Grassroots Economies

Living with Austerity in Southern Europe

Susana Narotzky

• Publisher: Pluto Press
• Year: 2020
• ISBN:
  9781786805782
• Edition: 1
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

The austerity crisis has radically altered the economic landscape of Southern Europe. But alongside the decimation of public services and infrastructure lies the wreckage of a generation's visions for the future. In Greece, Italy, Spain and Portugal, there is a new, difficult reality of downward mobility.

Grassroots Economies interrogates the effects of the economic crisis on the livelihood of working people, providing insight into their anxieties. Drawing on a wide range of ethnographic material, it is a distinctive comparative analysis that explores the contradictions of their coping mechanisms and support structures.

With a focus on gender, the book explores values and ideologies, including dispossession and accumulation. Ultimately it demonstrates that everyday interactions on the local scale provide a significant sense of the global.

1

Introduction: Grassroots Economics in Europe

Susana Narotzky

This book proposes a bottom-up approach to studying the impact of economic crises and structural adjustment policies on the livelihoods of working people across Europe. Over the past decade southern European countries—particularly Portugal, Italy, Greece and Spain—have been at the forefront of these economic dynamics. Named and shamed as the “PIGS”, and used as scapegoats for the disastrous effects of European Monetary Union by showing what befalls countries when they do not comply with the Maastricht Treaty, the PIGS’ alleged failures have fueled talk of replacing European “convergence” with a multi-speed Europe centered around a group of responsible “core” nations. Meanwhile, in southern Europe, prospects for well-being and upward social mobility, or even stable employment, have grown increasingly elusive since 2008. As a result of structural adjustment measures, a long recession, and continued unemployment and precarity, the middle-class horizons that once defined working class projects of social mobility have disappeared. For many, downward mobility for the next generation is experienced daily.

Not a few leaders in northern Europe have resorted to cultural stereotypes to describe the economic failings of their southern counterparts, ascribing negative traits to entire countries and their citizens, as part of a process aimed at producing national collective guilt. In so doing, they have naturalized the social and political economic relationships that produce inequality within and between regions, which many perceive to be unjust. Although economists and policymakers have furnished analyses and advised on political action to end the economic crisis, it has often resulted in greater precarity and inequality, producing social unrest including nationalistic and xenophobic reactions. In no small measure, this is because the “technical” models that inform these policies reveal little grounded knowledge about how real people make economic decisions in everyday life—within particular social and cultural environments and locally specific, historically produced institutional frameworks, embedded in multiple regimes of value.

This volume proposes an anthropological perspective that considers real life possibilities and strategies for making a living as well as models of the economy used to frame and understand larger economic processes and to guide everyday action. We consider the logical connections that ordinary people make by reflecting on their own experiences, against the backdrop of state policies and expert discourses that saturate the social field. Observation of people’s everyday practices and bottom-up understandings of economic constraints and opportunities will deepen our understanding of how ordinary people make economic decisions.

Through comparative ethnography in Portugal, Italy, Greece and Spain, we show how concrete and place-bound economic practices are articulated through meanings, values and ideologies tied to unequal processes of production and distribution, both locally and globally. Economic practices are relational: they build on different institutional frameworks and involve multiple scales of value, creating complex and often ambiguous or contradictory meaning-environments in which people cooperate or compete. In our analysis, we show how value conflicts develop in practice and how they produce tangible effects in the wider economy.

Findings from our southern European field sites reveal how official regulatory practices can produce or restrict livelihood opportunities, as well as affecting the relative power of authoritative discourses on the value of regulation and grassroots counter-arguments that oppose, reinterpret or create other channels of legitimacy. A word of caution is first needed here, as we understand “grassroots” in a slightly different way from much recent usage. One of Merriam-Webster’s entries for “grassroots” describes “the basic level of society or of an organization especially as viewed in relation to higher or more centralized positions of power.” We adopt this broad definition rather than the more common focus on organized mobilization (“grassroots movements”) that tends to equate the grassroots with social movements to improve society. The aim of our work is not to pre-judge the practices and discourses of ordinary people, but to observe and analyze them. The distinction we intend to draw at the outset—as a heuristic tool—is between “grassroots economies” (the practices of ordinary people to make a living) and “grassroots economics” (the logical connections developed by ordinary people to explain such economic processes).

