The Pursuit of Happiness is, perhaps, more than any other, the central theme in Capra's work. Happiness is to be found in peace, contentment, enjoyment of life, above all, freedom from the rat race, the individual asserting himself to escape from the oppressive hand of the forces of Organization. This idea was expressed in abstract terms in Lost Horizon …, a film dismissed by almost all influential film critics as pretentious and absurd…. In fact, it is one of the most dazzling pieces of film-making to come out of Hollywood in the '30s…. The last memorable image of the film is of Robert, a lone, tiny figure, against a vast expanse of snow, struggling onwards through a blinding storm, trying to find his way back to Shangri-la. This image crystallizes Capra's preoccupation with the Pursuit of Happiness. In Lost Horizon the plane's passengers have been carefully chosen to illustrate different aspects of the Rat Race. Robert Conway is a soldier and diplomat (the double-dealing world of diplomacy), Chalmers Bryant is a failed businessman (victim of Big Business), Gloria Stone is a showgirl (the empty glitter of Show Business), and Alexander P. Lovett is a palaeontologist (the aridity of the Intellectual World). All find peace and contentment in Shangrila, their participation in the Rat Race at an end. (pp. 66-7)

The series of Populist comedy-moralities, which emerged fully formed with Mr. Deeds, culminated in It's a Wonderful Life … and State of the Union…. With them, it was as if Capra had said the last word on the Populist philosophy. Since then, he has made only four films, and in them he has reverted to his pre-Deeds period (two of the films are actually remakes of early pre-Deeds successes). The detailed philosophic content, and the comment on social, political and economic problems are missing. Gone is the small town background, the Cooper-Stewart innocent. In Capra's later films, his heroes are reversions to the urban figures of the early films (newspapermen in Here Comes the Groom, hotel-owner in A Hole in the Head, bootlegger in A Pocketful of Miracles). The reason for this is easily apparent. Capra has realized that the world has moved on and that the forces of Organization have finally triumphed. The need for unified state control of the war effort set the seal on the victory of the New Deal. Though there was a backlash after the war, with McCarthyism, its anti-intellectual bias, and the triumph of the Republicans under the new folk hero Eisenhower, the heart had gone out of Populism. It's a Wonderful Life marks Capra's last, great, triumphant affirmation of faith in individualism. It becomes an allegory of post-war America. Bedford Falls represents the nation, Henry Potter the forces of Organization and George Bailey the spirit of Individualism. In the film, it is George Bailey who triumphs, but in fact it has been Henry Potter. (p. 71)