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George Bailey, Capitalist Hero

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12/25/2019

Every December, my family and I watch Frank Capra’s cinematic masterpiece It’s a Wonderful Life. It has only recently become a Christmas tradition in my family, largely because my silly youthful disdain for black-and-white movies made me reluctant to watch it. The film still moves me no matter how many times I see it.

Perhaps, then, it is naïve nostalgia that makes me rush to the defense of the movie’s protagonist George Bailey, after I came upon an article which takes a contrarian look at the film’s central message.

In his piece, the usually perspicacious author Tom Mullen zealously argues that the true hero of the film was not Bailey, but Henry Potter, the wealthy financier whom the movie portrays as the villain. Well, I suppose even the Devil needs an advocate.

Weren’t the Baileys Free to Be Charitable?

Early in the film we learn that old man Potter is a stockholder of Bailey Building and Loan, a company he despises. Why this is the case we don’t really know, but it makes for an interesting plot. At one point a young Bailey inadvertently witnesses Potter lecturing George’s father, Peter, the president of company, about how to run the business. Hard times have hit Bedford Falls and some people, unemployed and penniless, are unable to make their mortgage payments. Potter’s recommendation is simple: kick ‘em out and foreclose. “These families have children,” Bailey protests as he implores Potter to show some compassion. “They’re not my children,” Potter huffs, “Are you running a business or a charity ward? Not with my money!” (Note that despite the fact that Bailey does not heed his advice, Potter still doesn’t sell his share of the company.)

Mullen imagines that Bailey has a “fiduciary duty” to Potter to maximize his profits, something Bailey clearly didn’t intend to do. But this should have been obvious to Potter in the first place, before he ever invested in the Building and Loan. Potter never intended to reap a return on his investment; he simply wanted to eliminate the competition — to “kill it” as he says of the Building and Loan.

In any case, I don’t see why the Baileys are villains simply for allowing their customers to make late payments. It’s their business; they should be free to run it as a charity at times if they so desire. If Potter had a problem with that, he shouldn’t have bought part of the company. Indeed, the greatest principle of the free market isn’t that people should make lots of money; it’s that the market is free.

Bailey Wasn't Necessarily a Fraud

In his fevered defense of Potter, Mullen cleverly argues that people wouldn’t have lived in Potter’s “slums” if they didn’t like it, or had better alternatives. Perhaps this is true, or perhaps Potter used his (probably significant) political connections to effectively establish a government-sanctioned monopoly, or pass regulations making it harder for others to compete in rental real estate.

Whatever the circumstance, Mullen contradicts himself when he refers to Bailey Building and Loan as a “fraudulent Ponzi scheme.” Presumably, Mullen believes that because the Building and Loan only kept a fraction of its depositors’ money in cash, it was essentially lying to its customers about keeping their money safe. But we don't know this. It is likely many of Bailey’s customers, even the “yokels,” as Potter disparagingly called them, assumed that much of their money would be loaned out and not kept in the vault. We don't know that Potter attempted to conceal this fact from his customers.  As with many other banking customers in other times and places, it is likely that many of the customers knew how this type of banking worked, and yet these customers chose to deposit their money in the Building and Loan anyway.

George Bailey, Capitalist Hero

It was only by fighting old man Potter that Bailey was able to save the town from the monopolist’s grip. Through hard work, rigorous planning, and competent decision-making, George helped to transform Bedford Falls from a destitute town into a happy, bustling center of commerce. Taking a chance on those whom Potter considered “lazy rabble,” George was able to keep the Building and Loan not only afloat, but prosperous.

More than that, he used his knowledge of the town’s workforce to persuade his friend Sam Wainwright to build a factory in Bedford Falls, giving gainful employment to a large portion of the population. Indeed, it was only by means of honest, voluntary transactions that George was able to liberate the town from the monopolistic crony, Henry Potter.

Henry Potter, Statist Villain

Unfortunately, Bailey could not save his neighbors from the Henry Potter's statism, however. During World War II, Potter became the head of the draft board, gleefully enslaving young men and sending them to be killed overseas. This is hardly the work of an “honorable” businessman, as Mullen calls him. It is the action of a cold and ruthless man — not a man innocently trying to make a dime, but one which delights in having power.

Indeed, when Potter discovers that the bumbling Billy Bailey has inadvertently left eight thousand dollars with him, the grumpy man keeps it, essentially stealing the money and calling the District Attorney to accuse George of embezzlement. It simply doesn't get more crony capitalist than this.

“Freely You Have Received, Freely Give”

In the end, it’s George Bailey who encapsulates the true meaning of freedom. He escapes the long arm of the law and the DA’s attempt to prosecute him for a crime he didn’t commit, rescued not by a government bailout but by the freely given charity of his family and friends. George’s investments — financial and spiritual — finally pay off. In one of the most touching scenes in cinematic history, a crowd of people pack into the Bailey household and dump money on a table, enough to cover the lost cash. They do this not by order of some government bureaucrat or politically connected thug like Potter, but out of pure love for the man who has done so much for their town.

So, this Christmas, let’s all grab a bowl of popcorn, put our feet up, and enjoy the wonderful life of our capitalist hero, Mr. George Bailey.

Author:

Tyler Curtis

Tyler Curtis is a lender at a community bank in Missouri, and earned an undergraduate degree in economics from the Missouri University of Science and Technology.

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