American Left Turn
“Government is not the solution to our problem; government is the problem.” This phrase, uttered by Reagan during his inaugural address 30 years ago, would not resonate today with the 99 percent of Americans (according to the popular slogan of Occupy Wall Street) who want a larger government. This movement is a reflection of the shift in American values from traditions of freedom and individualism towards greater paternalism.
Although it is not clear how long the movement, which emerged on Sept. 17, 2011 when the activist group Adbusters Media Foundation and Anonymous organized their supporters to participate in a permanent protest action, will last, the shift of American society’s views to the left is evident. According to various estimates, at least 40 to 50 percent of Americans sympathize with the slogans against villainous bankers and thieving corporations. And this is in spite of the fact that OWS is a tiny scale phenomenon: only 300 people “occupied” Zuccotti Park and were forced to leave by the New York authorities the day before yesterday (ironically, the park is owned by a private corporation, something that many protestors consider to be an absolute evil); approximately 30,000 people have participated in protests across the country. This is no more than one hundredth of a percent of Americans. The popularity of the movement can be partially explained by large scale public relations support by the leftist media and Internet resources (a large network of websites, blogs, Twitter, Facebook and YouTube accounts, etc; the organizers are actively using the experience from the Arab Spring). More importantly, OWS is responding to the left’s social demands, which is becoming increasingly pronounced in the U.S.
The demonstrators’ main grievances are dissatisfaction with the unjust social system, a lack of social mobility and the growing income inequality. OWS supporters are confident that there is a growing social injustice in their society: The rich are getting increasingly bigger profits while paying increasingly lower taxes. According to a 2007 statistic, over the past 30 years, the share of national income earned by the top 1 percent of Americans increased from eight to 24 percent, while their share of taxes dropped to 37 percent. Through a system of deductions (for example, mortgage interest is deductible from taxable income), taxes on the rich get significantly reduced, which leads to the upper class owing a lower percentage of taxes than the middle class. In particular, the billionaire Warren Buffett had honestly computed that his income tax rate is lower than his secretary’s.
However, the key to understanding the movement is the timing of its emergence. Absolutely nothing specific happened in the U.S. that made people take to the streets in September 2011. If you try to find the cause in the 2008 financial crisis, then over the next three years, contrary to the protestors’ slogans, economic inequality in the U.S. decreased due to the post-crisis asset impairment, which affected the richest part of society. Why did the OWS members suddenly remember it now?
The demonstrators responded by emphasizing unemployment caused by the crisis: Approximately nine percent of Americans cannot find work today (as opposed to four percent in 2007 and an average of six to seven percent in the past 30 years). Additionally, even working Americans are forced to be content with less attractive positions, lower wages and lower social status than they could have expected in light of their education. The transfer of many industries to Third World countries caused the job deficit (although OWS participants are also protesting environmental pollution, which is logically incompatible with the demand of returning jobs to the U.S.).
However, the protest’s main cause is that the leftist portion of the American society, which in 2009 was enticed by Obama’s anti-crisis political program (which was just as fuzzy as the OWS slogans) and awaited with delight and enthusiasm the expected changes after his arrival, is now very irritated by the absence of these changes and by Obama. Since the Democratic wing of the establishment does not have a program to deal with economic problems, OWS is the American left’s reaction to the current ideological vacuum. In addition, since social program cuts have been frequently named as the solution to the budget crisis, benefit recipients (whose number in 2011 reached a record size: a sixth of the U.S. population) feel the danger of losing their benefits in the near future. The appearance of OWS is their response to the threat of cuts in the social sector, as reflected in their search for enemies, whom they’ve designated to be financiers and wealthy Americans: Don’t blame us for our problems, blame the rich one percent who steal from us. In this sense, the protest’s logic is the same as in London. The attempt to shift public discourse was quite successful. At the moment, the fiscal deficit problems have been forgotten, and the only topic of discussion is the economic inequality that has reached monstrous proportions. The Democratic Congressional Campaign Committee has already started collecting 100,000 signatures in support of the Occupy Wall Street movement. In his recent weekly radio address, Obama spoke about problems of the middle class related to income inequality.
OWS supporters continuously emphasize that they call for equal opportunities, not results. instead, however, they seek enemies (the top one percent) and call for increased redistribution. The increasing popularity of the movement in light of the upcoming election and the lack of an economic program is forcing politicians to respond to this request, especially since the American political system is median-voter oriented, by strengthening the financial sector and introducing new taxes and social subsidies. However, these measures will not solve the problems of the U.S. economy, which is in dire need of a deficit reduction and a decrease of the burden placed on the economy by social programs. This means that there will be a new round of social unrest and increased redistribution.
