Wall Street Movie Essay

The movie Wall Street demonstrated how the dollar, the fundamentally scarce resource, is traded, utilised, and allocated in the stock market. The two main characters in the film, Bud Fox and Gordon Gekko, exploit this allocation medium by using inside information. The main focus of the economic aspects of the movie is how greed contributes to our society.

The stock market is a great tool in to-day’s economy. It allows companies to raise money much more easily, and also has great liquidity in the exchanges which reduce the time and effort of selling securities. The limitations of this system, on the other hand, is that it is similar to gambling. If one invests money into stocks of a certain company, it is almost impossible to predict whether one will gain or lose money in the long, or short run. Thus, many people have lost a lot of money in the stock market. If this system were applied universally to the economy, it would most likely actually detriment the economy. For example, real estate is not part of the stock market. If it was, then people could invest their house into a company, and then if the company started to lose price, the investor could lose their house. Universalising the stock market would probably hurt a lot more people than it would benefit.

Our economy is largely driven by the guiding principle of self-interest, which states that people will only undergo transactions that benefit them directly, and they will always pick the one that benefits them most if there is a choice. However, this is not enough to drive the optimal functioning of the economy. If personal self-interest were to be allowed to have complete control of the economy, one consequence could be the creation of economic giants such as Rockefeller that can take over the economy of the entire country. In a less extreme scenario, people would lie and double-cross each other in nearly every transaction to ensure they get the most out of the bargain. This is clearly an unesireable world to live in. The way to counterbalance it is by introducing a government which guides the nation in the proper course, and an accompanying set of laws imposed over economic proceedings that will return an economy threatened by the aforementioned consequences into relative equilibrium. Such resolution is evident at the end of Wall Street when Bud Fox’s illegal transactions are uncovered by the police and he is arrested and incarcerated. Otherwise, self-interest is a sufficient guiding principle for the economy within these legal restrictions. In fact, it is what assures that economic supply and demand returns to equilibrium in every possible scenario.

Thus, as long as it does not get out of hand, personal self-interest is a sufficient guiding principle for the optimal functioning of the economy.