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Radical reformism?

October 18, 2011

I think the key question about Occupy Wall Street is the extent it represents a fundamental challenge to the system or is simply reformist.  There’s reason to hope it’s the former as it’s clear the protests aren’t simply aimed at a “Wall Street” that needs more regulation or against a few CEO bankers making multi-million dollar bonuses.  It seems to be a much broader “primal scream” against a system which concentrates power and income into a tiny elite to such a degree that 1% and 5% of the population respectively own 43% and 72% of financial wealth and the bottom 80% only 7%.  And a realization there’s something deeply wrong with people living poorly in a world of such vast productive technology.  There seems to be a widespread and growing recognition we don’t live in a democracy.

It’s impossible to see how true democracy can ever be achieved, though, if we limit ourselves to modest reforms of a system which not only permits but assures an ever greater concentration of power.  The simple and cold laws of economies of scale alone within a global market assure that small players can’t ultimately succeed and that ever more concentrated oligopolies will rule.  Left to itself, few things are more evident than that power and wealth will continue to accumulate into ever tighter hands as wealth begets ever more wealth.  If we want a democratic society, we need to stand up and directly confront consolidated economic power and wealth.  This has been known since at least Aristotle, who 2,400 years ago wrote of the incompatibility between democracy and oligarchy, the rule of wealth.  Democracy and industrial / financial capitalism are simply not compatible.

I think the best strategy for true change is to present a set of demands which can reasonably be sold to the wider public as reformist yet will still bring down the whole corrupt house of cards oligarchy stands on.  There’s a lot of great ideas out there, but here’s just four which appear reformist but are in its effects very radical: 1) tight regulation of profit margins, incomes, and business practices of all companies in oligopolistic markets; 2) democratic control of money down the lines of Functional Finance and Modern Monetary Theory; 3) an established minimum and maximum income; and 4) a 100% inheritance tax over some reasonably low wealth threshold.

Each of these ideas I think are highly sellable to the public and don’t directly confront the widespread support of “free enterprise”.  It’s widely accepted after all that monopoly power should be regulated, why not oligopolistic power?  We have a minimum wage today, let’s make it higher; and in the 50’s through the 70’s maximum marginal tax rates approached 100%.  There’s no public love of multi-millionaires and billionaires so I don’t think a high inheritance tax would be too hard a sell either.  And Functional Finance is just a simple logic that needs nothing more than a strong educational effort.

But this bare minimum turns out to be very radical.  If profits and prices of multinational firms were effectively regulated, not only would world prices decline and real wages rise, but stocks would plummet to unseen lows.  Stock values after all are nothing other than the net present value of the excess of price over wage, the monetary value of oligarchy, and they won’t be worth very much without high profits.  With tight regulation, ownership of the mega-corporations that control the lion’s share of production would effectively be transferred to the public and run in its interest.  If the logic of Functional Finance came into play, rentiers like Bill Gross would not only be quite upset with their zero interest rates but the power of private wealth to determine employment conditions and the level of prosperity would be eliminated.   A minimum and maximum wage plus a 100% inheritance tax similarly transfers power in a democratic fashion.  As stocks and other asset prices plummet, banks will require nationalization and the whole rotten foundation of Wall Street will collapse – a radical turn that also shouldn’t be too hard a sell.

The Empire of Capital that dominates our lives can be effectively attacked I think by a coordinated platform of democratic proposals having a strong history in progressive thought.  We don’t necessarily need the rhetoric of socialist revolution to actually achieve it as long as the reforms we demand are radical enough.  Socialism, after all, is democracy.

From → Wealth & Poverty

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