The Ethics Alarms 2022 “It’s A Wonderful Life” Ethics Guide, Revised And Updated

2022 Preface

I had this year’s introduction all written in my head—that’s how I write, you know—and then discovered hat it was what I wrote last year. No wonder it seemed so obvious. Well, never mind: there are still plenty of new matters to consider.

The main one is that “It’s a Wonderful Life” is a Thanksgiving film as much as it is a Christmas story. In the end, it is all about being thankful and grateful for life, family, friends, being lucky enough to live in the United States, and avoiding bitterness and regret. George Bailey is a good man who is nearly destroyed by bitterness, anger, frustration and regret, and Frank Capra, who directed and partly wrote the screenplay, is telling us that this is no way to live, or even survive. It’s a tough lesson: I have been tempted many times to fall into that trap. Regular readers here have seen me do it. Like George, I often feel like I didn’t achieve and experience what I could have, that my choices too often didn’t pan out, that I barely missed the breaks that I needed when I most needed them. I feel this way even though my father constantly lectured me, really all the way through our relationship, never to fall into George’s pit of despond. As long as you’re breathing, he said, there is always opportunity and hope. Reflecting on what might have been is foolish, depressing and paralyzing.

Ironically, Capra’s fable shows a man for whom revelations of what might have been are decisive evidence that his life, however disappointing to him, nonetheless had meaning. “It’s A Wonderful Life” is perhaps the first screen time travel parable, a forerunner of “Back to the Future,” and anticipated chaos theory long before Edward Lorenz figured out how chaos works. Harry’s toast at the finale, as I wrote last year,

states a life truth that too many of us go through our own lives missing. What makes our lives successful (or not), and what makes makes our existence meaningful is not how much money we accumulate, or how much power we wield, or how famous we are. What matters is how we affect the lives of those who share our lives, and whether we leave our neighborhood, communities, associations and nation better or worse than it would have been “if we had never been born.” It’s a tough lesson, and some of us, perhaps most, never learn it.

I’m not sure I have learned it yet, to be honest with myself. Intellectually, perhaps, but not emotionally.

I just watched the film again today; every time I notice something new, which is reflected in the updated guide  below.  I am also convinced that this is the greatest, riches, most complex ethics movie of all time.  “A Man For All Seasons” was long my winner in this category, but having watched that film too again recently, it doesn’t measure up to Capra’s masterpiece. Recalling the the real Thomas More burned heretics alive rather takes the sheen off Paul Scofield’s marvelous performance.

I also realized that this is very much an adult film. Kids don’t get it; indeed, I wonder if anyone under 40 really does. That makes it a strange Christmas movie. I grew up without seeing the film; the period when it was sold at junk prices to local TV stations which then resuscitated it reputation by wide exposure (I live when that happens) began while I was in college. Now that I think of it, I don’t know if my son has seen the movie. The black-and-white film block for so many younger Americans is a genuine obstacle to both cultural literacy and ethical instruction, and no, Ted Turner’s colorized version of IAWL doesn’t help, since it stinks.

Last year I wrote—and this was one of the points I had forgotten that I had made in last year’s introduction—

This movie’s intended message needs to be considered and taken to heart in 2021. Frank Capra, the movie’s director, designed the film to explain why it’s a wonderful country we live in. It may be that more and more vocal and powerful people want to send the opposite message today than ever before.

Tragically, it is definitely true that more vocal and powerful people want to send the opposite message today than even last year. Show them the movie, and all they will do is count black faces: yup, the only black resident of Bedford Falls appears to be the Baileys’ maid. Clearly, that means that “It’s a Wonderful Life” is just one more relic of systemic racism, and should be ignored and forgotten.

A society that can or will no longer learn from “It’s a Wonderful Life” is doomed to creeping stupidity and confusion. Ethics Alarms presents this annual ethics guide in the hope that we have not reached that desperate state yet.

1. “If It’s About Ethics, God Must Be Involved”

The movie begins in heaven, represented by twinkling stars. There is no way around this, as divine intervention is at the core of the fantasy. Heaven and angels were big in Hollywood in the Forties. The framing of the tale seems to advance the anti-ethical idea, central to many religions, that good behavior on earth will be rewarded in the hereafter, bolstering the theory that without God and eternal rewards, doing good is pointless.

Yet in the end, it is an ethics movie, not a religious one. George lives a (mostly) ethical life, not out of any religious conviction, but because step by step, crisis after crisis, he chooses to place the welfare of others, especially his community and family, above his own needs and desires. No reward is promised to him, and he momentarily forgets why we act ethically, until he is reminded. Living ethically is its own reward.

We are introduced to George Bailey, who, we are told, is in trouble and has prayed for help. One has to wonder about people like George, who resort to prayer as a last resort, but they don’t seem to hold it against him in Heaven. The heavenly authorities assign an Angel 2nd Class, Clarence Oddbody, to handle the case..He is, we learn later, something of a second rate angel as well as a 2nd Class one, so it is interesting that whether or not George is in fact saved will be entrusted to less than Heaven’s best. Some lack of commitment, there— perhaps because George has not been “a praying man.” This will teach him—sub-par service! Good luck, George!

