Someone needs to tell the Occupy Wall Street protestors that, while it may make some sense to be upset at the banks, etc. that were involved in the actions that led to the economic crash, that these were but secondary players. They ought to be protesting the primary cause, the primary players who created this crisis. That would be Washington, D.C. That would be the federal government and the Federal Reserve.
To believe the protestors, greed magically and suddenly, for no reason anyone can discern, surged all at once, and we ended up in an economic crisis. It is more likely that the amount or level of greed remains the same across time, meaning it cannot explain the crisis. What one has to seek out, then, is why so many people acted exactly the same way at the same time. How is it possible that everyone can be misinformed in exactly the same way, at exactly the same time?
More than that, the protestors also have to explain why and how it is that "greedy corporate fat cats" can benefit from a bad economy. Poor people can't buy as much as wealthy people. Thus, greedy businessmen want more wealthy people, as that means more people buying their stuff, meaning more profit. Only a complete idiot -- or a believer the economy is a zero-sum game -- believes otherwise. The protestors must believe this nonsense, or they would not be out protesting corporations now, three years into the crisis, rather than in 2008. What they do not realize is that it is not the corporations per se that are at fault for the continuing economic crisis, but the government because of the bailouts and stimulus plans and continued distortion of information. The markets try to adjust, and the government keeps feeding people bad information. Thus, it cannot adjust. The protestors ought to be blaming the people who are giving out the bailout money more than the people who accept it (who doesn't want free money? -- other than the banks that did not want to participate, but were threatened and forced to by the Bush administration, which are the same banks, ironically, being protested against now). Of course, these same protestors are asking for their own government handout -- so it's not that surprising they are not protesting their potential benefactors.
In other words, this protest is confused precisely because the protestors do not know what happened, do not want to protest those who caused the problems because they want those same people to give things to them, and because they do not have the least understanding of economics. They are the 99% alright. They are the 99% who don't understand economics (but, because they buy and sell things, think they do).
3 comments:
This is an excellent post. Thanks for writing it.
While, I won't dwell on the protesters. I'll say that anyone who advocates Austrian economics has already declared intellectual bankruptcy. Since, you're a specialist in humanities, I'll give you a pass.
I suppose, Alec, I should ask you first what school of economic thought you consider most valid. Surely it's not the Keynesians, whose policy recommendations gave us 70's stagflation and the ongoing recession. While mainstream macroeconomics has clearly done a great job of explaining both the causes of the recession and why we remain in it. And anyone who advocates socialism today is laughable. In the meantime, Austrian economics gave us one of the three people who developed the subjective theory of value, the defeat of socialist calculation as a realistic understanding of how the economy works, the idea that market coordination is required to overcome our inherent ignorance of most things, marginalism, spontaneous order theory (which has been rediscovered by mainstream economics in complex adaptive systems/self-organization theory), and a far more developed theory of entrepreneurship. I'm happy to associate myself with a school that includes Israel Kirzner and Nobel Prize winners like F.A. Hayek, James Buchanan, Vernon Smith, and Elenor Ostrom. Even now, mainstream economics is evolving more and more toward positions already held by Austrian economics. It is the only school that consistently uses complexity science in its understanding of economics. That puts it ahead of the rest, by decades. The rest are catching up. Except for those schools which are in fact intellectually bankrupt, like socialism and Keynesianism, of course.
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