Hollywood is having a fat year, luring audiences away from video games and home entertainment systems with big-screen spectacles recalling the heady days when sound (or color, or Cinerama) was introduced. Part of the lure is motion capture: a form of computer-generated (CG) animation that records the bodily movements and facial expressions of human actors, then transfers them to invented characters, such as 10-foot-tall extraterrestrials with blue skin, feline features, and long tails.

I refer, of course, to the Na'vi, the non-human heroes of director James Cameron's juggernaut hit, Avatar. Photographs cannot do justice to these creatures, because what is most striking about them is their utterly fantastical appearance combined with their utterly lifelike mobility. This isn't makeup, folks. Nor is it Mickey Mouse.

As many have noted, the plot of Avatar resembles that of a 1992 animated film called FernGully. But visually the two could not be more different, because along with motion capture, Avatar uses another cutting-edge CG technology: software able to generate a three-dimensional world, a virtual space through which a virtual camera can move with complete freedom. (Like a video game, only several gigabytes richer.)

By this means, we are transported to Pandora, a lush inhabited moon in a remote planetary system, whose exotic flora and fauna glow at night like the Sugar Plum Fairy in Vegas, and whose skies are festooned with "floating mountains" lifted from a Song Dynasty scroll. Project all this in 3-D onto an Imax screen, and you have the main reason why Avatar has become the top-grossing movie of all time, breaking the $1.8 billion record set by Cameron's 1997 blockbuster, Titanic.

Another film released over the holidays uses similar technology: Disney's A Christmas Carol. (Although Charles Dickens gets screen credit for the "story," the big credits, for writing, producing, and directing, all go to Robert Zemeckis, CEO of ImageMovers Digital, a division of the Walt Disney Company.) But the characters, notably Ebenezer Scrooge and the three ghosts, motion-captured from actor Jim Carrey, are all too familiar. And so is the virtual world: 19th-century London, prettified in the manner of Hallmark cards and mass-produced paintings by Thomas Kincaid. No wonder Carol has grossed a mere fraction of Avatar's haul.

Highbrow Animation

George Lucas, the creator of Star Wars, once quipped, "Creating a universe is daunting." This is true, as anyone can tell from a quick perusal of the book of Genesis. But for animators, being daunted does not pay. From the painstakingly hand-drawn classics of Walt Disney to the latest CG bells and whistles, the prizes in this realm go to the boldest, most obsessed visionaries. Animation begins in comedy, but by its very nature, it aspires to higher things.

Walt Disney is the prime example. By the mid-1930s, his studio was the world's leading supplier of the "cartoon shorts" shown in movie theaters, but already he was dreaming of producing the first full-length animated feature. That project,Snow White and the Seven Dwarfs (1937), was the Avatar of its day, in terms of labor, stress, cost overruns, missed deadlines, and predictions of disaster. It was also, like Avatar, a triumph. The public loved it; Cecil B. DeMille sent a congratulatory telegram; reviewers across the political spectrum praised not just its cartoon silliness (the dwarfs, the cute forest critters) but also its artistic seriousness (the music, the evil queen, the scenes of terror in the forest).

These kudos went to Disney's head, apparently, because while overseeing his next two features, Pinocchio (1940) and Bambi (1942), he began to dream again—only this time of producing a genuine "highbrow" work of art. Encouraging him were two cultural celebrities: Leopold Stokowski, the conductor of the Philadelphia Orchestra; and Deems Taylor, the composer and critic. The result was Fantasia, a series of animated shorts set to classical music that debuted in New York in 1940.

To judge by Neal Gabler's biography, Disney was so devoted to Fantasia that when it failed to impress the elite cultural establishment, he was crushed. Some critics praised the film's ambition, but overall, the reaction was withering, especially toward the segment which illustrates Beethoven's Sixth Symphony with scenes from Greek mythology—centaurs, fauns, and nymphs—cavorting in a style that can only be described as Disneyesque. Gabler reports that a careless remark by Disney—"This thing will make Beethoven!"—was used "to lacerate him for his alleged philistinism."

The trouble is, not all of Disney's philistinism was alleged. I hate to knock Fantasia, because I admire certain segments, especially the one based on Tchaikovsky's "Nutcracker Suite." But as Richard Schickel commented shortly after Disney's death in 1966, Disney's response to the criticism was not that of a "genuine artist [who] sees his failures…as instructive experiences," but rather a defensive withdrawal. When Fantasia sputtered at the box office (due, some say, to cuts by the distributor), Disney turned definitively away from elite culture: "We're getting back to straight line stuff, like ‘Donald Duck' and the ‘Pigs'."

