Avatar – Some Economic Observations

Avatar is an exceptional movie – it is the culmination of 5 years of work on the part of director James Cameron and it features new filming techniques including 3D Fusion Camera System as well as “Full performance capture” as the actors in the Na’vi sequences had to wear hoods which allowed computers to simulate the facial features and movement of the actors.

The first thing that struck me was the fact that ultimately a foreign culture and what appeared to be a hostile environment came to dominate and vanquish the alliance of a quasi US military and money. Strictly speaking Cameron made it very clear in the movie that this wasn’t the US military, but it bore a remarkable resemblance to what one might expect the US military to look like sometime in the future. In essence the traditional American heroes with all their technology lost, and the winners here were the foreigners who spoke a different language, had strange beliefs and customs, and looked odd to us humans. What went through my mind towards the end of the movie was that perhaps this marks a turning point in the American view of it’s military and foreign cultures? Or maybe Cameron is just part of an enlightened minority? The movie did put a disabled (and retired?) marine who crossed over to the Na’vi in the hero’s role underlining that it’s the people in the military who matter, not the institution itself. Nevertheless, given the above, I can quite understand why Cameron found it hard to get funding for this movie!

Setting aside all the technical wizardry involved in the film-making, there are quite a few themes and noteworthy aspects of the movie that made this economist sit up and think. Of course there were the small things like expressing all distances in kilometers – clearly by whenever this is supposed to be in the future, the implication is that we will have agreed to use the metric system to measure distances rather than miles ( - obviously a concession that America is going to have to make at some point in the future), and there was also the greed aspect to the movie which pitted culture and tradition of foreign peoples against the generation of corporate profits.

I hope I don’t spoil things here for people that haven’t seen it, but the environmental and international economics implications of the movie were to me quite stark, whether intentional or not. The fact that the Na’vi win in the end implies that although technology and military muscle are formidable obstacles to preserving cultures and the environment, they will not necessarily prevail. It also implies that as we continue to exploit the Earth’s resources we need to always try to ascertain the damage done on foreign cultures and the environment so as to take these concerns into account, otherwise they will come back to haunt us. What the film says is that this requires us trying to put ourselves in the situation of others before acting, and to get to understand what is important to these foreign cultures, and how to best negotiate and dialogue with them. Notice that this also plays into the “short run” vs “long run” distinction in economics, as it implies that in the short run if we’re too concerned with quarterly profits and possession of resources we could end up destroying cultures and the environment and in a much worse situation than we started in. Yes, it’s a variation on “time inconsistency” again!!

Lastly, watching the final credits ( - a monumental list of people and organizations) after most people had already left the movie theater, I quickly realized that this movie was clearly a global effort in terms of farming out the work to many many different countries, with much of the filming in New Zealand, but a sizeable part of the special effects done in France, and of course the US heavily involved. The film premiered in London, England and has a lead actor from Australia. So I guess the movie industry is finally getting around to adopting the principle of comparative advantage - well at least this film did!