The word zombie is sometimes used to refer to firms that are virtually insolvent, in a state where they can merely afford to service their debt, or to refer to government sponsored vehicles where bad assets are stashed to clear banks’ balance sheets from underperforming loans. The zombies I’m concerned with here, however, are actual flesh eating undeads. I think zombie fiction is especially interesting to economists because it mirrors a lot of debates going on within the profession.

A lot of people do not understand what zombies are all about and miss out on some great fiction. While it is true that zombies are the most brainless horror flick monsters around, it does not mean that zombie movies are senseless gore films. In fact, there’s a long tradition of using zombies in media as a plot device to push a social commentary and reflect on human behavior. Because zombies are clumsy, mindless, and generally easy to trick or avoid, zombie stories are not so much about the zombies, but about the survivors and how they cooperate. Zombie fiction allow us to witness miscooperation leading to dire consequences without having to experience these situations, just like economists use economic models (in the very loose sense) to reflect upon economic miscooperation because they don’t have the luxury of experimenting.

Because zombies are so easy to overcome, storylines have relied on other threats, which you could call zombie survival market failures. From an economist’s point of view, a lot of zombie stories involve variants of close-ended non-cooperative games, where egos and foul play get in the way of happy Pareto optimal endings. The model for human behavior is generally one where humans would have perfect chances of surviving if they could execute their plan, but where adverse selection and moral hazard make it so that they cannot spontaneously coordinate themselves. That is, humans have good expectations about what needs to be done to survive the post-apocalyptic world, but plan conflicts, absence of a consensus, betrayal and unenforceable contracts ultimately always lead to some of the most tragic possible outcome.

Think of George A. Romero’s Night of the Living Dead, the movie to which we owe modern zombies. It’s a huis clos movie where the survivors take shelter in a farm surrounded by flesh eating ghouls. Leaving aside the rather clumsy class struggle theme, the demise of the group is not so much due to the living dead trying to break in, but rather to the failure of survivors to cooperate and agree on a plan. The group on the ground level has a plan to resist zombie attacks that requires the unanimous cooperation of the group taking refuge in the cellar. The group in the cellar needs the collaboration of the other one for their radio, apparently a precious asset during zombie invasions. The zombies ultimately feed on their failure to agree. Other zombie movies by Romero explored similar themes, where safe havens that could have been shared are ultimately invaded and destroyed, leaving everyone worse off. This is the dominating theme in what I would call first generation zombie fiction, with more recent entries such as Zombieland also touching on it.

These behaviors can seem a little wooden, and overly pessimistic about human nature. In the face of certain death people would know exactly what to do to survive, but wouldn’t be able to do it because they value coming out on top of an argument or being in charge more highly than being alive? Moreover, in a post-apocalyptic world where a broken leg or a simple cut that gets infected can be the end of you, why is it that it is always failure to cooperate that leads to death instead of tragic unforeseen events?

Of course, in real life people do figure out how to coordinate themselves, and they’re rather inventive in the ways they do. Just think of the diversity and plurality of answers to coordination challenges; how some resources are managed by private firms, some by non-profit organizations, some by something in-between. And just think of the inscrutable mix of a lot of types of organizations and institutions that have emerged from our cooperation efforts to guard and enforce these agreements. It is true however that in a situation of urgency there’s no reason the survival learning process would be quick enough, and survivors adapt timely – zombies are not very forgiving. Still, the overall message of classic zombie fiction seems both overly pessimistic about human collaboration, and overly optimistic about human expectations.

Fortunately, what could be called a second generation of zombie storytelling “models” human cooperation better. In Left 4 Dead, Mountain Man, or Day by Day Armageddon for example, zombie apocalypse survivors do collaborate toward a plan, and there is clearly less betrayal toward  one’s own certain death. In these narratives, survivors lose their peers not necessarily due to a failure to coordinate, but because of truly unforeseen events. There is a sense that danger is unpredictable and all around the survivors. They don’t need a final zombie attack to come before they’ve agreed on a course of action for zombies to feast on human sashimi.

Having imperfect survivors that are capable of learning and innovating, yet are radically ignorant (instead of “socially challenged” Judas) changes the whole dynamic of zombie invasions. It allows authors to explore other themes such as anti-militarism. An example of a common theme is that government response always worsens the problem because of the knowledge problem, ordering survivors to seek shelters in areas that have already fallen prey to zombies. The only time where the military actually improves the situation is through insubordination or desertion. Often in those stories the only path to survival is individual initiative and rugged survivalism, an admittedly caricatural version of entrepreneurship. Of course this is not true of all zombie fiction, the popular zombie novel World War Z is not much else than a glorification of the war economy and government crisis management.

But mostly, having more realistic ideal types allows authors in The Walking Dead graphic novels (it’s less obvious on the TV show) to have groups of survivors experiment with a host of governance structures as their context and goals evolve. These range from a state of spontaneous leaderless voluntary cooperation, to characters imposing their tyranny upon a small community, with varying levels of success at their survival efforts. For example, the Governor leads his group with an iron fist, ultimately suppressing the feedback that would have signaled the Governor that his plan was wasteful. In Rick’s group, on the other hand, projects are generally more bottom-up initiatives validated or rejected by peers, and are much more successful. The franchise often explores problems associated with welcoming new survivors and their effect on enforcement and guarding costs.

Since it is customary to finish with an unsolicited policy advice, an implication derived from zombie fiction that will make it sound way more serious than it was ever meant to be; in times of crisis the law of association is more important than ever to increase the division of labor and make each party’s efforts more productive. Funny how, for zombie apocalypses just like for real world problems, themes emanating from Austrian economics seem to capture the problem of human cooperation better than mainstream economics, huh?