I’m the father of a soon-to-be-five-year-old girl, and like so many others in my position, I know every word of every song in the Disney movie Frozen pretty much by heart. Between princess dresses and DVDs and downloads and tickets to “Disney on Ice” and princess toys, I might as well make Disney executives authorized users on my credit cards.
Might the people have been better off had they not been taxed and had they retained the wealth they would have needed to weather the storm without having to crawl to the palace for help?It’s worth it – or so I tell myself – not just because I love my daughter, but because the movies also teach us important and not-so-obvious lessons about economics, politics, and history.
You probably know the story. There are two princesses, there’s some conflict, there’s some betrayal by someone masking devious intentions (and inexplicably describing his sinister plot to one of the protagonists), a commoner and his reindeer, a talking snowman, and happily ever after. It’s a combination of a good story, arresting visuals, and catchy music that will be a cash cow for Disney for years to come.
We’re introduced to one of the villains as people arrive for Elsa’s coronation: the Duke of Weselton arrives with the plan to “exploit [the] riches” of his “most mysterious trading partner.”
Anna sings a song of joy about the end of their seclusion and asks “who knew we had a thousand salad plates?”
Who, indeed, and how were they paid for?
A state, according to 1993 economics Nobel laureate Douglass C. North, is “an organization with a comparative advantage in violence.” In the best case, they trade protection services for tax revenue, but as the economic historian Alexander Gerschenkron has pointed out, their subjects most needed “protection” from their rulers. After all, they have nice farms, or nice huts, or nice sheep or donkeys, and it would be a shame if something happened to them.
Consider Anna and Elsa’s dealings with the Duke of Weselton and Prince Hans. There is clearly a managed trade partnership with the Duke, who is irate when he sees Prince Hans distributing “all of Arendelle’s tradable goods” when the perpetual winter hits.
Where did all these “tradable goods” come from, and how did they end up under royal management? Might the people have been better off had they not been taxed and had they retained the wealth they would have needed to weather the storm without having to crawl to the palace for help?
People benefit when they can specialize and trade. They can get more goods and services with the same inputs, or they can get a given array of goods and services with fewer resources. When governments interfere trade through tariffs, they create extra profits for special interests and tax revenue for themselves.
The people lose – they get less of whatever it is they’re trading for, they pay higher prices for it, and while they produce more of the good domestically, they do so wastefully, using resources that would be better used producing something else.
At the end of the movie, Queen Elsa “punishes” the Duke of Weselton by cutting off trade between Arendelle and Weselton. Ironically, the good queen Elsa is punishing not just the Duke, but also her own subjects who are now denied access to Weseltonian goods and who have to pay higher prices for substitutes.
Frozen is one the most successful movie in Disney’s Princess empire.
As they get older, I want to make sure our kids start asking a very important question: just where did the money for those salad plates come from, anyway?
A version of this ran at Forbes