The OWS phenomenon and its popularity among Americans reflect the dynamics of American society’s swing to the left in the 20th century. The founding fathers of the American political system understood the threat of populism, which is the basis of any democratic system based on a majority vote: The poor have always wanted to redistribute the income earned by the rich in the poor’s favor. But since the incentives and subsidies are addictive and do not stimulate work, the redistributive tendencies in democracies tend to rise, undermining the economic viability of these systems (the poor are less economically productive, so cash transfers — potential investments — redistributed in their favor are practically removed from the productive sectors of the economy). Moreover, redistribution reduces the incentive for productive sectors of the population to work; why make more money if the additional income will be taken away anyway?
Recognizing this threat, the founding fathers added into the U.S. Constitution a provision for a poll tax and a ban on a federal income tax. The former made it possible to restrict the voting rights of economic parasites; to have voting rights, a U.S. citizen had to at least earn enough to pay the poll tax. The latter stopped the poor from solving their problems at the expense of the rich by redistributing the rich’s income in the poor’s favor. Both provisions, however, were phased out, which established the trend of American electorate’s sustainable leftward swing. In particular, the federal income tax was introduced in the late 19th century. The threat of this novelty was well understood by the opponents of the tax. Thus, Judge John Dillon described it as “forced contribution from the rich for the benefit of the poor...class legislation...subversive of the existing social polity, and essentially revolutionary.” The writer William Hurrell Mallock suggested that this tax would, in fact, be temporary since “[it] would result in the defeat of its own ends; and most of the income which it was desired to pour into new moulds would float away in vapour.” As you can see, these hypotheses were not so far from the truth.
One hundred years ago, slogans like “the rich are to blame for everything” and “capitalism is the source of all evil” would be unimaginable to freedom-loving Americans. The average American was inclined to see the government as the problem rather than a solution, and supported the tax cuts, as opposed to hikes. Today, Americans see the government as the defender against the enemy-bankers, and there is a growing distrust of the rich in the society. The popularity of these ideas among the majority means that society's values have shifted sharply to the left. Essentially, OWS reflects the process of Americans moving away from the historical commitment to economic liberalism, which turns out to be incompatible with democracy.
Although it is not clear how long the movement, which emerged on Sept. 17, 2011 when the activist group Adbusters Media Foundation and Anonymous organized their supporters to participate in a permanent protest action, will last, the shift of American society’s views to the left is evident. According to various estimates, at least 40 to 50 percent of Americans sympathize with the slogans against villainous bankers and thieving corporations. And this is in spite of the fact that OWS is a tiny scale phenomenon: only 300 people “occupied” Zuccotti Park and were forced to leave by the New York authorities the day before yesterday (ironically, the park is owned by a private corporation, something that many protestors consider to be an absolute evil); approximately 30,000 people have participated in protests across the country. This is no more than one hundredth of a percent of Americans. The popularity of the movement can be partially explained by large scale public relations support by the leftist media and Internet resources (a large network of websites, blogs, Twitter, Facebook and YouTube accounts, etc; the organizers are actively using the experience from the Arab Spring). More importantly, OWS is responding to the left’s social demands, which is becoming increasingly pronounced in the U.S.
The demonstrators’ main grievances are dissatisfaction with the unjust social system, a lack of social mobility and the growing income inequality. OWS supporters are confident that there is a growing social injustice in their society: The rich are getting increasingly bigger profits while paying increasingly lower taxes. According to a 2007 statistic, over the past 30 years, the share of national income earned by the top 1 percent of Americans increased from eight to 24 percent, while their share of taxes dropped to 37 percent. Through a system of deductions (for example, mortgage interest is deductible from taxable income), taxes on the rich get significantly reduced, which leads to the upper class owing a lower percentage of taxes than the middle class. In particular, the billionaire Warren Buffett had honestly computed that his income tax rate is lower than his secretary’s.
However, the key to understanding the movement is the timing of its emergence. Absolutely nothing specific happened in the U.S. that made people take to the streets in September 2011. If you try to find the cause in the 2008 financial crisis, then over the next three years, contrary to the protestors’ slogans, economic inequality in the U.S. decreased due to the post-crisis asset impairment, which affected the richest part of society. Why did the OWS members suddenly remember it now?
