Monday, October 31, 2011

Occupy Wall Street is a Countervailing Power ...

The Occupy Wall Street (OWS) movement in the United States started simply enough. Frustrated by corporate greed and banking bailouts, people took to the streets. I doubt any of the angry protestors encamped in New York City (or other cities worldwide) believed their actions would resonate so strongly. People from various walks of life have been maintaining a presence in the financial district of Manhattan since mid-September and show no signs of leaving.

The entire scenario seemed almost random. No main goal or true policy to influence. No cohesive strategy. Just a series of non-violent demonstrations proposed months ago by a Canadian group known as ‘Adbusters’ (I know, I know – blame Canada!).

Would this really prompt anyone to occupy?
 Protestors now address themselves as representing the ‘99%’, a moniker striking at the top ‘1%’ of income earners in the United States. If a galvanizing theme had to be named, OWS appears intent on unveiling the gross economic inequality in America. The rich become richer and the poor become poorer.

My interest in this phenomenon isn’t in examining the validity of their movement, but in attempting to understand why OWS has become so successful. Any careful look at income earnings over the past four decades demonstrates a widening gap between the upper and middle/lower classes. But why now? Why has OWS lasted into its third month and spread to countless cities?

The answer has been around for over half a century. In 1952, American economist John Kenneth Galbraith’s American Capitalism introduced a new theory on what Galbraith termed as ‘countervailing power’.

Galbraith asserted the classical economic ideas on the free market were not entirely correct. The prevailing thought at the time emphasized competition between businesses regulated the economy. Galbraith concluded the real ‘regulator’ in the economy occurred as a result of a relationship between ‘buyers’ and ‘sellers’.

When one side of the relationship became too dominant or maintained too expansive of an advantage, a ‘countervailing’ force would come into existence to bring the relationship back into more of a balance.

Galbraith used the example of the early 20th century and the labor movement to illustrate his point. The relationship between business owners and workers lost balance when laborers were exploited via long workdays, low pay, hazardous conditions, etc.

As a result, laborers grouped themselves into unions to match the power of the business owners. Consequently, the relationship returned to an equilibrium of sorts.

Galbraith’s concept gained renown and its application was not limited to the field of economics. Other movements in history follow a pattern similar to labor. Women’s rights, civil rights, political parties, ideology, government policy making, and even morality have been subject to counterbalances when the relationship of the two main players becomes too distorted.

I believe the OWS movement represents a countervailing force in the relationship between wealthy and the middle/lower classes. The inequality between classes has reached a boiling point, where the ‘99%’ will no longer tolerate the status quo in the United States.

Yikes the top earners are way ahead!

To illustrate my point, consider the Canadian group who first prompted citizens to occupy Wall Street. The group, Adbusters Media Foundation, is hardly a force in America (or their home country, either). I doubt many people had any knowledge of their existence until approximately six months ago, when they started promoting the idea of OWS. Can anyone reasonably argue this group somehow put together the world’s greatest advertising campaign through their little known bi-monthly publication to produce such a sustained turnout on Wall Street?

Also, the mere fact the OWS movement has spread through numerous cities across the globe shows this problem is not localized. The problem (globally speaking) has prompted a worldwide response.

Furthermore, OWS is a leaderless movement. The success and sustained nature of OWS hasn’t been due to a charismatic individual’s leadership.

One critique of the OWS movement has been its lack of stated goals or outcome. However, I would assert that lends credibility to the notion of OWS as a countervailing power. The movement spawned almost spontaneously and has no real desired policy outcome, yet is wildly successful.

The theory of countervailing power doesn’t mean an end to the struggle between two sides of an issue. The battle between labor and management still exists, but has been corrected by labor unions (which have lessened in power since the mid-20th century).

Similarly, OWS won’t permanently solve the disparity between the wealthy and middle/lower classes, but shows no signs of dissolution until some semblance of balance is restored.

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