To the treasure of my people no man has a claim, because Smaug who stole it from us also robbed him of life or home. The treasure was not his that his evil deeds should be amended with a share of it. The price of the goods and the assistance that we received of the Lake-men we will fairly pay—in due time. But nothing will we give, not even a loaf’s worth, under threat of force.

Thorin adamantly refuses to give any of his treasure to the people of Lake Town, who have lost most of their village to Smaug’s flames. Even though the villagers very recently gave the dwarves food and shelter and Smaug’s fury was directly stoked by Bilbo and the dwarves’ interference, Thorin will not budge, claiming he owes no man a share of his birthright. Thorin’s belief that he is being tough-minded but fair, taking a stand for his convictions and his heritage, serves as a thin veil for the greed behind his actions.

All the same Mr. Baggins kept his head more clear of the bewitchment of the hoard than the dwarves did. Long before the dwarves were tired of examining the treasures, he became weary of it and sat down on the floor.

Here, the narrator reveals that as the dwarves tirelessly paw through the endless riches in Smaug’s lair, Bilbo eventually finds himself bored. Bilbo provides a more moderate example of the effect of greed. He can occasionally be swayed by the lust for riches, as anyone might be, but he ultimately has a better sense of perspective, quickly sensing the hollowness of the opulence around him. This practicality supports Bilbo’s status as this world’s representative for the common person—not above the occasional flight of fancy but grounded enough to maintain his integrity.

He had never bothered to wonder how the treasure was to be removed, certainly never how any part of it that might fall to his share was to be brought back all the way to Bag-End Under-Hill. Now a nasty suspicion began to grow in his mind—had the dwarves forgotten this important point too, or were they laughing in their sleeves at him all the time? That is the effect that dragon-talk has on the inexperienced.

Here, Smaug, the story’s mouthpiece for unfettered greed, begins to get inside Bilbo’s head, prompting the hobbit to wonder whether the dwarves will ultimately betray him. This momentary sowing of discord represents the effect of greed in general. Even among close comrades, the desire for wealth begets suspicion and treachery—greed can harden hearts, sever bonds, and disintegrate trust. Bilbo’s experience with dragon-talk adds an additional element of dread to the quest for Smaug’s treasure, suggesting that even if the dragon is vanquished, more insidious dangers still await the adventurers.

[A]s they gazed, first on one side and then on another, they forgot fear and even caution. They spoke aloud, and cried out to one another, as they lifted old treasures from the mound or from the wall and held them in the light, caressing and fingering them.

The narrator details the moment the dwarves see Smaug’s hoard for the first time and enter an almost trancelike state of greed. While Bilbo remains able to separate himself from the captivating quality of the gold, the dwarves possess no such ability, and their lust for wealth consumes them, wiping all else from their minds. This total loss of control appears disturbing, as Bilbo watches his fellow adventurers disappear behind glazed eyes. Their frenzy represents the story’s most visceral example of the effects of greed and casts doubt on the dwarves’ integrity going forward.

I go now to the halls of waiting to sit beside my fathers, until the world is renewed. Since I leave now all gold and silver, and go where it is of little worth, I wish to part in friendship from you, and I would take back my words and deeds at the Gate.

Thorin apologizes to Bilbo for their prior quarrels. Thorin lies close to death, and suddenly his single-minded desire for wealth deflates as he understands that a whole mountain of gold will do little for him now. Thorin’s change of heart affirms the story’s sense of priorities. At the end of everything, Thorin truly desires the genuine warmth of friendship and the knowledge that he can leave something or someone in the world better off.