Beyond Occupy: A Campaign to Decentralize Wealth and Its Associated Power
IN FOCUS, 29 October 2012
by Elizabeth Barrett – TRANSCEND Media Service
September 17th  was the one-year anniversary of the first Occupy Wall Street protest, which was held in Zuccotti Park in the financial district of New York City. The Occupy movement grew out of the natural rage people felt about the massive transfer of wealth from the public sector to certain people in the private sector during the bailout of the financial industry. The polling at the time of the bailout showed that the vast majority of Americans opposed it, yet those with influence went ahead with it anyway. The EU and the US continue today to use public money to support and protect private finance.
The economy is continuing to go from bad to worse for most people in the world, and headlines say that analysts “offer grim assessments of the economy’s future.” More and more people are without the basics in life, like a safe place to live, food to eat, utilities, and health care. There will be a point where people say that enough is enough, and will act if they have a positive place to direct their energy.
According to the Pew Research Center, polling now on the Occupy movement suggests that the American public agrees with its views but not with its approach. This article suggests a different way forward that focuses on taking positive steps to raise economic well being for society generally, by decentralizing wealth and the political influence that goes along with it.
Occupy uses the slogan “the only solution is world revolution.” While clearly systemic change is needed, their approach needs tweaking. What are needed for the Occupy impetus to turn into something really meaningful and effective are a clear goal, positive rather than negative energy, and additional tactics.
Mind the Gap – The Need for a Clear Goal
Capitalism is not “the name of the problem,” as Occupy suggests. In fact, the problem is too few capitalists, not too many. Capitalists are those who have assets, and everyone in the world needs assets. Rather than the 10% of the people who, according to the United Nations, own 85% percent of the world’s wealth, or “capital assets,” we need a much more decentralized capital asset profile. To spread the wealth around, the goal should be for many, many more people to have assets – and the way to accomplish this is for people to have an ownership interest in their work, to keep production of basic goods much closer to home, to have a society which does not commercialize public functions, and to place social limits on the unethical accumulation of wealth.
Concentrated asset ownership is bad for human society as a whole. Surprisingly, though, another Pew Research Center poll shows that there is no consensus in the US that the country is divided into the “haves” and the “have-nots.” The socio-economic division in the US and the world as a whole is perhaps more usefully seen as between the solely-self-interested, and the mutual-interested. The people who society needs most to be concerned about are those who, when their self-interest conflicts with the common or mutual interest, refuse to be public-minded and yield to the common good. Science calls them “free riders.” As such, the “gap” that needs to be minded is not so much between the haves and the have-nots, but rather between those who operate only in their unyielding self-interest and the public minded.
Furthermore, the goal should be to decentralize wealth before it is accumulated, rather than after. It is more effective to do so – people don’t much like having their “hard-earned money” appropriated by a government. Allowing people to keep money they ethically make is a powerful incentive, which was Adam Smith’s big breakthrough in thinking. That is why it makes sense to regulate and incentivize how people accumulate wealth, rather than to tax it after it is accumulated. Whether wealth is spread around before or after it is already in the hands of individuals is the difference between “mutualism” or “sustainable capitalism” and socialism, and it is an important distinction if we want to successfully decentralize the wealth around the world.
Post-accumulation decentralization or redistribution of assets is the current strategy of socialism, and some tax schemes under capitalism. There are a variety of taxation systems, such as graduated, regressive, etc. The original idea behind taxation is that citizens mutually contribute some of their assets to a “government” to support public services that are used by all. Public services or functions include things like fire and police, healthcare, education, and environmental protection. When wealth is held in the hands of the few, they pay most of the taxes, and the model of taxation as a form of mutuality fails. Taxation as mutual contribution rather than wealth redistribution works better when the wealth is spread around and almost all the people contribute to the community pot to support common, public benefit.
Distant Ownership, Distant Production
Diffuse or decentralized asset ownership can be accomplished by owning your own work and your own home, among other approaches that will be discussed in more detail below.
Not that long ago people used to own their own businesses rather than work as employees for others. Families would run a neighborhood bakery, a coffee shop or restaurant, a grocery store, a car repair shop. And goods were produced locally or regionally, rather than being shipped in from far away. These days, people spend their money at businesses which are owned by distant and extremely wealthy owners like Starbucks and Wal-Mart, and the manufacture or creation of basic goods is no longer in close proximity. 93% of people are now “employees.”
