Blog post

Occupy Wall Street

Publishing date
13 October 2011

What’s at stake: Around the world, young people – students, workers, and the unemployed – are bringing their grievances to the public square. Anti-corporate and anti-big bank protests have started up in Washington and on Wall Street, and they are spreading elsewhere. The Occupy Wall Street movement is in its infancy but seems to be getting political traction and finding echoes globally. Although its direction remains unclear, it is already raising some eyebrows in Wall Street and might be a force that traditional political formation might have to reckon with. Some are already portraying it as the Tea Party of the left but it seems to lack an integrated and cohesive platform.

Infancy and political traction

John Hanrahan takes stock at the Nieman Watchdog of the dramatic resurgence in street activism by progressives. Originated with the generic call to “occupy Wall Street” from a Canadian magazine, Adbusters, in mid-July, the basically leaderless New York protest has now grown and spread to other cities (including Boston and Chicago) and has won the backing of important organisations.

Rich Yeselson
, a historian of social movements in America and Europe, writes on the Wonkblog that whether OWS will grow larger and sustain themselves beyond these initial street actions depends upon four things: the work of skilled organizers; the success of those organizers in getting people, once these events end, to meet over and over and over again; whether or not the movement can promote public policy solutions that are organically linked to the quotidian lives of its supporters; and the ability of liberalism’s infrastructure of intellectuals, writers, artists and professionals to expend an enormous amount of their cultural capital in support of the movement.

John Quiggin
argues in the blog Crooked Timber that one of the most striking successes of the Occupy Wall Street movement has been the “We are the 99 per cent” idea, and more specifically in the identification of the top 1 per cent as the primary source of economic problems. What could give traction to the Occupy Wall Street movement is that the interests of the bottom 80% and that of the remaining 19% of the top quintile of the income distribution might now be aligned. First, a closer look at income growth figures suggests that, while the 19 per cent have enjoyed rising incomes, they’ve only barely maintained their share of national income. Another important factor is the growth of economic insecurity. Even if people in the top 19 per cent are doing well, they are less secure than at any time since the 1930s, and their children face even more uncertain prospects. That suggests the possibility of a policy response in which the main redistributive thrust would be to reverse this process.

We are the 99%

Ezra Klein writes that these are not rants against the system. They’re not anarchist manifestos. They’re not calls for a revolution. They’re small stories of people who played by the rules, did what they were told, and now have nothing to show for it. Or, worse, they have tens of thousands in debt to show for it. Felix Salmon adds that if you look at the Declaration of the Occupation of NYC, it’s targeted at “they” — and “they” is very much the 1%, not the larger group of people who aren’t suffering.

Nouriel Roubini
argues that while the global wave of protestshave no unified theme, they express in different ways the serious concerns of the world’s working and middle classes about their prospects in the face of the growing concentration of power among economic, financial, and political elites. This concern has been expressed in the Arab Spring; in riots in London; in Israel’s middle-class protests against high housing prices and an inflationary squeeze on living standards; in protestation by Chilean students; in the destruction in Germany of the expensive cars of “fat cats”; in India’s movement against corruption; in mounting unhappiness with corruption and inequality in China; and now in the “Occupy Wall Street” movement in New York and across the United States.

Jeffrey Sachs
argues in the Huffington Post that that the sense of injustice is not just about the top 12,000 American households with more income than the poorest 24 million households. It's about the degradation of politics that turns wealth into power through campaign financing, lobbying, and the revolving door of business and government. Vast inequality and the accompanying sense of injustice explain why the protests have also exploded in Chile and Israel, two countries doing rather well in economic growth and employment. Chile, Israel, and the United States are three of the five most unequal economies of the high-income world, together with Mexico and Turkey. As in the U.S., a small proportion of households in both Chile and Israel control an enormous proportion of the economy.

Stephen Gandel
finds an (unofficial) demands list on the OWS’s blog and notes that it is weird that the demands list doesn't call for raising taxes on the wealthy. That would seem to be the most direct and fastest way to lower the wealth gap between the rich and the rest of us. There are a lot of ideas like education, and raising the minimum wage (to $20!), and allowing for Unions to freely organize, that would produce more wealth for the poor, but they are solutions that would lower the wealth gap over time.

A Tea Party for the Left

Michael Scherer draws lines between the ultra-right Tea Party and its nearest complement in the realm of public furore. In its broadest outlines, this new outpouring of protest is driven by the same fuel that gave fire to the Tea Party: Anger at elites, a feeling of injustice, a concern about jobs, fear about the direction of the economy and a clear desire to take action. Whereas the Tea Party focused these furies on government, Occupy Wall Street focuses the fury on corporate America. It seems, quite simply, to be the left's answer to the right's size-of-government critique that has dominated national politics for the last two years.

