What do we want? We donÂ’t know! When do we want it? Now!
That’s a joke that’s been bouncing around the internet in relation to the OWS protesters and with some good reasons. The protesters have lacked any cohesive message. And, while I have mocked that, there is also a part of me that high fives these people – whether I agree with their ‘cause’ (whatever that may be) or not. It’s cool that people are passionate enough to get out and make themselves heard. That goes for the TEA Parties and OWS alike. Unlike the partisans, I will not deride either group… although I did at least understand the TEAs.
AnywayÂ… to the pointÂ… and I apologize in advance, this might be a tad long winded.
So, while watching news coverage of the protesters, I decided to do some digging, in the hopes of shedding a little light on the causes. If not for you, at least for myself.
The Western world has, for the past couple of decades, seen stable economic growth. And Governments generally ignored the warnings coming from the economist,
William White*, and chose instead to listen to his rival, Alan Greenspan. I think we can all see the consequences of that particular global error of judgment.
*For those who donÂ’t know who White is, he is a Canadian banker who at the time of his warning was the chief economist for the worldÂ’s most respected central bankÂ… International Settlements (BIS) in Switzerland. Since 2009, he has been much listened to, traveling from country to country speaking to business leaders, bankers and Governments.
OKÂ… back on topic:
Austerity is known to bring with it the instability, and protests, that have spread around the western world.
Research by Jocopo Ponticelli and Hans-Joachim Voth (Barcelona University) provides a data set of protests (strikes, marches, revolts and even assassinations) that show a link between fiscal austerity measures and social unrest. No big surprise but itÂ’s nice to have facts to back up opinion. From that research, spending cuts of 5% GDP lead to twice as many episodes of instability.
There is another
study from Latin America where Mr Voth studied the period from 1937 to 1995, which shows the same outcomes – a tightening of fiscal policies and civil unrest. Interestingly, this unrest occurs in both democratic countries and autocracies. So, it ain’t about democracy, folks!
What research also tells us is that people are more likely to protest austerity than any other cause. Samples from Europe show that austerity related protests attract hugely more support than, say, anti-war protests. Basic human selfishnessÂ…. We care most when it affects us directly.
What other factors should we include when trying to understand these protesters?
Well, letÂ’s throw into the mix the research that links high levels of debt and high unemployment. The International Labor Organization warned in 2010 that high levels of unemployment, particularly young people, were likely to cause social disorder. And, when you consider what happened in London in August 2011, they were right about that. Young people took to the streets in their thousands, looting, burning and causing millions of dollars worth of damage. Was it organized or spontaneous? Who knows, but the UK courts are currently packed with kids paying the price of those nights of mayhem.
There is also a great paper (albeit from 1994) by Alberto Alesina (Harvard U) and Roberto Perotti (Bocconi U) that reviewed 71 countries from 1960 to 1985. Their findings included the link between income inequality and social instability. In the view of the researchers, unrest erupts when the wealthy middle class is undermined.
So… how do we satisfy these protestors (assuming they have a coherent ‘demand’ other than the ridiculous crap bandied around in the media)?
Well, research (being a right wing, I might add that I am supposed to ‘hate sceince’ LOL) from
Daron Acemoglu (MIT) and James Robinson (Harvard – again!) shows that (and here is a big surprise people)…..
redistribution of wealth can quiet public unrest.
And that, ladies and gentlemen, is why, in my opinion, there is nothing spontaneous about this protest.
