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Commentary

Lessons From and For the Class Struggle on Wall Street


     
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A consensus has emerged that there really isn’t a consensus view among the Occupy Wall Street crowd and its assorted offshoots. Occupy Wall Street represents a motley collection of the disaffected and disenchanted from across the political spectrum that is more than just a left-wing version of the Tea Party. From the coverage I’ve seen, the Occupiers make some important points about the apparently never-ending wars and distributive politics favoring the few at the expense of the many. They would do well to take a handful of lessons to heart so that they can channel their frustrations in a productive direction.

First, wealth is not prima facie evidence that wrong has been done. When it is allowed to work free from interference, commerce is a positive-sum game. Look at some of the names on the Forbes 400. The Gateses and Waltons of the world didn’t get rich by stealing. They got rich by finding newer and better ways to make other people’s lives better—in short, by creating wealth. This isn’t to lionize the wealthy: no doubt, you will find skeletons in every closet and dirt under every rug if you look hard enough. By and large, though, it has been access to the institutions of commercial society rather than access to the institutions of political society that explains some of the vast fortunes about which so many of the Occupiers are so upset.

This raises a second important point originally made by Nobel Laureate Robert Lucas: economic growth, not redistribution, is what raises people out of poverty. If we’re serious about alleviating suffering, eating the rich is a spectacularly unwise course of action. As Lucas writes: “Of the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of distribution. In this very minute, a child is being born to an American family and another child, equally valued by God, is being born to a family in India. The resources of all kinds that will be at the disposal of this new American will be on the order of 15 times the resources available to his Indian brother. This seems to us a terrible wrong, justifying direct corrective action, and perhaps some actions of this kind can and should be taken. But of the vast increase in the well-being of hundreds of millions of people that has occurred in the 200-year course of the industrial revolution to date, virtually none of it can be attributed to the direct redistribution of resources from rich to poor. The potential for improving the lives of poor people by finding different ways of distributing current production is nothing compared to the apparently limitless potential of increasing production.”

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Art Carden is a Research Fellow at the Independent Institute in Oakland, California, and Assistant Professor of Economics at Samford University.
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