I started working on this post a long time ago and, for whatever reason, never got around to finishing it. So please keep in mind that this was largely written shortly after the film first came out. I should also disclose at the outset that this post will contain spoilers, so if there is some sort of unbelievably powerful force that has kept you from seeing this fantastic movie, please be warned. For those still interested, there’s more after the jump.





The groundwork: A major component of Bane’s plan in the the Dark Knight Rises (TDKR) involves the infiltration and subsequent occupation of Gotham city. Bane and the remaining members of the League of Shadows sneak into Gotham City, basing their operations in the tunnels and sewers beneath the city. Some members of the League have also worked their way into various positions in construction companies, the city maintenance department, etc. As the film progresses it’s revealed that Bane is targeting a nuclear reactor manufactured by Wayne enterprises for the purposes of producing clean and sustainable energy. Bane, with the help of a kidnapped nuclear physicist, is planning to weaponize the reactor and destroy Gotham City. However, in the interim period, Bane brutalizes Batman/Bruce Wayne and imprisons him in a special prison in Central Asia. As a punishment for killing Ra’s al Ghul, Bane plans to force Bruce Wayne to watch over the course of approximately 5-6 months as Bane prompts Gotham to tear itself apart. By blowing up all but one of the bridges connecting gotham to the outside world, and threatening to detonate his nuclear weapon at the first sign of external intervention, Bane successfully keeps Gotham isolated for a half year as the US military and various police agencies work to keep the citizens of Gotham from fleeing the city.

Ok, so we’ve laid the ground work. I give Chris Nolan credit for setting the stage in such a way as to acknowledge that the outside world was aware of the events unfolding in Gotham, and to provide a reasonable basis for the inability of US officials to intervene in Gotham (though they did try). However, in spite of the fact that Gotham survived the League of Shadow’s final attempt to destroy it, Bane’s occupation should still be expected to have had enormous consequences for the world beyond Gotham. This is what we really don’t get from the film, however, and I’d like to take a quick stab at fleshing out what some of these broader implications might be. Specifically, I’m interested in the economic costs of Bane’s occpuation of Gotham.

In what follows, I’m proceeding on the basis/assumption that Nolan’s Gotham City is essentially the equivalent of contemporary New York City. Indeed, the all-powerful Wikipedia page for Gotham City cites one of Batman’s writer as noting that the “Gotham” was a nickname for New York long before the Batman comics. Batman’s fictional home was named something different because the writers didn’t want anyone in New York to “identify with it” (see previous link). This little bit of trivia provides us with a lot of information, and by using New York City as a proxy we can derive some expectations as to what some of the broader consequences of Bane’s occupation of the city would have been. Below I’ll cover a couple such examples.

Let’s start with a general economic picture of Gotham. The Bureau of Economic Analysis provides some useful data on the Gross Metropolitan Product (GMP) of cities/metropolitan areas around the country. As you might expect, this is similar to the ubiquitous Gross Domestic Product (GDP) that so many folks use. GMP is simply GDP broken down by the economic activity accounted for by each metropolitan area.

The graph below shows the New York Metro Area’s GMP from 2007 through 2010.

As the values above indicate, recent GMP figures for the greater NYC area have generally fallen between $1.2 and $1.28 trillion. Please note that is trillion, not billion. It should also be noted that these figures cover a fairly broad area, including New York City, parts of northern New Jersey, Pennsylvania, and Long Island. Bane’s occupation of Gotham effectively shut down all economic activity in the city, but it also severed ties between the core of the city and its periphery, the rest of the country, and the entire globe. Presumably there remained some economic activity in Gotham’s periphery, but the vast majority of the city’s economic production was shut down for approximately 6 months. If I simplify things and just assume that Gotham’s GMP is $1.2 trillion, then we might infer that Bane’s occupation of Gotham led to a direct decline of approximately $600 billion in Gotham’s GMP, given that he ground the city to a halt for approximately 6 months. On its own this figure would amount to approximately 50% of Gotham’s GMP and 4% of US GDP for 2010. This is also a crude estimate if we consider that the League of Shadows only held a smaller portion of the city, and did not in fact control the total metro area—Manhattan as opposed to all five boroughs, for example. Still, the areas not occupied will still suffer from the decline in economic exchange arising from the occupation of this one borough. This is especially true since he occupied the most populous and economically vibrant portion of the city, as well as because much of the surrounding area was probably evacuated as a result of Bane’s possessing a nuclear weapon. So for present purposes I’ll just roll with this $600 billion figure.

