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10 economic lessons from ‘Emmett Otter’s Jugband Christmas’

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Jim Henson’s beloved Emmett Otter’s Jugband Christmas first entered the hearts of Canadian children in December 1977 and made its U.S. debut on HBO one year later. The musical Muppet adventure tells the story of widow Alice Otter and her tenderhearted son, Emmett, who decide the only way they can afford Christmas presents this year is to win a talent competition – with an exacting entrance fee.

Aside from its entertainment value – including a soundtrack composed by songwriter Paul Williams – the made-for-TV special teaches at least 10 deep truths:

1. Everyone works with incomplete information. The classic TV special is a variation on O. Henry’s The Gift of the Magi. Emmett and his mother make up their minds separately to enter the talent contest. Emmett puts a hole the washtub his mother uses to earn their meager livelihood, so he can start a jugband, and Alice hocks the tool box he uses for odd jobs so she can buy a dress suitable for the stage. Their actions came from incomplete information: Neither would have wagered losing their current sources of income – all of their capital goods – with no guarantee of success. Yet, as in the O. Henry play, that is precisely what happens.

Decisions undertaken with incomplete information may have disastrous effects. Friedrich von Hayek wrote that one of the central questions of economics is “how the ‘data’ of the different individuals on which they base their plans are adjusted to the objective facts of their environment (which includes the actions of the other people).” The free market limits this danger by allowing everyone to contribute his or her individual piece of the puzzle, spontaneously creating a better outcome than a central ruler imposing a one-size-fits-all policy.

2. Risk precedes reward. Both of the main characters encourage themselves to try to better their circumstances by reflecting on Pa Otter’s life of daring and his perpetual admonition to “take a chance.” Risk-taking is the heart of entrepreneurship. John Maynard Keynes, of all people, expressed this well when he wrote, “Business men play a mixed game of skill and chance, the average results of which to the players are not known by those who take a hand.” Incomplete information is a fact of life for investors and employers, too.

The characters in the series embrace risk-taking in the dueling songs they sing at the talent contest. Emmett Otter and his friends sing: “So many things to learn / But we’ll enjoy each lesson / Problems don’t worry us / When half the fun is guessing.” A few moments later, Alice sings: “Our world is always changing / Every day’s a surprise / Love can open your eyes in our world.” Only those who brave the unknown can reap the uncertain rewards which (may) await.

3. Adaptation is key. When the undertalented Yancy Woodchuck sings the song Emmett and his friends had prepared, they have to adapt on the fly. The band rushes to practice a new song with just minutes to go. The boys had to change their business plan, because new developments had changed the audience’s response to their product. The market makes this adaptation all the time. Ludwig von Mises wrote that prices face “perpetual change, because the conditions which produce them are perpetually changing.” Responding to changing market conditions allows companies to flourish by filling the appropriate niche, and prices fluctuate to reflect the snapshot of market supply and demand at any given moment.

4. Overpopulation is a misanthropic myth. All of Henson’s work stakes out idealistic ground, this special perhaps more than most. In her talent show entry, Alice Otter explicitly addresses the issue of overpopulation: “Some say our world is getting too small / I say with kindness there’s room for us all.” This must have sounded hopelessly naïve in the 1970s, when Paul Ehrlich’s Cassandra cries about overpopulation held sway. Neo-Malthusian views have reemerged in 2019, as 11,000 scientists signed a letter demanding that world leaders make “family planning” more accessible, and Senator Bernie Sanders pledged that he would promote taxpayer-subsidized abortion, “especially in poor countries.” Yet the concerns are misguided, not only because of the solidarity and inestimable dignity of the human race, but because – in the words of Elon Musk – “the biggest issue in 20 years will be population collapse, not explosion.”

5. The kindest person doesn’t always produce the best work. Ultimately, the Riverbottom Nightmare Band won the contest with a high-octane performance featuring electric lights and even a star-shaped guitar like the one Paul Stanley played in KISS. The entertainment value of their product exceeded that of everyone else, despite their self-centered lyrics about poor hygiene, hedonism, and willful ignorance – all of which they lived out.

