The Occupy movement has attracted a lot of mockery for its naivety. Bristling with iPhones, clothes made in China, and pure water in plastic bottles, they really gave me a laugh when they demanded free wi-fi! Most of the scorn is well-deserved but there is a kernel of important truth in their complaints.
To understand it, we must first winnow the wheat from the chaff. For starters, where on earth did they get the idea that the capitalism they are complaining about is “unregulated”?
When asked, no-one can ever name even one unregulated market.
The classic example of unregulated markets that people give is the financial markets. But a quick Google search shows the following regulators:
And that’s just at the federal level, just in the USA, and just in the markets for money and credit.
Reflect that this represents thousands of officials, whose permanent full-time function is to manipulate supply, demand and prices so as to change them from what they would be on the market unhampered by such interventions.
So for anyone concerned with the facts, that rules out unregulated capitalism as a cause of the problem.
Indeed the very idea that the problem is unregulated capitalism only makes sense viewed from the standpoint of full government control of all the means of production – full socialism. Yet no-one will own up to that conclusion.
No, the Occupiers say, the solution is somewhere between the level of big government that we have now, and full socialism. But they can never identify any principle to distinguish the economic interventions that are excessive, from those that are not. The only principle is that in any given case the problem is blamed on unregulated capitalism, and the solution is assumed to be more government intervention. So it’s not a rational belief system: it’s an “if-everything-were-nice-then-wouldn’t-everything-be-nice?” belief system.
Stock markets perform three major economic functions. The Occupiers wrongly criticize all three, when only one is the cause of their valid complaints.
Stock markets negotiate the provision of capital which companies used to produce the goods and services that we all use: the food, clothing, shelter, transport, communications and entertainment. Without capital we would produce everything with our bare hands. While the protestors use all these goods and services more than most other people in the world, their protests about “greed” ring hollow.