Buy Local, Buy Worker-Owned
Contrary to the current thought that also started with Adam Smith in 1776, human beings actually are not a commodity known as “labor” – they are living, breathing people. To decentralize wealth, those who are currently employees of commercial enterprises should be converted to having an ownership interest in their work. And we need people to start new, worker-owned businesses based on local and regional production. Converting “employees” of commercial enterprises to owners, through cooperatives, stock ownership, or partnerships, will eliminate the current norm that permits only a fraction of the value created by a human being’s work to be returned to him/her through a wage – while an “owner” takes the marginal value for him/herself. What is best for human society as a whole is for every human being to get the whole value of the work they do.
This will be a revolutionary change that will dramatically decentralize wealth. It may also run contrary to the vested interests of the private-sector labor movement (and, obviously, management), the leaders of which have enormous political power. I can’t say labor will like this proposal, but I believe it to be the best way to improve economic well being across the board.
A Second Industrial Revolution?
Not only is worker-ownership key to decentralization of wealth – along with this goes the concept that basic goods should be produced locally and regionally rather than in a centralized fashion as is the norm today. Commonly seen in many parts of the world in the “buy local” campaigns for fruits and vegetables, decentralized production of basic goods can be usefully expanded to the manufacture of textiles, apparel, footwear, furniture, steel and iron, basic electronics, ecoplastics (an environmental substitute for the plastics and chemical industry), toys and games, energy, and other basic commodities. We need a second industrial revolution, with the focus on decentralized manufacture and creation of goods. The Industrial Revolution in the 1700s in England and then across Europe created a great deal of wealth because manufacturing is a powerful engine of prosperity. Local or regional, worker-owned industries can produce goods for regional consumption, avoiding the need to ship things across the world and providing a diffuse engine of prosperity. The decentralization of the production of basic goods in the world will benefit the environment, broad-based economic development, and security.
Not All Money is Accumulated Equally
Another factor in the decentralization of wealth is the need to create written and unwritten social rules that shun the unethical accumulation of wealth. Making money isn’t inherently bad, but there are those who acquire their assets by walking all over the interests of others. But since not all wealth is accumulated unethically, the discussion needs to be more nuanced than just to suggest that anyone with money is evil.
If you make your money without hurting anyone else’s fundamental interests, why should society care? Tactically-speaking, it is better to split the wealthiest between those who act ethically and those who do not, rather than labeling all wealthy people as capitalist pigs. The goal should be to decentralize wealth, not to eliminate it altogether.
What is considered to be “unethical” accumulation of wealth should be broadly defined to include anything that has “external costs” – external costs being defined as anything which interferes with the satisfaction of fundamental human needs of others. Some examples of unethical accumulation of assets are tobacco and soda – people who accumulate their assets by creating and selling a product which harms people are acting unethically. Tobacco is carcinogenic and addictive. Soda has high fructose corn syrup, caffeine, and carbonation – the phosphorus in which is not meant to be ingested by the human body and makes the gut unable to absorb calcium. Another example of unethical accumulation is making your money through the work of “employees.” The production of anything that damages the environment has external costs and constitutes an unethical accumulation of wealth. There are many products and services which have external costs under our current socio-economic system.
A definition of unethical accumulation should include profiting from the performance of public functions like police and fire, education, healthcare, and military.
Non-commercial Performance of Public Functions
A critical aspect to the decentralization of wealth is whether the performance of public functions includes a “profit,” which makes them too expensive to afford on a society-wide basis and dramatically lowers levels of public well being. It used to be in the US that public functions were performed on a noncommercial basis, largely by governments. For example, hospitals and health insurance companies used to be not-for-profit corporations. Today still, public functions like police and fire are noncommercial.
The Reagan and Thatcher years brought a doctrine of “privatization” that changed the face of society in a profound way. Not only were commercial activities to be performed by for-profit entities, but noncommercial activities were as well. Examples include privatizing schools, police, fire, military services, healthcare, and other basic public functions. Privatization as a social operating concept is now so deeply entrenched in the US that popular discussion paints any activity that is performed without a profit incentive as “socialism,” despite the fact that public functions have been performed efficiently without a profit incentive for years in a “capitalistic” society. The axis of discussion turned for political purposes on whether functions are performed by government or by “the private sector,” when in fact, the proper axis should be whether the activities are performed on a for-profit or not-for-profit basis – regardless of whether they are governmental or non-governmental.
One of the places where this concept is seen most glaringly is in military contracting and foreign aid programs. For-profit corporations, like Dick Cheney’s Halliburton, are making gobs of money off of government contracts to perform public functions on a commercial basis, like preparing meals for the military or managing foreign aid programs. The US federal budget would be much smaller if “profit” were eliminated from the performance of public functions, and eliminating profit from healthcare in the US would make it affordable for all. There is a strong presence of unyielding self-interest in the commercialization of public functions currently, and the issue should be re-framed to create a social expectation that basic public functions are performed without profit by either governments or non-profit organizations.