Re-watching the film, I gained new found admiration for Capra’s restraint. Religious sermonizing and ostentatious religiosity are admirably avoided. “Hark the Herald Angels Sing” is sounded at the climax, but it quickly gives way to “Auld Lang Syne”

2. Extra Credit for Moral Luck

George’s first ethical act is saving his brother Harry from drowning, an early exhibition of courage, caring and sacrifice. The sacrifice part is that the childhood episode costs George the hearing in one ear. He doesn’t really deserve extra credit for this, as it was not a conscious trade of his hearing for Harry’s young life, but he gets it anyway, just as soldiers who are wounded in battle receive more admiration and accolades than those who are not. Yet this is only moral luck. A wounded hero is no more heroic than a unwounded one, and may be less competent as well as less lucky. (This is not an observation that one should make in public, as Donald Trump should have learned, but probably didn’t, when he made a lifetime enemy of John McCain.)

The episode also sets a theme: good deeds are not necessarily rewarded in life. One of George’s delusions is that he thinks they should be, that doing good things and being ethical ought to culminate in life success. It would be nice if they did, but they often don’t. “No good deed goes unpunished” is more than cynicism.

3.  The Confusing Drug Store Incident.

George Bailey’s next ethical act is when he saves the life of another child by not delivering a bottle of pills that had been inadvertently poisoned by his boss, the druggist Mr. Gower, who is addled by grief and drink after learning about the death of his own son. George’s act is nothing to get too excited over, really—if George had knowingly delivered poisoned pills, he would have been more guilty than the druggist, who was only careless. What do we call someone who intentionally delivers poison that he knows will be mistaken for medication? A murderer, that’s what.  We’re supposed to admire George for not committing murder.

Mr. Gower, at worst, would be guilty of negligent homicide. George saves him from that fate when he saves the child, but if he really wanted to show exemplary ethics, he should have reported the incident to authorities. Mr. Gower is not a trustworthy pharmacist—he was also the beneficiary of moral luck. He poisoned a child’s pills through inattentiveness. If his customers knew that, would they keep getting their drugs from him? Should they? A professional whose errors are potentially deadly must not dare the fates by working when his or her faculties are impaired by illness, sleeplessness or, in Gower’s case, grief and alcohol.

One could take the position that Mr. Gower “just made one mistake.” But trustworthy professionals don’t get to make such mistakes, not and still be trusted the next time. Trust is easily destroyed, and should be. The narrators in Heaven seem to believe that the fact that George never told a soul about the near poisoning  is evidence of his virtue. How would they feel if Mr. Gower eventually killed someone by mistakenly putting poison in some capsules?  (And why does he have a big bottle balled “POISON” around anyway? ) Here the film, not for the only time, celebrated loyalty over responsibility. It’s a bad ethics lesson.

Mr. Gower also slaps George on the head several times. Today hitting a child like that is regarded as child abuse by a parent; when another adult hits a child, it’s grounds for arrest. This is one of many examples of evolving societal ethics in “It’s A Wonderful Life.” When the film was made, Mr. Gower’s conduct in beating a child employee was considered forgivable. If the local pharmacist slapped my son, I’d swear out a criminal complaint, and he still might end up shambling bum like Mr. Gower in the film’s alternate reality section.

I have always been puzzled why George didn’t just shout out about the poison when he was first given the package to deliver, and not later, when he was being slapped around. After all, that big container labeled “poison” was just sitting there.

4. The Uncle Billy Problem.

As George grows up, we see that he is loyal and respectful to his father. That’s admirable. What is not admirable is that George’s father, who has fiduciary duties as the head of a Building and Loan, has placed his sketchy brother Billy in a position of responsibility. As we soon learn, Billy is a souse, a fool and an incompetent, and he keeps squirrels for pets, just like that suspect in the Zodiak killings. This is a breach of fiscal and business ethics by the elder Bailey as well a classic conflict of interest, both of which George engages in as well, to his eventual sorrow.

It is, to be fair, also a very common breach of ethics, the unreliable family member or friend kept working by a compassionate owner. One of my college roommates  continued to employ a close friend who sustained permanent brain damage in an auto accident. Doing so requires extra supervision, and some risk. How does one criticize generosity and loyalty like that? Yet it creates a very real ongoing conflict of interest that the film fails to condemn.

5. George’s Speech.

When his father dies, George delivers an impassioned speech to Mr. Potter, the owner of the only other financial institution in town, who proposes that the Bailey Building and Loan be closed down.  Potter has a point. For example he points out that Ernie the cab driver was approved by for a home loan by George, who is his good friend. Yes, it’s a small town, but still, this is a suspect policy and more importantly, a conflict of interest with the appearance of impropriety.

This time through the film I realized that two of the most clearly stated and correct ethical principles are articulated in this scene by Potter, the film’s villain. First he says that “high ideals’—ethics, essentially—don’t work without common sense. That’s right, and is an ongoing theme on Ethics Alarms.  The second is when Potter mocks the legitimacy of George approving loans to his friends. Potter is also right about that. It should not be allowed. No responsible and trustworthy financial institution would allow it.

