wallst

I’ve put off writing about the Occupy movement until now. It wasn't clear to me what Occupy Wall Street and Occupy London Stock Exchange wanted to achieve. Indeed, it still isn’t. But I’ve seen more and more articles like this, which claim that their problem is with governmental corporatism, which are worth considering. (I'm not particularly convinced by that article's take on economics, but it's just an example.) If this is correct, then the Occupy movement is more sympathetic that many have given it credit for being. Sadly, I don't think this is the case.

What do people mean when they say corporatism? The term is widely used but doesn’t seem to have a common definition. I and many other free marketeers use it to describe government collusion with big business; whether through direct cash transfers like bank bailouts, trade protection for industry like agricultural tariffs, indirect subsidies like taxpayer-funded roads or limited liability laws (as distinct from limited liability contracts, which are OK because they only apply to contract parties), or artificial barriers to entry like licensure. In this view, for example, Tesco is seen ambivalently, benefiting in some ways (unpriced roads, say, or agricultural subsidies) and suffering in others (such as import tariffs).

But this is not what many other people mean by the word. By corporatism, many mean a system in which large corporations exist, in their view wielding too much “market power”, such as the ability to sell below cost price to undercut rivals or to put pressure on suppliers to reduce their asking price. In this view, Tesco is a bad thing because of its size alone, irrespective of whether that size comes from the state. And, typically, they are comfortable with using the state to cut a large firm down to size.

This distinction is important: libertarians who are encouraged by the Occupy movement’s rhetorical opposition to corporatism should be wary of people using the same word to mean two different things. If you are opposed to corporations being sponsored by the state, I’m probably your ally.  If you want the state to stop big corporations from existing at all, I’m probably not.

The Occupy protest’s focus on Wall Street and, especially, the London Stock Exchange make me think that they are in the latter camp of anti-corporatists. Yes, Wall Street is home to bailed-out banks, but Occupy Wall Street hasn’t focused on the banks – they have targeted the financial sector in general, which is certainly not all (or even mostly) a creature of the state. Occupy London Stock Exchange’s focus has been even broader; the target has been publicly-listed companies, most of which are hardly recipients of government privilege at all.

The Occupiers are not anti-government, they are anti-wealth. Their slogan, “we are the 99%”, highlights this. The only way this distinction between the bottom 99% and the top 1% makes sense is if it is about money, not state-granted privilege.

Many Occupiers would probably say that they are OK with people who have really earned their money by making people’s lives better. But what meaningful definition have they settled on for this? Did Wilt Chamberlain deserve his millions, earned by taking a small amount of money from thousands of willing spectators? Does Wayne Rooney? Many Occupiers could answer yes to both questions. But what significant difference is there between Rooney and, say, the CEO of Royal Dutch Shell, or some other highly-paid CEO? If they’ve been paid the money willingly by shareholders, they deserve the money just as much as a sportsman who has been given money by thousands of spectators.

Most of the top 1% of income earners (or wealth owners) have made their money through market mechanisms, by selling something that people want. In fact, the biggest recipients of state largesse are usually the voting middle classes, who take from both the rich and the poor. I suppose “we are the bottom 60% and the top 2%” doesn’t have the same ring to it, but if the Occupiers were really against state largesse rather than the wealthy themselves, it would be a truer slogan.

Alas, despite the optimism of many libertarians, I don’t think there is much that is liberal about the Occupy movement’s aims. Whatever superficial resemblance to aspects of the free market cause there is in the Occupiers’ rhetoric is just that: superficial.

If the Occupy movement focuses on what it could achieve, it might realize that government is the only institution that will listen to it. If that happens, there might be some common cause with free marketeers – a broad-based anti-bank bailout campaign is long overdue in this country, for instance. But as long as Occupiers insist on bleating about “the 1%” and targeting legitimate private firms as if they are criminal bodies, I’m not optimistic.