Tax Increment Financing – a model in motion

Kevin Ward, Geography, University of Manchester

A definition

The irony!  Since the late 1990s a number of academics, consultants, professional associations and think tanks have been making the case for the introduction of Tax Increment Financing (TIF) into the UK.  This is a model based on debt-creation whereby a political entity – such as a local government – establishes a project area, sometimes on its own, sometimes through consultation with business, community and neighbourhood groups.  The property taxes (business rates in the UK) in the project area are then frozen.  The local government then borrows money against the project ‘uplift’ or ‘increment’, on the basis that if they spend the borrowed money on clean up, infrastructure, and other upfront activities then developers will come in and, well, develop!  The belief is that this will lead to an increase in property values (business rates in the UK) and this ‘increment’ will go to the political entity to pay off the debt and to reinvest in the project area.  After a period of time – normally around twenty five years – the debt will have been paid off, the project area gets dissolved and the property tax returns to going to the normal taxing authorities.

 

Referencing elsewhere

Beginning with the garishly yellow Towards an Urban Renaissance published in 1999 but assembled through meetings and overseas study tours in the preceding two to three years, a concerted if slightly incoherent effort has been made to get the central government of the day interested in TIF.  This publication was followed up by Paying for an Urban Renaissance and Towards a Strong Urban Renaissance.  So, first Labour and then, more recently, the Coalition have been lobbied.  This has not been easy.  Tax-talk does not always get the political pulse going.  Even those whose business it is to be interested in financing economic development have been known to roll their eyes when the conversation has turned to TIF.  The public, well they are even harder to get switched on!  There has not been much mobilization either for or against TIF in the UK – yet.

 

An important aspect of the grey literature produced in the UK on TIF has been the referencing of a number of other places.

 

 

These places have been pointed to as locations in which the TIF ‘model’ has worked, and from which the UK might – should? – learn.  One such place is Chicago, where the city government has since the mid-1980s established over one hundred and seven TIF areas.  It was the economic development model of choice of the former Mayor, Richard M Daley.  TIF was a significant issue in the 2011 mayoral election in the city, and new Mayor, Rahm Emmanuel has set about making the model more democratic and transparent.  That though is a blog in itself.  No, here my focus is going to be on California.  The ‘Golden State’ was where TIF began, at the end of the Second World War.

California dreaming/scheming

The 1945 California Community Redevelopment Law allowed cities and counties in the state of California to establish redevelopment agencies.   In 1952 voters approved a constitutional amendment to allow redevelopment agencies to use the property tax as a funding source, and hence, Tax Increment Financing (TIF) was established.   This essentially ‘redirected’ local property taxes away from other tax collection jurisdictions, which in some areas of California numbered over ten.  Redevelopment agencies could use TIF when they were able to demonstrate ‘blight’.  While some cities and counties established redevelopment agencies over the proceeding decades, the use of TIF did not become widespread until the late 1970s and the passing of Proposition 13.  This Proposition limited the local tax raising powers of cities and counties and required that any change in taxation rates be passed by a two-thirds majority.  Not a politically attractive option as you can imagine.   Rather like turkeys voting for Christmas!  Redevelopment agencies were separate legal entities and were not governed by this proposition, however.  So, from the 1980s onwards more and more use of TIF was made in the state of California.  Notions of ‘blight’ were stretched to almost breaking point.  Stories circulated about how some cities and counties were using their redevelopment agencies, which a generous reading would suggest went against the spirit if not the letter of the law.  Those tax collecting jurisdictions whose revenue dropped as it was ‘redirected’ to redevelopment sued, and cities and counties responded with their own legal proceedings.  Eminem domain cases, as redevelopment agencies sought to assemble parcels of land that would be attractive to developers, generated pockets of bad feeling amongst different groups.   Court case followed court case.  Proposition 98, introduced in 1988, meant the State made up for the loss in revenues experienced by the colleges and schools, which kept them happy.  And over the decades the amount sitting in the bank accounts of the four hundred plus redevelopment agencies around the state grew and grew.  By early 2011 redevelopment agencies were receiving about 12% of state wide property tax revenues.  This was compared to the 4% they were receiving in the early 1980s.