When Potter impugns George’s father however, George has a rebuttal:

“Just a minute. Now, hold on, Mr. Potter! You’re right when you say my father was no business man. I know that. Why he ever started this cheap penny-ante Building and Loan, I’ll never know. But neither you nor anybody else can say anything against his character, because his whole life was… Why, in the twenty-five years since he and Uncle Billy started this thing, he never once thought of himself. Isn’t that right, Uncle Billy? He didn’t save enough money to send Harry to school, let alone me. But he did help a few people get out of your slums, Mr. Potter.  And what’s wrong with that? Why…here, you are all businessmen here. Doesn’t it make them better citizens? Doesn’t it make them better customers?”

“You…you said that uh… what’d you say just a minute ago… They, they had to wait and save their money before they even thought of a decent home. Wait! Wait for what? Until their children grow up and leave them? Until they’re so old and broken-down that they… Do you know how long it takes a working man to save five thousand dollars? Just remember this, Mr. Potter, that this rabble you’re talking about… they do most of the working and paying and living and dying in this community. Well, it is too much to have them work and pay and live and die in a couple of decent rooms and a bath? Anyway, my father didn’t think so. People were human beings to him, but to you, a warped, frustrated old man, they’re cattle. Well, in my book, he died a much richer man than you’ll ever be.”

Capra, as was his habit, stacks the deck by casting the advocate for fiscal responsibility as Potter, whom the heavenly spokesperson has already identified as “the meanest man in Bedford Falls.” But George’s speech, delivered by Jimmy Stewart in his best “Mister Smith Goes to Washington” fervor, is pretty close to the philosophy that set up the U.S. for the housing and mortgage meltdown in 2008 and that wrecked the economy. George’s speech could probably have been recited with equal sincerity by various well-meaning members of Congress, like Barney Frank and Ted Kennedy, who were pressuring financial institutions to hand out mortgage loans to hundreds of thousands of aspiring homeowners who would never have qualified for them under well-established banking principles. It might sound familiar now President Biden tries to have student loan debts forgiven.

Peter Bailey’s “plan,” if one can call it that, was to give mortgages to people who couldn’t afford them, and then not press the good people to keep up with payments when they couldn’t afford them. In short, he was irresponsible, fiscally and otherwise, and his poor business sense, matched here to generosity and compassion as if one justifies the other, was guaranteed to be ruinous to investors, the unqualified homeowners, and ultimately the Building and Loan.  Ethical borrowing means committing to pay back loans on the terms of the loan. The greater the risk of a loan not being paid back, the more proof of collateral is needed. Neither Peter Bailey, nor George, nor Frank Capra knew how to somehow loan money to people who can’t pay it back, not foreclose on the property, and yet keep the altruistic loaner solvent.  They just knew it was“the right thing to do”…which when used in such a context, is a rationalization: #60, The Ironic Rationalization. From the definition on the Ethics Alarms Rationalizations List:

This rationalization can sometimes be a fair statement of fact rather than a rationalization. But “It’s the right thing to do” is routinely used to end a debate when it is only a proposition that must be supported with facts and ethical reasoning. Simply saying “I did it/support it/ believe in it because it’s the right thing to do” aims at ending opposition by asserting virtue and wisdom that may not exist.

The question that has to be answered is why “it’s the right thing to do,” and “Because it’s just right, that’s all,” “Everybody knows it’s right,” “My parents taught me so,” “That’s what God tells us in the Bible,” and many other non-answers do not justify the assertion.

Maybe it’s the right thing, and maybe not. Just saying it conduct is right without doing the hard work of ethical analysis is bluffing and deflection. “It’s the right thing to do” you say?

Prove it.

The problem is that a plan that can’t possibly work is never ethical. It is by definition irresponsible, and thus not the right thing to do.

How did Peter Bailey’s lunatic business plan become regarded by one political party as sound social policy? If one borrows money, one has made an obligation to repay it, with interest. A mass amendment to that principle of “But, if it’s too hard, that’s all right, you won’t really have to pay it back!” undermines personal responsibility and the willingness of loaners to loan.

6. George’s Fork in the Road.

George Bailey’s decision to give up his plans to go to college to save the Building and Loan is clearly not motivated by his personal dedication to the institution; he doesn’t like the place. He says so over and over again. He admires his father’s motivations for starting it, but if Potter had not sparked his resentment with his nasty comments about George’s late father, George would have been out the door. His passionate speech in rebuttal of Potter’s words put him on the spot: after those sentiments, turning down the Board’s appointment of him to be the new operating manager of the S&L would have made George a hypocrite in his own eyes, and rendered his passion laughable. If George has any integrity, then he must accept the appointment. This is a common experience in our lives: talk is cheap, but when events make us have to live up to our words, we often reject them.

It is one of the most interesting ethical moments in the film, because it represents a realistically complex ethical decision. George does what he does for selfish reasons as well as altruistic ones, and irrational reasons as well as considered ones. He wants to respect himself; he fears what might happen to his family and the community if Potter becomes the only financial power in town, and knows he will feel guilty if the consequences are bad. He feels like not staying will be taking Potter’s side over his father’s—completely irrational, since his father had given his blessing to George’s college plans, and wasn’t alive to be harmed by whatever he chose to do anyway. A large proportion of George’s decision seems to be motivated by non-ethical considerations, for he doesn’t like Potter—even hates him, perhaps—and wants to stick it to the old tycoon by foiling his victory. There are few ethical decisions in real life that are made purely on the basis of ethics, and Capra makes George’s decision wonderfully impure.

