Occupy Wall Street and a New Politics for a Disorderly World
Carne Ross | February 7, 2012
The global financial crisis has provoked a profound and necessary questioning of the prevailing political and economic orthodoxy. So pervasive is this disillusionment with the current order that it is hard to find anyone prepared to defend it. Disorder is the new order; disequilibrium rules, and old assumptions no longer hold.
As Kuhn’s theory might suggest, the rank contradictions of the current political-economic paradigm—gross inequality and massive environmental destruction—are so great that a new paradigm should emerge: a system of thought and method of political action that can address these ills, and indeed offer a better method of organizing and understanding human society.
As a diplomat in the British foreign service, I served deep inside one bastion of conventional politics—the world of international diplomacy. I helped propagate “top-down,” government-dominated politics across the world, including in Iraq, Afghanistan and Kosovo. I resigned because my government ignored available alternatives to violence and dissembled before the Iraq invasion (I had been Britain’s Iraq expert at the UN Security Council). This breach triggered a deeper questioning of the way things are done. I concluded that top-down management was not working and that conventional political models, including representative democracy, were producing not stability but its opposite, an increasingly fractured society at home and around the globe and a perilously vulnerable environment.
In my former career, I saw how governments attempt to enforce order on a world that resists their methods. But complex systems, such as a world of billions of dynamic connections, cannot be frozen as if on a chessboard, intelligible and susceptible to step-by-step command and control. Indeed, governments by their own admission are less and less able to control the massive, heterogeneous forces now making our world: dramatic economic transformation, mass migration and climatic change.
Worse, and this helps explain the failure, these attempts exclude the people most affected—ordinary people. It has become clear that even in our supposedly iconic democracies, government decisions do not reflect the needs of everyone but rather those who enjoy privileged access: large corporations, the superwealthy, the elites—the 1 percent who benefit from this disorder, like the speculators who play volatile markets, companies that profit from the absence of price on environmental destruction and the cynical politicians who exploit the growing anxiety and disaffection with crude and atavistic certainties.
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A new politics is needed, and in the early weeks of Occupy Wall Street, I saw signs of its emergence. Some would see the Occupy protests as yet more evidence of disorder, not its solution. But to my jaded eye, the beacons pointing to a better method were bright indeed. At the UN Security Council and other diplomatic forums, I had taken part in high-stakes negotiations on everything from Iraqi WMDs to Palestine to the future of the Balkans. But the experience of hundreds of people listening to the voice of one—anyone!—through the “people’s mic” moved me more than any of those worldly negotiations. This was a politics of the many, included at last, at least in the small square of Zuccotti Park, if not in our distant capitals. Here I saw true respect, not the pretend respect of diplomacy. Here I saw involving and passionate debate, not the childish antagonism of Internet debate or the partisan rancor of Washington. The crowd was gripped by an unfamiliar emotion, a shared sentiment that others were listening and that their decisions truly mattered.
This is the start of a new politics, but obviously mere meetings and protest marches are not enough. There is nothing certain about the future, save that it is our actions that will create it and that others are already exploiting our inaction. It is no longer sufficient to appeal to government to put things right; a corrupted system will not reform itself. We must create new systems, new modes of decision-making and interaction, and new forms of economic behavior to replace the old.
Occupy Wall Street demonstrated some of the necessary elements of this new politics. Anyone who wished to participate could do so. All had a voice in decisions. These are the features of “participatory democracy,” which, when practiced more broadly, delivers outcomes unfamiliar from our own corrupted democracy: equality (because the interests of all are accounted for); transparency (and thus less corruption); and a civic culture of respect, not ugly partisanship.
This is a politics of the many for the many, rather than that of a small clique of elected representatives, co-opted by the powerful few. It requires patience and work, as the Occupiers of Zuccotti Park have learned. The consensus principle is vital, and prevents the “tyranny of the majority,” but it must (and can) be engineered to allow fast decisions and discussions of complex issues. In Porto Alegre, Brazil, mass participation in decision-making has succeeded in deliberating the affairs of a city, and the results clearly indicate more equal provision of services, better environmental protection and an improved political culture, one that is open, nonpartisan and uncorrupted.
Once decisions are made this way, they have immense force. Unlike with the distant machinations of government, all participants feel that they have been consulted. Everyone commits.
Participatory democracy should be promoted for every public setting, from our neighborhoods to our cities and counties. As turkeys will not vote for Thanksgiving, politicians are unlikely to institute such systems. Instead, we will have to set them up ourselves, starting local—our street, our building, our school—and in doing so establish legitimacy from the ground up, a legitimacy that today’s politicians evidently do not enjoy.
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The second element is equally critical: this is the politics of the personal. Our political goals must be embodied in everything we do, for this is the most direct way to produce necessary and urgent change. Despite its perpetual encouragement by over-promising politicians, the habit of asking government to produce the ends we seek is out-of-date. Given the way that Washington (and indeed London or Paris) works, there is zero chance that any politician, even one with the best intentions, will deliver a just society, where the weakest are properly cared for and where the earth that sustains us is itself sustained.
