequence of Mario’s adventures: Bowser does not marry the Princess. He, the head of state, chose a policy that failed, at severe cost to his kingdom. That will not go unnoticed.
One remarkable fact about the 2008 financial crisis is that nearly every democratic leader in power at the time lost his next election. People tend to blame or credit those in power with the economic fortunes of the country. It’s both a strength of our democracy (keeps leaders focused on results) and a weakness (mitigating crises unrewarded).
British Prime Minister Gordon Brown was integral to the rescue of the financial system but lost in 2010. President Barack Obama was not in office when the recession began or credit crunched, but was blamed nonetheless for the poor economy in the 2010 midterm elections. Iceland, France, Italy, Spain, Portugal, and the Netherlands (insert links) all ejected their leaders the next chance they had.
The only G-7 countries without an electoral revolt were Canada, with a well-regulated financial sector, and Germany, which has prospered during the eurocrisis, even as the rest of Europe founders.
Level 3–2: Machiavelli and Miyamoto
So how does Bowser hold onto power, even after such a calamity befalls his country? It’s not as if he can act like Canada, where citizens saw the cause of the crisis clearly stemming from somewhere else. And it’s not like he can act like Germany, which can blame the profligacy of others and stay secure in an ideological view of the economy.
The most obvious answer is to say that Bowser’s Kingdom is not a democracy and therefore popular approval doesn’t matter. But that’s only partly true. Democracies may have the most visible diffusion of power, but autocracies rely on the consent and support of key groups. Caesar Augustus won over the Senate before moving against Antony and Hitler combined the support of disaffected youth with industrialists.
Autocrats also need to prevent the rise of possible opposition movements. It’s why dictators have used secret police and elite guard units to balance against the army, and why some Roman emperors even banned fire departments for fear of uncontrolled organizing.
In the wake of a military defeat, Bowser might be able to keep a hold onto power through these mechanisms, maybe telling the goombas that he’s the only reason the koopas haven’t stomped on them, and the koopas that if it weren’t for him, the goombas would overrun the country.
In the wake of an economic downturn, he could hold onto power by persuading the people that they need a strong leader to help them recover.
But in the wake of an economic collapse and a military defeat that was directly caused by his marriage plans? When most of the coins in his castle have been taken, leaving a penniless, discredited dictator? That’s a recipe for a coup.
Perhaps there was a coup. It would explain Bowser’s exile to the go kart, tennis, and party circuits. It seems unlikely, though, because with every new game, Bowser is at it again, still in power.
Level 3–3: Post-Mario reform
Two options are likely for what happens after Mario leaves.
The first is that nothing happens. Bowser’s subjects accept the defeat and move on, rebuilding for the next time they can try for the Princess. This would require a fanatical level of devotion to the idea that is almost never seen in real life (note how quickly Cuba stopped sending out revolutionaries after they all failed) or intense personal devotion to Bowser.
The second is that Bowser raises money from his subjects to recover. But those subjects now control a greater share of wealth than before, appreciating assets as their coins gain in value during a deflationary spiral. They could either withdraw into their own preserves, as the Roman Senatorial class did towards the end of the Western Empire, or would attempt to leverage their situation into greater powers, as the English barons did to King John, forcing him to sign the Magna Carta.
The second option is more likely. It explains why Bowser is still in command in each game. He has won over key factions through incorporating them into his governing structure. After each defeat, that faction is ruined and another moves in to supplant it.
This means that Nintendo is depriving us of the real action. While we get to see Mario jump and whoop over and over, the moment we turn the game off a War of the Roses begins, and a terrorized kingdom moves closer to democracy. It’s Game of Thrones, and the dragon is the central character. That is something I want to play.
4–1: A Mushroom Kingdom in Crisis

Bowser’s Kingdom is clearly in a mess. Deflation, economic paralysis, and an emboldened koopa aristocracy. But the Mushroom Kingdom, with the Princess returned and Mario triumphant, has to be doing better, right?
Not really.
Certainly, it is better that Mario succeeded, rather than failed in his quest. Losing a head of state in the Middle Ages without an immediate successor often led to bloody struggle for power. Though we don’t know whether the Princess is the daughter of a living king, the lack of any other member of the royal court, or of a competing rescue mission ordered by such a king, indicates that Peach rules all. After her rescue, she rules jointly with the coin-flush Mario.
And here’s where the problems begin.
