Certainly, the disparity in monetary wealth between the ‘haves’ and ‘have nots’ is both absurd and disturbing.2 Worldwide, a tiny percentage of the population possesses the majority of the wealth.3 This issue is no longer primarily conceptualised as an inequity between the developed and the developing world. Post-GFC popular consciousness of wealth inequity is characterised by the worker losing their house to bank foreclosure, with the CEO of that bank being worth tens of millions of dollars.4 The fact that there exists this inequality in monetary wealth, and consequently social and political advantage, is indisputable. In this context, there is almost a sense of inevitability about the Occupy movement: the rising call of ‘the 99%’.5
Yet, does it make sense to blame capitalism for this present state of inequality? The argument advanced in this Opinion is that government is the better target. The problem with condemning capitalism for our present woes is that it necessarily imbues capitalism with a motive or personality that it simply does not possess. Capitalism has no philosophy or morality: it is a blunt instrument. Capitalism is merely mechanics, a profit-driven economic system, not a theory to be despised or distrusted.
Consequently, portraying capitalism or capitalist enterprise as ‘evil’ is ludicrous. In fact, the capitalist pursuit of profit has been responsible for many boons to human society. For example, the current advanced state of medical science has been reached largely due to capitalist enterprise; due to a hunger for profit. Similarly, the advent of a market economy in China and India has pulled many millions out of the most abject poverty, and created a framework for self-improvement that never could have been achieved by state planning and welfare.
However, it is possible to argue that a blind trust in laissez-faire capitalism can define substantive values. Leading historian and essayist Tony Judt observed, just before his death in 2010, that it is the ‘uncritical admiration for unfettered markets, disdain for the public sector, the delusion of endless growth’ that has led to the global obsession with wealth and the cult of materialism.6 It is presumably this attitude that has prompted the Occupy movement. Nonetheless, capitalism remains only a means to profit, and we are misguided if we look to it for moral principle.
On the other hand, the manipulation of capitalism has had tremendous social consequences, and capitalist enterprise is a powerful tool to achieve specific ends that we may value as a society. It is the role of government to deploy capitalism in such a way. For instance, government need only create a new market consistent with laudable policy goals and capitalist enterprise will exploit it: it is the nature of capitalism. For example, if a policy objective is to reduce carbon pollution, then it might simply be a matter of parliament passing a law (and government seriously enforcing it) that makes it illegal to make, buy or sell vehicles that derive power from fossil fuels. This, in a pen stroke, creates a sizeable market for capitalist enterprises to manufacture and sell vehicles that do not derive power from fossil fuels.
It is perhaps by picketing Wall Street and Martin Place that the Occupy movement has made its blunder, attracting the criticism that it is directionless, or at least misguided. We are looking in the wrong place by attributing our calamities to the abstract, and thereby unaccountable, idea of capitalism. If the ‘99%’ want a shift toward lasting social change, then that can only be achieved by lobbying the body charged with representing them: Parliament. A strong government can achieve just about any aspirational purpose, by pointing this blunt instrument of capitalism where we as a society will it to go.
ALICE DRURY and MARK J RANKIN
© 2012 Alice Drury and Mark J Rankin
1. See, eg, Occupy together website, 2012, http://www.occupytogether.org/.
2. The Economist recently published a report detailing the Gini coefficient of a sample of countries, see ‘Poverty, Inequality and Redistribution’ 17 January 2012, The Economist Online, http://www.economist.com/blogs/graphicdetail/2012/01/focus-2. In addition, it is worth noting that presently, there exist 1226 billionaires in the world whose combined worth is $4.6 trillion – see 'The World’s Billionaires' (7 March 2012) Forbes http://www.forbes.com/billionaires/.
3. Estimates vary but it is highly probable that the richest 1 per cent of the world’s population own more than half of the world’s wealth, and the richest 10 per cent own nearly 90 per cent of global assets — see http://www.wider.unu.edu/publications/working-papers/discussion-papers/2008/en_GB/dp2008-03/_files/78918010772127840/default/dp2008-03.pdf.
4. As an illustration of this hypothetical, in Australia the average wage is approximately $70 000 per annum, while the CEOs of the big four banks earn on average approximately $10 million pa each.
5. Statistics like these prompted Occupy Wall Street, the original Occupy movement, to adopt the slogan ‘We are the 99%’. See http://occupywallst.org.
6. Tony Judt, Ill Fares the Land (Penguin, 2011) 2.