Bilbo´s treachery

[Faramir Jones]

Originally Posted by Puddleglum

Bilbo, while hired to do a job, was neither a subject of Thorin, nor his servant. Rather he was a friend who felt it was an act of friendship to save Thorin, even from himself. And even at the risk of being disowned or even killed.

As Gandalf put it "Well done!, Mr. Baggins!"

You're right when you say that Bilbo could not have 'betrayed' Thorin because he had never given allegiance to him, as the dwarves did, and as the Rangers did to Aragorn II. He was also not an employee, so did not have that obligation to Thorin.

From the contract itself, and the events described, Bilbo was an independent contractor, a self-employed person, hired by the dwarves to take back (not 'steal' as it was their own property) treasure. He was promised a fourteenth share of the profits, Thorin modifying this to say that Bilbo could pick his own fourteenth. This Bilbo did, in the shape of the Arkenstone. As it was his property, he was entitled to dispose of it as he saw fit, in this case giving it to Bard for negotiating purposes. All this was prefectly legal and above board, covered in the contract.

In terms of giving the necklace to Thranduil, Bilbo felt that he owed him some compensation for the food and wine he had taken. There are also, as MCRmyGirl4eva correctly states, hints that he 'always had a fascination for Elves'.

The big joke in the book, I think, is that while Bilbo is described as a burglar, he's actually quite a respectable fellow, as shown above. Even in the case of Gollum and the ring, Bilbo genuinely didn't know who its owner was when he found it; and when he suspected the truth, he was in no mood to return the ring to someone who wanted to kill and eat him... In the same way, when he tried to pick a troll's pocket, any sympathy the reader might have for the troll is negated when he and the other two decide to kill and eat Bilbo and the dwarves.

The only time in The Hobbit where we can say Bilbo was a real burglar was when, after escaping with the dwarves from the Elvenking's halls, he stole food and drink from a village by the Long lake. The book does not record if he ever paid compensation for that theft...