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
Arendt H, 1998 The human condition (University of Chicago Press, Chicago; London)
Bauman Z, 2012, “The left that ressembles the right” Eleytherotypia, Sunday 18th December 2012
Beckett S, 1983 Worstward ho (John Calder, London)
Blodget H, 2012, “NIALL FERGUSON: Okay, I Admit It—Paul Krugman Was Right” Business Insider
Castoriadis C, 1987 The Imaginary institution of society (Polity, Cambridge)
Declerck P, 2006, “On the necessary suffering of the homeless”, in Divided cities : the Oxford Amnesty lectures 2003 Ed R Scholar (Oxford University Press, Oxford) pp 161-176
Graeber D, 2011 Debt: the first 5,000 years (Melville House, New York)
Jones S, Oakley A, Watkins M, 2012, “Bond investors face euro reckoning” Financial Times
Krugman P, “The Greek Vise” The New York Times 6th February 2012
Trivizas E, 2011, “Trivizas on PIGS“,  last accessed 2 March 2012
Tsalikoglou F, 2012, “The homeless as medicine” To Vima, 29 January 2012
Zinn H, 1990 The politics of history (University of Illinois Press, Urbana)

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One thought on “The economic crisis: A view from the Everyday

  1. ulferlingsson

    You should be a fly on the wall of the rooms where the decisions of the state are taken, my dear. I believe you would be shocked to learn how the governing principle is greed and corruption, leaving the fancy scholarly ideas of “history” in disarray. I’ve been able to compare some of the world’s richest countries with some of the poorest, and there is a crystal clear correlation: Where corruption is anathema, the country is rich. Where you are considered an idiot if you don’t stuff your pockets while you are in office, the country is dirt poor. Case in point: Nicaragua and Honduras. To this contributes there election system, which they share with Greece (and the U.S., another corrupt country, but there it is mitigated by checks and balances that work to some extent). The inevitable conclusion is that Greece and Greeks must unite against corruption in all forms, and get engaged personally in politics, from the grass-roots and up. Demonstrating on the streets is meaningless, it doesn’t affect the “corruptos”, only taking the reigns will make a dent. (And by the way, it is “desesperados” in Spanish; “desperados” is Spanglish 🙂

    Reply

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