Level 4–2: Peach is Gerald Ford
Bowser has to deal with deflation, as his money supply contracts. The Princess will have to deal with inflation, as her money supply expands dramatically overnight. Neither are good.
If the Mushroom Kingdom is a relatively self-contained economy (like the United States, rather than Singapore), then Mario has injected money into the system without a matching amount of goods and services. We’re also assuming that there’s no once-in-a-generation lack of demand, as happened in the US and Europe post-2008, which meant that increased liquidity (quantitative easing) co-existed with low inflation. No, in the Mushroom Kingdom, existing products can now command higher prices and inflation sets in. It would not be continuing inflation, since Mario won a fixed amount of gold. Instead, it would function as a one-time tax on the savings of all subjects in the kingdom.
Level 4–3: Princess Policy-maker
How can Mario avoid this from happening?
A couple of ways.
The first would be to spend the money on necessary imports used for the kingdom’s benefit. If all the new supply of gold was immediately spent on hiring koopas from Bowser’s Kingdom to build new roads and bridges for Peach, there would still be some inflation, as the koopas spend money on food and housing while working in the Mushroom Kingdom, but the majority of the cash would never touch the Mushroom economy.
Not only would that leave it basically unharmed, but it would also prevent too much of the Mushroom Kingdom economy to gravitate to its new center (Mario’s pocketbook). If that happened, and Mario splashed the cash on himself, toadstools would be able to earn a better living building go karts and organizing parties, leaving traditional sectors to atrophy.
This is, in some ways, one of the principles behind a sovereign wealth fund. To prevent a single large industry, usually oil, from dominating and distorting the country’s economy, the proceeds from sales are placed in a separate fund. This fund could be used to stabilize government finances when export commodities have low prices, or as a savings mechanism to be used in the future.
Level 4–3: Mario to the un-rescue
However, there’s two problems with this scenario.
The first is that the coins belong to Mario personally. A sovereign wealth fund is the property of the government, and comes with a highly regulated governing structure. The coins Mario has won are his own personal property. He has just become the richest man in the kingdom. The ultrawealthy, especially back in the Middle Ages, did not give their fortune to the state because they were concerned about inflation.
The second problem is that Mario is a plumber. It’s an honorable and necessary profession, but I doubt he’s up to speed on the finer points of a financial mechanism that first gained prominence in the 20th century. I mean, have you seen him dive into pipes that seconds earlier had a giant piranha plant chomping out of them? He’s not the most prudent of people.
So that leaves us with an extraordinarily wealthy man marrying the head of state.
After Mario returns, he combines official governmental powers and a massive personal fortune that allows informal control. This was the foundation of his Italian ancestor Caesar Augustus becoming emperor and one of the reasons why his Italian descendent Silvio Berlusconi stayed in power so long. The most likely scenario is that Mario accrues power to himself as the Mushroom Kingdom stagnates and decays.
Level 4–4: Really?
Oh, come on, I can hear you say. Mario’s a great guy. He wouldn’t turn dictatorial. He would of course set up an SWF and do whatever he could for the Mushroom Kingdom. Why are you taking such an uncharitable view of him?
For one simple reason. Peach keeps getting kidnapped by Bowser.
It’s one of the laws of the business and technological worlds that firms with a monopoly have little incentive to innovate. They would only be disrupting their own business models. Mario as the most powerful man in the Mushroom Kingdom has little incentive to shake things up.
What the kingdom clearly needs, after a giant turtle kidnapped their head of state, is a stronger security force. But more police, or palace guard staff, or unified border control might turn against Mario. Nearly all coups across the world come from the officer corps of the army — usually mid-level officers too low to benefit from corruption and high enough to command allegiance. It’s why Gaddhafi was a Colonel for so long. If Mario were to create a large force, bigger than he could personally control by jumping on their heads when the time came, he could be sowing the seeds of his own demise.
Level 4–5: Yes, really
The logic of a dictator in this situation might be to make no changes in government. Since Peach keeps getting kidnapped by Bowser, whose country is falling to pieces, there clearly has been no change in the Mushroom Kingdom, even though it is repeatedly shown to be necessary.
Mario has become an out of touch and distant ruler who has hurt the common people of the Mushroom Kingdom. It’s not certain, but highly plausible.
However, the saddest case might be Luigi. Access to riches, but with no place in government and no responsibility often leads to a life of self-destructive drug addiction. I don’t want to claim for certain that this happened to Luigi, but he did have a game in which he saw ghosts and chased them with a vacuum cleaner.