Again, this figure is only for the 6 months that Bane held the city. In all likelihood economic productivity did not immediately pick back up to it’s pre-occupation levels, and depending on how long it took Gotham to rebuild and reorganize, the direct losses resulting from Bane’s occupation are probably much higher. Though there is nothing truly comparable to the scenario depicted in TDKR, we might learn something about these extended effects from other, real, examples. For example, this piece from the Bureau of Labor Statistics examines some of the economic impact from the 9/11 terrorist attacks in New York. The report estimates that the immediate effects of the 9/11 attacks on lost jobs and wages extended over the course of 3-4 months, totaling approximately $2.2 billion in lost wages. This Congressional Research Services report cites early estimates (the report was written in 2002) putting New York City’s losses to gross city product (GCP) at about $27 billion for the remaining three months of 2011 through 2012, and estimated between $83 and $95 billion in losses to GCP over the next three to four years.

To generate an estimate for our hypothetical case, I make a few assumptions:

The figures cited in the previous graph represents a fairly accurate picture of the economic losses amounting directly from the 9/11 attacks. That businesses, economic productivity, and population are all distributed evenly throughout the city’s territory. That the direct damage arising from the 9/11 attacks affected a relatively small portion of the city as a whole—I’ll assume 2% for present purposes. This is based on the $27 billion figure cited above, which works out to be about 2% of the New York Metro Area’s GMP. This figure was based on a little over a year’s time, but I’ll treat it as though it represents a year’s losses. Clearly the broader human and economic cost did in fact extend throughout the city, but it is a useful assumption for the present exercise in that it allows us to generate some estimates for the hypothetical case that prompted this post. Economic productivity is constant over time, throughout a given year (i.e., no seasonal fluctuations). Gotham City loses a baseline $600 billion from its GMP as a result of Bane’s attacks, as discussed above. Here I should note that for the ease of computation, I am going to purposely conflate GMP and GCP. That Bane’s attack coincides neatly with the last half of the year. This way we can assume that Gotham’s GMP was chugging along on track to its usual levels, thereby easing my job in estimating these figures. Lastly, let’s assume that Bane occupied and damaged a broader section of the city than in the case of the 9/11 attacks—I’ll say 20% for Bane, as compared to 2% for 9/11.

If we assume (as I do) that population, businesses, and general economic productive capacity are distributed evenly throughout the city, approximately 20% of Gotham’s businesses were damaged. Since the cost of damaging 2% of the business in NYC cost approximately $27 billion to the city’s GCP over the following year, I multiply $27 billion (2%) by 10 to estimate the costs we might expect to be associated with damage to 20% of the city’s businesses and population. From this we get a figure of about $270 billion. Since we know that Gotham took a big $600 billion hit by shutting down for six months, this suggests that the immediate reduction to Gotham’s GMP over the course of the six month occupation and subsequent year would be somewhere around $870 billion dollars. This process also yields estimates of $1.4 trillion to $1.5 trillion in losses to Gotham’s GMP over the course of the occupation the the following three to four year period, using the figures cited above. This works out to be about 116% to 125% of Gotham’s GMP and 9.3% to 10% of US GDP.

Substantively, this is a huge impact. It’s also probably still a very low estimate of the extended economic impact of this kind of event. I make some pretty strong assumptions about the spatial distribution of the city’s sources/capacity for economic production. In reality the sources of most of Gotham’s wealth production are probably located in the areas that were most heavily affected by Bane’s occupation. Rather than assuming that occupying/damaging 20% of the metro area’s territory translates into destroying 20% of its wealth-producing capacity, it may be something more like 60%-80% of its wealth-producing capacity within the given territory. These estimates are also only for the direct impact to Gotham’s GMP. The BLS piece cited earlier notes that the economy of contemporary New York—and by extension, Gotham—is heavily geared towards producing goods and services that are heavily reliant upon, and facilitate, connections with the outside world. Financial institutions in Gotham (like New York) likely facilitate a great deal of investment by foreign entities into a number of areas throughout the rest of the US. International trade would also suffer since the occupation would have required closing major ports. In short, the effects of Bane’s occupation would have had profound effects for years to come on the economies of Gotham and the rest of the US. It is entirely conceivable that these events would have pushed the US, and possibly the global economy, into a tailspin. This is to say nothing of the implications for US national security policy, or the implications for government spending on reconstruction, implications for the national tax base, etc. Accordingly, this relatively brief analysis doesn’t even really scratch the surface in terms of exploring the broader implications that this kind of major terrorist attack would have. However, while the events depicted in TDKR are purely fictional, it does serve as a useful exercise for illustrating the very difficult task of answering these sorts of questions.

*I’ve revisited some of the figures since originally posting this piece. I think it’s now a bit more accurate (at least as accurate as an exercise based on a fictional event can be).

Share this: Facebook

Reddit

Twitter

Email



Like this: Like Loading...