Thoughts, essays, and writings on Liberty. Written by the heirs of Patrick Henry.

“Individual rights are not subject to a public vote; a majority has no right to vote away the rights of a minority; the political function of rights is precisely to protect minorities from oppression by majorities (and the smallest minority on earth is the individual).”     Ayn Rand

March 23, 2012

Walking Dead Economics

by Stephen Littau

My wife and kids got me hooked on a series some of you may have heard of called The Walking Dead (and like the rest of the Walking Dead fans out there, I have to wait until October for the next season to begin as the characters have been left in quite a precarious situation) For those who haven’t heard of this series, basically Atlanta, GA (and as far as we know, the rest of the world) has been taken over by zombies (called “walkers” by most people who inhabit this world). While the series does have many of the elements of the zombie genre, the story and the characters in the story are quite a bit more complex.The story isn’t so much about the walkers as it is about the characters who not only have to survive this zombie apocalypse, but also manage to survive the other survivors and live with very limited resources.

One thing that becomes very clear at the beginning of this series is that many of the societal rules quickly go out the window when under constant threat of flesh eating walkers. Paper money is of no practical use (other than to start a fire perhaps). Debit cards and credit cards are even less valuable as there is no way to access your worthless money.

One other thing I noticed is that gold isn’t even a commodity that is of much use in this world.

It so happens that I have been reading Dave Ramsey’s book The Total Money Makeover as my wife and I are trying to apply his system to get our financial house in order (I highly recommend this book to anyone who wants to get out of debt). In the book I ran across the following passage in which Ramsey explains why he does not believe gold is a good investment, even as a hedge against a total economic collapse:

It is important to remember that gold is not used when economies fail. History shows that when an economy completely collapses, the first thing that appears is a black-market barter system in which people trade items for other items or services. In a primitive culture, items of utility often become the medium of exchange, and the same is temporarily true in a failed economy. A skill, a pair of blue jeans, or a tank of gas becomes very valuable, but not gold coins or nuggets. Usually a new government rises from the ashes, and new paper money or coinage is established. Gold will, at best, play a minor role, and the gold investor will be left with the sick feeling that real estate, canned soup, or knowledge would have been a better hedge against a failing economy. – The Total Money Makeover: A Proven Plan for Financial Fitness by Dave Ramsey (Thomas Nelson, 2003, 2007) p. 55.

I don’t know that I fully agree with Ramsey here though I’m by no means an expert on the history of gold or monetary policy. It seems to me that as a new civilization emerges from economic collapse, gold (and other commodities) would play a much greater role before people would accept any new fiat money. He seems to have a legitimate point, however; with regard to a collapsing or fully collapsed economy.

This is certainly the case in The Walking Dead. The resources most necessary to survive in this world are water, food, shelter, firearms, ammunition, medicine, fuel, spare parts, etc. Without these items, you aren’t going to survive for very long. Under these circumstances, who would trade a shotgun and ammunition for a bar of gold? I sure wouldn’t. I might trade a shotgun, assuming I already have enough firearms to hold the flesh eaters at bay, for some food and water. Better yet, I might offer to provide security for a few nights in exchange for food, water, and a temporary place to stay. This arrangement would continue as long as both parties agree.

In the course of the series, these are the kinds of arrangements that are worked out. Security is a major concern because, despite apparent efforts by the federal government to impose martial law, the government failed* and the law of the jungle is now in full effect. Many resources such as firearms, water, auto parts, food, fuel, etc. are scavenged from those who were either killed or simply abandoned their property (finders’ keepers).

Earlier in this season, the main characters find themselves at a dead end on the interstate as thousands of abandoned cars litter the road. Though on one hand this is very bad news, on the other, it’s an opportunity to scavenge whatever resources were left behind. At another point, a couple of the survivors make their way into an abandoned small town where they hit the jackpot in finding an abandoned pharmacy with a decent supply of prescription drugs. At the very end of this last season, the camera pans out to a prison near where the remaining surviving characters are camped out. What, if anything, can these refugees benefit from the prison? (I’m very interested to see where the story goes from here with the prison).

“What about silver bullets, do they have any value?” you ask. Silver bullets are needed to kill ware wolves, not walkers. Ware wolves? Seriously, ware wolves? Now that would be ridiculous.

*Or did it? Perhaps all the “important” people have been relocated to a secret and secure location while the citizens are left to fend for themselves.

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3 Comments

  1. I’ve been telling people the same thing for years, including on these pages.

    My holdings aren’t in gold, they’re in non-perishable foods, generators, machine tools and supplies; high quality, reliable firearms in useful chamberings, and parts, ammunition, and reloading components in useful chamberings etc…

    Comment by Chris Byrne — March 23, 2012 @ 3:20 pm
  2. It’s probably useful to remember that not all scenarios involving a “collapse” are the *equivalent of a zombie apocalypse*! Sheesh. In a scenario where fiat money becomes worthless, the whole planet isn’t going to explode, and gold will be the free market’s choice of money, most likely, because it still has all the qualities that Menger described as those of good money.

    As far as the economics of The Walking Dead: I think they are horrible. The writers have kneejerked into a Hobbesian nightmare vision of anarchy which, I’ve gotta say, you kind of sound like you are doing as well (referring to the “law of the jungle”). If, as you’ve noted, things like human skills and knowledge are in great demand, then it follows that instead of the few survivors going around shooting each other over one farm *when there are millions of farms out there for the taking for free*, the survivors would be desperately trying to find each other and trade their skills and knowledge.

    I like the series but I’m very disappointed that yet another opportunity to show how the economics of self-interest would lead people to cooperate *more*, not *less*, in an anarchic situation has gone begging.

    Comment by Andy — March 23, 2012 @ 4:08 pm
  3. I smell a sequel. One part zombie added to one part ware wolf. “The Howling Dead”. Now that’s entertainment.

    Comment by Norm Nelson — March 25, 2012 @ 10:24 am

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