Is There Economic And Political Meaning In "The Wizard of Oz?"

To get a handle on this, you can read Money and Politics in the Land of Oz By Quentin P. Taylor.  Below is an excerpt from the Taylor paper:

"Dorothy, the protagonist of the story, represents an individualized ideal of the American people. She is each of us at our best-kind but self-respecting, guileless but levelheaded, wholesome but plucky. She is akin to Everyman, or, in modern parlance, “the girl next door.” Dorothy lives in Kansas, where virtually everything-the treeless prairie, the sun-beaten grass, the paint-stripped house, even Aunt Em and Uncle Henry-is a dull, drab, lifeless gray. This grim depiction reflects the forlorn condition of Kansas in the late 1880s and early 1890s, when a combination of scorching droughts, severe winters, and an invasion of grasshoppers reduced the prairie to an uninhabitable wasteland. The result for farmers and all who depended on agriculture for their livelihood was devastating. Many ascribed their misfortune to the natural elements, called it quits, and moved on. Others blamed the hard times on bankers, the railroads, and various middlemen who seemed to profit at the farmers’ expense. Angry victims of the Kansas calamity also took aim at the politicians, who often appeared indifferent to their plight. Around these economic and political grievances, the Populist movement coalesced.

In the late 1880s and early 1890s, Populism spread rapidly throughout the Midwest and into the South, but Kansas was always the site of its most popular and radical elements. In 1890, Populist candidates began winning seats in state legislatures and Congress, and two years later Populists in Kansas gained control of the lower house of the state assembly, elected a Populist governor, and sent a Populist to the U.S. Senate. The twister that carries Dorothy to Oz symbolizes the Populist cyclone that swept across Kansas in the early 1890s. Baum was not the first to use the metaphor. Mary E. Lease, a fire-breathing Populist orator, was often referred to as the “Kansas Cyclone,” and the free-silver movement was often likened to a political whirlwind that had taken the nation by storm. Although Dorothy does not stand for Lease, Baum did give her (in the stage version) the last name “Gale”-a further pun on the cyclone metaphor.

The name of Dorothy’s canine companion, Toto, is also a pun, a play on teetotaler. Prohibitionists were among the Populists’ most faithful allies, and the Populist hope William Jennings Bryan was himself a “dry.” As Dorothy embarks on the Yellow Brick Road, Toto trots “soberly” behind her, just as the Prohibitionists soberly followed the Populists.

When Dorothy’s twister-tossed house comes to rest in Oz, it lands squarely on the wicked Witch of the East, killing her instantly. The startled girl emerges from the abode to find herself in a strange land of remarkable beauty, whose inhabitants, the diminutive Munchkins, rejoice at the death of the Witch. The Witch represents eastern financial-industrial interests and their gold-standard political allies, the main targets of Populist venom. Midwestern farmers often blamed their woes on the nefarious practices of Wall Street bankers and the captains of industry, whom they believed were engaged in a conspiracy to “enslave” the “little people,” just as the Witch of the East had enslaved the Munchkins. Populists viewed establishment politicians, including presidents, as helpless pawns or willing accomplices. Had not President Cleveland bowed to eastern bankers by repealing the Silver Purchase Act in 1893, thus further restricting much-needed credit? Had not McKinley (prompted by the wealthy industrialist Mark Hanna) made the gold standard the centerpiece of his campaign against Bryan and free silver?"

Now an excerpt from an economics textbook by Irivin B. Tucker:

"Gold is always a fascinating story: The Wonderful Wizard of Oz was first published in 1900 and this children's tale has been interpreted as an allegory for political and economic events of the 1890s. For example, the Yellow Brick Road represents the gold standard, Oz in the title is an abbreviation for ounce, Dorothy is the naive public, Emerald City symbolizes Washington, D.C., the Tin Woodman represents the industrial worker, the Scarecrow is the farmer, and the Cyclone is a metaphor for a political revolution. In the end, Dorothy discovers magical powers in her silver shoes (changed to ruby in the 1939 film) to find her way home and not the fallacy of the Yellow Brick Road. Although the author of the story, L. Frank Baum, never stated it was his intention, it can be argued that the issue of the story concerns the election of 1896. Democratic presidential nominee William Jennings Bryan (the Cowardly Lion) supported fixing the value of the dollar to both gold and silver (bimetallism), but Republican William McKinley (the Wicked Witch) advocated using only the gold standard. Since McKinley won, the United States remained on the Yellow Brick Road."