Personal action is also the most effective means of influencing others. Forget Internet petitions, tweeting, writing to your Congressman or other formats of usually fruitless complaint—what you do will have the most persuasive force in encouraging others to do the same. Think of “the wave” in a sports stadium. This is the way to change a complex, highly interconnected system, not top-down management, as network theory and social research are demonstrating. And throughout, an older maxim carries an eternal message: the means are the ends, as Gandhi taught. If you use violence, you are likely to get violence. Like his famous Salt March (or Salt Satyagraha), the ideal political protest is the one that embodies the change you wish to see. Do it yourself, and nonviolently.
Self-organized, nonviolent action by the many, consulting all those affected: some would call these methods anarchism, but if so it is a very gentle kind. In fact, these techniques amount to a politics of modernity, of complexity, a politics most appropriate to our current state. These methods also inhere in a new economics, for Marx was in this sense correct: the economics makes the politics. You cannot have a fair, cohesive or happy society when a tiny few hold the vast bulk of the wealth and where companies are legally bound to maximize profits over all else, ignoring any un-costed effects to the environment or society.
There are forms of business that in their very design make up a better politics. Cooperatives share ownership among their staff as well as agency—that sense of control and participation that contemporary society denies us. As Britain’s massive retail giant John Lewis has shown, cooperative companies can be just as successful, and can endure much longer, than the merely profit-driven. “Triple bottom line” companies give equal weight to their social and environmental impacts alongside the profit line.
Such companies can be founded. They can be competitive. And we can support them by choosing them over more negligent businesses. In the OWS Alternative Banking working group, for example, we are building the elements of a new Occupy Bank [see Carne Ross, “Revolution Through Banking?” TheNation.com, December 22], which would be democratic, transparent and egalitarian, and would offer better services than for-profit banks.
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Finally, it’s not just a better political system or a better economy that the new paradigm promises; it is also a richer aesthetics, a better culture. The ghastly homogenization and banality of consumer culture undermine our experience of life (this is perhaps the reason for the weird idol worship of the aberrational design fetishist Steve Jobs). The rabbit-hutch geography of the office combines with the humiliations of corporate culture (for bosses as much as the bossed-about) to alienate and demoralize everyone concerned. How we crave escape—pharmacological, alcoholic or virtual.
The current malaise is thus existential as well as political and economic. Nonetheless, this collective crisis can be captured in one word: agency. Control. We have lost it. We need to take it back.
The methods proposed here flow from an appreciation of society and the human project that differs fundamentally from the assumptions that underpin conventional neoclassical economics and representative democracy. The premise is that people are not merely self-serving but value other qualities—compassion, meaning, community, beauty—at least as much. That they can be trusted to run their own affairs, a trust that is repeatedly undermined in today’s fear-based culture. Hobbes’s “state of nature,” of war of all against all, is a bogeyman belied by real-life experience, which suggests that after disaster strikes, people facing common hardship collaborate without need for overweening authority, as Rebecca Solnit has eloquently written. Human nature is more beautiful than we have been led to believe.
But perhaps because the human is a rather subtle and undefinable beast, these methods, and this new understanding, may never make up a complete new system or structure, in theory or in practice. Marxism and neoclassical economics sought comprehensive explanatory systems of society and indeed of human behavior. Both in their ways proposed complete accounts of the human project, with all loose ends neatly tied off.
But if 1989 marked the end of communism, the global financial crisis and the insistent drumbeat of environmental disaster should mark the end of the political and economic orthodoxy that brought these perils about. The presumption of completeness inherent in both these thought-systems was their downfall because, inevitably, they left out crucial factors.
Marx failed to foresee that totalitarianism was an intrinsic risk of a self-appointed vanguard movement. The rationalist models of neoclassical economics failed to take account of the influence of irrational human behavior, like that witnessed in the credit bubble’s credulity, as well as the revealingly named “externalities” like social and environmental costs. Unpredicted and unmanaged economic volatility, mounting social fragmentation and grave environmental damage are now overwhelming the appealing but simplistic “internal” logic of equilibrium-seeking markets and utility-maximizing consumers.
Indeed, the pathetic human need for a complete explanatory system needs to be resisted, for no theory can offer a full account of a world that is already massively, and yet also increasingly, complex, where any event, from the destruction of a job to war, is the subject of countless factors, all in constant, dynamic interaction. We hunger for a detailed map of the world, but the best we can hope for is a general understanding of a new dispensation: complexity. And complexity does not demand management by authorities; it is instead best influenced by individual agents, acting by themselves at first, then with others, carrying the potential to affect the whole system.
This, then, is the new politics for a disorderly world. The defenders of the status quo claim that only their methods can maintain order. They are, in fact, achieving the opposite. The politics proposed here, and already evident in Occupy and elsewhere, can foment a deeper order, where people are connected to one another, reweaving our tattered social fabric, where work is fulfilling and responsible, and where everyone in society is given their proper voice and their interests are accounted for. Our current political and economic forms have made avowal of these ideals seem archaic, almost absurd. How ridiculous to wish for such virtues! We cannot let such cynicism triumph. A new way is possible, but it has to be enacted, not asked for.
