Capitalism: Fundamentally Flawed?

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“Capital itself is a moving contradiction, (in) that it presses to reduce labor time to a minimum, while it posits labor time as sole measure and source of wealth.”

– Karl Max (1858)

by C.L

It takes a word to spark controversy: capitalism. It’s a word so widely used and criticized that it seems redundant for someone to even write about it, yet here I am! The intention of this writing isn’t to focus on the technical but rather on the philosophical part, namely, capitalism’s rhetoric. Though some definitions may be necessary I am not trying to make a scientific contribution merely to raise a discussion.

Capitalism is an economic system that is preoccupied with the “creation of wealth and ownership of capitals and factors of production”, it is “a doctrine of economic thought that eventually laid the theoretical foundation for free market capitalism”.  Whereas free market is an economic system concerned with the “exchange of wealth, goods, and services”. Hence, these economic systems are different (yet both based on the law of supply and demand) they are correlated as one is an integral part of the other. In other words: free markets are a key component of capitalism. Despite their difference these two terms are so deeply associated that it seems common practice to use them interchangeably.

To clarify: there never was a purely capitalist economic system. Depending on the region you research there is a different “mix” of capitalistic and socialistic practices. In addition, there was never full blown market deregulation. When we refer to capitalist societies, there is actually significant government intervention in areas such as education, health care and transport. Consequently, there is some vagueness to the extent that an economy stops being capitalist and becomes a ‘mixed economy’.

Doing some research it got confusing to even pinpoint when capitalism came to be the predominant economic system of modern history. In any period, what is common is that all types of capitalism[1] imply that the economy is ‘market based’. The one thing consistent about capitalism and free market is the rhetoric. In the aftermath of the 2007 economic crisis advocates of capitalism and free market still talk passionately for markets regulating themselves, about the trickle down benefits of capitalism and the minimum role a government should have in regulating markets.

At the heart of the free market is irrefutably the “Invisible Hand”[2]. It is a metaphor used to describe how: “free individuals operating in a free economy, making decisions focused on their own self interest, logically take actions that result in benefiting society as a whole”. Ergo, when you have self interested choices in a free market an efficient economy emerges. If you leave traders to compete with one another, markets are guided to positive outcome as if by an invisible hand.

In reality, what advocates of capitalism and free market argue is that markets are NOT perfect[3], but that they work better with minimum government intervention. So, by its own nature, capitalism has limitations, which in return means that some level of regulation and legal protection is necessary. Moreover, the fact of the contemporary world is that Politics and markets are irreversibly intertwined; Politics shape markets and vice-versa. Furthermore, “economies can take a long time to reach their equilibrium and may even stall along the way which is why governments usually end up taking things in more visible hands instead”. Likewise, in periods of economic crises advocates arguing that large scale government intervention and regulation of the economy is neither necessary nor beneficial change the rhetoric to the obligation of the state to intervene and “save” the major conglomerates, albeit the markets. In addition, there is the issue of monopolies and monopsonies that capitalism, and by extend the free market, seems to exacerbate.

The point to grasp is that the market is not the product of the invisible hand but an institution created and nurtured by a visible hand under the rule of law”, so why do we keep insisting in an economic system that seems to be fundamentally flawed?

[1] There are different types of capitalism which can produce completely different outcomes.

[2]The term “Invisible Hand” was coined by Adam Smith to explain exchange, it was only later on that came to be associated with markets regulating themselves.

[3] There is no perfect competition/information, consumers are irrational, there is asymmetric information, conspicuous consumption and expensive goods are a sign of wealth and status.

Parallel Institutions

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by C.L.

The collapse of the worldwide financial cooperation during the Great Depression right after the Second World War guided the countries to meet and agree on a framework of economic policies, with the intention of financing to rebuild Europe as well as to protect the world from future economic shocks.

In recent years countries have been experiencing recurrent crises of public debt and deficits that are not merely events of yet another economic crisis of contemporary capitalism. These are in fact the tip of the iceberg. Deep accumulated deadlocks and contradictions are embedded in the modern way of development reforms that have great repercussions to both a country’s economy but foremost to societies.

Therefore, the emergence of parallel institutions emanates as a response to the assault of people’s lifestyle, which is mainly created by the political decisions of the existing indebted governments and international organizations. Ergo, parallel institutions counter the inability of the government to assert their inherent right to personal security as stated by the UNDP Development Report 1994.

