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4 Economic Lessons From ‘Cast Away’ – OpEd

By Jon Miltimore When the Robert Zemeckis film;Cast Away;came out in 2000, I didn’t go see it in theaters. Though Zemeckis is one of Hollywood’s last great directors (he delivered;Back to the Future,;Forrest Gump, and;Contact) I had little urge to watch a two-and-a-half-hour movie about a guy who gets stranded on an island, which seemed like a more dramatic version of;Gilligan’s Island. Over the years, however, I’d catch bits and pieces of the movie on TBS or some other station, and I began to realize that;Cast Away;has depth. So when I saw the movie streaming on Hulu recently, I decided to introduce it to my two sons, who are just 10 and 7. To my surprise, they loved it. “Can we watch the rest of the movie of that guy on the island,” one asked the next day. (It’s a long movie, and we had only watched the first half.) I said yes, but I asked them to predict what was going to happen. Their theories were what one would expect from little boys. Cannibals would be on the island. No, a;monster. Maybe both? An army of Amazon warriors? Cast Away, of course, contains nothing of the sort. It’s primarily a story of survival and, dare I say, economics. But I’m getting ahead of myself. Cast Away and Robinson Crusoe Cast Away;follows the story of Chuck Noland (Tom Hanks), a systems analyst at FedEx obsessed with efficiency. While on a business trip, Chuck’s plane goes down during a storm. He is the sole survivor and washes up on an uninhabited island somewhere in the Pacific Ocean, thousands of miles away from his girlfriend, Kelly (Helen Hunt), and the dentist he was scheduled to see before his plane crashed. (Foreshadowing Alert!) Chuck quickly realizes that the chances of getting rescued are slim. But we soon see that rescue isn’t his primary goal; survival is. He needs to figure out how to find food and retrieve drinking water. How to stay warm. How to make tools. Meanwhile, he’s facing physical and emotional challenges. Over the course of years, he battles not just nature but perhaps the most terrifying thing of all: total isolation. To maintain his sanity, Chuck invents his own companion from a volleyball found in one of his FedEx packages, whom he names Wilson. Cast Away;proved a hit with audiences and critics alike. The film raked in $430 million at the Box Office on a $90 million production budget, and has an 89% on 158 reviews on Rotten Tomatoes. One can see why audiences were drawn to the movie, but only recently did I see why economists would love the film. Cast Away;is a film that explores many of the facets of a Robinson Crusoe economy, a thought experiment economists have historically used to explore microeconomics and the benefits of things like trade, the division of labor, value, and other economic ideas. We see in;Cast Away;that life on the island for Chuck is very much like Henry Hazlitt described life for Crusoe in his classic work;Economics in One Lesson: His wants at first seem endless. He is soaked with rain; he shivers from cold; he suffers from hunger and thirst. He needs everything: drinking water, food, a roof over his head, protection from animals, a fire, a soft place to lie down. It is impossible for him to satisfy all these needs at once; he has not the time, energy or resources. He must attend immediately to the most pressing need. He suffers most, say, from thirst. He hollows out a place in the sand to collect rain water, or builds some crude receptacle. When he has provided for only a small water supply, however, he must turn to finding food before he tries to improve this. He can try to fish; but to do this he needs either a hook and line, or a net, and he must set to work on these. But everything he does delays or prevents him from doing something else only a little less urgent. He is faced constantly by the problem of alternative applications of his time and labor. The only real difference is that Chuck benefits from the fact that he has consumer goods contained within FedEx packages that he can crack open. This might not seem like a huge advantage, but it is. On his third day on the island, Chuck opens a package and finds a pair of ice skates, which allows him to open coconuts. (Finding and gathering coconuts had been easy; opening them was the challenge.) When he opens a package and finds videotapes, he can’t watch a movie; but he can use the tape to help him make tools. Chuck’s experience reveals several economic lessons: 1) Opportunity Cost As Hazlitt noted, Crusoe, like Chuck, is “faced constantly by the problem of alternative applications of his time and labor.” We see this over and over in;Cast Away. Chuck can fish or collect coconuts; but he can’t do both simultaneously. He can try to build a raft to get off the island, but he can’t do that if he doesn’t have water to drink (at least not for very long). So he needs to find a way to collect water first. What Hazlitt was describing was opportunity cost. It’s an idea central to economics. At its most basic level, opportunity cost is the idea that nothing is free. Everything comes with a cost, even if that cost is as simple as not doing something else. If I’m writing this article, I’m not mowing the lawn or checking my email or doing any other things I could be doing. A fancier definition of opportunity cost, one you might have heard your economics professor discuss as the idea relates to resources, is “the value of the best-forgone alternative.” You get the idea. Chuck needs to collect coconuts to eat. But it comes with a cost. He’s not doing many of the other things he needs to be doing. Which brings me to the next idea. 2) Specialization Specialization is one of the miracles of a market that we rarely think about. Every day in America, tens of millions of people go to work at their;trade. Some are plumbers. Some are farmers. Some are data engineers. Some people build houses. Some practice medicine. Unlike Chuck, we don’t have to do everything ourselves. Instead, we focus on a particular skill (or set of skills) to produce certain goods or offer a specific service efficiently. This idea is sometimes called “division of labor” —the separation of responsibilities in a production process—and it’s a process that benefits everyone. We don’t have to learn how to farm, fish, or hunt to feed ourselves. Instead, we create value by performing a specific job, leaving those other tasks to people in their own areas of specialization. 