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The Wicked Witch is Wall Street

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I was surprised to make a chance discovery about The Wizard of Oz.  The film with Judy Garland is firmly embedded in modern culture as a classic, but did you know that it was a rally call against the financial system when the book was originally written? It as a political, economic and monetary allegory of how the statists were oppressing the people at the end of the 1800s and, if you take this on board, could easily be transported to today’s friction between anonymous and government.

I didn’t ever think about it but, after reading this analysis in USA Gold, can truly believe that the Wicked Witch is Wall Street!  Here’s more background by Quentin P.Taylor, Professor of history at the American Rogers State College.

“The story of ‘The Wonderful Wizard of Oz’ was written solely to pleasure children of today” wrote the author, L. Frank Baum, in the introduction to his popular children’s story published in 1900. However, it might mean a lot more than that if you consider that Baum worked as an editor of a small newspaper in Aberdeen, South Dakota, before he wrote Oz. Baum had written on politics and current events throughout the late 1800s, a period that coincided with the formation of the Populist Party.

Baum was known to be a supporter of the Party and, in an article entitled “The ‘Wizard of Oz’ as a Monetary Allegory” (1990), Hugh Rockoff examined the analogies between Baum’s use of imagery and the monetary politics of the Populist era. In the book version of Oz, Dorothy treads the Yellow Brick Road in silver shoes, not in ruby slippers. Silver shoes on a golden road? A key plank in the Populist platform was a demand for “free silver” -- that is, the “free and unlimited coinage of silver and gold” at a fixed ratio of sixteen to one.

Populists and other free-silver proponents advocated unlimited coinage of the white metal in order to inflate the money supply, thus making it easer for cash-strapped farmers and small businessmen to borrow money and pay off debts. At the Democratic National Convention in 1896, the assembled delegates nominated William Jennings Bryan, an avid supporter of free silver, for president. The Bryan nomination created a split in the Democratic Party, as gold-standard delegates bolted the convention. When the Populists convened two weeks later, they decided to endorse Bryan, putting all their reformist eggs in the free-silver basket. When Bryan was roundly defeated by the “sound money” Republican William McKinley, the Populist Party, which had considerable strength in the Midwest and South, fell into rapid decline. By 1900, when Bryan was again defeated by McKinley, Populism already had one foot in the political grave.

According to Rockoff, the monetary politics of the 1896 campaign, which divided the electorate into “silverites” and “goldbugs,” supplied the central backdrop for Baum’s allegorical adaptation.

Dorothy, the protagonist of the story, represents an individualized ideal of the people. She is each of us at our best – kind but self-respecting, guileless but level-headed, wholesome but plucky. She is akin to everyman or, in modern parlance, “the girl next door.”

Dorothy lives in Kansas, where virtually everything – the treeless prairie, the sun-beaten grass, the paint-stripped house -- even Aunt Em and Uncle Henry -- is a dull, drab, lifeless grey. This grim depiction reflects the forlorn condition of Kansas in the late 1800s when a combination of scorching droughts, severe winter, and an invasion of grasshoppers, reduced the prairie to an uninhabitable wasteland.

The result for farmers was devastating. Many called it quits and moved on. Others blamed the hard times on bankers and middlemen who seemed to profit at the farmers’ expense. Angry victims also took aim at the politicians, who often appeared indifferent to their plight. Around these economic and political grievances, the Populist movement coalesced.

The twister that carries Dorothy to Oz symbolizes the Populist cyclone that swept across Kansas in the early 1890s. Baum was not the first to use the metaphor. Mary E. Lease, a fire-breathing Populist orator, was often referred to as the “Kansas Cyclone”, and the free-silver movement was often likened to a political whirlwind that had taken the nation by storm.

When Dorothy’s twister-tossed house comes to rest in Oz, it lands squarely on the wicked Witch of the East, killing her instantly. The startled girl emerges from the abode to find herself in a strange land of remarkable beauty, whose inhabitants, the diminutive Munchkins, rejoice at the death of the Witch.

The Witch represents eastern financial-industrial interests and their gold-standard political allies, the main targets of Populist venom. Midwestern farmers often blamed their woes on the nefarious practices of Wall Street bankers and the captains of industry, whom they believed were engaged in a conspiracy to “enslave” the “little people,” just as the Witch of the East had enslaved the Munchkins.

Populists viewed establishment politicians, including presidents, as helpless pawns or willing accomplices. Had not President Cleveland bowed to eastern bankers by repealing the Silver Purchase Act in 1893, thus further restricting much-needed credit? Had not the Republican candidate, William McKinley, made the gold standard the centrepiece of his campaign against the Populist candidate William Jennings Bryan and his free silver?

It is apt, then, that Dorothy acquires the Witch of the East’s silver shoes at the behest of the good Witch of the North, who stands for the electorate of the upper Midwest, where Populism gained considerable support. Still, for all her goodness, the Witch of the North is no match for the malign forces of the East, just like the voters of the upper Midwest.

The death of the wicked Witch is cause for rejoicing as the “little people”, thanks to the destruction of eastern power, are now free. All along, the Munchkins were vaguely aware that their bondage was somehow linked to the silver shoes, but the shoes’ precise power was never known. Similarly, although Wall Street and the eastern establishment understood silver’s power, common farmers knew little of monetary matters and voted against Bryan in droves.

Meanwhile the Wizard, who “can take on any form he wishes,” represents the politicians of the era.  Indeed, when the foursome enter the throne room, the Wizard appears to each in a different form and, like many politicians, is unwilling to help them without a quid pro quo: “I never grant favours without some return.”

Similarly, given the razor-thin majorities of most presidential elections, candidates rarely took clear stands on the issues. As a result, voters often had difficulty in determining what the candidates stood for. The Wizard fits this description as Dorothy is informed “no living person can tell ... who the real Oz is.”

There are many other metaphors and similes in the book relating to the political and economic times in America during the late 1800s which, if you’re interested, you can read in depth over on USA Gold.  Their analysis of the book also provided much of the source for this blog entry. Well worth the time.

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Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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