The Ethical Economics
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It's a Wonderful Life (1946)

This is a classic American film about a young man, George Bailey (James Stewart) whose dreams of traveling the world and becoming a great designer of modern cities are dashed as various family crises continually keep him in his small hometown. His friends and family go off to become college football stars, successful businessmen, and war heroes, while George Bailey remains at home running the family business, a small-sized savings and loan company.

George eventually feels like he is a failure and when money suddenly goes missing from his bank, it threatens to unravel into a scandal. George begins to feel that he is worth more dead than alive and considers suicide. At this stage an angel sent by God intervenes and prevents his suicide. To convince him suicide would be a mistake the angel offers to show George what would have happened to his family and his small town if he had never existed.

George's journey with the angel to a different reality eventually demonstrates the many positive impacts he has had on the lives of people in his community, largely because of his upstanding moral and ethical values and the way he ran his business and his life. When George realizes this, he decides he wants to live again and rushes back to face the consequences of the scandal. Instead he discovers that the whole community had banded together to make up the shortfall and bail him out of trouble. The film's ending moral is, "No man is a failure who has friends."

The movie also highlights the value of a small-town financial institution (as opposed to the more opaque ways financiers make money in movies like Wall Street). In the bank run scene (right column) George explains to the panicky customers how each person's savings has helped finance the construction of other peoples' homes. The other banker referred to in the clip, Mr Potter, his nemesis, is intent on controlling and monopolizing as many of the town's businesses as he can, but he is never able to gain control of George Bailey's Building and Loan.

In the end, the movie's grand finale ending is used to demonstrate that while the operation of the Building and Loan seems boring and mundane to George Bailey, by fulfilling the central purpose of the institution (i.e. redirecting savings into useful investments), he has contributed to the well-being of the entire community. When that same community comes together to show their gratitude to him in a time of great need, it demonstrates why he is the "richest man in town."

More Info




It's a Wonderful Life - Trailer


It's a Wonderful Life - Loan Board Speech


It's a Wonderful Life - Bank Run Scene


Reflection Questions

  1. Why are careers designing cities and traveling internationally seen to be more appealing than working at a small-town savings and loan? Do the former careers create more value? Do they create more happiness?
  2. What things in the movie demonstrate George Bailey's strong moral character? How does this influence his reputation in the community?
  3. Suppose George Bailey had become a designer of cities. Would the value he creates in that career be as noticeable to others as the value he creates in a small-town setting?
  4. Although the absence of one honorable citizen (George Bailey) seems unlikely to result in a complete degradation of a town as shown by the angel in the alternative reality, how would a town filled with Mr. Potter-types compare with a town filled with George Bailey-types? Where would you rather live?
  5. The film suggests that simple merchants in a small town, for example, those who run a bakery, or a butcher shop, or a savings and loan, are more deserving of praise than is commonly offered. Do you agree? Under what conditions would this be true?
  6. What basis does Mr Potter have for the allegations he makes in calling for George Bailey's arrest? Consider the fragility of a good reputation.
  7. Who has a better understanding of what it takes to be happy, Mary or George? Why?