The ‘Occupy’ protesters are 99% wrong

Successful political movements emerge when people with diverging aims can be persuaded that they are really on the same side, that their aims are just different aspects of the same broader cause. The anti-cuts rallies were a good example. From further away, they looked like a homogeneous movement with a common cause. Getting a bit closer, one could see dozens, if not hundreds, of sub-demonstrations for completely different causes. Yes, there were the obligatory ‘Fight all cuts’ signs. But most banners were about much narrower concerns, reading ‘No cuts at…’, and then specifying the respective banner-holder’s pet spending area (presumably the sector in which s/he worked or otherwise benefited from).

It is not obvious why, to pick two random examples, nurses protesting against pay cuts and art lovers protesting against art subsidy cuts should perceive one another as allies. They could as well view each other as competitors for scarce public funds. Inescapably, every pound spent on art subsidies is no longer available for paying nurses, and vice versa. One could easily make up catchphrases plotting one group against the other. Nurses have to toil in long shifts, just so that some artsy toffs can enjoy their posh galleries for free. Or, the cultural backbone of this country is being destroyed, just so that some philistines can buy bigger flat-screen TVs.

Still, they all marched side by side, because a narrative had developed which interpreted the cuts as acts of viciousness directed against all of them. They thought government was sitting in a big pot of money which, if they had just been willing to tap into, could have satisfied the concerns of all groups alike.

Last weekend’s anti-capitalist ‘Occupy’ protests can be seen as the reductio ad absurdum of this mindset. The unifying theme of all these protests seemed to be the 99% vs. 1% narrative: we, the 99% (aka ‘the people’) are kind and noble folks. It’s the other 1%, the bankers and business owners, which causes all the trouble. All we need to do is take power and money away from them, and give it to ‘the people’.

The big fallacy of this idea is that there is no entity called ‘the people’ or ‘the 99%’, which is defined by common characteristics or common economic interests. Ask 99 people what they think the government should spend a hypothetical windfall surplus on, and you will get 99 different answers. A commuter will say that the money should be invested in infrastructure to ease congestion. A parent of school-age children will say that more teachers should be hired, so that fewer classes are being cancelled. A resident of a high-crime area will say that the police presence should be increased, etc, etc.

This shows that firstly, this mystical collective called ‘the people’ has wildly divergent interests, and secondly, individuals can act selfishly in the political sphere no less than in the marketplace. If I vote for a political party which pledges to increase tobacco tax and spend the revenue on refurbishing the underground, I am acting in a self-interested way. I don’t smoke, but I use the tube regularly. So if you’re a smoking motorist, I vote for your money to be spent on me.

Still, the protesters are right about 1% of their ‘programme’: bailouts for banks, or indeed any privileges for Big Business, are economically harmful and morally objectionable. But the most logical conclusion from this concern is to demand the abolition of privileges, not the abolition of business.

Dr Kristian Niemietz is the IEA's Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).

13 thoughts on “The ‘Occupy’ protesters are 99% wrong”

  1. Posted 18/10/2011 at 12:50 | Permalink

    You’re right of course Kristian.But the irrationality and ill-directed anger of these protests is increasingly common on websites, letters to the press, radio phone-ins etc. I just hope it doesn’t cause the government to panic and embark on more headline-grabbing but damaging policy initiatives.

  2. Posted 18/10/2011 at 14:58 | Permalink

    Indeed – many of the protestors seem to object to ‘capitalism’. That we do not have capitalism in the UK or US – we have a form of corporatism where government controls 50% of the economy and regulates the remainder. Unfortunately, instead of recognising this and arguing for a purer form of capitalism where bailouts of banks or any other business couldn’t /and wouldn’t need to) happen they instead argue for coercive redistribution of wealth. However, they also fail to recognise that the sort of wealth redistributions they advocate is merely an identical form of the same problem. Why do 99% (even if it were 99%, which, as you observe it is not) of the population have the right to exploit and coerce 1% any more than 1% have the right to coerce a majority? Tyranny is tryanny no matter the numbers supporting it. Such redistributions will inevitably favour particular interest groups. The protesters also fail to recognise that the sort of wealth redistribution that they advocate has been attempted and has failed – landing us in the appalling economic mess that they themselves are protesting against.

