Occupy Wall Street: a movement against oligarchy

By Adam Hudson

It has been three months since the Occupy Wall Street movement began on September 17, 2011. For the first few days, the movement was largely ignored by the mainstream media. Now it has gotten to the point where it cannot be ignored. The movement has spread to over one thousand cities across the United States and around the world. Occupy Wall Street does not have a clear set of demands nor is there an easily identifiable leadership. Yet, it is united by the economic suffering shared by millions of people. The movement’s lack of clear demands is the most persistent criticism people (both detractors and supporters) make against Occupy Wall Street. While demands are important, this criticism misses what the movement is really about.

Most political movements focus on a single issue and make demands accordingly. The civil rights movement demanded an end to legalized racial segregation in the United States and advocated for civil rights for black people and other nonwhites. The antiwar movement in the 1960s demanded an immediate end to the U.S. war in Vietnam. While many of these struggles continued, there have been other movements, such as the environmentalist movement calling for measures to halt climate change. All these movements are undoubtedly important, however, these movements tend to focus solely on individual issues with little cross-pollination with other struggles. Nor has there been a centralized focus on systemic forces that unite these struggles.

Occupy Wall Street is different. While its focus is primarily economic, there are a slew of grievances behind it, such as unemployment, inequality, student debt, poverty, and human suffering from the crash of the global economy. Most movements would have focused on one of those grievances, such as a movement for a jobs program, a movement to end student debt, or a movement for economic equality. Rather than focus on one grievance, Occupy Wall Street unites them and attacks the system itself. As OccupyWallSt.org, the movement’s unofficial de facto website, says:

“#ows [Twitter hash-tag for Occupy Wall Street] is fighting back against the corrosive power of major banks and multinational corporations over the democratic process, and the role of Wall Street in creating an economic collapse that has caused the greatest recession in generations. The movement is inspired by the popular uprisings in Egypt and Tunisia, and aims to fight back against the richest 1% of people that are writing the rules of an unfair global economy that is foreclosing on our future.” [brackets mine]

In essence, Occupy Wall Street is an anti-systemic, populist movement against oligarchy and is actively creating a radical form of grassroots democracy.

Oligarchy

In order to understand an anti-systemic movement, it’s important to understand the nature of the system it’s up against. The political-economic system in America is not democratic — it’s oligarchic. Considering how much America touts itself as a “liberal democracy” and “beacon of freedom” to its citizens and around the world, calling America an oligarchy would understandably strike most people as odd. After all, how could a country with a constitution, bill of rights, and free elections be an oligarchy?

It’s important to keep in mind that the United States of America was founded as a republic, not a democracy. In a republic, people elect officials to the government and those officials are trusted to make decisions that benefit the country. The Founders did this because they distrusted democracy, particularly direct democracy where people actually make the decisions themselves. They didn’t believe the common person was capable of making important decisions for the country so they entrusted that power to themselves — rich, white male elites who saw themselves as wise men. More importantly, they wanted a system that protected their power and privilege. That’s why the only people who could vote, initially, were white men who owned property, which meant poor people, black people (slaves and free people), American Indians, and women could not vote. However, thanks to social movements throughout history, all U.S. citizens can vote. While many things have changed since 1776, political power in America has always rested in the hands of a rich and privileged class of people. This is what makes America an oligarchy.

In general, an oligarchy, as first defined by Plato, is a form of government where the richest citizens (in terms of wealth, family ties, royalty, etc.) are the rulers. Oligarchs, who are always a minority, “command or control massive concentrations of wealth…which can be readily deployed for political purposes”, as Jeffrey A. Winters and Benjamin I. Page explain in their study “Oligarchy in the United States?”. Oligarchy does not always have to be a tyrannical system. As Aristotle observed in Politics, IV, viii and Winters and Page say in their study, it can hide itself within constitutional governments. But there is a trade-off. Oligarchs say the masses, “As long as we control all the money and wealth, you poor masses can do whatever you want. Want freedom of religion? Go ahead. The right to vote? Fine. Just don’t touch our wealth.” If the underprivileged masses rise up and demand distributive reforms that threaten the oligarch’s wealth, such as taxing the rich, the oligarchs use the government to prevent that from happening. In the end, democracy becomes a sham. There are differences and occasional infighting within the oligarchic class, such as competition between different rival corporations. However, as Winters and Page point out, the oligarchs share common interests, namely protecting their wealth, acquiring more, ensuring its use for whatever purpose. In America, oligarchy is the power behind the throne of the constitutional-republic.

