Wednesday, October 26, 2011

Why the Occupy Movement?

I've spent some time with the young people participating in Occupy Christchurch. We need to ask what are they want, and why young people are involved. I believe they are responding to a deep knowledge that what the culture tells them about their future, and the reality of their situation, don't match. They are responding to what they see as injustice and the certain knowledge what the system is doing cannot be sustained and will collapse in their working lives. They are asking good questions. They do not pretend to have the answers.

Occupy Christchurch, October 2011

After WWII in the developed world there was an optimistic belief that, we could control our economic future. We would be as rich as we chose, we would work shorter weeks, retire early, and live long lives. Because of economic management, education and innovation, unemployment would be a problem of the past. As President Ronald Reagan said so well, "It's always morning in America." When I was a teenager, that feeling was widespread in New Zealand too. That culture is full of optimism. "You can do anything." "A good education is the foundation of a good career." "Economic growth is the key to our future prosperity." These ideas come out of the post WWII era, out of the industrial age, out of a time when we were ignorant of new knowledge like peak oil, over-fishing of the oceans, the melting of glaciers and icecaps, and the threats of human caused climate disruption.

In the last 40 years, even with "economic growth" there never seems to be enough money to do what we want to achieve. In addition, unemployment became a problem, beginning in the 1970's almost unseen, and rising into the 1980's; at that time mostly affecting older men. During this time we were steadily adding women to the full time work force. This lifted the income of the average family, but it also had the effect of vastly increasing the price of houses. The wealth effect of that might be seen as positive, but the social effect was certainly negative. Families suffered. Some of today's economists are now talking about "uneconomic growth".

I began to study economics in the 1970's. I wanted to reduce unemployment and to increase innovation. I discovered in an intuitive way that the system doesn't work in the way economic theory claims, but I was also indoctrinated, so I've struggled to explain how an economy works, even to myself. It's clear to me that economists want to be paid. Like politicians, economists are also servants of the paymaster. Economic theory justifies the wealth and power of the wealthy. Economists claim that the market system is the best possible way to ensure that scarce resources are well used. If as the result of markets, some people get very rich while others remain poor, that's a problem for governments to worry about. That's social policy, not economics.

Those who have wealth, buy political power. Political power is used to create law that favours the already powerful, police and military power is used to enforce that position. The law is used to ensure market domination. Free markets only exist at the village level. The major companies of the world control markets where there are few players. They operate trans-nationally to minimise their costs and maximise their revenues. The fact that the wealthy get more wealthy, is a function of politics, not a natural principle of economics.

During WWII, the USA wanted to rapidly increase production for the war effort. They looked for an quick and easy measuring tool that they could use to monitor the growth of production. They chose total cash transactions as that tool, what we now call Gross Domestic Product. This was introduced as a temporary measure only, for the war effort. Economists said at the time that it was a poor measure of what was important in the economy. After the war, politicians liked GDP so much that we've become stuck with it. It's a simple tool and it does relate directly to taxation, especially to taxation on wages. Even so, using GDP as the measure remains a very bad idea because it distorts every economic decision governments make. To understand that, let's try an analogy, football.

In the football league games are played every week and points are awarded for win, lose or draw results. There may be bonus points for high scoring games, but those are hard to earn. In every team there is focus on both attack and defence. It's perhaps even more important to stop the other team scoring than to score for your own team. At least keeping the "against" points as low as possible increases your chance of winning.

What would happen if the league management said that they were not interested in game results any more. From now on each team would be judged only on the total points scored against the opposition. The team scoring the most points at the end of the season would be the winner. So here's the new idea; the points we score count, and points scored against us don't matter. Does that change the nature of the game? Of course it does. All consideration of defence goes out the window. Now the only thing that matters is attack. How quickly can we score.

That's pretty much what we've done with using GDP as an economic tool. We chose to ignore the negative side of business activity, the points scored against the community or the environment, and only to count all the money points scored from whatever activities are undertaken. This bias affects all our decision making especially at government level. Guided by the false signal from increasing the GDP, we make bad decision heaped on bad decision, and tell ourselves we are doing well. We've learnt to pay ourselves by destroying the future, which is the opposite idea to the theme of this blog.

