Why occupy Sydney?

‘So, you think I am in favour of occupying Wall Street, do you? What makes you think that?’

I knew it was Jim as soon as he spoke, but it took me a moment to work out where his voice was coming from. When Jim wants to have a discussion with you, he seems to appear from nowhere and just start asking questions. I suppose he thinks that gives him some kind of advantage. It doesn’t work! Everyone I know just ignores his opening questions and goes through the usual preliminaries of saying hello and asking after his health while they compose a response.

Jim had obviously read a brief comment on my last post in which I had speculated that he might be in favour of occupying Wall Street, but not Sydney. I reminded Jim about our previous discussions about banking and limited liability. In our previous discussion about banking Jim had suggested that it was a scam for banks to promise to repay deposits on demand even though they knew that they would be unable to meet that promise if all depositors asked for their money at the same time. In our discussion about limited liability, Jim had suggested that it was wrong to allow owners of banks to gamble with borrowed money, secure in the knowledge that if their gambles do not pay off then the most they stand to lose is the value of their shares. I also mentioned that when banks have been declared by governments to be ‘too big to fail’, bankers have a strong incentive to take abnormal risks because they know that they will be bailed out by governments if they make large losses. I ended by telling Jim that I could picture him in Wall Street carrying a placard saying ‘Bankers are Wankers!’.

Jim seemed satisfied with my explanation, but when I had finished he asked: ‘So, doesn’t all that apply to Australia as well as the US? Don’t you think I should be in favour of occupying Sydney, too?’

I tried to explain that prudential regulation seems to have worked reasonably well in Australia, so there doesn’t seem to be much to protest about in terms of the way the financial system is working in this country.

Jim’s response was quite robust and is not quotable verbatim. After deleting expletives I think the message he was giving me was that although I tell people that I am a libertarian, he thinks I am actually a neo-socialist because I am in favour of some prudential regulation of the finance sector. (Jim can call me a neo-socialist if he likes – it makes a change from being called a neo-liberal. My views on banking regulation are actually fairly close to those of Adam Smith, so I am in good company.) Jim ended his outburst by telling me that while I was entitled to my own views, I should refrain from misrepresenting his views.

‘Well, does that means you actually support the Occupy Sydney movement?’, I asked.

Jim didn’t respond for a long time. Eventually, he asked, ‘What are the Occupy Sydney people actually on about?’ I wasn’t sure, but I suggested that the main theme of the Occupy movement all over the world seemed to be the injustice of unequal distribution of wealth and power – particularly the idea that the top 1% of the population in many countries tend to benefit disproportionately from economic growth.

‘And who do you think is responsible for that?’ Jim said. ‘It is the 99% who are responsible for making the 1% wealthy. We make a few film stars fabulously wealthy by going to the movies that they star in. We make a few sporting heroes fabulously wealthy by watching the games they play and buying the products they endorse. The same system applies in the business world. The CEO of a successful company develops a reputation as a star performer just like film stars and sporting heroes. Successful companies are only successful because the 99% buy the goods they produce’.

‘So’, I said, ‘you don’t think there is anything to protest about?’

Jim said, ‘No, that’s not what I mean. The Occupy Movement should be protesting about celebrity culture and the vacuousness of consumerism. They should be poking fun at the idea that a good is worth buying just because it is popular and that entertainment is worth watching just because the performer is a star. They should be asking people whether they actually get pleasure by helping Kim Kardashian to become wealthier’.

I was left wondering why Jim was picking on Kim Kardashian. One possibility that crossed my mind is that she might have green hair. Jim doesn’t like green hair.