At various times State Governors, such as Arnold Schwarzenegger, ‘raided’ these bank accounts, moving money into the State’s general fund, the balancing of which continued to be a significant problem.  In 2010 the California Redevelopment Association, the trade association for redevelopment in the State, had had enough.  Together with the California League of Cities, it successfully introduced Proposition 22.  This made it illegal for the State to ‘raid’ the bank accounts of the redevelopment agencies.   And this was the situation at the beginning of 2011, when the former Mayor of Oakland and a user of redevelopment funds, Jerry Brown, was elected the 39^th Governor of California (he was also the 34^th between 1975 and 1983).   Almost the first thing he did was to declare a ‘financial emergency’ and to eye the $5 billion reserves of the redevelopment agencies.

It gets ‘toxic’

Those of you who are still paying attention will realize that the past tense has been used throughout this blog.   And, so we come to the irony, at last!   Six weeks before George Osborn, the UK’s Chancellor of the Exchequer, mentioned TIF in his 2012 Budget Statement, the model was abolished in the State of California!  Two thousand and eleven was a year of claims and counter claims over the value-added of redevelopment agencies, debates that were often played out in both the law courts and in the media.  It got ugly – ‘toxic’ according to some – and ended up in the California Supreme Court on 29 December.  This ruled that AB27 – which would have meant the redevelopment agencies handing over large amounts of their reserves to the State – was illegal.   The Court basically reinforced Proposition 22.   So far so good for redevelopment agencies, and the California Redevelopment Association that represented them.  However, the Supreme Court upheld AB26 – which meant that as the State had created redevelopment agencies and TIF, through the 1945 Act and its 1952 addition, it could also end them.  Redevelopment agencies would be dissolved.  Panic in the California redevelopment community set in.  Attempts were made to build bridges with the Governor’s office and the State legislator, but to no avail.  TIF, and the 400 plus redevelopment agencies that used the model to fund a range of projects around the State, ceased to exist on 1 February 2012.  The result remains an absolute mess.  One sort of bureaucracy is being replaced with another.  Successor agencies around California are trying to manage the winding down of a highly complex and locally specific ‘model’.  Meanwhile, at the State level, Jerry Brown is pulling in staff from different department to oversee the processes through which it gets to give the okay to some TIF projects to continue and to end others.  Watch out for wave after wave of court cases, as all involved seek to establish landmark rulings.

 

Endings and beginnings

So, one of the UK’s main reference points for Tax Increment Financing (TIF) no longer exists.  The state where TIF began sixty years ago shut down the model and is now dealing the economic and political fallout.  What lessons can be learnt from what happened in California in 2011?  A few I would suggest.  First, a model never really ‘exists’ in its purest sense.  There are lots of different ‘models’ in California and they have all morphed and mutated over the years.  It is not easy to identify from which version those in the UK have looked to learn.  However, great care does need to be taken when generalizing from a model that was established at a particular time in a particular place.   Second, as models change over the years, so it is worth reflecting on the impetus for their initial establishment.  A number of the Californian redevelopment agencies of 2011, and their use of TIF, were a long way from the initial thinking of the 1950s.  A model with a quite ‘progressive’ policy DNA had in many ways become far less progressive, almost regressive in places, by the time of its cessation.  So, it is important to put in place checks and balances.  This was not the case in California.  Third, the law of unintended consequences is prone to makes its presence felt. A number of changes in the legislative and financial system, of which redevelopment agencies were one element, led inadvertently to the incentivising of certain forms of behaviour.  Proposition 13 squeezed city government and made it very attractive to establish redevelopment agencies.  Redevelopment agencies often competed with one another for capital investment.  Other changes made the system more and more complex.  This required the involvement of a growing amount of expertise – economic, environmental, financial, legal, planning, and redevelopment consultants all saw their businesses grow on the back of the increased amount of activity undertaken by redevelopment agencies.  They also then had a stake in a particular version of ‘redevelopment’ and in its continued existence.  So, try and keep it simple!

