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It's a Wonderful Life

Posted by Kate Porter on December 10, 2000 at 01:54:20:

Kate Porter
Economics in Film
It?s a Wonderful Life


It?s a Wonderful Life begins in the ?party economy? of the 1920?s, during the rise of capitalism in America. The growth of economy and rapid technological advances during this post-war period lead to improvements in production and telecommunication, increasing the importance of financial markets. Allowing companies to make money by the sale of shares, financial markets open ownership of companies to the public. In the 1920?s, when business was booming and many people were making money in the market, the public became very excited about the get-rich-quick opportunities they saw in a market they didn?t necessarily understand. When the ignorant public began throwing their money into the stock market on the unstable basis of margin buying, money in the market became inflated until the market eventually imploded. Numerous people, businesses and banks were financially ruined in the stock market crashes of 1929. Speculating heavily with their deposits, many banks were totally wiped out during the crash of 1929, which created a run on the banking system. The crashes, along with other social, political and economic disasters, provoked the Great Depression.

The Great Depression is the backdrop for It?s a Wonderful Life, and although the film does not delve deeply into the economics of the depression, it influences and affects every aspect of the movie. The first major impact the depression has on Bedford Falls is the run on the bank. Everyone in town is in a panic because of the market crash, and fearful that they may lose all of their money in the Savings and Loan, the public rushes to the bank in an attempt to retrieve it. Fortunately, the Savings and Loan was not financially ruined in the crash, but the bank system does not allow for all of the money of its customers to be kept in the bank itself. Therefore, George has difficulty explaining to the residents of Bedford Falls that he does not have all of their money in the bank at any specific time. So during the crash, when Mr. Potter offers fifty cents on the dollar, many people are willing to take that cut in their savings in order to have the security of money in their wallets. George is able to foil Potter?s plan to shut down the Savings and Loan by dispensing his honeymoon money to the desperate people, retaining their patronage. This is neither the first nor the last time that Potter tries to shut down the Savings and Loan.

Potter is desirous of achieving a monopoly in Bedford Falls; the only obstacle he faces is the Bailey Savings and Loan. Many times, Potter is unable to buy it or shut it down. When ?Pa? Bailey passes away, Potter tries to close it by saying that its existence is futile, but George makes an impassioned speech and the board appoints him head of the Savings and Loan. Recognizing the importance of maintaining a free market in Bedford Falls, George sacrifices his future to keep the bank open. Later, Potter tries to employ George in an effort to shut down the Savings and Loan, but fails. When Uncle Billy ?loses? eight thousand dollars, Potter finds the money and unethically keeps it. Knowing that this unexplained loss of money means trouble, George shouts at Uncle Billy, ?where's that money? Do you realize what this means? It means bankruptcy and scandal and prison. That's what it means. One of us is going to jail, well it's not gonna be me!? Potter uses this to his advantage and looks forward to the closing of the Savings and Loan while he phones the authorities to turn George in for fraud and theft. Potter will go to any means to achieve a monopoly, because he will selfishly reap all the benefits.

The importance of the Savings and Loan becomes apparent when Clarence negates George?s existence-- Potter closes the bank following Pa Bailey?s death. Bailey Estates was never created and all the people of Bedford Falls, now Pottersville, are forced to live in Potter?s slums and pay Potter?s rent. Maintaining a monopoly in the town, Potter turns Pottersville into a cheap, tawdry town that makes money only for him. Everyone else lives a bitter, poor, desperate life?with no money and no opportunities, they have to sink to meet the surrounding communities? standards. The businesses, the people and the quality of life change with George?s existence. Nick lives in Potter?s field and works as a bartender in Pottersville. He is a mean and cynical old man. In Bedford Falls, Nick had lived in Bailey Estates and had owned the bar with help from the Savings and Loan. He was a caring family man. The importance of balance of powers within a single community is evident when examining the two scenarios.

George Bailey fights on the side of the people in Bedford Falls. He sacrifices himself and his future a number of times in order to raise the standard of living. Keeping the Bailey Savings and Loan in business saves the town from Potter?s monopoly and the subsequent transformation of Bedford Falls. It?s a Wonderful Life is not only a story about one man?s impact on the lives of others, but also a glimpse of how a town can transform under different economic scenarios.


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