Self-regulation in markets “inevitably” leads to failure and corruption, former Governor and Attorney General of New York Eliot Spitzer asserted Tuesday.
In the midst of the nationwide Occupy movement against economic inequality, Spitzer argued for government regulation of markets in the Yale Political Union debate “Resolved: An Unregulated Market is a Corrupt Market.” Spitzer addressed the roughly 160 Yale students gathered in Sheffield-Sterling-Strathcona Hall 114 as he explained that only governments can ensure integrity in market transactions and that businesses often act corruptly in response to pressure from the market and competitors.
“The greatest debate going on in our society right now is what the proper role of the government in the marketplace is,” Spitzer said.
As Spitzer built his defense of government regulation of markets, he discussed the corruption he witnessed in business while he was New York’s attorney general. He described the Merrill Lynch scandal of 2002, in which the company knowingly fed bad stock advice to the public, causing Spitzer’s office to subpoena its members. He also referenced an instance in which the developers of drug Paxil, an antidepressant, purposefully did not publicize the fact that the drug leads to increased suicide in teens.
The companies acted immorally, Spitzer said, because they had no incentive to self-regulate their practices.
“They knew they had been lying to the public, giving stock advice that was wrong,” said Spitzer, who famously resigned as governor of New York after his relations with a prostitute became public in March 2008. “They knew their competitors were doing it, and the pressure of the marketplace was such that if they stopped doing it they would lose market share and lose profits.”
Spitzer said he sees the government’s ability to protect America’s core values as the most important argument for why the government should regulate markets. In the past, he said the nation has made progress in issues based on race, gender and sexual orientation only after the government made discriminatory practices illegal.
Once Spitzer finished his roughly hour-long speech, the YPU opened the floor to representatives from Yale’s political parties to speak in support of or against the resolution. While the Party of the Left and the Liberal Party supported Spitzer’s view, the Party of the Right and the Tory Party dissented. The measure passed in Spitzer’s favor, 45-18.
Those in the audience — mostly members of the YPU — said they enjoyed hearing Spitzer speak at the debate and that they found him highly engaging.
“Spitzer was the most engaging, wittiest, sharpest speaker we’ve had this year,” Jonathan Yang ’13, president of the YPU, said. “As we’ve seen with Occupy Wall Street, there is no more relevant a time for this discussion than now.”
Max Jacobson ’13, chairman of the Party of the Right, said he thinks bringing big-name speakers to YPU debates can sometimes discourage students from disagreeing with the main point, but that he felt Spitzer’s talk went well.
On the other hand, Eitan Fisher ’13 said he was disappointed with the limited spectrum of discussion and thought it was a “debate between capitalists and capitalists.”
Spitzer joined members of the Yale Political Union for post-debate pizza at Yorkside after the event.