Occupy Wall Street: Right Anger, Wrong Direction

Occupy Wall Street is an enemy of its own cause.

For almost two years the Tea Party movement has voiced its anger, and now a counter-movement is providing balance to a dialogue that is badly needed in America. Corruption and dysfunction in both markets and politics have caused us to reflect on our values and social institutions.  

Like Tea Partiers, the Occupiers represent a range of different concerns, but generally speaking, if the Tea Party protests are anti-government, the Occupy protests are anti-corporation—specifically the greed associated with them. In a sense, the two movements are two sides of the same coin—they are populist ("grassroots") movements sparked by anger at authorities ("elites") for abusing their authority.

Yet, clearly they are calling for radically different policies. In fact, they represent ideologies directly in opposition to one another, so a victory for one is a defeat for the other. That's called "zero-sum," and it is the nature of political action, whereas markets operate on the “positive-sum” principle that all voluntary parties gain.

This distinction draws attention to the misguided agenda of the Occupiers. What they want, at least ostensibly, is more opportunity for the have-nots, and justice in our economic and political dialogue. But the policies they are demanding can result only in the opposite outcome.

Businesses—even large corporations—must operate on the basic formula of customer satisfaction. If people are not happy with a product, its price, or how a company is being run, they will go elsewhere and the company will collapse. Corruption and bad business can sometimes go under the radar for a time, but it always backfires. Despite its tainted reputation, the business community is directly beholden to consumers; or “the people.”

In politics, however, only the will of the majority prevails, and accountability is loose at best. And in a nation that has gradually pushed more power to the federal level, and especially to the executive branch, decision-makers are more separated from the people than ever.

The Occupy movement is mistaken in targeting the corporate world as an enemy of opportunity and justice. And they are mistaken in thinking that government is the answer, as though government could not itself be corrupt and oppressive. Indeed, problems in the world related to oppression and corruption are far more prevalent among the political classes than entrepreneurs and business owners. Corporations look for ways to meet the demands of the community. On the heels of Steve Jobs's passing, some have pointed out the irony of a group using Apple devices to promote their anti-corporate message.

But the Occupiers are not entirely wrong. There are legitimate rebukes to be cast against bailouts, fraud and interest groups. But the way to correct these problems is not a tighter relationship between government and business (i.e. regulation), but a clearer picture of their separate and individual roles in society. Markets provide material needs and laws protect the innocent. Governments should protect citizens against fraud, abuse and harmful neglect, thus businesses should be legally held accountable to fulfill their contracts, be honest with consumers and not pose an undue health threat.

More regulations and redistributionist policies work against the Occupiers' goals by constricting the economy, reducing overall economic opportunity and actually encouraging greater special interest activity in Washington. When congress decides to regulate, all interested parties descend on the Capitol to argue their case and gain the favor of politicians. Rather than being a solution to "crony-capitalism," regulation just becomes another political tool as government selects winners and losers.

Markets operate on a voluntary basis, where all parties win. Governments operate on a coercive basis, where the strongest win. Blending the two together in an effort to achieve an idealistic view of economic equality is to place America on, as Friedrich Hayek put it, The Road to Serfdom. The Occupy protestors, and America generally, would do well to see that free enterprise is the only true democracy.