WEBVTT FILE

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[background noise]

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-Oh, hey, warden!
Is it noon already?

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We’re just blowing
through nap time today.

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-I’m sure by now you’ve heard.

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-You’re cancelling nap time?! Ahh...

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-Terrible thing.

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-Mmm, I’m getting a solid 10-12 hours
of sleep in here every night

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‘cause it’s always night in here.

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-We just have to put it behind us.

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-Done and done. Ahh! So, listen -

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you need to find somebody else
to do your embezzling

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because I am not good at accounting.

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I need to stop ‘cause
you’re gonna get caught.

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-Nothing stops.

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-Alright, if you put it that way.

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Can I have some time
to think about it?

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-Give him another month
to think about it.

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-Hey, thank you,
that’s very generous.

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I thought you were gonna
want an answer today.

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Can you shut the door on your way out

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‘cause I’m gonna need to think
about this while totally awake.

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I’m just gonna stay awake,
think about what I’ve done,

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not gonna nap, bye warden.

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[snoring and yawning]

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[music]

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-Hey there! I’m Andrew Heaton
and you’re watching EconPop -

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the show that patiently chisels
through the concrete wall

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of popular culture just to wade
through the sewer of economics.

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The Shawshank Redemption
is a beautiful film

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about how harsh
and brutal circumstances

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can’t snuff out human dignity,

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and about how even in
the most degrading

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and oppressive of environments,

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humanity will find a way

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to sneak around
the rules to trade stuff,

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like unfiltered cigarettes
and posters of pin-up girls.

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Andy Dufresne is an aloof accountant

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wrongfully convicted of murder

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and sent to the notorious
Shawshank penitentiary.

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The thing is, when Andy gets
to prison he doesn’t like it.

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The uniforms are drab

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and the random bursts
of violence are upsetting.

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So Andy decides to break himself out.

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Breaking out of prison may seem
like an easy thing to do,

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but trust me, it’s not.

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It’s like the prison guards

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are always one step
ahead of you or something.

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You can’t just
break out spontaneously -

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you have to apply time and effort.

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Remember kids,

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a successful jailbreak requires
hard work and a sharp mind.

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So Andy decides
to tunnel his way out.

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An interesting choice.

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Personally I prefer
to fake my own death

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and escape through
the morgue, but whatever!

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And he's a traditionalist, I get it.

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Even so, a tunnel-sewer combo
like the one Andy pulls off

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requires special tools.

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Specifically, a tiny
rock-cutting hammer.

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You can’t just steal that
from a squirrel size Mason.

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You need to trade for it.

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Good thing Red’s there.

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Not only is Red played by
Morgan Freeman who’s awesome,

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he is a middleman - in his words,
a man who gets things.

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-Cigarettes, a bag of reefer
if that’s your thing,

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a bottle of brandy to celebrate
your kid’s high school graduation.

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Damn, near anything within reason.

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-He’s one of several individuals
who facilitates trade

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within Shawshank, and between
Shawshank and the outside world.

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What the prison lacks in tasteful
community theater productions

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and a tight-knit Rotary club,

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it makes up for with
a thriving barter economy.

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But it’s not just intoxicants

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and tiny tools which
are traded in the film.

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As Andy spends more time behind bars,

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he moved past
trading money for stuff,

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to exchanging knowledge for beer.

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-The IRS allows a one-time only gift

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to your spouse for up to $60,000.
-Tax free?

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-Tax free. IRS can’t touch one cent.

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If you get the forms
I’ll prepare them for you.

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I’d only ask 3 beers apiece
for each of my co-workers.

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-Andy has extensive tax know-how

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and he’s able to capitalize
on his service

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in exchange for special treatment,

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like the guards beating
the hell out of his enemies.

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It’s every accountant’s dream.

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-Two things never
happened again after that.

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The Sisters never laid
a finger on Andy again,

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and Boggs never walked again.

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-Trade is swapping something you have
for something you want.

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It’s what separates us from chimps.

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People never trade down either.
That’s chimp stuff.

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If I decide to buy
a grappling hook for $100,

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it means that’s worth more
to me than the $100.

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Otherwise, I’d just keep the cash.

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And the guy hawking
the grappling hook

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would rather have the money
than the grappling hook.

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In any free exchange

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both parties are better off
after the transaction.

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And also, in this one, I escape
prison, using a grappling hook.

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Here’s how trade works:

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I have a cow. I would like
your daughter. Let’s trade.

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But bartering gets complicated.

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You love your daughter

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and it’s difficult to make
change for a whole cow.

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Every time we introduce
a new farm animal to the economy,

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we’re gonna have to
work out an exchange rate,

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how many chickens equals an alpaca?

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Well 14, everybody knows that.

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But it’s not always so obvious.

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Hence, mankind developed money.

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Rather than using 100 different
sorts of livestock

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and objects as their
own forms of currency,

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we use one, more or less,

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universal medium in the form of
coins, bills or notes.

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Back when I was in prison,

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we didn’t always use cash
for our transactions.

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We used cigarettes.

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Cigarettes are reasonably small,
they take a long time to go bad

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and you can smuggle them
into the pokey

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rolled up in your shirt cuffs.

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Nowadays cigarettes are banned
in federal facilities

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and inmates use mackerel.

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Seriously, I’m not making that up -
you can google it.

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Something which started out
consumable, and functional,

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and gross, turned into
a medium of exchange.

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When buying certain items is illegal,

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we call their exchange
a black market,

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and that’s when things get dangerous.

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In an open, legal market,
the store owner has the law

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to protect her from thievery.

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Free markets benefit
from open competition

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and the social pressure
of civil society.

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Not a lot of people
run out on their dinner bill,

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and liquor stores that poison
customers go out of business.

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But if we don’t have access to courts
or constables or Yelp,

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we have to enforce
contracts ourselves,

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and it behoves parties
to develop a reputation

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for being ruthless and strong.

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[people fighting]

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Back when I was in prison,
my cellmates and I didn’t take kindly

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to someone failing to make
good on their IOUs.

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We couldn’t send over
an attorney or a repo man

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so we sent over Knuckles and Bludo -

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2 upstanding inmates
built like angry refrigerators.

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Black markets make
everything riskier,

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which also drives up
the price of products,

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which in turn makes organized
crime more lucrative,

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expansive and ultimately deadly.
That’s why I got into it.

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Prohibition is what led
to organized crime in America,

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but now that alcohol is legal,
you rarely see anybody

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shooting up a winery
over a Zinfandel dispute.

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By the way, “Zinfandel dispute”
was my prison nickname.

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Shout out to the guys in the gang!

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America incarcerates more people

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than any other country on
the planet and we pay for it.

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Aside from the high costs
of feeding, housing

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and beating nonviolent
drug offenders,

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a felony charge and crippling
emotional damage

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are a terrific way to ruin
someone’s job prospects for ever.

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We lose all that productivity
through opportunity costs.

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We spend tax dollars on
maintaining the system,

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and we make it virtually impossible

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for felons to get a job afterwards.
So they turn back to crime.

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-The man’s been in here 50 years,
Heywood - 50 years!

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This is all he knows.

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In here he’s an important man,
he’s an educated man.

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Outside he’s nothin’.

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-Some day they’ll catch me
and I’ll go back to prison

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but I know I can make
my experience more enjoyable

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using trade to get things I want,

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like friends and protection
and brandy.

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And also things I need, like
a jackhammer and some dynamite.

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Thanks, trade!

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[music playing]