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The Wizard of Oz as a Monetary Allegory

By Dr. Hassan Shirvani — Since the Chicago journalist L. Frank Baum published his The Wonderful Wizard of Oz in 1900, the book has become one of the most beloved American tales of adventure. Millions of both children and adults have taken great pleasure in reading about Dorothy, a little girl living in the midst of the Kansas prairies with her aunt, who is “carried away” by a tornado to the Land of Oz, a magical place populated by the little Munchkins and a host of other wonderful characters. Anxious to find her way back home, Dorothy sets out to seek the advice of the Great Wizard of Oz who resides in the Emerald City. During her trip, Dorothy meets new companions, including the Scarecrow (who needs a brain), the Tin Man (who needs a heart), and the Cowardly Lion (who needs courage). She invites them to accompany her to visit the Great Wizard and ask him to fulfill their wishes. Following a long series of adventures, including a climactic battle with the Wicked Witch of the West, Dorothy finally “returns” home, finding herself awakened from her dream on her bed, to the relief and cheers of her family and friends.

For many years, the Wizard of Oz retained its status as purely a modern classic of the children literature. More recently, however, a number of authors have argued that the Wizard of Oz is not a children book at all, but rather a populist allegory about the US monetary debates of the last quarter of the 19th century. During this period, the successive Republican administrations, concerned about the potential inflationary effects of the excessive monetary expansion during the American civil war of the early 1860s, gradually returned the US monetary system to the gold standard. Under this system, banks could only print new dollar bills when purchasing gold, as opposed to earlier times when they could also print money by purchasing US government bonds. This return to gold, under the conditions of severe gold shortage, resulted in a tighter money supply and, hence, the economic depression of the late 19th century. To combat the depression, a number of Democrats began the free silver movement which favored giving banks the permission to also print money by purchasing silver, a metal found in abundance in the western American states. The free silver coinage, many Democrats asserted, would end the dearth of money and, thus, initiate the process of American economic recovery. Indeed, during the 1896 presidential election, the Democrats led by their nominee, William Jennings Bryan, called for an end to “crucifying mankind upon a cross of gold.”

Baum, a journalist at the time in Chicago, is supposed to have composed the Wizard of Oz as an allegory depicting these events. Thus, according to this interpretation, Dorothy (representing America and her honest values) wearing silver shoes (representing the free silver coinage) recruits the Scarecrow (representing the American farmer), the Tin Man (representing the American worker), and the Cowardly Lion (William Jennings Bryan), to accompany her on the yellow brick road (representing the gold standard) to the Emerald City (Washington, D.C.) to plead with the Great Wizard (the Democratic president Grover Cleveland) of Oz (an ounce of gold) for free silver coinage. In the process, Dorothy and her companions also battle the Wicked Witch of the West (William McKinley, the Republican presidential nominee in 1896). Unlike the Democrats, McKinley was against abandoning the gold standard in favor of a more expansionary bimetallist (gold and silver) system. As it turned out, however, the issue of the silver coinage became moot with the new gold discoveries in Alaska in the 1890s, which served to undermine the Democratic platform and, thus, to cost the Democrats the US presidency both in 1896 and 1900.


Hassan Shirvani, Ph.D.
Professor Cullen Foundation Chair in Economics

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