A Most Violent Year (2014)

A Most Violent Year, the 2014 film by J.C. Chandor, is one of the most enjoyable and compelling depictions of the effects of state capacity on the individual and society. It’s New York City, 1981 – a time of violent crime and government action to clean up the city – and Abel (Oscar Isaac) is running his father-in-law’s heating oil business. He’s a man of some quality – determination, intelligence, and moral aspiration, despite operating in an industry that isn’t playing by the rules. Various moral-laden business decisions comprise the drama of the film.

Abel wants to run an honest business. He is a more commercially-competent and morally-aspirational operator than his competitors. On these qualities alone, he could succeed and gain market share, wealth and status. However, he operates in a dirty industry, ensuring his business and moral aspirations are in conflict. The DA’s office is investigating the industry over tax evasion, fraud, etc. The heating oil industry hasn’t yet been cleaned up and made legitimate. It has the remnants of the bad old days when Abel’s father-in-law ran the business. Complicating the situation, Abel’s competitors, who would struggle in a more transparent and clean world, are hanging on by stealing his oil, depleting Abel’s finances at the moment he is about to pull off the biggest deal of his career. Abel refuses to arm his drivers – which would be illegal – despite the urging of the union. He knows it’s a slippery slope that could lead to a violent episode and punishing legal attention that would cripple his business. He seeks protection for his drivers from the DA’s office, but the DA and the police are unhelpful. Further, Abel’s business, despite his moral aspirations, isn’t clean. We know that his father-in-law wasn’t always scrupulous, and when Abel hides documents before a search warrant is carried out at his home, and when his wife states they follow standard industry practice on every front, we assume he’s not as clean as he’d like to be. When the government was at a distance, and his competitors were playing dirty, it may have been rational for him to dirty his hands. But for now, he’s urging the DA’s office to protect his drivers. While he waits, he’s walking a tightrope, on financial, security and legal fronts. Throughout, he aspires to be better than his world.

The depiction of industry dynamics, the role of government and state capacity, and the battle to be moral and stay true to your convictions, is great to watch. It’s hard to stay clean in a dirty world. When you don’t have protection from the police, you may need to use your own force to ward off roving bandits. If you don’t cheat when others are cheating, you may also go down. But if you cheat at the wrong moment – when the government is cleaning up the industry – you could be brought down with it. The transition from dirty, fraudulent and violent to clean, honest and peaceful, is a tightrope Abel is walking in this movie. How clean can he stay in a dirty world? Can he survive the transition and emerge as the new face of the industry, with the approval and support of the government?

Fortunately, excellence plays an important role in Abel’s story. He is clearly the most commercially competent operator in the industry, one with higher ambitions, a true leader for a more honest, clean society. He comes out of the transition bruised and battered, owing substantial money to competitors, but with a strategic advantage in the industry. He may be hobbled financially, but he’s still in the game. However, his survival also owed to a deal he was going to have to make with the Assistant DA, who has political aspirations. Abel will avoid legal heat but will pay for it through political support. This is a realistic depiction of a mutually beneficial political transaction, which are often needed when a country transitions into a new equilibrium – from dirty to clean.

A sequel is sorely needed to explore what happened next. With Abel’s attention now turned to the political realm, what sort of moral compromises await him? While order is established in the heating oil business, and bad actors have been driven out, does a new form of corruption enter in the form of rent-seeking, buying influence and favouritism?

Herein lies the difference between a world with state capacity and a world without. In the latter, gangs and/or clans wield influence through force, and roving bandits strike. Morals are compromised and violence is closer. It is a world of strong men, of men who will use force or fraud to get ahead. In a world with state capacity, however, government has the power, and attention turns to influencing that power in your direction. Influence replaces force. But without proper accountability, businesses will get ahead through political corruption. However, if government can facilitate a genuine open access order, industry can operate in a positive-sum world, for the benefit of customers, and with clean hands.

It’s interesting to consider how Abel, the morally aspirational businessman, would have coped in the time of his father-in-law. How would operating in that environment have changed him? Would he be the businessman he is in 1982? Given his qualities, I think he would’ve done well in earlier times…but it would have cost him his soul. For while he is morally aspirational, he is also pragmatic, and determined to succeed.

A Most Violent Year illustrates the choices involved in a morally-compromised game. It’s easy to sit out and have clean hands. But, like politics, business can have moral compromises, especially where government hasn’t been able to facilitate a clean, cooperative equilibrium. Abel is inspirational – for his business acumen, his determination, and his moral aspiration. Watch this man go about his business and think about what you’d do in his situation. Luckily, Australia is not New York City in the early 1980s, and for that, I am most grateful.