Most people in the U.S. today know Frank Capra’s 1946 film It’s a Wonderful Life mainly as a Christmas movie. If you haven’t seen Capra’s film recently or only know it by its association with the Christmas season, you may be surprised by how much the film is explicitly about economics. Equally surprising is the unhappiness of the economics, which is not entirely erased by the famous happy ending. In what follows, I will suggest that It’s a Wonderful Life can help us to understand the unhappiness of Donald Trump’s America.
Since Trump’s election two years ago, one might conclude from exposure to the U.S. news media that there had been a sudden mass conversion to Marxism. Where previously the term “working class” appeared mainly in the discourse of the left and academic left, it now was everywhere used to name those voters who gave Trump his electoral-college victory. Previously, the media had preferred terms such as “blue collar,” or “lower middle class.” Americans themselves have never in large numbers identified as “working class,” and polls previously had long shown that as many as 90% of Americans regarded themselves as middle class, including people of virtually all income levels. (There is some evidence that this broad middle-class identification may have eroded somewhat since the recession of 2008.) But because the shift of three traditionally industrial states—Michigan, Pennsylvania, and Wisconsin—from the Democratic to Republican column in 2016 gave Trump the election, pundits were quick to turn to the white working class as an explanation.
Many on the Left in the U.S. have been quick to accept this interpretation of the election, which confirms their belief that voters typically do vote out of economic motives and that therefore a traditional leftist message, like that of Bernie Sanders, is what was needed. And yet, more careful analysis of voting patterns shows that Trump voters were in fact more affluent than Clinton voters and that union members supported her over Trump. Moreover, the analysis that Trump’s victory could be uniquely credited to such voters ignores the fact that the Democratic Party has been steadily losing the votes of many less-affluent whites since 1968. The explanation for this is largely racism, and I want to make clear that I believe racism and misogyny were both important factors in Trump victory. There is strong evidence that suppression of African-American votes gave Trump his victory in Wisconsin, and some evidence of the impact of voter suppression in a number of other states. However, no event as complex as an election involving hundreds of millions of votes can ever be explained simply. There is an economic explanation that must be added to the politics of white-male identity. That explanation is not, however, the exploitation of the working class; it’s the decimation by capital flight of the traditional petty-bourgeoisie, who were in effect the dominant class in small-town America.
It’s a Wonderful Life, Frank Capra’s 1947 celebration of small-town life in the U.S., is a powerful expression of petty-bourgeois class-consciousness. Our hero, George Bailey, runs a small savings and loan, and he is firmly placed between the evil, high-bourgeois Potter and the working class, which is represented by several minor characters. (It is important that African Americans and Latinos are extremely marginal to this hierarchy, the only African-American character in the film being Annie (Lillian Randolph, the Bailey family’s maid.) In the film’s vision of Bedford Falls if Bailey had never been born, the “Pottersville sequence,” the community becomes something straight out of Marx: there are only two classes, one of them oppressed, and the civic virtues of the petty-bourgeois Bailey have disappeared. In the 21st century, this vision has largely been fulfilled in the U.S. and at least some other older industrialized nations, although not exactly as Capra imagined. The problem for small towns in Trump’s America is not nefarious local capitalists, but a lack of them. At the heart of Bedford Falls’ economy were locally owned businesses of all sizes. The number of such businesses has consistently fallen since the 1970s, as local banks, factories, corporate headquarters, and retail stores of all kinds, were taken over, replaced, or closed by national or international corporations. As a result, the petty bourgeoisie is much reduced in numbers and influence. The hollowing out of the middle in these small towns affected more than just the petty bourgeois themselves, as their spending supported a significant percentage of the working class. The remaining petty bourgeois felt the loss of their formerly wonderful life acutely, and they voted for Trump.
How It’s a Wonderful Life got to be a holiday staple is worth recalling. When it was released in 1946, it was generally well received, garnering five Oscar nominations, including one for Best Picture. However, the film was a box-office disappointment, and the result was the failure of Capra’s production company, Liberty Films. Because of a clerical error, the film’s copyright was not renewed. Because it was in the public domain, in the early 1970s, local TV stations could broadcast it for free, and they did so during the holidays. The film’s newfound popularity led to the copyright being held by Paramount, and the film is shown once a year on NBC, both entities being divisions of Viacom.