Still, this may be the single most important decision in George Bailey’s life. It changes everything, for him and for the town. Most important of all, perhaps, it probably is the tipping point in the formation of George’s character. Many of us face ethical decisions that require us to embrace or reject core values. Once a value has been rejected, down-graded in our priorities, we may be permanently changed as human beings. Choosing non-ethical considerations —self-interest—over honesty, integrity, loyalty or fairness one time will make that choice easier the next time, then a habit, then a character trait, then a personal philosophy. George faces that fork in the road and chooses integrity, respect, fairness and caring…because of the man he was at that moment, a caring and ethical one. Had he chosen to leave, thus opting for new experiences and ambition over the values he had once thought paramount, George Bailey might have become less like his father and more like Mr. Potter. Luckily for him, he recognized this pivotal moment in his life and character when it occurred. Too often, we make life and character-altering decisions in the heat of the moment, without playing ethics chess and thinking about the possible consequences.

George also makes his life-altering decision under pressure, another condition that leads to unethical acts. When we have such decisions to make, the wise course is to delay, take time to consider, and consult with others. As “It’s a Wonderful Life” shows, however, this isn’t always possible.

Is it fair for the board of directors to put all of this on George? I think so: their fiduciary duties  include trying to keep the institution open, and they reasonably see some obligation in the fact that George is the deceased founder’s son. The move still breaches a Golden Rule analysis here, for what young man would want to have his life’s plans turned inside like this? Still, this is a utilitarian decision, and a valid one. The whole town’s future is at a stake, and that outweighs George’s plans. Nonetheless, he doesn’t have to sacrifice his future for the “grubby town” as he calls it. Once he lets the board push him into his fateful decision, he can’t keep blaming them.

7. Harry’s Betrayal

George gives his college money to younger brother Harry, an ethical act if there ever was one. All he asks in return is that Harry return after college and take over the Building and Loan, so George can get on with his life. Harry, however, returns to Bedford Falls with a new wife, who has other plans. Harry plays George like a violin, and lets George be a martyr and waive Harry’s obligation.

I regard this as a despicable double-cross by Harry Bailey, aided by the new Mrs. Bailey. He had made a deal, and benefited greatly from it. By the time he got back home, his wife should have already been told in no uncertain terms that he was taking the weight of the S&L off of George’s weary shoulders, and that he was turning down her father’s offer to employ him. Harry knew George and what he was like—his brother’s penchant for sacrificing his own needs for others. The script shows Harry putting up a perfunctory fight when George lets him off the hook, but he simply should have refused to accept George’s arguments. Harry had an obligation, and a big one. He took an easy route to avoid it, and closed his eyes to the Golden Rule answer staring him in the face. Harry knew what was fair, knew what George wanted, needed and deserved, and still accepted George’s waiver.

Yes, George is accountable and responsible for his own actions. At this point, he is a candidate for a diagnosis of toxic altruism; he’s a probable altruism addict, a professional martyr. He consents to being taken advantage of, and then is better about it for the whole movie. I bet you know people like this. I sure do.

Thus we have to face the fact that George is a screw-up. Many of the things that lead to his emotional break launching the climax of the film are his own fault, though Capra want the audience to have complete sympathy with him. Yet he is substanially accountable for his fate.

8. Sam and Mary.

George’s next ethical dilemma occurs when his mother urges him to try to steal away Mary, the lovely local college girl (played by radiant Donna Reed) who is supposedly the main squeeze of George’s obnoxious friend, Sam (“Hee-haw!”) Wainwright. The movie’s view is that since Sam is a jerk, there’s nothing wrong with George stealing his girl and Mary slyly encouraging him to do it. Capra even shows Sam with a floozy in his office when he’s calling Mary, so we know he’s a louse. Sam obviously considers George a friend, however, so George’s motivations and conduct in this episode are still less than admirable. He and Mary do foil Sam’s well-intentioned efforts to turn them into inside-traders, something that was not illegal at the time, but still unethical.

George certainly is a rude jerk to Mary, apparently holding repressed anger against her because her attractiveness temps him to again nail himself to the town he hates, and because he was pitching woo to her when he learned that his father was stricken. It’s lucky that she sees the good in George, because he’s hiding it well. Lashing out at others for your own self-fueled misfortune is a really unethical habit. I wouldn’t let George have a dog, because he’d probably kick it.

9. The Run on the Bank!

The second great ethical turning point in “It’s A Wonderful Life” and the fictional life of George Bailey comes when there is a run on the Building and Loan just as George and Mary are leaving on their honeymoon. Yet again, George makes a huge personal sacrifice and uses the money he saved for the trip to keep the bank from closing and out of Potter’s clutches yet again. A few things to keep in mind:

  • He had no obligation to use personal resources for this purpose. Rationally, he could have required at least some interest, as long as it wasn’t excessive.
  • When Potter offers to pay off the S&L’s obligations at 50 cents on the dollar, George has no right to reject the offer unilaterally—it’s not his offer to reject. He needs to consult his board, or at least try to, and if they vote to accept Potter’s gun-to-the-head deal, George can’t over-ride them. If he can’t reach the board, then his ethical obligation is to act as he thinks they would, and he knows they almost certainly would accept Potter’s offer. George’s conduct in this situation is personally courageous and generous, but a blatant fiduciary breach of trust and an abuse of his authority.
  • Mary is the one who offers up the couple’s money, and she does it without consulting George. She also has no right to do this. She may presume, from watching George go through life offering himself up as a human sacrifice, that he would approve, but it is irresponsible and disrespectful for her to risk the couple’s resources on a bad bet like the Bailey Building and Loan, during a financial crisis, without discussing it with her husband first. (How does the Building and Loan weather the Great Depression, by the way?)

