New Economic Cultures in Spain and Greece

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* M.A. Thesis: The Transformative Effects of Crisis: A Hitchhiker’s Guide to the New Economic Cultures in Spain and Greece. Janosch Sbeih. Schumacher College, 2014

URL = https://www.scribd.com/doc/273819741/Janosch-Sbeih-2014-New-Economic-Cultures-in-Spain-and-Greece

(MA Economics for Transition; Schumacher College ; SCH 504: Dissertation; 25 August 2014)


ABSTRACT

"By adopting an action research methodology, I inquire into how far the responses of citizens to the global economic crisis of 2008 lead to the emergence of a new economic culture in Spain and Greece. Since Southern European states follow austerity directives and do not offer sufficient support for their population, communities organise to provide for each other through cooperation and solidarity. Decentralised political and economic movements are building structures to challenge and replace established centralised institutions. As people drop out of the formal economy, they find material relief, ideological support and a sense of belonging in networks of alternative economic practices."


Contents

"Chapter 1 provides an overview and discussion of the literature pertinent to my research and a theoretical grounding how to interpret the impact of economic crises on culture.

Chapter 2 presents my research findings in Spain where I discuss a few select examples of signs for a new economic culture that I personally came across during my research.

In Chapter 3, I discuss my research findings in Greece and compare and contrast my impressions of the development of a new economic culture in Greece to that of Spain. The last section forms the conclusion of this dissertation and offers a short outlook how the findings might play out in the years to come."

  • Chapter 1: UNDERSTANDING CRISES 13
  1. The Metamorphosis of the Current Economic Crisis 13
  2. Crisis: Meaning and Origins 15
  3. Crisis as Opportunity 17
  4. Crisis as Community Builder 20
  5. Beyond the Crisis: The Emergence of Alternative Economic Practices 21
  6. Cultural Hegemony and the Third Industrial Revolution 27


  • Chapter 2: SPAIN 30
  1. La Feria de la Economia Social y Solidaria – Madrid 31
  2. La Plataforma de Afectados por la Hipoteca (PAH) 33
  3. La Cooperativa Integral Catalana 40
  4. 15 May 2011: A Historical Date 43


  • Chapter 3: GREECE 47
  1. The Importance of Culture and History 47
  2. Solidarity Economics and the Welfare State 49
  3. The New Economy in Greece 52


Excerpts

From the Introduction

Janosch Sbeih:

"The economic crisis of 2008 which was triggered by the bursting of the US American housing bubble took its toll on the societies of Southern Europe. The speculation and trading of fictitious financial instruments led ultimately to a tangible humanitarian crisis (Red Cross, 2013). Spain’s unemployment rates peaked in 2013 at 26.2% across the whole population and 55.5% for people under 25 (Eurostat, 2014). These numbers are only eclipsed by Greece, the first developed country to be downgraded to “emerging market” status (Stoukas & El Madany, 2013). There, the unemployment rates were 27.3% and 58.3% respectively in 2013 (Eurostat, 2014), with the average Greek salary being cut by 40% five years into the crisis (Georgiopoulos, 2013). Combined with harsh cuts in state support, this translates directly into increased rates of homelessness, poverty and social exclusion (Red Cross, 2013). Many of the young and mobile leave their countries in search of brighter prospects elsewhere – 500,000 emigrated from Spain in 2012 alone (Burgen, 2013). In Greece, 800,000 lack access to primary healthcare (Cooper, 2014) and there are reports of children fainting in school due to malnutrition (Katerini, 2012). The economic situation puts many in the position of having literally to decide between either buying foods or paying the electricity bill and keeping the lights on (Pascalidou, 2012). The discussion and analysis that follows over the course of this thesis must be read against the backdrop of this social devastation and human suffering. As much human tragedy as is incorporated in these numbers, crises like this are an integral part of the capitalist system and essential for its reproduction (Harvey, 2014). Its systemic instabilities are confronted and reconfigured in the course of such crises while much gets torn down and laid waste to make way for the new.

What the new is is often unclear as Antonio Gramsci (1971) explained:

- “The crisis consists precisely in the fact that the old is dying and the new cannot be born.”

