James Schamus Wants to Tell You How the Economy Really Works

You’ve probably seen one of James Schamus’ movies. The former CEO of Focus Features was the screenwriter for The Ice Storm and Crouching Tiger, Hidden Dragon, and producer for Brokeback Mountain and Eternal Sunshine of the Spotless Mind. But his two newest films are perhaps even more important than anything he’s done in the past. Schamus recently took part in the new series We the Economy, part of an anthology of films called “20 Short Films You Can’t Afford to Miss.” The series, which is produced by Microsoft co-founder Paul Allen and filmmaker Morgan Spurlock, is designed to raise awareness and understanding of the mechanics of the US economy, with each film produced by a different acclaimed filmmaker.

In his two contributions, That Film About Money (parts I and II), Schamus, a self-described “economic theory junkie,” sets out to address the question: “What is the real value of a dollar?” The answer, as Schamus puts it, is going to “freak you out.”

, Part I

VICE: One of the main contentions of the films is that money is created through debt, correct?
James Schamus: Well, money is a way of accounting for debt. I’m not arguing against the idea of this kind of accounting. As it occurs in human history, it unlocks a lot of energy. If you go back to Mesopotamia, back to these large, centralized bureaucracies, you notice that the birth of writing occurs pretty much alongside the birth of money and accounting. They kind of go hand in hand, but that’s a whole other video. Symbolic representation, you might say, is a kind of accounting. It’s representing something that isn’t there, that you think is behind it somehow. Money and language are kind of weirdly functions of the same technology, of representation, of promising. My word is my vow, my bond, my promise, that’s the only reason words mean anything, because they’re kind of like money—they represent. So when you watch the way in which large-scale centralized bureaucracies like Mesopotamia, for example, function, you see how these two technologies go hand in hand. And a lot of energy gets moved around, because you can move things around without having to move the things. You can just move the symbols around.

So what part about it do you object to?
Let me put it to you this way: Part I [of the film] lets you know that this is all a fiction. We’re all agreeing to agree, we’re all buying into each other’s promises. And that’s not necessarily the worst thing in the world. It just means when the bank says We’re awesome. We have over $200 billion in deposits . And they go in front of Congress and say this shit, you want to go, Dude, what you just said is, technically, you are $200 billion in debt. Because when you put money in the bank you are lending the bank your money. We just need to remind people there is something weird about this, so when people like the folks from Goldman Sachs get up and say this crap, you can call them on their bullshit. Part I is saying, Just remember, this is really weird.Part II is like, Let’s watch how weird works, when really powerful people get together and screw the rest of us. Let’s see how it actually works in practice. And let’s just see what happens over the course of the last 40 years and watch precisely how the system makes it look normal that basically the top .01% can take a gigantic Hoover vacuum and shove it up the rear end of 99% of the world’s population and drain every last penny out of their asses, and pretend that’s like the normal course of business.

I always found it interesting that we always refer to these financial upturns and downturns as a cycle .
Yeah, it’s the business cycle. It’s kind of like, yeah, that’s the mass murder cycle. [laughs]

What have people said to you about the videos? Are people surprised at the information?
Yes, even sophisticated people. My set is fairly well-educated, to put it mildly, and many of them are quite successful, to put it mildly, and many of them think of themselves as politically very sophisticated and aware of things and having opinions about economics and the economy and who to vote for. And I thought, you know, if in a couple of brief minutes I can A) tee up the absurdity of those assumptions and B) in Part II, just knock them over politically with how what we think of as a natural order of things is actually a machine for creating massive injustice and inequality, and entertain people at the same time, that’s a pretty good challenge.

Is that what you were trying to accomplish with the films?
I’m not trying to convey much information, my main goal is simply to freak you out. If I can freak you out, in a fun way, then you’re going to be motivated to stay freaked out and be suspicious from now on every time you look at a business page of the Times or whatever you read. So the goal was, for the rest of your life, every time you see a dollar bill, there’ll be this weird middle-aged guy in a hat [referring to himself in the films] in your peripheral vision going, “Are you kidding?” And every time you walk by a bank for the rest of your life you’re going to go, “Oh, that looks like a weird temple but I know it’s not, or it looks like a weird airport lounge, and now I know why: because there’s nothing there.” If I freak you out enough, if you have the opportunity to learn something, you will. And clearly this thing, my little contributions, now that I’ve seen most of the others, are a definite kick in the ass to these kind of Neoliberal assumptions to how natural the economy is.

You talk about credit cards and advertising in the films, how do they play into all of this?
Well, the banks run the whole credit card business, essentially. That’s their business. Trust me on this one—they are, as Rick Wolff says, the masters of all debt, and it is they who have managed to pump up and inflate threefold, the last four years, the debt of the average household. And again, they make money every which way on the mushrooming cloud of debt that they have handed over to different people. And again, you can see even now with mortgages, the return on these kinds of mortgages where the banks make them, and they immediately spin them into tranches of mortgage-backed securities that they sell off.

