Harry Potter and Bad Economics

This is a common argument in role playing games, fantasy and sci-fi. How does the economy work? If magic can do anything, why don't people use it to do everything? Star Trek and the Federation have the same problem.

But this actually presents a problem for authors. If magic is too powerful then the characters will be omnipotent gods, and there won't be a plot. Magic must have rules and limits in order to leave the author enough room to tell a story. In economic terms, there must be scarcity: magical power must be a finite resource.

JK Rowling is not, to put it mildly, known for her seamless plotting or the gripping realism of her characters, most of whom spend the latter books pointlessly withholding information from each other that, if shared, would end the installment somewhere around page ten. But for me, there is another problem with the books, one that has kept me from looking forward to the seventh volume as keenly as I might. I am an economics reporter, and the books are chock full of terrible economics.