How do for-profit and not-for-profit corporations differ in the US? Non-profit business doesn’t pay tax to governments like other business because they are performing a public function. People get paid a salary to work for the organization rather than taking the “profit” out of the business and paying it to the “owners.” The tax code limits nonprofit salaries to those which are “reasonable,” a question of fact for a judge. Nonprofit salaries of USD$500,000 per year have been upheld as reasonable.
It begs the question, what is the role of government? It should be to help its citizens to satisfy their fundamental human needs. If not this, then why do they exist? People should expect governments to help individuals to be self-sufficient when they need it. Government should not favor some citizens over others in its policies and should be expected to treat all people in a similar fashion without favoring those with exceptional wealth.
In sum, a clear goal, which Occupy was criticized for lacking, is foundational to a strong and effective social change movement. Pre-accumulation decentralization of wealth is one such clear goal. In addition, the movement can benefit from transforming its negative approach to a positive one and adding to its tactics.
The Need for a Positive Approach
Successful social change movements are based on a positive rather than on a negative energy. From a tactical perspective, it is much more productive to be “for” what you want rather than “against” what you don’t like.
The peace symbol during the 60’s was a clear, simple symbol of a positive goal, one that anyone could recognize instantly. Massive cultural change occurred across the world as a result of the positive efforts made during this period. Clearly what is needed again is a cultural revolution across the world to change systemic aspects of human society, but an “anti” revolution isn’t going to produce the desired result. I urge people to focus their energy on what they would like the end result to look like.
Social Change Tactics 2.0 – The Power of Money
The cultural revolution that took place across the world in the 1960s changed the relationship between state and society by being able to limit government militarism as never before. There is again a profound desire across the world for social change, and it is time again for a major shift – where those who are the state do the bidding of general society rather than the other way around.
The protests that worked so well to turn the tide in the Vietnam era don’t work as well now because states have learned how to counteract them effectively, and we need to go to social change tactics 2.0. The rollout of massive counterforce, where those in authority essentially go on a war-footing, has intimidated most citizens into not turning out for public demonstrations. During this year’s May Day protests in Oakland, for example, the “public safety” turnout was staggering. One could have imagined there had been a national emergency of epic proportions, from the looks of the mobilization.
It’s not to stay that public marches are completely useless, just that they should be limited to short durations during daylight hours and perhaps use flash-mobs. The most important social change tool should be how people spend their money. Using the power of money will bring about the desired social change – not exactly a boycott, which urges the withdrawal of consumer spending, but rather a redirection of consumer spending to businesses that are worker-owned and producing their goods locally and regionally.
Use the power of money. Boycotts have been pivotal social change tactics in many actions, including getting out from under apartheid in South Africa and the civil rights movement in the US. The most significant social action people who care about decentralizing wealth can take is to spend your money at businesses which are worker-owned, and producing locally and regionally. Every day we wake up and give our money to corporations that centralize asset ownership. Re-directing how we spend our money can powerfully bring out the needed social change, and no one has to risk being beaten with a police baton.
Decision-making in the world today is concentrated in the hands of a few who make choices that affect the vast majority. It is critical to general human well being that people participate in the decisions that affect their lives, and that their fundamental human needs be satisfied. Even a “majority rule” model - – where 50% of the population is said to “vote” – leaves half the population with unmet concerns or basic needs. 100% of the people in the world matter. The way to decentralize political participation is by going around elected officials and voting with your money.
While the old adage was Vote with your Feet, we can now add to that, Vote with Your Money.
Reduce the Influence of International Commercial Finance
A final note is that it is really important to reduce the disproportionate influence of international finance in human society by depositing your money in not-for-profit banks and expecting capital for public functions to be provided on a noncommercial basis. These huge international banks – nine of which hold the vast majority of the individual deposits of the world’s population – do seem to be running the world, and it is not good for human society for money to be concentrated in a few commercial banks.
A Cultural Revolution or “Global Spring” – Toward Mutualism or Sustainable Capitalism
The energy behind the Arab Spring, Occupy, and many other social change movements like the “buy local” campaigns and environmental awareness-raising could be combined into a Global Spring movement to raise levels of wellbeing in human society across the world. This is what “mutualism” or “sustainable capitalism” is – decentralized wealth and decentralization of the political influence that goes with it.
Elizabeth Barrett is a public international lawyer and mediator based in San Francisco. You can find her online at theglobalspring.org.
This work is licensed under a CC BY-NC 3.0 United States License.