Has a Harvard Professor Mapped Out the Next Step for Occupy Wall Street?


Lawrence Lessig's call for state-based activism on behalf of a Constitutional Convention could provide the uprooted movement with a political project for winter


Observers and participants alike have interpreted the Occupy Wall Street movement as expressions of frustration with persistently high unemployment and underemployment, with the appearance of growing income disparity in the United States, and with the sense that the richest among us are disproportionately responsible for the current crisis. But the fundamental problem, you could argue, is that we have simply not had meaningful financial reform in response to the crisis. The Dodd-Frank Bill that was passed last summer was better than nothing, but it did not do what needed to be done to fix the problems that caused the current crisis: We haven't punished anyone. We haven't broken up banks to prevent them from being "too big to fail" in the future. The banking system that's brought us the current crisis remains in power, barely chastened. "Why?" ask the Occupy Wall Street protesters.

Lawrence Lessig has an answer. In his new book, Republic, Lost: How Money Corrupts Congress -- and a Plan to Stop It, he spends 20 pages reviewing the the 30 years of deregulation that led up to the financial crisis and outlining our present circumstances. In fact, this book, published just before Occupy Wall Street began, is perfectly positioned to become the movement's handbook. While few protesters will need convincing that the government is corrupted by money, the book lays out the case in a such a comprehensive and persuasive manner -- and proposes such specific and radical solutions -- that it seems tailor-made for the Occupy movement. And it's ambitious proposal for state-based activism on behalf of a Constitutional Convention could provide the movement with a next organizing step as it nears its two-month anniversary Thursday -- and faces such questions as how to ride out the winter and how to respond to police crackdowns.

* * *

Lessig, director of the Edmond J. Safra Foundation Center for Ethics at Harvard University and a professor at Harvard Law School, spent 10 years fighting to reform the nation's copyright laws. The effort produced a half-dozen books, led to the creation of the Creative Commons licensing system and a case before the Supreme Court, which ultimately failed. Rather than dissuading him, Lessig concluded four years ago that this failure perfectly situated him to take on an infinitely harder challenge -- the reform of Congress itself. The shift in focus led him to leave Stanford University and relocate his family to the east coast to teach at Harvard in 2008, where he began the research and activity that gave rise to his latest book.

His first congressional reform effort wasChange Congress, a grass-roots movement to gather pledges from elected officials to reform campaign financing, and pledges from potential donors to not give money to officials who hadn't taken such a pledge. But as that movement failed to gain sufficient momentum, he's shifted focus towards more dramatic strategies, exploring the possibility of a Constitutional Convention at the September 2011 conference and in this book.

The strategy for non-fiction books of this type is well understood: it's anecdote-plus-conclusion. A story, followed by the lesson the author wants us to learn from it. As an academic, Lessig has the research chops to find the anecdotes that best fit the narrative case he's making, and to lay them out in wonderful detail. But his real gift is in the art of stringing them together into a story. That means that this book is as persuasive as it is enjoyable to read. This is very good indeed, because if Lessig is to succeed, he'll need to persuade a great many people.

Lessig is most comfortable in the section where he describes government corruption, telling not the story of corrupt individuals, such as Rod Blagojevich and Jack Abramoff, but that of an entrenched set of incentives that skews the motivations of political actos -- the system itself. Lessig, a liberal, takes great pains to extend a hand to Republicans, and makes arguments that are direct appeals to Republican priorities. "The single most salient feature of the government that we have evolved is not that it discriminates in favor of one side and against the other," he says, "it discriminates against all sides in favor of itself." The corruption happens at the level of the institution, not the individual, he argues.

All along, we are reminded how difficult this problem will be to solve. Not only is it rooted in the deepest part of the political system, but there are a host of interests who will fight any reform. The businesses and individuals who make large contributions to government will oppose reforms because they are a threat to their power. Politicians will oppose them because they threaten the system that allows them to stay in power. And lobbyists will fight them because ultimately they threatens their entire profession. At every point, Lessig points out counter-arguments to the case he's making, explains difficulties that may not be obvious, and generally reminds us that the problem is large and solutions will be difficult.

So his focus is not so much on the solutions, but on the first step: laying down the argument for why change needs to happen. Seventy-five percent of the book is a deep examination of the problem of corruption: what corruption means (from an almost philosophical perspective); the specifics of how corruption operates in our particular system; and an analysis of how our government will continue to fail us, given the present system.

The bulk of the first part of the book consists of detailed scenarios of government activities that seem obviously to put the interests of specific parties (read: corporations) ahead of the interests of the nation at large. His telling of the lead-up and aftermath of the current financial crisis is worth the price of admission by itself. (Fun fact: credit for many of the key deregulations, including the repeal of the Glass-Steagall Act and the decision that federal agencies should not regulate the growing derivatives market, goes to the Clinton Administration.)

But consider the case of food subsidies and tariffs. These manipulations began during the Great Depression, when the cost of actual staple foods -- flower, rice, etc. -- was high enough that starvation was not unheard of. The government introduced tariffs to protect domestic farmers, and subsidies to lower the costs of food. But the system has now been in place for close to a century and political money has twisted it into shapes that have no hope of being justified by any actual utility. We place tariffs on sugar, so that sugar in the U.S. is two to three times as expensive as in other countries. And we subsidize corn production: the US government spent $73.8 billion between 1995 and 2009 subsidizing corn, driving its price close to zero. One result of these policies is that High Fructose Corn Syrup was nonexistent in 1980, but accounted for 41 percent of all sugar consumed by Americans by 2006. Another result is that cattle raised in the U.S. are now fed almost entirely corn, which they don't digest well, requiring antibiotics on a massive scale and producing poorer quality meat. And even though the subsidies account for huge outlays for the federal government and the tariffs make products more expensive for Americans (the sugar tariffs cost the overall economy an estimated $3 billion per year, while providing $1 billion of extra profits to domestic sugar producers), they've proved impossible to eliminate under the current system. Every time a politician floats the idea of reforming or eliminating the farm bill, they're reminded that a small percentage of the money the beneficiary companies make is allocated to campaign contributions, and crucial for the reelection of a large number of senators and representatives.

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Alesh Houdek lives and works in Miami. He writes occasionally at Critical Miami.

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