The film’s holiday role has developed despite the fact that it is mainly a story of the frustrations of George Baily. Towards the end when the hero contemplates suicide, the film becomes quite dark, and Robert Ray has likened the Pottersville sequence to film noir, where Main Street has been turned into something that looks like 42nd Street of the 1970s. Capra’s film is a fable about the importance of the petty-bourgeoisie to American society. This point is demonstrated at the very start of film when we are introduced to Bedford Falls, a fictional town in upstate New York, where, while the sound track allows us to hear people praying for George Bailey, the visuals show small businesses, including a store, Martini’s bar, and a car-repair shop. George is shown as a young teenager working in Mr. Gower’s pharmacy, and we soon discover that his father and uncle are the proprietors of the Bailey Brothers Building and Loan. Virtually all of the male characters in the film own their own businesses.
The picture of the economics of small town America was not entirely inaccurate earlier in the 20th century. While major industries such as steel, automobiles, and oil were controlled by monopolies or near monopolies, many other economic sectors were typified by individual proprietors. Small towns certainly had both economic hierarchies and status hierarchies, which Capra’s film ignores in favor of an idealized equality shared by small banker, cab driver, cop, and bar owner. What It’s a Wonderful Life doesn’t illustrate very well is where the capital for these small businesses came from. Small towns had there own banks, and they typically also had small factories, often locally owned. In some parts of the country, there would have been prosperous agriculture that brought cash into local economy. Each small town, in other words, was to some extent a microcosm, partially self-sufficient and self-sustaining.
The obvious figure for capital in the film is Potter, but Potter is an anachronism, a villain out of 19th-century melodrama. He is intended to be symbolic of monopoly capital, but his financial activities are not typical of it. For one thing, Potter is an individual, but by 1946 monopolies were typically held by corporations. For another, Potter’s economic holdings are said to reach everywhere in Bedford Falls, but apparently his wealth originally derived from rents. In the film, he acts as an investment banker, providing capital to the local bank. Marx excluded both of these sectors from the productive side of capitalism. Potter comes across, then, as something more like an aristocrat out of place in democratic America. The anti-monopoly element of his creation derives, I would argue, from the Progressive Era, when the petty bourgeoisie saw monopolist robber barons like Carnegie and Rockefeller as their class enemies. As the character of Sam Wainwright, George’s classmate turned plastics entrepreneur, makes clear, Capra is not in the least anti-capitalist, but the capitalism he imagines is one in which large numbers of people participate happily in capitalism, not by owning stock, but by owning their own businesses. And their own homes.
The virtue of home ownership is repeatedly emphasized in the film. In the scene depicting a meeting of the building and loan’s board following the father’s death, Potter complains about a loan to someone he believes isn’t deserving of owning a home, while George defends the man and attacks Potter’s position as mere self-interest. But his speech, one of the longest in the film, is in fact a defense of the ideal of homeownership. George asserts that his father, who wasn’t much of a businessman (because he lacked self-interest)
did help a few people get out of your slums, Mr. Potter, and what’s wrong with that? You’re all businessmen here. Doesn’t it make them better citizens? Doesn’t it make them better customers? You said they had to wait and save their money before they even thought of a decent home. Wait? Wait for what? Until their children grow up and leave them? Until their so old and broken down . . . Do you know how long it takes a working man to save $5000? Just remember this, Mr. Potter, that this rabble that you are talking about, they do most of the working and paying and living and dying in this community. Well is it too much to have them work and pay and live and die in a couple of decent rooms and a bath? . . . This town needs this measly one-horse institution if only to have some place where people can come without crawling to Potter.
The growth of home ownership was an important aspect of the post-war American economy, but as with the character of Potter, in other respects Capra’s film looks backward rather than forward. For example, there is a scene, literally set in the early years of the Depression, featuring a run on the building and loan. Changes in banking regulation in the 1930s put an end to bank runs, so this would not be a contemporary economic concern. The incident does provide Capra with another chance to extoll the virtues of small-town capitalism as George gives a speech to the frightened depositors explaining how the institution works. The Building and Loan is saved because most of the depositors in the end act in their rational self-interest by not asking for all the money in their .
