They Are the One Percent… and We Should Be Worried

To the extent that the Occupy Wall Street crowd has a core cause, it is an economic one. However, its title and location are the only real clues, because when it comes to demonstrating their vast economic knowledge, these people cannot.

They claim to be among the 99% of Americans who are victims of various legal and moral crimes committed by the financial sector, and that has risked their futures. But, what sort of future do they have?

What they are truly demonstrating is the vast failure of the education system. They have no global perspective or understanding of their historical position. They fail to understand THEY are the 1%. My Che Guevara looking friend to the left here stands to earn $1.6 million more in his lifetime than his high school party buddies who did not go to college. This means, on average he will earn $35,500 more a year than his high school counterpart will, and this is just the American part of the story. The average world citizen earns $7,000 a year right now and that is highly skewed, the median income is much lower. Only 19 percent of the global population lives in a country with mean per capita earnings greater than $7,000. Che is among the 20 to 25 percent of Americans that attend college and, assuming he graduates, will be in the upper income strata, likely the upper 20 percent. So, Che here is in the upper 20 percent of the upper 19 percent, which means, globally speaking, he will be among the wealthiest 4 percent in the world. Just like his Woodstock grandparents who became the BMW driving yuppies, he will protest and rail against the man or rage against the machine or whatever and then go earn a very good living over his lifetime and all of it brought to him by capitalism.

Historically, his case is worse. The fact that he has the time to go and camp out and not have to hunt, forage or farm speaks volumes that his twenty years of schooling do not seem to have prepared him to realize. While he is standing on the pavement thinking about the government and what it owes him, he does not realize that his urban camping trip is costing more than most people who have ever lived earned in a lifetime. As Deidre McCloskey points out in her book Bourgeois Dignity, Americans spend on average $120 a day, if this were 200 years ago the figure would be lucky to be $3 a day in current dollars. Living before the advent of wide spread free market capitalism would be like trying to live in the current economy on $3 a day, Che’s visit to Starbucks cost more than $3.

The sad aspect is not so much that Che is protesting but that he does not know any of this. His teachers and professors either do not know it or do not believe it.

Other than some solid points on the bailout issue, the OWS crowd is exhibit A on the massive deficiencies of the American education system. Che’s prospects are as good as anyone who has ever lived, he would not trade places with the richest person in the world of 200 years ago. That person had no modern medicines, lived in a drafty house with no temperature control other than fireplaces, spent most of his life within a few miles of his house, probably saw at least one child die before he did. He had no internet, no lights, no phones, no motor cars, and was frequently infested with lice…ok maybe that one is still an issue for the OWS crowd.

If Che spends his entire life on welfare he will still live better than most people who are living right now or who have ever lived, but he does not know this. Economic progress is not inevitable; it is the product of free market capitalism. The irony in all of this is that true capitalism is about serving others. Wealthy people in a market system do not rob and pillage the poor they find more efficient ways to serve and attract consumers.

Entrepreneurs are people who have a vision for what could be, many fail but those that succeed make our lives easier and better in many ways, they save us time and effort and for that we reward them with a small percentage of the total value we derive from what they have done. Steve Jobs, whom OWS reveres, and Bill Gates and so forth have provided us with billions, maybe trillions of dollars in value, and in exchange, we voluntarily give them a little bit of it in the form of the monetary prices we pay.

Go watch the show Mad Men and see what life was like before Gates et. al. came along. The other side of this is that the socialist system, which Che here wants, encourages greed and exaggerated selfishness as each person has the incentive to get as much of the common resources as he can before someone else beats him to it. Without property, prices and profits there is no progress. The failure of American education to teach these truths is a crime and will have long range impact, as we are already seeing.