How a Conservative Economist Would View Rape

Executive Summary

• Alan Greenspan’s Argument: Let the Market Work it Out
• Applying Conservative Ideology to Rape

The Warning by Frontline covers some of the obvious illicit activities that lead the financial crisis and demonstrates that if even a bit of common sense had been used, we could have avoided the meltdown.

Introduction

There is a very interesting segment on a Frontline episode called The Warning which is on the precursors to the financial meltdown. Fed Chairman Alan Greenspan is discussed admonishing the Chairman of the Over the Commodities Futures Trading Commission, that he was against the criminalization of fraud. His statement was something to the effect.

Brooksley, we are never going to agree on fraud, you probably think their should be rules against it, I think the market will figure it out. – Alan Greenspan

Brooksley Born, Chairman of the CFTC was pressured and unethically intimidated by Robert Rubin, Alan Greenspan, and Larry Summers not to regulate the derivatives market. Greenspan, Rubin, and Summers proposed the cockamamie idea that the CFTC had no authority to regulate derivatives, which is strange because that is exactly its charter. In fact, they have the exclusive authority. Amazingly Rubin is still a power broker, and Larry Summers is a very senior advisor to Obama.

Alan Greenspan was in the pocket of the industry he was supposed to have regulated. Imagine if Ivan Boesky or Gordon Gekko were head of the Fed, and you have a good approximation for the moral character of Alan Greenspan. He was also a follower of Ayn Rand, a faux philosopher who believed that the only morality was self-interest and consequentially is the patron saint of egotistical and greedy types and half of Wall Street (the half that can read). I have a write up of Ayn Rand here…

Alan Greenspan’s Argument: Let the Market Work it Out

Conservatives have a very strong tendency to rely upon the market for all things in life….except they don’t. So conservatives enjoy the protections of the government when it suits them and is in their interests, such as when they want no-bid contracts from the government, or if they want government subsidies. In these cases they remove the word “market” and use words like strategic, competitive, building a future. However, when the less powerful ask not for preferential treatment, but simply justice, very quickly the work market comes out. Another word which is very popular and often used with the word market is the word shareholder. Shareholders would be for this and that, and the company can not be concerned with society in general because they must listen to their shareholders.

Often what is missed in this is the structure of a corporation itself, and the fact that it has shareholders at all is a legal creation, which is of course based upon the legal authority of the state. The state could very quickly eliminate all of these circular discussions on shareholders by removing stock ownership from the corporate form. Now we could begin speaking about how the corporation can be directed in ways that benefit society rather than the shareholders. This would have the positive effect of reducing the incidence of sweatshops globally, as well as reduce the pollution of the environment. Degrading the environment is certainly in the interests of shareholders, but not in the interests of society.

Applying Conservative Ideology to Rape

Conservatives have sort of a flexible view on rape, which matches their flexible standards on everything. So most conservatives during slavery were for the rights of masters to rape their slaves. However, they were less for whites being raped, although their protests varied depending upon the wealth level of the white in question. They were strenuously opposed to a wealthy woman being raped by someone from the lower class. If we apply Alan Greenspan’s approach to fraud to rape, we come to an interesting model. Alan Greenspan’s philosophy, which is not his but borrowed from conservative thought, is that things like fraud can be worked out in the marketplace.

The logic goes something like this; if someone begins defrauding people, that eventually the market will figure it out, and people will no longer do business with that person. Applied to a rape, this would mean that police should not prosecute or even investigate charges of rape, because once the rapist began raping enough people, eventually enough women would find out, tell their women friends, and nobody would go on dates with this rapist any longer. Case closed.

Conclusion

Like most of the conservative thought the idea of the market working it out is completely ridiculous. It should go without saying that legal protections are necessary to prevent individuals from exploiting other individuals. This is why there are police, why there are regulators and why there are officials at sports games. This is because the law of the jungle is not just and leads to exploitation and suffering. Let us not allow conservatives to talk us out of the fact that we all deserve protection against the exploitation of others. This is as true of violent crime as it is of white collar crime.