10. Potter’s Offer…

Mr. Potter’s next tactic is to try to hire George away from the Building and Loan with a large salary. George views the offer as an invitation to corruption, and nobly turns it down.  There is no wrong, or unethical, solution to George’s dilemma. He could justify taking Potter’s offer as ethical because it allows him to  better the lives and future of his family and children, and perhaps he should. Surely whatever obligation he feels to his father’s project and the community has been more than fulfilled by this time. George, however, is blocked by cognitive dissonance. He detests Potter and all he stands for; if he agrees to work for the man, he cannot avoid embracing Potter’s values, or at least becoming connected to them. He will have to be loyal, because he is always loyal; he will be dependent on a man whose ethics he reviles. This is how people become corrupted.

Does George have an ethical obligation to risk corruption of his core values—remember, none of us are as immune to corruption as we think we are (this is called Restraint Bias)—for the benefit of his family and children? Wouldn’t this be the greatest sacrifice of all for the altruism addict, selling his integrity so his children have a better future? Or would he be corrupting them, too?

I think George is right to uphold his integrity and avoid allying himself and his family’s welfare to someone with deplorable values and who is, after all, untrustworthy, perhaps because I would (I hope) make the same decision in his shoes. Nevertheless, it is not the ethical slam-dunk that Capra would have us believe, and it wouldn’t take much more than a solid argument to tip me to the other side. My father held a series of jobs that he detested, under unappreciative superiors not worthy of him, because he wouldn’t travel frequently (and he loved to travel) and wouldn’t sacrifice his parenting duties to be more financially successful and to have more career options. I often wonder what he would have thought about George’s decision.

George at least should have  consulted Mary. If she is anything like my mother, she would have said, “Are you nuts? Take the offer!”

This might be the most profound and useful scene in the movie. Many of us, perhaps most, face this kind of choice in our lives, sometimes more than once. George-like, I have often second-guessed my decision to devote so many unpaid hours to building a professional theater company for 20 years (my wife REALLY questions it), and to focus my professional life on the inevitably non-lucrative field of ethics and the risks of operating a small business rather than getting a regular and significantly larger paycheck. (I did, however, have a disturbing tendency to get myself fired.) Most of the time, when this has happened, someone I respect has been near to convince me that I have made the right choices even if they continue to involve some sacrifices.

Watching the scene again this year, I realize that it raises the eternal question, does everyone have a price for which they will abandon their principles? The value of $20,000 in 1946 today is $305,653.33. Yikes. I’d be sorely tempted to abandon the ethics business for a guaranteed contract for that amount, and I’m not as strapped for resources as George was. That salary would solve many problems. I believe I would turn the offer down if it meant working for someone like Potter. I hope I would.

11. Uncle Billy screws up, as we knew he would.

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 in the world is Uncle Billy still working for the Building and Loan? He’s working there because George, like his father, is putting family loyalty over fiduciary responsibility. This is unethical, and is one of the reasons nepotism is often forbidden in ethics codes. Even if George felt the need to employ Billy, there is no excuse for entrusting important responsibilities to a man who keeps a free-running squirrel in his office. An why didn’t someone warn him that his was an unacceptable risk? Eustis. Mary. Somebody.

Potter, of course, is a thief; by keeping the lost money to trap George, he’s committing a felony.  Moreover, as a board member on the Building 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.

Since we are focused on whistleblowers these days, it is a good time to point out the cowardice and complicity of Mr. Potter’s lackey who pushes his wheelchair. He sees the crime in progress. If he had any ethics at all (and spine) he would have 1) warned Potter than he saw what he was doing, and would report him and 2) blown a very loud whistle if Potter continued with his plot. As it is, he’s an accessory.

12. George folds under pressure.

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 courageous, principled and admirable than we thought, and more importantly, than he thought.

This is a brave move by Capra, 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 badly 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 Building and Loan, which his actions have kept operating; he says he hates the “drafty old house” (Whose agreed to live there?); he asks, “Why do we have to have all these kids?” (Do we need to explain it to you, George? This is another example of George self-flagellating for the consequences of his own decisions.). 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 Building and Loan and the welfare of Bedford Falls for Potter’s help, because he can’t accept the results of his own mistakes.

One 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.


Another lesson is that regret is one of the most destructive and insidious of human instincts. This is also the lesson of Stephen Sondheim’s “Follies,” (which I directed in one of the theater productions I am most proud of)  and whether it takes a movie or a musical to get it though your head, the lesson is one that must be learned. I was lucky: my father made a fetish of rejecting regret. He emphasized that what mattered was what lay ahead, not the mistakes and carnage left behind. Regret leads to anger, rage, guilt, bitterness and depression. We must learn from our bad choices, not get confused by the good ones that went wrong because of moral luck, and avoid beating up ourselves and others about events and consequences we can’t change.

