Occupy Wall Street and the Celebrity Economists


The Occupy Wall Street movement has transfixed the nation.  In just a few weeks, it has spread from Manhattan to hundreds of towns and cities, and it has now taken root in other countries.  It has focused the widespread anger that we feel toward a tiny group of extraordinarily rich individuals (the 1%) who have destroyed our communities, eliminated our jobs, taken control of our government, and done everything they can to make us (the 99%) as insecure as possible.  Whatever we have, they want.  Whatever we aspire to, they would deny us.

I applaud the efforts of the many thousands who have occupied and demonstrated.  I urge everyone to do whatever you can to support OWS.  Join an occupation.  Visit an OWS site.  Send money.  Tell your friends about it.  It has been a long time since anything like this has happened in the United States, and there is no telling what might follow.  Some commentators think that OWS is the birth of a new and radical political movement.  I hope they are right.

It has been interesting to watch as famous people have gravitated to Zuccotti Park or written about the OWS phenomenon.  This is not surprising.  We live in a celebrity culture, and the media love to latch on to celebrities, conveying the notion that only the views of “important” persons matter, that any event must be seen through the eyes of those in the know.  Since I taught economics, I took special notice of the famous liberal economists who have gone to the Financial District in New York City and embraced OWS or written favorably about it: Paul Krugman, Jeffrey Sachs, Robert Reich, Joseph Stiglitz, Jeff Madrick, a pantheon of the stars of liberal economics.  Their presence was generally applauded by OWS supporters, including people I know who are left-wingers.  Krugman, Sachs, and Stiglitz in particular have been singled out for praise.  Each has said or done some deplorable things in the past (Sachs, for example, was a consultant to Russia and Poland after the collapse of the Soviet Bloc, and he urged the “shock therapy” that devastated lives in those countries), but my leftist acquaintances have eagerly welcomed their changes of heart now.

I applaud these economists for abandoning some of their past views.  That they have endorsed OWS is a good thing, too.  However, what they have to tell us is not particularly enlightening, nor will it shift the balance of power in the United States solidly in favor of the 99 percent.

Joseph Stiglitz, Nobel Economics Prize winner and former president of the World Bank, summed up the liberal view nicely in his remarks to the OWS occupiers:

You are right to be indignant.  The fact is that the system is not working right.  It is not right that we have so many people without jobs when we have so many needs that we have to fulfill.  It’s not right that we are throwing people out of their houses when we have so many homeless people.  Our financial markets have an important role to play.  They’re supposed to allocate capital, manage risks.  We are bearing the costs of their misdeeds.  There’s a system where we’ve socialized losses and privatized gains.  That’s not capitalism; that’s not a market economy.  That’s a distorted economy, and if we continue with that, we won’t succeed in growing, and we won’t succeed in creating a just society.

Almost every sentence after the first one is wrong.  The sentences about the unemployed and the homeless would be fine on their own, but unfortunately they follow the one that says that “the system is not working right.”  How so?  It is working exactly as capitalist systems work.  They have always been marked by poles of wealth and poverty, periods of speculative bubbles followed by recessions or depressions, overworked employees and reserve armies of labor, a few winners and many losers, alienating workplaces, the theft of peasant lands, despoiled environments, in a word, the rule of capital.  Losses are always socialized, and gains are always privatized.  It is impossible to create a society that is both just and capitalist.

The other liberal economists named above have made statements similar to those of Stiglitz.  They all believe that capitalism can be made to function in the interests of the majority, for the 99 percent as it were, if only we had a government that would regulate it appropriately.  And they all think that, if it hadn’t been for the neoliberal period of market fundamentalism ushered in by Margaret Thatcher and Ronald Reagan, we’d still all be — in the words of Stiglitz and Krugman’s friend and fellow economist, J. Bradford Delong — “slouching toward utopia.”  That it could be in the nature of capitalism, in the working out of its laws of motion, that the problems we face are rooted doesn’t enter their minds.

A friend of mine says that Occupy Wall Street has changed the political landscape in the United States.  It has opened up new possibilities for discussing and debating what is going on in the world and what we should do about it.  He says that we shouldn’t be complaining that the occupiers haven’t come up with a specific set of demands or developed a full-blown theory of social change.  We should be happy that, at last, there is a large and visible outpouring of men and women, young and old, giving witness to economic, political, and social conditions that are no longer acceptable.  It is up to us, my friend says, to place our own ideas in the mix, organize around specific demands in our own locales, form our own political organizations.

I agree with my friend.  So, let me put forth two arguments aimed at radical economists.  First, let us develop our own analysis of the economy and eschew both criticisms of mainstream economics and worshiping at the feet of those few mainstream economists who shed tears for the poor and the unemployed.  Liberal economists like Krugman, Sachs, and Stiglitz have not had a single insight into the workings of capitalist economies that compares even remotely to those developed by Karl Marx on nearly every page of Capital, Volume I.  Nor will they ever.  This was well understood by two of my mentors, Harry Magdoff and Paul Sweezy.  Harry called Krugman a “prizefighter for capitalism.”  This was before Krugman’s turn toward John Maynard Keynes, but it is still true.  Once at lunch, I asked Paul what he thought of the economic ideas of William Vickrey, a liberal economist who had just won the Nobel Economics Prize and who had worked for the Roosevelt administration during the New Deal, as had Paul.  Sweezy allowed that Vickrey was a good man, but the advances in economics for which he had won the Prize were “trivial.”  The same can be said of both Krugman and Stiglitz.  In the economics classes I teach to union members, I have found that Keynes and liberal economics resonate with the students.  But Marx makes them stand up and take notice.  So let’s stick to Marx and build as much as we can on his understanding of capitalism.  This is the only economics that cannot be coopted by the 1 percent; it is the only one they fear.  We will wait forever for the liberal economists to become Marxists.  In the United States, I know of only one person who moved from respected neoclassical to radical economist — John Gurley.  He had the temerity to praise the economics of Mao Tse Tung, and he rejected in toto that for which he had become well known.

Second, radical economists must ally themselves firmly with the working class.  This the liberals will never do.  Karl Marx was a labor educator and a founder of the world’s first working-class political party.  Engels used his family’s wealth to wage war against the capitalists.  They and their radical heirs became one with the workers, not in the sense that they were never critical of the racism or sexism or national chauvinism propounded by some workers or of the practices of many unions, but in the sense of identifying with and participating in the class struggle wholeheartedly and without reservations.  They would have been, as we must be, with the 99 percent, if not always in body at protests like those of OWS, then in spirit.  The liberal economists who have appeared at OWS, on the other hand, have no such politics.  In fact, the ones I have mentioned here are, in terms of their incomes, wealth, and the social circles in which they move, full-fledged members of the 1 percent.  I don’t believe that, in the end, they will commit class suicide.  I do believe that, come next year, they will vote for Obama.  And if ten million workers were occupying their factories, construction sites, schools, hospitals, and offices, they would find reason to say that things had gone too far.

Michael D. Yates (mikedjyates [at] msn.com) is associate editor of Monthly Review and editorial director of Monthly Review Press.  He is the author of Why Unions Matter (second edition) and Cheap Motels and a Hot Plate (both from Monthly Review Press).  This article was first published in his blog Cheap Motels and a Hot Plate on 22 October 2011.


var idcomments_acct = ‘c90a61ed51fd7b64001f1361a7a71191’;
var idcomments_post_id;
var idcomments_post_url;

| Print