Monday, July 6, 2009

Art Imitates Social Science

. Monday, July 6, 2009

Last night my wife and I watched The Treasure of the Sierra Madre, the classic Bogey film about prospecting for gold in Mexico. Although it was meant as a morality play, I was surprised by how much economics and international relations theory there was in the film. A partial list:

1. Game theory, game theory, game theory: The whole film was textbook game theory. The gains from cooperation, the costs of defection, credible commitment problems, security dilemmas, the role of signaling, it's all there (and more). There is one-thousand times as much game theory in Sierra Madre as there is in A Beautiful Mind. Interestingly, though the film was made several years after von Neumann and Morgenstern's classic book, the novel the film was based was published twenty years prior.

2. Division of labor: While the two younger prospectors had the start-up capital and energy, the old-timer had the necessary knowledge.

3. The tragedy of the commons: Technically, the prospectors were trespassing and the gold they found didn't belong to them. Because of that they are constantly under threat from bandidos, federales, indigenous populations, and other prospectors. They had to extract as much gold as they could in a short amount of time, hoarding all the gains for themselves before they were forced to share. True, this isn't the classic "tragedy of the commons" because the gold is not reproducible as are fish stocks or grazable land, but the applications to modern resource extraction (and accompanying security dilemmas) are even greater for that fact.

4. The scarcity of resources: The only reason they were searching for gold, of course, is because its relative scarcity makes it a valuable commodity. But even beyond that, the scarcity of gold led the prospectors to race against time to extract as much as they could before their operation was found out. There's also a bonus for conservationists: after they had drained the vein dry, the prospectors clean up their operation to leave the mountain as they had found it (less a good amount of gold, of course), despite the fact that it cost them valuable time and energy. Interestingly, this lost time may have been their downfall but I think that is coincidental.

There's more, including gains from trade, the necessity of strong institutions for economic development, the political economy of immigration, and the role of incentives in shaping behavior. The film must be viewed as essentially realist (I can't say why without spoiling it), but there is a heavy dose of institutionalism and constructivism as well.

Drezner and his Foreign Policy pals ran their lists for best films about International Relations several months back, and none of them included Sierra Madre. After watching it, I think it is a notable omission.

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Art Imitates Social Science
 
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