Whether TIF ever actually gets introduced into England remains unclear.  Other models are also being discussed.  Edinburgh in Scotland got its TIF business plan agreed in late 2010 but has not made as much progress as it would have liked.  What is clear however is that in all areas of policy there will continue to be models that catch the attention of consultants, policymakers and politicians.  These models will find themselves being moved from one place to another, raising issues for those places they pass through as well as for the models themselves as the places they encounter lead to changes in their very constitution.

Migrants and Comparative Urbanism

Nina Glick Schiller, Director of Research Institute for Cosmopolitan Cultures and Professor of Social Anthropology University of Manchester.

 

It was in the back room of an ‘Afro-shop’ in 2001 in Halle/Saale, a downscaled city in eastern Germany, that I was introduced to the comparative perspective that African migrants deployed to assess the relative merits and deficits of living in various European and American cities. As the men exchanged information and experiences, interspersed with comments on the football match they were watching on a small television perched high on a shelf, I realized that they lived within a transnational social field —a network of networks—that provided them with information with which to compare cities. They discussed employment opportunities, the degree of surveillance by authorities, the cost of living, the availability of health care and the quality of life and the cultural ambience of various localities.

Based on information from siblings and other kin, co-religionists, and friends, the men compared general differences between state policies and the specific differences between cities in Germany, France, the UK, the United States and Canada. To these men, who came primarily from Nigerian cities but had often come to Germany after working as traders in cities across West Africa, not all cities were equal. They deployed a system of comparing and ranking cities in which the cities that urban scholars have called global cities and gateway cities such as London, Paris, and New York were most desirable, although sometimes other rich and prosperous cities with less global cultural prominence such as Frankfort were also highly ranked.  Cities that held less cultural allure but allowed for some industrial employment and anonymity such as Birmingham were acceptable.  In contrast, cities without the possibility of even illegal work and without urban cultural capital such as Halle/Saale were generally ranked as undesirable but not as undesirable as the African cities from which they had fled. Most of the migrants who remained in Halle did so because their asylum seeker, refugee, student status or marriage to Germans kept them in the area. However, some migrants found ways not only to settle in the city but also to claim rights to the city and make it their own. These included the Ghanaian woman who owned the ‘Afro-shop’ and sold cooked food to the men gathered in the backroom and the Pentecostal Christians in the group who saw themselves as claiming the city for Jesus (Glick Schiller, 2009; Glick Schiller and Çağlar, 2008b; Glick Schiller et al, 2006)

In the 1980s and 1990s, a set of urban scholars had declared a handful of primarily European and American cities global on the basis of a limited number of economic indicators. A closely related scholarship ranked cities as world cities based on factors such as their interconnectivity and whether they contained significant firms serving the financial sector—accounting, advertising, banking/finance, insurance, law, and management consulting. Over the succeeding decade, global cities/ world cities literature have been critiqued on many points including the implication that only a small set of cities could be considered globe-spanning in their economies, interconnections and flows of labour and capital. By implication, all other cities remained bounded within nation-states.

This weakness of the global cities literature led some scholars to characterize any attempts to assess the relative merits or attractiveness of cities as Eurocentric and elitist. For example, Jenny Robinson has popularized Amin and Grahm’s (1997) term ‘ordinary’ cities, suggesting that urban scholars ‘post-colonizalize urban studies’ by setting aside the binary modernist division between the west and the rest and examine the way cities “off the map” were globally imprecated. Robinson’s arguments highlighted the globally interconnected historic urban project of capitalist production and distribution. Recognizing interconnection does not necessarily preclude the possibility of comparisons. To say cities are all interconnected does not mean they all equally benefit from such linkages or experience them in the same way.  However, some urban geographers, fearing an econometric ranking system began to argue against any comparative perspective. Yet urban comparisons have flourished in recent European cross-national research programmes but without clear criteria upon which city comparisons are being made.