Ultimately, our work addresses the widely experienced breakdown of social reproduction and struggles to overcome it, both at the immediate, everyday, personal level and on the wider scale of systemic understandings of continuity. The chapters articulate ethnographic cases embedded in historical, political and economic relationships with theoretical debates of various kinds. These include, among many others, the reappraisal of classical concepts such as “small commodity production” within the neoliberal push towards small and micro enterprises and self-entrepreneurship; the critique of “southern” welfare models that rely on institutionalized kinship support as they are challenged in contexts of austerity; and the conceptual value of the formal–informal distinction as opposed to its regulatory value regarding actual practices of labor devaluation and fiscal avoidance.

We address the latest, uneven transformations of capitalism from the point of view of ordinary people’s everyday lives, models, priorities and personal or collective (in)capacities to act or stand still. We will see how industrial restructuring, globalization, financialization, and competitive and rent-seeking processes are co-determined at different scales by complex interactions between unequal agents, framed by moral arguments configured through valuation struggles. Rather than supporting a general theory of neoliberal capitalism, our ethnographic research in southern Europe points to the increasingly illiberal organization of capitalism.

This book is a creative combination of the edited collection and the monograph, and results from a collective process of developing, sharing, analyzing and theoretically engaging with our ethnographic material both during and after fieldwork. The authors have therefore become co-authors through continuous debate during the various phases of research and analysis. Most have visited each other’s field sites and gained first-hand, guided insight into the livelihood experiences, conflicts and logics that only long-term fieldwork can unveil. The book is an anthropological monograph of a collective kind. Unlike edited collections, the comparative method is inbuilt, enabling theoretical discussion without forgoing the concrete realities and processes we seek to explain. The authors attend to the “global sense of place” (Massey 1994) within everyday interactions; spatial diversities and similarities are considered from within historical processes of unequal and combined development at different scales— regional, national, European, global—that inflect local expressions of neoliberal practice.

Uneven Accumulation and Privilege

Unevenness has a history, one that describes the development of capitalism as a particular constellation of connections and disconnections (see Makki 2015 for a review of the literature). Ray Hudson (2016) in “Rising Powers and the Drivers of Uneven Global Development” traces the historico-spatial transformations captured by the literature on uneven development as follows. The “old industrial development literature” of the 1960s and early 1970s stressed center/periphery relations (Wallerstein 2004) and the development of underdevelopment (Frank 1967) in which the industrial center imported raw materials and labor and exported finished goods, thereby siphoning off surplus value and blocking development—a trend resisted by import substitution industrialization and tariffs often linked to post-colonial national development policies. This was followed in the late 1970s and 1980s by the “new industrial development literature” (Fröbel et al. 1980; Arrighi 1994; Silver 2003) which traced changing forms of unevenness linked to the deregulation of markets and the undermining of labor movements in core countries, most notably the movement of productive capital in search of lower labor costs (often aided by repressive political regimes and lax environmental regulations). As a result, deindustrialization and unemployment overwhelmed the traditional core countries (UK, US, western Europe) (Hudson and Sadler 1989) while extractive industries and land grabs in the “peripheries” expanded previous forms of dispossession (Li 2011; Borras et al. 2012). Although the global north/south metaphor came to replace that of the center/periphery, exports of raw materials and foreign investments became increasingly complex, including south/south and south/north flows of capital and resources.

The third shift in the uneven development literature, which Hudson locates in the late 1990s and 2000s, focused attention on multinational corporations moving from direct production to brand management and the capturing of monopoly rents (Harvey 1982, 1974) through intellectual property rights, virtual commercialization platforms (Amazon, Uber, AirBnB, etc.) and financial products (Henni 2012; Standing 2016). This move was accompanied by the financialization of corporate, state and ordinary people’s incomes, the greater role of tax breaks, offshore tax havens, enclaves and export processing zones and the blurring of legality and illegality in the everyday operations of worldwide capitalism at different scales (Gill and Kasmir 2016; Lapavitsas 2009; Neveling 2014). In terms of production, long supply chains, outsourcing and subcontracting often fed on unregulated or indentured forms of labor (Breman and van der Linden 2014). In the financial and fiscal domains, corruption, generalized bribery, tax avoidance or evasion, tolerance of money laundering and transfer pricing became widespread. While research and development, information and communication technologies, value-added services, and designer and luxury goods would revitalize western economies, the growing absolute surplus population worldwide, including in the old core countries, was pushed towards illegal (criminal or fiscally opaque) forms of livelihood: drug dealing, prostitution, smuggling, counterfeit production, street vending, subsistence and petty production. These were often tied to the legal economy through money laundering (Duffield 1998) or financial instruments such as micro-credit (Guérin et al. 2014).

