“It’s A Wonderful Life” Ethics, Part 3

Here is the final installment of the Ethics Alarms overview of the ethical issues raised in Frank Capra’s classic. Some of the comments on Parts 1 and 2 have suggested that my analysis is unduly critical. Nothing could be further from the truth. I love the movie, and have already said that I find it ethically inspiring. Noting that characters act unethically in a movie about ethics is no more criticism than pointing out that people in horror movies never just leave when things start getting weird (as I would). I know that their actions drive the plot and are necessary. This is, however, how an ethicist watches a movie with as many ethical choices as “It’s A Wonderful Life.” I can’t help it.

Now back to George, Mary, and Bedford Falls:

11. Uncle Billy screws up as we knew he would

11.  Christmas Eve arrives in Bedford Falls, and Uncle Billy manages to forget that he left the week’s deposits in the newspaper he gave to Mr. Potter. Thus more than $8,000 is missing on the same day that the bank examiner is in town. Why is Uncle Billy still working for the Savings and Loan? He’s working there because George, like his father, is putting family loyalty over fiduciary responsibility.  Potter, of course, is a thief; by keeping the lost money to trap George, he’s committing a felony, and an unnecessary one. As a board member on the Savings and Loan, Billy’s carelessness and George’s negligence in entrusting him with the bank’s funds would support charges of misfeasance. Mr. Potter, had he played fair, might have triumphed over George legitimately, and no Christmas miracle or guardian angel could have saved him. But this is the inherent weakness and fatal flaw of the habitually unethical: since they don’t shrink from using unethical devices, they often ignore ethical ways to achieve the same objectives that would be more effective.

12. George folds under pressure

12. Faced with an unexplainable deficit (since “We lost it” would not endear the bank to regulators) George panics. This is a remarkable feature in the screenplay and Stewart’s portrayal, because George’s reaction when faced with a personal crisis reveals him to be less principled and admirable than we thought, and more importantly, than he thought. This is a brave move by the film makers, and an instructive one. George Bailey’s story is a good example of how it is relatively easy to stick to ethical principles when one feels in control and relatively safe, but when desperation and fear set in, the ethics alarms can freeze up, leaving only primitive “fight or flight” instincts. That’s where George is on Christmas Eve. He verbally abuses poor Uncle Billy, who feels bad enough already and whom George shouldn’t have trusted in the first place. When a fool acts foolishly, the person at fault is the one who placed him in a position where his foolishness could be harmful. George is full of rage and frustration that all his self-conscious martyrdom has bought him no breaks in life, so he rails about conditions that were the results of his own choices. He hates the Savings and Loan, which his actions have kept operating; he says he hates the “drafty old house” (Whose idea was it to live there?); he asks, “Why do we have to have all these kids?” (Do we need to explain it to you, George?). He snaps at his children, who are excitedly preparing for Christmas, and is insulting and rude to his daughter’s teacher, not because of anything she’s done, but because he’s mad at the world.

Now we understand a little more about George Bailey. Like many heroes, leaders, and regularly virtuous people, George Bailey is a narcissist. His obsession with helping others and sacrificing his own needs was to feed his vanity and self-esteem. He needed others to respect  and admire him, and he needs to admire himself. What he is facing now is scandal and diminished respect from others—things that undermine his carefully constructed self-image. So with the walls closing in, where are his ethical principles? Gone. He doesn’t share his crisis with Mary, for example, though she has a right to know that her whole family is imperiled by the crisis. Incredibly, he goes to Potter, and begs to make the deal with the devil that he righteously rejected when he felt in control of his fate. Now, he’ll trade his integrity, the Savings and Loan and the welfare of Bedford Falls for Potter’s help, because he can’t accept the results of his own mistakes. The lesson: even the most ethical people usually have their breaking point, the point at which ethical principles will be trumped by personal interest. Watching just the first part of “It’s A Wonderful Life,” we might have believed that George Bailey was the rare idealist who would stand true even when he was at personal risk.


After being turned down by the devil, Potter, only then does George resort to God, whom he clearly has ignored up to this point. Now he prays, the classic hypocrite’s prayer, a foxhole conversion. Then he gets drunk. George is a coward after all.

