Wall Street Greed and Accountability

A clear, consistent message underlying the Occupation of Wall Street over the past couple weeks says that the greed of the big banks is a far-reaching social problem. Standing in as representatives of an entire corporate system, an economy characterized by mercenary avarice and a fundamental lack of justice and humanity, the banks have also been put forward as an example of what’s wrong with the so-called free market.

There is a sense today that corporate malfeasance, though desperately underreported by the conventional news sources, is at all times all around us, endemic in the culture prevailing in the world’s biggest companies. So when Wall Street’s critics, from student protestors to academic economists, talk about “moral hazard,” they’re identifying the problem of unaccountability.

Given that the idea of accountability, of making rich, elite institutions answerable to the public at large, is at the heart of popular worries about corporate capitalism, it is perhaps myopic to hold that greed alone is the problem. Whatever you think about greed — and probably most of us regard it as a moral defect — it is, in and of itself, essentially impotent.

The greediest, most uncompassionate corporate titan, if actually held accountable, would be rendered unable to victimize the public with his grasping schemes. And yet insisting that accountability would solve the problem appears a tautology; it sounds, after all, a lot like insisting that if only we don’t allow Mr. Moneybags to cheat the public, he won’t be able to cheat the public.

The question is therefore how to foster and promote accountability. Market anarchists have an answer, contending that the state’s primary economic importance can be understood as insulating the ruling class from accountability.

Simply put: Authority makes people do things that they otherwise wouldn’t, that wouldn’t make practical sense to them in an environment unconstrained by the state’s obstacles to genuine free trade and association. Ultimately, the only way to exploit an individual is to build power imbalances that leave her with no way out, no option but to accept the patently inequitable boilerplate presented to her by nameless, faceless institutions — government and corporate monoliths — that dot the road to survival.

To eke out an existence in a world defined by privileged cartels (see Wall Street), one must kneel before and pay tribute to the rent-seekers supposedly doing us a favor by allowing us to live and work. But that’s just it; in a society where capital and resources weren’t coercively bound up in a handful of towering, antiquated bureaucracies — and where individuals and communities could make use of their own time and resources without asking for permission — the idle ruling class would lack the leverage necessary to starve the productive.

That society would play host to a true free market, one in which none could appeal to the violence of the state to protect spurious and undeserved claims of right. Today, we quite literally pay, in lower wages and higher prices, to cushion inefficient, thriftless oligopolists against the natural tendencies of voluntary exchange and cooperation.

We are all quite familiar with the headlines and their underlying causes: Eminent domain land grabs for new office parks and shopping centers; intellectual property laws’ monopoly mark-ups on prescriptions and productive technology; more and less blatant subsidies to politically-connected big business.

And while none of this state-corporate connectedness and favoritism is at all surprising to us, we still somehow find it hard to believe that the defilement of the free market is a great service to the rich — not a harm to them. A genuine free market is not a surrender to greed, but is rather a great check against it, producing accountability by preventing anyone from profiting through coercive privilege.

By engaging it to describe a corrupt system of legal scams and bribery, the corporate power elite besmirches the phrase “the free market.” But market anarchists understand that the phrase itself is hardly as important as the substance, and what we’re talking about — mutual respect and consensual economic relationships — is in substance very different from their “free market.”