The Occupy Wall Street movement is a symptom of a growing public disquiet about the workings of market capitalism, writes Richard Lambert. As such, Monday night’s decision to close down the camp in New York City is unlikely to check the protests: if anything, the reverse may be true.
Public support for free markets is based on two broad arguments. The first is that they deliver more efficient outcomes than the alternatives. The second is that over time they create increased prosperity for society at large. Both these assumptions have taken a severe jolt in the past few years.
We now know that the efficient market theory is for the birds, and that market failures can have devastating consequences for wide sectors of the public. We also know that the fruits of economic success have become increasingly unevenly distributed. In the US, all the growth – and more – in recent years has flowed to those at the very top. The upper one per cent of Americans are now taking in nearly a quarter of the nation’s income every year, double the proportion 25 years ago. Those in the middle have seen their real incomes fall over the same period, precipitously so in the case of those with only high school qualifications.