  3. Posted 18/10/2011 at 15:20 | Permalink

    Recent government policies (I’m referring to the last Labour government) seem to have come directly from ‘Alice in Wonderland’. The Dodo said: ‘All have won and all must have prizes.’ So suggesting that the concept of opportunity cost should set one sub-group of the 99% against another sub-group implies that total government spending was capped — yet that doesn’t seem to have been the case. (And governments seem to have been ‘over-spending’ throughout most of the eurozone and in the US too.)

    So far I’m rather impressed by the coalition government’s long-term approach in several areas. Even a small example like the Prime Minister’s willingness to wait a week for a report on Liam Fox’s activities suggests that he wants to avoid a knee-jerk reaction, which makes a welcome change.

    If protesters are intending to occupy public spaces indefinitely, perhaps arrangements could be made to charge them rent?

  4. Posted 18/10/2011 at 21:18 | Permalink

    We should not be fooled into thinking it is 1% who are owners. One of the biggest problems we face is that those who receive any private pension income (the majority of the population) are seeing their funds diminished in value and annuity prices rise. Anybody with a life insurance policy, pension fund (personal or company), unit trust or even a bank account is an owner or at least has an interest in business profitability – and the prospects for business profitability have not been that good recently (at least compared with the prospects for those in receipt of tax credits or who work in the public sector over the last 13 years).

  5. Posted 25/10/2011 at 10:18 | Permalink

    Interesting article. Although, I’d like to add something which doesn’t seem to be considered…

    I’d like to take your argument and attach it to a rally about accessible education. This rally might include differing placards about reading, writing, math, latin, gcses or degress. Despite these differing interests, the overarching theme is the same – accessible education. Should we undermine universal access to education because the needs of individuals are so diverse?

    Crime is another. Some are assaulted, others robbed, others suffer identity theft. Do we undermine a universal standard of policing because needs/interests are so diverse?

    Individuals will always have their own interests. Interests are as diverse as our personal experiences. That doesn’t mean we can not agree on some basic human standards that we all wish to enjoy (eg, human rights, bill of rights, etc etc).

    In the case of Occupy, I personally believe a standard of fairness is being called upon. Some economists say the cuts aren’t necessary and vice versa. Whatever the case, the money seems to be flowing upwards and not downwards. There is no reciprocation. The UK may have just agreed not to pursue tax havens and tax avoidance in a deal to protect their own havens according to the tax justice organsiation. Again, most of Europe back an FTT bar the UK – due to flight? does the UK seriously believe that banks will flee the WHOLE of Europe if there is European consensus on FTT?

    It is unfair and the people should speak up until each of these actions are fully explained in the spirit of ‘we are all in this together’. In a way each person can individually identify with. Because after all, these are genuine personal experiences, ones that no one else could possibly fully know.

  6. Posted 25/10/2011 at 12:16 | Permalink

    @anonymous – I take your point (and like the reasoned way you put it) but this also makes the movement difficult to argue against. This is good for the movement but difficult for policymaking. As soon as specifics are mentioned, the whole debate becomes more complex. To take your own point, even the Commission’s own estimates regarding the FTT see it raising little revenue and see it reducing growth. Tax havens do have an important function in preventing double and triple taxation and so on. When we go down the road slogans…specifics…debate, life becomes rather more complicated than the protestors and their supporters are willing to admit. We could all have a generalised sit in and protest against the welfare state or a generalised sit in and protest about high house prices and the planning system and the problems for the younger generation, and so on. These things have their place in a free society but there comes a time (and that time was up, in my view, 24 hours after the protest started) when you say “I’ve made my point, I am unhappy, we – or others – now have to talk about policy”. To sit on somebody else’s property making a protest is simply wrong – nobody should believe that their own views are more important than other people’s property rights.

  7. Posted 25/10/2011 at 13:18 | Permalink

    @Philip. Thank you for your response. I agree with much of what you say. I’ll take a couple of points to respond to. 1) Policy. I wholeheartedly agree that policy needs to be discussed. However, in the protesters’ defense, as an example, tax havens were the subject of a promise by Osbourne who said he would clamp down on them to ensure that we all contribute equally to our country and it’s progression. He has since cut a deal with Switzerland that required only a proportion of the evaded tax to be return and tax dodgers anonymity preserved. It was discussed and only half delivered. A conversation with ‘the people’ needs to be taken seriously and delivered upon as required by democracy. We want benefit fraud shamed and repaid and we want tax evasion shamed and repaid – all of it. Also, the Occupiers are beginning the campaign as we speak. This is only the start of discussion between them. Give them some time and hopefully they will have cohesive and specific requests. I would also like to see their voted for and paid for government representatives coming out to talk to them. Where have they been? 2) Property Rights. I do not know the full argument but I am certainly aware that the Dean at St Paul’s gave them permission to stay in that spot and removed the police. The Dean used his right to allow them to stay. Also, what are a citizenship to do when democracy is unstable and normal democratic channels are closing down on them – apathy has been so rife due to undelivered promises and corruptions (iraq, tax evasion, hacking, expenses, uni fees, blah blah) from ALL the main parties. People don’t bother to vote and the differences between parties are slight. Democracy itself has to be strengthened in this country. Urgently. And democratic rights are, in my opinion, more important than the inconvenience of a London space having a few peaceful people sitting in it.

