Occupy Wall Street and the Diversity of Objections to Inequality

Right now Occupy Wall Street has favorable polling. So did the Tea Party at its beginning. As Seth Ackerman pointed out to me, once people saw that the Tea Party wasn’t a new thing but this old, arch-conservative thing, one that wants to take our global historical moment and wage total war against public sector workers and uteri, they turned against it. One symptom that it was an old thing was the books that it circulated: from Hayek’s underwhelming Road to Serfdom to Bircher Cold War tracts from the types who thought Eisenhower was a member of the communist conspiracy.

Ackerman noted that it isn’t clear what will happen with Occupy Wall Street ideologically, if only because at this point the left-liberal project and progressivism more generally is chaotic and up for grabs. This makes for a fun, fascinating, and scary moment for a potentially insurgent left.

This movement is very focused on inequality. But why? A lot of different ideas have already surfaced. With so much of the debate about the 99% and the 1% framed in the context of extreme inequality, it might be worthwhile to step back and examine the liberal arguments against inequality and discuss what I see of them in Occupy Wall Street.

This is a great cheat-sheet — a list of objections to inequality resulting from the high liberalism tradition from TM Scanlon’s “The Diversity of Objections to Inequality” (article not free online, here’s a summary). Liberals, in general, have five objections to inequality:

A sixth point will hopefully be added in the future: A more equal distribution creates a better economy. There’s an assumption that the market, instead of creating concentrations of wealth and power that slow growth, assigns resources to where they are best used in both the short and long term. However, it is hotly contested whether income inequality causes crashes; researchers at the IMF found models where it can. And a whole other strain of research finds that equality causes growth to be more sustained (see summaries by Roosevelt Institute Fellow Georgia Levenson Keohane as well as Brad Plumer).

As Scanlon is quick to note, only a few of these are necessarily egalitarian — you can be concerned with relieving the suffering of the poorest without actually caring about disparity of incomes. And there is usually a huge emphasis on how the power referred to in number three is primarily a problem of electoral politics and policy instead of a problem of dominating, controlling power relations between individuals.

So where does Occupy Wall Street stand on these? What I find fascinating is that there is much more of a focus on forms of power and domination as opposed to the more general concerns of egalitarian liberalism, those focused on stigmatization and fairness. This is a healthy move for the debate.

One of the major concerns you hear from people in occupations is that the political process has become fundamentally corrupted. This gets right at number three: Money has become so concentrated and such an overwhelming presence in our politics that we need some ways of reforming it at a structural level. The stakes are higher in Occupy Wall Street. The government blurs into the private sector, wealth is no longer a measure of contribution but instead rent extraction, and no party or individual can be trusted to work within the system. There needs to be a reboot. How did we get here? Hacker and Pierson’s Winner Take All Politics is a good place to start when looking for the answer.

Another argument is that Wall Street itself is out of control. Having failed quite profitably in its sole responsibility — allocating capital responsibly, not towards Pets.com, junk mortgage debt, strip-mining companies for short-term gains, and worthless housing stock nobody wants — and then getting bailed out when it all collapsed, the sheer presence of the financial sector among the top 1% feels like a crime. This power is more ruthless than than that in the normal discussion. It drives the entire economy, and it appears to have just driven it off a cliff. For more, 13 BankersEconnedAge of Greed, and Wall Street from the 1990s all walk readers through this story.

What about the 99%? I’ve previously looked through the We Are the 99% Tumblr and found that the biggest emphasis was on debt, ranging from student loans to medical debt, and a lack of enough employment to get by month-to-month. Here inequality is less a problem related to the more traditional liberal concerns of fairness or the idea that a few are left behind, and more a problem in which inequality is making indentured peasants of a huge part of the population. Risks are shifted to individuals who are already struggling, opportunities and possibilities are ruthlessly revoked, employment is nonexistent, and month-to-month survival is a battle for more than the just the very bottom. Books such as Graeber’s Debt: The First 5,000 Years approach this from an anthropological point of view. Other works include Elizabeth Warren’s book on how fixed costs of the middle class drive even two-income families into poverty, as opposed to more general discretionary spending (read: “frivolous” spending), or Tamara Draut’s Strapped.

