The Past, Present and Future of a Movement: ‘The Occupy Handbook’

The first tents appeared in Zuccotti Park in September of 2011. One month later, there were hundreds of encampments springing up in cities and towns across the world, united by a single declaration of defiance and solidarity: “We are the 99%”. It was a message that resonated throughout society as an appeal to the democratic ideals of justice and equality that seemed suddenly out of reach for so many, and the Occupy encampments were a dramatic physical representation of that appeal.

The global financial collapse of 2007, the ensuing recession and the increasingly elusive recovery have revealed deep, systemic inequities in our free market economies, supported by the corrupting influence of money in politics and a judicial order that privileges the rights of corporations over those of ordinary citizens. The Occupy movement forced these realities into public discourse — both the corporate news media and mainstream political figures were suddenly talking about issues of economic disparity — and it seemed for a moment like the whole world was watching, hopeful, and ready for change.

And then the raids began. Police attacked the encampments with hand held weapons, rubber bullets and tear gas grenades. They arrested thousands of peaceful protestors in the occupied parks and public spaces throughout the United States and the rest of the world. And by winter, the movement was in danger of becoming a memory.

Now that the permanent occupations have ended, the question for many within the movement and for their supporters across the planet is: where do we go from here? The articles and essays in The Occupy Handbook address this question by situating the movement within a historical context of progressive dissent and direct action, and by offering many potential strategies for transforming the protestors’ anger into viable political outcomes. Written by a selection of prominent journalists, academics and economists, The Occupy Handbook presents a range of ideological perspectives and prescriptive actions from the revolutionary anarchism of anthropologist and activist David Graeber to the progressive tax policy solutions of economists Peter Diamond and Emmanuel Saez. Taken as a whole, the book provides a powerful testament to what the Occupy movement has already accomplished simply by inspiring these types of discussions to occur.

There has been a great deal of media criticism that the Occupy movement’s refusal to articulate a clear set of demands, its lack of leadership and commitment to consensus based decision making will prevent it from affecting any lasting and substantive change to the ruling political and economic order. However, these critiques seem to miss the point, for the demands of the movement are clear and they are made evident through the very act of occupation. By engaging in a discourse of economic justice, by organizing through principals of direct democracy, and by provoking the violent censure of the state through these peaceful actions, the movement has revealed and challenged a political order that upholds conditions of societal inequity through the threat of violence, incarceration, disenfranchisement and debt. Their demand is for a more free and equal society, governed by true democracy rather than through coercion and fear. How we get there is ultimately up to us all, and The Occupy Handbook provides many potential strategies for meeting this demand.

We Are the 99 Percent: The Demand for Economic Justice

The most salient accomplishment of the Occupy movement from its inception was the introduction of a discourse of economic justice into mainstream media and politics. The slogan “We Are the 99%” captured the popular imagination by appealing to the values of fairness and equality that are increasingly threatened by the unequal distribution of wealth and resources in society. In the US, income disparity is currently at its highest level since the Great Depression, with the top one percent of the population earning 23 percent of the income, and the top five percent controlling 75 percent of the financial wealth (Roubini, Nouriel. “Economic Insecurity and Inequality”, 152). Over the past 40 years, the share of income earned by the richest one percent has more than doubled, while income for the middle 60 percent of Americans has fallen to 46 percent, from a high of 58 percent in 1968 when the U.S. Census Bureau started collecting data (Madland, David, Walter, Karla, Bunker, Nick. “Unions Build the Middle Class”, 273.) In the years leading up the global financial collapse, from 2002 to 2007, the top one percent accounted for two-thirds of all income growth in the U.S. (Maclay, Kathleen. “Interview with Emmanuel Saez”, 311). And at the very highest levels of income, things grow even more disproportionate, with the 400 richest Americans controlling more wealth than the bottom 150 million combined (Gresham, George. “Occupy Wall Street: The First Quarter and Beyond”, 276). For the least fortunate Americans, the situation is particularly dire with an unprecedented 46.2 million people living below the poverty line, and one in seven American households unable to afford the cost of food (“Occupy Protestors Say It’s 99% vs. 1%, Are They Right” Rogers, Simon. The Guardian, 16 November, 2011).