Inspired by what I learned from African migrants in Halle, who recognized hierarchies of economic, political, and cultural power in their ranking of cities I argue for a relative comparative approach to the study of cities. Such an approach, builds on and develops Kevin Ward’s work on a ‘relational comparative’ urban studies. I add a concern for the ways in which residents of cities including migrant populations experience, understand, and evaluate the relative merits of cities. It is important in such comparative work to actively engage in an analysis of city rescaling processes and acknowledge active agency of migrants as what Ayse Caglar and I have called ‘scale makers’.  As scale makers, migrants relate to cities not only as workers but as business people, transnational capitalists, cultural producers, gentrifiers, intellectuals, makers of sacred space, and participants in transnational activism.

The relative positioning of a city within hierarchical fields of power may well lay the ground for the life-chances and incorporation opportunities of migrants locally and transnationally. At the same time, migrants contribute not only to the daily fabric of urban life but also to the construction of these fields of power. In order to understand the different modes and dynamics of migrant incorporation and transnationalism, we need to address the broader restructuring of capital and the rescaling processes affecting the cities in which migrants are settling and the roles of migrants in both restructuring and rescaling processes.

In summary, in comparing the specific similarities and differences between cities, in terms of their relationship to migrants, the variations to be studied include: (1) the production/destruction of capital in a particular city and its region; (2) the power hierarchies (economic, political and cultural) within which that city is situated and to which that city contributes as they stretch within and across the borders of states; (3) the specific history of that city that has shaped its institutional and political structure and narratives; and (4) the ways in which these variations make it possible for migrants to act as scale makers within urban repositioning processes. Within the neo-liberal push toward competition between cities, the resources of cities, including their human resources – which encompass the migrants and their skills and qualities – have acquired a new value and became assets among global competitors.  A comparative variation-finding approach to the relationship between migrants and cities in relative different positions of power and global reputation allows researchers to assess when and how migrants become scale makers.

The economic crisis: A view from the Everyday

by Maria Kaika, Geography, School of Environment and Development. maria.kaika@manchester.ac.uk

February 2012, Working Paper. Copyright: Maria Kaika

Turning a public of Indignados into a public of Desperados: the making of Greece’s Nouveau Poor. 

A walk through the streets of Athens today, can be a confusing, or even alienating experience. If one walks around the Acropolis or in the upmarket shopping district of Kolonaki, one comes across a city buzzing with people eating in restaurants and cafes, oozing with music, laughter and joy. But if one ventures two blocks further towards the city centre, one encounters a different city; a city whose every corner, every niche, is occupied by homeless people, and beggars, and whose air is saturated with woodfire smoke, the result of people who cannot afford their gas or electricity bills.

This extreme polarization of the Greek society, and the radical changes in the city’s physical and social fabric took place over a very short period of time; just under two years. These two years saw the Greek economy imploding, as a result of a soaring public debt, which currently totals 340 billion EUROS, and the Greek society polarizing like never before as a result of a set of ‘austerity measures’, to which the Greek government committed itself, in order to continue receiving funds from its creditors. Indeed the 12 billion Euro worth of savings that the Greek government made in 2011 affected mainly pensioners and the salaried lower middle classes. The cuts were translated into 30,000 job losses in the public sector; 20-30% cuts in wages and pensions across the public and private sectors; and a rise in general unemployment by 40 percent. During the first quarter of 2011, the GDP fell by a further 7%, whilst the suicide rate increased by 40%. A quarter of businesses in Greece has gone bust, 20% of shops in the centre Athens are currently empty, and youth unemployment currently runs at 49%.

As today Greece counts 3 million people living at the edge of poverty, has the highest risk of child poverty in Europe (at 24%), and 25,5% of its population living in substandard housing conditions, it is hard to disagree with Paul Krugman, who recently termed Greece’s austerity measures ‘terminal’ for the population . Although the austerity measures did not delivered the anticipated economic results, they did deliver a new social and political situation in Greece: nouveau poor, and turned a public of Indignados into a public of Desperados.