The Republican primaries grind on. Now that Newt Gingrich has declared his determination to fight it out until the convention in August, the year’s news “agenda” will be wholly dominated by the soap-opera arguments of the presidential contest. Though tediously drawn-out, the ritualized debates reveal little of how the successful candidate will really perform once in office. But one message comes through, unintentionally, loud and clear. Our political culture, and indeed society, is obsessed with the idea of “leadership.” This obsession is not only demeaning (both to the candidates, and to us); it is profoundly dangerous.
Our culture fetishizes leadership. A thousand books extol the “leadership lessons” of tycoons and sportsmen. The leaders are wise; the rest are rendered impotent sheep. As the deification of the leader and his superhuman qualities reaches its orgiastic climax in the presidential election, it seems almost blasphemous to point out an awkward new reality. The king is shedding his clothes. Leadership, at least of the traditional political kind, is not working.
The nature of the world today is dramatically altered from the circumstance of only a few years ago. Globalization is spawning an immense and growing complexity, requiring new forms of management. It is simply impossible for any single authority to understand or arbitrate this maelstrom. Yet this omniscience is what we demand of our leaders.
Any event, from recession or war to the creation of a single job, is now the function of countless myriad and ever-changing factors. This always was the case, but now it is more so. Nevertheless, like children looking up at teacher, our infantile political culture requires the would-be leader to claim that they alone can make wise decisions to govern this extraordinary complexity. The gameshow format of the campaign debates (which tells its own story) only highlights the absurdity: “In 30 seconds, please tell us how you would save the economy?”
The evidence of the disastrous ineffectiveness of top-down “leader-led” management of the world is all around, should we care to see it. In the environment, climate change accelerates. In the economy, volatility mounts untrammeled by the confused and belated efforts of governments, forever behind the curve. In society, inequality and social tension are in parallel ascent.
Traditionally, and with easy resentment, we blame politicians and political parties for these failures. But the uncomfortable truth is they are not the problem. The problem is in fact us, for in our pathetic obeisance to the leadership cult we have abdicated not only our own responsibility, but, worse, our much greater power to deal with today’s new world.
In a complex system, the most potent agent of change is not authority but the individual, and the group. The era of a world organized and dominated by states and their leaders is ending. No one will take their place in the director’s chair. No single agency or leader will determine any particular event, or necessarily understand it. An era of leaderless change is upon us, where history will be written by the many, not the few.
This shift is buttressed by recent research in network theory: Complex systems resist centralized command-and-control, but individuals can trigger change across the system. Other research highlights another under-rated vector of change — those with most influence upon the behavior of others are not government, not experts, but those right beside us: neighbors, family and peers.
Conventional assumptions about political power are thus overturned. It is action by individuals, and with others, which offers the most effect. As we realize the decline of the leader-based model, a new form of self-organized politics will emerge.
Rather than looking to distant authority for answers, individuals and groups will pursue change directly through their own behavior, for the means, as Gandhi taught, are the ends. To arbitrate our common business, people are starting to negotiate directly and horizontally. In cities around the world, participatory democracy, where all can take part in decision-making, is producing fairer, less corrupt and more sustainable outcomes. Decisions made through mass participation reflect the interests of everyone and not just those with privileged connection to the leadership.
Watching the trading of hollow slogans in the debates, we intuitively know that the leader-centric model is not working. Taking responsibility instead ourselves will demand more work. But action by us is not only more effective, it is also more fulfilling than the cynicism and frustration evoked by today’s leader-obsessed political culture.
Worshipping leaders is more than usually dangerous in today’s new complex circumstance, but this cult has long denied our own remarkable power.
This Quantum Diaries blog is an excellent discussion of the virtues of logical positivism in science, namely the vital distinction between claims that can be tested against evidence, and those that cannot, or where the evidence does not exist.
However, logical positivism is a very dangerous framework for the study of human affairs. This is one of the fundamental assumptions of the thinking behind “The Leaderless Revolution”. Human society comprises many elements, including economic transactions, and other measurable features. These measurable elements are however not the whole picture, by any means. And what cannot be measured may be the most important of all. These elements include things like compassion, love, hate and our existential sense of being, including our relationship with “Nature”. There may be some psychological tests that can crudely put numbers to these features of the human experience, but I suspect that even their most ardent proponents would not claim these measurements comprise a complete account.
Despite this grave reservation, this is nonetheless the claim of the neoclassical mainstream discourse of economics. It does offer, both in its statistics and aesthetics (neat graphs, defined relationships, equations) it offers a compelling and attractive explanation of “what is going on”. The school of “Freakonomics” etc attempts to put economic explanation to many contemporary phenomena, suggesting that “economics” can explain more or less everything.
