Protests echo elite angst

Those who support Occupy Wall Street (OWS) and similar protests should ask themselves why it has enjoyed a sympathetic hearing from many of the world’s leaders. Among those American politicians who have supported the sentiment, if not necessarily the tactics, of the protestors are President Barack Obama, Vice President Joe Biden and Nancy Pelosi, the Democrat leader of the House of Representatives. In Europe supporters include Wolfgang Schäuble, the German finance minister, and Mario Draghi, the future head of the European Central Bank. Others such as Jose Manuel Barroso, the president of the European Commission, have laid into the banks at the same time as the protestors.

Even the Financial Times (FT)  has come out in support of the protestors. It recently ran a prominent feature by John Gapper, its chief business commentator, entitled “In praise of Wall Street protestors” (free registration required). To the extent the protests are criticised it is usually because of actual or potential violence and for being linked to old style unions.

The pervasiveness of such statements suggests that the discussion of the Occupation of Wall Street protest has focused far too much on the participants. Such actions can only be properly understood in relation to the disorientation and fears of the elite.

Despite the incoherence of the protests it is possible to identify two related themes running through their arguments. First, that the banks are largely to blame for the economic crisis and subsequent austerity programmes. Second, that the overwhelming mass of society must show solidarity against a tiny clique that is undermining social cohesion. Both arguments were being widely made by top politicians and the mainstream media long before the protests started a month ago.

After the collapse of Lehman Brothers in September 2008 it quickly became the orthodoxy that banks are to blame for the crisis. Such a view confuses the immediate trigger for the crisis and the underlying cause (discussed by me in an article for the Guardian here ). It also fails to appreciate how integrated financial institutions and other types of companies have become (see my blog post for thecurrentmoment here ).

Nevertheless politicians have a vested interested in blaming bankers for the crisis as it helps absolve them of their share of responsibility. The reluctance of politicians to encourage restructuring with a view to creating a more dynamic economy was one of the main causes of the crisis. In Britain, for instance, the overwhelming focus until 2008 was on promoting the City rather than strengthening the economy’s productive base.

The cultural elite too was happy to indulge in crude baiting of Wall Street rather than grappling with the economic causes of the crisis. William Cohan’s Money and Power: How Goldman Sachs Came to Rule the World became a bestseller. So did Matt Taibbi’s Griftopia despite including classic anti-semitic imagery (my FT review of it is available here ). Given the obsession with the conspiratorial power of global finance it is not surprising that some of the protest’s supporters are clearly anti-semitic .

The second key theme of the protests, that they represent the vast majority against a tiny parasitic minority, is also in line with elite thinking. Mainstream politicians on both sides of the Atlantic have loudly proclaimed that their societies have become too unequal. But their goal is not to raise the living standards of the mass of the population but to push them lower. That is the context in which Obama’s calls for “shared sacrifice” by the American people should be understood.

Obama wants the public to accept cuts in living standards but is scared of the social fragmentation it could bring. He is desperate to shore up social solidarity at a time when it is under strain. Making populist attacks on bankers and “fat cats”, already an unpopular target, is one way of trying to achieve this objective.

The OWS slogan “we are the 99 percent” is essentially saying that we, the protestors, are accepting cuts in our living standards so the super-rich should do so too. In effect it puts austerity in a form that is more palatable to the public.

There is nothing progressive about the current wave of protests that started on Wall Street. On the contrary, such actions should be seen as an echo of the acute angst of the elite.