(This post assumes you’ve seen It’s a Wonderful Life. If you haven’t, watch it tonight.)
Mr. Potter is basically right about George Bailey.
You can’t run a lending business like “a charity ward” — particularly one owned by other people, for whom you act as a fiduciary agent.
If Bailey gave away money to anyone who asked, he would bankrupt the place.
No matter how much profit Bailey selflessly chooses to leave on the table, it isn’t enough to build infinite houses for free.
And that’s the first clue as to what is really happening here: George Bailey doesn’t bankrupt the Building & Loan.
In fact, he somehow pulls it through the Great Depression (which, in the real world, sank Building and Loan Associations as a category — more on that later) and his large family lives simply but comfortably.
Which means that, somewhere off camera, someone at the Bailey B&L is denying loans, foreclosing on deadbeats, and repossessing properties.
It may be done very patiently, compassionately, judiciously — but it’s happening. A lending institution exists to make exactly these decisions — they have no other function.
We see George make a lot of decisions that aren’t “strictly business” — but he also isn’t giving everything away. So what is he really up to?
George Bailey conspicuously gives (the B&L’s) money to the people he thinks deserve it, and who he believes to be good for it.
Some of these choices are pretty sensible from the outside (like Ernie Bishop, his taxi driver buddy) — but others are harder to justify (like Violet Bick, who wants the money so she can skip out on a bad reputation).
In Potter’s words: “if you shoot pool with some employee around here, you can come and borrow money”.
Needless to say, any one of the informal, personal favors that Potter observes in the Bailey Building and Loan — virtually every decision we see Bailey make in the film — would likely land him in serious trouble today, even without the crisis caused by Uncle Billy’s nepo-hire incompetence.
Potter’s objections are, of course, self-interested — but they’re also a reasonably forthright representation of Yankee business norms, as critiqued by an Italian immigrant (writer/director Frank Capra).
when a garlic-eater says something so unthrifty that you gotta hit them with that Anglo stare
From Potter’s perspective (which is the prevailing perspective at every company you’ve ever worked at, as well as their regulators), agents responsible for other people’s investments ought to be impartial and procedural, and perform their fiduciary duty to maximize shareholder returns.
As seen through this lens, George Bailey is essentially a gangster, using other people’s money to hand out favors to his friends and build a personal patronage network.
The film clearly admires George for his leniency to debtors and disregard for profit, but that too is a way of acquiring personal influence at the shareholders’ expense.
A lot of people in Bedford Falls owe George Bailey a favor — and the heartwarming climax of the movie is when that favor is called in, and his friends receive him into everlasting habitations.
The propriety of George’s behavior depends on whether you think of him as an employee, responsible to act in the interest of his employers — or a king, responsible to act in the interest of his subjects.
From the film’s perspective, George Bailey is clearly the rightful heir to the throne of Bedford Falls, and it’s exactly his unaccountable, sovereign power that allows him to save the realm.
You don’t hear about Building & Loan Associations anymore because they required human trust, loyalty, and coordinated action.
Building & Loan Associations operated under a mutual membership structure, in which homeowners paid for their homes through “share accumulation”, in which a significant portion of the monthly payment was a purchase of shares in the B&L.
The value of your shares was based on the profitability of the association, and you were obligated to buy and hold your shares to maturity. A B&L depended on strong economic alignment — you needed your neighborhood to stay financially healthy, so that all your neighbors kept making their payments.
This is what George Bailey means when he says “…The money’s not here. Your money’s in Joe’s house, right next to yours … you're lending them the money to build, and then they're going to pay it back to you as best they can. Now what are you going to do? Foreclose on them?”
Well, in the real world, in the Great Depression, they did foreclose on each other, and B&Ls largely collapsed, in favor of Savings & Loan Associations (S&Ls) with conventional mortgages as we now understand them (a strictly bilateral contract between the individual debtor and the bank).
The miracle of It’s a Wonderful Life is that George Bailey, by God’s grace, holds his people together through courage, sacrifice, and force of will.
When George “stands up to Potter”, he’s not fighting for infinite free houses for everyone in Bedford Falls: he’s fighting for his own personal right to decide who gets the loans that don’t make sense on paper, who gets a few extra months to make payments, etc. He wants the power to decide the exception.
Which is to say: Bailey and Potter are fighting for sovereignty over Bedford Falls — to decide who lives there, and in what sort of homes, and on what terms. They are explicitly struggling for personal power.
The most important question to ask of It’s a Wonderful Life is: why would a selfless, decent man like George Bailey struggle for personal power? And why would the people of Bedford Falls struggle and sacrifice to keep him in power?
Answer: because both George Bailey and the people recognize that his sovereignty is their sovereignty.
If George had refused to take on the Bailey Building & Loan after his father’s death, it would have been dissolved — and for lack of a binding institution, every member’s property would have been gobbled up piecemeal by Potter.
If he had not set an example of sacrifice during the bank run, even the stalwart members of the B&L would have been cleaned out and forced to sell their shares — probably for less than the 50% discount Potter initially offered.