Mary’s behavior during George’s meltdown make less sense to me every time I watch it. Gee, Mary, do you think something really terrible has happened to your husband? What was your first clue? He comes home looking like the Devil is pursuing him. He is irrational in the phone call with the teacher; he is abusive with his kids, and he erupts in violence by destroying the long-time physical reminder of his abandoned dreams of being an architect. George is in a crisis: the response of a competent life partner is to send the kids to their bedrooms and to find out what’s up. Instead, Mary lets George walk out, and immediately goes to the phone because “Daddy’s in trouble.” If she was so sure, why did she let George leave?

13. George heads for the bridge…

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, which is pure escape: it’s not going to help matters, just make them blurrier. George is a coward after all.

As a coward, he seeks the ultimate coward’s solution, suicide.  [ Note: many have objected to this characterization of suicide.  I stand by it, in the context of this movie. I don’t deny that suicide can be justified, even brave, or that it is often the product of mental illness. When it is used as George chooses to use it, however, it is cowardly. ] 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.

Suicide is also insurance fraud in this context: George is moved to try it because Potter suggested that he’s worth more dead than alive, thanks to the policy. But he really isn’t. The insurance company won’t pay for a suicide.

14. Welcome to Pottersville!

George meets Clarence, his tattered guardian angel, who tricks George into rescuing him instead of drowning. George is relentlessly nasty to Clarence—rude and disrespectful.  If Clarence didn’t have a job to do and a personal objective to accomplish—he wants those wings—he would be ethically justified in telling George Bailey to go to Hell.  It is noble to continue to help someone in the face of abuse, disrespect, contempt and incivility, but it isn’t ethically mandatory.

There is also the intriguing question of why Clarence doesn’t just tell George that Potter stole the money. Then he could have Potter arrested, and the town, presumably, would be better off. Apparently there are “rules” that prevent this, and, I suppose, Clarence wouldn’t get his wings this way. Transforming the entire world into a dystopian Hell seems like an awfully baroque way to solve George’s problems, when a simple tip to the police would be just as effective. Clarence isn’t very bright—an incompetent angel. No wonder it takes so long for him to get his wings.

After Clarence grants George his wish that he had never been never born, we see what Bedford Falls and it occupants would be like without the Building 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.  Bert 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 Building 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  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  dangerous, and so is the reverse dream that ignoring laws when people break them for good reasons will do anything but undermine civilization.

A nation that would  do either 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 marry old Hee-Haw and 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. (A classic episode of “Married with Children” took this perspective, with selfish slob Al Bundy learning from his guardian angel, played by the late Sam Kineson, that if he had never been born, everyone he knows and the world in general would have been better off.) Clarence revels in showing George the tragedy and havoc that would have occurred without him: Violet a drunken floozy; Martini apparently vanished or deported;  Nick, now a mean bully, running the bar;  graves sit where George’s houses were; Ernie the cabby without a wife and bitter, like everyone else; Uncle Billy insane, George’s mother mean and suspicious, the soldiers on the transport Harry saved all dead, because Harry drowned when he was eight, and Mr. Gower a shambling beggar after being sent to jail for poisoning that boy, because George wasn’t there to stop him. It’s interesting that Clarence never tells George about what happened to that boy he saved, since he was piling it on. Maybe that kid grew up to be a serial killer. Surely some of the men on that transport ended up causing more pain than joy in the world.   Clarence would rather George not know about that butterfly effect.

Many have noted that ironically Potterville seems like a lot more fun than Bedford Falls, and perhaps better off financially. Writes one wag,

It looks like much more fun than stultifying Bedford Falls — the women are hot, the music swings, and the fun times go on all night. If anything, Pottersville captures just the type of excitement George had long been seeking.

Is Pottersville a resort town, peddling gambling, sex and entertainment to tourists? Why isn’t that better for the residents than living in dull, economically stagnant Bedford Falls? Capra’s answer, just like Clarence’s, would be that money isn’t everything.

Back to Bert the cop…as I noted, he fires his gun at the fleeing George, and doesn’t seem all that concerned about hitting an innocent bystander by accident. Did the absence of George in this alternate universe make Bert a trigger-happy idiot? Why would that be? It is because the cultural rot that has set in because of the community’s corruption had totted Bert too. obliterating kindness, empathy, and more.

Here is a good example of ethics evolving: when the film was made, an officer shooting at a fleeing suspect was neither unusual nor regarded as wrong. Now, it is likely to be called murder if such a suspect is shot dead.

That’s progress.

I guess.

15. “The richest man in town!”

After George talks his way out of No George Hell, he joyfully returns to his Bedford Falls home to be arrested. He arrives to find that Mary has inexplicably left her brood of small children, including sick ZuZu, alone in the house, pretty irresponsible parenting even by the relaxed standards of the Forties.

Note how casual the authorities are, allowing George to run around the house and play with the kids, rather than getting down to business, cuffing him, and dragging him off. Strange values and priorities: today we reject shooting at a fleeing suspect, but our police would arrest George and haul him off the second he walked in the door.

In the grand finale, the entire community rallies to save George and the Building 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, and full of those virtues since George is alive—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.

Of course, we know he won’t. There also has to be an investigation. What did happen to the $8,000? George is ethically obligated to find out…and if he does, then what? Will the town have the integrity to have Potter arrested and imprisoned, when he owns most of the businesses and is the source of most of the town’s capital? In an old Saturday Night Live skit, a “lost reel” of the film shows the happy mob at the Baileys’ being tipped off to what Potter did, and  confronting the old man, followed by everyone stomping Potter to death.

