Economic ignorance in Hollywood

Thomas Sowell:

It is not really news that Hollywood is still producing anti-business movies, but there is a certain irony in it nevertheless.

Although these movies tap a certain envy and resentment of corporate wealth, that large corporate wealth comes from far more modest individual amounts of money from about half the population of the United States, which owns stocks and bonds -- either directly or because money paid into pension funds or other financial intermediaries are used to buy stocks and bonds.

The irony is that the average Hollywood star who is making anti-business movies is far wealthier than the average owners of those businesses, who are half the population of the country.

The Los Angeles Times refers to documentary "films" that are "critical of corporate power." But just what does this vague word "power" mean when it comes to businesses?

Wal-Mart is the big bugaboo these days but what "power" does Wal-Mart have? I lived three-quarters of a century without ever setting foot in a Wal-Mart store and there is not a thing they can do about it.

It so happened that this past summer in Page, Arizona, I needed to buy some toiletries, which caused me to go into a nearby Wal-Mart for the first time. Inside, it looked more like a small city than a large store. But the prices were noticeably lower than in most other places. Is that the much-dreaded "power"?

Apparently Wal-Mart does not pay its employees as much as third-party observers would like to see them paid. But obviously it is not paying them less than their work is worth to other employers or they probably would not be working at Wal-Mart. Moreover, third parties who wax indignant are paying them nothing.

One of the morally indignant "films" (more high-toned than "movies") coming out of Hollywood makes the same complaint against Starbucks, depicting poverty-stricken Ethiopian coffee growers providing beans for the big-bucks coffee store chain.

Are the Ethiopian coffee growers worse off now that Starbucks is buying their beans? Supply and demand would suggest otherwise. But moral crusaders seldom have time for economics.

...

There is more. One of Hollywood's recent hits Sariano was based on the false premise that oil executives would sponsor the assassination of middle eastern leader because he was engaging in activity to raise prices. The premise is economically ignorant. Higher prices raise the value of the oil companies inventory and to the extent that they have to purchase addition inventory they pass the price increase on. But, that is not that exciting a plot.