I've been writing about this for several years now. I usually say that the direction we are choosing is stealing the chance of living a successful life from our grandchildren. I'm going to change that call. The young people in the Occupy Movement, who are camped in parks and squares across the world are saying; "Today's bad decision making is already stealing my future. Evidence that the way we have organised the world is not sustainable is coming from all quarters, but the system chooses to ignore that new information." For occupiers the words "not sustainable" mean, few jobs and less opportunity; living in a depleted and hostile environment, probably leading to ongoing wars over resources, which will continue as everyone gets poorer and poorer. There is no good end to the current system. We are destroying our world, knowing what we do, and we seem completely unable to stop that process. We badly need a system wide reset. To achieve that without a long lasting economic depression or a world war is the preferred option.

Alvin Toffler wrote about this problem 30 years ago. He said (1980) that, "Nowhere is obsolescence more advanced or more dangerous than in our political life." Since the political system is incapable of change, the responsibility for change comes back to you and me. It means understanding that a revolution in the way we do things is necessary. We must fight for the freedom to openly discuss what's happening in the world and to organise ourselves so that change becomes possible.

To that end the last 30 years have been wasted. There is a steadfast refusal to acknowledge the need for change. The old industrial world mentality is still formally holding the reins of power. As things get worse protests move into the streets. The example of the Arab Spring, has demonstrated the power of peaceful occupations. The response from Bahrain and Syria on how to deal with occupations is sobering. There is a crisis of leadership here. The public must generate social permission for change, but if the established powers resist that call, as they usually do, violence is inevitable.

The Occupy Movement is protesting are about inequality. They point to the obvious inequality of wealth that the market system is delivering. However the key inequality is political inequality, clearly represented by the dictatorships of the Middle East that are slowly being cast aside, and by the corrupted, gerrymandered, and cash soaked political system in the USA. The USA is an open demonstration of political mismanagement, a joke, in which the ruling elite pretend to be a democracy. Russia has abandoned the pretence of free elections, and China is many things, but mostly authoritarian. Political inequality is the rule almost everywhere.

I should note here that under New Zealand's relatively new voting system, MMP (Mixed Member Proportional) that political privilege has been seriously damaged. Our system is not perfect, but it's delivered some surprising innovation in legislation, and there is plenty of room to improve how it works. My personal idea is a campaign for Two Strong Votes which would increase voter power over the electorate seats by using preferential voting for the local MP.

Alvin Toffler wrote 32 years ago about the unwillingness of the worlds elites, to see and accept the need for change. The time is up. Further pretence that protecting the status of our elite class is good for the nation, can no longer be supported. Access to better information via the Internet allows us all to see that my problem, is your problem, and that across the world most of us face very similar problems. We can stand united against corruption and unfairness wherever we live.

Sadly the political systems of most counties that claim to be democracies are similarly controlled by elites, in such a way that effective democracy is denied. The United Kingdom, Canada and India are clear examples. Better information exposes the systematic corruption of the business/political alliance that seems to be universal. Young people are saying "take the money out of politics." That's a good start. Changing the voting method to abolish first past the post elections would also help. We need to appreciate that failure to create a sustainable system kills people. Today's businessmen and politicians talk about "sustainable development" when what they mean is applying greenwash to the same old destructive practices.

Here is the message:
Droughts are more common and more severe.
Floods are more common and more intense.
Biodiversity is declining everywhere. Deforestation is a particular concern.
The over fishing of the oceans continues. Our oceans are polluted.
Lakes and rivers are polluted with chemical wastes and farm waste.
Ground water is polluted, by drilling activities for oil and gas, and by surface residues seeping into the aquifer.
Soil erosion and the loss of soil structure. Excessive irrigation is also poisoning soils.
Persistent organic chemicals are found in the flesh of Canadian Salmon.
We are all Canadian Salmon, the same chemicals are also now found in human tissues.
Rising human cancer rates and other sicknesses are triggered by chemical pollution and lifestyle choices.
The ice caps and glaciers are retreating.

