Co-written and directed by
Douglas plays Gordon "Greed is Good"
The movie depicts a fundamental dilemma at the heart of modern capitalism. You cannot leave companies at the mercy of short-term-oriented financiers such as
Some Like It Hot (1959): the trouble with rentier capitalism
Some Like It Hot is rightly acclaimed as a brilliant, quirky comedy. It has cross-dressing and shtick so rapid that even after 10 viewings you are still finding new things funny. But it is also a brilliant portrayal of what's wrong with rentier capitalism. Consider the world of the movie:
The Matrix (1999): you can't trust happiness
It is increasingly accepted that income, the economists' traditional measure of human welfare, is not a good indicator of wellbeing. There are at least two reasons: first, because money is only one of the things we want in our lives; and second, because even when it comes to money, we often make poor decisions as consumers.
As a result, some economists have tried to measure wellbeing by asking people directly how happy they are. But even ignoring the issue of whether happiness is something that can be measured, we can't really trust "happiness studies" because we cannot totally trust people's judgments on their own happiness.
First of all, there are all kinds of "adaptive preferences", in which people reinterpret bad situations to make them more bearable: "sour grapes" - deciding that what you could not get is actually not as good as you had thought - is a classic example. Moreover, many people who are oppressed, exploited or discriminated against, say that they are happy. Some even oppose changes that would improve their lot: many European women, for example, opposed the introduction of female suffrage in the early 20th century. These people think they are happy because they have come to accept the values of their oppressors. The most perfected form of it is found in The Matrix, the Wachowskis' 1999 sci-fi movie in which people don't even know they are being used as organic batteries to power their machine overlords. HJC
Few people would associate this Disney movie with economics. But it contains a scene that gives an excellent summary of the nature of modern banking, one that opens with young
Michael is not convinced and doesn't want to give up his coin; but mesmerised by the singing, he loses concentration and
The scene illustrates how banks depend on maintaining the confidence of their depositors. Like all other banks, the Fidelity Fiduciary had made a promise it could not keep: it had promised its depositors that they would be paid in cash upon demand, when actually it had enough cash to pay only a proportion of them. This is usually not a problem. At any given time only a small proportion of depositors would want to withdraw their money, so it is safe for the bank to hold in cash only a fraction of the amount in its deposit accounts. But if a depositor begins to doubt the bank's ability to pay her back, she has the incentive to withdraw her money as soon as possible. Even if the doubts are totally unfounded (as in
This "confidence problem" has led to the development of central banks (such as the Bank of
We all love conspiracy movies, but this was no
The film highlighted a real economic issue: the difficulty that markets have in putting a price on the impact of a company's core activity on the wider environment. In economics speak, this is the problem of measuring "externalities". Pollution, medical consequences, congestion, noise, climate change, community displacement and unrest fall into that category. What isn't measured tends to be ignored.
Some progress in this area has been made. In the decade that followed the film's release, companies have come under increased scrutiny for their business ethics. Corporate social responsibility has become something that companies espouse, at least publicly. A lot more needs to be done. But the business imperative is clear. Today, thanks to social media and 24/7 news, allegations of a company's failure to meet required standards travels instantly round the world. It can result in global boycotts of products, falls in share values, chief executives losing their jobs and, at times, companies that have been around for decades if not centuries going under. Think Enron, think Arthur Andersen - and many more.
The Sound of Music (1965): how to handle success
A musical about an errant trainee nun in the Austrian Alps, starring
Producer Richard Zanuck was 30 years old, and this was his first big hit. So what did he do next? Understandably, he tried to repeat what he'd just done."I was convinced that the musical was back, and a lot of people, a lot of other studio heads, were convinced that this was the way to go," he told me when we had lunch just days before he died in
First, Doctor Dolittle, an adaptation of the children's books by Hugh Lofting, contributed to
It's not that the past is never a good predictor of what lies ahead. There are of course many examples we could cite of times when looking backwards, consciously or not, has helped people reach the right decisions. The key, though, is not to be wedded to our past successes and failures, or our experience-based instincts, so that shifting tides or new information are ignored. Nor should we assume a linear trajectory - more so now than ever, as we attempt to navigate today's uncertain and unpredictable digital world, in which things are changing with an ever greater rapidity.
It is a testament to Zanuck's creative energy and willingness to introspect that he came back from these harsh experiences to produce Jaws, Driving Miss Daisy,
The Full Monty (1997): the reality of unemployment
This hit British movie, starring
In standard economic theory, this kind of unemployment should not exist. If the British steel industry goes into decline because of competition from, say,
The point is that workers cannot freely move across different jobs, because their experience is specific to their line of work - there are few skills that are equally valuable in all industries. The alternative that most unemployed workers face is to get a new job that does not require much skill - in this case, stripping - that pays far less. HJC
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