Of course, some animators never left the "straight line stuff." In striking contrast to Fantasia was the consistent production of cartoon shorts by such Disney rivals as the Fleischer Studios (creators of Betty Boop and Popeye) and Warner Brothers (home of Wile E. Coyote and Bugs Bunny). To measure the difference, just try to imagine Popeye or Bugs joining Jiminy Cricket in a chorus of "When You Wish Upon a Star"!

Similarly, United Productions of America (UPA), a studio founded in 1944 by disaffected Disney employees, spurned Disney's commitment to visual realism and depth. These were men who had borne witness to such heroic Disney efforts as the multiplane camera, a tall contraption with a camera mounted at the top, used to photograph downward through several glass plates, the highest plates painted with the foreground of a scene, the middle ones with the moving characters, and the lowest ones with the background. Rejecting all that, and adopting the modernist preoccupation with "flatness," UPA developed the herky-jerky style of "limited animation" that gave the world Mr. Magoo and the many popular TV series of Hanna-Barbera (Tom and JerryThe FlintstonesYogi BearThe Smurfs). Today the same deliberately simplified style is found in such diverse programs as South ParkSpongeBob Squarepants, and (in a class by itself) The Simpsons.

None of these rivals has come anywhere near the commercial success of the Walt Disney Company, now the world's largest media corporation. Some would argue this has less to do with Disney's lofty aspirations than with the company's brilliant, some would say ruthless, business practices. When it comes to diversifying product, fostering synergy, and dominating global marketing and distribution, Disney still knows how to stay one jump ahead of the competition.

This is true even though Disney missed the first bite of the computer-generated apple, firing a young animator named John Lasseter when he tried to introduce CG in the early 1980s. Since then, of course, Disney has corrected that mistake. Since 1991 it has done business with Pixar, the company Lasseter founded after he was fired; and in 2006 Disney bought Pixar for $7.4 billion. Also used by Dreamworks, Sony, and Warner Brothers, the Pixar style of CG animation has yielded a string of hits—ShrekIce AgeFinding NemoThe IncrediblesRatatouilleWall-EUp—that make all other forms of animation look obsolete.

Yet the Pixar style is not just a look, it's an attitude: irreverence carried as far the market will bear, and no farther. As inThe Simpsons, each satirical barb in a Pixar-style film is tipped with the honey of whatever sentiment is appropriate to the target. For example, when the target is family, outrageous betrayal is allowed as long as it doesn't disrupt the basic bonds. Far be it from me to criticize such a winning formula. But it's basically a comedy formula, and as evidenced by the life of Walt Disney, the creative freedom promised by animation tempts the most gifted practitioners to reach higher.

Faiths, Old and New

What does reaching higher mean in 2010? For the answer, look again at Fantasia, which along with artistic ambition displayed religious aspiration. In 1940 it was not uncommon to see Christian, especially Catholic themes in Hollywood films. So the ending of Fantasia—a vision of satanic revelry set to Mussorgsky's "Night on Bald Mountain," followed by a procession of candle-bearing worshipers into a cathedral of trees set to Schubert's "Ave Maria" —attracted little comment. Yet as noted by journalist Mark Pinsky, this was "the most explicitly religious sequence in any Disney feature until The Hunchback of Notre Dame," released in 1996.

This means that for the last half-century the Disney corporation has been airbrushing religion out of the Magic Kingdom. From the black magic in Snow White to the voodoo in The Princess and the Frog (2009), the supernatural in Disney consists of folklore and magic, not miracles and faith. As Pinsky points out, some Christian evangelicals regard this as sacrilege. But as he also argues, the "Disney Gospel" of "dreaming, wishing, hard work, love and self-sacrifice" is made up of equal parts American Dream and biblical ethics.

Pinsky makes the further point that while Disney "always called himself a Christian," he also "insisted that any narrow portrayal of Protestant Christianity (or any religion, for that matter)…was box-office poison, especially in lucrative, overseas markets." The prescience of that comment is borne out today, as Hollywood earns two-thirds of its revenue overseas and gazes hungrily at huge potential markets in India and China. Given the global nature of today's audience, the need to avoid "narrow portrayals" is greater than ever. And this goes double for animators with lofty aspirations.

Does this mean the future is reflected in the wide golden eyes of the Na'vi? The top brass at Sony, Dreamworks, even Fox (which begrudgingly bankrolled Avatar) are not announcing any more $500 million productions. This may change, as Avatarbreaks box-office records in country after country. But if the major studios do launch a new project on this scale, they had better heed the real lesson of Avatar, which is less about money and technology than about a new belief system replacing the Disney Gospel.