This ties into traditional liberal concerns. Liberals want institutions that allow people to develop their talents and also ones that insure them against the bad luck of health and unemployment. These institutions have been unraveled, and their public nature has been replaced with debt. And when people involved in Occupy Wall Street talk about this phenomenon, they connect how debt functions as a new safety net with the experience of servitude and suffering. Not in a relative sense of inferiority and shame (although that’s there too), but in actual deprivation and the feeling of powerlessness against creditors, bosses, and the top of the elite.

Indeed, these concerns are reflected in the format of the general assembly and other current, institutional characteristics of Occupy Wall Street. Without permanent, clear leaders, there is no one to arrest, corrupt, or otherwise take over. That address their concerns about political domination from sources internal and external. The focus on mass participation and consensus derives, in part, from inequality in political access. Resources and responsibilities are distributed in the most egalitarian manner because physical deprivation is just one bad month away for many in the occupations (indeed, in the country). Collective enterprises offer a potential solution to giving workers real power in the workplace, power that can be put into action across the country and isn’t dependent on Obama and the Senate.

This strikes me as firmer ground on which to try and build up a resurgent left. What’s your take?

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18 Responses to Occupy Wall Street and the Diversity of Objections to Inequality

  1. tarynhart says:

    Agree with all of your choices wholeheartedly (although I haven’t read 13 Bankers or Strapped – so, don’t know on those, but otherwise great choices).

    I believe many (I hope most) see the American crisis in the context of the failed neoliberal economic model. (See e.g. http://occupywallst.org/article/10-15-call-to-action/) Thus, I would include Naomi Klein’s “Shock Doctrine” and Joseph Stiglitz’s “Globalization and its Discontents.” Though it’s not exactly a critique of neoliberalism, I would include Paul Krugman “The Return of Depression Economics” because it undercuts austerity arguments.

    Also, in terms of an earlier promulgation of the thesis that inequality has a political cause (central to the Hacker & Pierson argument), I would include Paul Krugman “Conscience of a Liberal.”

    Finally, though it’s an older work, Barbara Ehrenreich’s “Nickel and Dimed” seems more relevant than ever.

  2. Tea Party trivializing is not a given, just because you do it does not make it a foregone conclusion.

    As for the occupy movement. I’ve stated many times as well that this is about debt. The problem is angry people have a tough choosing when it comes to revenge against the pillagers versus saving the walking wounded.

    To save the walking wounded, change the bankers rule of law that states “Restructuring a debt first requires a default”, to “Restructuring a debt DOES NOT first require a default” and main street can begin to heal from within.

    To satiate one’s anger, keep occupying until one gets their pound of flesh.

    However I prefer helping the walking wounded, and the ounce of cure known as “Restructuring a debt DOES NOT first require a default” instead of trying to get a pound of flesh.

    • Dan Kervick says:

      As for the occupy movement. I’ve stated many times as well that this is about debt.

      I just got back from the General Assembly of my smallish Occupy New Hampshire group, and I wish I could tell you the message was even that clear. But I couldn’t detect any clear agenda, consensus grievances or unifying political sympathies. Many of the people there were so down and out, I doubt they even have debts. The point of it all just seemed to be to satisfy the sheer of desire of people who have no voice or status in society to stand before a crowd and speak, and to stay somewhere with their feet planted, and prevent themselves from being moved.

      I detect more coherence in some of the other occupation sites. But not where I was.

  3. Lucy Honeychurch says:

    There are a number of fundamental problems to address (and numbers of attendant symptoms of those) in both our econonomy and our political system. To my mind, what’s relevant is, what to DO.

    Seems to me a root cause of alot of our evils is money in politics.

    I think we’d go a long way to solving a large swath of our fundamental and symptomatic problems if we call a Constitutional Convention and decide to Federalize all election campaign funding – including Judicial campaigns.