But not everyone agrees with this. Economist Bradley Hansen wrote an article titled The Fable of the Allegory: The Wizard of Oz in Economics in the Journal of Economic Education in 2002. Here is his conclusion:

"Rockoff noted that the empirical evidence that Baum wrote The Wonderful Wizard of Oz as an allegory was slim, but he compared an allegorical interpretation to a model and suggested that “economists should not have any difficulty accepting, at least provisionally, an elegant but controversial model” (Rockoff 1990, 757). He was right—we did not have any difficulty accepting it. Despite Rockoff’s warning, we appear to have accepted the story wholeheartedly rather than provisionally, simply because of its elegance. It is as difficult to prove that The Wonderful Wizard of Oz was not a monetary allegory as it is to prove that it was. In the end, we will never know for certain what Baum was thinking when he wrote the book. I suggest that the vast majority of the evidence weighs heavily against the allegorical interpretation. It should be remembered that no record exists that Baum ever acknowledged any political meanings in the story and that no one even suggested such an interpretation until the 1960s. There certainly does not seem to be sufficient evidence to overwhelm Baum’s explicit statement in the introduction of The Wonderful Wizard of Oz that his sole purpose was to entertain children and not to impress upon them some moral. The Wonderful Wizard of Oz is a great story. Telling students that the Populist movement was like The Wonderful Wizard of Oz does seem to catch their attention. It may be a useful pedagogical tool to illuminate the debate on bimetallism, but we should stop telling our students that it was written for that purpose."

I found a review of the book in the NY Times from 1900 and it does not mention anything about OZ having political or economic meaning. The book was also made into a musical a few years later and none of the reviews of the musical mention any political or economic meaning.

Flushing out the true cause of the global toilet paper shortage amid coronavirus pandemic

By Marc Fisher of The Washington Post.

It seems like panic buying and the fact that we are at home more (and are using more TP there and less at work) are the main reasons (and they may be related). It is costly for the makers of institutional TP to get their stuff to stores since it is not currently set up for the consumer market. It reminds me of  The Law of Increasing Opportunity Cost. That is the idea that as you try to produce more of one good (A), you have to keep giving up more and more of another good (B), to get 1 more unit of A. This is because different resources are better suited to different productive activities. More on this below.

Excerpts:

"The problem, like the virus that spawned it, is global. In Australia, a cafe began accepting rolls of TP as payment — a cup of coffee will run you three rolls. In Hong Kong, armed crooks held up a supermarket; all they took was 600 rolls of the soft stuff. A pet store in Dornburg, Germany, last week set up an outdoor toilet paper drive-through in a parking lot when the owner was able to obtain a massive shipment.

Nothing seems to be unspooling in the right direction for a commodity that rarely gets much attention: In Hutchins, Tex., a tractor-trailer hauling a full load of toilet paper crashed and burned last week on Interstate 20. Rolls, most charred or reduced to cinders, splayed all over, shutting down the roadway.

Demand is as flush as supply is bare. Americans have spent $1.4 billion on toilet paper in the past four weeks, a 102 percent increase from the same period a year before, according to data collected by IRI, which tracks retail sales based on the bar codes on products. (Prices have been quite stable over that time.) Only hand sanitizers, disinfectant wipes and the like have seen substantially bigger sales boosts."

"So why do the TP shelves remain great banks of emptiness more than a month after many stores reported that customers were hoarding the stuff?

The leading theories are:

1. We’re buying too much toilet paper because we’re panicked there won’t be any when we need it.
2. We’re actually using way more than usual at home because most people are sheltering in place rather than using the facilities while at work, school, restaurants or other public places.

