Did Cairo Influence Wisconsin Protests?

“It’s like Cairo has moved to Madison these days,” said Wisconsin Rep. Paul Ryan Feb. 17. He was viewing the 70,000 protestors demonstrating against Gov. Scott Walker’s efforts to take collective bargaining rights away from public unions. Gov. Walker is no Hosni Mubarak, but Ryan isn’t alone in noticing the resemblance.

A student e-mailed me, asking whether I thought the protests in Wisconsin were influenced by the uprising in Cairo.

I ended up devoting twenty minutes to the question in my Feb. 24 next class. As the following video shows…

…there are connections. Activists in Tunisia, Egypt and Wisconsin may well find themselves acting in solidarity with one another. They may send one another messages. A protester in Wisconsin may wear the kufiyyah as a sign that indexes the protests in Cairo, but the Cairo protests cannot be said to have led to or inspired the Wisconsin protests in the way the Tunisian protests can be said to have inspired the Cairo protests.

And yet, there is a distinct connection and it concerns ways the current global economic downturn has exposed the rising gulf between rich and poor, and the demand for an economics that serves the public good.

Globalization means we’re all more connected than ever before. Ecological and economic shocks in one part of the world lead to dramatic shifts in food prices elsewhere. According to a December 2010 briefing paper on the website of the UN’s Food and Agriculture Organization:

Recent bouts of extreme price volatility in global agricultural markets portend rising and more frequent threats to world food security. There is emerging consensus that the global food system is becoming more vulnerable and susceptible to episodes of extreme price volatility. As markets are increasingly integrated in the world economy, shocks in the international arena can now transpire and propagate to domestic markets much quicker than before.

As it becomes harder and harder for the poor, the working classes and the middle classes to make a living, they begin to notice the wealth disparities around them. These disparities give them someone to blame: the wealthy elites—in the government—who are prospering by the same system that is hurting them.

By the measurements used by neoliberal economists, Egypt was a tremendous success as it shifted from Nasserist socialism to a free market economy. But this was not the case for most citizens.

What citizens saw is that the infrastructure built during the Nasserist era—especially the health care system and the public school system (the only hope for many for social advancement)—fell into decay. The new regime built fabulous new private hospitals and schools, but most Egyptians could not afford them. Instead, they experienced stagnant or falling wages relative to rising inflation. The government estimated unemployment at approximately 9.4% last year (disproportionately distributed among people under thirty), while some 20% of the population is said to live below a poverty line defined as $2 per day per person.

The rich grew richer not by stealing from the poor but simply by taking advantage of their existing wealth to invest in the privatization process. As Walter Armbrust writes:

To describe blatant exploitation of the political system for personal gain as corruption misses the forest for the trees. Such exploitation is surely an outrage against Egyptian citizens, but calling it corruption suggests that the problem amounts to aberrant behavior from a system that would otherwise function smoothly. If this were the case then the crimes of the Mubarak regime could be attributed simply to bad character: change the people and the problems go away. But the real problem with the regime was not necessarily that high-ranking members of the government were thieves in an ordinary sense. They did not necessarily steal directly from the treasury. Rather they were enriched through a conflation of politics and business under the guise of privatization. This was less a violation of the system than business as usual. Mubarak’s Egypt, in a nutshell, was a quintessential neoliberal state.

Okay, that’s Egypt, a third world country run by dictator and a corrupt regime. Obviously, the root causes leading to the Wisconsin protests must be quite different, right? Well, yes… but there are more similarities than you might expect.

First, the disparity between rich and poor is actually greater in the US than in Egypt. According to the CIA Factbook, the GINI index (which measures the degree of inequality in the distribution of family income) is 34.40 in Egypt but is 45.00 in the United States. That means the wealth disparity in the US is 23.5 % greater. We just don’t notice because there’s so much more wealth in existence. Here is the US disparity shown graphically:

And like Egypt, not only is the wealth disparity growing but the rich are growing richer as the poor get poorer. According to the Congressional Budget Office, while the top one percent of Americans have enjoyed enormous growth in average gross household income since 1979, the top 20 percent has enjoyed only modest growth and the bottom 80 percent has stayed roughly the same.

Until you take taxes into account. Once you add in taxes, the bottom 80 percent of the US actually has less spending power than they did in 1979!

Now for Gov. Williams, and many other Republican governors, this disparity is irrelevant. For him, the problem isn’t the rich, it is the middle class teachers, nurses, administrators and other public sector workers who—though their salaries are marginally lower than their private sector peers—enjoy relatively generous health benefits and pension benefits, leave policies and protection against unfair termination. These were won through collective bargaining, and Williams wants to end that practice.

The bottom line, said Williams recently, is the bottom line. The state can’t pay for all these benefits any more.

But why not? Data from the Senate Joint Committee on Taxation suggests that part of the problem has to do with how we’ve been taxed over the last couple decades.  Since 1950, income tax has held relatively steady, paying for between 40 and 50 percent of the federal budget. But corporate taxes have decreased from 32 percent in 1979 to less than ten percent now. The difference has been made up by payroll taxes. Payroll taxes, of course, are shared between employers and employees, so as corporate taxes decline, workers are taking on more and more of the burden of supporting the government. State budgets are different, of course, but the trends are similar.

I don’t suppose that the average protesters can articulate these trends or describe such statistics. But like the protesters in Cairo, they are aware that something is unfair, that they are being punished for economic declines by the very people who have profited by those downturns.

One of the chief differences between the neoliberalism that structures global economic interactions in the contemporary world and classical liberal economics is the notion of a public good, or commons. While classical liberalism assumed a common good protected by the state, neoliberalism assumes that markets can handle public goods better than governments. This erosion of public goods is noticed by the public, though they may experience it differently. I would expect such protests to continue.