Oligarchy and inequality in America and around the world

Material resources bring political power to those who own them. In his study, “Who Rules America”, G. William Domhoff provides a great analysis of political power in the United States and how wealth and income are sources of power. As his study points out, when looking at inequality, it is important to distinguish between income and wealth. Income is what people earn working but also includes “dividends, interest, and any rents or royalties that are paid to them on properties they own”. On the other hand, wealth is what a person or family owns minus what they owe (debts). A person could be rich, in terms of income, but if they have a lot of debt then they are not very wealthy. What a person owns is measured by marketable assets, such as real estate (homes, property), stocks, and bonds, but this doesn’t include consumer goods, such as cars, because they can’t be converted into cash. Add up all marketable assets, subtract debts (mortgages, credit card payments, etc.), and you get net worth. There is also non-home wealth called “financial wealth”, which Domhoff defines as “net worth minus net equity in owner-occupied housing”. Winters and Page rightly point out that most people use their homes as places to live and their home equity for personal consumption and home improvement. Owner-occupying homes are rarely used a resource for political power. Therefore, when analyzing political power, it is better to look at financial wealth.

America’s massive economic inequality is a qualifying feature of oligarchy. According to Domhoff’s study, the richest 1% of the population (those who make $380,000 a year or more) own 35% of the country’s total wealth, the next 4% own 27%, the next 5% own 11%, while the bottom 80% own 15%. In addition, the top 1% own 43% of the country’s financial wealth (which is important for political power), the next 4% own 29%, the next 5% own 11%, while the bottom 80% own just 7%. In 2006, the top 1% earned 21.3% of all income, up from 17% in 2003, while the bottom 80% earned 38.6%, down from 42.2% in 2003. This occurred even as workers’ productivity rose but workers’ income remains stagnant for over 30 years. As Domhoff points out, “Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America” [emphasis mine].

While the top 1% own a large portion of the country’s wealth, at 3 million people, they are too large to constitute an oligarchic elite. The top 1% also includes many upper middle class managers and professionals, many of whom are actually subservient to the real oligarchs. There are those within the top 1% who are significantly wealthier and more powerful than others. Millionaires and billionaires are more well-off than most doctors and lawyers but they’re all included in the top 1%. Collectively, the top 1% own an average wealth of $3.3 million. The top tenth of 1% (.1%), on the other hand, own an average wealth of $14 million, while the top hundredth of 1% (.01%) own an average wealth of nearly $66.6 million. For the Forbes 400 list, the average wealth is well into the billions. Considering the differences and collective problems within the top 1% or even top 10%, Winters and Page consider the top tenth of 1% to be the oligarchs. Whatever the empirical measure, at the end of the day, the oligarchs are a small but extremely wealthy group of people.

Global wealth inequality shows that oligarchy extends across the world. According to a study done on global wealth distribution, the richest 1% of adults in the world own 40% of global household wealth. The richest 2% own more than half, the richest 10% own 85%, while the bottom half own 1% of global wealth. The study also points out that nearly all of the world’s wealthiest individuals live in “North America, Europe, and rich Asia-Pacific countries” with 37% of the richest 1% living in the United States. China is in the “middle third of global wealth distribution, while India, Africa, and low-income Asian countries dominate the bottom third”.