New York Times columnist Ross Douthat calls this new belief system "pantheism" and belittles it as "Hollywood's religion of choice." But because he focuses exclusively on America, he misses the most important source of this creed: the master of Japanese animation, Hayao Miyazaki.

Miyazaki came of age in U.S.-occupied Japan but does not claim Disney as an influence. Instead, he points to European animation, which has always resided more comfortably (if less lucratively) in the realm of fine art. And despite his friendship with Lasseter (who arranged a cushy distribution deal with Disney), the 69-year-old Miyazaki is hardly about to go Hollywood. On the contrary, his lyrical, hand-drawn work draws most of its inspiration from Shinto, the traditional Japanese animism, with its belief in kami, spirits that dwell in nature, symbolize the virtues, and represent the ancestors.

This animism blends seamlessly with environmentalism in many Miyazaki films. For example, Princess Mononoke (1997) is about spirit-animals defending a primeval forest against a rapacious mining company (basically the same plot as Avatar). In Spirited Away, winner of the 2003 Academy Award for Best Animated Feature, the "stink spirit" of a polluted river cries out to be cleansed.

The great advantage of this new belief system is its universality: every government on earth gives lip service, at least, to preserving the natural environment; and every culture possesses a repository of folklore used to entertain children and teach them valuable lessons. To call this "pantheism" is to join the ranks of those who would condemn the fairies, gnomes, and talking animals in Disney.

Most likely, there's a political motive behind Douthat's animus against animistic animation. In Avatar, Pandora is despoiled by a 22nd-century version of a greedy American corporation backed up by brutal American mercenaries. The human hero is a former Marine, but his heroism consists of going native and leading the Na'vi in a successful insurgency. These references are so heavy-handed, one wonders if Cameron and his fans are aware that the Taliban and al-Qaeda are not peaceful tree-worshipers; or that American soldiers fighting and dying in Afghanistan and Iraq do not deserve to be caricatured as goons.

State-of-the-Art Propaganda?

Will this glib anti-Americanism become part of animation's new belief system? It's hard to predict. But for the sake of argument, let's say it doesn't, and the next generation of spectacular films is based on the Gospel of Miyazaki without the Michael Moore overlay. Would that be such a bad thing?

It depends on the alternative. The worldwide religious resurgence of the last 50 years has been a good thing in many ways. But it has also led to the transmogrification of faith into extremist ideology. What would happen if one of these extremist movements got their hands on the money, technology, and expertise to produce Avatar-quality propaganda?

Here's one possible scenario. Avatar is Sanskrit for "descent" or "appearance"—the earthly manifestation of a Hindu deity. One of the first films to reach India was Vie et Passion du Christ (1903), a French silent film with state-of-the-art special effects such as color (hand applied) and splicing to make divine beings such as the Angel of the Annunciation miraculously appear and disappear. So impressed was a Bombay printer named Dadasaheb Phalke, he vowed to do the same for the Hindu gods.

Today Phalke is revered as the father of Indian cinema, and the making of his first major film, Raja Harishchandra (1913), is the subject of Harishchandrachi Factory, India's entry for Best Foreign Film at the 2009 Academy Awards. This new film is a light-hearted comedy that avoids the freighted topic of religion. But that doesn't change the fact that Phalke adapted his story from the Hindu epic the Mahabharata. The Hindu roots of Indian cinema run deep, and right now there are quite a few Hindu extremists who would like to turn that country's prolific film industry into a propaganda machine.

To its credit, Bollywood has avoided taking sides in the current culture war between extremist Hindus and Muslims. Some leading figures, such as director Yash Chopra and actor Shah Rukh Khan, have made films urging religious tolerance and reconciliation between India and Pakistan. But others have stooped to anti-Muslim stereotyping. And as the industry acquires more technical expertise from its partners in Hollywood, the likelihood grows that this kind of propaganda could become more powerful and sophisticated.

Needless to say, there are also plenty of Islamist extremists who would happily return the compliment, using cutting-edge special effects to foment hatred against all infidels, including Christians and Jews. One barrier might be the Islamic stricture against graven images. But barriers can be gotten around, if the atmosphere is sufficiently heated. In volatile conflicts such as the Indian-Pakistani dispute over Kashmir, what better way to rally the masses than with the entertainment equivalent of the nuclear bomb? Compared with such a prospect, the Gospel of Miyazaki looks downright benign.