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Some OWS Stuff

There is an interesting interview with Richard Wilkinson on ted.com about the damage to society that is caused by excessive inequality [1]. The conclusion is interesting, it seems that one part of the solution is to send the message that excessive greed is anti-social. The demonstrations against the greedy 1% seem likely to do some good in this regard. He also has a TED talk about this in which he shows that even the rich don’t benefit from great inequality [2]. If nothing else the links between great inequality and high rates of mental illness and murder should convince people that they don’t want to live in such a society.

Buying Cameras

Some of the radio news reports have claimed that some of the people in OWS camps in Australia are somehow unworthy because they have smart-phones and digital cameras. They seem to believe that people have to demonstrate great poverty to have standing to complain. The problem here is that owning a mobile phone is essential to getting employment in many industries, so the vast majority of people who are old enough to work but not near retirement age just have to own a mobile phone. Once you have decided to use a phone if you are going to use it a lot (which you probably will if living in a tent in a public place) then being on a contract usually makes economic sense. As the cheapest contracts include a “free” Android phone that means almost everyone who is old enough to be allowed out alone at night and young enough to be willing to sleep rough for a cause will have such a phone.

A related complaint is about people owning good cameras. One reason for this is the fact that the huge number of cameras deters the police from using excessive force – that’s a good justification for spending money on a good camera. But then a good camera doesn’t cost much nowadays, the specs on $100 cameras are quite impressive and a camera that costs $400 new will have features that are useful for professional photographers – and cameras are even cheaper on ebay.

In Australia social security payments for a single person who is out of work are as much as $486.80 per fortnight [3]. Therefore someone who is living on social security could buy a great camera if they saved up two weeks of social security payments or buy a similar camera on ebay for one week’s worth of payments.

When at a protest the widespread use of cameras is essential for protection against police brutality. It’s worth saving up for a camera.

But really they are missing the point, OWS is about representing ~99% of the population. Even people on the average income are suffering because of the greed of the rich.

Is Australia such a Great Place?

There have been claims that Australia is such a great place that OWS protests are not needed, supposedly we have a very egalitarian society. The ABS data shows that the level of inequality as expressed by numbers isn’t that great when restricted to just income if you restrict the analysis to the top 20% [4]. The mean gross household income per week is $340 for the lowest quintile and $2,380 for the highest quintile giving a ratio of 1:7.0. But when you look at total household net worth it’s $27,400 vs $1,720,700 – a ratio of 1:62.8! The ratio for the richest 1% would surely be a lot greater but a quick search of abs.gov.au didn’t turn up any statistics on them. Also Richard Wilkinson’s analysis puts Australia quite close to the US.

If the people who are in the top 1% earned their money, paid taxes, and didn’t pervert the political process then there wouldn’t be any OWS protests. The corruption in the political process and rent seeking by corporations isn’t as bad here as it is in the US, but it’s bad enough that we need some serious changes. Emily Manuel wrote an interesting article for Tiger Beatdown about the need for an Occupy movement in Australia [5]. Her description of the political problems in Australia is quite clear. But I wasn’t convinced by her analysis which suggested that Australia is different from the US in any significant way.

Really Comparing Income

To properly compare income it doesn’t make sense to compare a ratio of money earned, or disposable income which is often misleading due to disagreements about what is considered disposable. It’s really about which of the things that you want to do can be achieved on your income. One possible way of comparing it is based on Maslow’s hierarchy of human needs. The poorest 20% of households in Australia have a gross income of $340 per week. The ABS shows that the average of private rental prices in the 8 capital cities (where most of the population lives) is $218 per week [6]. Obviously the poorest households can’t afford an average rent unless you have lots of people packed in one house. No matter how you look at the numbers it’s going to be difficult for low income people to pay for rent and food. That puts them on the bottom level of Maslow’s higherarchy.

It seems to me that the benefits of increased income diminish and it becomes more of a contest to be richer than other people. Owning an old car is a significant benefit over having no car. Owning a new car has some real benefits over an old car. Luxury cars usually have safety features before they are introduced to cheaper cars, but apart from that the benefit of owning a luxury car is small. Owning multiple Rolls-Royces doesn’t seem to provide any real benefit, someone who would want to do that would probably be better served by hiring a good psychologist.

Update:

In a comment Brendan Scott cited The Theory of the Leisure Class by Thorstein Veblen. That’s a great point, and I’ll have to read that book! I still maintain that owning two Rolls Royces is a symptom of psychological problems, people who can sort out such problems won’t feel the need to try and prove that they have more money than others.

Charles Stross has an interesting article about wealth disparity etc [7]. Being a sci-fi author he also explores what life might be like after Drexler boxes satisfy most of our current materiel needs.

The Age has an informative article by Suzy Freeman-Greene contrasting the OWS protests in Melbourne which were broken up by police to the Catholic anti-abortion protests that have been going on for more than 20 years [8]. It seems that corporations aren’t the only large organisations that are pwning democracy!