A great piece of evidence for global oligarchy is a study called “The Network of Global Corporate Control” done by Swiss researchers. Using network control theory (explained well in layman’s termshere), the study maps out global market networks from a database of 43,060 transnational corporations (TNCs) and about 30 million economic actors (individuals and firms). In concludes that “737 top holders [top 2%] control accumulate 80% of the control over the value of all TNCs” [brackets mine]. Moreover, the top 10 firms (top .02%) control 19.45% and the top 50 firms (top .1%) control about 40% of the global financial network — and most of these firms belong to the financial sector. There are criticisms of the study’s methodology, mainly over what the study counts as ownership and control. Despite those criticisms, the basic point remains clear: the global economy is controlled by a small group of interconnected firms — a global oligarchy.

This study also says something about capitalism — it’s an oligarchic economic system. Undercapitalism, the means of production in an economy are owned and managed by private individuals and corporations. As Karl Marx observed, those owners rely upon the labor power of their workers to produce goods and services, and then sell those goods and services for profit. The benefits of profit go primarily to the owners, while the workers are given wages for meager subsistence. Even if workers are more productive, they don’t always reap the benefits, which is evidenced by the fact that wages have stagnated for over 30 years, while workers’ productivity increased. In 1949, Albert Einstein, the famous physicist, made an astute observation about capitalism:

“Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked by even a democratically organized political society.”

Not only does oligarchy hide itself within democratic political systems, it is also a fundamental underpinning of capitalism as an economic system. Therefore, the oligarchs of the modern era are super-rich individuals, large multinational corporations, and big financial institutions like Goldman Sachs.

How oligarchs rule

Oligarchs rule in various ways to maintain and acquire more wealth and power. These include lobbying for bills in Congress and donating large sums of money to politicians. During the debate over healthcare reform, for example, a majority of Americans wanted a publicly-funded healthcare option to compete with and would be cheaper than private health insurance. However, the health insurance industry aggressively lobbied to remove this from the final bill, knowing it would harm their industry. In the end, they got what they wanted. In his 2008 presidential campaign, Barack Obama gained most of his campaign funding from the financial sector. For his 2012 reelection campaign, President Obama is still getting large sums of money from the financial industry — more so than all of the Republican presidential candidates combined. Obviously, oligarchs who donate large sums of money to politicians want something in return, which are policies that favor them.

Lobbying and financial donations are the most well-known ways oligarchs maintain their rule. However, there are numerous subtle ways oligarchs use, as well. These include creating think-tanks, such as the Heritage Foundation, that do policy research which influence politicians’ decisions on key issues, such as tax reform. There is also the revolving door between government and the private sector. This works in two ways: people work in private industries, particularly large corporations and financial institutions, usually lobbying for them, then leave and wind up working in government positions, such as Congressional staffers who help draft legislation and then vice versa, working for the government and then lobbying for private industry in government. People working in private industry wind up lobbying the federal government they used to work in or vice versa. According to OpenSecrets.org, several industries, such as the financial industry, defense companies, and telecommunications, employ lobbyists who used work in government. As a result, not only do big business and big banks pressure politicians through campaign contributions but they play an important role in drafting legislation designed to regulate their behavior. That allows them to water down regulations and draft legislation to get what they want.

The 2008-2009 financial crash is a good recent example of this. During the 1930s’ Great Depression, the Glass-Steagall Act of 1933 was passed to create a firewall between commercial banking, which everyone uses to hold deposits and take loans, and investment banking, which involves more risks and doesn’t hold deposits. For years, the financial industry tried to weaken and eliminate this bill. In 1999, they got what they wanted in the Gramm-Leach-Bliley Act which repealed Glass-Steagall. The next year, in 2000, the financial industry received another victory with the Commodity Futures Modernization Act which ensured the deregulation of complex financial instruments, such as derivatives and credit-default swaps. This made it easier for the financial sector to speculate on people’s (many of whom were poor and nonwhite) subprime mortgage loans (due to the housing bubble) and turn them into risky financial instruments, such as derivatives and credit-default swaps for profit. This led to the financial crash of 2008-2009, which devastated the global economy and created economic misery for millions of people — hence the anger of Occupy Wall Street at the financial industry.

