Factored out to find its least common denominator, the #Occupy movement boils down to the slogan “People not profits”. This slogan tells us that grasping avaricious corporations focus too monomaniacally upon their bottom lines, and in so doing cause terrible harm. What’s needed, it continues, is a focus on people — individual, quirky, imperfect, sometimes needy, sometimes secure: the building blocks of society, too complex to be reduced to an aggregated figure in a sales spreadsheet. A compassionate, humane focus on these people and their needs and wants is the right way forward, not a fetishistically numerological obsession with bank balances and market tickers.
I think it’s a horrible idea. Lemme ‘splain.
The main problem is that focusing on people doesn’t always — or even often — mean acting benevolently towards them. Humans are full of nasty misanthropic tendencies ranging from intergroup bias to collective narcissism to simple sadism. There’s every reason to believe that, if we focus on people, we will do terrible things to them. (The historic record is particularly convincing in this regard.)
Even without resorting to sadism, people-focus can end up hurting more than it helps. If I’m a baker at the end of a long day, I might reasonably decide to spend the rest of the evening with my family — people I care strongly about and who care strongly about me. If this means that I don’t bake a loaf of bread for you, and you go hungry… well, that sucks for you.
Now say it with me, kids:
It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.
Focus on profit, and all of a sudden it makes a bit more sense to bake that last batch of loaves; to stock enough bread that no paying customer need be turned away. Furthermore, focus on profit, and you add incentives for people to be — not necessarily friendly, but at least accommodating — towards those they’d otherwise dislike. As Eric Crampton and David Henderson point out, racism is often too expensive to be pervasively practiced by private concerns: widespread discriminatory regimes from Jim Crow laws to apartheid were mandated by the state… an institution which could put people before profits.
By contrast, here’s Voltaire:
Go into the London Stock Exchange—a more respectable place than many a court—and you will see representatives from all nations gathered together for the utility of men. Here Jew, Mohammedan and Christian deal with each other as though they were all of the same faith, and only apply the word infidel to people who go bankrupt. Here the Presbyterian trusts the Anabaptist and the Anglican accepts a promise from the Quaker.
The incentive to make a profit convinces otherwise-antagonistic people to deal with — and, given the right institutional infrastructure, actually to trust — each other. That’s powerful stuff.
But suppose we were able to perfect human nature to the degree required by statism and come up with a sufficiently benevolent population to make “people not profits” turn out better than, say, North Korea. Even then, “profit” would still outperform “people” as a guiding motivation.
Here’s the next problem: We people don’t actually know what other people want. (We have a hard enough time figuring out what we want.) If I’m a baker, I’m unlikely to know ahead of time how much you want a loaf of bread compared to a bag of croissants or a box of donuts. It’s unlikely that I’ll have the time or the resources to bake all of them for you, and for everyone else who steps into my shop. Maybe I’m really concerned about other people’s health, and I stop baking donuts and other fattening confections; conversely, maybe I get great satisfaction out of the joyful smiles of people who bite into my delicious donuts, and I stop baking whole-wheat bread.
But if I want to make as much profit as I can, I need to be very concerned with the prices I charge. These prices will inform the inputs I buy and the products I sell, and will tell me what my customers want and how much they want it. My suppliers can tell me how hard it is to produce flour, or mixers, or butter, simply by varying their prices, and I can do the same to so inform my customers. Note that simply having a price system isn’t enough: people have to care about profits in order to make full use of the information those prices carry. Care enough, even, to put those profits ahead of other people who aren’t willing to pay for a product but want it anyway.