Blazing Saddles and crony capitalists

The recent death of Gene Wilder prompted a number of showings of his films around the country. I was able to attend a screening of the Mel Brooks classic comedy Blazing Saddles. The comedy still holds up after more than 40 years, but what struck me this time is that the plot is a perfect example of the increasing crony capitalism that infects economies across the world.

The short version of the plot is that a U.S. attorney general in a western state is collaborating with the railroad to build a line through that state. Quicksand forces them to re-route the line through the town of Rock Ridge. Rather than buying up the property, the AG appoints a black man as sheriff, hoping that will scare the residents away, which is where the comedy comes from. When that fails, the AG uses brute force to try to accomplish the same end.

Though played for laughs, the underlying political economy here reflects both the reality of railroad history as well as more contemporary concerns. Historically, railroads often used the power of state and provincial governments to grab land. U.S. railroads also used more subtle arrangements, such as getting state governments to mandate that banks purchase railroad bonds as collateral for their currencies (a mistake that Canadian banks avoided, thankfully).

We see similar patterns today in the ways firms use government-granted privileges to enhance their profits at the expense of consumers. Consider the attempts in many North American cities to ban ride-sharing services such as Uber and Lyft. Most of these are coming from the taxicab companies who want to protect their government-granted monopolies by using government power to outlaw or severely hamstring their competition.

This sort of crony capitalism, where private firms profit not by pleasing consumers but by pleasing politicians, is problematic for many reasons, but perhaps the most important is that it undermines support for genuine capitalism. When people believe that profit comes from cronyism and force, rather than value-creation through voluntary exchange, they are more likely to condemn the latter—and that does not bode well for economic progress.

One of the advantages of Blazing Saddles is that its comedy enables it to lay bare the problem as the attorney general and the railroad foreman are clearly the bad guys and the residents of Rock Ridge are the innocent victims. One can only hope that between the laughs, a few viewers see the implications for contemporary political economy in its comedic take on the Old West.