“The third theory is that both of those are right,” said Doug Baker, vice president at the Food Industry Association, which represents retailers, distributors and producers — the whole chain of businesses from the factory to you.

It’s a three-part problem, Baker said. Part One, hoarding: “We have actual situations across the country where people are buying an entire case,” he said. “Demand became unprecedented and still is.”

That’s something the industry knows well — customers regularly wipe out the toilet paper aisle ahead of big snowstorms and hurricanes, and the system can quickly rebound. But this crisis has tested limits because the spike in demand is nationwide, has been going on for some time, and is open-ended.

Part Two, displacement. The same number of people have the same need for toilet paper. But the industry is not set up for a wholesale move from work and school to home; home TP is softer, packaged in smaller rolls and is made and distributed by different companies than are the jumbo rolls seen in offices, institutional settings and public restrooms.

Part Three, adapting on the fly. Baker said the industry is changing, fast. Manufacturers have added hours at the factories and last week, the companies that make the industrial stuff made a deal with the country’s big food distributors to get their product into grocery stores.

But it’s not as simple as putting the big commercial rolls onto trucks. Most industrial rolls don’t have bar codes on the package, so stores have trouble stocking them. They’re adapting by putting little code stickers, like the ones stuck onto pieces of fruit, on the commercial rolls.

Grocers contend that, as Ira Kress, interim president of Giant Food, put it: “There is not a supply shortage, but it does take some time for the manufacturing process and our supply chain to catch up from the significant spike in demand.”

Giant’s suppliers “are shipping far more product to us than normal, but we are also selling far more product than normal,” Kress said. “Please only purchase what you need for this week as opposed to stocking up.”

It is unlikely the shortages will go away soon."

Here are some basic terms that economists use to discuss this issue:

Opportunity Cost-The value of the best foregone alternative. There is no such thing as a free lunch. If we want to build one more skyscraper, we may have to give up one submarine, since there may not be enough steel to go around (steel is scarce!).

The law of increasing opportunity cost-As more of a particular good is produced, the opportunity cost of its production rises. Why is the law of increasing opportunity cost true? Different resources are better suited to different productive activities. This is just about the same as saying people have different abilities, like some are more entrepreneurial and some are more bureaucratic.

Let’s assume that we have society with five workers who can make either of two goods, candles or shoes. Now the best candle maker will not necessarily be the best shoemaker and some candle makers will be better than others. This simply means that workers have different abilities.

In the real world, the best doctor would not be the best lawyer. Some plumbers are better than others.

In the table below, the number of candles OR shoes that each worker can make in a day is listed.

Worker	Candles	Shoes
I	7	3
II	6	4
III	5	5
IV	4	6
V	3	7

Again, the workers have different abilities, just as they do in the real world.

What are all of the combinations of candles and shoes that this society can make? If all the workers make candles, they can make 25 (just add up how much each worker can make). How many shoes? ZERO, since each worker spends all day in the candle factory (this is combination A in the table below).

If we want to make some shoes, the first worker we would tell to stop making candles, if we are rational and trying to get the best deal, would be worker V.  So we gain 7 shoes and lose 3 candles. That is why combination A is 22 and 7. Worker V no longer makes candles since they are making shoes. So the opportunity cost of making a shoe is some number of candles (and vice-versa).

The rest of the combinations that show what would happen if we kept moving workers out of candle making and into shoe making is in the table below.

Combination	Candles	Shoes
A	25	0
B	22	7
C	18	13
D	13	18
E	7	22
F	0	25

Now what happens to the opportunity cost as we move from combination A to combination B? Then combination B to combination C, and so on? The table below shows this:

Change	Candles Given Up	Shoes Gained	Candles per Shoe
A to B	3	7	0.429
B to C	4	6	0.667
C to D	5	5	1.000
D to E	6	4	1.500
E to F	7	3	2.333

By moving from point A to point B, we give up 3 candles to gain 7 shoes. The cost of each shoe in candles is .429 (3/7). Then we give up 4 candles to get 6 shoes, with each shoe costing .667 candles. The more shoes we try to produce, the more candles that have to be given up to get each shoe. So the opportunity cost of producing shoes rises.

