student corner Economics within 'Wizard of Oz'
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By Kwon Jae-kyung
“Somewhere over the rainbow...” This verse reminds me of the 1939 film “The Wizard of Oz” starring Judy Garland based on L. Frank Baum’s 1900 novel.
There have been some theories on the author’s intent in writing it, but whenever Baum was asked directly about hidden meanings, he replied that his only intention was to make money for his family and entertain children.
One theory is that some elements of the story act as social commentary and point toward the political and economic state of the U.S. at the time.
When it was established as an independent country, the U.S. used the bimetallism monetary standard ― a system which valued the dollar according to the quantity of both gold and silver.
As the output of silver increased after the American Civil War (1861-1865), the U.S. turned to the gold standard ― a system which valued the dollar according to the quantity of gold only, causing serious problems.
Despite the growing economy, the amount of gold which the government could hold was limited. This led to a sudden increase in the value of money and a money shortage.
As a result, deflation hit the U.S. and Europe. The need for gold increased throughout the world in 1896, the year of a U.S. presidential election.
As the value of money increases, it benefits the rich who own gold and hurts the poor. This made Baum support Democratic presidential candidate William Jennings Bryan as he advocated for silver and gold bimetallism. This would have increased the U.S. money supply, raised prices and reduced farmers’ debt burdens.
However, Republican candidate William McKinley was elected. Fortunately soon after, gold mines were found, solving the problem naturally.
How did the author reflect his thoughts on the gold standard in his beloved children’s stories? According to those who believe the writer intended to satirize the gold standard, certain elements of the storyline represent certain things.
Dorothy, a typical American citizen, Oz, an abbreviation for ounce (a measurement unit for gold and silver), the Yellow Brick Road that Dorothy follows to reach Emerald City, the gold standard Emerald City, the swindling world of greenback paper money that only pretends to have value, the silver shoes that made Dorothy’s wish come true (which became ruby slippers in the color film) and gold and silver bimetallism.
The implied conclusion: for citizens, the government should return to gold and silver bimetallism.
After the U.K. accepted the gold standard in 1844, major countries including the U.S. followed. Later, European countries had a limit to their money supply because of World War I and the gold standard. The productivity of the U.S. rapidly increased and European countries decreased imports from the U.S., which led to global oversupply. This oversupply caused the Great Depression in the U.S. in 1929.
To help recover from global economic catastrophe, English economist John Maynard Keynes suggested a fiscal policy theory that the government should take aggressive action against the fluctuating economy. This ingenious theory was reflected in the U.S.’s New Deal, and is currently used in public investments, still strongly influential around the globe. This is the Keynes revolution.
After the Great Depression, monetary systems constantly changed. Systems such as the Bretton Woods system and Gold Pool were used until August 1971 when U.S. President Nixon ended the gold standard and now the official standard currency is the U.S. dollar.
As Baum has passed away, nobody will ever know for sure if he deliberately hid his dissatisfaction with the monetary system in the storyline. Even if this theory may not be true, it might be worth learning.
The writer is a senior at Daewon Girls’ High School in Seoul.