Paul Martin and Ernesto Zedillo are members in good standing of the global elite. Mr. Martin is a former Canadian prime minister, finance minister, deficit hawk and, in his life before politics, multimillionaire businessman. Mr. Zedillo is a former president of Mexico, holds a doctorate in economics, directs Yale University’s Center for the Study of Globalization, and serves on the boards of blue chips Procter & Gamble and Alcoa.
Yet when I interviewed the two of them in a wide-ranging public conversation last week, hosted by the Centre for International Governance Innovation, a independent research organization in Waterloo, Ont., they sounded an awful lot like the people camped out in Zuccotti Park in New York.
Neither man had sympathy for the complaint that Occupy Wall Street lacks a clear agenda. As Mr. Zedillo put it: “These criticisms – ‘Oh, they don’t have an agenda, they only pose problems and provide no solutions’ – well, they are citizens and they have earned the right to express a very serious, real problem.”
The truth, the two men agreed, was that the protesters are articulating an important global concern.
“I have yet to talk to anyone who says they aren’t reflecting a disquiet that they themselves feel,” Mr. Martin said. “The powerful thing is that Occupy Wall Street has hit a chord that really is touching the middle class – the middle class in Canada, the middle class in the United States, the middle class right around the world – and I think that makes it ... very, very powerful.”
Mr. Zedillo thought the Occupy group should widen its sights – “I could argue as an economist it’s not only about Wall Street. They should have an Occupy G20.”
Mr. Martin and Mr. Zedillo would be welcome at any corporate dining room on Wall Street or financiers’ dinner party, but it was striking how strongly their view of Occupy Wall Street differed from the conventional wisdom among U.S. business elites.
That dissonance was not lost on Mr. Martin. He started out diplomatically – “I think that most people have basically given them a fair amount of credit,” he said of the protesters – but then added: “I don’t want to pick on U.S. bankers, but the reaction ... that really got me was the banker who basically said, ‘You know, these are just a bunch of welfare bums. What we’ve got to do is cut welfare.’ A New York banker saying we’ve got to cut welfare is staggering to me. Why doesn’t he just look in the mirror? ... What’s happened is that the inability of some people to defend their position has become so manifest that it’s actually added to the power of Occupy Wall Street.”
The welfare bums critique is a familiar elite response to populist rage, and it is not confined to the United States. Some of the German reaction to protesting southern Europeans had a similar flavour, as did some of the British pushback against the riots there last summer.
What is interesting about the United States is that the first burst of grassroots anger came from the right. Although the policy prescriptions of the Tea Party could not differ more radically from those of Occupy Wall Street, the movements share an anti-elite sentiment. That may be why some on the right are putting forward an analysis of U.S. ills that deftly combines the anti-welfare bums riff of the upper crust with grassroots anger against many of those same elites.
There is a reason “crony capitalism” is the common target of political movements that differ over nearly everything else. At a time when governments have spent billions bailing out banks, even as they cut pensions and social services, and when income inequality is soaring worldwide, it is hard to deny that the 1 per cent are getting a terrific deal.
But taking the diagnosis of crony capitalism as the first step toward a cure for the Western world’s ills is a little more complicated.
Economic growth is the most pressing problem today, and no matter how fierce your animosity toward the 1 per cent, it is hard to see how reining in that group more effectively will goose the gross domestic product (in many countries, the rise of the 1 per cent has coincided with strong economic growth).
The second complication is that your crony capitalism may well be my meritocratic democracy. Dividing the “bad” crony capitalists from the “good” innovative entrepreneurs is hard to do. And sorting them out without creating a new group of crony capitalists may be even harder.