The main idea behind the concept of “uneven and combined” capitalist development is that capitalist relations in their different forms are grounded, mutually constitutive and comprehensible only as wholes (Smith 2016; Makki 2015). Here, I wish to apply this insight to the concrete combinations of the main abstract forms of surplus extraction: monopoly and competition. Monopoly depends on the political power needed to enforce differences and carve out protected spaces, whilst competition relies on the political power needed to level the playing field for economic actors and enforce freedom of circulation.

Competition is the basic ideological argument of policies that reduce protective regulation and subsidies: the rolling back of the state should diminish costs and improve productivity, which are the keys to increasing global market share in an open, competitive environment. However, “competitive” policies mostly apply to the vulnerable, namely to labor, the self-employed and small firms. Although large firms also compete, their power allows them to lobby and corrupt policy-makers into regulating all sorts of privileges including “business friendly” environments (tax breaks, state contracts, land rezoning, bailouts) as well as the imposition of product “standards,” a form of regulation that erects barriers for potential competitors. The privileges of corporate firms include effective toleration of legal loopholes that enable siphoning off profits without paying taxes. This means that, on the one hand, small firms and labor are increasingly forced into a “despotic” market of unfettered competition. On the other hand, large corporations enter the market from positions of privilege that enable them to secure market share on grounds other than competition. Generally speaking, reaping monopoly rents is the aim of all capitalist firms as they seek to control the market by pushing competitors aside and becoming price-makers by whatever means possible. Finally, the growth of the finance, insurance and real estate sectors in present-day capitalism, together with the exponential increase of e-commerce and internet service-providing platforms, is responsible for the rise of rent-profit (access) as opposed to surplus-value profit (productive) within practices of capital accumulation.

What we call capitalism has always combined the ideology and practice of competition with the objective of reaping monopoly rents and limiting competition through political leverage. As different kinds of actors struggle to set the rules of the game, we see the role of the state in co-producing the playing field. In general, actors with greater power will obtain more privileges and be less affected by competition. This is true for firms but also for labor, as powerful unions and professional guilds evidence through the creation of internal or protected labor markets.

Why is this relevant now? Neoliberal ideology espouses the idea of individual and corporate freedom from state interference as the objective of pure capitalism. But what we are witnessing today is a move towards an illiberal form of capitalism in which the state is a major player in the regulation of privilege. Rather than providing equal opportunities by redistributing assets through public services, governments and supra-national institutions are creating privileges for big corporations and wealthy individuals, thereby negating both the liberal ideology of equality and the postulate of freedom from state intervention. Indeed, austerity regimes encourage the creation of status groups and brokerage networks at different scales that promote inequality and dependency, often through the use of violence (Gill and Kasmir 2016). This is certainly the case on the fringes where the absolute surplus population tries to eke out a living.

Two consequences are crucial: (1) competitive global market frameworks are selectively enforced on powerless actors while monopoly privileges are instituted for the powerful; and (2) actors are shifting from struggles around exploitation—i.e. capital/labor (class) struggles—to struggles for or against privileges in attempts to redefine boundaries of inclusion and exclusion in accessing resources.

In Europe, less powerful actors experience this increasingly illiberal capitalism as a betrayal of the liberal promise of equal opportunity fostered through the prevention of privilege and public spending on basic services. In Portugal, Spain and Greece, such were the clear promises of the transition to democracy and integration into the European Economic Community (EEC). As these promises have been broken, we have witnessed how laboring people make two contradictory claims to the state: (1) the elimination of the pri...

Table of contents

• Cover
• Title
• Copyright
• Contents
• Abbreviations
• Series Preface
• Acknowledgements
• 1. Introduction: Grassroots Economics in Europe
• Part I: Making A Living
• 2. Bondage Unemployment and Intra-class Tensions in Greek Energy Restructuring
• 3. Work, Wage and Subsidy: Making a Living Between Regulation and Informalization
• 4. Criminalizing Livelihoods: “Illegal Vegetables” and the Return to the Home
• 5. Austerity, Social Values and Value: The Social Economy and Entrepreneurship in Catalonia
• Part II: Social Reproduction
• 6. Austerity Welfare and the Moral Significance of Needs in Portugal
• 7. Family, Housing as an Asset, and the Production of Welfare
• 8. Social Reproduction in Times of Crisis: Inter-Generational Tensions in Southern Europe
• Part III: Experiencing and Embodying Austerity
• 9. The Entrepreneur’s Other: Small Entrepreneurial Identity and the Collapse of Life Structures in the “Third Italy”
• 10. The Body Politics of Austerity in Portugal and Spain: Women, Dispossession and Agency
• 11. Austerity from Below: Class, Temporality and Scale in Grassroots Analyses of Crisis
• Notes on Contributors
• Index