Economic Implications Involved in the Movement - Essay Example

?Occupy Wall Street Movement All political or social movements in the history are founded on moral issues. In the ‘Occupy Wall Street’ movement, the people who feel that their confidence is misplaced on a system which is fraught with lack of fairness, self-interest and betrayal, protest against the system. The movement is nothing to do with politics; neither there is formal organization nor leadership. It represents the progressive thinking and ideology of the public against various economic and social issues which include exploitation, corruption, economic inequality, poverty and social injustice, concentration of wealth and lack of corporate social responsibility. The sentiment becomes contagious and spreads to all countries of the world. 1. What are the Moral and economic implications involved in the movement?  Moral implications of the movement reflect in recklessness on the part of few powerful corporations as in the case of Enron or powerful industry like financial services as in the case of subprime crisis which has not only affected various stakeholders and the nation, but destroyed the fabric of the system. The government’s policies in dealing with the crises have been in favour of the corporations at the cost of the common man. Pittman (2008) states that “Without the government money, Goldman, Merrill Lynch & Co., Morgan Stanley, Deutsche Bank AG and other firms could have become some of the biggest creditors in a bankruptcy filing by AIG, the world's largest insurer, because of its billions in losses on subprime bonds and corporate debt.” Disintegration of the system over a period of time is the root cause of various economic and social issues which led to the uprising of this movement. The decay in the system erodes the values of democracy and demoralizes our capitalist society. The renaissance in thinking which forms the basis for the movement indicates the spiritual strength of the society and the nation which calls for a change. Economic development in a country is possible and sustainable only in a healthy society with equality in opportunities. Moral and economic implications are inseparable. Tax cuts to the rich corporate companies in the name of encouraging industrial development, and subsidies in the name of social welfare to protect insurance companies and financial deregulation measures in the garb of liberalization, hitherto gone unnoticed by the public or misinterpreted in press to the benefit of big corporate entities have been brought under public debate. This has given rise to the questions related to issues such as morality of the corporations and relevance of the capitalism. Greed of the companies, for example pharmaceutical companies and the patent laws which protect them in their exploitation of the general public has become the common subject for public discussion. The dilemma of common men in prioritizing their resources even between rent and food under inflationary conditions led them to unite under “We are the 99%” that reflects the economic inequality and lack of distribution of wealth. It is now believed that increase in wealth of 1% can be equated to the losses of the rest. Since Wall Street symbolizes the economic power of 1%, it lends focus to the agitations. Poverty has become the single most economic issue to be tackled by the nation, and obviously, this responsibility cannot be left to the 1%, going by the experience. The technological innovations in the field of software development and telecommunication though increased the complexities in the manipulation of the system by the corporations on the one hand the same developments and rise of social networks have opened new opportunities and avenues for cohesiveness in the society and its self-realization. 2. How can we theoretically analyze the implications? According to utilitarian theory, good actions form the basis for overall happiness. The underlying cause of actions in the case of subprime crisis or other major financial scams is greediness on the part of the corporate companies. Velasquez, M. et al. (1989) state “Stripped down to its essentials, utilitarianism is a moral principle that holds that the morally right course of action in any situation is the one that produces the greatest balance of benefits over harms for everyone affected”. Logically, when only 1% is benefited from the system, the affected 99% are demoralized and protest against the system which protects the beneficiaries. The economic issues such as poverty, concentration of wealth and economic inequality are the consequences, when the situation is one that produces imbalances in the society, contrary to the utilitarian views. Aristotle’s moral theory is an example of virtue theory. Sherman, N. (1997, P. 1)states “Certainly Kant’s conception of virtue is in important ways distinct from Aristotle’s, and Kantian texts are correctly thought of as locus for modern discussions of autonomy and respect in a way that Aristotle’s texts simply are not. Kantian theory stipulates that actions should be based on moral rule or principle. It calls for respect to others and not just accomplishing the personal aims. Contrary to this theory, the corporate actions in the recent history have focused their attention on corporate goals or aims without any respect for the society or its responsibility to the society. BBC states (2002) “In just 15 years, Enron grew from nowhere to be America's seventh largest company, employing 21,000 staff in more than 40 countries. But the firm's success turned out to have involved an elaborate scam.” It is a good example of a corporation where the moral rules or principles have been rudely violated while pursuing the corporate aims without any respect for or responsibility to the society. Kantian theory is modern in its approach and traces the background for the movement effectively. The economic issues such as poverty, concentration of wealth and economic inequality are also the results of ignoring moral rule or principles by the powerful corporations in pursuit of their corporate goals. 