And now for something completely different

Georges Melies approached cinema as a showman, a stage magician: he was a performer trying to amaze and astound his audience, rather than worrying about how to tell the story. He started doing the tricks that you can play with cinema: running tim e backwards, chopping it up and putting it in a different order. The famous scene in Voyage to the Moon where the rocket lands in the man in the moon's eye is such a strong image because it shows science and technology violating the natural world. A punc h in the eye for the moon - which is personified. That simple, metaphorical stuff - I don't know why we don't do it any more. His films are so naive, and yet they're completely magical.

Melies tended to work on a flat surface: it's a world of cut-outs. And he holds the frame like a proscenium arch. That's one thing I used to be criticised for in my cartoons for Python, which I think were very much influenced by Melies: I was very slow in learning the vocabulary of film, the close-ups and all that. There's a script I've written called The Defective Detective, which I haven't got the money for yet but which I want to do like a Melies film in which the backgrounds are all trompe-l'il paintings, and yet there are real, three-dimensional people moving among this stuff.

Although we can now do far more elaborate effects seamlessly, sometimes we lose the magic. There's something to be said for doing things crudely and letting everybody marvel at how you managed to pull it off! Naturalism in films is seen as being realistic, but I don't believe that: it's just another artistic trick. What intrigues me about the world of Melies is that, although it's totally artificial, it probably comes closer to certain truths. In The Adventures of Baron Munchausen I was trying to do a bit of that. I liked the idea that a lie can be closer to the truth than a fact.

Since those early days, the system has become more and more ossified as it gets bigger. It has become dominated by bureaucrats: agents, lawyers, managers, City executives. The talents, the entrepreneurs and the showmen are in the minority. Whereas in Melies's time it was the other way round. They were cowboys. Outrageous things were going on; they were stealing and suing. You're talking about a very small number of people, but there was an incredible amount of energy. Animation still has something of that today because it costs less money. One person can sit there and draw the movie and you've got total control. That freedom is what the first film-makers had.

It's not just films: I think society as a whole has lost that kind of innocence: the ability to see things in a much freer and more inventive way. The only place I find it still is in children's books. We've become so trapped in material things that we've lost the fun of life: if you don't have the right car, as opposed to a silly car, you're a failure. I've lived in England for the last quarter of a century and in that time even the English have become less eccentric and playful. Everybody's become more frightened and nervous and trapped in a narrow view of the world. We're really getting dull! I hope I share the kind of madness Melies had - a madcap, outrageous, silly approach to doing things, just for the sheer joy of tricking people. Dancing girls strutting round the place. In one film, he's filming the sky and all these comets suddenly have faces and there are women floating through the sky. It's beautiful! You can see he loved life in all its idiosyncrasies.

He went bust, like a lot of those early film people. They gambled everything; that's one of the things I liked about them. I hope I don't end up like Melies on Montparnasse station in Paris, on one of those little stalls selling children's toys. Isn't that a sad ending? Or maybe it's a wonderful one . . .

n Terry Gilliam's films include `Time Bandits', `Brazil', `The Adventures of Baron Munchausen' and `The Fisher King'. He is the presenter of `The Last Machine', a five-part series on the origins of cinema, which begins on BBC 2 on Saturday at 8.00pm