These recent increases in economic disparity are the result of an unregulated free market economy, a reckless and mercenary financial sector, and a middle class culture of debt and consumerism. These conditions have resulted in astronomical profits for CEOs, investment bankers and hedge fund managers, while the American middle class falls further behind, burdened by mortgage debt, rising education costs and a dismal job market that has yet to show any real signs of recovery. Whereas owning a home was once a source of financial security for middle class families, and an evocative symbol of the American dream, it’s now a debilitating financial burden for many, with a quarter of current mortgage holders owing more to the banks than their homes are worth (Weschler, Lawrence. “Enough With Occupying Wall Street: It’s Time to Start Preoccupying Wall Street”, 401).

The crash of the US real estate market was the result of years of predatory mortgage lending, unsustainable levels of debt and an irrational faith in an ever-rising housing market. As the market soared through the ’80s and ’90s, subprime lending allowed home owners to borrow cash based on the value of their homes, while adjustable rate mortgages targeted individuals with low incomes and poor credit who would have been previously ineligible to qualify for home loans. Wall Street traders bundled together the riskiest of these loans as securities, and reaped enormous profits by betting on an ever-rising housing market. These practices combined to create a market bubble in which home values were vastly overinflated, and when the burden of debt that fueled the real estate boom rose to unsustainable levels, the entire world economy came crashing down as a result. Journalist Bethany McLean describes the situation as such: “It was a virtuous circle until it wasn’t: rising house prices led cash-constrained borrowers to extract equity, thereby causing prices to rise even more.

Or you could think about it as a giant scam, whereby people were lured into the the market until every last penny had been sucked out” (McLean, Bethany. “Your House as an ATM”, 97). The victims of this scam — the working and middle class homeowners who believed in the value of their homes as long term investments — are the ones who have suffered the most after the crash, while the perpetrators have emerged largely unscathed. The collapse of the real estate market, the rising costs of education and health care, along with fewer opportunities for employment, have left millions of middle class American faced with the threat of foreclosure, bankruptcy and poverty.

At the same time that the middle class has seen its income stagnate, its home values crumble and its debt burden rise, the financial sector of the American economy has experienced a period of unprecedented growth. This is hardly a coincidence. In order to address conditions of rising inequality in the ’80s and ’90s, the US government encouraged increased lending on the part of financial institutions. The result was a rise in consumer spending despite a decline in middle class incomes, a paradoxical situation that was made possible only through rising levels of consumer debt. This increased debt provided a temporary fix for the ailing consumer based economy and added up to large profits for banks and other lenders (Rajan, Raghuram. “Inequality and Intemperate Policy”, 81).

Prior to 1980, people working in the financial sector made roughly the same income as people working in other comparable industries. By 2006, after years of deregulation and increasingly leveraged financial markets, their income was 60 percent higher than wages in other industries. These gains were made despite the fact that the profits and revenues generated by the financial sector are not based on creating anything of tangible economic value. In fact, Lord Adair Turner, chairman of Britain’s financial watchdog group the Financial Services Authority, goes so far as to describe the activity of Wall Street and other financial centers as “socially useless activity” (Cassidy, John. “What Good is Wall Street?” 60-61).

Perhaps the most egregious example of such activity is the case of proprietary trading, in which investment banks bet their own capital on movements in the markets. Although there is no social or economic justification for this activity, other than to generate massive profits for financial institutions and their shareholders, in 2007, the value of outstanding credit default swaps, a particularly volatile form of proprietary trading, was $60 trillion dollars, or four times the US gross domestic product (Cassidy, 68). This astronomic ascent of an unregulated financial industry dominated by investment banks that had grown “too big to fail” and too complex to understand, played a major role in the rising levels of economic inequity over the past thirty years, and was directly responsible for the collapse of the world economy.

The current levels of inequality in our societies are a detriment to both our democratic values and to the functioning of our market based economies. In a 2011 International Monetary Fund study, it was found “that widening inequality leads to lower economic growth. Even aside from the issue of fairness, inequality is bad according to traditional economic ‘efficiency’ criteria (Roubini, 163)”. One strategy for immediately addressing these unsustainable levels of economic inequality is to reduce the debt burden of the middle class. This would benefit the economy as a whole because it would redirect consumer income from debt reduction to spending on goods and services (Hudson, Michael. “Debt Jubilee”, 478.)

Up to this point, the banking industry has refused to adjust the principal amount owed on mortgages to current market values, leaving millions of home owners “underwater” — owing more to the banks that their homes are currently worth. By reducing the principal amount of their mortgages, the banking industry could help home owners remain in their homes rather than falling into foreclosure and bankruptcy as a result of high mortgage payments that were set before the market crashed.

