Stalag 17 - Ending Explained

The central twist is that the security chief, Sgt. Price, is the German spy. He is a German national who lived in America and was planted in the camp. Sefton deduces this by observing the shadow of a loop in the light cord (Price's signal) and confirming it when Price knows the time of the Pearl Harbor attack in Berlin time, not American time. In the climax, Sefton exposes Price to the barracks. The prisoners then use Price as a decoy, throwing him out into the yard with tin cans tied to him to draw the guards' machine-gun fire. Amidst the distraction, Sefton cuts the wire and escapes with the wounded Dunbar, leaving the remaining prisoners to marvel at his ingenuity.

Many critics view the film as an allegory for the McCarthyism and the Red Scare of the 1950s. The barracks represents a paranoid society where fear leads to witch-hunts and the persecution of the non-conformist (Sefton). In this reading, the 'mob' is the American public ready to turn on their own based on suspicion rather than evidence. Another interpretation suggests the film is a critique of unchecked capitalism vs. socialism, with Sefton's 'racket' exposing the moral ambiguities of profiting from collective misery.