Makers vs. Takers at Occupy Wall Street
The Occupy Wall Street protests have popularized the distinction between the lowest 99% and the highest 1% of income earners. Prof. Chris Coyne suggests that a distinction between makers and the takers is a better way to understand the problems that the protesters decry.
There are makers and takers in all income brackets in society. Makers are individuals who produce things that people value. When people trade with makers, both parties are made better off. Put another way, trading with makers is a positive sum game. Takers, on the other hand, are individuals who redistribute or destroy value, which is a zero sum or negative sum game.
The Occupy Wall Street Movement is really about the protesters’ frustrations with the takers of society who fail to produce value for society, and instead, look to government to take wealth from others.
Coyne argues that we want a society with many makers and few takers. In order to obtain this outcome, we need to limit the takers by placing constraints on government, making it difficult to use government to take from the makers. Therefore, Occupy protesters worsen the situation when they ask for special government privileges such as eliminating student debt.
Chanting: We are the 99 percent! We are the 99 percent!
Christopher Coyne: One of the main messages that has emerged out of the Occupy Wall Street movement is the split between the 99 percent and the 1 percent at the top who hold all the wealth. I think a better way to think about this is splitting groups into makers and takers.
And there’s makers and takers in every single income bracket. You can think about it this way: makers are basically individuals that produce things that people value. From this standpoint, makers produce positive-sum wealth. They produce things that people value, and in doing so they earn wealth as well. Both parties are made better off by makers. Takers, on the other hand, are zero or negative sum. They simply take wealth from other people that have generated it.
This does not increase standards of living because it simply involves investing resources and redistributing income from makers to themselves. Really what the Occupy Wall Street movement is all about is revealing frustration with the takers in societies, those people who basically are unwilling to produce things that people value and therefore turn to government to take wealth from other people that do it. The solution to this is constraining the takers. We want a society of makers with very few takers, as few takers as possible. And the way you do this is by placing constraints on government such that they are unable to take wealth from the makers and give it to the takers.
Protester 1: Just tax, let’s tax the people who don’t need the money to put it in systems for people who do need it.
Protester 2: I mean this is about a new system that is more fair and does allocate wealth, and, you know, not just income but wealth, assets, safety, security more equitably for sure.
Christopher Coyne: The Occupy Wall Street movement is upset and rightfully so at the fact that there are takers who have grabbed a lot of wealth without producing things that make people better off. The solution to this problem is not for the Occupy Wall Street to become takers themselves. In other words, the solution is not for them to make claims about debt forgiveness for student loans and for redistribution through taxation of income such that they then become takers. Because by doing so they have not solved the fundamental problem of constraining takers. Instead they have actually contributed to the fundamental problem by becoming takers themselves.
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