This refusal to adjust the debt burden of home owners to a level consistent with the current market values of their homes is particularly devastating to those who were the victims of predatory lending practices during the real estate boom. In “Debt Jubilee”, professor of economics Michael Hudson offers an innovative solution for alleviating the debt burden of struggling home owners by applying the New York State law of fraudulent conveyance: “This law says that if a creditor lends to a borrower without having any idea how the debtor can pay in the normal course of business, without losing property, the loan is deemed to be fraudulent and is declared null and void. Applying this law to defaulting homeowners would free the homes that are in negative equity throughout the country. It would undo the fraudulent loans that banks have made, the trick loans with exploding interest rates, balloon mortgages, and so forth (Hudson, 479).” Although it was the banking industry that created the conditions of unsustainable debt that resulted in the collapse of the world economy, it was the victims of their predatory loans who are left to bear the economic burden.

By reducing the principal amount owed on their mortgages and by forgiving debts that were acquired through fraudulent lending practices, banks could offer relief to a struggling middle class and contribute in a vital way to the economic recovery. And yet, they refuse to do so simply because it would mean writing down the value of the mortgages on their books, and showing a loss on their quarterly earnings statements (Salmon, Felix. Principal Reduction, 450). There is a direct and causal relationship between the massive growth of an unregulated financial industry, unsustainable levels of middle class debt and rising disparities of wealth in our societies. And it is ultimately the failure of our governments to uphold the democratic values of fairness and equality within our market based economies that has allowed for these inequities to occur.

This is What Democracy Looks Like: The Corrupting Influence of Money in Politics

Democracy in America has always been an uneven and contested terrain. The founding fathers established the government’s system of checks and balances partly as a way to protect the ruling class from the threat of a voting public. And for many years, women and racial minorities were denied the legal right to participate in the democratic process in any way. Despite the democratic advancements made in the 19th and 20th century, the current form of representational democracy in the United States remains dominated by a ruling class of career politicians and a two party system that is increasingly polarized on cultural and ideological issues even as both parties answer to the same powerful lobbying and corporate interests. Racial disenfranchisement continues in the form of felony voting laws and the disproportionate enforcement of drug laws within communities of color. Nearly half of eligible voters feel so alienated from the political process that they decline to participate at all.

In the Occupy encampments across the world, a radical form of participatory democracy has emerged to challenge the dominant political structures that claim to function according to democratic principals. Drawing upon traditions of feminism, anarchism and Quakerism, the protestors have established systems of direct democracy and consensus based decision making, rather than any form of hierarchical leadership. Occupier and anthropologist David Graeber describes the political significance of organizing in this way: “From the very beginning, organizers made the audacious decision to operate not only by direct democracy, without leaders, but by consensus. The first decision ensured that there would be no formal leadership structure that could be co-opted or coerced; the second, that no majority could bend a minority to its will, and that all crucial decisions had to be made by general consent (Graeber, David. “Occupy Wall Street’s Anarchist Roots”, 145).”

Although there has been criticism that the movement’s strident commitment to horizontal organizational structures and consensus based decision making will hinder any efforts to engage effectively with the existing political structures, the very act of organizing in this way is a powerful symbolic challenge to the prevailing notions of democracy. Cultural critic Michael Greenberg describes the subversive power of Occupy’s experiment in direct democracy in this way: “Occupation marked a major innovation in modern American political activism, a return to what is basic about assembly and democracy and simple human contact … Just as important, it marked a rejection of the stratagems and calculations of party politics and traditional organizational methods.

Therein lay much of Occupy’s threat. It functioned outside the arena of political prizes: power, influence, access, the right to make laws (Greenberg, Michael. “On the Meaning of Occupation”, 267).” The direct democracy of the Occupy movement works to expose the ruling system of governance in the U.S. and other western powers as more beholden to the interests of lobbyists and corporations than to the will of the people. This corrupting influence of money in politics emerged as one of the Occupy protestors’ primary grievances with the existing political order, and the example of their own egalitarian organizational structures were offered as a compelling alternative form of governance.

