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Myrdal On Wall Street

Posted by Martha Young on December 16, 2000 at 23:06:49:

Martha Young
Economics In Popular Film
Myrdal on Wall Street
Myrdal’s economic theory of circular and cumulative causation is depicted in the film Roger and Me. In Flint, Michigan, General Motors closes eleven factories, which causes over thirty thousand people to become unemployed. The company claims that they need to close the factories to “stay competitive.” The viewer sees the truth; they are greedy and will make money wherever they can, regardless of the people they may harm. Labor is much less expensive in Mexico, where GM only has to pay the workers $0.70 an hour. As a result, General Motors begins to close plants in Flint and move them to Mexico. Some people leave Flint to find work elsewhere and some remain, struggling to find new forms of employment. As more and more workers lose their jobs, poverty in Flint becomes more severe. Increasingly people are evicted from their homes, become ill, the violent crime rate in Flint becomes the highest in the country, and the general standard of living plummets for the poor. Michael Moore describes their living conditions, “The rat population has now surpassed the human population.” Their environment worsens to the point where Money Magazine declares Flint the worst place to live in the country. The poor citizens in Flint live Myrdal’s circular and cumulative causation theory.
In addition, the rich population of Flint prospers during this time of great poverty. The wealthy community of Flint spends their time at the ballet, golfing and relaxing at Grosse Point. When the jail becomes too full and another one is built there is a large party in which couples pay one hundred dollars to stay over night in one of the new cells. They didn’t seem to mind “celebrating American tragedy,” as Moore had said in another instance. At the end of the documentary, Michael Moore says, “The rich were richer, the poor, poorer and the people everywhere had a lot less lint thanks to the lint rollers in my town. It truly was a dawn of a new era.”
Myrdal’s theory is also highlighted in the films, Wall Street and The Boiler Room. By not hiring women and creating a male dominated environment, the men progressively gain power, just like the rich getting richer in Roger and Me. The women do not have the same opportunities to earn money and power.
Several factors contribute the portrayal of Mrydal’s theory of circular and cumulative causation. It would be difficult to picture a female employee participating in the group activities of the male employees at J.T. Marlin, in The Boiler Room. Their nights together consist of fast car rides to the bar, picking up women, and an occasional fight to provide the nights entertainment, made complete with rap music and constant swearing in the background. A woman undoubtedly has the ability to work on Wall Street, but the business portrayed in The Boiler Room make the working environment more like a ‘boy’s club’ than an office full of workers. The Feminist Majority Foundation states, “Women executives are frequently excluded from social activities and often describe the "clubbiness" among the men that exists at the top. The corporate executive suites are ‘the ultimate boys' clubs." Because men hold the highest positions in the company, when it comes time to hire or promote workers, time and again they hire other men. “ …The men at the top look to former colleagues and old school ties; in both areas, women have been virtually absent,” a member of the Feminist Majority Foundation writes. This concept is often referred to as “the old – boy network.” In the film “Wall Street,” Gordon Gekko alludes to this concept when he is explaining to Bud Fox what ‘it takes’ to be successful. He says, “It takes years of genetics and a Yale education…” It is very difficult to break the chain of the ‘old – boys network’. The Federal Glass Ceiling Commission writes, “In 1980, only one woman held the rank of CEO of a Fortune 500* company. She came into the top management by inheriting the company from her father and husband. In 1985, this executive was joined by a second woman who reached the top - by founding the company she headed.”
Marlin enhances this boy’s club environment further by his means of communication with his employees. He says, “You need to realize that this is not charity work… We’re not here to make friends. We’re not saving the manatees. You want vacation time? Go teach third grade public school.” I cannot imagine Marlin’s reaction if one of his female employees was pregnant and asked for some maternity leave. In addition to the lack of women in the work place, J.T. Marlin also forbids his employees from selling stock to women because, “You will here from them every fifteen minutes,” he says. He refers to this rule as, “don’t pitch the bitch.”
“Increasingly, women are bumping into a ‘glass ceiling.’ Ann Morrison describes the problem: the glass ceiling is a barrier ‘so subtle that it is transparent, yet so strong that it prevents women from moving up the corporate hierarchy.” In addition to the “old boy network”, job segregation causes women to “bump into the glass ceiling” and continues the cycle of circular and cumulative causation. The Glass Ceiling Commission writes, “Women continue to be highly segregated in the workforce. Ninety-nine percent of secretaries are women.” Job segregations occurred in both The Boiler Room and Wall Street as the female workers shown are secretaries.
The Commission also writes, “Job segregation translates into lower earnings for women. Full-time employed women still earn considerably less than men. The average man with a high school education working full- time earns more than the average woman fulltime worker with a college degree, and the situation is even worse for African-American, Asian-American, and Latina women.”

As mentioned above, job segregation results in “lower earnings for women.” Conversely, job segregation and the existence of ‘old-boys clubs’ create more power and money for men. In the movie The Boiler Room, J.T. Marlin was a twenty seven year old millionaire. When speaking to his male employees he says,” You will make a million dollars in three years. The question is, how many times over?” As these men make more money they also gain additional power. In Wall Street, Gordon Gekko says, “We make the rules pal. The news, war, peace, famine, the price of a paper clip.”
In order to stop this downward spiral of circular and cumulative causation, according to Myrdal, an “external shock” is needed. Myrdal argues that in order to trigger a change in a poverty stricken area, an outside force is needed. One form of an external shock that may help begin to crack the “glass ceiling” is affirmative action. Because companies are forced to employ a certain number of women and minorities, hopefully more of the employees will work their way to the top. Mount Holyoke College and similar institutions can also be considered an external shock as it promotes, teaches and encourages women to break through the old – boys network and not only fracture the “glass ceiling”, but to shatter it.
In conclusion, the films Wall Street and The Boiler Room contain examples of insider information, hostile takeovers and bridge financing. Moreover, males carry out the economic concepts and actions displayed in both movies. There are minute numbers of females in both films, except when placed in the stereotypical role of secretary. This is not because Oliver Stone or Ben Younger, the directors of the two films, hated women and did not want them starring in their movies. It is a reflection of the male dominated atmosphere in the American business world. Similar to Myrdal’s economic theory of circular and cumulative causation as exemplified in Roger and Me, blockades such as job segregation and maintaining the power of the ‘old – boys club’ exacerbate the negative effects of circular and cumulative causation for women and give men more power.

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