The deregulation of the financial industry occurred through aggressive lobbying, lavish political donations, and the fact that members of the financial industry served in Bill Clinton’s administration. Robert Rubin, who worked at Goldman Sachs for 26 years, served four years as Clinton’s Treasury Secretary, while Lawrence Summers served four years as Deputy Treasury Secretary and took over as Treasury Secretary when Rubin left in 1999. Both Rubin and Summers played a role in advising Clinton to adopt neoliberal policies, such as deregulating the financial industry. Even after the crash, the financial industry continues to weaken legislation, such as the Dodd-Frank bill, that regulate their greedy and risky behavior, and received massive bailouts ($7.7 trillion) from the Federal Reserve.

Another subtle way oligarchs rule is through controlling the media and influencing political discourse. Six large media corporations own the mass media (television networks, cable channels, movie studios, magazines, newspapers, publishing houses, music labels, etc.). They are Time Warner, Walt Disney, Viacom, Rupert Murdoch’s News Corp., CBS Corporation, and NBC Universal. In addition, Clear Channel owns over 1,000 radio stations in the United States, while Google, Yahoo, and Microsoft own many websites throughout the Internet. As a result, media corporations will tailor their content to please advertisers in order to generate profit. The end product is information that inevitably reflects the ideological viewpoint of the media’s owners or does not present any views that harm the economic interests of big business.

In addition, news outlets rely on sources within business and government for information. If a news outlet publishes anything too critical of business or government, it loses access to those sources. This entices media outlets to appease political and economic elites by not publishing anything critical of them. Oftentimes, the media will repeat elite talking points without fact-checking or critical analysis, which occurred during the run-up to the war in Iraq. Noam Chomsky and Edward Harman make these points about corporate control of mass media in their book Manufacturing Consent: The Political Economy of the Mass Media, which later became a documentary based on the book.

These are the key ways oligarchs rule: lobbying government, lavish political donations to politicians, the revolving door between government and the private sector, and corporate ownership of mass media. In addition, laws and the Constitution are interpreted to favor the interests of economic elites. The notion of corporate personhood, established by Supreme Court decisions Dartmouth v. Woodward (1819) and Santa Clara Count v. Souther Pacific Railroad (1886), grants corporations the same rights and responsibilities as natural persons under the U.S. Constitution. This makes it easy (even easier, thanks to the Citizens United case) for corporations to donate large sums of money to politicians with very little restrictions.

Occupy Wall Street challenging oligarchy

Since the nation’s founding, oligarchy in America existed to preserve the power of the elites at the expense of the citizenry. This is where Occupy Wall Street comes in. In targeting the power of Wall Street and the 1% over the political system, Occupy Wall Street challenges oligarchy in America. Therefore, it is more than just a protest for short-term reforms; it is an anti-systemic movement.

In three months, Occupy Wall Street dramatically changed the national dialogue. Before the movement, the country and media focused on cutting the national debt. Since the movement, the country’s attention shifted toward inequality, corporate corruption, jobs, and unemployment. In addition, 650,000 Americans joined credit unions in October, which is more than all of 2010. This signals a shift in the country’s political consciousness. More people are realizing that big banks are not their friends. This shift in consciousness is due to the power of the Occupy Wall Street movement.

Criticisms for Occupy Wall Street’s lack of demands miss the character of the movement. If one talks to people at an occupy encampment or reads the Declaration of the Occupation of New York City, it’s fairly easy to extrapolate what the demands are: raise taxes on the rich, end of corporate personhood, student debt forgiveness, end to home foreclosures, campaign finance reform, equitable wealth distribution, measures to halt climate change, and many others. Within the movement, there are multiple ideas for policy changes and they’re constantly discussed. What’s unique about Occupy Wall Street is that it unites these disparate grievances into a movement that challenges the system as a whole.