Level 5–1: Foreign Policies of Peach and Bowser

One of the enduring mysteries of the Super Mario series is that Peach keeps getting kidnapped. The Mushroom Kingdom security apparatus has been explained by Mario’s complacency, but why does Bowser keep trying? Is he that besotted with love? A would-be Paris pining away for his Helen? A Beast looking for a Belle?
That seems unlikely. Bowser isn’t the loving type. I doubt the two are even anatomically compatible. Besides, as we’ve discussed in Part 3, Bowser in the later games is relying on the support of various koopa factions. Will they all support the princess kidnapping policy even if they won’t be the ones marrying her. Are they the ultimate wingmen?
Level 5–2: Princess Platform Plank
I see two reasons for this formulaic repetition.
The first is an ideological fixation on the princess. Many cultures are willing to take and inflict great pains for certain unbreakable commitments. Usually, this is for revered territory. We saw it with Russia towards the Crimea, Serbia to Kosovo, and Palestinians and Israelis for Jerusalem.
Yet that doesn’t feel correct. Territory is unmoving and can occupy a place in collective memory and constant pull on nostalgia and always there when a leader needs to divert attention. Medieval kidnappings, on the other hand, were for ransom or vengeance — not to salve ancient grudges. And if they’re able to establish such elaborate defense structures, we should assume some level of rationality by Bowser and his subjects.
That points to the second, and I think more interesting, option.
Bowser kidnaps Peach because doing so, and the ensuing marital and political union, is widely accepted as good policy. No matter how much Mario destroys everything of economic value he sees, Bowser’s government believes that another attempt will pay off long term.
Level 5–3: But why?
Economists have shown that people are usually risk averse. We’ve shown in the first two parts of this series that Mario’s adventures are extraordinarily costly to Bowser’s Kingdom’s economy. This means that the long-term payoff of a union between the two must be huge, in order for it to be continually pursued.
And, usually, in international relations, when benefits to a political union are that big, something happens.
It may not happen immediately. France and Germany fought three wars in seventy years before setting up a cooperative structure. Mainland China is Taiwan’s largest export destination, but no one expects a reconciliation between the two anytime soon.
An emboldened and wealthy Mario in charge of the Mushroom Kingdom and deep-seated antipathy from all goombas with stomped loved ones speaks to a low probability of joining the two kingdoms.
But change could happen slowly. The European Union began with a functionalist philosophy. Because asking the French, Belgians, Italians, Dutch and Luxembourgish to share sovereignty with the Germans who six years earlier had occupied them was impossible, the European project began with a coal and steel community. The average citizen, it was assumed, would not be stirred by such basic commodities, and political cooperation would grow slowly.
Mario and Bowser could agree on a similar path. For example, Mario begins on an incredibly dangerous quest and it is only when he reaches Bowser’s Kingdom, he finds a mushroom that doubles his size and allows him to take damage. Is he bad at military preparations, or is that type of mushroom only grown in Bowser’s Kingdom? Meanwhile, Mario is a plumber and Bowser’s Kingdom is strewn with pipes so blocked that plants have begun to grow inside them.
This looks like scope for a free trade agreement. Doing so would help to realize some of the gains that Bowser and his koopa ministers are so adamant to realize.
Level 5–4: The greatest Nintendo character of them all
This would explain one of the other conundrums of the Mario universe. Bitter enemies are regularly seen playing sports and driving go karts with each other. Countries in a Cold War almost never experience such a thing.
But what if Bowser, by this time a mere figurehead, and Mario, tempered by the demands of power and having seen the disruptions his wealth brings, are persuaded to drive together as a goodwill gesture, the kind seen at G20 summits when Obama is photographed smiling three down from Putin.
Maybe Mario and Bowser aren’t aware of this. Their fierce competition on Rainbow Road implies the two are still out to get each other. What better way to advance necessary foreign policy than to get the two adversaries out of the capitals and onto a really long track in space? It will allow the members of the cabinets, diplomats, and Bob-ombs time to get business done, while Peach is protected by the public eye and three red shells.
In the end, I end where I begin. After an extensive survey of the politics and economics of Super Mario Bros., I conclude that the true hero of the game, the one that will pull the two sides out of a destabilizing economic spiral and rising inequality is the one who, due to his constant presence, advice, and camera-ready enthusiasm is clearly Peach’s Prime Minister. Toad.
He is a combination of Schumacher, Churchill, and a mushroom. Both kingdoms owe him their gratitude.

Originally published at www.chrisoates.info.