And for the Future?:
The human population of the world continues to expand: A die off event should be expected.
The coming high price for oil will destroy many "profitable" markets.
Higher oil prices will create food shortages, and that will cause riots in many countries.
Famine in multiple places at once is likely, with no chance of providing adequate food aid.
Water shortages are likely to make the oil crisis look like a children's game.
Resource wars can be expected. That's what desperate and doomed people do.

Can you read that message? We've been refusing to read it since President Jimmy Carter first told the USA about it in 1979. James Gustave Speth was the team leader who advised President Carter, and his current proposals for change, The Eight Necessary Transitions, make interesting reading. The reaction of the American public was to vote Carter out of office. We see what we want to see. Some people, most people in the past, can only see the benefit from what we are doing. They choose to be blind to the real cost of human behaviour. Real costs, cannot be avoided. No law can abolish real costs. No cash payment can stop the effect of a real cost. If by our actions we close our future options, that damage is done. Death will be the result. You, your children your grandchildren? Perhaps. Other people certainly.

The young people involved in the Occupy Movement, understand that message at least vaguely. They know that the new knowledge in the message concerns them, that these crises will play out in this lifetime. Their children will be left to do the best they can with the depleted sort of world this generation creates. The ability to read the message distinguishes a 21st Century person from a 20th Century person. Which of those do you choose to be?

Please use the comments tag below to ask questions and to make further suggestions.

John S Veitch
The Network Ambassador



Dusty67 said...

Kia Ora John, Interesting but as I read it I feel you are still stuck in the system.

That is just going on what I have been learning.

You say you were studying economics but most of the economics taught is keynesian yet the system only practices from what I understand about half of what Keynes proposed.

Our education systems ignore for example Hycek altogether.

As a Kiwi you like I would of had to live through the era of Sir Robert Muldoon. It is only in the last couple of years that I have come to unerstand what he was aiming to do. He was actually described by the New York post when head of the world bank & IMF as having come up wit the most brilliant solution, but it would never be followed as the US would loose its position of power.

AFter that both he & Ronald Reagan(after his gold report apparently told him the US no longer has any gold of its own held by the treasury) took another tack.

The system as it is set up requires us to be always in debt. some know how to use it(good debt) & the rest of us are told the best options are the opposite. Hence we are foreever worse off.

If you go to you will be able to find a clip about how the tax system really works.

The only reason we pay tax is to pay off the loan principal & interest of the loans governments take out from the cetnral bank system.

What the mainly young people are protesting about is the rising inflation (CPI like the GDP is manipulated to say what they want, not what is really happening) which you find with the rising food prices(anyone wondered why food is going up but they are telling you there is no inflation?).

Why their education & qualifications are next to useless? Since 1903 in the US followed by the world the education system has bascially been a slavery system.

How many requirements such as site safe have little relevance to the actualy work carried out.

Then there is the further restriction on the freedoms we used to enjoy.

Each time they protest though it gives the powers that be more excuses to impose more restrictions.

Always beware when politicians or bureaucrats give you what you think you want because they are generally taking what you think you are getting. Foreshore seabed is a classic in this as is the ETS(it has nothing to do with global warming but all to do with another derivative that can be traded).

John S Veitch said...

Hello Dusty67

I've struggled for 30 years to deschool myself, so I can "get out of the system". Actually that's not quite correct. I want to make positive contributions to change and improve the system, but to do that I have to "get the system out of me."

If you believe I've failed to do that, you are probably right. Still for anyone with a 20th Century education and business background, that is the task. As Ghandi said; "Be the change you want to see in the world."

The world, mother nature, some would say "God" is sending us a message. So far we've refused to understand it. It's not that we didn't get the message. We see it plainly enough. Most of us can read it. Refusing to understand it, is an active choice we are making. That choice will kill people. As you say Dusty67, I'm part of the system too. What does that make me?

Bridget Marsh said...

Hi John and readers

It seems to me (unschooled in economics) that we are the system and we can't get the system out of ourselves. The change can and will come when we act on the knowledge we have and behave differently. Honouring a different set of values. That takes huge courage and belief. Sharing our ideas of how to behave differently is helpful - at least for me.