And they’re not responsible for collecting on them.
Absolutely. And with advertising, you know from your neoliberal friends and economics professors that the magic hand of the market is the result of the fact that we are all rational economic agents, and this entire system is founded on this bizarre belief that we are rational economic agents. There’s this deep-seated rationality attached somehow to our innate greed that creates this wonderful system. This is the entire ideological edifice on which this whole thing is supported, right? If that were the case, why would we then spend a trillion dollars a year, a massive portion of our gross domestic product, making irrational appeals to ourselves to buy shit we don’t need? Like, how did that happen? So if the whole system is based on irrational appeals to go out and buy crap you don’t need, like a bag with a label on it that jacks the price up by some multiple that has nothing to do the actual use-value, for example, how does that jive with your rational economic agent theory that supports the entire structure of the system?

Well, in that vein, you say in the film that it’s not just that corporations are becoming people, but that people are becoming corporations. What does that mean, exactly?
As Mitt Romney explained, corporations are people too! Corporate personality is an evolving legal theory, it’s a legal fiction. Again, you see money and fiction aligning themselves here. It has a really interesting history. Back in the 1800s, if you wanted to incorporate a company, you actually had to have a special bill passed by a state legislature. It was that difficult to do, because people were rightfully concerned that what happens when you create corporations is you create cover for people to do all sorts of nasty criminal stuff, and the only person who could ever go to jail is this thing called the corporation, which can’t go to jail, so you’ve actually created a monster.

And remember the structure of corporations: there are shareholders, who nominally own the corporation—although now that’s been rigged by management because different classes of stock and options and all that—you have the management, and then you have the board of directors, who are supposed to give a sort of oversight of the management on behalf of the shareholders. So you have basically the Father, the Son, and the Holy Ghost. And corporations are really interesting people; think about it this way: if you were to hold an annual meeting of the shareholders in which the board of directors and the top management were all attending, and God forbid a bomb went off or a comet landed on the meeting, and everybody died, the corporation would still live. Its shares would be handed to their heirs, and you’d rehire. So they’re unkillable. At the same time, they’re also not responsible for anything. Their liability is just this vague abstraction.

Getting back to what you said earlier, as a filmmaker and screenwriter you deal with narrative, is that something that fuels your interest in economics?
Yeah, I think so. Take the whole idea of the economy, for example, which people think of as this thing, as a noun. The economy is a word, it’s a noun. How long has the economy been a thing, do you think?

You mean how long has it been a thing in the way we describe it today?
Yeah. Give me your best guess.

A hundred years?
You’re way off. It’s 50 years. Like, it’s bizarre; it wasn’t a thing before. The economy shows up as a noun in the 1950s, essentially. The first government reports that start using the word, “the economy,” in that way, was in the 1950s. Isn’t that crazy? So Tim Mitchell, who’s a professor at Columbia, wrote a really interesting article recently on this drawing on a lot of really cool research. And for Tim, as he explains, the way you get a thing like the economy and create it as this object—I mean the series is called We the Economy—is the technology by which governments really fold in the idea of the future as part of their purview, that they really have to manage and control. And so you create a thing that you manage, and deal with, especially in conjunction with the financial classes that help you run the government back and forth, like Federal Reserve banks—is it government, or is it private? Does it matter? No, because it turns out the government is kind of a private enterprise. So yeah, narratives are about, “What’s going to happen next?” Well, the economy is a technology by which power really tries to manage what’s next, but also people’s understanding of what’s going to be next, people’s understanding of what they have to invest, even personally, into their society, their culture, their government, their politics, in order to be part of this.

So it’s a management thing, and again it adds that aura of inevitability. The one thing you know about economics is that when somebody says, “Well you know, that’s just the business cycle,” economically we can or can’t do this, it gives it the aura of the inevitable, when in fact—and this is what my movie is trying to say—there’s nothing inevitable about this. This is politics. It used to be called “political economy.” That’s what they used to call it.

Pre-1950?
Yeah, not like, “the economy,” you’d just say, “in political economy.” It’s a political thing, but now people think of it as a technical thing, even a governmental thing. But of course you just want to say, and this is what Part Two says, “Guys, excuse me, this is just politics by other names.” People say, “Oh, economics is a science.” Well in many ways there are scientific apparatuses, I’m not knocking these people in the Econ Department. There’s a lot you can learn studying these systems and there’s a lot of mathematical modeling you can do, and especially if you really want to use it to play markets by doing flash trading, there’s a science to that but it’s not science. It’s scientific-ey, it’s scientistic.

Do you think what you talk about in the films is stuff that the Federal Reserve and the banks would want us to know? Why don’t we learn this in school?
No. There’s no way that the guys who control the banking system want you to know this stuff. And it’s amazing because I went online to look at all the movies that are supposed to educate you about the economy, and some of them have a lot of hits, but they’re all patently insane. It’s mind-boggling. And there’s a reason nobody actually understands this stuff, because every time somebody tries to explain it, they’re kind of lying to you, because they really don’t want you to know that the whole system really is run by a bunch of bankers who have this thing rigged. [ laughs]

Giancarlo T. Roma is a Brooklyn-based writer, musician, and former competitive chess player. Follow him on Twitter.