Over the past 30 years, the U.S. Supreme Court has opened unprecedented opportunities for corporations and wealthy individuals to influence political leaders. In 1976, the court’s decision in Buckley v. Valeo defined spending money to influence elections as a form of free speech, protected by the First Amendment. Then, in the 2010 case Citizens United v. Federal Election Commission, the court invalidated a previous held campaign finance law that limited corporate influence on elections, upholding the perverse legal principal that corporations are people under the First Amendment. Robert Reich, the former secretary of labor in the Clinton administration and current professor of public policy at UC Berkeley, describes the result of these rulings upon our political system: “Together, Buckley, and Citizens United have given big corporations, Wall Street, and their lobbyists and trade associations, as well as very rich individuals, the ability to drown out the First Amendment rights of every other American. If money is speech, those who have the most money have the loudest and most powerful speech.

If corporations are people, the biggest corporations are the most politically privileged people in the land. The voices of average Americans can’t be heard because most of us don’t have the dough to break through, and none of us are corporations (Reich, Robert B. “Occupy Democracy”, 366).” The protection of corporate spending in politics as a form of free speech has resulted in a government that provides unfair advantages to corporate interests, while eliminating basic services and protections for the poor and middle class. There are bail outs for Wall Street while more and more homeowners fall into foreclosure. There are subsidies for big agribusiness and oil companies and patent protections for the pharmaceutical industry while small businesses are failing as a result of unbearable insurance and tax burdens. And there are bankruptcy laws that release American Airlines and Donald Trump from obligations to their debtors and labor contracts, but don’t allow for struggling middle class homeowners to renegotiate their mortgages (Reich, 362-363).

These kinds of unfair advantages are the spoils of the corporate lobbyists whose influence over Congress has grown exponentially in recent years. Following the Supreme Court decisions that established corporate spending on politics as a form of free speech, lobbying expenditures rose to over $3.5 billion in 2010. The revolving door between Congress and the lobbying industry has grown to the point where half of all senators and 42 percent of House members are awarded lucrative positions within the lobbying industry at the completion of their terms (Reich, 367). The promise of these high paying jobs as well as the unlimited campaign spending that is funneled through Super-Pacs by corporations and wealthy donors has had a corrupting influence on Washington D.C. Politics that is pervasive and impossible to fully calculate.

Never in history has there been such an enormous flow of private money into the political system, and the result is the transformation of our democratic system of governance into a vehicle for supporting the interests of a small ruling class over the will of the people. As Reich explains: “Millionaires and billionaires aren’t contributing unlimited amounts of money out of their sheer love of country. They have a more self-interested motive. Their political spending is analogous to their other investments. Mostly they want low tax rates and friendly regulations (Reich, 367).”

The recent rise in corporate profits, particularly within the financial industry, is a direct result of deregulation and an increasingly regressive tax structure, policies that were effectively purchased by the the corporations themselves through the influence of their lobbyists and campaign contributions. Economist Jeffrey Sachs describes the situation as such: “Top CEOs, unleashed by deregulation and unhindered by weakened trade unions, are the ultimate winners, especially in the United States where corporate governance is weak. Many CEOs act with impunity, taking home unconscionable incomes that they award themselves in a rigged compensation process. They game the political system through their financing of political parties and politicians (Sachs, Jeffrey D. “Occupy Global Capitalism”, 465).” The rising levels of economic inequality in our societies are directly related to the influence of corporate money in politics, as policies of deregulation and a regressive tax structure work to further consolidate wealth and resources into the hands of the rich.

According to economist Emmanuel Saez: “The U.S. income gaps shrank significantly after the Great Depression with the New Deal policies of stringent regulations and progressive taxation and widened significantly after the Reagan revolution that undid those regulations and progressive taxation. The extraordinary increase in income concentration in the United States from 2002 to 2007 was driven in large part by surging profits in the real estate and financial sectors made possible by deregulation (Maclay Kathleen, “Interview with Emmanuel Saez”, 313).” This deregulation of the real estate and financial sectors would lead directly to the volatile combination of subprime lending, mortgage back securities and proprietary trading that was the catalyst for the global economic collapse. And the Obama administration’s decision to bail out the banking industry while offering little relief to struggling home owners, as well as the failure of Congress to implement any significant measure of financial reform, is evidence of the ongoing influence of corporate money in politics to this day.

One of the clearest indications of the government’s constitutive role in rising levels of economic inequality is the increasingly regressive tax structure that has been implemented in the US in recent years. Under the existing US tax structure, the richest Americans pay a smaller portion of their income in taxes than the middle class, with some of the very richest people paying little to no taxes at all. A median worker earning $29,989 per year pays an average of 21.9 percent of their income in taxes, while the top 400 income earners, the very richest of American who earn an average of $279,969,823, pay only 18.4 percent. Among those top 400 wage earners, 30 paid less than 10 percent and 100 paid between 10 and 15 percent of their income (Johnston, David Cay. “Taxing the I Percent of the 1 Percent”, 371).

