The Movie’s Not Called “It’s A Wonderful Life Of Economic Freedom”

Programming note: Understanding America will be taking a Christmas break, returning with a probably excessive pile of things you should be reading on January 3. Warmest wishes to you all for the holidays and the new year.

“It’s A Wonderful Life” is the official Christmas movie of Understanding America. It emphasizes local businesses anchoring and nurturing prosperous communities. It warns about the shortcomings of the unchecked pursuit of profit in the “free” market. It celebrates decent lives and strong families built in hometowns atop mutual obligations.

And according to former Senator Phil Gramm, a leading proponent of the Republican Party’s market fundamentalism since the Reagan administration, it’s really a parable about the wonders of “economic freedom.”

So your one thing to read this week is Gramm’s essay from Christmas Eve 2019 in the Wall Street Journal: George Bailey Saw the Miracle of Capitalism.

I recommend this partly because it’s just a lot of fun, and a great illustration of how market fundamentalism truly is a fundamentalism. Obviously, “It’s A Wonderful Life” is a critique of capitalism and an argument that the common good requires placing other priorities above the pursuit of profit. But a fundamentalist cannot “Take the L,” as the kids say. Everything must fit within the reigning orthodoxy or else be condemned as heresy. And who’s gonna condemn George Bailey?! So instead, Bailey must #actually be a stand-in for “real-life Baileys throughout our nation’s history,” like, you know, private-equity baron and Chinese Communist Party partner-in-education Steve Schwarzmann.

Gramm’s commentary inadvertently shows how “It’s A Wonderful Life” does exactly what great art should do, creating accessible abstractions that help people to better understand reality. Mr. Potter, the film’s villain, is a wealthy slumlord, exerting market power against customers and competitors alike to maximize his own profits at the expense of the community’s welfare. This, Gramm says, “epitomizes the Democrats’ caricature of unredeemable capitalism.” But Gramm doesn’t say what, if anything, the caricature gets wrong.