By David Dewhurst
Last Saturday, in a co-ordinated demonstration around the world, 'Occupiers' demonstrated in hundreds of cities, banging pots and marching in protest about the international economic disorder - especially debt and the need to forgive it. There was nary a flicker in the main media. On Sunday 14th a few dozen London Occupiers took up the invitation by St. Paul’s Cathedral to attend Evensong. Partway through the service four of my fellow members of Occupy London, each dressed in white with a chain round their waists, attached themselves to the pulpit and recited a short prepared statement. They took communion, remained for a few hours and emerged to a seven figure hit rate on Google and trending articles across the main media websites. Our non-Occupy friends and relatives texted and phoned with enquiries more than at any previous single Occupy event, including the St. Paul's churchyard eviction.
At best, the mainstream narrative for Occupy tends to be 'well-meaning but fuzzy.' Kindly clerics have likened us to the inchoate pre-Charter Chartists – doomed to failure in their time but perhaps partial validation in a suitably distant future. In fact the occupylondon.org.uk website has a series of statements agreed at its general assembly meetings proposing dozens of specific actions as well as general policy, and more obscurely filed on the website and the web circuits of individual working groups are plenty more. Perhaps ‘we refuse to pay for the banks’ crisis’ (Initial Statement, point 3) is too demanding a concept; perhaps the pages agreed on banking reform are just boring. Or just maybe the usual allegations against the media from ‘extremists’ have a point.
All the main media are complicit in unfair tax avoidance schemes that are increasingly obvious to the 99%. Until these are ended other reform is hobbled at best. This is obvious with outfits such as Newscorp whose predilection for declaring profits as pretty palindromes for years in a row is notorious. But holier outfits such as the Guardian and BBC have incentives to blunt our message. If you have the time available Google the strategies of the Guardian Media Group or visit the Daily Mail website where they helpfully explain the moral hazard placed upon the BBC’s main presenters and programme makers in becoming self employed. The claim that, ‘not a single journalist would be able to write on the subject’ ... if they had to show ‘total purity in all their dealings and investments, both personal and corporately’ carries the point.
So what does Occupy really want? OK, I have to issue the usual caveat that anything not put to general consensus isn’t definite Occupy policy but only that of an individual or working group, but as a member of Occupy London’s Economics Working Group (EWG) from its start last November I can read the runes well enough.
The fact that untamed inequality is evil is simple; ways to deal with this get complex and controversial. Occupy has not yet resolved all the political and economic controversies of world debate but we’re a long way on from last year.
How do you initially explain controversies in atomic physics? You don’t begin by talking about string-like clouds of probability oscillating in eleven dimensional phase space. You begin by talking about little balls. Occupy London’s Economics Working Group has produced, 'The Little Book of Ideas.' It contains 27 ‘chapters’ of a few hundred words each, alphabetically ordered from ‘Austerity’ to ‘Transparency (in Accounting)’. Our target is not the audience which reads political blogs. It is the broad spectrum affected by the economic crisis who are, in our opinion, being mystified by what passes for economic debate.
Tom Moriarty and Peter Dombi, converts from the finance and investment world, drove the majority of the production but got a handful of chapters from the rest of us. Mine on ‘Regulatory Arbitrage’ was painfully simplified. Some chapters could feature in a primary reading scheme. All chapters should engage you in thought, and perhaps, like us, notions for development in the second edition.
How else to raise the level of debate? Following tradition, Occupy's New Putney Debates thenewputneydebates.wordpress.com officially kick off on Saturday 27th October with inputs from Richard Wilkinson of 'The Spirit Level' on 'Inequality: the enemy between us' and John Christensen, massively referenced in 'Treasure Islands' and former economic adviser to Jersey, on 'The Finance Curse: Tax Haven Britain, Predator and Victim'. On Sunday 28th, after a session on 'what would real democracy look like?' including John McDonnell MP, we show a play at St. Mary’s Church, Putney about the original English Revolution.
Monday 29th continues with Andrew Haldane, executive director for Financial Stability at the Bank of England in a discussion on, 'can banks be made socially useful' along with the chief economists of the TUC, Which? a small business rep and a member of the Occupy London EWG. We're facilitated by Lisa Pollack from FT’s Alphaville.
An equally excellent series of events continues up to November 11th. If you haven't yet decided to click the link you might care to know that we’re fielding some of the top names in UK environmentalism, but it's not about top names, even if we're encouraging people to debate with some top quality window dressing.
There are competing frames on the current crisis. Szasz taught us that the battle in the human jungle is, 'define or be defined.' The neatest, and most ruthlessly resisted, narrative squarely blames the rich. "There’s been a war between my class and the rest and my class has won. It’s been a rout," Warren Buffet said. We take that as read. The distribution of wealth and income has increasingly congealed at the top. Trickle down degenerated to aneurysm. Roughly, there is a limit to the capacity for real consumption by the very rich. Their surplus chases a bubble of written 'rent' extraction devices. As it threatens to burst demand, captured governments underwrite that bubble as the top priority of the taxpayer.
This consolidates the real crisis of effective demand for 'non-paper' goods and services which is the basis of the economic turmoil. Paying the rich off will ultimately only exacerbate the situation. Left to itself the logic of compound interest captures a larger and larger share of wealth within a diminishing fraction of the population. The point arrives when a successful predator has sucked too much from the goose that lays its golden eggs. When we passed that point is an exercise for economic historians. The real point is to reverse direction.
Whether the reverse should stop at the wealth distribution – Gini coefficients, whatever – of the early '70s or of the hunter-gatherers, is an optimisation problem for better economists than the neo-liberals who defined the rationale for the "50 year-long giant intellectual mistake" which got us here in the first place. (Quote from Lord Turner)
What is ultimately inescapable, unless we descend to debt peonage, is a real restoration of the balance. A claw-back of the fruits of the tax strike or go slow which was orchestrated from within the financial sector over the last several decades is difficult. Allocating blame for the intellectual and financial captures of (in particular) English speaking legislatures by the deregulators and misinterpreters of Adam Smith may be a waste of time. Many Marxists, libertarians and opportunists will blame 'the system.'
The traditional answer (Hammurabi 1750 BCE) is debt repudiation or forgiveness, referred to in the Old Testament as Jubilee. Credit to the Archbishop of York as the first UK establishment figure to align with the Jubilee Debt Campaign which is calling for national and international Debt Audit Commissions which track where and how debt was incurred and what effectively can be written off. A few 'respectable' economists are preparing opinion. The IMF points out that the debt burden is not sustainable long term. Adair Turner hints about writing of the debt created through QE.
To articulate the complete fix and counter objections takes just a little longer. Adequate progressive taxation requires the end of tax havens. While the Tax Justice Network and Economists grouped around Stephany Griffith Jones argue that this can be done from the UK alone, Occupiers are sceptical about its attainment without international alignment against the plutocrats. While few Occupiers believe that a land value tax would solve everything most of the EWG believe that it would help a lot (as do two former deputies of the Bank of England).
When the Alpine economic landscape is softened, systems must develop to stem the recreation of pinnacles from potholes. In one of our developing documents the set of suggestions runs into hundreds. The truth the plethora of mainstream commentators will struggle to avoid to their last tax return is simple: The rich must pay. Face that fact and intelligent debate can begin.
Dave Dewhurst is a longstanding member of the Occupy London, Economics Working Group and Secretary of the Cybernetics Society.
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