Sympathy for OWS

But if the fatal principle should come to be introduced, that, under pretense of organization, regulation, protection, or encouragement, the law may take from one party in order to give to another, help itself to the wealth acquired by all the classes that it may increase that of one class, whether that of the agriculturalists, the manufacturers, the ship owners, or artists and comedians; then certainly, in this case, there is no class which may not try, and with reason, to place its hand upon the law, that would not demand with fury its right of election and eligibility, and that would overturn society rather than not obtain it (Bastiat p.11).

I sympathize with the Occupy Wall Street protesters. It is a sad state affairs when one group of people are enriched at the expense of everyone else. Some at OWS and elsewhere argue that the bankers who got rich through bailouts are criminals.  They used their campaign contributions to influence government policy that helped them get rich. Some argue that campaign finance laws should be stronger to prevent the influence of these bankers over government. If they were not allowed to donate money to campaigns, then the congressmen would not subsidize the banks at the expense of everyone else. This is all true, but it does not address the root of the problem and therefor it cannot solve the problem. As Bastiat pointed out,

…as long as it is admitted that the law may be diverted from its true mission, that it may violate property instead of securing it, everybody will be wanting to manufacture law, either to defend himself against plunder, or to organize it for his own profit. The political question will always be prejudicial, predominant, and absorbing; in a word, there will be fighting around the door of the Legislative Palace (Bastiat p.12).

Another approach looks deeper.  Corruption is unintentionally promoted by the idea that it is the function of government to encourage the economy. In order to create and preserve a vibrant economy, policies were enacted making it legal for government to favor certain people or industries at the expense of all others. This takes the form of government provided subsidies, tariffs, bank deposit insurance, flood insurance, low interest rates and licensing requirements. These policies distort the way people would otherwise act. The policies themselves become part of the data used by individuals who act in order to remove the uneasiness associated with being alive. Individuals may act based on the data that says the best way to ensure the success of my business is to go to congress and win a grant or subsidy or protective tariff.  These policies encourage lobbying/corruption.

In order to prevent fighting around the door of Congress, Bastiat offers the following advice.

See whether the law takes from some persons that which belongs to them, to give to others what does not belong to them. See whether the law performs, for the profit of one citizen, and, to the injury of others, an act that this citizen cannot perform without committing a crime. Abolish this law without delay, it is not merely an iniquity—it is a fertile source of iniquities, for it invites reprisals; and if you do not take care, the exceptional case will extend, multiply, and become systematic. No doubt the party benefited will exclaim loudly, he will assert his acquired rights. He will say that the State is bound to protect and encourage his industry; he will plead that it is a good thing for the State to be enriched, that it may spend the more, and thus shower down salaries upon the poor workmen. Take care not to listen to this sophistry, for it is just by the systematizing of these arguments that legal plunder becomes systematized (Bastiat p.14).

It is fatal to accept the argument that special treatment for some people, at the forced sacrifice of others, is vital to the well being of society. Sure, some people will be better off, but the vast majority are punished as is witnessed by the OWS protesters. The solution is to reject such arguments and enact policies prohibiting government from encouraging or discouraging any particular industries, even if you see the great benefits offered by such an industry. If this were to occur, the corruption we all despise would be easy to spot and considered a crime. Once it becomes a crime, acting man will look at the data and it will tell him that approaching congress for a subsidy or tariff may result in a waste of time at best and jail time at worst.

Reference

Bastiat, The Law. 1850

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