Writing Contest: First Place
Money and Banking in the Movie Mary Poppins
Mary Poppins is a Disney classic movie, based on a book by P.L. Travers, and directed by
Robert Stevenson. The story features the well-to-do Banks' family in London in the year 1910.
The Banks' children, Jane and Michael need a nanny and Mary Poppins appears magically. From
tea parties on the ceiling to popping into pavement pictures, Jane and Michael accompany Mary
Poppins and her friend Bert, the chimney sweep on a series of magical adventures.
When George Banks, the conservative father and banker asserts that the children should
learn about the real world instead of playing games of fantasy, Mary Poppins suggests that the
children visit the bank with their father. On the way, Michael wants to use his 'tuppence' (twopence)
to feed the birds. His father refuses, pronouncing it a waste of money and promises to
share his plans for the tuppence at the bank. At the bank, Jane and Michael are introduced to
the chairman, the senior Mr. Dawes. The children's visit to the bank together take up less than
ten minutes in the movie and yet in those few minutes, the movie introduces the audience to
fundamental economic concepts. The time value of money and compound interest in financial
economics (Hirschey, 727) are introduced in the form of a song sung by the elder Mr. Dawes, "a
giant in the world of finance." Accompanied by a chorus of other bankers, Mr. Dawes tries to
convince Michael, with a song, the wisdom of saving the tuppence in a bank account and the
magic of compounding as the principal multiplies over time. As Mr. Dawes explains, Michael
Bank's present value of one tuppence can grow into a future value of a 'generous amount'
through semiannual compounding, if Michael deposits the tuppence in the bank. Mr. Dawes then
goes on to explain the relationship between savings and investment when he tells Michael how
the savings "prudently invested by the bank" will fund investments such as "railways through
Africa, self-advertising canals and plantations of ripening tea."
Michael, refusing to be swayed, demands his tuppence back, and gets into a struggle
with Mr. Dawes. When the other customers at the bank hear Michael yelling "give me back my
money," they think the bank is insolvent and the ensuing panic starts a run on the bank as all the
depositors demand their money back immediately. Later that day, George Banks loses his job for
having caused a bank run. For Michael, the opportunity cost of the tuppence saved, is the
pleasure of feeding the birds which is the "next best alternative foregone" (McConnell & Brue,
27). Michael makes a choice between consumption now and consumption in the future (intertemporal
consumption) when he chooses not to save his tuppence. The opportunity cost of the
future consumption is present consumption foregone. This episode also illustrates the role of
subjective preference and choice and how it varies across individuals. Michael prefers to feed the
birds today rather than choose future 'opportunities' of savings and investment. Evidently,
Michael has a rather strong preference for the present over future consumption, in contrast to his
father and the other bankers who express a preference for future rather than current
The run on the bank is the most succinct economic concept that the movie depicts. A
bank panic or bank run is a situation in which all or most depositors with checkable deposit
appear at once to demand those deposits in cash (McConnell & Brue, 269). Banks only keeps a
small portion of their checkable deposits as reserves and lend or 'wisely invest' the remaining as
the bankers chant in unison to Michael. This is the system of fractional reserve (McConnell &
Brue 257) which helps banks create money by loaning out the excess reserves as credit. This is
what makes the banking system vulnerable to bank runs. Individually, s customers lose
confidence in the bank they are acting rationally when they demand their deposits back. But in
the process, there is a run on the bank causing the bank to fail and a loss for all its customers
(Kaufman). If the bank is indeed insolvent, then this could affect other banks and financial
institutions which transact with the bank. This is called financial contagion (Kaufman). It is to
ensure against such loss of faith in the banking system that central banks such as the Federal
Reserve have been charged with being the lenders of last resort and that deposits insurance has
been introduced (Parkin, 404). Such interventions make the possibility of bank runs remote.
However, financial contagion is still observed in security markets as investors lose faith in
financial transactions. Even today, the rule in financial markets is to halt all trading when there is
panic selling. This is depicted in the movie, where the bank panic is contained by closing the
doors and calling a halt to all transactions. In the movie Mary Poppins, since the bank is not
financially insolvent and the panic is based on inaccurate information, the bank run is contained,
and the story ends on a happy note with Mr. Banks being named one of the directors.
In the end, it is Bert the chimney sweep, who states the moral of the story. He reminds
Mr. Banks how short childhood is and how easy it is to miss the precious opportunity of
fatherhood. There is yet another classic example of opportunity cost, as Bert drives home the
fact that the opportunity cost of Mr. Banks' glowing career at the bank is time foregone with his
children. As Bert says to Mr. Banks, "you've got to grind, grind, grind at the grindstone, while
childhood slips like sand through a sieve. And soon they've up and grown, . and it's too late for
you to give." Bert's simple words strike a chord and the story ends with a reformed Mr. Banks
returning to his family, anxious to mend his relationship with his children.
Hirschey, Mark, (2003) Managerial Economics, Thomson South-Western Ohio.
Kaufman, George G. (2004). Bank Runs. The Concise Encyclopedia of Economics
Fund, Inc. Ed. David R. Henderson. Library of Economics and Liberty.
Mary Poppins (1964)
McConnell, Campbell R. and Stanley L. Brue, (2002). Economics: Principles, Problems and
Policies, McGraw-Hill/Irwin, New York
Parkin, Michael, (2000). Macroeconomics, Addison Wesley, USA.