The Building and Loan’s housing development, Bailey Park (contrasted in the film with “Potters Field”), imagines in a small way the massive suburban developments that would soon be built around all of America’s largest cities, but also on the outskirts of small towns. While some of these suburbs would be populated by working-class families able by virtue of union contracts to afford them, many more would be home to petty-bourgeois and professional-managerial people. The democratizing of home loans George Bailey is describing is part of the process of removing them from the center of small-town life.
The vision of Pottersville also derives fundamentally from the 1930s, when many in the middle class were driven down the economic ladder, and many feared a society split into only two classes. Earlier, we heard Potter assert that loaning money to workers makes them lazy and shiftless, rather than a “disciplined working class.” What Capra’s vision holds is that encouraging home ownership allows people to escape that class, as the character of Martini, who was apparently based on Capra’s own family, illustrates. George acknowledges that there are workers, but the film never shows them to us because their historically appointed mission is to rise into the petty-bourgeoisie. While this vision is certainly in keeping with postwar American ideology, the fear the film seeks to contain was not.
The film’s ending might also be seen as more of the Depression than of the post-war moment. After George returns home, glad to be alive after his guardian angel has shown him what Bedford Falls would be like had he never been born, he expects to face disgrace and arrest. What he finds instead is that his friends have contributed to make up the missing short-fall. In a neat illustration of “from each according to his abilities to each according to his needs,” Capra gives us a socialist solution to a capitalist problem, much as the New Deal had done for the country as a whole. Capra himself was a life-long Republican who voted for Roosevelt’s opponents. But this scene suggests an acceptance of Roosevelt’s methods in the face of economic disaster. The entire film depicts admirably social solidarity in Bedford Falls that helped to mitigate the ravages of capitalism and that, one might argue, is implicit in the very idea of the welfare state. This is a film after all, that celebrates a man who does not go off to seek his fortune, but who stays home and helps others.
Late 1940s audiences no longer lived with downward mobility as an immediate fear. Such fear, however, is now current, and it may be no coincidence that It’s a Wonderful Life finally caught on in the 1970s, when economic confidence dwindled and, as is clear at least in retrospect, major changes in the U. S. economic order began. The decline of small town America seemed to accelerate then, though it perhaps began earlier, as local economies were increasingly deprived of the partial autonomy they had enjoyed. Fast-food franchises, discount stores, and convenience chains all started to put locally owned establishments out of business. Wal-Mart has been major force in the disappearance of homegrown retail. Local banks were swallowed by state banks, which would later be swallowed by national behemoths. Doctors, who were typically self-employed and among many small towns’ economic elite, were increasingly employees, still relatively well paid, but no longer identified with the petty-bourgeois class. Moreover, the decline in the economic fortunes of small towns often meant that there was no longer a doctor in town at all.
More recent economic developments have compounded these trends. We all know that both international outsourcing and automation have reduced the number of manufacturing jobs in the U.S., and these problems have hurt cities and towns alike. But another factor has been the consolidation of ownership as result both of pressures of international competition and of the growing influence of financialization. While we sometimes might imagine that most manufactures have long been large multinational corporations, in fact the U.S. had many enterprises that continued to locate their headquarters in small or medium size cities. As these businesses were taken over by financial interests or multinationals, the capital they brought to their home communities was lost together with the middle-class jobs that their offices provided.
Without capital to support new businesses and without people with sufficient income to patronize them, the economies of small towns are effectively moribund. The rural areas around these towns used to be part of those economies, but they are now equally imperiled. The parts of the U.S. to which capital has migrated, mainly on the coasts, are doing relatively well, but much of the middle of country feels like Pottersville, but even more depressed and tawdry. For alcohol and burlesque, read opioid addiction.
The fall of the petty bourgeoisie has spurred status resentment, but curiously not the class antagonism for which one might have hoped. Instead of blaming the capitalists, the petty-bourgeoisie blame the professional-managerial class on the coasts who have replaced them in the economic hierarchy. The dispossessed petty-bourgeoisie continue to cling to their identification with successful capitalists, and Trump was the very image of that, as The Apprentice proved. The petty-bourgeoisie cannot represent themselves; they must be represented. Trump is their representative.