Whilst the 1% of the Greek population still engage in conspicuous consumption and drive luxury cars, the most desperate amongst Greece’s nouveau poor have now joined ranks with illegal migrants, junkies, and alcoholics in the streets of Athens, begging, or rummaging through garbage for food. Yet, Athens’ new class of poor can be distinguished easily from Athens’ veteran poor;  junkies, alcoholics, or begging migrants. They are young or elderly, men or women, who, until recently, belonged to the middle classes, but were spat out from these ranks as they lost their jobs, took massive cuts in their salaries or pensions, or had their homes repossessed. They still wear decent clothes, and still bear in their eyes a sense of dignity. They beg whilst looking at you straight in the eye, as if they were asking for a cigarette, or for the time. Their body language as they search through garbage for food is erect, and almost dignified, because they are convinced they do not deserve what they have got. They have not reached – yet – the level of misery that turns human beings into wretched creatures (Declerck, 2006). They have not – yet – entered the terrain where their existence is defined only by their position as beggars in a country that appears to have no future.

This is the once aspiring middle classes come poor; this is our poor, our ex-neighbour turned homeless; and for being that, for being our poor, they deserve  – and receive – a level of compassion, and national and international media attention, like no other group of poor in Greece, or elsewhere in Europe has ever received. Everybody has read reports about Greece new poor; but very few are aware of the struggle for survival of Greece’s one million undocumented migrants from Afghanistan, Pakistan, Nigeria or Iran. Many have seen the international headlines about the suicide attempt of the public sector worker in Athens; but very few have heard of the year long hunger strike of Afghan migrants in Athens, who arrived there in search of Europe and found themselves trapped in this city, unable to move forward or backward.

Caring for our poor: the affective consequences of a local debt crisis.

I have highlighted the distinction between our poor and these other categories of poor, and the difference in attention that that these groups receive, in order to argue the following: the shock waves that the social consequences of Greece’s crisis sends down Europe’s spine are directly related to the fact that, this crisis concerns our poor. This is the first time, after the Second World War, that a European Union member country is faced with a humanitarian crisis; the first time, since the establishment of the European Union, that European Union members are treated like Africans or Latin Americans; that is, the first time that Europeans suffer the consequences of a debt crisis like Africans or Latin Americans do. Technocratic governments; the demand for appointed ‘commissioners’ to govern the ungovernable Greeks; demands for austerity and asset privatization in return for cash flows; demands for constitutional changes to prioritize servicing the country’s debt over servicing the population’s basic needs; all these are long established practices in the debt ridden countries of the developing world. But when these practices are transposed into European context, they become, for the first time shocking and widely publicized. They bring the message of a debt crisis home. And they make it louder. And by bringing the message home, Greece’s nouveau poor generate in western populations and political elites a set of interesting affective reactions (Tsalikoglou, 2012) that have serious political and social consequences.

First, they generate a soothing effect: it is the Greeks who suffer, not us Italians, us English, French, or Germans; not me; I still have a job; I can still feed my children; I am lucky; I’m OK.

Second, they generate a reassuring effect: after a year or two of doubts, I now feel Greeks have actually suffered enough; they are now worthy of my compassion. And the fact that I can still feel compassion is reassuring; it means I am still a human being.

Third, they generate desire for geographical distancing: Their suffering is inherently linked to their ‘Greekness’. It is close enough to me but cannot touch me, because I am not Greek; it remains outside my own country and my own home, and I want to keep it this way; I want to distance myself and my country as much as possible from ‘them’.

This way, the shock of poverty and misery brought home by the Greek crisis becomes, at best, a focal point for display of human compassion, and, at worst, a focal point for the display of racism. When it takes the form of racism, Greeks deserve what they get, because they are lazy, crooks, incompetent, etc. When it takes the form of compassion, Greeks do not deserve what they get, because they are the ones who gave us democracy; they fought on our side during the second world war, etc.