It matters very much that George Bailey has the power to cut all these informal human deals to prevent the bank from failing, and the personal magnetism to convince people to take less than they are owed.
His sovereignty doesn’t compete with theirs — it’s precisely because he is in charge that they are able to hold on to their own dominions.
This is why the archetypal connection between the righteousness of the king and the health of the land is so resonant and intuitive.
People in our corner of Twitter are accustomed to thinking of our present algorithmic, headless, entropic state as a unique dysfunction of managerialism.
But it’s actually just the Law of the Jungle — the state of the land without a protector — and it’s one of the oldest stories there is.
In the alternate history of Bedford Falls in which no king emerges, power/sovereignty simply falls to the most cunning and dangerous predator (Potter), who does not actually want to “rule” Bedford Falls in any meaningful sense. He just wants to eat it.
Potter is an agent of pure entropy, breaking down and extracting and consuming every competing node of power or value. The strippers and vagrants in Pottersville are not the product of any affirmative human vision: they show up for the same reason crabgrass shows up in a neglected garden box.
That’s why the people want George Bailey to decide who lives in Bedford Falls, and on what terms.
They want to be subject to a human judge and protector, executing a human vision, instead of the blind idiot god of entropy.
The desire to be subject to righteous human judgment — to kneel before a Good King — is not just the product of monkey instinct or propaganda. It solves all kinds of spiritual and practical problems.
Likewise, George doesn’t want power because he likes wielding it — power isn’t all that much fun unless you’re crooked.
George fights for his father’s throne because, if he doesn’t, the realm will come to ruin. It’s not (strictly) supernatural — things fall apart when they’re run by people who don’t give a shit.
Some friends have said that they never liked It’s a Wonderful Life because they understood it as a movie about giving up on your dreams and embracing the longhouse.
In the beginning of the film, he dreams of testing himself against the world as a knight-errant, and he is robbed of the opportunity by circumstance.
The war montage in which he fights “The Battle of Bedford Falls” is played as a joke, and the narrator describes him as merely “getting four years older”.
There’s a genuine element of tragedy in his being thrust too young into kingship — but that’s the sacrifice that sanctifies the real Battle of Bedford Falls.
It would be a longhouse movie if George Bailey gave up adventure to be a clerk and obediently do his fiduciary duty — but it’s precisely his fight for unaccountable power that makes him heroic. He governs Bedford Falls in the people’s interest but not at the people’s pleasure.
The moral of It’s a Wonderful Life isn’t that placid domesticity is better than adventure — it’s that power is better than money, and good men should fight for it.
I mention this because it is exactly the distinction between genuine patriarchy and servile “happy wife happy life” family-values conservatism, and this confusion gets in the way of a lot of young men pursuing the kind of power that they could win.
You live in Pottersville today because there was no George Bailey.
To the extent that our managerial system is worse than other historical forms of misrule, it’s because it actually moralizes procedural anarchy. Not only is there no human judgment, no human bonds of loyalty, no human order — but there ought not to be, and anyone who tries to create such an order is both a moral and political criminal.
So in our world, no human power emerged to defend the “common wealth”, the reciprocal bonds of loyalty, the shared sovereignty represented by the Bailey Building & Loan. We were left to fight the vast, impersonal cultural and economic forces that threatened our families and property alone.
And here we are.
It’s a Wonderful Life is a Christmas movie because all stories about The Good King are stories about Christ.
George Bailey has to pour himself out over a lifetime to win the trust of a skittish, short-sighted people.
Bailey’s personal virtue and sacrifice is what makes it possible for the people to credibly unite behind him and make their own sacrifices, take up their own cross — which they desperately want to do, because it’s the only way they can resist the malevolent, inhuman powers that threaten them.
The Christmas miracle is the return of the King who will set things right, and judge us with compassion. (To be judged with compassion is not to be infinitely indulged.) It’s a miracle because it is the defeat of the entropy that would otherwise be inevitable — the indifferent law that would judge us to our destruction.
The turning point of human history is God revealing himself, not as an impersonal force or energy or law, but as a Man — with a man’s heart and judgment and particular love.
EXIT News
- On last Tuesday’s full-group call, we had to call an audible on our discussion of technical recruiting (rescheduled for January), and instead discussed conservative job boards.
- No full-group call this week. Merry Christmas. We’ll have a Monday night full group call on 12/30 to showcase our AI and tech call.
- On last week’s real estate call, a developer walked us through his process of assessing a real estate investment. One attendee described it as “a masters-level real estate investment course in 90 minutes”. Spreadsheet shared in the #real-estate chat.
- EXIT will have a sponsor table at the Coronation Ball, January 19th at the Watergate in Washington, DC. We have one seat left; if you are a member and would like to join us, please DM right away.
- We will also hold a DC cocktail hour for members and Substack subscribers on Saturday, January 18th. RSVP links below the paywall. EXIT cocktail hours are a great opportunity to meet your local guys, and see if the full group is right for you.