3 comments to Some OWS Stuff

  • Brendan Scott

    Re: Rolls Royce:
    see: The Theory of the Leisure Class paper by Thorstein Veblen.
    http://en.wikipedia.org/wiki/The_Theory_of_the_Leisure_Class

    The added benefit of a Rolls Royce is demonstrating to other people that you can afford something that they cannot.

  • joe

    As a n American living in Australia it never ceases to amaze me how unbelievable ignorant and arrogant the people here are about things in America. Everyone likes to sit back and smugly make their proclamations about how aweful the inequality is and how terrible our capitalist society is. They trot out papers and articles written. Y academics who have never worked a day at a real job in their entire lives as “proof” to back their smarmy brainless asertikns and continue the self congratulatory circle jerk.

    Get one thing straight Aussies. You. Know. Nothing. About. America. I at least have the common human decency and respect to not spout off about Australian politics and society because I know there are hundreds of basic cultural and historical factors I cannot know. Only growing up here and having parents and others from previous generations, along with a local education can give someone the reference to make informed statements.

    But that basic, and obvious fact seems to be as impossible to impress on Aussies and Europeans as physics is to chimpanzees.

    Plus the fact that Australian “news” routinely spouts off things about events in America, or society there, that are blatently and ridiculously wrong. It seems that using Google to do the most cursory fact checking g also falls into the “physics and chimpanzees” category here.

    The truth about OWS is that they are nothing g more than a loosely cobbled together collection of anarchists, communists, and starry eyed youths with protest culture syndrome. They are simply angry because others worked hard in school, and then spent decades working hard to build a business and in the end became wealthy, while they chucked all of that into the Aussie style “too hard pile” and still expected to get their trophy for participation. Its the same old class hatred Aulinsky followers have propagated for decades.

    So for those too lazy to do tbe work, bere it is spoonfed to you. . . Wall Street did not cause the mess we are in, government did. Bill Clinton forced the banks to make thousands of loans in the late 90’s to people in poverty and to illegal immigrants. The banks were forced by law to issue loans to people who they knew could never repay, or face devastating penalties. Most of these were through “low doc” or “no doc” loans, where no proof of income was required. Then unscrupulous people in the middle class took advantage of the loopholes to get these pains too, for houses way above their means. Then 5 years later 9/11 happened and the resulting mini-recession caused the variable rates to jump and everyone defaulted. Yes, some bankers took advantage of this and made things worse. But the vast majority of them were fighting day and night to fix it, save the economy, and keep these people in their homes.

    But no one wants to talk about that. Its so much easier to point at the guy who worked hard, got ahead, built a business, and created jobs and yell “unfair!”, or “greed!”. Easy, and the most blatent declaration of stupidity I’ve seen in decades.

    But it keeps swirling around in Australia because bashing America, its culture, and capitalism is the popular and socially acceptable opinion to have here. Popular, ignorant, and utterly lacking in the most basic integrity. It seems the Aussies have lost all connection to the idea that truth is more important than being accepted by the collective.

    I hold no hope that this response I write will make even the lightest scratch in the impenetrable adherence to ignorance I see in this country. But as a person who actually has the integrity the author of this article lacks, I am fulfilling my obligation to the truth.

    I now return you to your mutual mental masturbation.

  • etbe

    Joe, I’ve visited the US on more than a few occasions and made an informed decision not to live there – in spite of companies trying to convince me to live there and work for them.

    I regularly discuss politics with US citizens and residents and I follow US news. I don’t pay attention to Australian news sources in regard to what’s happening in the US, I also don’t pay attention to Murdoch news in regard to any issue.

    It’s quite clear that OWS isn’t about “anarchists and communists”, all you have to do is talk to regular middle-class people in the US and Australia who support it. Naturally for an open organisation like OWS anyone can join in and there are some fringe elements, but a significant portion of the working middle classes support it.

    Regarding the “worked hard in school” issue, there are lots of wealthy people in the US who had an academic career just like GWB. Regarding the “build a business” issue you should compare the typical result of actually building a business with the result of working for a bank. I’ve started a small business and like the vast majority of people who did that I didn’t make much money out of it. Starting a business involves a lot of risk and most businesses fail within a few years. Working for a bank however is quite safe. As an aside I’ve worked for a few banks in the past too – although not as one of the highly paid people in the trading side.

    http://en.wikipedia.org/wiki/Fannie_mae

    The US banks deliberately accepted falsified documents regarding the ability of borrowers to repay loans, Lack of banking regulation and fraud investigation was part of the problem. The Wikipedia page about Fannie Mae indicates that anti-predatory lending rules were dropped in 2004, that’s not Clinton’s fault.

    Please cite a reference for your incredible claim that bankers were fighting to fix the mess and keep people in their homes. There are numerous documented instances of homes being forclosed which can’t be sold.