That would be unethical.

  • 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 thinks George absconded with the money, the fact that he can now 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 everyone hears 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 Eve.

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.

I bet he can, because he has absorbed the message. His life has had meaning after all, and there’s still a long way to go.

And so it is for all of you.

Happy Thanksgiving….Happy Holidays…. and Merry Christmas!


12 thoughts on “The Ethics Alarms 2022 “It’s A Wonderful Life” Ethics Guide, Revised And Updated

  1. It occurs to me that the reason Clarence doesn’t tell George about Potter’s theft is that it would only have solved the immediate problem, but not the long-term problem of George’s mounting bitterness. After George is returned to reality, even before the big party where he gets off the hook, George’s resentment and despair is gone. Even though he might be going to jail, he’s still happy that everything’s back to normal, even wishing Potter a Merry Christmas.

  2. “…yup, the only black resident of Bedford Falls appears to be the Bailey’s maid…”

    True, but what an actress! Lillian Randolph was wonderful in everything she did. Few people know that she was the voice of the Mammy in the “Tom & Jerry” cartoons. Those aren’t pc now and they ended up being redubbed by June Foray years ago because of the racial connotation of a black mammy (yep, she got whitewashed!)

    On our vacation through middle New York this year, we stopped in Seneca Falls which was the inspiration for Bedford Falls. The bridge inspired the one George was going to jump off of and there is a tiny museum dedicated to the film with sections focused on the actors, particularly the supporting performers. We were glad to see a nice exhibit for Randolph and her character.

  3. Every year it seems like you post this and every year I find it inspirational. Last year was the first time I ever watched the movie. I think, it was a little fitting, because I found myself being a lot more sympatric to George and the Elder Bailey based on another project I started then. I would like to share a little bit about that and perhaps offer a different prospective on why George decided to stick around.

    I serve as the president of the board for the local Fuller Center for Housing. We are a non-profit group who’s goal is to provide affordable housing for low income people in the name of Christ and in the name of our founder Millard Fuller. For those of you who aren’t familiar with the man, I highly suggest you check out his story. It’s a good one. By 29 he was a self-made millionaire, but his money and his commitment to his practice (lawyer) were tearing his family apart. His wife, thinking it was the end of their relationship, took his children and his kids to NY. He followed them, and after a long talk, they agreed to get their lives together and give away most of the money. In the following years they ended up on Koinonia Farm (another good story), Zaire (Now the Congo), then came back to start one of the most sucessessful housing movements in the United States: Habitat for Humanity. As of 2013, Habitat was the largest non-profit builder in the world and has helped more than 35 million people construct, rehabilitate, or preserve homes since 1976. Fuller Center, while different in name, has a similar mandate and purpose.

    Well, what do we do? In some ways, we are a little bit like the Building and Loan. We act like the bank in the normal transaction between the people in need of housing and the builders who will build the housing. However, the biggest difference is we not only charge 0% interest on our loan, but we only charge for cost of the materials and contracted labor (we also do 80% of building). We have smaller projects we do as well that might be home repairs such as roofs, bathrooms, ramps, or anything a person might need costing less than $5,000. Our motto is “Hand up, not hand out.” We are going to do everything we can to get you what you need, but in the end, we still expect you to pay for it. More than that, we expect you do put in a number of hours of what we call “Sweat equity” where you must help out with the home or other projects related to the program.

    I believe its a noble cause. Everyday, we get calls about housing, renting, and building repair. I see people who are forced to make 600-1200 rent payments (average mortgage prices for the area) but for some reason can’t get a loan from a bank because they have terrible credit or are living at the the poverty line. These are people that for whatever reason need that hand up to pull them out of the trenches of life that could not do it on their own. They need help. More so, they are grateful for our help. I see it in the mother and daughter who we last build a home for who now sits on our board. I see it in the woman who just paid off her roof we installed five years ago. I see it to the dozens who came to our meetings last month asking for door repairs to keep the winter air out.

    Though Elder Bailey is a fictional character, the story tells us he was motivated more by compassion than by wealth. It couldn’t have been a profitable business, to constantly be in a state of peril. I would even agree with your assessment in a few places that it wasn’t even a good way to run a business. But its clear Elder Bailey had a mission to help the people of the town, and as someone who sits on a board, I’m pretty sure his board was well aware of his motives, as well as George. I think if George was a real and good man, he would have not been able to walk away from something like that. He would have seen the work as too important. I think the movie tries to show this in the Potterville scene.

    Millard Fuller died in 2009, but we carry out the legacy in his name and style. We rarely build garages because he believed people should be housed before cars. We give people multiple chances before allowing them to default on their loan (and work with them where we can), because of his perchance for offering others forgiveness. We give a bible at the end of every build because of his love for Christ (those we have no religious requirements for anyone we help). We make you work for it, because he never believed in a hand-out.

    Elder Bailey needed to make a living to take care of his family. I can’t fault him for this. I think if he could have escaped it, he might have been another Millard Fuller. Fortunately for us, we got the real one.