13. George heads for the bridge

As a coward, he seeks the ultimate coward’s solution, suicide. This is the watermark of the narcissist: at this point, he doesn’t care about Mary, his children, the bank, or his obligations. He just wants to escape accountability and consequences. The usual excuse given for George’s deplorable conduct is that our hero is having a “breakdown.” No, this is just George being human…and unethical.

14. Welcome to Pottersville

 After Clarence grants George his wish that he was never born, we see what Bedford Falls and it occupants would be like without the Savings and Loan. It looks and sounds a lot like New Orleans, really, but the idea is that Pottersville is a coarser, cruder place than its Alternate Reality in the Park with George. The businesses we see are all sin-related or pawn shops, and the people are different too—meaner, more irresponsible. Why, Ernie the cop even fires his gun into the crowd when George slugs him and runs away after accosting Mary—who despite being about the most adorable, lovely and sensitive woman in the world, has somehow been unable to find a husband without George in it.


It’s easy to make fun of Pottersville, but the sequence’s main point is still valid: without the Savings and Loan to symbolize caring and a mutually supportive community, the ethical culture of the town has rotted, and rotted the ethics of everyone in it. Cultures do rot, which is why, for example, the popular Republican fantasy that America can just round up all its illegal aliens and march them at gunpoint and without their children back to where they came from is so dangerous. A nation that would really do such a thing has turned the corner towards Pottersville. We must always be vigilant about spotting and avoiding cultural tipping points that will erode our basic ethical values. (I feel that I have to mention that Capra’s version of Chaos Theory’s “Butterfly Effect” with George as the butterfly is a little one-sided. There are always perverse and unanticipated reactions when something is taken out of the cosmic equation, and it would have been more realistic to show someone being significantly better off with no George, like if Mary had gone on to become a fabulously rich and famous movie star who wins an Academy Award for “From Here to Eternity” and goes on to star in an iconic 1950’s TV sitcom.)

15. “The richest man on earth!”

 In the grand finale, the entire community rallies to save George and the Savings and Loan, out of gratitude for his many unselfish acts through the years, filling his table with more than enough money to cover the deficit. This is the uber-ethical moment in the film, a massive display of unselfish thanks, compassion, community, charity, loyalty, generosity and gratitude, proving what an essentially ethical and caring place the town—now Bedford Falls again—has grown into thanks to George’s influence. Just enjoy it and cry, like my wife does every time, when Harry raises his glass to toast “My brother George, the richest man in town.”


  • Harry owes George a lot more than a toast, since his ingratitude put him in this situation in the first place.
  • George can’t ethically accept more money than the deficit, since it isn’t intended for him personally anyway. How is he going to be responsible and give the extra money back? How will he decide who gets a refund on their remarkable generosity? Are the donors now his partners? Ethically, George was obligated to organize the orgy of good will going on in front of him, since it was technically a complex business transaction.
  • And he’s still got to fire Uncle Billy tomorrow, or maybe the day after Christmas.
  • As for the happy bank examiner, swept up in all the Christmas spirit, he needs to be fired too. He’s abdicating his responsibilities. The deficit is still unexplained; the S&L is still in violation of regulations. If he  think George absconded with the money, the fact that he can pay it back doesn’t mean he didn’t commit the crime.
  • The sheriff, similarly, is breaching his duty by tearing up the warrant for George’s arrest. It isn’t his to tear up; only a judge could do that. It’s a legal document. Good will and gratitude don’t suspend the law.
  • Finally, there’s Sam Hee-Haw Wainwright. What a prince! George steals his girlfriend, he and Mary treat Sam like a disease through the whole movie, and yet he comes through with an open-ended loan! Of course, once we learn that, George should start handing everyone back their money. He doesn’t. And he and Mary probably still make fun of Sam after New Years.

And George? He’s happy and ethical again, because everyone is showering him with love and admiration. Later, we should hope, Mary will have some words with him about candor and trust in the marital relationship.  For his part, George Bailey needs to reflect on how his principles folded up like a telescope once things got tough, and think about how he can control his narcissistic tendencies to make more responsible and ethical decisions in the future.

Aw, he probably does. After all, it’s a wonderful life!

3 thoughts on ““It’s A Wonderful Life” Ethics, Part 3

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