Lets say you are a 17th century monarch in waiting. You live in Scotland and you await the death of the monarch to the south, Elizabeth I. On her death, you will be raised to the English throne. You are, in fact, James VI of Scotland, soon to be James I of England.
You have a deep interest in the earliest possible notice of the death of Elizabeth. The moment between monarchs is a perilous time. Even with the best claim in the world, you can be supplanted by nimble, powerful counter-claimants. Plus, you are sitting in Edinburgh well removed from the seat of English power. You want to be quick about it.
You also have a deep interest in receiving certain knowledge of Elizabeths death. Elizabeth’s health has been failing for some years now. Someone might hear a rumor of a sudden decline, and race north to give you the "news" on the assumption that death was coming, when it was not.
Your problem is simple. If you are too late in mobilizing to claim the throne, your chances of gaining it are put at risk. If you are too early…well, if you are too early, God help you. You will begin your march to the south, not as Elizabeth’s successor, but as a rebel or a clown. Elizabeth doesn’t forgive people even minor slights to her majesty. How do you think she is going to feel about the premature celebration of her death?
So what do you do? How do you manage this risk, multiplied by this uncertainty?
Here’s what James did.
The first man to make it to Edinburgh with the news of Elizabeth’s death was Sir Robert Carey. Some weeks before, he had arranged for a string of horses to be prepared for him at inns along the Great North Road. He rode continuously, for 70 hours. En route, he fell from his horse and was kicked in the face. Bleeding, swollen, and exhausted, he arrived at the palace of Holyroodhouse, and seized the honor of being the first to honor the new monarch of England, Scotland, France and Ireland.
James asked what letters Carey had brought with him from the English Council. Carey had none. This was a private initiative. He had been living beyond his means for years, and he was desperate for the advancement that would surely come to the bearer of this news.
But Carey did have something that would serve as proof. He presented a sapphire ring which James had once sent to Careys sister, Philadelphia, Lady Scroope, with the express purpose that she would return it as soon as she knew that Elizabeth had died. With this ring, James England wed.
Clever James. He had created a signal that would serve both his ends: earliest notice tempered by greatest certainty. The sapphire ring was a cunning thing. It was a kind of economic bargain with the future, one guaranteed to release its value only if and when certain conditions were satisfied, only as and when certain incentives were set in motion.
1) James began be creating (or surrendering) something of relatively exceptional value: the sapphire ring. The ring could not be duplicated without difficulty or expense. No counterfeit ring would be likely to deceive him. (This is the Elizabethan age, after all. A counter claimant might well conspire to embarrass James through counterfeit.)
2) James placed this ring with someone sufficiently well placed to be an early recipient of news of Elizabeth’s death.
3) The ring had three kinds of value. It was valuable in itself. As a token from someone in power, it was still more valuable. But as a signal of James accession to the throne of England, it was most valuable.
4) Lady Scroope was "incented to keep the ring for values 1 and 2. Her brother, Robert, might want to start the ride early. But Lady Scroope would be reluctant to gamble something so valuable on his desperate whim.
5) But on certain news of the death of Elizabeth, Lady Scroope was now incented to release the ring as soon as possible and to see to its delivery to the future king of England. For all we know, it was she who paid for those horses on the Great North Road, and she who said to Robert, translating now for modern ears, "get your butt up there."
6) In sum, James’ bargain meant he did not have to trust Lady Scroope, her motives, or her judgment. Her pursuit of advantage would protect his pursuit of advantage. The ring contained two values. One kept the ring in place. One set it in motion. The value to him was the value to her was the value to him.
This is one of those little "anthropology meets economics puzzles. No, I dont know what to do with it. But perhaps you do. Hey, you’re James I.
Historical details from:
Nicolson, Adam. 2003. Gods Secretaries: The making of the King James Bible. New York: Perennial, pp. 4-5.
With a tip of the hat to John Deighton for helping me think about how trust and incentive works in the marketplace, even a royal one.