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Badlands, the extraordinary first film directed by Terrence Malick, a 30-year-old Harvard graduate and Rhodes Scholar then known primarily for translating Heidegger, opened very quietly 40 years ago next month.

After gradually accruing a reverential reputation as one of the most haunting accounts of heartland violence and alienation ever made – and influencing everyone from Oliver Stone and Quentin Tarantino to Bruce Springsteen – it kicked around in various substandard VHS and DVD versions for decades, a kind of pale ghost of what people remembered seeing on screen those many years ago. That changed this week with the Malick-approved release of the long-awaited Criterion Blu-ray version of the movie, which can now be appreciated in all its subtle, dreamlike glory.

(Although approved by the notoriously publicity-shy director, Malick himself does not appear anywhere on the extras-added disc, except for an incredible moment in the movie itself when he appears on a doorstep as an architect who rings the killer's bell and lives to walk away.)

Inspired by the notorious 1958 killing spree perpetrated by the 19-year-old Charles Starkweather and his 15-year-old girlfriend Caril Ann Fugate – which left 10 people dead and introduced America not only to the notion of random serial killing but a killer who fancied himself a self-made outlaw celebrity – Badlands took one of the most troubling incidents of the buttoned-down 1950s and reimagined it provocatively for the dubiously liberated, Vietnam-fatigued, Nixonian-hardened 1970s. Although set in 1959 and explicitly coded as a period piece, Badlands felt deliberately and unshakably out-of-time, a nightmare recurring because the fear it incarnated was as livid now as it ever was.

Starring 31-year-old Martin Sheen as the Starkweather figure Kit Carruthers, a genial psychopath with good manners, black-and-white cowboy boots and a carefully maintained movie star pompadour, and 24-year-old Sissy Spacek as the Fugate stand-in Holly Sargis – the two of whom meet cute when Kit's garbageman spots Holly twirling a cheerleader's baton on her front lawn – Badlands established a tone of calculated dissociation from the outset. While Holly's strangely poetic, teen-romantic narration ("Sometimes I wished I could fall asleep and be taken off to some magical land") describes a world of swooning innocence and longing, the movie shows us something else: a place where untethered souls drift dangerously from one incident of spasmodic violence to the next, where the ravishing and indifferent vastness of the Colorado landscape stands in chilling contrast to the acts perpetrated by the puny figures that cross it in a dust-churning stolen Caddy. Even the music functions to complicate easy response: In what other movie would the music of Erik Satie seem so appropriate for a mid-western murder spree, or Nat King Cole sound so lovely as a soundtrack for a post-homicidal twirl in the headlights?

Although audiences were well-conditioned to the lovers-on-the-lam scenario, a road movie subgenre that dated back at least to Fritz Lang's You Only Live Once and ignited a countercultural sensation just seven years previously with Bonnie and Clyde, Malick's version was something new and possibly even more unsettling.

For Kit and Holly's actions couldn't be written off as the result of poverty, institutional indifference, social pressures, elder generation insensitivity or any such external convenience. When Kit kills Holly's father (Warren Oates) with a bullet to the back in the man's own living room, it's clear he's done so as a matter of choice, a statement of style and a gesture of pure convenience. But it's also an invitation to Holly to join in the movie he's just got rolling for them both, and her expression of inscrutable blankness over the act – our first indication that the casting of the largely unknown Spacek was a stroke of inspiration – suggests both that she's ready to take her part and to play the supportive audience. This is murder as a role-playing game. This is a movie about living in a movie.

Although Badlands stunned its first audience into silence at the 1973 New York Film Festival – where it premiered alongside Martin Scorsese's similarly crowd-silencing Mean Streets – it failed to make much of a stir on general release, but even in cropped, faded, bowdlerized and generally mutilated form it found a constituency and held it. By the time the seventies were being widely classified as a second golden age of Hollywood movies in the nineties, Malick's first movie was routinely held up as proof of the claim. Moreover, now that the director's own reputation, thanks largely to the conspicuous art-house crossover success of The Tree of Life a couple of years ago, appears household-word secure, Badlands has attained the status of a must-see first work of genius. Which it definitely is, but its power is hardly contained by even the most generous definition of art. Badlands is a murder ballad sung from the heart of the land, that collective darkness where the movies do our dreaming for us.

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