This is called the law of increasing opportunity cost.

The law of increasing opportunity cost-As more of a particular good is produced, the opportunity cost of its production rises. (see how the numbers rise in the “Candles per Shoe” column in the table above)

Why is the law of increasing opportunity cost true? Different resources are better suited to different productive activities. This is just about the same as saying people have different abilities, which is what we see in the number of candles and shoes each worker can make. 

Historically, college students who graduate into a recession have settled for lower-paying jobs at less prestigious companies

For the Class of 2020, a Job-Eating Virus Recalls the Great Recession: With interviews postponed and internships canceled, graduates seeking work fear for the future by David Yaffe-Bellany and Jaclyn Peiser of The NY Times. Excerpts:

"A number of major companies, including Yelp and Disney, have suspended their internship programs, a common route to a first job for many graduating seniors. At some job fairs in early March, major companies simply didn’t show up; now all those career events have been canceled."

"Historically, college students who graduate into a recession have settled for lower-paying jobs at less prestigious companies than people who finished college even a year earlier. Economists have found that the impact of that bad luck can linger for as long as 10 or 15 years, leading to higher unemployment rates and lower salaries — a phenomenon known as “scarring.”"

"“I’m worried for them,” said Lisa Kahn, an economist who has studied how recessions affect college graduates. “If they’re graduating into a large recession, they’re going to suffer some pretty severe short-term consequences. And that’s probably going to stay with them for almost the next decade.”"

"Some industries, like nursing, have even seen an increase in job listings, according to ZipRecruiter. The number of e-commerce listings rose 228 percent over the past four weeks compared to last year. Personal consulting jobs went up 26 percent."

Also Expectations run into reality after graduating during the recession by Scott Tong of Marketplace. Excerpts:

"“We certainly find a significant fraction of graduates that are permanently affected,” said Philip Oreopoulos, an economist at the University of Toronto who has published on this topic. “And even for those who are not, they do come off quite worse off over the lifetime.”

As far as earnings over a lifetime, studies find recession graduates can make $60,000 to $100,000 less than their luckier peers.

Oreopoulos found in his study that young recession graduates tend to start out in low-paying first jobs at smaller firms.

“Not only did they end up with lower wages,” he said, “but they ended up in firms that tended to be smaller and tended to pay less.”"

Also The Career Effects Of Graduating In A Recession from the National Bureau of Economic Research.

HEB’s response is a masterclass in preparation and being ready to support your community

Every Grocery Store Should Be Handling the Pandemic Like This Texas Chain: Whole Foods, local grocery chains, and probably the federal government could take a page from HEB's emergency preparedness book by Hannah Smothers.

"Every person who grew up or even just briefly lived in Texas knows two things, by heart: the pledge of allegiance to the state flag, and that “no store does more than my HEB.” The beloved grocery store is universally known (among Texans, and anyone who knows a Texan) for fresh tortillas, smiley employees, and generally being the best place to buy food in the state. But for the past three months, doing more has also included perhaps the smoothest and swiftest response to the COVID-19 pandemic in the entire country. HEB’s list of coronavirus safety measures is long and thorough, and more stores—especially in places with already high confirmed cases—should be doing exactly what the Texas chain already has.


Grocery stores have become an unexpected frontline of the coronavirus pandemic, as people facing quarantines and lockdown crowd in to hoard toilet paper, flour, and hand sanitizer (or just to absently browse, which is sick and wrong). Grocery employees are considered essential workers, meaning they’re among the few groups who have to keep leaving their homes and commuting, even as the rest of us are told to stay home and stay well. For workers and customers alike, grocery store aisles are easily one of the most dangerous places anyone can be during the pandemic. Some stores have taken measures to mitigate that danger and keep people safe, to the best of their ability. Others have gone the White House route and can’t seem to get it together, risking the health of countless people all the while.

HEB, meanwhile, has remained countless steps ahead of the game. Before the WHO upgraded coronavirus to pandemic status, before the White House and most state governments announced any plans, and before there was even a single identified case in Texas, HEB—the beloved, Texas-only grocery chain—was preparing an emergency response plan it’s been refining since 2005.