  4. On Point 1:

    Jack: “The heavenly authorities assign an Angel 2nd Class, Clarence Oddbody, to handle the case..He is, we learn later, something of a second rate angel as well as a 2nd Class one, so it is interesting that whether or not George is in fact saved will be entrusted to less than Heaven’s best. Some lack of commitment, there— perhaps because George has not been “a praying man.” This will teach him—sub-par service! Good luck, George!”

    I think this serves two purposes. First, how much suspense are you going to have if you send the best angel. From a story-telling perspective, you need, at least, the “possibility” of failure. Secondly, this makes the story a “redemption” story for the angel, as well. Clarence has to be invested in the outcome because he wants to get his wings. Yes, that character arc is way down the list of things in the movie to talk about, but , it is there, albeit undeveloped.


    • it’s good and valid to point out the competing interests of story-telling and common sense responsible conduct. Clarence is described by the honcho angels as having a sub-human IQ level—for some reason, this bothered me this time through the film more than before. Imagine: “Hey, Sarge: some guy with four kid is on a ledge threatening to jump! Who should be send to talk him down?”

      “Let’s send that idiot Clarence who never does anything right. Maybe he’ll finally succeed at something.”

  5. Most typos I spot merely irritate me, but I think you may be missing at least one material “not”, before a “be allowed”. And the material typos I miss are even more important. Spotting typos irritates me because it makes me worry about the ones I miss, that it makes me think must be there. That’s why fixing computer bugs you learn about is no fix; you have to go looking for yet more bugs as well.

      • I think you missed the point. The whole reason I wrote “at least one”, and not “only one”, and then pointed out the problem with a policy of fixing bugs you are told about and thinking that that is a fix, is that that is not a fix. All it is is way of getting a false sense of security, unless and until you go looking for all the bugs to which your faulty process – of which the known bug is but a symptom – gave rise. You should not come away with the idea of “only one” from my telling you about it, as though that is all that is there. This piece needs more of a stress test approach.

        • But no, that isn’t the process! I re-proof several old posts most days, and sometimes even find no typos at all, but revise them anyway. I have, luckily, several proofers among the EA readers, and get most of my typo tips from them, via email.

          It is still, of course, a losing battle. This post, which I revise every year, actually should be the most unlikely home for typos, and that is depressing.

          • I think you are still missing it. You shouldn’t be saying “that isn’t the process”, when I am referring to whichever process – yours, software writers’, whoever’s – is yielding bugs, typos, etc. It is in fact your process, whatever it was and whatever you intended it to be, that did that, this time. The thing itself is the evidence thereof, or, as you might say, res ipsa loquitur. And not facing up to that means keeping the process essentially as is, and you should expect the typos to keep flourishing unless and until something deeper changes for the better. So, yes, that is the process – I was talking about what led to this, here, today. That process.

            I am going to make a concrete suggestion, despite Oscar Wilde’s warning about giving advice. Consider your “This post, which I revise every year [emphasis added], actually should be the most unlikely home for typos …”. That is almost certainly the point at which, and the means by which, you introduce typos, partly because everybody sees what they meant rather than what is there (to the point that we cannot edit our own stuff until after a long fallow period), and partly because every such revision affords time and chance more opportunity (e.g., just now some key bounce made this very text start inserting a couple of lines higher up than I intended). That makes this post of yours the most likely home for typos.

            Sadly, the only effective techniques for avoiding such errors are impractical at this scope and scale (there is even a way to estimate the number of errors that have not been found!). I am merely advising you how best to catch and kill errors after they are born – stress test, presume guilt, and infer many unseen cockroaches from each one you see, so repeat fixing everything until you don’t see any cockroaches even after a couple of repetitions of the first two steps. Do not end the loop at …find/fix but at …find/fix/find, with at least two clean passes at the end. And do not take the opportunity to make some upgrades while you are in there – that way hubris lies. Revising and doing afresh is not a way to catch and kill errors, but rather yet another occasion for them to arise! Hint: which programs are more stable, ones with version numbers a.bc where bc is zero or non-zero? And this even holds as between (say) version 2.32 and version 3.00.

  6. Before line 5, I still think you should address Mary’s invocation of the dark arts and pagan superstition. In this article, you make a reasonable argument that there is no ethical difference between a *sincerely* believing ‘practicer’ of dark arts cursing another person to death and an attempted murderer.

    At some point I need to do a review of Wonderful Life and Superstition, such as the unending trips to the Malt Shop and wishes for wealth followed by “Hot Dog”. But Mary, either she believes it or not, wished *anything* to happen to keep George Bailey in town right before engaging in a superstitious rite to bring about the wish. And a moment later his dad dies, leaving him almost the sole responsible follower of his dad’s footsteps in the community.

    Now, either in the Wonderful Life universe, this works, or it doesn’t, but Mary believes so. Nevertheless, Mary may not have intentionally wished death into George’s family, but she negligently made such an overly general wish that could include such an outcome.

    On another topic, I hope someday to discuss the difference between ‘gemeinschaft’ and ‘gesellschaft’ and small homogenous familiar communities and large diverse disconnected communities and how I think the ethical boundaries inside those communities makes all the difference in interpreting not just Wonderful Life, but also, Miracle on 34th Street and White Christmas. The movies may be more ethically appropriate than we think if we recognize that the story writers probably came from smaller more intimate communities than we are familiar with in the modern day.

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