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Why 'Occupy Wall Street' spread

Updated: 2011-11-29 13:50

By John Ross (chinadaily.com.cn)

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The Occupy Wall Street movement spread rapidly to other US regions and has had a wide global impact. Within a month of the first 'Occupy' event similar demonstrations took place in Los Angeles, Portland, Oakland and over 90 US cities. The movement spread to Europe with campaigns in cities including London, Berlin and Paris.

In some cases only a few hundred people were involved. In other countries, such as Italy, the movement fused with very large protests against social spending cuts. Many newspapers and politicians made supportive statements and China's media followed the movement. To have such a quick and wide impact a movement must have deep social roots and touch deep social feelings which therefore require careful analyzing.

The immediate focus of the 'Occupy' movement is self-evidently a demand for greater economic rights for ordinary citizens as well as a demand for greater equality. The movement's central watchword 'we are the 99 percent' means equally 'they (the richest) are only 1 percent'; however, economic inequality in the US has been rising for many years - US census data shows that in the last 11 years the midpoint of US incomes has fallen in real terms by seven percent. Increasing living standards for the majority of Americans came through increased borrowing, which for a period was made possible by rising house prices. A recent Wall Street Journal survey of economists found that they anticipated most US real incomes would not regain their previous levels even 10 years from now. In contrast incomes for the one percent of privileged Americans has risen rapidly – hence the 'we are the 99 percent' slogan. But if rising inequality has existed for a long time why did the movement start now?

One reason is naturally the direct impact of the 2008 financial crisis on ordinary Americans – many of whom lost their jobs and the great majority of whom suffered a decline in living standards. The collapse of US house prices meant the route to maintaining living standards by increased borrowing was no longer possible.

In addition to the direct economic consequences, these events had a deep ideological effect. These economic trends destroyed the previously accepted argument for accepting inequality. Most people focus on their own situation and are primarily motivated by events which directly affect them rather than wider concerns. Therefore, movements based simply on abstract 'equality' do not have much attraction. 'Provided my life is improving why should I worry if a billionaire is getting richer' is the attitude most people have.

Even among those motivated by more general issues great inequality could be seen as a 'necessary evil'. The argument is people have become rich due to special skills or knowledge which has also helped the economy grow and has therefore ultimately benefitted everyone.

This view is largely myth – as some of the richest Americans note. A great amount of wealth is inherited, not earned. There is no evidence that children of successful people are any more talented than the children of others. Accumulations of inherited wealth, therefore, simply transfer it to less efficient hands.

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