The “Occupation” protests in Wall Street and elsewhere are understandable. However, there is a certain tone to them which is disturbing, primarily because of its vagueness. In short, they’re heavy on emotion but light on rational think through, focussing not on what economic model we should be utilising, but instead the idea that there is an evil 1% who have ruined everything for everybody else, and if those people vanished everything would be ok.
As a means of venting frustration, this makes perfect sense. But it doesn’t point to an idea as to how we choose to run this planet. Many of the protestors are quick to dismiss capitalism as a failed model, but the reality is that post-1945 spike in living standards in the west was funded by capitalism. The welfare state, although initially funded by social insurance and taxation, eventually expanded to require the much hated capitalist bond markets to make up the deficit. We created a welfare system where people believe in a right to healthcare regardless of actual cost and a fixed retirement date even though advances in healthcare (brought about mostly by capitalism) have led to huge increases in healthcare costs and also increased the cost of funding pensions for people living far longer than when their retirement date expected them to. Follow that with the low taxes movement of the 1980s, led by President Reagan and Margaret Thatcher, which moved to slash tax revenues whilst doing relatively little to match those tax cuts with spending reductions, which then put an even greater demand on the bond markets to fund the welfare system. Today, we’re reaping the reward of that.
Could we create a model that doesn’t need capitalism and the bond markets? Probably, provided we are willing to live in a society free of the baubles of the capitalist system. We could build societies based on the revenue generated within that society, but you’re talking a bare bones society free from iPads and designer labels and Sky Sports, or foreign holidays, credit cards or multiple cars and it’s there that the anti-capitalist occupiers start to lose commitment. You are asking people to work hard for far less disposable income, in effect, a form of permanent austerity programme.
What we are talking about is a more equal society closer to the 1920s in terms of consumer choice and standard of living, and let us not forget that the much hated 1% included Steve Jobs and Mark Zuckerberg and the musicians and filmmakers and many of the people that innovated the products we have grown to love. If we are to have a society where accumulating substantial wealth through innovation is not to be permitted, fair enough. But don’t expect those people to just sit quietly. Somewhere in the world will welcome them, and there they shall go, and prosper, because there is a reason why hardly any of us have products in our homes from actual communist economies. Unless, of course, you decide that they are not permitted to exit the state, and must stay and work. Problem is, the whole of Russia and Eastern Europe tried that from 1945-1989, and it didn’t work either, at least, not without shooting a lot of people.