Literature as an Economic Tool: A Look at The Wonderful Wizard of Oz

This post was inspired by the recent release of Jane Austen, Game Theorist by Michael Chwe. In his book, Chwe argues that game theory, though a modern concept, has behind it the long and rich history of strategic thought and “schemes”, examples of which can be found in the classic literature of Austen. A wonderful reaction to the new book (by Jane Austen herself!) can be found here.

Economics and literature have long been intertwined. Literature can serve as an eloquent, very public way of protesting or supporting the economic and political decisions taking place during the author’s lifetime, and can be used as a historian’s tool to look back on the issues of the day. Charles Dickens, for example,  wrote A Christmas Carol in 1843 as a strong critique of the economic policies in England that ignored and punished the poor. And of course, Animal Farm by George Orwell is an allegorical novel against Stalinist Russia that I imagine we all know quite well thanks to high school English class.

Dickens and Orwell consciously wrote their stories to highlight political issues. For some authors, however, it is less clear if the political or economic message was intentional. L. Frank Baum’s The Wonderful Wizard of Oz is a much-debated example of this. His story of Dorothy, and her little dog too, was published in 1900 with great success and was sold as a fairy tale for children.  Six decades later, in 1964 Henry Littlefield published a paper in the American Quarterly arguing that the story was a parable on Populism and implied that Baum did this intentionally.

Baum’s Classic and the Populist Allegory

The populist movement in the late nineteenth century was for the everyman, the farmers, the working people.   William Jennings Bryan, as the Democratic nominee for the 1896 presidential election, became the political face of the movement. In a fiery speech during the 1896 elections Bryan asked, “Upon which side will the Democratic party fight: upon the side of the ‘idle holders of idle capital’ or upon the side of ‘the struggling masses?'”  Farmers, a large part of the populist movement were desperate to combat deflation that was making their debts more burdensome and falling crop prices.  At the time, the Populists were urging a return to a bimetallic standard as a way to fight deflation (Congress had removed the silver dollar from circulation in 1873). Bryan advocated for free silver and, as he concluded his speech, he said of his opponents, “…we will answer their demand for a gold standard by saying to them: You shall not press down upon the brow of labor in this crown of thorns; you shall not crucify mankind upon a cross of gold.”

Littlefield connects Baum’s Dorothy to the everyman. Dorothy’s silver shoes (they were silver in the book) represent the free silver movement supported by Populists. The silver shoes on the yellow brick road (the gold standard) symbolize the bimetallic standard populists wanted. The Lion is William Jennings Bryan, cowardly perhaps only because of his pacifist views. The Scarecrow is the American farmer – lacking brains, he is unable to understand the complex issue of monetary policy. The Wizard of course is the president, dwelling inside Emerald City – seeing only green, the color of money. The list goes on.

This paper landed with a splash and economic historians have been building upon or arguing against Littlefield’s ideas ever since. In 1990, Hugh Rockoff took Littlefield’s ideas a step further, and found symbolism in even the tiniest details of the book, down to the field mice and the number of stairways in the Wizard’s palace.  Another economist, Gene Clanton, argued that no, this story is not about Populism, but rather it is an allegory for Progressivism – the yellow brick road represents prosperity through the success of the gold standard.

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The Controversy

In the past fifty years, the story of Dorothy has been accepted as an allegory of the economic and political debates of Baum’s time. But what does Baum think? There is no indication that he wrote this as an allegory. Indeed, as many historians point out, Baum writes in his introduction “the story of ‘The Wonderful Wizard of Oz’ was written solely to pleasure children of today. It aspires to being a modernized fairy tale…” Historians have combed through his letters, analyzed his editorials and papers and have found no indication that he was even that interested in politics and the debates of the day and that perhaps he was cynical of the whole process. No reviews of the book at the time of publication ever linked it to an allegorical tale of the current political situation, and Baum himself never once mentioned the possibility in any of his known correspondence.

Ranjit Dighe, who developed an annotated version of The Wonderful Wizard of Oz as a tool for economics professors, writes that the story was “almost certainly” not a conscious effort to create an economic and political allegory. However, he recognizes that the book’s characters and incidents strongly parallel actual issues and events in Baum’s life time. Those parallels are “striking, whether intended or not; the book works as a Populist allegory” (Dighe, 8).

While Jane Austen wasn’t aware her schemes illustrated game theory, Chwe shows that her novels can serve as a useful demonstration of the theory. It is the same for Baum’s classic tale. Perhaps Baum was unknowingly influenced by the rhetoric and events happening around him as he wrote his famous story. Maybe it really is just about a girl and her dog and some characters she meets on her quest to return to Kansas. Regardless, as Dighe points out, the allegory fits – almost uncannily so. As such, the story can be used as an engaging, illustrative tool for understanding the economic debates and the political issues of the time.

Further Reading

Dighe, Ranjit S. The Historian’s Wizard of Oz: Reading L. Frank Baum’s Classic as a Political and Monetary Allegory. Praeger Publishers, 2002.

Hansen, Bradley A. “The Fable of the Allegory: The Wizard of Oz in Economics.” The Journal of Economic Education. Vol. 33, No. 3. Summer, 2002, pp. 254 – 264.

Littlefield, Henry M. “The Wizard of Oz: Parable on Populism.” American Quarterly. Vol. 16, No. 1. Spring, 1964, pp. 47 – 58.

Nasar, Sylvia. Grand Pursuit: The Story of Economic Genius. Simon and Schuster, 2011.

Rockoff, Hugh. “The ‘Wizard of Oz’ as a Monetary Allegory.Journal of Political Economy. Vol. 98, No. 4. August, 1990, pp.739 – 760.

See Also:

Chwe, Michael.  Jane Austen, Game Theorist. Princeton University Press, 2013.

William Jennings Bryan’s “Cross of Gold” Speech.

Encyclopaedia Britannica Online, “Free Silver Movement.”

Infographic: All illustrations are by W.W. Denslow and come from the first edition of the book:
The Wonderful Wizard of Oz  By L. Frank Baum; With Pictures by W.W. Denslow. Chicago; New York: G.M. Hill Co., 1900, c1899.
The digital version of the first edition can be downloaded here.


4 thoughts on “Literature as an Economic Tool: A Look at The Wonderful Wizard of Oz”

  1. Hi Meg:

    This is off topic, but I was wondering if you have been watching Mr. Selfridge. I am particularly interested in the character of Agnes and her status as a shop girl. I was wondering about her education level, what it would have been. Clearly she is talented, but not university educated. I wondered what her prospects would be in reality. Thanks!


      1. Yes, the show is very good. I found that the first one dragged, but it was setting up the story and introducing characters. I went back and watched the first episode for fun and to catch all the little things I missed first time. It was much more interesting understanding what was going to happen. Lots of early 20th c. English economics going on and the American in Britain. Looking forward to your comments!


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