This tendency in mainstream economics, which is now expanding to include discourses like “behavioural economics”, is of course well recognised more broadly in the mis-named “social sciences”. It is not however recognised in our broader culture. The claims of this very limited form of analysis are perpetrated as eternal provable truths of both individual and business behaviour (“micro-economics”) and the economy and thus society as a whole (macro). The reason that these claims are rarely challenged in public debate is of course that these claims suit the plutocracy, for whom neo-classical economics serves as a very convenient quasi-scientific platform for their more hidden and implicit project of economic exploitation, both of ordinary people and the environment. Notably, mainstream economics continues to ignore the pricing of both “social costs” (which in my view are unpriceable in meaningful terms, precisely because they are unmeasurable) and envirnonmental “externalities”) (likewise unpriceable, but to a lesser extent).
It is time to confine logical positivism to pure ‘science’ (the quoted blog was written by a particle physicists) and reject its claims, except in a very limited setting, about human society. That, to me, is the paradigm shift (to echo Kuhn) that our politics and indeed our culture must now undergo. An acceptance of the unmeasurable as equally important, and perhaps more important than the merely measurable. This assumption will allow us to develop a fuller, more accurate and richer understanding of the human project overall, and value, both empirically and otherwise, other things than those that merely appear in the analyses of mainstream “economics”, the most misleading of supposed sciences.
How the mainstream will appropriate Occupy & thus eviscerate it
I tweeted about this yesterday.
Looking back at the upheaval of 1968, it’s all too clear that the ideals of that short moment were appropriated by the mainstream and thus nullified. As Slavoj Zizek has observed, Che Guavara became a T-shirt logo rather than a global revolution. The words and slogans of the movement (which, like Occupy, was tellingly diffuse) became part of mainstream commercial culture, where their repetition and misplacement gutted them of any political meaning and, above all, effect.
When crockery shops advertise their wares as “gifts for the 99%”, the extraordinary impact of Occupy is evident, but also, sub-textually, the profound risks to its message and impact. More dangerous still is when the likes of Newt Gingrich and other Republican contenders rivalling the uber-capitalist Mitt Romney use Occupy-type language to criticize his slash-and-burn allegedly job-killing methods at Bain Capital.
We all know that if President, none of these candidates will do the slightest thing to modulate the egregious environmental and social impacts of corporate crony capitalism of the ilk that is so dominant today. Rather the opposite. Yet these candidates shamelessly appropriate the language of Occupy to curry favour with a deeply disenchanted public. Basta!
My conclusion. As the ‘68-ers manifestly failed to do, Occupy must move from words to action, for relying on the platform of words will see the ground cut from under our feet. In contrast to the ease with which they can steal the words of Occupy, the Gingrich’s of this world will not be able to appropriate actions consonant with the ideals of Occupy for this would be to enact Occupy’s sought revolution. And that won’t happen in a century of Sundays.
Wanted: Recommendations for Avatars of The Leaderless Revolution
To celebrate the ideas of “The Leaderless Revolution”, I’d be really grateful for suggestions of individuals around the world who are taking action to affect political and economic circumstances directly, not by campaigning or politicking but by doing - the essence of the philosophy of the book.
Whether establishing forums of participatory democracy, cooperatives, new banks or using other methods to bring economic and political justice by direct means, these are the individuals demonstrating the new form of politics which brings real results, in contrast to the sclerosis and corruption of an ailing government-centric mode of politics.
The US edition of The Leaderless Revolution is going to be published in hardback by Blue Rider Press (Penguin Books) in one week from now. A free copy will be sent to one hundred such individuals, so please share your suggestions of who might find the book useful.
I am trying to understand why I have always found new year’s eve a dismal affair. This morning, for some reason, I am in the mood to break this down.
The manufactured celebration affirms our false understanding of time, that it is all about what is past and what lies ahead, when in fact life is “about” neither. Neither past nor future exists. There is of course only the present.
Increasingly, I can only interpret any event or idea politically. And new year’s eve is no exception. Almost all politics is about the future, an endlessly recycled promise of better times. Witness the ghastly rhetoric of the Republican primaries. The only other political narrative is blame for the past or, less often, the present. Almost no discussion is devoted to the experience of the here and now.
This is what a new kind of politics means to me. Instead of the repetitive and often hollow conjuring of a better tomorrow, politics should be about us, here, now (this is one reason why anarchist thought is often associated with atheism, which similarly rejects the false promise of heaven). Materialism and indeed capitalism relies upon the creation and repetition of currently unsatisfied desires, which are briefly satiated by the act of consumption. For it is consumption, as we are often told, that drives the economy.
Thus, the current economic set-up requires an unrelenting focus on the future, and not the present: what we might enjoy, rather than what we have today. It takes little analysis of course to recognise that under the surface, the other requirement is the constant promotion of dissatisfaction with the present. Advertising must reinforce this. Things will be better if you purchase this product.
Thus, the false celebration of new year’s eve is the most obvious marker of an economic and political culture which relies upon us ignoring the most important experience of life: what is now. In its place, we are asked to remind ourselves of the disappointments of the past and the hope of the future, which likewise will be ultimately unfulfilled too. We must turn a new leaf!