However, although compassion and racism may appear to be at the opposite ends of the spectrum of political and social reaction to this crisis, they are in fact, part of the same, Janus faced type of politics which allocates justice or hatred, compassion or despise, only after it places human beings into unified categories. It is only after I can other all Greeks as crooks and lazy PIIGS that I can express racist views about them. But it is also only after labelling all Greeks as a deeply democratic and suffering people that I can feel compassion for them. Whilst racism transforms human beings into dehumanized bodies, compassion transforms them into dependent bodies. Both cases confirm that debt is the end of freedom (Graeber, 2011). And an un-free human being -worthy of compassion or not – is a de-humanized being; a human being that can no longer produce its own history.

Learning from global capitalism: Try again and fail BETTER next time.

If we take seriously Hanah Arendt’s (Arendt, 1998) claim that History is the making of meaning, and totalitarianism the production of meaninglessness, we are currently in a moment that produces meaninglessness. In this paradoxical moment, group, the economic crisis generated a proliferation of group stereotypes across Europe, whilst the salvage of the European project is left to a bunch of nationalistic political elites. Inside Greece, this nonsensical nationalistic rambling presents other Europeans as villains, and the return to drachma as the way to save Greece from the ‘evil’ grip of foreign creditors. Greece’s family run political elites have twice now failed to negotiate Greece’s debt properly, and have twice now chosen to default on Greece’s people, rather than default on Greece’s creditors. Still, they blame the evil Germans, rather than themselves, for the misery that the Greek population has to suffer. Outside Greece, similar nationalistic ramblings present the economic crisis as a problem predominantly linked to Greece, and argue that the solution to the crisis dwells in chucking Greece out of the euro or even out of the European Union, because it is a nation of crooks who will always fail to deliver their promises.

But, of course, the claim that all Greeks, Portuguese Italian Irish and Spanish are crooks and lazy PIIGS is a claim as non-sensical as the claim that all Germans are Nazis (Trivizas, 2011). And, of course it is convenient for Europe’s political and petty local economic elites to revert to nationalism. It keeps them in power by posing false dilemmas, and constructing straw enemies. For, whilst European governments become increasingly entrenched in petty nationalism, capital becomes increasingly internationalized. Capital has never been patriotic: this is why it survives and thrives over time. In the midst of the crisis, Greek capital invests in multi-million mansions in London, whilst major private European funds invest in making “Greece the Florida of Europe”; Chinese sovereign funds buy large parts of Greece’s main port (Piraeus), whilst Qatar invests 5 billion US dollars in Greek tourism infrastructure.

There are good lessons to be leant from the movements of international capital. In a recent interview to Business Review, Niall Fergusson suggests that “the only way out of the current crisis —without disbanding the EURO—“ is to do as international capital does, namely “commit substantial resources to peripheral economies” (Blodget, 2012): But, for those who cringe to the sound of the word subsidies, we don’t even have to go that far. We could start by arguing for a more even-handed treatment of one Country towards another. As of January 2012, Greece actually runs a primary surplus (Krugman). This is a remarkable change that received little attention. It means that from now onwards, any new loan that Greece receives will only be needed to service its debt. Because part of Greece’s debt is served at 16,8% interest. Over the next couple of years, the European Central Bank is set to make a multi billion profit from interest repayments made by Greece. 5bn Euros of this profit is now earmarked to go back to the coffers of the countries that have contributed to Greece’s aid. Moreover, whilst France, the UK and Germany borrow at 0.25 interest or thereabouts, they still lend Greece at 3, 4 or 5%. In common language, this is called usury. In economic language, it is called aid. Why does Germany and France lending at high interest rates to Greece or Ireland, sound more outrageous than Bavaria subsidizing East Germany,England subsidizing Wales, or New York subsidizing Mississippi?