Royal Wolverson
adds that both groups are repulsed by their taxpayer dollars funding Wall Street's bailout. Both are disenchanted by the death of the American dream. And both feel left out of a system that seems less like a democracy than a cavalier plutocracy. James Sinclair has a nice visual in the form of a Venn diagram to describe the Tea Party and Occupy Wall Street’s overlapping interests. Addison Wiggins at the Daily Reckoning speculates that, "for all we know, the OWS protesters are the college grads with no jobs stuck living in their Tea Party parents' basement."  

Robert Reich
argues that if Occupy Wall Street coalesces into something like a real movement, the Democratic Party may have more difficulty digesting it than the GOP has had with the Tea Party. The modern Democratic Party is not likely to embrace left-wing populism the way the GOP has embraced – or, more accurately, been forced to embrace – right-wing populism. Wall Street is a big campaign contributor. And Barack Obama is many things but he is as far from left-wing populism as any Democratic president in modern history.

The danger of elite capture

Yves Smith argues that the absence of demands of the occupy Wall Street movement risks giving place to a form of elite capture of this movement if they cannot for themselves a series of demands. The evidence of corruption among the elites is substantial. As recently as the early 1980s, the overwhelming majority of people who went into government agencies did so out of a spirit of public-mindedness, not with an eye to how the resume-burnishing and connection-mongering would pay off later. The revolving door has become institutionalized, and rampant conflicts of interest are accepted unblinkingly. I think OWS is best served on building on its current momentum, getting more followers and extending its reach, since the dangers of elite capture are serious. There is nothing more that the orthodoxy would like to do than neuter the aims of OWS via inside the Beltway dealings and negotiation of hard to understand legislative fine print.

Paul Krugman
argues that people like Joe Stiglitz and him have an obligation to work on this, helping to translate what justifiably angry citizens are saying into more fleshed-out proposals. That doesn’t mean taking the public out of the loop; it means putting whatever expertise you have to work on the public’s behalf. I mean sure, I’m an elitist in the sense that I believe that economics is a technical subject that benefits from study and hard thinking. But that’s very different from being anti-democratic.

Similarities and differences from the alter-globalisation movement

Naomi Klein pronounced a speech at Zuccotti Park, published in the Nation, where she compares this movement with anti globalisation movements in the late 1990s. But there are important differences too. For instance, we chose summits as our targets: the World Trade Organization, the International Monetary Fund, the G8. Summits are transient by their nature, they only last a week. That made us transient too. We’d appear, grab world headlines, then disappear. Occupy Wall Street, on the other hand, has chosen a fixed target. And you have put no end date on your presence here. This is wise. Only when you stay put can you grow roots. Another crucial difference a decade makes is that in 1999, we were taking on capitalism at the peak of a frenzied economic boom. Today everyone can see that the system is deeply unjust and careening out of control. Unfettered greed has trashed the global economy.

*Bruegel Economic Blogs Review is an information service that surveys external blogs. It does not survey Bruegel’s own publications, nor does it include comments by Bruegel authors.

About the authors

  • Jérémie Cohen-Setton

    Jérémie Cohen-Setton is a Research Fellow at the Peterson Institute for International Economics. Jérémie received his PhD in Economics from U.C. Berkeley and worked previously with Goldman Sachs Global Economic Research, HM Treasury, and Bruegel. At Bruegel, he was Research Assistant to Director Jean Pisani-Ferry and President Mario Monti. He also shaped and developed the Bruegel Economic Blogs Review.

  • Shahin Vallée

    Shahin Vallée is head of DGAP’s Geo-Economics Program. Prior to that, he was a senior fellow in DGAP’s Alfred von Oppenheim Center for European Policy Studies.

    Until June 2018, Vallée was a senior economist for Soros Fund Management, where he worked on a wide range of political and economic issues. He also served as a personal advisor to George Soros. Prior to that, he was the economic advisor to Emmanuel Macron at the French Ministry for the Economy and Finance, where he focused on European economic affairs. Between 2012 and 2014, Vallée was the economic advisor to President of the European Council Herman Van Rompuy. This experience has put him at the heart of European economic policy discussions since 2012, in particular on issues related to the euro area and international policy coordination (IMF, G20). Having started his career working for social investment vehicles and entrepreneurship in Africa, he has also worked as a visiting fellow at Bruegel, a Brussels-based economic think tank, and as an economist for a global investment bank in London.

    Vallée is currently completing a PhD in political economy at the London School of Economics and Political Science. He holds a master’s degree from Columbia University in New York, a degree in public affairs from Sciences Po in Paris, and an undergraduate degree in econometrics from the Sorbonne.

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