There has been a growth in academic literature examining the relationship between human rights and human security. On the one hand scholars have established a link between human security and human rights pointing that human security is defined by international human rights norms (Rachmaran 2002: 9; Evans 2011: 7; Tabjabakhsh and Chenoy 2007: 132; Dine and Fagan 2006: xi-xii; Annan cited in Shani et al: 7; Gasper 2005; Achaya 2001: 448; CHS 2003; ICSS). On the other hand, critics point out that human security rhetoric and agenda can possibly undermine the human rights regime (Howard – Hassman). While, other human security scholars do not make any explicit mention of human rights in their work (MacArthur 2008; Thomas 2001), both school of thoughts though agree that human security and human rights do hold a significant role in political order.

Whereas, we have come a long way from the Classical Security Studies there still is a lack of available literature in correlating the role of NGOs and civil society (structured parallel institutions) arising as a response to fill in the governance gap of heavily indebted countries and provide security to the citizens.

Women in War

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by E.I

Women are severely affected by violent conflicts. They are often more exposed to physical violence in conflicts then men as they may be victims of sexual violence and trafficking. They also assume the roles of combatants in wars or peace activists as well as household heads during and after the war. In one of the major achievements for women, the UN Security Council adopted resolution 1325 (UNSCR1325) in October 2000. The resolution recognized the important role that women play in preventing violent conflicts and sustaining peace. Therefore, the resolution called on the participation of women in all efforts to bringing peace and security. Unfortunately, up till present day the marginalization of women in mediation and peace negotiation still persists.

After the Cold War, the ratio of female: male ratio of people dying in violent conflict witnessed a considerable increase. As a result, more women are dying as a direct consequence of war[1]. During wartime, women suffer from many forms of sexual violence whether employed as a strategy of war or violence diffused across units and tolerated by commanders. Rape has been employed as a weapon of war in various conflicts, mostly notable in the wars in Bosnia and the Democratic Republic of Congo. It is sometimes used in a systematic way with the deliberate targeting of women for the purpose of rape. Some studies show that wartime experience increases individual incentives to engage in sexual violence due to the breakdown of institutions, or because combatants target enemy civilians with violence to revenge for the violence suffered by their community. In some conflicts, sexual violence is symmetric, with all parties to the war engaging in it to almost the same extend.

The employment of sexual violence can also be very asymmetric as one armed group does not respond to sexual violence by the other party. Some armed groups do not in fact engage in rape despite interaction with civilians. They may even engage in ethnic cleansing without engaging in sexual violence. In some conflicts, commanders may prohibit sexual violence for strategic reasons. Many fear the consequences of uncontrolled violence by their combatants. Others depend on civilians for information, thus, attempt to restrain sexual violence against those civilians. In addition, some believe that armed groups that rely on female combatants restrain sexual violence as they fear that sexual violence against civilians may evolve into sexual violence against their group members.

Impact on Economic Empowerment

Women economic participation is another key factor in empowering women that is impacted by conflicts. Due to prevailing discrimination against women access to formal employment, women are less likely to be employed. While women are primary victims of conflicts due to being displaces, subjected to sexual violence and HIV by combatants, in many cases women are active participants assuming roles that they did not play before. This constitutes extra burden on women but it may also represents an opportunity to assume new responsibility. Nevertheless, women face many challenges as in the aftermath of conflicts societies tend to allocate roles in the same traditional ways that prevailed before the conflict. Constraints on women regarding economic development persist. Women who lose their partners during the conflict face difficult economic situation due to their limited access to economic activities, limited right to own land and other property. The responsibility to provide care for dependents and lack of facilities places a burden on women.

Despite being directly affected by violent conflicts, women are hardly involved in the mediation process. The UN Security Council Resolution 1325 acknowledged the importance of women participation in conflict prevention, peacebuilding and reconstruction. It was based on the fact that peace settlements tend to be more lasting and sustainable when women participate in their formulation. The resolution provided legal and political framework through which women can voice their opinion on matters that are crucial to them when it comes to peace and security issues. Nevertheless, there continues to be disregard to women issues globally. Peace talks continue to exclude women and negotiations focus on amnesty for men who committed crimes against women. Worth to mention that the resolution was passed under Chapter VI of the UN charter whose decisions take the form of recommendations not binding laws and there is no institutional mechanism in the UN to measure its implementation due to lack of funding. Even the UN itself seems reluctant to implement the resolution. In addition, the majority of leaders and representatives within the UN are male.