3) The Benefits of Trade Specialization is wonderful, but it wouldn’t be of much value in and of itself without something else: trade. Trade is fundamental to market economies, but unfortunately for Chuck, he has nobody with whom to trade stuff. That’s why Chuck has to spend a great deal of time learning how to do everything himself. How to make fire. How to spear fish. How to make shelter and make water traps. In a market economy, we don’t have to do these things because of trade, which by definition benefits both parties. The 19th-century economist Frédéric Bastiat;demonstrated how in a storybased on Robinson Crusoe and his island companion, Friday, who encounter a trader: As the fable goes, one day a canoe arrived from a foreign island. Since there was plenty of game but no agriculture on that island, the foreigner wanted to trade game for vegetables. He offered to supply Robinson and Friday with all the game they needed — and thus to cut six hours from their working day. In re­turn, they were to give him two baskets of vegetables each day. This would increase the time they devoted to agriculture from six hours to nine hours. Thus the for­eign trade would result in a net saving of three hours of labor each day for both Robinson and Friday. Crusoe and Friday walk away and discuss the proposal. Friday likes the idea, but Crusoe does not. Robinson pointed out to Friday that if they accepted the for­eigner’s offer, their own hunting industry would thereby be ruined. In turn, Friday pointed out to Robinson that they would still have as much game to eat as they now had. True, they would have to work longer at agriculture, but they would still save three hours of labor on the total transaction. Then Robinson argued that the three hours of saved labor was not a gain but a loss, since everybody knows that labor is wealth. Any­way, what would they do with those three hours? Friday replied that they could use them to fish, or to improve their house, or to read, or merely to loaf. But Robinson was too firmly grounded in the labor theory of protectionism to be con­vinced. He honestly believed that labor itself (rather than the net product of that labor) is the meas­ure of wealth. Bastiat debunks various economic fallacies in the parable, but its primary lesson is that trade benefits;both;parties, something Robinson Crusoe struggles to understand. Poor Chuck, however, encounters nobody to trade with, so he’s unable to improve his situation. 4) Subjective Value My favorite lesson in;Cast Away;is that of subjective value. At various times in the film, we see that the value of items isn’t fixed; it changes based on Chuck’s situation. One example is when Chuck is trying to make fire on the island. He tries and tries and simply can’t do it. In a market economy, a 99-cent lighter is something we take for granted. On an uninhabited island, we quickly see that something as simple as a cigarette lighter has;tremendous;value. Zemeckis artfully shows us this idea late in the film. After Chuck has been rescued, he stares at a clicker as it produces a flame for about 10 seconds. Chuck now realizes the value of a machine he’d taken for granted before he was stranded. Another example is crab legs, a delicious and expensive food many of us love. After Chuck makes fire, we see him hungrily eating a crab he’d cooked over the flames. He clearly relishes it. “Mmmmm,” he tells Wilson, his imaginary volleyball friend. “You gotta love crab.” Later in the movie, after Chuck’s rescue, FedEx coworkers are throwing him a party, celebrating the fact that the man they presumed dead is alive. After everyone leaves the party, Chuck is left alone in a room. He sees a massive stack of crab legs on a plate. He picks one up and looks at it—in disgust. After four years on the island, Chuck can no longer look at a crab leg, let alone eat one. The lesson is simple. Things don’t have an inherent value. We place value on them, and people value things differently; and prices help us navigate the ever-changing value of items. Conclusion Cast Away;is an enjoyable movie for a lot of reasons. The love story of Kelly and Chuck is moving, and bittersweet. The writing is imaginative, and it allows Hanks to carry a movie with very little dialogue. Many of the scenes are absolutely beautiful. But my favorite part of the movie is that it makes you;think. It doesn’t just make you wonder how you would do in such a situation; it makes you see things that you’ve never seen before—and appreciate those things. The truth is, there are many wonderful things we enjoy every day—hot showers and lighters, grocery stores, windows, and lamps—that we just take for granted. It’s easy to do, and we even see Chuck doing it after his experience on the island. At the very end of the movie, Chuck is driving down a country road drinking a bottle of water. It’s no big deal, he’s just sipping water absent-mindedly, like we all do. But the audience sees it. Chuck didn’t have to capture the water from the sky. He didn’t have to drill a well. It’s just something he paid $1 for at a gas station. Zemeckis is telling us something: most of us can’t see the miracles all around us, which are not accidental, and shouldn’t be taken for granted. About the author: Jonathan Miltimore is the Senior Creative Strategist of FEE.org at the Foundation for Economic Education. Source: This article was published at FEE