What Is To Be Done?

Abstract

What Is To Be Done? William E. Connolly (bio) Occupy Wall Street, or better described, the 99% movement, represents a delayed reaction to the political economy of inequality, crisis, military adventurism, and corporate authoritarianism of the last 30 years. It carries the potential to energize the democratic left, to pull Obama and Blue Dog Democrats toward the left, to mobilize local energies, and to awaken a yet larger section of the American populace. Its immediate adversaries are Wall Street, the volatility of unregulated capitalism, Republican blockage of corporate regulation, jobs programs and existing tax policies, the right edge of the evangelical movement, the lack of labor and consumer representation on governing boards of most firms, the diffidence of the democratic party, campaign laws that flood the air waves with right wing disinformation, the right wing majority on the Supreme Court, and a 24-hours news media that uses distraction and scandal mongering to draw attention from the plight of the urban poor. The dynamics of this critical movement deserve much closer attention, but that will not be my focus today. One question the media poses, now that it can no longer simply ignore this movement, is, "What do these people want?" "What do they stand for, anyway?" Below are a few interim answers to such questions. The interim answers are definitely at odds with the pure market fantasies of neoliberal capitalism. But they are compatible with capitalism per se, understood as production for profit, contractual labor, the primacy of the commodity form, a significant degree of competition between firms, and a large role for the state. A large state? In actual fact, every advanced capitalist country has a large state; they vary in the extent to which they support egalitarianism, unemployment benefits, health care, and sustainable modes of consumption over huge prison expenditures, intensive crime control policies, and gargantuan military budgets on the other. Capitalism per se has serious problems, dangers and limits, but that is not the focus now. Some policy responses, then: 1. A minimal objective is to transform the tax code so that capital gains taxes, now set at 15%, are equalized with other taxes. If you earn, say, over $300,000 in income, your capital gains will be taxed at the same adjusted rates as your income tax. This reform means that incomes gained from work and investment are treated equally. A much more progressive tax system is also required. And a transaction tax on derivatives is required that could bring in a few hundred billion over a decade, even as the myth that low taxes for the rich generate high productivity must be exposed. And the indispensability of the state must be acknowledged by the shape of a progressive tax system. 2. Banks must be required to set aside much bigger deposits for the loans they make, to reduce the chances of another bank induced world collapse. Investment and savings banks must be separated once again, prohibiting the casino approach to investment by banks. Housing foreclosures, most of which have been created by a crisis started at the top, can be stopped by renegotiating loans. Unemployment insurance must be extended. 3. State policies must be introduced to press banks and corporations to invest the huge amount of capital they have on hand. How? One approach would be to reward institutions that invest their funds in productive ways with modest tax breaks while hitting those which curtail growth with tax increases. As this is done, it is essential to publicize to the broader populace how the most immediate barrier to job growth today is the current unwillingness of private institutions to invest their capital. 4. A general jobs program, alone, is not sufficiently focused. State action must aim at reconstituting the general infrastructure of consumption that now sets the frame of possibility in which everyday consumption is set. By building fast transit systems, trolleys, trains, and bike paths you shift a large portion of current state expenditures and subsidies from roads, highways and airports toward more egalitarian alternatives; you open up new possibilities of production; and you introduce less expensive consumer choices for travel. By creating a state health care system you increase the competitive position...