Capitalism as Drama

Somehow the movie Wall Street (1987) still holds up after all these years. Sure, the technology is dated — the cell phones are hilariously huge and the fat-back screens in offices display only green digits — but it hardly matters. The clothing by Alan Flusser is of course amazing and holds up too, but the real merit here runs deeper than appearances alone.

The sensibility of the film, the thrill of commerce and trade, the challenge of the battle between money and morality, and the larger-than-life quality of its main character — the rich, savvy, and unstoppable Gordon Gekko — all combine to make a legendary story that remains strangely inspiring in ways that its maker, Oliver Stone, surely did not entirely intend.

The film ends with a paean to labor unions and governments that save companies from rapacious capitalists, but it seems artificial, like a Victorian novel that had to have a happy ending lest the readers revolt. The overall message concerns the central role of finance and commerce in moving history forward. Even the famed "greed is good" speech gives one pause: he is onto something here, even if it is inelegantly stated.

In the same way that the Godfather movies shaped the culture of organized crime, Wall Street continues to influence the way traders and high-flying capitalists understand themselves.

And it's no wonder. The impression one is left with is all about the courage, the thrill of the fight, the riskiness of entrepreneurship, that struggle to obtain vast wealth, and the striving for the status of "master of the universe." It pictures commerce as a gladiator fight, a magnificent and relentless struggle for progress, an epoch and massively important terrain in which the fate of civilization is determined.

Enticing isn't it? Indeed it is and should be. Not all of commercial life is like this but parts of it are. And some features are universals that don't just apply to high finance. Everywhere and always, the future is uncertain. Those who make good judgments are rewarded. It isn't easy. It isn't for the faint of heart. Competition can be as fierce in a small business setting as in a big business one. Even the tiniest shop faces a daily risk, and this risk affects decision making in every area. Contrary to what Gekko claims, there is no sure thing, even with inside knowledge and even with all the wealth of the world. Indeed, Gekko is ultimately undone by forgetting that there might be someone out there with even better information.

The thing that levels the playing field in this rivalry in the service of society is the ubiquitous reality that no one really knows for sure what is around the corner. And in the end, whether you win or lose depends on that fickle and uncontrollable thing called consumer volition and its confrontation with the other undeniable reality of scarcity in all things.

I was trying to think of another story that captures that amazing element of drama associated with commercial life. It was this feature of the novels of Ayn Rand that most impressed Ludwig von Mises and Murray Rothbard. She gave voice to their own love of economics as high-drama intellectual battles for and against the progress of man.

My own favorite writer in this genre is Garet Garrett and his four novels written in the 1920s.

It is not just his novels. It is Garrett's entire worldview. He saw the market as the tableau for the working out of the great struggles in human history. Unlike Oliver Stone, he favored capitalism for the very reason that it was the engine of progress, and a vibrant and wholly cooperative way to work out the competitive spirit in the human person.

The virtues of steadfastness, valor, bravery, and the impulse to make a dent in the universe, and never, never, never give in (Churchill) are tragically associated with the death and destruction of war, but free enterprise provides a means by which these impulses can be channeled toward creative purposes.

And so, for example, in The Cinder Buggy we are witness to a titanic struggle within a family over whether the future belongs to iron or steel. And the description of the struggle, in the lives of its entrepreneurs, causes the heart to race.

The day of steel was breaking. It was not a brilliant event. It was like a cloudy dawn, unable to make a clean stroke between the light and the dark. Yet everyone had a sense of what was passing in this dimness. Gib, whose disbelief in steel rested as much upon pain memories and hatred as upon reason, was a fanatic; but at the same time great numbers of men with no such romantic bias of mind were violently excited on one side or the other of a fighting dispute. Fate decided the issue. The consequences were such as become fate. They were tremendous, uncontrollable, unimaginable. They changed the face of civilization. Vertical cities, suburbs, subways, industrialism, the rise of a wilderness in two generations to be the paramount nation in the world, victory in the World War, — those were consequences.

And look at this. You have to love this material:

And all the time, bad as it was, steel kept coming more and more into use, especially, that is to say, almost exclusively in the form of rails. And the reason the steel rail kept coming into use was that an amazing human society yet unborn, one that should have shapes, aspects, wants, powers and pastimes then undreamed of, was calling for it, — calling especially for the steel rail. The steel men heard it. That was what kept them in hope. The iron men heard it and were struck with fear.

Even the everyday actions of workers become fascinating:

The air was torn, shattered, upheaved, compressed, pierced through, by sounds of shock, strain, impact, clangor, cannonade and shrill whistle blasts, occurring in any order of sequence, and then all at one time dissolving in a moment of vast silence even more amazing to the ear. Conversation would be possible only by shrieks close up. The men seemed never to speak at their work. They did not communicate ideas by signs either. Each man had his place, his part, his own pattern of action, and did what he did with a kind of mechanical inevitability, as if it were something he had never learned. They were related not to each other but to the process, kept their eyes fixedly on it for obvious reasons, and stepped warily. A false gesture might have immediate consequences.

Garet Garrett: The Collection

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Later in the book, the fight between the dynasties revolves around price movements. One side gets into the nail business. The other side dumps nails on the market to lower the price, attempting to drive all competition out of business, even though it proves harmful to the very firm doing the dumping. The action is driven by spite, and the capitalist deems the price paid worth it for his goal of revenge. The action starts his downward spiral toward death. The firm that hopes to make and sell nails moves on to greater things.

So it is in the real world of commerce. No, the profitability is not always the motivation. Self-interest defines a wide category of human impulses, from benevolence to greed to the desire to destroy. This multiplicity of motivation can no more be ended than human nature itself can be permanently changed. The beauty of the market is its capacity for funneling it all in the service of the consumers, and The Cinder Buggy shows how all this works. Who won from the struggle? Those who needed nails and were glad to pay a lower price.

Price movements are also central to the drama of Satan's Bushel. The reader follows the price of wheat up and down and up again, and watches these price changes shift the fortunes of families, communities, and whole regions. No matter how powerful and rich the players, they are reduced to bit players in the face of larger market trends.

Garrett writes of a wheat speculator what could be said of Gekko in his best moments: