Earlier this summer, the BBC interviewed Darcus Howe, a West Indian writer and broadcaster. The interview, which was subsequently posted to YouTube, focused on the UK August riots and Howe’s thoughts on what happened in Croydon, a working-class suburb outside of London. He laid the blame for the riots on growing income inequity and unfair treatment from police and the state. He went on to link similar demonstrations in Syria, Cairo and Port-O-Spain as manifestations of the same phenomena.
At the time, I thought the link between the Arab spring and the UK riots was bit of a stretch. At a gathering at the British High Commissioner’s residence, I asked colleagues and friends for their take. At the time, my British colleagues were pretty embarrassed about the violence that seemed out of place in the UK, a democratic country. It was one thing for this to happen in the Middle East but totally out of place in a democracy. I was told the riots were really all about entitlement. Too many people had for too long been living off of government support. The British government’s decision to launch aggressive austerity measures had upset the welfare class. My friends told me that Brits would have to learn how to live with less in these difficult times.
As I watch the ‘Occupy’ events now unfolding in London, Zurich, Hong Kong, Paris, Toronto, Rome and, of course, on Wall Street, I can’t help but wonder if Mr. Howe wasn’t on to something. These protests are also grounded in perceptions of inequity and economic insecurity. The protest that began on Wall Street was triggered by the perceived injustice of recent bank bailouts, exorbitant financial salaries and capitalism’s perceived moral lapse. Like in the UK and the Middle East, the young, the unemployed and the disenfranchised seem to be at the core of this movement. Left-wing sympathizers, such as AdBusters’ Kalle Lasn, are using social media to help orchestrate these protests. What is different in North America is that these protests haven’t become violent and therefore they are beginning to gain some traction with the middle class as well. The middle class are worried about their jobs, have seen their income stagnate, pension and health benefits rolled back and are surely facing higher taxes, at least in the United States.
Recognizing that this movement – as long as it remains peaceful – might resonate with people who actually vote, government and political leaders are starting to take notice and get out in front of shifting public opinion. President Obama remarked over the weekend that unemployed workers “can challenge the excesses of Wall Street without demonizing all who work there.” And, Mark Carney, Governor of the Bank of Canada, called the main message of Occupy Wall Street an “entirely constructive” expression of economic frustration and income inequality. As long as the protests remain non-violent, there will be broad-based voter sympathy for the messages. And, politicians have noticed.
It is too early to predict how government may respond in terms of policy. It is difficult to see, though, how they can preach austerity without addressing perceptions of growing income disparity and corporate greed. Right now, as personal incomes decline and government debt grows, the top 1 per cent of society, as Warren Buffet noted, pays very little in tax while corporate profits continue to be strong but parked on the sidelines and not reinvested. Even conservative governments will soon realize there are political limits to their philosophies of low personal and corporate taxes. For Canada there is a remarkable opportunity to leverage these global trends to our advantage if we keep our heads about us…but that is a topic for next week’s blog.