No doubt, by now you’ve heard about the Occupy Wall Street movement..
..the collection of (mostly) young people protesting against banking corporations in Manhattan. This movement started September 17th and has spread to 70 major cities in the US and 900 cities world-wide. OWS focuses on three aspects: social/economic inequality, corporate greed, and political lobbying by the financial sector. If you want more facts, feel free to check out the wikipedia entry, as it’s really a waste of my time and yours to regurgitate it all here.
Last night, a very appropriate special was on PBS, entitled “Free or Equal”. This one-hour show took a look at Milton Friedman’s economics and, specifically, the series he hosted in 1980 called “Free to Choose”. For those that don’t know, Friedman was the economicÂ advisorÂ to Reagan and received the Nobel prize in 1976. He was a very smart man that influenced nations and individuals. In this special last night, the host, Johan Norberg, visited the places that Friedman had influenced in the 70s and 80s and took a look at what they are now. Honk Kong, Chile, and Estonia (directly, to name a few) have allÂ benefitedÂ greatly from the free market capitalism that Friedman brought with him. In the case of Chile, the new freedoms in the marketplace directly translated to a yearning for more freedom in society and politics. Within a short time, the dictator, Augusto Pinochet, was forced to resign and a democratically-elected president took his place.
Hong Kong, however, met a different fate. Soon after Friedman’s work there, it fell under Chinese rule. Seeing the great prosperity by what was once a refuge town, the Chinese adopted a laissez faire attitude towards Hong Kong economically. Hong Kong was free to trade internationally without restriction,Â tariffs, and government interference. In turn, it would be silly to lobby or appeal to the government, as it held no control over the market.
Estonia was also a victory for the free market, as a poverty-ridden former-USSR state was transformed into the wealthiest country that resulted from that breakup.
So let’s back up a little..
Free market capitalism, by definition, is free from governmental interference. Trade is conducted locally, nationally, and internationally, without penalty or restriction. Competition becomes fierce and companies/individuals must rely on innovation, competitive pricing, or tremendous customer loyalty to succeed. Those who do, turn a profit. Those who don’t, lose money and have to refactor what they are doing. This naturally forces advancements in almost all business sectors and increases the demand of producers in a system. Costs go down and both the buyer and the seller, ultimately, win. Granted, that’s a simplified overview, but this is, after all, a blog.
Tying this in to OWS..
1) social/economic inequality. Friedman made a very keen observation that what some people (in this case, OWS-ers) want is an equal finish line.. this is a wrong mentality to have. The equality should be the starting line. He argues that in a system, freedom and equality are not necessarily one and the same. By its very definition, freedom will allow some to succeed and others to fail. Both those who fail and those who succeed have an incentive to win. In an “equal” (economically) system, there is no incentive to do anything, as the successes are split with the losses. You might ask.. “Doesn’t that sound like socialism?” Right you are, my friend. This is exactly the direction that a country takes when it’s leaders decided to start redistributing wealth.
2) corporate greed. If a company makes money, it has the right to spend it how it wills. Breaking the down a little bit– if the owner of a company decides to take a massive paycheck at the expense of his workers, that is his/herÂ prerogative. Employees are free to leave and work for a different company and, before long, that first company will drown by the owner’s own greed. The successful company will be one that balances and moderates itself. You and I should feel no claim to the profits any company claims unless that company is owned by us. How is demanding banks repay our loans for us any different then the greed they display themselves? If they are greedy, so be it. If it’s their money, they have a right to it.
3) political influence. If you remember back to the example of Hong Kong, in a truly free market economy, the government has so say, so lobbying has no effect. Once government interferes with tariffs, subsidies, restrictions, subsidies, penalties, subsidies, taxes, subsidies, and employment meddling (gender/race quotas, etc), companies and industries are free to lobby for their benefit.
So you see..
By saying, in essence, “down with capitalism”, you’re making a stand against your own point. You rally against an economic philosophy that benefits everyone as a generalÂ populous, incentivizes everyone to succeed by their own hands, and increases quality of life… the very economic philosophy thatÂ eradicatesÂ the negatives you list..