This teaches a hard truth: The most capable or productive individual may not be the kindest human being. Skills and personal decency are not distributed in matching sets. The market rewards those who produce goods or services people desire, regardless of the moral purity of the producers. Most entertainers don’t share my convictions, economic or political. But they do not need to meet my moral test for me to acknowledge their talent and, as a lifelong music buff and former disc jockey, I do not have to endorse their views to appreciate it.

Music history provides an example, which is particularly appropriate for the Christmas season. At the first performance of Handel’s Messiah in 1742, contralto Susannah Cibber was in the midst of a divorce – something as scandalous then as it is commonplace today. But when she sang her text, taken from Isaiah 53, Rev. Patrick Delany stood and shouted, “Woman, for this be all thy sins forgiven thee!”

6 Cooperation brings success. As the two acts make their way home after their disappointing finish, they begin to sing their songs together and find their songs complement one another. Doc Bullfrog said the judges felt each of their songs needed something and, hearing them performed together, he realized that “what you needed was each other.”

Cooperation is the cornerstone of a free economy. Employees need to be hired by owners, who in turn need investors or lenders to provide capital. This delicate dance of mutual benefit keeps the economy moving – and everyone benefiting.

7. Negotiation is non-negotiable. When Doc Bullfrog offers the gang a job singing at the Riverside Rest, the area’s “favorite café and night spot,” they virtually jump at that chance. Alice Otter curbs their enthusiasm, asking, “Is the pay regular if we play regular?” The music industry has provided no shortage of disreputable characters, exploiting people’s drive to perform for personal gain. Fantasy Records once dubiously accused Creedence Clearwater Revival lead singer John Fogerty of plagiarizing himself, in order to get a portion of his new song’s royalties. People, and civilizations, cannot be afraid to take their own side.

8. Rewards come in unexpected ways. The TV special appears to be headed for a heartbreaking ending, as the impoverished characters have lost both the contest and their means of future income. Then, Doc Bullfrog hires them to perform in his restaurant. Their sacrifice of their previous means of income was not only not in vain, but it alone opened the door for them to find a more satisfying and better-paying line of work. Although they did not win the prize they sought, taking a chance opened up unforeseeable possibilities that let them fulfill their dreams.

This fictional chain of events is as unlikely as, say, Toni Braxton getting discovered while singing to herself at a gas station. Braxton has gone on to sell a reported 67 million units worldwide. There is no clear way to forecast the collision of talent and opportunity.

9. Choice benefits everyone. Technically, this lesson does not come from the screenplay or the film; it comes from the made-for-TV special’s distribution. Jim Henson said in 1977 that he could not find a network willing to take a chance on his creation:

The problem isn’t the show because it’s one of the best things we’ve done. It’s the industry. It isn’t easy. There are only three networks buying in the marketplace and if one doesn’t like it, none of them seem to want to pick it up. If it gets on the air just once, it will be a hit, I know it. But, the special is probably a little too gentle for modern day television. That’s one of the frustrations of the business.

Henson, unable to interest any of the Big Three networks, sold his program to a relatively young cable upstart called HBO. Henson’s prediction proved true: His gentle television show thrived for generations to come. Hollywood is reportedly about to reboot the venerable program. But it never would have gotten a first U.S. viewing without an additional outlet that allowed greater opportunity and choice. Excellence is rewarded, and consumers maximize their satisfaction (or utility), when the would-be gatekeepers and central planners are dethroned.

10. Justice takes place in the next life. Henson and Williams wove a Gospel metaphor into “When the River Meets the Sea.” The song – which Henson asked to be played at his funeral – advises: “Patience my brothers and patience my sons / In that sweet and final hour truth and justice will be done.” The lyrics remind us of the words of another Christmas carol: “God is not dead nor doth He sleep / The wrong shall fail, the right prevail.”

The fact that this tender special continues to teach its heartwarming truths 42 years after its unlikely debut proves that justice sometimes prevails on earth.

Related:

The 5 deep spiritual reasons we love ‘It’s a Wonderful Life’

Oscar-winner ‘Coco’ is a free-market family gem

Movie review: ‘The Founder,’ Schumpeter, and the entrepreneur

(Photo credit: Screenshot.)

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Rev. Ben Johnson Rev. Ben Johnson is Managing Editor of the Acton Institute's flagship journal Religion & Liberty and edits its transatlantic website.