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Economic Aspect of The Wall Street Movie


Movies are generally for entertainment a reason why any none entertaining movies are less sold. The movie Wall Street, in addition to being entertaining, conveys economic lessons as a moral of the storyline that enlightens those who understand the business of financial trade. Although the movie was made in the 1980s, the then prevailing economic situation was actually similar to what Wall Street has witnessed in the recent passed years with the same negative outcome.

Summary of the movie

The movie ‘Wall Street’ basically portrays vividly, the 1980s over-excesses in the U.S. financial capital. This is expressed through a young, eager and impatient stockbroker (Charlie Sheen). He moonlights as a liaison to a ruthless, heartless and greedy mega-millionaire (Michael Douglas) who seems to have his hands on most of every aspect of big business. Sheen gets to a state of dilemma between the kind of lifestyle that he dreams of and the heavy price to pay for it. In addition, Sheen is also depicted as sharing a somewhat strained relationship with his family, especially his father. The ensuing tumultuous relationship that Sheen has with Daryl Hannah only acts to add into the film’s cinematic intrigues.

The film deals seriously with financial markets issues ranging from stockbrokers greed to flouting of trading regulations. The movie succeeds in further advancing the phrase ‘Young urban professionals’ that gained momentum during the 1980s. The idea of managing to retire by the age of 40 with vast amounts of wealth was a good appeal to these professionals. Majority though are still working today since they never made the money or spent more than their earnings. Ultimately the 1980s was a boom that culminated into gloom a matter that becomes painfully clear as depicted by Sheen’s character. To some extend the movie warns those thinking they can manipulate a strained economic system for their own benefit to carefully weigh out the stakes involved. Douglas portrayal of money- and power-mad players in the financial field is not only in practice in New York but also in several markets and sectors around the world.

Economic aspects of the film

Capital is stocks of goods used in the production of others. Normally, this is with the aim of making a profit. Classically, capital as a factor of production can be financial or physical. In this case, financial capital entails such assets as shares and stocks, property or bank deposits. These assets are a form of wealth for the holder. On the other hand, such assets as equipment, machinery and a plant are symbolic of physical capital. Debt or share capital investment in a given company could also be another form of capital (Sexton 109).Capital can also be classified as fixed for durable assets such as factories or circulating like quickly used up raw materials. There is private and social capital depending on the ownership and human capital.

In the movie capital is mentioned in various instances. There are scenes of trading at the stock exchange describing Douglas in detail in various ways as he conducts his activities. This depicts the use of financial capital in order to trade. There is a case where we vividly watch Gekko’s performance at his desk. For example, he is seen punching furiously at the buttons of his telephone. His advice to his subordinates is that they should ‘rip out’ the throats of their fellow competitors in the stock market. Although this is a figurative remark, nonetheless, the Gekko is depicted as a ruthless and aggressive investor. He checks his blood pressure with one hand and continues to smoke using the other in the office desk. There is also the centerpiece moment in the movie; the speech he delivers to the stockholders at Teldar Paper as an explanation to why he trades in such a manner. At face value, one would interpret the speech that the Gekko delivers to be somewhat logical. On second thought, the Gekkos comes across as a brutal stock broker. When a company raises capital by selling of stocks to the public for the first time, it is known as initial public offering or simply as IPO. Underwriting firms assist the IPO issuer to determine what type of security to issue whether common or preferential. They also help in determination of price and timing of the IPO for the market it is intended for. IPOs are normally risky investments since the investors do not know how the prices may move on the first day of trade.

Given the two options of stocks, both the common and preferential stocks holders have rights to ownership of the company that offers the stocks for trade. The holders of common stocks have a right to vote in any major corporate decisions of the company that they have a stake in. on the other hand, preferred stocks are without any form of voting rights.

Consequently, the holders of preferred stocks cannot take part in any corporate decisions through a voting exercise. From a legal point of view however, there are dividends that the holders of preferred stocks are entitled to. In some situations, when the profits of a company are low, only preferred stock holders are issued with dividends while the rest do not receive anything. A good example of preferred stock is the convertible stocks. The holder of convertible stocks has the choice of trading in his/her preferred shares with a certain amount of common shares.

Gordon Gecko’s ‘Greed is good’ speech is logical and rational in the justifications of his actions. I however disagree with this opinion since it leads to not only unethical means of trade but also illegal and irresponsible behavior. The speech to Teldar paper shareholders was also biased since he intended to take over the company and was meant to serve his interests. In a nutshell, the greed is good speech can only be correct in an ironic sense if understood to satirize the society. Although the character followed the credo to become very successful, ultimately it was his downfall. Wall Street investors who ever made that kind of money in the 1980s too did end up in financial difficulties just like the actor. In deed the recent financial market s meltdown have replayed the exact scene on some on some of the investment bankers in New York.


The film depicts a side of the Wall Street investors that although is not appealing to the public, is nonetheless a reality in the course of daily business activities for investors. The recent financial meltdown has been caused by activities similar to those portrayed by the movie. In both cases, a period of financial ease preceded the fall. The film’s satirical aspect teaches as to actually do the reverse of what the main actor does. IT does not only entertain but gives proper guidance on what to avoid in the game of investment.

Works Cited

Sexton, Robert. Exploring Economics (4th Ed.). Toronto: Thomson Nelson Publishing Company, 2007. Print.


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