Crises shake people’s mental conceptions of the world and their place within it as unconscious assumptions that previously were held to be universally true, suddenly fail to make meaning of the unfolding events. Institutions that were always assumed to be rock-solid and that helped to govern one’s life suddenly disintegrate and leave a void of insecurity until there are new concepts and institutions that give a meaningful framework to the personal world of subjective experience. That phase of transition between the disintegration of the old and the creation of the new – which may happen in different chronological orders, simultaneously and over longer timeframes – holds opportunities and dangers in the course of shifting power relations. This moment of turmoil is often regarded as a ‘window of opportunity’ to push forward an agenda that has been long crafted but was never able to be implemented because the antagonistic forces are too strong in times of stability.

At the moment, it seems like neoliberal actors are successful in their cause of forcing structural adjustment programs that have been long tested by the Washington Consensus in the global periphery on the crisis-struck societies of Southern Europe. In the name of fiscal stabilisation, comprehensive austerity programs prescribed by the “Troika” of the European Commission, European Central Bank and International Monetary Fund are dismantling the welfare state through cuts in public services and employment. This means that people not only lose their jobs, but the social safety net to fall back on and to provide for at least the basic necessities of life is at the same time severely reduced. The old, the young and the infirm thus join the freshly unemployed in the ranks of the victims of the crisis. Amidst this social distress, public assets and common goods are identified to being privatised in a fire-sale that is said to even eclipse the disastrous privatisation programs in Eastern Europe after the collapse of the Soviet Union in sheer size and aggressiveness (Roos, 2014). Public assets and utilities like railroad networks and water utilities are planned to be given over to private corporations for a fraction of their actual value. Cultural and ecological commons like the Greek coastline and ancient temples are considered to be sold off for private development. This “accumulation by dispossession” (Harvey, 2004) is benefiting the global capital class by transferring common goods into their hands for private development. On the other hand, representatives of the traditional left like Marxist geographer David Harvey (2014) lament that the political left does not have much to hold up against the power of capital which is currently expressed in the form of neoliberal policies. After trade unions and traditional left wing parties have been beaten down by thirty years of ideological and political assault from the right, what remains of the radical left now operates largely outside of any institutional or organised oppositional channels, focusing on small-scale actions and local activism, so he argues (ibid.). As the autonomist, anarchist and localist groups seek to change the world without taking power, an increasingly consolidated plutocratic capitalist class remains unchallenged in its ability to dominate the world without constraint, so it seems.

Underneath this grim image of the world, however, an entirely different state of affairs seems to emerge from the rubble of the crisis. An entire generation of young people who are well-educated, literate in digital communication technology and disconnected from the formal labour market sees itself confronted with a society that seems to hold no prospects for them beside a life in precarity (Mason, 2012). Unencumbered from prior struggles for political participation and workers’ rights, this group that is equipped with the skills to become tomorrow’s elite is the reason “why it’s kicking off everywhere” (Mason, 2013). Without any central organisation or leadership to follow, a mass movement of people who felt indignant about the self-serving politics of the political and economic elite came together in 2011 to occupy the main squares of Spain and Greece. Distrustful of leadership and representative democracy as such, the Spanish indignados movement and the Greek movement of Syntagma square started to engage in radically democratic prefigurative politics through direct participation in assemblies. Once the occupations of the main squares were evicted, the assemblies dispersed into different chapters and moved into the neighbourhoods where they are less visible but better able to organise themselves to address local issues.

Besides grassroots activism in the realm of politics, also the economic sphere is a space for constructive change on the ground. As the formal economy starts failing on increasingly many people, a parallel economy begins to develop that is founded on principles of social and ecological values, participation and cooperation. Decentralised networks of workers’ cooperatives, community currencies, alternative exchange networks, community supported agriculture, cooperative financial institutions and solidarity initiatives to provide food, housing and healthcare for those abandoned by the welfare state are only some of the creations of people who imagine and practise a new economy. Since the onset of the crisis, a surge in such alternative economic projects could be observed and members of the middleclass who in other circumstances might have dismissed such unorthodox economic practices search in these economic countercultures ways to get through the crisis. Indeed, the participants of this new economy differ in their motivations from the meeting of sheer need which proves easier in these solidarity networks to ideologically motivated groups that are convinced of the unethical and instable basis of the mainstream economy. For many, these new economic practices provide not least of all conceptual stability, something to believe in, in a time where everything seems uncertain and formerly trusted institutions like banks and governments stand all of a sudden on shaky grounds.

In the midst of a crisis it is hard to see where the exit might be. Crises are not singular events.