  8. Posted 26/10/2011 at 13:06 | Permalink


    regarding your education rally example, you are describing an interest coalition which is sufficiently small and homogeneous to hold. They want more money to be spent on education, and thus less on sth. else, say infrastructure. Or alternatively, they want higher taxes. If they get what they want, there will be more money for maths AND latin, so there’s no need for them to split along these lines. Either way, what they want is more money for themselves, paid by other people. This works as long as the group is sufficiently small and homogenous. But you cannot claim that this applies to a hypothetical group comprising 99% of the population, or even 50% or 20%.

    Numbers aside, Occupy gives the wrong answers to the wrong questions. I’ll give you three names of people who are almost certainly among the despised 1%: Ingvar Kamprad (Ikea), Theo Albrecht (Aldi) and Michael O’Leary (Ryanair). How did these people become so rich? By providing the rest of us with cheap furniture, groceries and air travel at an acceptable quality. Why should it be bad for us if these people got even richer? Where exactly is the conflict of interest between ‘us’ and ‘them’?

    Yes, of course these are random examples, and there are people who live at our expense without providing us with valuable goods and services. But they are not necessarily in the upper 1%. You’ll find them right across the distribution.

  9. Posted 26/10/2011 at 14:43 | Permalink

    Hello Kris. Very good comment, thank you. Some points in response are 1) The Occupations do seem to have themes of democracy and fairness. I do not see evidence of them asking it to be rewarded to just 99% but to 100%. It is the 99% that they say haven’t fully accessed these things that belong to the 100%. It also doesn’t seem to be an unreasonable request from a hypothetical 99% who have had no satisfactory explanation from their governments as to why contribution to the lowering of debt hasn’t been entirely universal in the case of banks (do they proportionately contribute to redistribution and growth following the bailout?), a feeble battle against tax evasion, and an employment crisis despite large director salaries (this one is a huge philosophical and economic debate which we might not be able to deal with here). If these issues (and perhaps others that they have discussed) were as high on the agenda as the cuts to services for least well off and big society austerity then I am sure this Occupation would have no grounding or meaning. 2) I do not believe that majority of the occupiers have a problem with wealth – some people have always been wealthier than others and a lot of the time it is earned proportionate to the efforts made. I would personally wish to see all wealth accumulated with moral and ethical considerations, but that is another story. In addition, I do not know or see any supporter of the Occupations that despise wealth per se (although I’m sure there are some – again, many diverse interests to consider) and so this would need to be evidenced as being the majority view. I think Michael O’Leary and others of his standing would be perfectly welcome and safe in the presence of the occupiers – unless he forgot to pay his taxes and lobbied (cash in hand) for a change in policy that benefited the few and not the many. It is not a fight against wealth, but a fight against the corruption wealth can cause. And we can not deny we are seeing plenty of it in our times.

  10. Posted 26/10/2011 at 15:37 | Permalink

    you see, that’s the problem: What is ‘fairness’? I have never met anybody who perceived their own remuneration to be unfairly high. We always feel that what we get is ‘only fair’ and fully deserved. It’s always the others who, we feel, get far more than their ‘fair share’. When the public sector employees demonstrated against a cut in their very generous pension formula, they were effectively demonstrating for you and me to pay for it. It has nothing to do with the upper 1% extracting revenue from the bottom 99%. It’s about one group within the 99% extracting revenue from another group within the 99%. And they did not perceive this as greed, but as fairness. One man’s greed is another man’s fairness. It’s completely pointless to complain about other people being greedy, and that’s exactly what the Occupy crowd does.
    And yes, of course the Occupiers have a problem with wealth per se. Why else would they call the upper 1% their enemies, without a distinction of how these 1% got where they are?

