"Dragon Sickness" played a major role in The Hobbit: The Battle of Five Armies as Thorin became obsessed with wealth and gold, and paranoid about keeping it. This kept up even to the point of being willing to sacrifice the lives of others so long as it meant that he could keep it all to himself. It's described in the book as well, but I don't recall it having as much emphasis.
The explanation we are given about Dragon Sickness is that Smaug "cursed" the gold by spending so much time with it. However, it's not clear to me if this curse, and by extension Dragon Sickness, is a figurative or literal thing. Did Smaug's presence somehow alter the gold, perhaps through magic? Or is it just a figurative saying for people becoming unhealthily obsessed with the gold to the point of not caring about anything (similar to "gold fever" during the real-world California Gold Rush).
In other words, is "Dragon Sickness" a figurative or a literal curse?
Answer
Probably literal
"Dragon-sickness" is referenced in the book version The Hobbit on two occasions:
Thorin himself
Bilbo thought that Thorin would at once admit what justice was in them. He did not, of course, expect that any one would remember that it was he who discovered all by himself the dragon's weak spot; and that was just as well, for no one ever did. But also he did not reckon with the power that gold has upon which a dragon has long brooded, nor with dwarvish hearts. Long hours in the past days Thorin had spent in the treasury, and the lust of it was heavy on him.
The Hobbit Chapter 15: "The Gathering of the Clouds"
The Master of Lake-Town
The old Master had come to a bad end. Bard had given him much gold for the help of the Lake-people, but being of the kind that easily catches such disease he fell under the dragon-sickness, and took most of the gold and fled with it, and died of starvation in the Waste, deserted by his companions.
The Hobbit Chapter 19: "The Last Stage"
However, both of these characters have an acknowledged weakness to gold; for Thorin it's a bit of a hang-up of Dwarves, and of course the Master is a rather contemptibly greedy chap.
Something very similar is described on one other occasion, in Appendix A (emphasis mine):
Frumgar, they say, was the name of the chieftain who led his people to Éothéod. Of his son, Fram, they tell that he slew Scatha, the great dragon of Ered Mithrin, and the land had peace from the long-worms afterwards. Thus Fram won great wealth, but was at feud with the Dwarves, who claimed the hoard of Scatha. Fram would not yield them a penny, and sent to them instead the teeth of Scatha made into a necklace, saying: "Jewels such as these you will not match in your treasuries, for they are hard to come by."
Return of the King Appendix A "Annals of the Kings and Rulers" Chapter II: "The House of Eorl"
Once again, there's enough ambiguity here that it's hard to say definitively if this was a real curse, or just an extremely unhealthy fixation. It's easy to understand Fram being miffed by a bunch of Dwarves showing up and demanding his hard-won gold, but on the other hand he responds with almost comical diplomatic ineptitude; not dissimilar to Thorin's handling of the situation in The Hobbit.
However, in an essay titled "Notes on Motives", Tolkien suggests that Gold was particularly infected by the lingering malice of Morgoth, the Great Enemy:
Morgoth's power was disseminated throughout Gold, if nowhere absolute (for he did not create Gold) it was nowhere absent.
[...]
It is quite possible, of course, that certain 'elements' or conditions of matter had attracted Morgoth's special attention (mainly, unless in the remote past, for reasons of his own plans). For example, all gold (in Middle-earth) seems to have had a specially 'evil' trend
History of Middle-earth X Morgoth's Ring Part 5: "Myths Transformed" Chapter VII "Notes on motives in the Silmarillion" (ii)
Based on that, I'm inclined to argue that the "curse" is literal, although perhaps misattributed to dragons.
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