I was recently talking with some friends who work at the Chicago Board of Trade. Hearing the opinions voiced by Occupy Wall Street protesters, the traders agreed that they'd seen disturbing changes within their industry. While they might have written off criticisms 15 years ago, they've since watched the financial sector become more and more based on speculative gambling--with people trying to make profits by moving money around rather than by supporting real economic activity. To a surprising degree, my friends were willing to consent that the system has grown bankrupt. Yet, while they share some of the activists' criticisms, they don't like the street protests and are doubtful that the occupations will help our democracy.
I have been sympathetic to their concerns, but I ultimately disagree with their assessment of the protests' importance. Occupy Wall Street is rooted in a deep tension in American life. In Democracy in America, Alexis de Tocqueville illuminated how the conflict between equality and liberty is at the center of the American political drama. That we are now having an open and spirited debate about the optimal balance between these two values is a crucial, and welcome, development.
For decades, we have focused on extending liberty in the realm of the marketplace, but this has come at the expense of democratic equality. There was a time when our government approached economic policies with a dual bottom line: Policies were meant to create not only competitiveness, but also social well-being. In recent decades, however, our policy-makers have shifted to pursuing competitiveness as an end in itself, without regard for social benefit. As a result, we now witness a failure to create broadly shared prosperity--a failure that takes the form of glaring inequalities of wealth.
But there's been a failure in our politics as well. Our system has too often failed to include the voices of working- and middle-class Americans as part of the discussion, privileging the political speech of the wealthy. As Harold Meyerson recently asked in The Washington Post:
After all, did the financial deregulation of the past two decades get enacted on its merits, or because of the campaign contributions and lobbying prowess of the financial sector? The 1999 repeal of the Glass-Steagall Act, which had kept federally insured commercial banks separate from investment and speculator banks, didn't happen because speculative banking had suddenly become safe. It happened because Citibank and other institutions made mega-campaign contributions and lobbied ferociously for repeal. The Commodities Futures Modernization Act of 2000, which deregulated derivatives, was enacted because the leading banks believed they could make untold profits if it passed. And because they did indeed make untold profits--in the past decade, banks' gains reached 41 percent of all the corporate profits in America--they had even more money with which to influence our lawmakers.
Americans are not only feeling a financial pinch; they're feeling disenfranchised. We have experienced cuts to the welfare state for decades. But what we saw in Wisconsin and other state-level fights in early 2011 was that when Republican governors coupled further rollbacks in social services and decreases in education funding with attacks on some of the few remaining middle-class jobs in America, it created a level of insecurity that drove people--in numbers rarely seen--to voice their concerns outside of an electoral framework. These people used protests because the more traditional channels of democracy seemed blocked to all except those who could afford high-priced lobbyists. The same lack of democratic equality gave rise to Occupy Wall Street, and it will continue to motivate protests for as long as it persists.
Even within the business world, a variety of figures have recognized the imbalance. Henry Blodget, CEO and editor-in-chief of Business Insider, argues, "Importantly, the inequality that has developed in the economy over the past couple of decades is not just a moral issue. It's a practical one. It is, as sociologists might say, "de-stabilizing." It leads directly to the sort of social unrest that we're seeing right now." Meanwhile, Laurence D. Fink, Chief Executive of BlackRock, states of Occupy Wall Street, "These are not lazy people sitting around looking for something to do. We have people losing hope and they're going into the street, whether it's justified or not." And for his part, Vikram Pandit, chief executive officer of Citigroup, says: "[These protests are] completely understandable. Trust has been broken between financial institutions and the citizens of the U.S., and that is Wall Street's job, to reach out to Main Street and rebuild that trust."
Historically, social movements have often been unpopular--and yet they've made important contributions to American politics. When viewed in hindsight, many protest movements once thought to be too unfocused, unkempt, or unruly ended up securing gains that are now taken for granted in our society.
While some observers may feel disappointed or confused by the message coming out of Occupy Wall Street, we should recognize that social change is a messy process. During the 1930s, those opposed to such measures as social security and labor rights frequently denounced those pushing for changes as dangerous Bolsheviks. Historian Kim Phillips-Fein notes that William Clinton Mullendore, president of the Southern California Edison Company and an influential conservative thinker, argued in 1931 against that era's reformers, "[Those stirring up 'trouble' are] apostles of hatred."
Yet in the end the social movement activism derided by establishment figures proved essential to creating the political climate necessary for change. Labor unionists and others speaking out made the reforms of the New Deal possible and paved the way for the growth of the American middle class in the post-World War II period. Few can argue today that this wasn't a good thing for our country.
What's at stake now is the health of our democracy. When a disproportionate number of Americans feel disenfranchised, it weakens the social fabric of our country. We see this in the ever-more-acrimonious clashes displayed on cable news. Will Occupy Wall Street, like New Deal-era activism, be viewed in retrospect as effectively pushing our political debate in a healthier direction? This remains to be seen. But it is clear that a renewed drive to again create shared prosperity in our economy and democratic equality in our politics is long overdue.