The richest Americans are able to avoid paying taxes by using a variety of legal loopholes such as the ability to turn income into capital gains, to deduct unlimited amounts of property tax and by sheltering their earning in offshore locations. Billionaire investor Warren Buffet famously exposed the inequities in the current US tax structure when he revealed his own personal tax statements: “He paid $6.9 million in federal income tax, an effective rate of 11 percent. Viewed as a share of his wealth, however, Buffet’s income tax came to less than two-tenths of one percent. Buffet believes that his income tax should be higher, and that for the super wealthy the estate tax rate should be set so high that it ensures we have a society of economic merit, not inherited wealth (Johnston, 380).” Just how much higher the tax rate should be for the wealthiest Americans is the subject of much debate. The Obama administration favors an increase from the current marginal tax rate of 35 percent to the 39.6 percent rate that was in place during the Clinton administration.

However, economists Peter Diamond and Emmanuel Saez argue that a truly equitable tax system would mean returning to a marginal rate in the range of 50 to 70 percent, consistent with levels prior to the Reagan and Bush tax cuts (Diamond, Peter and Saez, Emmanuel. “Taxing High Earnings”, 317). Taxing the richest of Americans at a higher rate would greatly benefit society as a whole, allowing corporate profits to be redirected into the public infrastructure, employment, education and social programs, and yet it is unlikely to happen as long as corporate spending on lobbyists and elections continues to be protected as free speech by the US legal system. And it is important to recognize that raising taxes alone will do nothing to address the inequities in society unless we reform the ways in which our tax dollars are invested. The two biggest expenditures under our current federal budget are health care and military defense. These costs are driven up by the powerful influence of the pharmaceutical industry and military contractors over Congress while less money is allocated to the kinds of education, employment and social programs that could actually help to kickstart a viable economic recovery.

The solutions to eliminating the corrupting influence of money in politics are clear, and yet they are exceedingly unlikely to occur because of the political influence that money has already purchased for corporations and the wealthiest of Americans. Publicly funded elections and an end to corporate personhood would drastically reduce the monopolization of political power by the rich. However, these kinds of reforms are obstructed by the existing corporate stranglehold over Congress and a pro-business Supreme Court. The greatest hope for achieving these ends in the US is the ratification of a Constitutional amendment to keep private money out of politics. This would require a major populist movement from outside the mainstream political establishment to compel a two-thirds vote of each house of congress and a three-fourths vote of the states. Needless to say, this would be a tremendously difficult accomplishment, but the Occupy movement’s inspirational embrace of radically egalitarian governance reveals that there is still hope in society for true democracy to one day flourish.

We the People, Not We the Corporations: The Power of Collective Action

It seems that we have created a monster. The legal definition of the corporation as a person, whose behavior is defined by the “best interests of the corporation” principle, and whose money is protected as free speech, has had a detrimental effect on our economies, our societies and our political institutions. The power that we have bestowed upon the corporation has lead to the emergence of a financial sector that operates as the epitome of the corporate will to self interest, an industry that creates nothing of tangible value, rather existing only for the sole purpose of generating its own profit. Corporations have co-opted our governments to serve their own interests while destroying the social safety net for the poor and middle class.

Now that the markets have crashed, the bubbles have burst and the 99 percent have suffered for years from the unequal distribution of wealth, power and influence in society, it is time for the people to take a stand against these institutions of our own devising that now determine our destinies. As producers and consumers, we have the power to contest the corporate hegemony, through our own collective action in the form of general strikes, boycotts and by forming our own cooperative institutions and ventures. These efforts will require confronting the boundaries of nation, class, race and gender that divide the 99 percent, and working together for our own common interests.

We live in a globalized world, and any viable form of resistance to the inequities that we face will need to be international in scope. International labor and consumer unions, and broad coalitions of activists and intellectuals must be formed in order to challenge the global economic order and its dominance by multinational corporations and the governments that perform their bidding. The global Occupy Movement, the Arab Spring, the Spanish Indignados and the Chilean Student Movement are all examples of the power that remains in the hands of the people when we come together to fight for our own common interests. The violent censure of these collective actions by the state through police brutality and incarceration is evidence of the real threat that these movements pose to the existing political and economic order. It’s time to realize that the demand for a more free and equal society is within our reach, if only we can act together.