Wednesday, October 26, 2011

Sustainable Capitalism and Occupy Wall Street: Can Capitalism Save Itself?



Yesterday, I had a guest lecturer at my policy class.  Steve Rocco, the Co-Founder of Mission Markets. 






The group works to:




With an outpouring of support for Occupy Wall Street indicated in polls which suggest a majority of Americans believe income inequality is too severe, Rocco talked about how we have gotten here.  “A generation ago management split profits 50/50 with workers.  Today, management takes 80 %, and the workers get 20%.  The problem is management is one guy and there are 50 workers.  When that happens over and over again you have the situation we find ourselves in.  And there is obviously little to no demand on the market.  I don't know if the 80/20 split is accurate and don't know if it was ever 50/50.   But we do know that the ratio between CEO pay and his average employee has gone up a lot.”  Today, Chief Executive Officers earn 343 times more than average workers.  

Fifteen years ago, my little brother wrote a paper at the London School of Economics arguing that our economic models were not sustainable. He argued that capitalism as we know it is carcinogenic.  The school rejected his argument.  For far too many years, far too few have paid attention to countless indicators which suggest what we are doing is no longer sustainable.  If only he could turn the paper in today.  Today, many seem to understand that current economic models represent a model of growth which supports uneven development, environmental disrepair, and expanding inequality.  Today’s New York Times reports:

The genius of the OWS movement is that it has helped take what were once boring pie charts showing distributions of wealth and helped turn this data into movement to change this.  Today, unions, social workers, anarchists, homeless and health care advocates are translating the movement’s critique into policy proposals for reforms, including extending the millionaire’s tax in New York.  Our governor is supported by Koch Brothers, # three and four on the Fortune 400 list of the richest Americans.  They want him to create more tax breaks for the one percent.  The task facing the governor is will he support the one percent who fund him or the other 99% who want to continue the millionaire’s tax in New York state.  Already police upstate are supporting the 99% and abstaining from cracking down on the movement.  Next Tuesday, a rally is planned as a March on Governor Cuomo "1%". “Meet at 5th Avenue and 41st Street @ 12pm we will march from Byrant Park to the Governor's office. Let's tell the #1 Politican (Cuomo) to make the 1% pay their fair share.

While reforms are in the air, many are suggesting this crisis offers a moment to create a smarter more sustainable form of capitalism.  Today, many realize there are smart ways of supporting community economic development.  Keeping money in credit unions, buying and selling local so cash flow stays in neighborhoods and generates economic movement – these are just a few of many simple practical approaches.   

My first social work job in New York was with Greyston Foundation



The movement for sustainable investment has already turned a supportive eye toward OWS, suggesting the two movements are fundamentally aligned.  Just last week, Zevin Asset Management, pioneers in socially responsible investing, issued a statement of support for the OWS movement.

In this time of declining living standards and high unemployment, many people feel bitterness and disappointment.  And justifiably so, as overwhelming evidence demonstrates the rich have gotten richer at the expense of the middle class, the working poor, and the unemployed. The rising differential between executive and worker incomes and the disregard exhibited by many corporations for their local communities and the environment are symptoms of a financial system which rewards short-term destructive gambling instead of focusing on the long-term sustainability of our economy. As socially responsible investors, we seek the same goals as those protesting. Therefore we stand alongside the Occupy movement, supporting freedom, transparency, human dignity, and responsibility. We hope that the voices of the 99% will bring much needed changes in government policy to help address excessive corporate greed, greatly weakened environmental and financial regulations, the housing crisis, crumbling infrastructure, shrinking schools and libraries, and a disappearing social safety net. There is no reason for so many to be unemployed when there is so much to be done.

The point of course is that a sustainable community and economic development is dependent on full participation of everyone in the community.  This includes those who have turned to social protest and direct action as a way to push their message back into the public sphere of debate usually dominated by the richest of interests.  Sonia Kowal, the director of socially responsible investing at Zevin, explains that social action is an important part of the larger conversation about sustainable development. 
This income inequality is bad for business.  It is bad for capitalism and communities.  The point of this movement is that we are all dependent on each other.  Interdependence means we all need each other.  We are all connected.  By interdependence, Benjamin Barber suggests:


This, of course, the message of the global justice movement as it has dovetailed into OWS.  Does the movement have goals – most certainly.  Already Adbusters, which put out the first calls for the OWS movement, has submitted a proposal for a financial transaction tax which would both curtail the culture of risk and gambling on Wall Street and generate capital for economic recovery.  The group has called for a global march for such a tax on October 29th.  Reducing risk and creating accountability for Wall Street would be first step in reducing the privatizing of profits and socializing of risk which has so enraged a generation.  Crises are opportunities for capitalism to either crumble or reinvent itself in a sustainable way.  Unless we get to the point where we can move away from a culture of greed toward a culture of interdependence, then we will find ourselves coping with the former.  And we will see more of what is happening in Oakland repeat itself in cities across the country.  



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