The Wizard of Oz: An Economic Fairy Tale?

AMA4-22-15And all along, you thought The Wizard of Oz was a delightful children’s adventure, brought to life on the big screen in that famous movie starring Judy Garland.

But in the years since the movie put the beloved L Frank Baum story into the cultural fabric of American life, a variety of scholars, historians and economists have found deeper meanings behind the adventures of Dorothy and her little dog Toto.

At least seven theories have been advanced about the “real” meaning of The Wizard of Oz. That’s the title of the 1936 movie; Baum’s novel was actually titled The Wonderful Wizard of Oz, but we’ll use the film’s title to keep things simple. Among the leading interpretations of Baum’s story: it’s a Christian allegory that has Dorothy following the Yellow Brick Road to get to the Emerald City (heaven); it’s an atheist allegory (there is no wizard, which means there is no god), a feminist allegory (Dorothy triumphs), and more.

But as a new Business Insider article reports, the one theory that still captures the imagination of some economists and financial experts was advanced by a high school teacher named Henry Littlefield. His reading of the book sees The Wizard of Oz as an allegory about American monetary policy of the time – with implications for what came later as a result of conflict over maintaining the gold standard and the “ Free Silver” movement of the day.

If you’re hazy on the story, it comes down to this: little Dorothy and her trusty dog Toto are transported into the magical world of Oz, where they join the Scarecrow, Cowardly Lion and Tim Man in their journey along the Yellow Brick Road to find the Emerald City. After a long series of adventures, Dorothy clicks together the heels of her silver shoes there times and is transported home.

According to Littlefield’s theory, many of the story’s characters do double duty as metaphors for figures in the landscape of the American economy of the day. And Dorothy’s journey represents one that could lead to prosperous outcomes for the country as a whole.

This reading of the story sees Dorothy as the common citizen struggling to make sense of the economic realities of the world of the early 1900s, when unemployment was rampant, drought was pinching farmers who were in debt to the banks, and the country was debating what direction to take its monetary policy.

Carrying the theory forward, the Scarecrow represented farmers, who were indebted to bankers. As deflation hit the country in the late 1900s, their debt ballooned while those bankers got more money. Dorothy’s other companions, the Tin Man and the Cowardly Lion, also represent figures of the day.

The Tim Man, economists say, represents the industrial workers, who faced soaring unemployment rates in the waning years of the nineteenth century. That’s suggested by the Tin Man’s rusty joints and creaky movements that keep him from being effective.

For Littlefield the Cowardly Lion was William Jennings Bryan, a proponent of the Free Silver movement to add silver to the gold standard to boost the money supply The Yellow Brick Road was the gold standard itself, which took the traveler to the Emerald City, Washington DC, where everything was seen as dollar green.

There Dorothy met the Wizard, who’s believed to be Grover Cleveland or possibly William McKinley – both presidents who were known for not doing much to help the economy. Once Dorothy met the Wizard, she clicked the heels of her silver shoes three times and was able to get safely home – demonstrating that adding silver to the country’s money supply would help the economy out of its tight spot.

And Oz itself? Why, its name is the same as the measurement of a unit of gold – the ounce.

Clearly, the producers pf the legendary movie weren’t concerned with keeping the allegory going, though. The silver shoes Dorothy wears in Baum’s book were replaced by the famous ruby slippers in the movie, just to take full advantage of the trendy new Technicolor film process.

The gold standard was once the bedrock of US monetary policy. Throughout the nineteenth century and much of the twentieth, gold was bought and sold at a fixed rate among participating countries, and the value of currencies were tied to the value of gold. Silver was part of that equation too, in a system known as bimetallism. The Gold Standard Act was passed in 1900, the year that Baum’s book came out, so that lends some support to the “economic” theory about the message hidden in his book.

The gold standard effectively ended in 1971, when US President Richard M. Nixon severed the connection between a country’s currency and real commodities such as precious metals.

Literature is always open to  interpretation, and who can say what L Fran Baum really intended to say in his novel? But although literary scholars have largely dismissed Littlefield’s interpretation of the book, the parallels are striking – and the discussion serves as a history lesson for followers of American monetary policy. (Top image: Flickr/Photatelier)

Read more from The American Monetary Association:

Do Currency Wars Drive World Economies?

The US: World’s #1 Tax Haven?

The American Monetary Association Team

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