MANY of those occupying Wall Street and the City of London object to corporate greed. Yet greed is usually harmless.
For example, I may well be greedy. I would like to earn more despite already earning what many of the protesters would consider more than enough. But my greed is harmless because I cannot force people to give me their money; I must persuade them to part with it. And I can do that only by offering them something they want in return. Given my impotence, my greed is beneficial to others. It inspires me to come up with valuable things to offer them.
The anti-capitalists must really be worried about corporate power. And their language suggests they are. They claim that large multi-national companies “exploit” workers and “force” other firms out of business. They speak as if corporates use coercion to satisfy their greedy desires.
Sometimes companies do wield coercive power but, ironically, never in the free markets that anti-capitalists despise.
Imagine a subsistence farmer in a third world country working 70 hours a week to provide himself with about $5 worth of food and shelter a day. A clothes-making factory opens nearby offering jobs that pay $1 per hour and a 70 hour week. He will probably take the job, since it doubles his income.
If the factory had been opened by a local man using a subsidised micro-loan, those occupying the City would celebrate. If started by an American firm, however, they will claim the worker is being exploited. But where is the exploitation? If working for $1 an hour benefits the man when he is paid by a poor local, it benefits him when he is paid by a rich American. And, in both cases, the job is taken voluntarily.
Or take the greatest crime in the imagination of British anti-capitalists: a supermarket chain such as Tesco “forcing” a high-street butcher out of business. Where is the force? The supermarket’s scale allows it to offer shoppers lower prices than the butcher. They voluntarily switch suppliers and the butcher goes out of business. No one has been coerced.
Sex may make the matter clearer. Tim is a local boy who all the local girls think is gorgeous and who enjoys the attendant benefits. One day a handsome American named Brad moves into town. Brad uses his superior “pulling power” to seduce the women Tim used to get.
This is disappointing for Tim. But Brad has wielded no power from which people must be protected. Coercion is involved only when someone acts involuntarily. Deny this and you cannot distinguish seduction from rape, employment from slavery, or buying something from stealing it.
It is, in fact, those who wish to protect the “victims” of free markets who would employ force. Tim and the local butcher can be protected from their disappointments only by preventing consumers from acting on their preference for Brad and Tesco.
Anti-capitalists complain about cronyism but they do not object to it in principle. They merely dislike the most successful cronies of recent times: namely, those bankers that received bailouts. Propose that the government use its coercive powers to bestow gifts on school teachers, nurses or local shopkeepers and few occupying the City will complain. Like any greedy banker or corrupt politician, they are keen to replace voluntary exchange with state-compelled transfers when doing so benefits people they like.
Jamie Whyte is a senior fellow of the Cobden Centre and author of Crimes Against Logic (McGraw Hill 2004).