Occupation, Inequality and the Myth of Progress

Opinion, by Nathan E. Williams

RIO DE JANEIRO, BRAZIL – As Europe grapples with the worst financial crisis in a century and the Eurozone topples towards the brink of collapse, the ‘Occupy’ protests that have set up encampments in most major European and U.S. cities have been seen as a reaction to the institutions of power, both political and financial, that got us into this mess.

In the European and U.S. media, the protests have been analyzed exclusively from a European and U.S. perspective – these two continents being the joint center of the financial crisis. From the coverage you would hardly know there are hundreds of protests claiming the ‘Occupy’ label globally, from São Paulo to Vancouver, Melbourne to Istanbul.

In countries defying the economic crisis, where economies are growing strongly and creating jobs (which should, on the face of it, make them immune from popular anger) people have still felt compelled to take to the streets in protest.  The phenomenon, it is clear, goes beyond those countries suffering most from the financial crisis. There is something else at play.

It would be easy, perhaps comforting, to dismiss the protestors as a ragtag bunch of student idealists, hippies and counter-culturists with a hazy, unrealistic agenda.  It is true that the agenda of the protestors may not be particularly well thought-through, but the protestors themselves are representative of a broad cross-section of society.

From working people to single moms, recently unemployed to long-term unemployed, military veterans and middle-class families, people have decided to take a stand against what they see as a system fast running out of legitimacy.

And there is one fairly straightforward reason for this loss of legitimacy: growing inequality, of both means and opportunity.

Across the world, the gap between the rich and the poor is widening. Even in emerging economies with growing middle-classes, the benefits of economic growth are being shared unfairly. For example, even in Brazil, which has made big strides in pulling people out of poverty, a 2010 World Urban Forum report showed that the richest ten percent absorb 50.6 percent of all income, while the poorest ten percent take only 0.8 percent of the country’s wealth.

In the developed world, a turbo-charged and dangerous process of regression is taking place.

In the UK, a report earlier this year by the High Pay Commission (a body established by the UK government) showed the top 0.1 percent of earners take an increasingly large chunk of all income. If current trends continue, by 2025 the top 0.1 percent of earners will take ten percent of the national income, and by 2030 the UK will have gone back to levels of inequality not seen since Victorian England.

In the United States, a Congressional Budget Office study last year found that between 1979 and 2007 the top one percent saw their income increase by a staggering 275 percent while all lower quintiles lost their share of national income. Another report by the High Pay Commission in the UK revealed that the bosses of Britain’s top 100 received an average rise in their pay of £1.3m to almost £4.5m last year, the biggest jump in nine years.

As countries have gotten richer, the majority of people have gotten disproportionately poorer. This process of regression has been obscured by the ability of increasing numbers of people to buy material goods on credit. From cars to TVs, fridges to iPods, the more ‘stuff’’ we had, the more we convinced ourselves we were sharing the proceeds of growth.

Of course, the reality is that debt was bad for most people but good for the wealthy – the bankers – who sold it to us. They then sold it between themselves, making mammoth fees in the process, until the house of cards came tumbling down. Rather than heralding the end of a system weighted in favor of the elite, little seems to have changed.

In bailing out banks, the majority footed the bill for the greed and irresponsibility of the minority; a minority who continue on much as before, making decisions which serve only to bolster corporate interests and reinforce an unequal and, ultimately, unsustainable model of capitalism.

It is this patent unfairness of a system geared to the minority which is propelling a global movement.

Even for those with a comfortable existence, these facts – and widening inequality is a fact – grate. Much of the world has witnessed incredible progress over the past 100 years, both societal and economic. But this progress has lulled us into complacency about its inevitable onward march.

History shows there is nothing inevitable about progress. From civil rights to the suffragettes, progress has been organized and deliberate, often fighting against ingrained establishment interests.

If the majority leaves it up to the minority to make the decisions about what ‘progress’ looks like, don’t be surprised when these decisions benefit only the minority.