3. Who is responsible for income inequality and uneven wealth distribution in the U.S.? The lack of ethical framework to the business, especially, the financial services sector has substantially eroded the public confidence which is essential in a democratic set up. Creation of exotic derivative products, high frequency trading or algorithmic trading through sophisticated computer systems , insider trading and lack of accountability of the market analysts and people engaged in investment research have undermined the reliability of the financial institutions and the banks. The spiralling stock prices suck liquidity in the economy and prevent its usage for development of infrastructure or establishment of new industries for growth of the economy or creation of new employment. The financial institutions are primarily responsible for channelling more and more money to push up the stock markets to unrealistic levels, not backed up with economic growth. The debt culture is ingrained in the people of the nation at all levels. Savings should form the basis of investments for a sustaining economic growth. Though the naivety of the public is generally stated as a reason for their economic losses, marketing gimmicks of the businesses and the pro-business attitude of the media makes manipulations easier. Since the proportion of non-plan expenditure is continuously increasing in the budgets, the governments have been relegated to a position of regulator over a period of time with little scope for effectively intervene in the economic growth of the country. The increasing administrative expenses of the government including defence outlay, leaves little room for increasing the plan expenditure. The government is also slow in keeping up to the pace of technological developments in reorienting its policies. The government needs to review monetary and fiscal policies constantly, lay down regulations to improve efficiency in directing and controlling of the corporate companies for the purpose of enforcing strict compliance in discharging their social responsibilities and take measures to encourage savings at all levels. Therefore, the successive governments which came to power over a period of time have been responsible along with the corporations for the present state of affairs on account of their failure in addressing these issues. 4. What is the equitable outcome from the movement that would be appropriate for our capitalistic society? Shaw, W. H. (2011, P.7) states “Ethics deal with individual character and with the moral rules that govern and limit our conduct. It investigates questions of right and wrong, fairness and unfairness, good and bad, duty and obligation, and justice and injustice, as well as moral responsibility and the values that should guide out actions.” Business ethics call for accountability, responsibility and transparency in business decision making. The corporate social responsibility extends beyond business and covers environmental issues and conservation of natural resources for the use of the generations to come. In an equitable society, growing influence of the corporate companies needs to be curtailed taking into consideration the welfare of the society. For example, ‘patents’ becoming a tool in the hands of the corporate companies to exploit the common man or media barons stifling the protests against injustice through propaganda in the name of freedom of press is neither in the interest of capitalism nor democracy. The judicial setup in the country is taken advantage of by the corporate companies to perpetrate their influence over the economic policies of the government and have control over the issues which affect majority of the people, who are vulnerable on account of their inability to access to the system which has been designed to offer protection to them as well. When the successive governments have failed to take effective steps to arrest the causes for the poverty, the stage is set for the political reforms as well. Equitable outcome from the movement envisages alleviation of frustration of the general public by respecting their legal rights and addressing these issues. 5. Will the movement continue, fad away, or turn into something else? Though lack of leadership is cited as a weakness for the movement, it should be remembered that the revolutions in Arab countries like Egypt, Libya and Yemen, popularly known as Arab Spring, brought down many governments responsible for corruption, concentration of wealth in fewer hands, poverty and human rights violations. Protests, rallies and public meetings are spontaneously organized against the economic policies of the governments and United Nations in various countries, and Gautney, H. (2011) states, “Fast-forward to the late 1990s when protest networks emerged around the world in opposition to the World Bank, WTO and G-8. This time uneven development, debt and neoliberalism took center stage, alongside environmental concerns and world poverty. The protesters were “Anti” globalization as well as “Alter”: Free flows of information as opposed to patenting, free movement of people as opposed to policed immigration, and free trade as opposed to NAFTA”. The ability of open source software of Linux in competing with Microsoft’s Windows is a case in point in respect of an industry, where Linux has neither formal leadership nor formal organization comparable to Microsoft or Apple. Participation of the public in the movement through social networks such as Twitter and Facebook keeps the smouldering embers of the movement alive. There are no specific goals proclaimed for the movement as the issues are varied. This is a non violent movement wherein people organize meetings and rallies on their own, and it has become a global phenomenon. The inspiration derived by the public from the movement will transform the nature of policy making at the government level and decision making in the corporate companies. It is a democratic movement with participation from majority of the public which is bound to succeed in a leading democratic country like US. References BBC News (2002) Enron scandal at-a-glance, 22 August, 2002. Gautney, H. (2011) What is Occupy Wall Street? The history of leaderless movements, The Washington Post, 11 October, 2011. Sherman, N. (1997) Making a Necessity of Virtue – Aristotle and Kant on Virtue, Cambridge University Press Pittman, M. (2008) Goldman, Merrill Collect Billions After Fed's AIG Bailout Loans, 29 Sep 2008, Bloomberg, Retrieved from http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTzTYtlNHSG8, Retrieved on 30 Oct 2012. Velasquez, M., Andre, C., Shanks, T. S. J., & Meyer, M. J. (1989) ‘Calculating Consequences: The Utilitarian Approach to Ethics’, Issues in Ethics, V2 N1 (Winter 1989) Shaw, W. H. (2011) Business Ethics – A Text Book with Cases, Seventh Edition, Wadsworth, Boston, MA02210. Read More