Hence, after almost 17 years of endorsing the resolution, engagement of women is still lacking and discrimination still persists. Peace agreements that were concluded after the resolution are mediated and negotiated by men, most often failing to reflect issues that are of importance to women. Many men still find it hard to picture women playing certain roles, thus preferring to place men over women in leadership positions. Women who are engaged in the mediation process face the challenge of sexual abuse and personal security. Moreover, violence against women is a common phenomenon worldwide. The Global Movement to End Violence against Women highlighted these forms of violence to include rape in custody, marital rape, sexual harassment, trafficking and prostitution, labeling and harassing women and domestic violence. Many efforts were made by women to challenge and end violence by men, yet many efforts witness set back.

Contemporary conflicts remain to be characterized by new tactics of war including sexual violence, abduction for sexual slavery and for fighting, forced displacement and deliberate targeting of civilians. Women are not only victims of these conflicts but also peace activists. Despite the major role played by women in war and peace, women are not included in official peace mediation. The UN recognized that the marginalization of gender issues in conflict resolution could lead to social inequalities that fuel the eruption of conflicts. Members of the Security Council asserted the positive role played by women in preventing conflicts and peacebuilding. They acknowledged the full participation of women in making decisions about conflict prevention and resolution. Yet, many challenges still prevail.

Given the current conditions and challenges that women face in situations of conflicts and wars, a lot remains to be done. Governments should provide more gender-based training to military and police forces before they are deployed. They should also increase the participation of women in peacekeeping missions as a means to gender national security institutions. According to UN figures[2], women constituted 1% of deployed uniform personnel in 1993. After around 20 years, women constituted 3% of military personnel and 10% of police personnel in UN Peacekeeping missions. In addition to women deployment, protection must be provided to women and girls under the threat of physical violence. The role of women in post-conflict stabilization and reconstruction efforts should be enhanced. Priority should be given to promoting women socioeconomic development in the post-war era, especially women who are household heads and support economic projects that support women participation. Finally, women should be guaranteed participation in mediation and peace negotiations, disarmament, demobilization and reintegration.

[1] I intend to write a separate article on the condition of women in the ongoing wars in the Middle East since 2011, to explain their roles in the current conflict and how the implementation of resolution 1325 has not been in place yet

[2] http://www.un.org/en/peacekeeping/issues/women/womeninpk.shtml

Square: justifying the name

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by C.L.

Historically speaking the square has always been a place of gathering for citizens. The main square of a country is an intrinsic part of the everyday lives of its citizens. Throughout history the square has provided the space for social gathering, for social uprising, despite the unique context, cultural traditions, history and course of development.

Nowadays, the square has risen once again to be a place of conflict between the symbols of the state and protesters. Be it in Greece, Egypt, Libya, Spain, France e.t.c. the square is a political symbol, is where people gather to bring about social change.

Parallel Roads: Argentina, Greece

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by C.L.

Greece seems to be walking in Argentina’s footsteps of 2001. Both countries suffered from a sovereign debt crisis as well as a political one. The period of the birth of unsustainable debt was born during their junta years for Argentina and Greece. They both have a clientelist ethos, facilitated by high levels of government borrowing. Greece like Argentina, operated in a lawless state with exceptional high levels of corruption and are unwilling to bring to justice members of the elite and politicians. They both are characterized by weak institutions and weak governance.

Both countries build up government deficits mostly from large investment spending increases that they financed with loans. In both countries, politics were unable to enforce fiscal discipline and led their public debt out of control.

Greece, at first seemed to be intact from the 2007 sub-prime crisis, just as Argentina seemed to weather the 1990s crises. In addition, Greece like Argentina gave up monetary flexibility, Argentina by pegging the peso to the dollar and Greece by entering the Eurozone. Moreover, they both enjoyed an artificial economic success due to their new currency regimes that eventually resulted to loss of competiveness. Furthermore, the new currency gave to both countries the ability to borrow in a hard currency that was a cause for the ballooning of their debts.

Neoliberal policies were pursued in Argentina by the IMF and in Greece, with its entrance into the EU. Greece nowadays, is carrying out a fiscal adjustment and reform program imposed by Troika, whereas, Argentina followed the same program under the auspices of the IMF. They both have a similar protest ethos, with people rallying to the streets to show their disapproval against policies and political elites.

Despite the similarities, Greece is in a much more difficult position than Argentina was in 2001. When the crisis erupted, Argentina’s budget deficit was 1.4 per cent of GDP in Greece was 8.5 per cent. Argentina’s debt at the time of collapse was 62.2 per cent, when Greece’s only in 2009 was 115.1 per cent. And the projections are even more worrying: “even if Greece follows precisely the IMF policies, its debt will continue to increase to a level of 140 percent of GDP in 2014” (Nechio 2010).