  11. Posted 26/10/2011 at 18:16 | Permalink

    Kris, I certainly agree with your comments. I really do. There are all sorts of unfair calls for disproportionate access to public funds and many people aren’t considering fairness on the broadest scales. No doubt about it. Consideration need a blanket approach and I do not condone greed and attitudes of entitlement with no foundation. Here is an illustration from the USA. While the USA’s political and economic situation is different to our own in some ways it is also very similar, it is very telling that many people from the ‘1%’ are coming out in support of the ‘99%’ there and asking for more efficient redistribution of wealth. I assume the only ways to do this is through jobs and taxation. A televised question time with Obama included a ‘search engine 1percenter’ asking him directly to increase his tax. This man felt as though he had more to offer his society because while he had benefited from a particular economic system it had failed many who could not find jobs or get business loans and so had been excluded from it through no fault of their own. We can not say it is a matter of skills and knowledge because we know of thousands of new graduates that can’t enter the current system either. Something has gone wrong and it doesn’t seem fair that so many are excluded from independence from the state and personal prosperity while it is enjoyed by the people that probably need it the least. Especially when it is the taxes of the many that have ensured that the businesses of the few could business. However essential that bailout was. Does it really feel right to you? Isn’t there an alternative that ensures all members of society can either take part or are properly cared for when the system fails? Do we need a new system? This is a matter for democratic discussion. Yet normal lines of democracy – even just on the level of conversation, explanation and/or reasoning that Mr and Mrs Average could understand – have been underused and sometimes entirely ignored. My MP refuses to respond if I ask for any further explanations to the ‘standard lines’. And I am honestly just asking for further depth to help me understand decisions that seem to have better alternatives on the face of things. I try not to take a stand without evidence and a rational comparative view. I suspect the occupiers have felt the same block to their questions. While the issues you mention are valid and would need to considered as part of the wider argument I find it really surprising that you can not see or even intuit some level of corruption, poor decision making and avoidance of duty by the upper echelons pre and post this financial crisis. If you do not feel anything along those lines at all and feel any sympathy for the occupiers in any small part, then I can never hope to change your view. Thank you for your interesting and well thought out responses so far.

  12. Posted 27/10/2011 at 10:34 | Permalink

    Hi Anonymous,
    nobody belittles present levels of unemployment, especially youth unemployment. But again, this isn’t a matter of some evil elite deliberately causing it or even profiteering from it. Nobody benefits from generally high levels of unemployment, except maybe those who administer the welfare rolls.

    This doesn’t mean that unemployment cannot be caused by entrenched interests, but again, it’s one group within the 99% vs another group within the 99%. I’ll give you an example: Well before the crisis, there was an occasional oversupply of medical and teaching graduates. There’s a very simple way of solving the problem: Allow each hospital/PCT and school to set its own rates of pay. We would then, in the above situation, get more teachers and more doctors, but at a lower pay. Why does it not happen? Because those already in the market are not willing to accept a paycut, and lobby against it. There’s not even enough solidarity within these relatively small groups of people, who have sat on the same benches at university, to overcome the problem. That is why even though I hold the value of solidarity in high esteem, I would not want to live in a society where I depend on other people’s solidarity. And again, the incumbents in this situation do not perceive themselves as greedy, and would be genuinely offended if you called them that. Greed is other people, as Sartre didn’t say. They would say, why can’t we just hire more doctors/teachers at the existing rate, why can’t other people pay for this?

    Regarding the 2nd point, I didn’t say the top 1% are beacons of virtue, all I’m saying is they’re not a different species of human beings. They should never have been bailed out. The bailout was the original sin, it has poisened the debate for years to come. Now everybody can argue, “I’m not accepting cuts or anything else; you’ve shielded these people so you have to shield me as well”. The banks should have been allowed to fail.

  13. Posted 27/10/2011 at 12:07 | Permalink

    Hi Kris, yes, again you are making excellent points. There are certainly actions (or inactions) within the ‘99%’ that are detrimental to the ‘99%’ and the bailout was indeed the original sin. We are absolutely agreed! A horrible double standard has been and is committed by both ‘sides’. My only concern is that double standards committed by the most powerful – economically and politically – need to be more urgently (but not solely) redressed because the impact seems greater and perhaps we can only debate one issue at a time starting with the most detrimental. Will it be possible to redress the bailout blunder? The debate on bonuses failed. The debate on tax evasion failed. So what can be done to offer society some small compensation following this monumental political and economic failure? I guess that’s what the occupiers are asking. Perhaps we should help them answer rather than undermine the question.

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