This is why I hate new year’s eve. Happy new year!
Near the end of Arthur Koestler’s Darkness at Noon,there is an extraordinary passage:
“Perhaps later, much later, the new movement would arise- with new flags, a new spirit knowing of both: of economic fatality and the ‘oceanic sense’. Perhaps the members of the new party will wear monks’ cowls, and preach that only purity of means can justify the ends. Perhaps they will teach that the tenet is wrong which says that a man is the product of one millions divided by one million, and will introduced a new kind of arithmetic based on multiplication, on the joining of a million individuals to form a new entity which, no longer an amorphous mass, will develop a consciousness and an individuality of its own, with an ‘oceanic feeling’ increased a millionfold, in unlimited by self-contained space.”
These are the final thoughts of Rubashov, the central character of the novel, as he contemplates his imminent execution at the hands of his erstwhile comrades in the Communist Party. Rubashov asks himself what has happened to this rationalist system, communism, that it will use such brutal and oppressive means to attain its just society. He realizes the mistake in the system is in the precept, the ends justifies the means:
“It was this sentence that had killed the great fraternity of the Revolution and made them all run amuck. What had he once written in his diary? ‘We have thrown overboard all conventions, our sole guiding principle is that of consequent logica; we are sailing without ethical ballast’.”
Rubashov ends up hoping for a movement that encompasses the irrational (his ‘oceanic sense’) as much as the rational and the logical, treating humans as more than mere numbers. Notably, it is not a system or structure that he wistfully imagines, but a “movement”.
Koestler’s scepticism of any science-based, rationalist system must surely apply not only to communism, but our own current rationalist dispensation. And here too we witness the ultimate destructiveness of a doctrine of ends (material wellbeing) justifying more subtle, less brutal, but nonetheless poisonous, means (inequality, the devastation of nature, and the ghastly emptiness of modern work).
But in Rubashov’s strange imagining, we see the pre-figuring of a new political dispensation - a movement - where the rational and irrational both find a place, reflecting at last their coexistence in the flesh and blood dispensation that is us, the human.
The political methods of the 20th century are, it appears, less and less effective for the world of the 21st.
The nature of globalization is without precedent: accelerating interconnectedness, with billions of people interacting constantly in a massive, dynamic, and barely comprehensible process.
Yet the assumption persists that the political processes and institutions designed in the 20th century, or earlier, remain appropriate and effective in this profoundly different state of affairs. In fact it appears that the ability of national governments and international authorities to manage the severe problems arising from this new dispensation are declining, despite their claims to the contrary.
Take climate change. The annual climate summit has just ended in Durban, after dozens of “preparatory” meetings and thousands of diplomatic discussions. Its output was a decision to agree a treaty in 2015 to introduce emissions limits in 2020. Oddly, many governments (and commentators) are claiming this as some kind of victory.
It is traditional to blame individual states (the US, China) for the failure to agree to more robust measures, and these do bear some responsibility. It is however also apparent that the process itself is the problem, and has been since its inception. The negotiation echoes traditional models of state-based interaction. Governments treat it as a bargaining process, where commitments to curb emissions have to be matched by other countries. The net result is that nothing is done.
The correct measure of Durban is not the declarations of success by the participating governments, which are required to trumpet their own effectiveness and negotiating prowess. The only output that matters is the concentration of carbon in the atmosphere. This has grown with unprecedented rapidity by more than 10% since the first such conference, the so-called “Earth Summit” in Rio de Janeiro in 1992.
Effects in the real world should be the test of such processes, and indeed of all political methods, including government’s. By this measure, efforts to curb financial volatility or terrorism have been similarly ineffective. Experts say that the internationally-agreed Basel III rules to reduce risky banking practice are insufficient, and they are already being watered down by banks’ lobbying. Ten years after 9/11, and despite the killing of Osama bin Laden, we find ourselves in a condition of never-ending threat, multiple conflicts and the seemingly permanent embrace of an intrusive and hugely expensive security state.
There is a more pernicious consequence of the repetitive but tenuous claims to effectiveness made by the practitioners of conventional politics and government: everyone else is dulled into stupefied inaction. If “the authorities” claim to be on top of these problems, what does it matter what we do? And here’s the rub. We have been pummeled into a kind of dazed apathy, endlessly badgered by politicians that they can fix it, when in fact we are the most potent agents of change.
At home, democracy has been subverted. Corporations donate copiously to both parties to insure their influence. Politicians initiate legislation in order to extract rents from big business. Private prison owners lobby for longer sentences. There are now lobbying organizations representing the interests of lobbyists.
This legal corruption is deeply entrenched in our supposedly democratic political system, resisting all attempts at reform. It is naïve to expect decisions from this system to reflect the interests of ordinary people. And this is what we see: tax regimes that tax incomes of the poor more than the accumulating wealth of the rich; healthcare legislation whose primary beneficiary is the healthcare industry; a comprehensive failure to regulate the banking industry to prevent further violent crises such as the ‘08 credit crunch.