The demonstrators responded by emphasizing unemployment caused by the crisis: Approximately nine percent of Americans cannot find work today (as opposed to four percent in 2007 and an average of six to seven percent in the past 30 years). Additionally, even working Americans are forced to be content with less attractive positions, lower wages and lower social status than they could have expected in light of their education. The transfer of many industries to Third World countries caused the job deficit (although OWS participants are also protesting environmental pollution, which is logically incompatible with the demand of returning jobs to the U.S.).
However, the protest’s main cause is that the leftist portion of the American society, which in 2009 was enticed by Obama’s anti-crisis political program (which was just as fuzzy as the OWS slogans) and awaited with delight and enthusiasm the expected changes after his arrival, is now very irritated by the absence of these changes and by Obama. Since the Democratic wing of the establishment does not have a program to deal with economic problems, OWS is the American left’s reaction to the current ideological vacuum. In addition, since social program cuts have been frequently named as the solution to the budget crisis, benefit recipients (whose number in 2011 reached a record size: a sixth of the U.S. population) feel the danger of losing their benefits in the near future. The appearance of OWS is their response to the threat of cuts in the social sector, as reflected in their search for enemies, whom they’ve designated to be financiers and wealthy Americans: Don’t blame us for our problems, blame the rich one percent who steal from us. In this sense, the protest’s logic is the same as in London. The attempt to shift public discourse was quite successful. At the moment, the fiscal deficit problems have been forgotten, and the only topic of discussion is the economic inequality that has reached monstrous proportions. The Democratic Congressional Campaign Committee has already started collecting 100,000 signatures in support of the Occupy Wall Street movement. In his recent weekly radio address, Obama spoke about problems of the middle class related to income inequality.
OWS supporters continuously emphasize that they call for equal opportunities, not results. instead, however, they seek enemies (the top one percent) and call for increased redistribution. The increasing popularity of the movement in light of the upcoming election and the lack of an economic program is forcing politicians to respond to this request, especially since the American political system is median-voter oriented, by strengthening the financial sector and introducing new taxes and social subsidies. However, these measures will not solve the problems of the U.S. economy, which is in dire need of a deficit reduction and a decrease of the burden placed on the economy by social programs. This means that there will be a new round of social unrest and increased redistribution.
The OWS phenomenon and its popularity among Americans reflect the dynamics of American society’s swing to the left in the 20th century. The founding fathers of the American political system understood the threat of populism, which is the basis of any democratic system based on a majority vote: The poor have always wanted to redistribute the income earned by the rich in the poor’s favor. But since the incentives and subsidies are addictive and do not stimulate work, the redistributive tendencies in democracies tend to rise, undermining the economic viability of these systems (the poor are less economically productive, so cash transfers — potential investments — redistributed in their favor are practically removed from the productive sectors of the economy). Moreover, redistribution reduces the incentive for productive sectors of the population to work; why make more money if the additional income will be taken away anyway?
Recognizing this threat, the founding fathers added into the U.S. Constitution a provision for a poll tax and a ban on a federal income tax. The former made it possible to restrict the voting rights of economic parasites; to have voting rights, a U.S. citizen had to at least earn enough to pay the poll tax. The latter stopped the poor from solving their problems at the expense of the rich by redistributing the rich’s income in the poor’s favor. Both provisions, however, were phased out, which established the trend of American electorate’s sustainable leftward swing. In particular, the federal income tax was introduced in the late 19th century. The threat of this novelty was well understood by the opponents of the tax. Thus, Judge John Dillon described it as “forced contribution from the rich for the benefit of the poor...class legislation...subversive of the existing social polity, and essentially revolutionary.” The writer William Hurrell Mallock suggested that this tax would, in fact, be temporary since “[it] would result in the defeat of its own ends; and most of the income which it was desired to pour into new moulds would float away in vapour.” As you can see, these hypotheses were not so far from the truth.
One hundred years ago, slogans like “the rich are to blame for everything” and “capitalism is the source of all evil” would be unimaginable to freedom-loving Americans. The average American was inclined to see the government as the problem rather than a solution, and supported the tax cuts, as opposed to hikes. Today, Americans see the government as the defender against the enemy-bankers, and there is a growing distrust of the rich in the society. The popularity of these ideas among the majority means that society's values have shifted sharply to the left. Essentially, OWS reflects the process of Americans moving away from the historical commitment to economic liberalism, which turns out to be incompatible with democracy.