    That would suffice for me. Then we can see how things go …

  4. Mark says:

    My take:

    For decades the left has sought to increase the benefits available to the lower half of the income distribution – at any cost. At the same time, for whatever reason, they have not succeeded at delivering those benefit increases in the form of outright transfers of property, cash or services.

    A compromise emerged in the mid 90’s (largely as a result of Clinton’s nned to deliver something to the left after failing to deliver a national health care proposal, and as a tradeoff for welfare reform, and a tradeoff for interstate banking and Glass Steagall, and against the backdrop of declining interest rates and budget deficits due to increased tax collections from a surge in productivity due to techonological adaptation) whereby housing and education benefits were made more available with a catch – the form was debt, not gifts. Republicans signed on because their Sun Belt base, particularly real estate developers & Sun Belt banks saw how much money they would make from it. Centrists signed on because they go along with everyone.

    The left may have erred in signing on for this compromise on the theory that half a loaf was better than none. It is what has left the OWSers and others burdened with debt. Alternate mechanisms, in hindsight may have been wiser, although the delivery of benefits might have been postponed for a few years. Such mechanisms should probably be more savings focused than debt focused.

    We are now replicating the transfer / no transfer struggle, in the context of the debt burden. To forgive a debt is basically to effect a transfer,as the borrower keeps the cash previously advanced or the cash or property that would otherwise have satisfied the debt. The “banks” have been put in the middle although most housing and education debt is held or guaranteed by the federal government.

    Our political system is not going to deliver the grand bargain needed to resolve this. We need to reform housing and education to make them less expensive, and more responsive, less subsidized, and we need to resolve legacy debt. The grand bargain would trade debt forgiveness, savings assistance and retraining programs against phaseouts of the mortgage interest deduction and radical restructuring of secondary and higher education to make them much more focused on marketable skills, less expensive and shorter in duration,but there are too many entrenched interests that will oppose the latter changes and nothing will happen.

  5. Ninguna says:

    I heard Herman Cain suggest that middle and lower income Americans could mitigate the higher taxes they would pay under his plan by buying more used, and this non-sales-taxed goods. After seeing your analysis of the 53% tumblr, I wonder: how exactly does one purchase used health care or education?

  6. Josephtee says:

    I basically agree with your analysis, Mike. I suspect that a great deal of the protester’s excitement comes from powerlessness
    My main complaint – and I suspect a lot of people at OWS would agree – about our political/social structure is how a dominantly a secular version of “prosperity gospel” is preached. Making money for its own sake is considered virtuous amongst the political/social elite. Its considered silly and anachronistic to dedicate your life to something that isn’t financially prosperous. To give just one quick example among many: I was recently at the Grand Canyon with the fam and at our campsite we met another nice family. We swapped stories, ate dinner together, played cards, all that stuff. In the evening we all went to listen to the Ranger talk about the history of the canyon, wildlife, human history (dates over 13,000 years back at least) and conservation. She was a great speaker, answered questions ably and gave us good advice about hiking out. The 15 year old boy from the other family asked excitedly how she became a Ranger: BS in Biology, MS in Wildlife Ecology or something like that. As we walked back together the boy said to the Dad how cool it would be to be a Park Ranger, living amongst the animals, keeping things wild. The Dad laughed the idea off saying “yeah, what a good way to get rich… Park Ranger – ha!”
    This isn’t a parenting critique. Its just a bummer that this is a reflection of dominant society. I don’t understand why the kid shouldn’t go for it. When did it become wrong to want to be a Ranger? Or a Teacher? I don’t know for sure but I suspect a lot of people feel the same way I do. Why does dominant society look down on people (us) because we think a life in an office isn’t a life we want. That it’s OK to not be a brown-noser looking for a promotion around every corner. That having a decent job is fine. That having just one job is fine. That there is more to your life than your job.
    Concerns like these don’t have a political voice. I don’t know that such a voice would be particularly leftist.
    But if someone/some group/ some ideology could develop a way to talk about these concerns I think they would be mighty successful. I suspect that a great deal of the protester’s excitement comes from a sense of powerlessness that comes when nobody in power speaks your language. I think issues like torture, environmentalism, universal healthcare and many other contemporary leftist issues would have much more support among the polity if the left could better speak the language of meaning. The left needs to start a conversation about what kind of society we want to live in. Right now those issues are being discussed on economic terms: Can we afford healthcare for all? Of course we can. Does torture work? Sometimes, sometimes not. But its reminiscent of a barbaric society and we are better than that. Can we afford to pursue clean energy? Bacteria figured out how to use sunlight to make a living, I’m sure Job Creators in The Most Innovative Country on Earth can figure it out too.
    We all see a lot of people happy to dismiss OWS as overeducated, indebted Art History majors who are just getting their kicks out of protesting. That’s dismissive and unhelpful. I think its worth listening to the despair underlying everyone’s concerns about debt. All lot of what the protesters seem to be doing is asking questions like “Is this the only way to do society? Now that we’re in the middle of a crisis can we all take a deep breath and just simply talk to each other? What does everyone want out of life? What kind of country do we want to live in?” I think these are legitimate questions and I hope the left can develop good responses to them. The right is rejecting OWS as illegitimate, will the left step up?