Cynical despair would be a perfectly understandable response to this dismal picture. But this reaction entirely suits those who profit from the status quo. Instead, this analysis leads to one clear prerogative: there is no choice but to act ourselves. If we are not to stand by while the world’s problems deepen, there is only one alternative: action based upon on our convictions, uniting with others for greatest effect. And as we shall see in the next post, such action is in fact far more powerful than any other method of politics in effecting real and lasting change.
A former diplomat, Carne Ross is the author of The Leaderless Revolution: how ordinary people will take power and change politics in the 21st century, published by Blue Rider Press (Penguin), ebook now available, hardcover to be published in January 2012. For further information and videos explaining the book, visit www.theleaderlessrevolution.com. This is the first in a series of four posts.
The more I think about it, the more I think that Cameron’s diplomacy was disastrously ill-planned. Whoever dreamt it up should resign. It’s basic diplomacy to prepare negotiating partners for your proposals, and assess prospects BEFORE you table. This clearly was not done.
A quick bluffer's guide to what's happened in the EU
I suspect that an awful lot of people are trying to understand the dramatic events in the EU on Thursday night. And they are dramatic.
Here’s a very brief attempt to make sense of it.
The EU leaders met (this is the “European Council”) to decide new common fiscal rules. They did this to stem the collapse in confidence in the euro, following runs on sovereign debt in Greece, Italy, Spain and, increasingly, elsewhere in the EU. The French and the Germans had earlier agreed an outline deal whereby member states would sign up to a much stricter set of rules on budgeting. In many ways, these rules, which require balanced budgets and prevent states from running up unsustainable debt burdens, amount to a “fiscal union”. A fiscal union is in essence ceding member states’ powers to decide their own budgets to the EU itself. For some therefore, a fiscal union amounts to something pretty close to a political union - the final ceding of sovereign powers of government to the collective EU, arbitrated by member states acting together and by the European Commission, the “Secretariat” of the EU (though in reality this body is much more powerful than this term implies, and its new powers in this arrangement are not yet clear).
These proposals were packaged as a new EU treaty, dramatically changing the nature of the EU itself. The UK’s David Cameron refused to sign up to the treaty, on the grounds that other member states would not agree to other rules which would protect the UK’s financial services industry from certain common EU rules, which the UK judged might harm the City’s global competitiveness. Since new treaties require unanimity among the 27 member states, the UK effectively veto-ed a new treaty.
Once this became clear, other member states of the EU agreed that they would nevertheless pursue the new budgetary rules without the UK. This means that these rules will have to be agreed and implemented outside of the EU structures. This opens up significant questions about how these rules will be effected, since the established architecture of the EU - the Commission, the European Court of Justice etc - cannot be used. At least, this is the case for now. The necessity to pursue this new treaty outside of the EU may damage the agreement’s credibility in financial markets. In this sense therefore, the goal of restoring the fiscal credibility of the EU has been undermined. Whether this effect is severe or insignificant will depend on market reaction, immediately and in the longer term as these plans play out.
Meanwhile, the UK is diplomatically isolated. It failed to get agreement to protect the City from certain EU regulations which, under the EU’s existing treaties, the UK is obliged to implement. At the same time, the irritation caused by Britain’s veto on a new EU treaty will limit its ability to influence future legislation on financial services, and indeed anything else. So in this sense, this was a very severe diplomatic failure for the UK. In diplomacy, if you ask for something and don’t get it, and others agree to something else, it’s very hard to pretend that this is anything other than a failure. Moreover, the UK has severely limited its influence in future EU decisions. Double the failure (if not more).
The overall significance for the EU as a body is considerable. The large majority of EU member states have agreed to establish new and stringent fiscal rules governing their national budgets. Whatever label you choose, this is a very big step towards political union. And the UK is not part of it. Some commentators, such as the Economist’s Charlemagne are calling this a “divorce”, and in many senses it is.
But less clear is whether the imbroglio in Brussels will prove sufficient to restore confidence in the euro. So far, market reaction has been generally positive. But this will only be sustained if the new inter-governmental agreement reached in Brussels effects strict budgetary rules with credible enforcement mechanisms. Had this been agreed as an EU treaty (i.e. had the UK not vetoed), the credibility of the new agreement would be higher. In this sense, the UK’s veto may have damaged efforts to restore the eurozone’s finances. Little wonder that the UK is so unpopular.
But there are other subtexts beneath all this late night wrangling among the elite club of European leaders. Not one of those leaders has consulted their populations whether they wish to join this emerging fiscal union. Not a single one. And it’s not clear whether any of them will. Member states traditionally have avoided referendums on major treaty changes, correctly suspicious that their populations would rebuff them. So while the EU’s leaders may have taken a massive step towards fiscal and thus political union, they have taken a step further away from real political consent. The long term consequences of this cannot be imagined as positive, even if they are today unclear.
