My regular readers know that from time to time I see parallels between real life economics and the movies (see, for example, here and here). It's happening again. This time the movie is Strictly Ballroom.
At first glance, this is a chick flick in which an awkward plain jane named Fran (I don't think we ever learn her last name) manages to get the good-looking ballroom dance champion, Scott Hastings, to dance with her. She does this mainly by being bold and willing to take chances at an opportune moment. Her appeal to Scott is her willingness to dance steps that Scott has made up and to dance them at the Pan-Pacific Grand Prix Amateur Five-Dance Latin Championships, no less.
Unfortunately, there's a lot of pressure for Scott to conform to the formulaic steps prescribed by the Australian Dance Federation. His regular partner has abandoned him because he won't "dance the steps you're supposed to."
"Well, of course, you can dance any steps you like," says Australian Dance Federation president, Barry Fife. "But that doesn't mean you'll.....win."
It's a fun movie on many levels: romance, transformation, redemption. But it is also notable for the economics in it.
"Economics?" you say. "Maxine, I've seen the movie. There is nothing remotely related to economics in it."
Ah, but you would be wrong. The whole movie is about economics. Consider this exchange between Scott and ADF prez Fife:
Fife: "Where do you think we'd be if everyone went around making up their own steps?"
Scott: "Out of a job."
You see? It's a movie about rent-seeking. As long as the ADF maintains control of the steps that are danced and as long as its members control the steps that are taught and the judges that judge the competitions, they're guaranteed income for life. (As an aside, one of my grad school classmates, after seeing the movie, took to referring to his dissertation committee as the Australian Dance Federation. And, no, none of them were Australian or dancers.)
As the plot unfolds, we learn that Scott's parents, who were the reigning Australian champions 20 years earlier, confronted a fateful choice in their own dance careers. Scott's father, Doug, wanted to dance his own steps at the Pan-Pacifics, but Shirley was afraid that if they did they would never be able to teach, they had to conform in order to be sure of having an income later in life. As a result, she opts to dance with someone else, instead of Doug, and loses the competition anyway.
All this is revealed, just as Scott is about to take the dance floor at his own Pan Pacifics, having dumped Fran and returned to his previous partner who had refused to dance with him until he agreed to dance Federation steps. He's planning to conform and dance the ADF steps when we hear Doug say to Shirley: "You lost anyway, Shirley. You should have stuck by me."
And then, as Shirley shoves Scott out to the dance floor, Doug says to Scott: "We had the chance, but we were scared. We walked away." (And then, shouting) "WE LIVED OUR LIVES IN FEAR!" (Cue echo chamber on "fear.")
So why have I been thinking about Strictly Ballroom? Well, lots of reasons, I think. Not least is that I've been watching rent-seekers structuring finance and politics in ways that assure that they will continue to secure rents at the expense of more able, talented, and creative individuals. Individuals who, if they could retain those rents for themselves, could almost certainly put them to better use, investing in human capital, physical capital, preservation of environmental resources, and even just good old consumption. They would dance new steps, create new products, and make us all better off.
I hope some of you have noticed that I just used the same argument to motivate reining in investment banker compensation, bank fees, and lending practices, that is often used by so-called conservatives to argue for lower taxes. You see, rent-seekers' profits, are like a tax on us all. It is money that flows out of our pockets into their's with no commensurate return in benefits to us. The loss of income to rent seekers through higher prices, fees, and interest rates that they charge tends to impede the creativity, productivity, and economic advancement of the more able and innovative among us.
Another reason I've been thinking about the movie is the phrase, "we lived our lives in fear." We seem to be living in a fear-based world. We have gradually ceded individual liberties (think TSA for starters) out of fear. The Dems are afraid to allow tax cuts to expire because they could be accused of "raising taxes." We fear to tax the wealthiest, because they might work less. This last despite an impressive array of wealthy businessmen and women who say they should be and would like to be taxed more. We fear to act because we imagine the unintended consequences of our actions will somehow be worse than what now confronts us. We are afraid to provide health insurance to all Americans, for fear it will move us to excessive state control. If we allow gays to marry, some fear heterosexual marriage will...well, I'm not sure what they're afraid of, but they are afraid.
In the movie, Fran morphs from plain jane to beauty, but her strong suit is courage. "Vivir con miedo es como vivir a medias." she tells Scott as she persuades him to take a chance and dance with her. "A life lived in fear is a life half-lived." This is why his father's words, "We lived our lives in fear" resonate with him and inspire him to take the chance and do the right thing: dance his own steps with Fran at the Pan Pacifics even if he doesn't win.