If we understood countries as the social historical constructs that they are, and if the economy were as ‘rational’ as it claims to be, interregional subsidies within the EU would make as much sense as interregional subsidies within the same country; and interregional lending at extortionate interest rates within the EU would sound as outrageous as the proposal of having Bavaria lending East Germany at 5%.

If we could see beyond the nationalistic parapets that Europe is building, we could also divert our attention to another remarkable fact: that the Eurozone’s greatest build up of debt is not with the governments of Greece Portugal or Spain; it is with the financial sector, whose total debt doubled from 155% of EUs’ actual economic output in 1999 to 222% in 2012. The financial sector’s debt currently runs at 20 trillion EUROS, but receives little media or political attention, compared to Greece’s debt of 340 billions which makes headlines across Europe every single day, and has claimed thousands of wo/man hours in the European and national parliaments over the last 2 years (Jones etal., 2012)

If, as a Greek passport holder, I wanted my understanding of the crisis to go beyond false dilemmas and the nationalistic rhetoric that Greece and the rest of Europe is currently stuck with, I should first and foremost remark that I am not Greek. I am not Greek, if being Greek puts me in the same category as 14,000 or so crooks who are now documented to have embezzled public funds in Greece, who drive around in SUVs and avoid paying taxes worth a total of 36 billion euros. I am not Greek, if that puts me in the same category as the thugs who beat up migrants in the streets of Athens in the name of ethnic cleansing.

But, at the same time, we are ALL Greeks. Like 99% of the Greek population, who did not embezzle public funds, we collectively foot the bill for bailing out indebted banks, or indebted countries; we collectively receive cuts in our pension funds, and we do not receive millions in bonuses, or Royal titles, for running banks that go bust, or for gambling with other people’s pension funds. If we take the rhetoric of the market to its full consequences, the fact that we are all consumers and tax payers, can form the basis for our commonality, as Bauman suggests (Bauman, 2012: no page). And if we wanted to take our commonality beyond the market logic, we collectively are the unknown people whose countless small actions, as Howard Zinn puts it, make history and produce change (Zinn, 1990).

So, addressing you as fellow global consumers, I would urge you to go to Greece for your next holiday. It will be an act of pleasure; you can enjoy the sun and the sea, and you don’t even have to face poverty if you stay clear off the main streets of Athens. It will also be an act of compassion: you will be contributing to a sinking country’s economy.

Addressing you as fellow human beings, I would still urge you, to go to Greece for your next holiday. But I would advise you to walk off the beaten tourist track; walk the main streets. It will be an act of comprehension; it will bring home an understanding of why compassion and charity cannot work as a tool for social change. Because they are predicated upon the construction of divisive lines and divisive identities. Charity is for the middle classes. The only tool left to the poor is Politics. But, at this moment, when centre, right and left party political elites revert to primitive forms of nationalism, politics reverts to its rawest and most desperate form; politics as rioting. The recent burning of historical buildings in Athens during rioting was an act as nonsensical or as desperate, as the burning of the African American ghettoes in the 1960s. It was an act performed within a political moment that produces meaninglessness and fear. Today, we are all numbed by fear. Fear that our country may be next in line, our household next on fire, our children next to suffer. Fear of failure of any new attempt to think differently about the world or the economy.

However, this moment of meaninglessness and social disarray, is the best moment for transformative thinking. It is the moment when new radical imaginaries stop being an intellectual exercise, and become a social necessity. If we take seriously Cornelius Castoriadis’ conceptualization of history as the creation of new meanings and new social imaginaries (Castoriadis, 1987), there is no better moment than now for this type of creativity.

It is the moment to counter pose divisive stereotypes and fear of failure with Samuel Beckett’s (1983) aphorism that, if you have ever failed, try again; and fail again. But try to fail better next time. In fact, this is exactly what global capitalism has always done: constantly trying and failing and trying and failing again. And it is still here, perpetually transformed, and more powerful than ever. We should learn from global capitalism! We should dare to think differently, think beyond divisive lines; dare to try again and dare to fail again. In the process, we may create new meaning.

BIBLIOGRAPHY
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