While they have their obvious triggers, the tectonic shifts they represent take many years to work out. It is often unclear whether one is still in the crisis itself or in its aftermath as the crisis metamorphoses and gives rise to new dynamics. In this sense, the aim of my dissertation is to explore the cultural economic shifts as they are currently unfolding. In order to do so, I recognise the need to immerse myself in the field where these shifts are taking place. Therefore, I have spent six weeks in Spain and Greece researching the new economic cultures that emerge as a response to the crisis. It is not my aim to come up with a unified statement of what the conclusive effects of the crisis are which is an impossible task as we are still in the midst of unfolding events. I much more attempt to tease out some of the changes that are currently unfolding in the form of shifts of economic cultures; in particular, a strengthening of so-called “alternative” or “new economics”. However, the effects of the economic crisis on economic culture are complex, contradictory and in dialectic struggle. The crisis represents a political and cultural hegemony in crisis. As much as there are grassroots movements to detach themselves from political and economic practice as commonly known, there are intensified efforts by the current centralised powers to uphold the old order of a political and economic elite.

In order adequately assess the economic cultural shifts resulting from the crisis, I regard it as indispensable to include the related political movement in my analysis. The political movements of 15M in Spain and the occupation of Syntagma square in Greece are relevant for the countries’ economic cultural shifts for a number of reasons. First, they overlap largely in terms of social networks; most people who are part of the new economics networks have also been part in the political movement. Second, both movements’ central concern is to create viable alternatives to an undesirable status quo in the political and economic sphere. It is generally accepted that one cannot come about without the other. Third, both movements adopt decentralised, transparent and participative models and processes as their prefigurative structures. Fourth, while the economic initiatives are inherently political as they are concerned with ownership, participation and social change, the political movements are deeply concerned about economics as they emerged as a response to the dismantling of the welfare state, protest centrally about the prioritisation of banks over civil population and have a strong focus on the commons in their projects and organisation. The research question guiding my thesis is: “To what extent do the responses to the economic crisis in Spain and Greece resemble a move towards a new economic culture that is characterized by cooperation, solidarity and community-orientation?”. To gather data for this research question, I have engaged in field research in Spain and Greece adopting a methodology of “action research” which I lay out in the following section."


From the Conclusion

" It seems like the earth is trembling again in Europe. The global financial crisis of 2008 has drawn ripples through the social, political and economic spheres of Southern Europe. Contemporary Greece and Spain are characterised through the struggles between a political elite trying to adhere to the Troika’s austerity policies and a population that is indignant about the prioritisation of banks over their own needs. In both countries, there are resistance movements against the austerity policies that dismantle their welfare state and privatise the country’s public assets. 2011 has been a decisive year to construct a movement of the people as decentralised, non-hierarchical, assembly-based movements occupied the main squares in Spain and Greece. Out of these spontaneous gatherings rose neighbourhood assemblies and communities of new economic practitioners. Together, they started to construct their own political processes and alternative economy that is based on cooperation, solidarity and community-mindedness.

The research question that serves as the red thread of my dissertation reads: “To what extent do the responses to the economic crisis in Spain and Greece resemble a move towards a new economic culture that is characterized by cooperation, solidarity and community-orientation?”. During my field research I came across festivals for the cooperative and solidarity economy, a largescale squatter’s movement for mortgage-affected people, an integrated cooperative network that helps people to detach themselves from the formal economy by building up a collective production network, and many individual projects that aim to build up a new economy with the values that people would like to see embodied in economic interactions. The values embodied in these economic initiatives can be described as “from the people for the people”; this new economy is based on cooperation, democratic decision-making, mutual aid and solidarity. Its primary motive is the creation and provision for communities, placing a strong emphasis on social relations, participation and the common good. I believe that the plethora of alternative economic initiatives and the decentralised political movements constitute clear signs of a new economic culture in the making. The economic crisis plays a crucial role in the development of this new economic culture.

First, it disrupts the cultural hegemony of the current economic system by demonstrating its inherent injustices and instabilities. Consumerism and “business-as-usual” is for many not an option anymore as they are taken out of their old lifestyle with the loss of their jobs. Since it is very difficult to find new employment, people look for alternatives to make ends meet. They start engaging in barter networks, group together in worker cooperatives and find social support in a wider movement of people who face similar troubles with paying their mortgage. As the state is not supporting its population adequately through the economic crisis, people look to each other to help each other out and build something new. Some people have engaged in these alternative economic networks for many years already and others try to find their way into this new economic culture as the crisis cuts into their lives. While in Spain established networks saw a significant increase in people interested to get involved or start up new projects and were able to provide assistance through established institutions and frameworks, Greece has to prototype this culture from scratch and boasts an impressive number of projects starting up in the social and solidarity economy. At the same time, governments and banks lose legitimacy and are challenged by their electorate and former customers. Representative democracy and property rights of banks are called into question by widespread social movements that put social pressure on banks and experiment with direct democratic processes. Legitimacy is drawn from established centralised institutions and redirected to newly emerging dispersed social networks. The social turmoil that can be observed in Southern Europe at the moment can be interpreted as the struggle between the old and the new economic culture, between the old centralised institutions of power and the new dispersed social movements that challenge the cultural hegemony of the governing institutions and build new political and economic structures.