“When did we start looking at the coronavirus? Probably the second week in January, when it started popping up in China as an issue,” Justen Noakes, director of emergency preparedness at HEB, recently told Texas Monthly in an oral history about the store’s much-lauded response to the pandemic. Current customers and far flung HEB fans alike regularly praise the multi-billion dollar chain for doing more than the federal government to respond to coronavirus, a statement that becomes distressingly more true each day. After reading the Texas Monthly story, Arnold Schwarzenegger referred to HEB’s response as “a masterclass in preparation and being ready to support your community.” Within a month of the virus reaching Texas, HEB had done more to protect shoppers and employees and replenish empty shelves than any store in New York City, the epicenter of the U.S. coronavirus pandemic.

Since early March, HEB has:

• Extended fully paid medical leave to anyone diagnosed with coronavirus
• Given hourly store, warehouse, manufacturing, and distribution employees $2/hour pay increases through April 12
• Shut down high-contact services, like bulk bins, salad bars, and the famous in-store tortillerias
• Offered concierge low-cost delivery services to seniors
• Asked corporate employees to volunteer for in-store and warehouse shifts
• Set aside essential items for employees
• Limited store hours to allow for restocking
• Put purchasing limits on a slew of essential items
• Placed social distancing stickers on the floor, marking where customers can be six-feet from one another
• Started individually sanitizing carts before handing them to customers, who enter the store single file during busy hours
• Installed plexiglass shields at registers to protect cashiers

The only grocery store I’ve gone to since coronavirus started spreading throughout New York City is a Union Market two blocks from my apartment, which I normally never shop at because it’s exorbitantly expensive. The last time I went, a little over a week ago, they’d just started closing early, letting seniors shop before opening, and had stuck pieces of painter’s tape every six feet on the floor in the register line, to mark where people should stand.

I stopped going to the Key Food around the corner because, the last time I went, the lines for the registers were crammed into one of the store’s slim aisles and it was impossible to move around without bumping into another person. It felt chaotic and dangerous to be there, and that was after five minutes, not an eight-hour shift. Compared to HEB, whose Texas stores are the size of airplane hangars, NYC grocery stores have the unfair disadvantage of having to cram as many aisles as possible into very small spaces...; but that’s just all the more reason to limit customers and minimize contact.

As a privately held, $28 billion-a-year company, HEB could probably swing more than a temporary, $2 raise for hourly workers, and employees still say working at even a well-prepared grocery store right now is unnerving and scary. But in the face of reports about Whole Foods employees getting sick, having panic attacks on the job, being instructed to buy hand sanitizer elsewhere, and encouraged to share sick leave with colleagues, HEB’s response is practically golden. HEB probably had a head start because it operates solely in a state where hurricane season means nearly annual emergency situations, but there’s no discernible reason why Amazon-owned Whole Foods (or any other grocery store) couldn’t start taking a page from HEB’s playbook and put many of the same measures in place to protect its employees going forward."

Awash in dirty plastic: We’ve got a big problem in our recycling market

By Michael Taylor of The San Antonio Express-News. Excerpts:

"plastic straws represent just 0.03 percent of American plastic waste that ends up in the ocean, according to Rachel Meidl of Rice University’s Baker Institute for Public Policy"

"the global market for recyclable commodities got a massive shock at the end of 2017, with the situation still evolving.

China announced a new program called “National Sword” in 2017 in which it would not import 24 types of waste, including many mixed paper and plastic products, starting in March 2018. A further list of 16 more items, including many metals, will be banned from import by the end of 2019."

"The China bans allow for the importation of “clean” plastics and metals, but it ceased the importation of what people in the industry call contaminated commodities, or mixed materials.

Even after the 2017 policy change, China remained open to highly pure or homogeneous paper, plastics and metals, but not the mixed, dirty and hard-to-handle stuff it had previously bought from the United States and Europe.

Underlying this China ban is the first key lesson of the economics of the recycling industry: Demand and prices are highly driven by the purity of the commodity.

