How might we think about “Occupy” Wall Street?

Photo by AJ McCafferty

Photo by AJ McCafferty

Our ability to understand even the short term direction of national or international political systems is discouragingly low. Witness the widespread surprise at the success of the “Arab spring” uprisings against entrenched dictatorships in Tunis and Cairo. It is especially hard, in the midst of events, to predict the longer term implications of any particular occurrence, such as this fall’s “occupy Wall Street” movement. Nevertheless, as citizens it is our responsibility to make our best efforts to do just this: To sort out the significant from the ephemeral, to sketch underlying trends, and to update our present and future world models accordingly. In this spirit, the following points seem in order with regard to the “occupy Wall Street” protest:

  •  While the protest itself has been only symbolic – financial transactions in Wall Street were not interrupted by the “occupation” – beneath this symbolism there are serious reasons why many Americans, and not just those who joined in or sympathized with the protest, are unhappy with the structure and functioning of our economic and political systems. Unemployment remains far too high, economic growth is anemic, inequality is rising, and the financial sector — whose hubris led to the recession in the first place, has been bailed out but has not been effectively reformed.
  • A chronic weak point of our system has been its short term focus, its frequent inability or unwillingness to conceive of the nature or possibility of unforeseen risks and to take prudent steps to prepare for such eventualities. As with our diets, we seem to prefer intellectual fast food: It’s tasty, filling, and we can assume away any negative consequences by relegating them to a distant, theoretically unknowable future. The lesson we should have learned from the financial crisis and the recession that has followed is that we need to be much more modest about our understanding of the new globalized economy and the risks it poses, and consequently much more pro-active in building and maintaining effective national and international economic and financial defenses — before we are surprised by a crisis rather than once we are in the midst of dealing with it. This as yet unlearned lesson is the economic and financial equivalent of the security and political lessons we should have learned, but did not learn, from Pearl Harbor and 9/11.
  • Our short term addiction is most likely to get us into trouble in times of rapid change – and the globalization of recent decades is certainly one of the most dramatic shifts in human history. Basically this shift has been positive, raising hundreds of millions of people out of poverty, spreading wealth and development beyond the old core of “western” countries to engage the talents and energies of countries and peoples on all continents. And, of course, the US government, US companies, US technology, and US universities have played major roles in promoting this globalization. It is thus at least ironic that we appear so ill-prepared to deal with some of the risks inherent in globalization, indeed, that we seem significantly less well-prepared to do so that some of the newer arrivals on the world scene.
  • Relative to us, some of the newer world powers have appeared to be much more agile, more pragmatic, less ideological, more effective – qualities that once upon a time, not so very long ago, were considered to be quintessentially American. Significantly, they have shown an ability to reinvent themselves in and for the modern world, and in the process to learn from the experience of others. Most famously, perhaps, China opted to incorporate market economics, international trade, and decentralization into its national development strategy, upending decades of Maoist economic centralization. India has gone through a similar process of intellectual and economic opening, which is driving forward the economy of what is soon to be the world’s largest country. Brazil has not only transformed its economy but has made significant progress in lessening the notoriously wide gap between its rich and poor.
  • What would it take for us to reinvent our public institutions and capabilities for the modern world, on the same scale and with the same creativity that we have invested in the reinvention of our financial, corporate, and technological institutions and capabilities over the past generation? To what degree could we do as others have done, learning from others and picking and choosing ideas that would work here in the US? Beyond our borders, to what degree could we contribute meaningfully to the building (or rebuilding) of international institutions and capabilities effective enough to keep up with the challenges of global technological, financial, and economic change? The last time we attempted anything like this on a grand scale was in the midst of WWII, when we had the foresight to sponsor development of the World Bank, the IMF, and the other key institutions of the postwar economy. We need to attempt this again, for today’s very different world.

Written by John Hawes