The question how this new economic culture will fare when/if the economic crisis ends and regular employment opportunities become available again is posed often in relation to my research. I believe that the new economic culture and structures currently being built will persist one way or the other and are not only a temporary phenomenon to weather the crisis. Certainly, many individuals who get engaged with alternative economic practices, because they currently do not see another possibility to get by, aim to take up formal employment again as soon as the opportunity arises. Many others though find a deeper sense of fulfilment and belonging through the communities of new economic practitioners and would not want to give up the practised values of cooperation and solidarity for a better-paid job. The older generation that has lived for decades in the old work- and consumption-model may find it tempting to go back to their old lifestyles even though the alternative economic practices that were very marginal before the crisis have become widely accepted by now. However, the young people who are now in their twenties and have lived through six years of crisis – and who knows how many more – will be strongly shaped by this period of their lives. They are engrained with values of economic democracy, cooperation and solidarity in a time that is crucial for their socialisation. They adopt the new political and economic culture as their main culture and will want to continue to co-create the economic structures they are part of even if the formal economy recovers again. Furthermore, it can be expected that the global economic structures will continue to be shaken by economic crises in the years to come, if not by inherent instabilities of the capitalist system itself, then by external resource pressures that will converge in the coming years and make a radical rethinking of the economy necessary. The localised and cooperative production networks that are currently developing in Southern Europe are crucial prototypes of resilient production and distribution networks outside of the global economy. Chris Thomson who has been a Bank of England economist, lawyer in Scotland and Scottish National Party candidate lives now in Catalonia and recognises the change that is currently taking place: “I don’t think the mainstream structures will last much longer. They are in their death throes. One global paradigm is dying and, at the same time, another one is growing that will replace it. The new paradigm hasn’t got a name but you can see signs of it, social and economic signs” (Chalmers, 2014). He explains: “It’s like any birth – it’s painful for the mother and it’s utterly confusing for the child. The real success of the paradigm will be individual change, individual by individual” (ibid.). In context of the current economic crisis, many individuals have bid goodbye to the old economic paradigm and are now adopting a new economic culture that may constitute this new paradigm."


Other Excerpts

See:

Discussion

Solidarity Economics and the Welfare State

"Greece is the country hit hardest by the economic crisis and the population’s capability to meet basic needs suffers accordingly. As many families struggle to feed themselves or access healthcare services, solidarity initiatives like social medical clinics, social pharmacies, and social kitchens spring up across the country (Solidarity4All, 2013). These solidarity initiatives are all volunteer-run centres for peer-to-peer assistance. Solidarity clinics are run by volunteer doctors and health care workers who provide free primary healthcare to those who lost access to the medical insurance system.

Social pharmacies are centres where citizens can donate pharmaceuticals or drop off the drugs that they have at home and do not need for themselves, in order for them to be given out to people who need medicine but cannot afford any. Social supermarkets provide every 15 days packages of food and household goods for families in need. The contents of the supply packages are gathered by private individuals in front of supermarkets who ask customers to donate something to the solidarity network; they often have a list of items that are most urgently needed. Solidarity kitchens are networks of individuals who bring ingredients and cooking equipment to a public place in order to cook and share a warm meal together. Often anybody can come to these events, whether in need or not, and people are encouraged to help in other ways – like cooking or helping to clean up – if they cannot contribute ingredients, in order remove the stigma of charity and make it an event of coproduction instead. Furthermore, there are free education activities like Greek language courses for immigrants and music and language classes for children which are not offered in school and families have to organise privately. Although in 2012, there were about 20.000 homeless in Greece – a phenomenon almost unknown before the crisis – there are no house evictions yet because Greek mortgage legislation is not as punitive on the debtor as in Spain. This legislation is scheduled for revision at the end of 2014 though (ibid.).

