What is “Occupy Wall Street” — along with other “Occupy” movements that have popped up in various spots — all about in the end?
Many people seem bewildered. They ask: What does the movement want to achieve exactly? What’s the point?
Occupy Wall Street claims to speak for the 99 percent that are not in the top one percent of income earners. That’s breathtakingly presumptuous.
In contrast, the movement’s critics say Occupy Wall Street amounts to nothing more than ragtag liberals protesting free enterprise, and engaging in class warfare. And that’s pretty much the case.
However, saying that these protestors don’t know what they want is off base. Their intentions are quite clear — to attack capitalism as fundamentally immoral. But they succumb to four big mistakes.
First, some protestors are outraged by government bailouts in recent years of various financial institutions, as well as auto manufacturers. A solid majority of Americans agree on this count. A Rasmussen Reports poll released on November 17 found that 59 percent of voters view the bailouts as being bad for America.
But government bailouts have nothing to do with free enterprise. Instead, that’s bad and costly public policy. If upset about bailouts, then the protests should focus on the White House and Congress.
Second, the big sin supposedly rampaging throughout capitalism, according to this crowd, is greed, especially corporate greed. Occupy Wall Street members seem to have watched the movie “Wall Street” and mistook Gordon Gekko’s “Greed is Good” speech for economic reality.
Last time I checked, though, sin, including greed, is not limited to any particular sphere of life. It’s something that humans can succumb to whether in a corporation, in government, in a nonprofit, in a church, or at home. Indeed, when people sleep in parks and take to the streets to protest against wealth, it’s worth keeping in mind that envy, too, is a sin.
But a key flaw to the greed claim comes from the fact that these protestors fail to understand how the free enterprise system works, in particular how success comes about in a market economy.
In socialism or a large welfare state, one gains by using political power or influence to take from others. A person need not perform any worthwhile work, need not build or create, and need not be concerned with others in any way.
It’s the exact opposite with free enterprise. Before individuals can fulfill their own needs and desires, they must first look to see what others need and want. An employee must provide a service to an employer. For an entrepreneur, success only comes when creating a new demand among consumers, or finding a better way to provide a good or service. Likewise, a corporation — namely, its shareholders and employees — can thrive only by serving customers well.
No matter what one’s personal motivations might be — such as improving the lives of others, seeking to create, making a better life for a family, or even wanting a fast car and a yacht — free enterprise requires that a person first understand others and meet their demands. So, if someone is consumed by selfishness and greed, the free enterprise system actually makes it more difficult for that person to succeed.
The third problem with the Occupy Wall Street movement is its apparent view that the economy is a zero-sum game. That is, if one person succeeds and becomes wealthy, it must be at the expense of someone else. If you have a bigger piece of the pie, I must have a smaller one. This thinking generates class warfare and envy.
But in reality, economic growth occurs. To stick with the pie analogy, the pie either gets bigger, or more pies are baked. Free enterprise provides the incentives for entrepreneurship, investing, inventing, innovating, and improving productivity and efficiency. In turn, economic, income, and employment growth accelerate.
Fourth, for the many claims about the freedom to occupy parks and clog streets, the Occupy Wall Street movement has an infantile, limited grasp of freedom. Capitalism is morally superior to other economic systems because of freedom. Individuals are free to own, use, develop and derive returns from their property. And one of government’s primary duties is to establish and protect property rights. From this foundational protection of property — both physical and intellectual — and an overall sound rule of law, free enterprise can flourish, which creates wealth; decreases poverty; and vastly reduces the need, but also provides resources for private charity and government to aid those in distress.
Freedom works in both the political and economic realms. In fact, as we have learned from recent history in places like South Korea and Taiwan, economic freedom helps expand political freedom. In those places, freer markets generated and expanded wealth, with demands for greater political freedom following, and being achieved.
Occupy Wall Street emerges from a combination of frustration and ignorance. In this economy, one can sympathize with frustration. But the ignorance cannot be accepted, as it misdiagnoses what ails us, and works to tear down the most morally and economically sound system known to mankind — free enterprise.
Raymond J. Keating is the chief economist for the Small Business & Entrepreneurship Council. His new book is “Chuck” vs. the Business World: Business Tips on TV.