"It's a Wonderful Life" deconstructed

[cavalier973]

Check out this article (and all the articles to which it links)
http://blog.mises.org/archives/006030.asp

I disagree that Mr. Potter is somehow the hero of the story.  He does "provide value" to people in the town by offering affordable housing, even though the people who rent from him seem to despise him for the service he offers them.  On the other hand, he takes the $8 grand that Uncle Billy folds into Potter's newspaper without batting an eye.  He seems to be politically connected (he tells the telephone operator to put a congressman on hold while he talks about his rental business with his rent collector), which, coupled with the larcenous activity revealed later, leads me to suspect that Potter is a Political Entrepreneur rather than a Market Entrepreneur.  He probably, though it is never stated, inherited his fortune from a more entrepreneurial forbear, and tries to maintain his inheritence by keeping out competition and setting a floor on rental rates (or something like that) through legal maneuvers.  I would take this as an explanation why Potter has no other apparent competition in the town except the Bailey Building & Loan.

A word about the BB&L: Gary North criticizes the Baileys for running the same scam of fractional-reserve banking that the banks run.  But a Building and Loan is not the same as a bank.  It's a little difficult to find out a thorough treatment of a building & loan's business structure (it was a forerunner of the savings and loan association), but what it seems to be is a sort of mortgage co-op.  The members pool their money, which is lent out according to prior agreement (i.e. they draw straws, or something like that).  Then as the mortgages are paid off, the next in line can get their mortgage.  In other words, the accounts are not treated the same as demand deposit accounts.  Even the dialogue of the movie shows this; when Randall asks for his $242, George eventually relents, slides over an account slip, and says that Randall will get his money in 60 days--terms he agreed to "when he bought his shares."

Then there is the criticism that George Bailey is not a businessman.  I could go either way here; George is certainly able to keep Potter from putting the Building & Loan out of business, primarily through severe cost-cutting.  But George doesn't seem able to capitalize on the higher quality product he offers (nice homes).  I suspect that George derives utility from something other than the higher income he could be earning by charging more for his houses (or by being the brilliant world-travelling architect that he dreamed about all his life).  Part of this is probably due to the building & loan's business model.  Part of it is that George is conducting business in an a depressed market.  To maximize his accounting profits, George should move out of Bedford Falls to somewhere that his talents as contractor and financier could earn a higher income.  But (per Professor Mises), I cannot judge George's decision to stay in Bedford Falls, and keep managing the Building & Loan instead of starting a new, more profitable business as irrational.  Geroge apparently had a different set of preferences than I would have had.  First, he had a sense of "family duty" in keeping his father's legacy business as a going concern.  Tied to this family legacy is George's apparent psychological satisfaction resulting from continually beating the guy in the marketplace who "probably killed his father".  So I disagree with Gary North that it was Mary who kept George in Bedford Falls; it was actually his father.

I do agree with North that Sam Wainwright is the real entrepreneur in the story.

[Cognitive Dissident]

WRT Old Man Potter, what they've done is wrapped up the trite view of the "piggy capitalist" into a single character so as if to make everything the character does evil.  It's the famous "straw man argument" played out on the silver screen.  I think the big point is that the author's anti-hero is a straw man and many of his evils are not evil.

[davann]

Love this movie. It has been a yearly staple at Christmas for since I was a child.

Old man Potter was a political entrepreneur.

I've always dreamt of doing a remake with a twist. The main character would be a fictional political hack. say a member of the house or senate. The show then will go through and show the life of an average evil politician. Up until Clarence, the story would be about all the "wonderful" things the man did to help others with political influence. A disastrous event would come along for our politico and Clarence then would appear and show him the unseen horrible results of his actions and how life would have been much much better for everyone if he was never born. Clarence would get his wing at the end when the politico jumps into the river, killing himself. I've got to come up with a catchy tag for that like the "every time a bell rings an angel gets his wings". Like "everytime a congress man dies nobody cries" but better.

This could be a block buster in todays political climate!