Finance goes to Hollywood

[CAMBRIDGE] Over the years, Hollywood films have had much to say about financial markets and institutions – often reflecting a distinctly populist perspective. At a time when both populism and financial volatility are much in evidence, what lessons might these films hold about regulation?

Start with the 1939 classic The Wizard of Oz, in which Dorothy and her cohort – the Cowardly Lion, the Scarecrow, and the Tin Man – travel along the “yellow brick road”, in order to reach the magnificent Emerald City, where they hope to find the wizard who can make their dreams come true. But the city’s splendour – and the wizard’s power – turn out to be illusory.

Most of the film’s devotees don’t realise that it is a populist allegory about money. The yellow brick road represents gold, and the Emerald City is a metaphor for Wall Street. The Cowardly Lion represents William Jennings Bryan, a populist presidential candidate in 1900, when the book on which the film was based was written. Bryan railed against big-city bankers and the monetary austerity of the gold standard, and pledged to advance the interests of farmers in the American West (the Scarecrow) and factory workers in the east (the Tin Man).