Bilbo Baggins and Thorin Oakenshield's employment relationship

Bilbo Baggins and Thorin Oakenshield are bound by a formal employment agreement that transforms into a fraught personal bond, tested by greed, loyalty, and the shadow of dragon-sickness. Their relationship is the central human (and hobbit) drama of the quest, moving from reluctant partnership to genuine friendship, then to bitter estrangement, and finally to a deathbed reconciliation that underscores the story's themes of courage, fellowship, and the corrosive power of treasure.

Origins of the Contract

The relationship begins not as friendship but as a business arrangement orchestrated by Gandalf. At the Unexpected Party in Bag-End, Thorin announces the quest to reclaim the dwarves' treasure from Smaug, and Gandalf presents Bilbo as the "chosen and selected burglar" for the expedition. Thorin's initial skepticism is evident; when Gloin questions Bilbo's suitability, saying "He looks more like a grocer than a burglar!" , Gandalf insists on his choice, declaring "If I say he is a Burglar, a Burglar he is, or will be when the time comes" . The terms are formalized in a note left for Bilbo: "Terms: cash on delivery, up to and not exceeding one fourteenth of total profits (if any); all travelling expenses guaranteed in any event; funeral expenses to be defrayed by us or our representatives" . This contract establishes Bilbo as a hired professional, not a volunteer, and Thorin as the expedition's leader and paymaster.

Growth of Mutual Respect Through Shared Peril

As the journey progresses, Thorin's opinion of Bilbo shifts from condescension to grudging admiration. After Bilbo escapes the goblin tunnels and rejoins the company, the dwarves "looked at him with quite a new respect" , and Thorin acknowledges his value. By the time they reach the secret door on the Lonely Mountain, Thorin's tone has changed markedly. He declares, "Now is the time for our esteemed Mr. Baggins, who has proved himself a good companion on our long road, and a hobbit full of courage and resource far exceeding his size, and if I may say so possessed of good luck far exceeding the usual allowance—now is the time for him to perform the service for which he was included in our Company; now is the time for him to earn his Reward" . This speech, though formal, reflects genuine respect for Bilbo's proven abilities. Bilbo, for his part, accepts the dangerous task of entering the dragon's lair, saying "I think I will go and have a peep at once and get it over" , demonstrating his commitment to the contract and to Thorin's cause.

The Breaking Point: The Arkenstone and Betrayal

The relationship reaches its crisis when Bilbo, seeking to prevent war between the dwarves, elves, and men, secretly gives the Arkenstone of Thrain to Bard and the Elvenking as a bargaining chip. When Thorin learns of this, his rage is volcanic. He seizes Bilbo, crying "You miserable hobbit! You undersized—burglar!" and threatens to throw him from the wall . He denounces Bilbo as a "descendant of rats" and declares, "I am betrayed" . Thorin's dragon-sickness—the lust for gold that has clouded his judgment—drives him to repudiate their bond entirely. He offers a fourteenth share of the hoard in exchange for the Arkenstone, but this is framed as payment to a traitor, not as a reward to a friend. Bilbo, hurt but resolute, replies, "Take it that I have disposed of my share as I wished, and let it go at that!" , and is swung down from the wall, departing with nothing but the mithril coat Thorin had given him earlier.

Deathbed Reconciliation

The final, most poignant phase of their relationship occurs after the Battle of Five Armies. Thorin lies mortally wounded, and Bilbo is brought to his side. Thorin speaks his last words to the hobbit: "Farewell, good thief... 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" . In this moment, Thorin sheds the dragon-sickness and recognizes the true value of their companionship. Bilbo, kneeling and filled with sorrow, replies, "Farewell, King under the Mountain!... This is a bitter adventure, if it must end so; and not a mountain of gold can amend it. Yet I am glad that I have shared in your perils—that has been more than any Baggins deserves" . Thorin's final words to Bilbo are a testament to the hobbit's character: "There is more in you of good than you know, child of the kindly West. Some courage and some wisdom, blended in measure. If more of us valued food and cheer and song above hoarded gold, it would be a merrier world" . Bilbo weeps at this parting, and the reconciliation, though bittersweet, redeems their relationship.

Narrative and Thematic Significance

The Bilbo-Thorin relationship is the moral spine of The Hobbit. It embodies the story's central tension between the Baggins values of comfort, peace, and home, and the dwarven obsession with treasure and revenge. Thorin's arc—from proud king to greedy miser to repentant friend—is measured by his treatment of Bilbo. Bilbo's arc—from reluctant burglar to courageous peacemaker—is defined by his loyalty to Thorin even when betrayed. Their final reconciliation affirms that friendship and shared experience outweigh gold, a lesson Thorin learns too late but Bilbo carries home. The relationship also illustrates the theme of unexpected heroism: Thorin, who initially dismisses Bilbo as a mere grocer, comes to call him "good thief" and acknowledges his worth. In the end, the contract that began as a business arrangement is fulfilled not in gold but in the mutual respect and sorrow of their farewell.