It’s a Wonderful Life: the power of small business

By on December 19th, 2016 in Editorial

That message comes through loud and clear, but often at the expense of the film’s more nuanced celebration of SMEs’ power to tailor their services more closely to customers while standing up to and disrupting frequently unscrupulous banking practices.

Newlyweds George and Mary Bailey (née Hatch) are heading off on their honeymoon when they notice a run on Bailey Brothers’ Building and Loan – the family lending business started by George’s father and uncle.

Compelled by his unassailable good nature, George stops the car and dashes into the bank while his hot-to-trot wife implores him to forget the Building and Loan’s troubles and instead join her on what will undoubtedly be a very sexy holiday. No dice; there are good deeds to be done.

Upon entering the bank, George discovers that Old Man Potter – the nefariously slapheaded proprietor of the much larger and far less moral Bedford Falls Trust and Savings Bank – has called in every cent of its loan to Bailey Bros., and is offering all Bailey Bros. customers fifty cents on every dollar of their savings if they switch to the Trust and Savings Bank.

In doing so, Potter has manipulated a panicked crowd into attempting to withdraw all their savings from Bailey Bros., quite deliberately threatening the family lenders’ very existence in a cold-hearted attempt to monopolise the banking services available in Bedford Falls.It’s a diabolical plan, but what Old Man Potter fails to anticipate is the ability of small businesses to adapt nimbly to any given situation, the powerful oratory skills of George Bailey, and the sheer clout of basic human decency.

Climbing onto the Bailey Brothers’ Building and Loan counter, George delivers a rousing speech to his customers:

If Potter gets hold of this Building and Loan there’ll never be another decent house built in this town. He’s already got charge of the bank.  He’s got the bus line. He’s got the department stores. And now he’s after us.  Why? Well, it’s very simple. Because we’re cutting in on his business, that’s why.  And because he wants to keep you living in his slums and paying the kind of rent he decides.

In powerfully arguing that Potter’s Trust and Savings Bank is a many-tentacled monolith with little regard for anything other than the bottom line and total corporate supremacy, George begins to sway his customers round to the idea that it would be better to stick with the more personal and transparent service offered by Bailey Brothers’ small business.

But how? Building and Loan has no money, and its customers need to make withdrawals to fund their Christmas celebrations. George pleads with the townsfolk to take out only as much as they need to tide them over during the festive period, but there still isn’t enough money in the vaults.

That’s when Mary – moved by her new husband’s passion – steps in to offer up the $2000 they’d saved for their honeymoon.

The customers of Bailey Brothers’ – many of whom are George’s friends – are reassured by this display of faith and begin withdrawing smaller and smaller sums; only what is necessary to cover their bare essentials, now anxious not to send the bank under or take advantage of George and Mary’s generosity.

In doing so, Bailey Brothers and its customers fend off the corrupt advances of Old Man Potter’s Bedford Falls Trust and Savings Bank, and live to fight another year. There is a sense of trust between Bailey Brothers and its customers, and recognition of the fact that although it may not be the biggest provider of financial services, it is undoubtedly the most personal, most caring and most honest.

In the words of George Bailey:

Now, we can get through this thing all right. We’ve got to stick together, though. We’ve got to have faith in each other.

And that surely, in any context, is the true meaning of Christmas.


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James is freemarket’s Chief Commercial Officer. He has a history of finding new ways to solve age-old financial challenges and was responsible for launching some of the first online money transfer and prepaid card initiatives in Europe.


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