Purity in this market means the homogeneous consistency of one type of resource. If a recycler can cleanly separate any secondhand material — whether it’s plastic, metal, paper or even glass — industrial buyers will pay a premium.

Mixed materials, by contrast, whether blended with other materials or contaminated by nonrecyclables or worse, go for the lowest prices, if they’re purchased at all.

By 2019, the tons of scrap plastic imported to China fell to less than 1 percent of 2017 levels.

Imports of plastic waste from the U.S. and Europe to Indonesia, Malaysia, Philippines, Thailand and Vietnam briefly quadrupled in 2018 as plastic exporters scrambled to find alternatives to the China market. But those Southeast Asian markets have proven unable to handle the volumes coming from the U.S. and Europe. Recyclers in the U.S. are now awash in dirty plastic, with no outlet for their commodity. Much of that is headed for landfills.

The price of products such as cardboard and what the industry calls “mixed paper” has also plummeted."

"U.S. cities that used to earn a profit on their recycling programs now lose money every month. Some cities have either cut back part of their programs or are considering doing so."

Related posts:

Has An Increase In Supply Reduced The Economic Value Of Recycling? (May 17, 2018)

As Costs Skyrocket, More U.S. Cities Stop Recycling (April 04, 2019)

What about all this plastic pollution? (June 17, 2019)

How Odysseus Started The Industrial Revolution

Factory work may have been a commitment device to get everyone to work hard. Odysseus tying himself to the mast was also a commitment device. Dean Karlan, Yale economics professor explains how commitment devices work:

"This idea of forcing one’s own future behavior dates back in our culture at least to Odysseus, who had his crew tie him to the ship’s mast so he wouldn’t be tempted by the sirens; and Cortes, who burned his ships to show his army that there would be no going back.

Economists call this method of pushing your future self into some behavior a “commitment device.” [Related: a Freakonomics podcast on the topic is called "Save Me From Myself."] From my WSJ op-ed:

Most of us don’t have crews and soldiers at our disposal, but many people still find ways to influence their future selves. Some compulsive shoppers will freeze their credit cards in blocks of ice to make sure they can’t get at them too readily when tempted. Some who are particularly prone to the siren song of their pillows in the morning place their alarm clock far from their bed, on the other side of the room, forcing their future self out of bed to shut it off. When MIT graduate student Guri Nanda developed an alarm clock, Clocky, that rolls off a night stand and hides when it goes off, the market beat a path to her door."

 See What Can We Learn From Congress and African Farmers About Losing Weight?

Something like this came up recently in the New York Times, in reference to factory work and the Industrial Revolution. See Looking at Productivity as a State of Mind. From the NY Times, 9-27. By SENDHIL MULLAINATHAN, a professor of economics at Harvard. Excerpts:

"Greg Clark, a professor of economics at the University of California, Davis, has gone so far as to argue that the Industrial Revolution was in part a self-control revolution. Many economists, beginning with Adam Smith, have argued that factories — an important innovation of the Industrial Revolution — blossomed because they allowed workers to specialize and be more productive.

Professor Clark argues that work rules truly differentiated the factory. People working at home could start and finish when they wanted, a very appealing sort of flexibility, but it had a major drawback, he said. People ended up doing less work that way.

Factories imposed discipline. They enforced strict work hours. There were rules for when you could go home and for when you had to show up at the beginning of your shift. If you arrived late you could be locked out for the day. For workers being paid piece rates, this certainly got them up and at work on time. You can even see something similar with the assembly line. Those operations dictate a certain pace of work. Like a running partner, an assembly line enforces a certain speed.

As Professor Clark provocatively puts it: “Workers effectively hired capitalists to make them work harder. They lacked the self-control to achieve higher earnings on their own.”

The data entry workers in our study, centuries later, might have agreed with that statement. In fact, 73 percent of them did agree to this statement: “It would be good if there were rules against being absent because it would help me come to work more often.”"

The workers, like Odyssues, tied themselves to the mast to resist the temptation of slacking. This made it possible for factories to generate the large output of the Industrial Revolution.