In case you haven’t heard, Bank of America has decided to not institute its controversial $5 debit-card fee. Leftists everywhere are rejoicing. They are celebrating this decision as a great victory for the 99% over the evil, greedy, bankers. They are pointing to this as a great accomplishment by the Occupy Wall Street rallies.
What they don’t realize is that this decision in fact proves the inherent superiority of laissez-faire capitalism as a foundation of societal order.
The classic complaint from leftists is that corporations are unresponsive. That they can do whatever they want, whenever they want, and that we will be forced to bend to their whim. That without big government, companies would pollute the air and water, charge $100 a gallon for gasoline, and murder you, perhaps all at the same time. Some industries are declared to be monopolies, and the ones that obviously aren’t are assumed to be engaged in anti-consumer cartel behavior. The only thing keeping them in line is government, you know, the institution that is REALLY responsive to the people! We hold the government accountable in a way that nobody but government could possibly hold a corporation accountable, right? Right?
Wrong. BofA reversed its decision not because of government regulations forcing them to do so (actually, it was government regulations that caused the decision to be made in the first place), but in response to consumer demand. Customers were cancelling their accounts because of it. People who weren’t customers were nevertheless lining up to publicly denounce and demonize them, hurting their public image. Most important, none of their competitors were following suit. In fact, many advertised against it in a scheme to scoop up BofA clients (my own bank displayed a banner ad on its website declaring “We’ll never charge you to access your own money). That doesn’t sound like collusion. That sounds like proof that what the Austrians and the libertarians have been saying all along is absolutely correct. That the free market responds to consumer demand and behavior. That companies cannot unilaterally impose anti-consumer practices on an unwilling populace.
Meanwhile, take a moment to reflect on exactly how responsive government is to consumer demand. Every single one of our wars is currently opposed by over half of the country. You can run the entire gamut of political issues of the day and find examples of things the public obviously wants that the public will never actually get. An end to militarism, a balanced budget amendment, and legalized online gambling are just a few examples. Meanwhile, things the majority of the country opposes (like say, Obamacare) are shoved down our throats and we’re told to deal with it.
The anti-capitalists on Wall Street can celebrate this decision all they want. Unfortunately for them, it proves that their core thesis is wrong. If they were right, the big news of the week would be that Bank of America is keeping it’s $5 debit card fee and all the other banks were following suit and matching it, and that government had decided to end all the wars, repeal Obamacare, enforce immigration laws, and reduce spending. Instead, the opposite happened. Who knew?