Popular art often mirrors common ideas about current economic affairs and reflects the conventional wisdom guiding public opinion. This is particularly true of film.
Influential critic David Bordwell makes some excellent points about how filmmakers might try to anticipate and react to popular political attitudes -- classic (and soon-to-be classic) action movies are a case in point. Because the target audience of most action films tends to be fairly broad, and must therefore reflect popular ideas in order to be successful, they end up giving a sort of man-on-the-street view of the economy.
In action movies, this idea plays out mostly in relation to movie villains and their evil schemes. The classics of the 1980s were a prime example. Prior to the collapse of the Soviet Union, Eastern Europe and Soviet-allied South American countries were go-to locations for action villainy, especially any kind that could be tied to Cold War propaganda and economic rivalries.
"Red Dawn" is one obvious example of Cold War paranoia, with Nicaraguan and Cuban communists teaming up with the Soviets to invade the United States. In fact, due to shaky relations between the U.S. and South American governments at the time, movie producers invented a fictional country, "Val Verde," to avoid controversy. The nation was featured in several films, including "Commando," "Predator," and "Die Hard 2," which featured, respectively, a military dictator seeking to overthrow the president, Soviet and "Val Verdian" forces covertly working together, and a drug-trafficking warlord wanted by the U.S. military.
These movies also have their fair share of economic elements that truly belong to the 80s. It was a decade of financial decadence, and it shows in pop culture. A classic example is the constant use of bearer bonds as an action McGuffin. Because bearer bonds are unregistered, whoever holds the bonds collects the coupon and principal payments. If stolen, the initial purchaser has almost no recourse, creating an attractive investment for cunning villains who want to engage in large scale thievery.
Combined with the powerful bull market for bonds in the 80s, it is no wonder that the security played such a prominent role in many films of the era, including "Beverley Hills Cop," "Die Hard," "Lethal Weapon 2," and "License to Kill." In Die Hard, Hans Gruber actually boasts that he will earn a 20 percent interest rate on his stolen fortune. Such a return on any financial investment these days would be the real robbery.
The late 80s also created new economic villains, in the form of Japanese businessmen. The cult classic "Showdown in Little Toyko" features Japanese drug dealers (playing into the anti-drug message in many 80s classics) who devise a new sinister product to sell, and the villain even boasts of growing Japanese economic superiority compared to corrupt and decadent America.
Similarly, in Die Hard, the Nakatomi Corporation represented a Japanese incursion into the U.S. economy by erecting its new headquarters in Los Angeles. It was indicative of the paranoia felt toward Japanese capital investment, and reflected the popular wisdom that "in a few years they'll own the whole country." The Japanese were not the real bad guys of course, but in a way, the audience gets the message that they share the blame. The Nakatomi executive even jokes with John McClane that since Pearl Harbor didn't work out, the Japanese will get the Americans with "tape decks," a reference to the country's growing concern over Japanese economic dominance.
In reality, the Japanese takeover never happened, because Japanese expansion in the 80s turned into another credit bubble, with the eventual collapse leading to Japan's ongoing economic stagnation. In retrospect, Nakatomi Plaza is less a symbol of the end of American economic supremacy and more a reminder of how resources, especially capital goods, are mismanaged during periods of artificial boom.
From an economic perspective, the setting of the movie is a perfect example of a malinvestment in progress, with the giant, fortress-like Nakatomi Plaza still undergoing construction and renovations in the late 80s, the height of the Japanese asset price bubble. But as the Japanese economy fizzled and the Soviet Union collapsed, the political and economic undertones of 80s action films faded from popular cinema. Changing times calls for more contemporary villains and plot devices to bring a new sense of fear and danger to the moviegoer.
More recent economic plot devices seem to miss the point though. The fourth Die Hard film had John McClane protecting the nation from a terrorist intent on stealing social security and bank account funds. But as McLane quips, he's "always in the wrong place at the wrong time." He probably should have taken the day off and let the terrorists realize that there really isn't much left to steal. In another amusing twist, in "The A-Team," the top-notch crew has to track down stolen U.S Treasury plates. Apparently no one told them that all the private counterfeiters in the world combined can't measure up to the destructive power of central bank expansion.
Although recent events provide much fodder for evil schemes, the lack of a clear and universal villain persists. Perhaps this fall's remake of "Red Dawn" is indicative of a renewed focus on East-meets-West tension, with China emerging, as it has economically, as a new challenger to the U.S. (consistent with the Val Verde anecdote, the original version of the film featured China as the invader, but was edited in post-production to change the villain to North Korea).
Action films from the last few years seem to reveal a U.S. economy struggling to find a new identity and sense of place in the world. This makes sense, given the trauma of the financial crisis and several seemingly-looming economic disasters. For example, in 2009, after the meltdown, and when wealth-preservation strategies were on the rise following the collapse of major financial institutions, the late Tony Scott's remake of "The Taking of Pelham 123" featured a villain seeking to manipulate the world gold market.
The economic conflict and protests that characterized the past few years is also making its mark on cinema. The "Dark Knight Rises" focused on an economic and social collapse brought about when a conflict between the greedy (Wall Street) and the envious (Occupy Wall Street) finally explodes. Rich bankers and socialites are thrown out of their homes, and the poorer classes administer punishment through Stalin-esque show trials. In many ways, the film simply reflects the mood of pessimism which pervades the economy, although it does leave room for hope about the long run.
The direction that the new generation of action movies will take remains to be seen. Whether it depicts an ailing U.S., past its economic prime, or a new kind of triumph, only future economic events will tell.
Matt McCaffrey holds a master's degree in economics from Auburn University and is currently a PhD candidate in economics at the University of Angers. He is also the editor of Libertarian Papers. Patrick Newman is a senior studying economics and mathematics at Rutgers University.