For this, and perhaps for this alone, Cameron can be credited. While the urban British elites may be horrified at the UK’s new and deep European isolation, which may well be prolonged, there can be little doubt that the majority of British people will be happy that the UK has not joined this undemocratic rush, untrammelled by any popular consultation, towards a centralised European state. But this is just guesswork. The British people won’t be asked whether they like or not either. So any credit for Cameron in this sense should be (very) limited.
And this is an early interpretation.
The FT has a very good narrative of what actually happened at this meeting. I shall try to post a link shortly (tho they have an irritating paywall). Stop press: I can’t even find the original article on their site. However, here is their summary of the agreement:
● To be agreed intergovernmentally outside the judicial and institutional framework of the EU
● 17 eurozone and 6 non-eurozone countries to take part, 3 others consider. UK stays outside.
● Treaty will enshrine new fiscal compact
● Each government to adopt a “golden rule” to ensure balanced budget (a structural deficit of no more than 0.5 per cent)
● European Court of Justice to ensure that national fiscal rules comply
● Automatic fines for governments that breach 3 per cent deficit limit, unless qualified majority decides otherwise
● Rapid deployment of leveraged rescue fund, the €440bn European Financial Stability Facility
● European Stability Mechanism, the new €500bn fund, to come into effect from July 2012
● No agreement to run the two funds simultaneously which would have increased total firepower but this will be reviewed in March
● Eurozone and other EU countries to lend €200bn to the International Monetary Fund via their central banks
● The requirement to get private bondholder to share burden of future rescues will be dropped from European Stability Mechanism treaty
● The ESM will be able to make bail-out decisions according to an 85 per cent majority, if Commission and European Central Bank conclude a decision is urgent.
Some thoughts on the future of Occupy Wall Street #ows
When a crockery store in mid-town Manhattan advertises its wares as “Gifts for the 99%”, you know that the Occupy Wall Street movement has achieved extraordinary cultural impact. At UN climate negotiations, the most vulnerable island states have talked about “occupying” Durban. Even Republicans are now talking about inequality.
But as winter draws in, and Zuccotti Park has been emptied of its occupiers, the movement faces difficult choices: what comes next? For certain, there will be more marches, and imaginative protests, but will protest, ultimately, be enough to shift an entrenched status quo?
Few in the movement believe that conventional politics can respond effectively to their concerns about rising inequality, or re-engineer a political and economic system that benefits a minority above all others. But it is conventional politics that still runs the country, and as the Presidential election approaches, attention is likely to drift back towards it.
Instead, OWS can set itself to the task, monumental but plausible, of building a new and better economic system, and indeed democracy. Rather than rely upon a corrupted system to reform itself, the movement should instead construct a new one.
This requires not the storming of police barricades, but something quieter but ultimately more sustainable. The contours of a new system are already evident in the movement itself. Occupy’s “General Assembly” is a model, still imperfect but perfectible, of inclusive participatory democracy, where all can have a say in decisions.
This echoes ancient Athenian democracy where citizens, not politicians, took turns to decide the city’s affairs. Today, examples of mass participation in government have produced more equitable and durable decisions in New Orleans, Brazil and in many cities around the world. Participatory democracy is workable, and it is more transparent and less corrupt than the ailing “representative” systems, which – or so we are told – constitute democracy today. Where everyone gets a say in decisions, then the decisions benefit all, and not the minority.
Likewise, in the economy, cooperative companies share ownership among their workers, but without sacrificing competitiveness, as Britain’s successful John Lewis partnership has shown in the ferocious retail market. These are not idealist visions; they are proven alternatives to an iniquitous status quo.
Within the Occupy movement there are working groups developing these ideas, largely unreported by a press over-eager to pigeon-hole what is in fact a highly eclectic phenomenon. One group may set up an Occupy cooperative.
Another, which I am part of, is exploring an alternative bank that, like a credit union, is owned by its customers, and includes the poor, who are often today excluded. But in addition, the bank would be a competitive alternative to the for-profit banks, offering services attractive to businesses and individuals. It would by the manner of its operations, and perhaps by mutualizing its assets, be more stable than the for-profit banks whose profit-driven frenzy of concealed credit has done such damage to the world’s economy, and the poor in particular.
One group is discussing the very fundamentals of our economy, and whether a currency can be established that is not produced by creating debt, as the dollar is today, and offers independence from both for-profit banks and government, a peer-to-peer system, if you like. These groups are forums for informed and sophisticated debate, but they are working towards practical outcomes. Our intention is to construct these alternatives, not merely demand them.
This will not be easy. But Occupy has released enormous pent-up frustration about a political system poisoned by money, and an economy that is failing the majority. And it has also liberated hope, and an inspiring sense of common purpose. In our banking group, there are professors, currency traders and Wall Street bankers who share these aspirations, and have put their energy and considerable expertise to creating something better.
One beauty of Occupy is that it is many things, not one thing, just as no one can claim to be its leader, or speak for it. It may spawn a hundred if not a thousand new initiatives, many of which may fail, but some of which may succeed, and in transformative ways.
