The economic lessons of ‘It’s a Wonderful Life’

The economic lessons of ‘It’s a Wonderful Life’

There are too many Christmas traditions to count, but one tradition for many families is watching Frank Captra’s “It’s a Wonderful Life” sometime between Thanksgiving and Christmas.

The 1946 American Christmas family drama may not be as visible today to the younger generations now that NBC owns the license to the movie and shows it just twice a year, but it still remains as popular as ever. On, a site where the public can rank anything – including which campaign promises president-elect Trump is most likely to keep – “It’s a Wonderful Life” is the top ranked Christmas movie of all time. The Jimmy Stewart movie beat out such classics as “A Christmas Story” (No. 2), “National Lampoon’s Christmas Vacation” (No. 3), “Home Alone” (No. 5) and, yes Sam Wyant, “Elf” (No.9).

The movie is full of life lessons such as keeping faith, selflessness and perspective. If you watch it again this year, look deeper for the business lessons from Bedford Falls. The Acton Institute published a three-part series on the economics from the movie, including how banks differ from building and loans, how a run on a bank could sink a community before the FDIC and how home ownership creates wealth.

The final post in the series talks about two central themes that everyone should reflect on at Christmas time.

1) How your actions create a ripple effect.

George Bailey is able to see how his existence affected the entire United States. If George didn’t save his kid brother Harry then Harry wouldn’t have been able to save hundreds of men in World War II who would have died on a troop transport. If the Building & Loan had failed then hundreds of families would have missed out on home ownership.

That lesson extends to all parts of life. Your actions in your home or business affect your family, customers, coworkers or employees. They then affect positively or negatively the people they come in contact with.

2) Life is about trade-offs

George Bailey repeatedly makes trade-offs putting the needs of friends and family above his own. Even though the movie has a happy ending, the reality is that the day after the movie ends he’s going to be faced with the same struggles he had the day before. What his guardian angel helps him realize – and why the movie continues to resonate with generations – is that the trade-offs he made in life were worth it.