An important factor for the constant increase of the debt levels is the vast amount of borrowing. The term “bail-out”, which is used repeatedly in Greece’s as in Argentina’s case, in essence refers to interest bearing loans. That form of help only increases the levels of indebtedness! Moreover, these loans are not used to boost the economies of the failing countries but rather are going to cover the obligations to foreign investors.

Furthermore, the measures that are forcedly imposed by the IMF in Argentina, and by the Troika in Greece, such as: cuts in public spending salaries and pensions, tax increases, massive lay-offs create an immense pressure for the society. All these measures depress spending thus making almost impossible for the state to gather the available income needed.

In the times of extreme economic crises, social movements have rapidly increased. They arise as an answer to the failure and disappointment of governments as well as international organizations to guarantee the “inherent right of people to personal security” in the framework of “safety from chronic threats such as protection from sudden and harmful disruptions in the patterns of daily life-whether in homes, in jobs or in communities” (McRae and Hubert, 2001; UNDP Human Development Report, 1994). They provide an alternative form of governance to the neoliberal practises that states follow.

In the case of Argentina it is evident that social movements are not only a temporary “solution” but also, can be a viable answer to the new social realities people are faced with. And although, the implications of the sovereign debt crisis in Greece, are still remain to be seen, a new “generation” of European social movements arise to provide alternative spaces for action.

Social Movements in Greece

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by C.L.

The political culture in Greece rests upon massive mobilizations, strikes and demonstrations that paralyze the country. Throughout the Modern Greek history “Syntagma” square has been a place where protesters gather to express their disapprovals, to reveal their worries and anger against the ruling authorities.

The most common repertoire of collective action in Greece includes demonstrations, bomb attacks, and destruction of public buildings and private banks, taking over of universities, capturing television and newspaper stations, rejection to pay tolls in the highways and fierce clashes with the police.

Prior to the economic crisis, Greece was stunned by successive scandals regarding enticements in state agreements, with Greek politicians owning offshore companies and colossal bank accounts overseas. The announcement of the financial situation of Greece and the publicity of the austerity measures imposed to the Greek people by the government in accordance with the Troika aggravated the people which rallied to the streets.

Privatization programs, huge pension and salary cuts, massive lay-offs, higher taxes, cuts in government spending in the public sector were only some of the measures that brought an unprecedented assault of the quality of life for the majority of the population. Individuals mobilization was a direct rejection of the political system, people were refusing to pay for the doings of the corrupted successive governments.

On May 5th, 2010 an unparalleled wave of protests took the streets. That day was marked by the death of three bank employees that were trapped inside the burning building of the bank. People shocked by the loss of lives suspended their mobilizations, but anger was building up.

The announcement of another “round” of austerity measures and with a large part of the population reaching poverty levels, people, on May 25th, 2011 resumed to the streets causing an unbelievable level of turmoil and throwing the country into an era of remarkable chaos. Pavement chippings were torn, and offhand gasoline ammos were thrown to the police in a ruthless attack of fire and concrete. The demonstrators tossed barriers, fences, and blockades and lighted up cars. (Lynn 2011: 7). Demonstrators assembled outside the parliament shouting “thieves, traitors” and requested to know “where did the money go?”

“Indignant Citizens Movement”:

May 25th, led to the emergence of the indignant citizens movement (“aganaktismenoi”) and marked the turn from violent protests to peaceful demonstrations. Up to day, in the “Syntagma” square tents have been set up to house the people that occupy the square, practically living there. Thousands of people meet every day at the Square in order to partake in the gatherings and mutual events having nothing to request but symbolize the birth of a social structure. Everybody in these meetings are permitted to express their thoughts, fears and beliefs whereas, topics vary from administrative complications to ways and forms to resist current politics.

Nevertheless, what is impressive is that this movement surpasses the Greek borders. Volunteers rally upon a campaign of “awareness” with other European societies that are faced with the same problems. Rallies and demonstrations become joined European events since there are now taking place simultaneously in other European countries that have similar economic problems such as: Spain and Portugal. This has sparked the creation of “Indignant Citizens” movements across many European countries that promise to continue their mobilizations until the government reacts.

Greece’s Case Study

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by C.L.

The US sub-prime crisis in the summer of 2007 followed by the economic recession that began in 2008 brought Greece at the center of attention. Greece is part of the European Community (EC) – now European Union (EU)- since 1981, and in 2001 it forswore its national currency the “drachma”, adopted the euro, thus joining the Eurozone.

Greece is a country located in Southern Europe and is part of the greater Balkan area. For much of its history Greece was part of a series of wars and has itself a long history of political conflict, from its Civil War (1946-1949), to the Colonel’s Junta (1967-1974) and the turbulent years of the “Regime Transition” (Metapolitefsi).