Zizek on contemporary ideology in a "post-ideological" age
From “First as Tragedy, Then as Farce" (Verso, 2009):
Zizek cites an anecdote about Niels Bohr: surprised at seeing a horse-shoe above the door of Bohr’s country house, a fellow scientist exclaimed that he did not share the superstitious belief that horse-shoes kept evil spirits away, to which Bohr snapped back, ‘I don’t believe in it either. I have it there because I was told that it works even when one doesn’t believe in it’.
"This is indeed how ideology functions today: nobody takes democracy or justice seriously, we are all aware of their corrupted nature, but we participate in them, we display our belief in them, because we assume that they work even if we do not believe in them".
"…Inspiring to read it alongside Carne Ross’s wonderful account of his journey from British WMD expert at the UN to emergent anarchist, The Leaderless Revolution: How Ordinary People Can Take Power And Change Politics In The 21st Century (Simon & Schuster, £16.99). Puts the “We” back into “Yes We Can”."
#OWS - Alternative Banking proposal - The Commons: A good bank
This note was shared with members of the Alternative Banking working group of Occupy Wall Street (New York) today. It reflects our discussions in recent weeks.
The Commons: A Good Bank
This note has been prepared by the alternative banking working group of the Occupy Wall Street (OWS) movement. The note is for discussion with the OWS movement and more broadly.
The purpose of this note is to describe the characteristics of an ideal bank that embodies the values of the OWS movement. The current banking system lies at the heart of our current economic crisis of increasing volatility and inequality. To change that system, we need to replace it with a better bank. What would be the characteristics of this bank?
None of these features is new, and many are already evident in credit unions, community banks and “mutuals”. But our purpose is to imagine something that might have a broader reach and impact – that might transform the banking system, and thus, by its example and through its operations, potentially create an economy that is fairer, more inclusive, democratically managed and stable.
Democratic – all customers would own the bank, and have an equal say in its governance, regardless of the amount of money in their accounts. Employees – or rather partners - might be co-owners of the bank, forming a co-operative.
Accessible – the bank’s services would be accessible to all, and in particular the poor, who are often excluded from today’s banking system, thus making them vulnerable, for instance, to predatory lending. Ideally, the bank would be available to anyone in the country, and perhaps one day, the world.
Stable – the bank would eschew the risky practices of the for-profit banks that have damaged the world economy (affecting particularly the poor) and perpetuate systemic risk. Instead, it would operate in a way to minimize risk, for instance by mutualising all its liabilities in a manner suggested in Laurence Kotlikoff’s concept of “Limited Purpose Banking”.
Non-profit – the bank would be run for the benefit of its customers and employees. Any profit would be returned to customers in the form of cheaper loans or other services, or pro bono services – such as interest-free loans - for those in dire need. Without the need to generate profits or maintain a high stock price, the bank could offer more competitive services than the for-profit banks, thereby contributing to the next characteristic.
Competitive – the bank would offer services to individuals and businesses that would be as good as or better than those offered by for-profit banks. This objective is plausible if the bank is non-profit, and has a “light” infrastructure, perhaps by essentially operating as a “clearing house” to match lenders and borrowers (similar but not identical to “peer-to-peer” services). We also note the abysmal quality of current banking services in the US, in contrast for example to those offered in many European countries.
Transparent – the opacity and unintelligibility (even to those working in finance) of the financial system have contributed to the “credit crunch” collapse. The operations of this bank would by contrast be wholly transparent, thus again helping minimize any risk caused by its operations.
Equal – no partner or employee in the bank would be paid more than a certain multiple of the lowest-paid worker, for instance no more than eight or five times that number. In this way, the bank would promote greater equality and would encourage this characteristic in the economy more widely. This would also contribute to the competitiveness of the bank.
In establishing the bank, the principles embodied in the characteristics outlined above should be followed as much as possible (“the means are the ends”). One possibility to consider too is that, like the Grameen Bank, the bank might operate upon trust rather than legal contract with its customers, thus helping rebuild this scarce social commodity.
If there is general consensus within OWS and perhaps more broadly on the desirability of such a bank, the Alternative Banking group will set itself to the design and perhaps construction of the bank, drawing on the examples and experience – and perhaps the assistance – of similar such banks around the world. But there is no monopoly here: anyone is free to take inspiration from these ideas and embark upon the same challenge.
John Burnside. The surprise hit of 2011, in our house at least, was The Leaderless Revolution (Simon and Schuster, £16.99), an inspiring plea for emergent anarchism from former British WMD and sanctions expert Carne Ross. If everyone read this book, politics might begin to be about trusting each other rather than lobbies, subsidies and cynicism
The Browser on The influences behind The Leaderless Revolution
Our political and economic systems are inadequate and failing. But what can we do? The author of a new book on the subject tells us what inspired his involvement in the Occupy movement and how a leaderless revolution could work
'So bold, so full of incontestable truths and overwhelming convictions, that it should be read by every diplomat, politician and thinking citizen with the courage to pick it up.' - John le Carré on "The Leaderless Revolution"