For the Occupy movement, now is a time to be thinking about an answer. Jack Peat looks at how new business ideas could manifest themselves in a new political movement.
By Jack Peat
Occupy was a mass movement that leveraged the power of digital communications to protest against the inequalities of wealth and the abuse of power structures. It was the most organised attack on large corporations of our time, but a lack of actionable demands meant that its effects were limited to awareness, rather than response. In order for this to be rectified, a modern political movement must be born that utilises newfound business principles to impose change from within, rather than being imposed from the marginalised underbelly of our society.
Capitalism is indeed flawed, but to say that it is redundant is a short-sighted perception of reality. Tim Smit, founder of the Eden Project in Cornwall, once said: “I’m not anti-wealth. I’m just against the perception that great business implies exploiting a market rather than developing it.” What he calls the “hollowness of financial gain without social profit” is a good analogy of what people are actually pissed off about – This doesn’t require revolution, it needs evolution.
Enabling ‘good capitalism’ calls for a new order. Political parties aren’t timeless, and the two-tiered power struggle that has existed in most modern democracies since the World Wars is an outdated and inadequate means of representation (hence the reason the electorate feels under represented). In the same way the Labour Party was born out of out of the trade union movement in 1900, a new party can emerge from the educated, knowledgeable and connected populations of today. The evolution is already being felt in the business realm, it just requires political recognition.
What’s the beef?
General discontent in the ranks of ‘Occupyers’ stemmed from the inequitable distribution of wealth and the powerful and unfair role large corporates have come to play in modern society. Coming from a working class background myself I find it difficult to forget the inequalities of wealth and sympathise with the movement on these grounds, but I’m also in tune with how the economy works, and tackling an economy of millions as if it were an island of hundreds will never work.
Huge public spending is not the answer. The initial proposals from the Occupy Wall Street movement asked for one trillion dollars in infrastructure funding, which is ambitious, but also laughable. Long-term solutions can’t be met by relying on the government to bail people out as and when they need it – if anything, the role of government should be mitigated on the basis that centralised power has been proven to be ineffective.
Trying to overthrow capitalism also won’t work, what we actually need is a ‘good’ version of it. Capitalism is an economic representation of human instinct, and it has proved successful (and it has been successful) because it is almost primitive in its appeal to human psyche. No one does something for nothing and there has to be systems that rewards – of which pay is one – hard work and innovation. We also don’t want wealth to move, and taxing the hell out of the upper class won’t lead to a semblance of balance, it will just mean money disappears from the economy altogether.
What’s the solution
The economy is a naturally self-healing beast. It is run by us, the civilians, and our resolution in the face of adversity is admirable. In the last few years, as corporates have withdrawn and pursued risk aversion tactics, an age of entrepreneurialism has emerged which is filling the gaps and creating new opportunities. When it comes to politics, there is a lot we can learn from how business responds to crisis.
Decentralisation, both politically and economically, is the most prudent way of giving power back to the people. The funnel effect of channeling the fruits of labour from the bottom to the top is redundant, and there are several bonafide and actionable ways that this can be rectified.
Crowdfunding (the concept of people investing in people) is utopian in its conception and complies directly with the requests set down by the Occupy movement. The problem with banks making the lion’s share of investment is that it creates a domino effect when one component slips up (financial crisis). But diversify that investment, and not only are the risks shared, but so are the returns.
And why stop with funding. Energy and water can be made more sustainable if they are decentralised. If one region invested the money they pay a ‘big six’ energy provider and instead pooled it with their community into renewables, that region could become self sustainable and energy independent within years. The idea that a sole provider means a better service at a better cost is ludicrous.
Politically, creating a more diverse autonomy (i.e- power is spread out regionally) rather than having centralised systems of control will allow leaders to create solutions for actual problems. It’s understandable that parts of the British Isles are disillusioned with Westminster, as it clear to see why Athens might feel strangled by Brussels – economic unions are a good thing in a globalised marketplace, but political policies should not be one size fits all.
The internet and market liberalisation
The internet has created a level playing field and a chance to redefine modern democracy. There are large corporates and local governance in the market, but by and large it is a virtual projection of our world that could be tamed with utopian principles.
Bitcoin is a wonderful example of this, and there is nothing to say such a system can become ubiquitous. Bitcoin stands for free-market money and is safe from the grabbing hands of a state that cannot wait to debase, devalue and decimate whatever currency it gets its hands on, destroying hard-working savers. It could liberate fair trade, where people and businesses can trade like for like regardless of their location.
There is no limit to the power of the web, and every man and his dog can have an idea and start up on the internet. It has also proved its power in harnessing political movements, but these forums can actually be actioned if political parties become more forward-thinking about how to utilise them.
Economics students are becoming disillusioned about what they are being taught. “They don’t reflect reality”, is a common concern, and they would be right. Academics at Cass Business School recently revealed that a monkey picking investments at random could beat funds tracking the US stock market, but yet this is the type of risks we run on the modern market.
Keynes was good, but he’s not longer relevant, and quantitative easing (over-reliance on banks) and other economic tricks have been found wanting in the current crisis. Textbooks can’t fix real life problems, and we need to incorporate decentralised and realistic models into our finance systems.