Friday, 4 April 2014

Hollywood Babble On & On #1134: Question Meet Answer!

Nate Winchester asked... 
D, you think this is a big reason why Hollywood always gets capitalism and businesses etc. Heck, when I read some of these I start to see why the movies have this weird trope about "greedy" businesses doing things that would actually cost more money than... almost any other possible action. What about you? You think that's where it comes from?

Definitely, and you've inspired me to go off on a long rant about Hollywood's bad relationship with economics.

So, away we go!

Stupidity, especially about economic issues, is one of my personal bugbears.  Resident Evil, AliensElysium, Repo Men, and literally dozens, if not hundreds of other films, all feature that all purpose villain Evil Incorporated doing things that aren't remotely profitable, but they sure as hell are evil.

Why do Hollywood movies insist on doing this?

Well, there are several reasons:

1. IGNORANCE: The trope of the evil rich person goes so far back it predates capitalism. It's roots lie in the pre-capitalist feudal societies where wealth wasn't created, it was distributed, and usually it was distributed at sword point, and usually by order of whoever had the most swords at their command. This has created an idea that exists in people's heads that if someone has something than that someone must have taken it from someone else.

What people don't seem to know is that wealth is no longer taken, it is created. Someone figures out a way to deliver a good or a service to customers in a way that balances quality and price for maximum profitability.

John D. Rockefeller eventually dominated the oil industry by figuring out how to extract, refine, distribute, and market oil to customers cheaper and with a better quality than his competition. He made it possible for people to read at night, and even helped save the whales because nobody needed massive quantities whale oil anymore. (Ladies still needed whale bone corsets until the 1920s)

Carnegie figured out how to reduce the cost of steel by 90%. That made trans-continental railways and high rise buildings possible, thus reducing the costs of shipping and housing.

They didn't go to people's houses wave a sword and say: "Gimme all you got in the name of the king!" They found a way to give people things they could use at a competitive, yet profitable price.

Same thing with Steve Jobs, Bill Gates, and thousands of other entrepreneurs and the companies they've founded.

Even contractors who make weapons for the various militaries of the world don't really make their money off the weapons. When it comes to military contracts the company aims to make a small profit from getting the military to pay for the expensive research and development process.

Once that's done they immediately set out looking for civilian uses and markets for variations of their discoveries. The game console that you use to blast aliens probably started life as the hardware running a guided missile. The stuff that helped save your life in the emergency room, probably started out as a military contract, and so on and so forth.

Then there's the whole concept of hogging some sort of technology and keeping it only for the 1%.

Well, that's a great way to go bankrupt.

Take for example two companies: Rolls Royce and Ford.

Rolls Royce made customizable high-end hand-made cars for the super-rich.

Ford made cars for as many people as possible.

Rolls Royce has skirted bankruptcy for most of its history, even during the best of times, and was even nationalized by the British government because of its shaky finances. Ford on the other hand grew immensely huge, with branches worldwide, has managed to weather almost every storm, and was the only car company in the USA to refuse a government bailout.

Do you see what this long-winded rant is getting at?

If everyone in Hollywood truly understood economics, they wouldn't be using half of the premises they use.

2. LAZINESS: To understand economics requires effort, not only to learn, but also to explain to those in Hollywood who still don't understand. That's a hell of a lot of work, especially the explaining part.

It's just easier to stick with the tried and true tropes of "Everything's wrong because of corporations" because it doesn't need to be explained to anyone who works in...

3. HOLLYWOOD: It's believed that Garson Kanin once said "The trouble with Hollywood as an art is that it's a business, and the trouble with Hollywood as a business is that it's an art."

I would like to add to that wisdom that it's a business that's not so much run as a business, but as a feudal kingdom.

In Hollywood too many people end up in positions of power and authority based more on their social connections than their ability. Once in a position of power they then act as if everything is a zero-sum-game and that if any money is to be made it should be made only by them because they're in their position by a form of divine right. Their lack of competence, and occasional abundance of corruption is usually covered by the fact that the companies they run are just small cogs in much larger machines, and their product, movies and TV shows, are a much desired product worldwide.

Spend enough time in such an environment, and you might end up honestly believing that every business operates like that.


Now I've recently seen some states that puts the whole "corporate villain" trope down is that the "faceless mega-corporation" is on the way out. During the 20th century most corporations employed a large percentage of the population, and had an average lifespan between creation and dissolution or takeover of about 75 years. Nowadays only a small percentage of the population work for so-called mega-corporations and the average corporate life-span is down to 15 years.

What we are seeing is the rise of the individual politically connected mega-investor who runs various investment groups and hedge funds instead of a corporation, and profits by buying and selling corporations, either as a whole, or in pieces.

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