Peace Economics and #occupywallstreet

Everyone’s got a theory of why they believe the #occupytogether protests have sparked, and indeed now gone global.  I don’t believe we need to over-think it:  people have solid evidence that they’ve been robbed.  I thought I’d bring a bit of what we can call “peace economics” theory to the conversation to keep the conversation moving forward and hopefully focused on where to head next.  What’s most important is putting in place systems, values, laws and maybe even institutions (I suggested Warren’s Financial Consumer Protection Bureau in my last blog) that can make it likely that we won’t end up here again.  One compelling feature of the field of conflict resolution, in fact, is precisely that it is based in “systems thinking”—that is, seeing the larger picture of how cultural assumptions and values, political regimes, economic systems and historical forces all interact to produce what we actually see on the ground.  Or in Zuccotti Park. 

Peace economics, as a relatively new school of thought, is somewhat undefined and still rather invisible.  But the Occupy movement suggests it is an idea whose time has come.  Perhaps its most important insight is that markets depend on a certain level of social trust and cohesion.  This itself is not a new idea.  Remember, Adam Smith himself (terminally misused and misunderstood in my view) referred to himself not as an economist but as a moral philosopher.  So lesson one of peace economics theory:  markets depend on a basic level of social trust and cohesion.  It’s clear this has broken down in the US.  I hear it not just in the rage at Wall Street banks who broke the economy with fraudulent mortgage securities.  I hear it in the everyday suspicion that seems to float around that other people can’t be trusted to do an honest job without threat of being fired, or who seem convinced that the housing crisis was caused solely by greedy middle classers who just had to have a McMansion they couldn’t afford.  The data doesn’t support that view, as a new CBO report recently confirmed. (Think #occupy is going away?  Ask yourself when was the last time a CBO report went viral!) I hear it from too many GOP candidates who, seemingly without having grasped that we have 9% unemployment, suggest that folks who are struggling get a job. We can’t rebuild markets that work without some basic level of social trust.

Gandhi, not someone usually associated with economics, I think gives us our next couple of principles of “peace economics”.  He taught that “wealth without work” and “power without principle” would decay and ultimately destroy a society.  Regarding wealth without work, some peace economics theorists have noted, for example, how important it is to distinguish between productive and unproductive parts of the economy.  I hear echoes of this idea when people concerned about economic inequality note that the financial institutions most implicated in mortgage-securities fraud make money essentially by moving money around.  Indeed one primary concern of #occupy has been the explosion of the financial products industry without investment in sectors that would enable the real economy to grow.  Hence the disconnect between Wall St and the real economy, and hence our market recovery while we’re still struggling with 9% unemployment. 

A further principle as we move towards some sort of more formal theory of peace economics might be a serious scrutiny of a concept that has only recently been challenged:  the idea of the “economic man”.  Science and economics are increasingly showing “homo economicus” to be false, and this is peace economics theory building block number four.  Of course this is the idea, often associated with Adam Smith, that people are completely (or at least primarily) driven by self-interest and will behave rationally in pursuit of what is best for them.  Certainly people act in their own interest but to put this forward as an unproblematic, uncomplicated truth is misleading.  To act in our own interest, we need solid information.  An increasing amount of research also suggests that our cultural identity and emotions influence our decision making far more than especially those of us in the “rational” West might be comfortable admitting.  Consider for example Lakoff’s The Political Mind, which argues that we are shaped and motivated by images, framing and symbols that if not quite ‘irrational’ are certainly super-rational.  Along similar lines, Rifkin presented voluminous research in his The Empathic Civilization that the human mind is wired for empathy, connection and collaboration at least as much as it is wired for aggression.  In their (our) exemplification of solidarity and local, participatory, collaborative democratic processes, OWS demonstrates this reality (at least so far). 

A fifth, and our final, principle of any developing peace economics theory must be sustainability.  Bluntly if it were up to the whaling industry (to pick one example) there would be no whaling industry as the population of whales would be extinct.  There is a difference between what is profitable or in the economic interests of one company and what is in the interest of an industry as a whole.  This to say if economies are to be considered peaceful, they must be sustainable.  As peace economics theory continues to develop, it can usefully build on the indigenous wisdom that, “Only when the last tree has been cut down, only when the last river has been poisoned, only when the last fish has been caught;  only then will you find that money can’t be eaten”.  So-called “locavores” (those who advocate eating locally grown food) and environmentalists have been singing this song for some time.  In hyper-developed, post-industrial countries like mine, it can be amazingly easy to lose sight of how real our dependence on nature is.  When researching the indigenous land rights movement in Paraguay, as I did some food shopping at a market near the room I was renting, wandering past fruits and vegetables from the seller’s own yard and meat slaughtered only that morning, I was viscerally reminded that everything we eat comes from something plant or animal.  Such an obvious statement--only someone from the rich world would be surprised by such a reminder!  Synergy and partnership just last week between Occupy Miami and a large demonstration of environmental activists suggest this could be a useful collaboration, and further suggests that as a whole, #occupy is seeking more economic transformation than just a drop in the unemployment rate. With the world’s attention and growing momentum now, maybe OWS is becoming a movement which can push forward a global transformation towards economies that enable human security and peace. 

Interested in more?  This article on Twenty Questions for Peace Economics:  A Research Agenda from 2002 is a great start.