Rather than appealing to the system to make reforms so that the protesters will go away, Occupy Wall Street sets up a model of a better society in the present to protest the unjust nature of the current system. As David Graeber, an American anthropology professor at Goldsmiths, University of London, an anarchist, and early organizer of Occupy Wall Street points out:

“You’re creating a vision of the sort of society you want to have in miniature. And it’s a way of juxtaposing yourself against these powerful, undemocratic forces you’re protesting. If you make demands, you’re saying, in a way, that you’re asking the people in power and the existing institutions to do something different. And one reason people have been hesitant to do that is they see these institutions as the problem.”

At occupy encampments around the country, people collectively make decisions by consensus at general assemblies. There are also working groups set up to deal with each issue impacting the community, such as legal, media, food, housing, and education. There are no established hierarchical structures or official leaders. Everyone is a leader. More importantly, basic resources, such as food and housing, are provided to everyone for free. These amenities also help nearbyhomeless people, foster youth, poor people, and others who have been shunned out of society. This brings to light the fact that many people have suffered under poverty and inequality long before the 2008 financial crash hit.

In recent weeks, many occupy encampments, particularly those in major cities, such as New York City, San Francisco, and Boston, have been evicted by police. The people who called those encampments their homes are now back on the streets. This encouraged the movement to enter a new phase: occupying foreclosed homes. Occupy Our Homes is a new movement in solidarity with Occupy Wall Street protesting home foreclosures by putting people back in their homes or preventing imminent foreclosures. To do this, Occupy Our Homes is partnering with grassroots organizations that have experience dealing with housing rights. This is prescient since millions of people lost or on the verge of losing their homes as a result of the bursted housing bubble. More importantly, it accomplishes something that directly impacts people who are suffering.

Occupy Our Homes is an example of Occupy Wall Street’s horizontal organizational structure in action. J.A. Myerson, an independent journalist involved with Occupy Wall Street’s Media and Labor Outreach committees, explains it well here:

“There are already organizations who have issued [demands], and they all know that, in the current moment in the history of struggling for justice and equality, Occupy Wall Street is the rising tide that will lift all boats. It is the force that will shape what the country votes on and how it votes on those, that will shape what candidates will feel pressured to campaign on…Let the organizations already fighting for these demands fight for these demands. Occupy Wall Street’s assistance will come in the creation of political culture that includes protesting corporate control of the country without interruption every day and every night in hundreds of cities and towns.”

Occupy Wall Street has been able to unite people from various political persuasions, from mainstream liberals to socialists, anarchists, to even free-market libertarians, and various movements, such as labor and antiwar, under an anti-oligarchy, anti-corporatist umbrella. From there, people can continue working on their various agendas. Occupy Wall Street, on the other hand, provides solidarity and additional resistance. In the case of Occupy Our Homes, Occupy Wall Street provides national attention and additional support for grassroots organizations that have been working on housing rights for a long time. Occupy the Hood and Occupy Colleges are examples of Occupy Wall Street extending its support for movements working on issues impacting poor, nonwhite communities and students respectively.

Eliminating a deeply-entrenched oligarchic system is no easy task. While Occupy Wall Street has accomplished a lot within three months, it has a long way to go. It still needs to address other issues, such as racism, sexism, and Western imperialism. More importantly, it needs to build a brand new world, from the ground up, that is free of injustice and oppression in order to underminbloge the current oppressive oligarchic system. How to achieve this is very difficult and, at some point, will involve participation in the formal political system. There are no easy answers to these problems. On the bright side, Occupy Wall Street is a movement where the 99% can address these problems and work toward building a better world.

Adam Hudson the Oakland Political Buzz Examiner for Examiner.com and a contributing writer for PolicyMic.com. He graduated from Stanford University in 2010 with a degree in International Relations and Middle Eastern Languages, Literatures and Cultures. This article was first published on his blog.

Tags: Occupy Wall Street