In June 2014, I have visited the umbrella organisation “Solidarity 4 All” (S4A) which attempts to assist the various autonomous solidarity projects in material and immaterial ways (Solidarity4All, 2013). I was told that the organisation is the node of 2,000 self-governing solidarity initiatives throughout the country, one third of which is situated in the metropolitan area of Athens. S4A provides financial assistance to purchase medical equipment and materials where solidarity clinics and pharmacies do not succeed to acquire them through their own means. The funds are partially provided by a number of Syriza MPs who donate 20% of their salaries to the organisation and partially through an international grassroots campaign for solidarity with Greece (Greece Solidarity Campaign, 2014). The international solidarity movement which comprises members from England, Germany, Austria, Spain, Italy, Sweden, Denmark and Belgium supports Greek solidarity initiatives through money and materials like clothes and school materials. Besides being the connecting hub and providing support for the various solidarity initiatives throughout Greece, S4A organises wider campaigns like asking olive oil producers to donate part of their produce to gather one litre of olive oil for every unemployed person in Greece. A more regular campaign is the “No Middlemen Movement” which connects farmers directly to the end-customers without using intermediaries to sell once a month fresh produce like vegetables, potatoes, oil, flour and lemons at cost price (Katerini, 2012). This way, the price for these goods can be lowered by up to 50 percent compared to what they cost in the supermarket (ibid.). Besides the immediate alleviation of material need, S4A regards the role of solidarity also as emotional support against the fear spread by the media, government and neo-Nazi movement of “Golden Dawn”. The latter runs their own solidarity networks which gives out rice and cooked meals to poor Greek Orthodox families to gather them for their cause. S4A hopes to have a long-term impact with their work to politically mobilise society and engage it in inclusive and democratic ways of making decisions.

The response of Greek civil society to the crisis is impressive: S4A estimates that between 2011 and 2012 the number of solidarity initiatives rose from about 100 to over 2,000 (Katerini, 2012) – a remarkable number for a population of about 10 million. Although the solidarity initiatives certainly have a positive impact in terms of people’s morale and actual material well-being, overall, the various clinics and food initiatives have far more people requesting help than they can assist with the means they have. Although such solidarity networks provide the lived experience of mutual aid which is important in the development of a new economic culture, they resemble rather Rebecca Solnit’s (2009) account of collaborative disaster relief than long-term structures for an economic transition. The S4A organisers are themselves painfully aware that the solidarity initiatives perform a role that a functional welfare state should usually perform. If there was a welfare state which would provide a basic social safety net to ensure people’s subsistence and a universally accessible healthcare system, there would be little need for a solidarity network. It often seemed to me as if people in the solidarity economy had an ambiguous relation to charity and the welfare state. On the one hand, they are outraged about the catastrophic shrinking of the welfare state in form of cut pensions, unemployment benefits and free healthcare, and on the other hand they disparage charity as an enslavement of the human spirit. Proponents of solidarity initiatives emphasize the notion of co-production and mutual aid in their projects to the extent that in some cases they exclude those unable (or unwilling) to help in the acquisition and distribution of resources. This is for example the case in the video documentary “Pieces of Madrid” (Jourdan, 2014) where a Spanish solidarity network asks customers in front of supermarkets to buy something extra for their food bank while framing it as mutual aid: “We have gathered this food to hand it out to people who need it. Mutual aid: we give the food out to the people who help. It’s not charity; it’s help that we give out mutually. Those who come to help also receive help. Those who don’t help, don’t receive help.” First of all, it is a questionable distinction between charity and mutual aid as the customers donate something to the solidarity network out of charitable reasons without expecting anything in return. To the extent that members of the food bank have to contribute to the acquisition of the food in order to receive something, it could equally well be framed as an organised beggar network which distributes its bounties internally. While acknowledging the virtues of co-production, I find it dangerous to exclude people from solidarity initiatives because they are unable to contribute. Certainly, it is important to empower people to contribute to their own subsistence since people easily fall in the trap of psychological and material dependency if they are being spoon-fed by a person or institution. However, if only people able to contribute are included in solidarity networks, then it raises the question where the people remain who do not have access to either state benefits or citizen-led solidarity initiatives. This is a crucial question that came up more generally in relation to my research. Individuals with the skills, education and social capital to build up and participate in alternative economic practices are to some extent able to weather the crisis outside of the formal economy and state services. Those, however, who lack the skills or social and cultural capital to gain access to these networks, are left to their own demise if there is no private or public support system to guarantee their subsistence. This is why, in my eyes, it is indispensable to have a functional state which guarantees at least the subsistence of all its inhabitants and the diffusion of social welfare."