TeeJaw Blog

Occupy Wall Street And The Myth Of The 99%

Posted in Government and Politics by TeeJaw on Tuesday, December 13, 2011, 7: 00 AM

This is from Todd Henderson of the University of Chicago Law School writing in Forbes:

The ‘Occupy’ movement will never succeed against its “one percent” adversaries until it begins to understand that there is not a single one percent, but rather many.

An entire field of economics, known as “public choice,” studies how small, concentrated groups with similar interests generally prevail politically against larger groups of diffused interests. And, in our society, these concentrated interests – like unions, defense contractors, religious groups, farmers , etc. – are not necessarily part of the “one percent” Occupy talks about, and several have even joined or co-opted the Movement. But they are part of the broader one-percent problem.

But there is something important about rhetoric of the one percent. “Public choice” economics explores the problems of concentrated interests. There are fewer corn farmers than taxpayers, and the gains from ethanol subsidies are large for each corn farmer, while the costs per taxpayer are quite small. The costs of coordination and the financial incentives mean the farmers will get their way so long as the government has the power to subsidize or penalize. This simple dynamic explains much of how our government allocates resources.

For example, in education policy, teachers are the one percent, while students and parents are the 99 percent. But it is generally the power of the concentrated teachers’ unions that drives decisions about education spending and policy. The fact that teachers unions support Occupy undermines its power. A true movement of the 99 percents would be on the side of students, not teachers.

“rich” people are too heterogeneous to be considered a concentrated interest…

…if Occupy would find areas of common ground with the rest of the 99 percent of the population, we could start to fight back against all the one percents that distort policies to their favor and against the less powerful.

Read the whole thing.

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