One reason having ethical principles and living by them is important is that they guide us when our emotions are tending to over-ride sound judgement. Prudence tempered with compassion. Beneficence that preserves and enables autonomy for the least and last and those in the middle by those who are relatively better off. Duty and obligation that might require greater sacrifice by those who have benefitted most from the last 30 years of deregulation and socialized risk. Investment in education and infrastructure that benefits everyone. Anyone whose life or politics are guided by these principles would do well to stand by them now, rather than capitulate in hopes of "winning" next time.
But I think the primary reason the movie has been on my mind is Doug Hastings.
"You lost anyway, Shirley. You should have stuck by me."
I keep thinking the Democrats, including Mr. Obama, should pay attention to this. They lost anyway. They should have stuck by their principles and the change they originally promised, instead of becoming Republican light. I, for one, would rather lose because I stuck by something I believe in, than abandon my most deeply held ethical principles and lose anyway. Sometimes virtue is the only reward.
It's not too late. The Democrats and Mr. Obama could still decide to dance their own steps to their own tune. I wonder if they've forgotten how.
Absolutely right - except you didn't have enough emphasis on the fear.
The ADF rules you with fear only if you care about the association and their competitions. One can easily move on to tango or Lindy Hop or square dancing and gain skill and admiration in those areas.
But in the dance federation of commerce, where do you go? To live comfortably, you must engage the monetary system. Oh, one could live like the raggle-taggle gypsies, always at risk, never at peace. Neither of these choices is freedom, and even the comfortable one is not truly a choice, since it is only open to a fraction of the population.
In a utopia I toy with now and then, the whole country has a festival tied to an eleven year cycle, where all currency is thrown in a bonfire one summer night, and not replaced till the following year, with new, redesigned currency. (You can keep the old stuff, it just isn't negotiable anymore.)
The purpose is to press all the air out of real wealth, to take the wind out of the sails of the rent seekers. The eleventh year is when each community really knows who their friends are and what real bounty they have provided for others.
Noni
Posted by: Noni Mausa | 12/16/2010 at 06:05 PM
Outstanding comment.
I wonder, sometimes, why the logic of the zero-sum game does not impress itself upon the public mind more, when the increasing proportion of national income and wealth flowing to the very, very few, comes up. There seems to be a very common inability, across much of the political spectrum, to connect the dots that lead from income distribution issues, to the increasingly predatory conduct of banks and health insurance companies and other corporations, and back to the increasingly authoritarian state, being built in our politics, as you say, by fear.
The Left could really use a demagogue right now: someone, who could say to parents with teenage children wondering how anyone could afford $15,000 for health insurance and $20,000 for a year of college, while staying current on credit cards charging 18+% and an underwater mortgage, while working, if lucky, a job, where wages are stagnant or declining, that Social Security is "going broke" only in the sense that Rich people and powerful corporations do not want to pay taxes.
Your insight about "fear" seems especially apropos during the enactment of the Hostage Tax Cut Extension. Our politics do seem to be driven by an unreasoning fear of crashing The System, as if the The System is not oppressing us.
There really is a sense in which the the Economy of the post-WWII era is completely played out. The remaining foundation of economic rents is little more than rapidly eroding beach sand, and the tide is coming in. The U.S. is perched on top of a high dune, and anywhere it goes from here will carry it down from those heights; we will lose our privileged positions as hegemon or technological leader or whatever, but we will lose those advantages very soon, no matter what. But, instead of using the remaining advantage of height, to see where we could go, and to go, we wait, paralyzed, for the tide.
Posted by: Bruce Wilder | 12/16/2010 at 06:16 PM
Maxine
Nice post. I'd extend it a bit - not all "controllers" are rent-seekers. The dance we are all moving in is an old and complex one, with none of us fully aware of the whole pattern or all the possible moves. Duty, honour, obligation, compassion need their guardians and exemplars - and these are part of the pattern too (Jane Jacobs explores some of this very well). And if they must be there, they must be paid for.
We have dismantled a good deal of authority over the last few decades on the grounds that we did not need them, or that they just got in the way of wealth-creation. Sometimes it was true. Sometimes - like the older university or banking traditions, I think we lost more than we gained.
The dance goes on, but who now sets the pace and pattern?
Posted by: Peter T | 12/18/2010 at 07:05 AM