While searching for an explanation for the Occupy Wall Street movement rapidly spreading across American cities, many observers are trying to link the sentiments toward some push for government action.
Congressional Democrats and President Obama just announced plans for a tax on millionaires, which they assume (correctly) will appeal to many of the protesters. With labour unions getting behind the protests over corporate greed and the widening gap between rich and poor, the movement is quickly becoming defined as a partisan struggle. That’s too bad because both ends of the political spectrum can probably find some common ground regarding the Occupy Wall Street movement.
Political conservatives often tout the writings of Adam Smith, the 18th-century author of Wealth of Nations, who persuasively argued for the benefits of the free market. In it, he stressed that an “invisible hand” helps guide the market toward providing good for all. Smith said that a businessman would provide more benefit to society than any “lawgiver or statesmen” even though he is “pursuing his own interest”.
Economists such as Marx, Keynes and Friedman have debated for years over whether this “invisible hand” really works. But, capitalism — not government spending — has some clear advantages. Many people have gotten a kick out of seeing protesters on Wall Street getting money out of ATMs and buying Starbucks coffee, for instance. Despite all our complaints, many of us enjoy the comforts of living in a world that free-market capitalism has created.
But, one part of Smith’s philosophy receives too little attention. In his Theory of Moral Sentiments, Smith wrote that “by acting according to the dictates of our moral faculties, we necessarily pursue the most effective means for promoting the happiness of mankind.”
Smith assumes that everyone will operate with some type of ethical oversight, what he called referred to as “moral faculties”.
Perhaps more than anything, these protests represent a belief that some corporate executives have lost touch with the idea of virtue — ethical underpinnings about the right way to act that transcend all boundaries. During this economic downturn, many observers have called for a fundamental recalibration of our values. They’ve asked us all to step back for a moment and make sure we’re living life according to the right set of ideals.
Both conservatives and liberals can agree with this fundamental call to re-examine our values.
Even with my free-market leanings, my ethical reasoning tells me that paying a CEO $30 million (Dh110 million) per year while laying off 30,000 employees making $50,000 a year doesn’t appear ethically justifiable. Media reports are littered with hundreds of other examples of corporate excess — all of which have been approved by boards of directors who also appear to have also lost sight of their “moral faculties”.
By pointing out these ethical lapses, the Occupy Wall Street movement is adding its voice toward a conversation about what should be considered acceptable in our society. In effect, the protesters are becoming part of the “invisible hand” of the free market. Perhaps CEOs and boards will think differently the next time they’re considering a pay package or weighing whether to make layoffs, knowing that so many people — including their customers — are paying attention.
In this sense, the protests are actually not in conflict with any conservative principles — which laisez faire capitalist can disagree with people’s right to protest? This one can’t.
However, when protesters or political parties go one step further and demand the government take action against those perceived as greedy, many people become troubled. Forcibly taking away someone’s money and giving it to the government won’t help create any jobs and could easily hurt the free market economy. Regulating salaries for corporate executives isn’t going to make CEOs or boards any more virtuous — instead they’ll find ways to get around regulations they’ll perceive as needlessly meddlesome.
If we’re looking for real change, let’s focus on helping to create change from within by pointing out that corporate greed and excess is unjustifiable. Let’s bring back the concept of “shame”—it can be a powerful motivator. We’ll have more success concentrating on proper “moral faculties” rather than trying to create specific laws to regulate virtue.
Matt J. Duffy is a professor of communication at Zayed University in Abu Dhabi, where he teaches media ethics.