Henry Potter Is the Undeniable Hero of 'It's a Wonderful Life'

Christmas is right around the corner. During all the festivities and family gatherings, your grandmother, or some other relative, will inevitably try to cajole the whole family into an obligatory viewing of It’s a Wonderful Life. While the inspirational theme of one man being able to make a difference is touching, try not to take all of this film’s messages directly to heart, lest you desire reduced opportunity amid slower economic growth.

The film follows its supposed protagonist, George Bailey, from his young days of saving his little brother from drowning in a lake and stopping his boss from accidentally poisoning a child. However, where Bailey goes off the rails, and becomes an economic cautionary tale, is when he inherits his family’s Building and Loan after the death of his father.

George’s father, Peter Bailey was President of Bailey Brothers Building and Loan, and routinely butted heads with the film’s supposed antagonist, Henry Potter. Potter owns the bank and most businesses in the fictional town of Bedford Falls. The elder Bailey rants to his son that Potter only wants to liquidate their business because it’s one that he can’t get his greedy hands on. George later parrots this same anti-capitalist rhetoric once he picks up his father’s mantle.

Before elaborating on Bailey’s horribly flawed economic worldview, it is important to get some background on Potter, the man who should ultimately be considered the hero of Bedford Falls. We learn fairly early on in the film that Potter is a board member and stockholder in the Building and Loan. In all likelihood, the small Building and Loan is not a publicly traded company. Thus, it stands to reason that Potter was able to become a stockholder by giving Peter Bailey capital. If Potter truly wanted the Building and Loan to go under, he could have withheld his significant wealth from it. Instead, he invested, and later pushed for its liquidation because it was not making healthy business decisions or making a profit. This is counter to the Baileys’ narrative that he is a monopolistic pig who treats little people like cattle.

Potter’s background is a lesson on what concentration of wealth can mean for small businesses. Potter is able to use his considerable resources to fund family operations like the Bailey Brothers Building and Loan, among countless others in the fictional town. It is especially magnanimous considering how often the Bailey family smears Potter to anyone and everyone who will listen.

For viewers who may not have picked up on this subtext earlier in the film, it is revealed far more clearly later on when the Great Depression hits Bedford Falls. Bailey’s company is exposed as a fraud for its subprime loan schemes as, when there is a run on the Building and Loan, Bailey is unable to pay out. Potter, on the other hand, is financially secure enough and offers to buy out all of Bailey’s customers. After making this honorable offer, Bailey continues to degrade Potter, and convinces people that they don’t need their money and that it should instead stay tied up in his company. The Building and Loan can only run if Bailey can convince people to act counter to their self-interest.

Part of Bailey’s pitch to keep money in the Building and Loan was perhaps his most bold attack on the free market. He tells the mob that no one wants to live in the housing options Potter provides, calling them “overpriced slums.” However, if there were more affordable, liveable alternatives, people wouldn’t be in Potter’s homes. Yet, there is clearly a high demand for them, as they are more affordable than Bailey’s alternative.

Even after the misinformation campaign against him, Potter offers Bailey economic security when he comes to him for help after his uncle misplaced significant funds from the Building and Loan. Admittedly, the funds were mistakenly given to Potter himself, but given his contributions over the years and the Baileys’ poor business decisions, it was likely money Potter was owed anyway. But, Potter offers George a job, opportunity to travel, and prosperity for his family. Bailey considers it before declining and, again, smearing Potter as a greedy old man.

At this point, it has been established that Potter is responsible for most of the jobs in Bedford Falls, provides them with affordable housing options, and was willing to provide assistance when the economy went downhill. The moral of this film still rings true. One man can make a difference in the lives of so many others. However, it is Potter, not Bailey, who is that man.

There are other lessons to be learned as well. Wealthy businessmen with excess capital can use that money to prop up or help start entrepreneurs and small businesses. They can also use it to create opportunities for a wide range of individuals. It also shows that the market speaks louder than any anti-capitalist ever could, and that is evidenced by the well-being of the citizens of Bedford Falls. We can also see how the subprime loan scheme run by the Baileys forces investors and customers into economic dire straits. We have seen that play out numerous times in our nation’s history, most recently in 2008.

So, if you do get roped into watching It’s a Wonderful Life this holiday season, keep an open mind. Draw inspiration from the good that Henry Potter accomplished for the men and women of his town, and reject the anti-market, anti-capitalist narrative pushed by the Baileys.