  7. Fred Mounts says:

    What is the consensus on The Spirit Level by Richard Wilkinson and Kate Pickett?

  8. Yosemite Semite says:

    Collective enterprises? Dream on. They have failed in the modern world almost everywhere they have been tried, in almost every form. Kibbutzim? Dead; now capitalist and individualist. Ejidos in Mexico? Ineffective and moribund. The Hippies? When I was in Eugene, Oregon, in the 70s, there was a hippie car mechanics collective, which included the strangely named couple Cecil and Cecilia. Cecil, called Sonny, ultimately took over the collective because it was not effective at delivering its services, and he didn’t like working in an organization like that. The Hoedads, the tree-planting collective in Eugene? It lasted 20 years but also died. To say nothing of the Soviet collectives.

  9. JW Mason says:

    This all seems right to me. I wonder if you saw Richard Wolff’s presentation at OWS a couple weeks ago. I’m perhaps biased, but I thought it was really powerful, and very effectively brought the focus around to democracy, or maybe better self-management, in the workplace.

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  13. ripley says:

    P. 39-39 of Graeber’s “fragments” is the best response to skepticism about collective, non-hierarchical, egalitarian organizations

    Also, I like MIke Davis’ points
    I especially like his point about the experience of the camps linking their experience to the homeless population, which poses one of the more important possible political linkages (through an empathic/physical/experiential link) to come out of the occupations. BUt more broadly I think he is much closer to what matters

    Also see the ‘letter from Cairo’ highlighting these are not, in themselves, protests.

  14. Re: A more equal distribution creates a better economy.

    The book Liberty, Equality, and Efficiency greatly informed my world view.


  15. The emphasis on power, domination, the corruption of democratic self-government, risk shifting, economic in/security, and debt servitude all look to me like central civic republican concerns. Maybe the left is rediscovering its progressive republican side (as some in the British left have recently http://www.redpepper.org.uk/the-future-left-red-green-and/)?

  16. Bruce C. says:

    Some anecdotal evidence for inequality of wealth causing financial crises: The sequence of booms and busts in technology, real estate and commodities going back to the 1990’s can be seen as a pattern of wealthy individuals and organizations making “momentum” investments trying to maximize their returns.

    On the flip side, unequal economic distribution helps keep inflation low — up to a point. Money in the hands of the lower and middle class circulates and contributes to demand. Money in the hands of the wealthy gets “invested”.

    So in effect, the inequity of wealth distribution causes inflation in the financial markets (bubbles) as opposed to the consumer markets. There could even be a pattern of pump and dump going on in the financial markets as a whole that is enabled by the fact that the concentration of wealth combined with new trading techniques gives the investment class oligopoly power over the market.

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