Nowadays, the country suffers not only from a staggering economic crisis but also a crisis of political representation with dire consequences for the people that are faced with these new social realities. Researchers, point to the “high government spending, weak revenue collection” as well as “structural rigidities, tax evasion and corruption” as some of the components that brought the country to this state.

Political Background Analysis:

In 1962, under the Association Agreement Greece started to subsidize loans by the European Community in order to “increase the competitiveness of the Greek economy of Greece’s full membership in the European Economic Community (EEC)” (Lynn 2011: 40-43). The debts constructed in the period 1962-1972, amounted initially to $300 million and “quadrupled between 1967 and 1974” (Toussaint 2011: 1).

Post-war Greece is a story of “family dynasties” and ruling elites. In 1981, the presidency of Andreas Papandreou was marked by socialistic practices and an explosion in the number of civil servants and the “birth of a ruinously wasteful and corrupt public sector” (Manolopoulos 2011: 5). During that period, trade unions gained more power, with salaries and pensions suddenly thrusting.

By the mid of the decade and as a consequence of the economic policies that were followed, inflation reached unrecorded levels. The government, in an effort to fight inflation and stabilize the economy enforced an austerity package, were the drachma was devalued and taxes elevated, followed by a “bail out” loan from the EU. Greek governments were starting to find a pattern. They would spend excessively and then EU would “bail them out”.

In 1996, Costas Simitis resumes the Presidency. At that time period Greece’s public debt was lurking at “110% of GDP” (Lynn 2011: 47). In 1999, with a budget deficit of 16 per cent of GDP, a debt ratio of more than 100 per cent of GDP and inflation running at double-digit levels, Greece was unable to meet the convergence criteria set by the Treaty of Maastricht in order to enter the Eurozone.

As Lynn (2011: 51-53) noted, between 1999 and 2001, Greece’s economic indicators changed in a magic fashion, with the budget deficit being 1 per cent of GDP, inflation having dropped to 5 per cent, though public debt remaining stagnant at 100 per cent of GDP. In light of this transformation and despite the public debt had exceeded the levels stated by the convergence criteria, Greece in March 2000, applied to enter the Eurozone and in January 1, 2001 drachma was withdrawn and Greece introduced the euro as its official currency.

The adoption of the euro gave the government the ability to borrow abroad virtually as much money as it wanted at very low interest rates with no currency risk, and the Greek society a false sense of prosperity and wealth. Indicative of this is what Weisbrot (2011) noticed: “before it joined the Eurozone Greece’s household debt was only 6 per cent of the nation’s GDP. By 2009, it was nearly 50 per cent of GDP. And by the end of 2009, government debt marched upward to about 115 percent of GDP”. These numbers are revealing about the orgy of borrowing that followed with Greece’s entrance to the Eurozone.

The years following its accession into the Eurozone, Greece borrowed heavily in international capital markets to fund the government’s budget and deficit accounts. To illustrate that with numbers, in 1994 approximately 85 per cent of the Greek government debt was held domestically whereas by 2007 there was a turn with foreign investors holding 75 per cent of the debt.

In October 2009, Greece’s new government led by Giorgos Papandreou, “suddenly realized” that the actual numbers concerning the deficit were not correct and announced that the figures for 2009 were not around 6 per cent of GDP but more than 12 per cent of GDP (Nelson and Belkin 2010: 3; Manolopoulos 2011: 55-56; Featherstone 2011: 199-200; Argyrou and Tsoukalas 2011: 174).

Consequently, this created great turbulence in Europe, in the Eurozone countries specifically and in the international financial markets. By 2010, Greece was no longer able to borrow from the markets. On April 2010, the government formally requested financial assistance from the EU and the IMF. According to the Nelson and Belkin (2010: 3) writing for the Congressional Research Service the current debt crisis in Greece has both “domestic and international causes”.

Domestic causes:

The easy answer for the troubles that Greece finds itself today would be “a long period of fiscal indiscipline”. Indeed, the numbers show exactly that: in 2009 the country’s budget deficit was close to 13 per cent with the public debt soaring at 125 per cent that same year. Nevertheless, fiscal indiscipline is more than economics; it is about the embedded culture throughout the facet of the Greek political as well as societal life.

Greece’s economy relies heavily on tourism, shipping and agriculture. With its entrance on the Eurozone, the country found itself in a position of weak international competitiveness. The tide of easy money enhanced the society’s purchasing power but the supply-side was disappearing and many of the Greek textile businesses transferred to Bulgaria and Turkey, taking with them employment positions and future business revenues (Manolopoulos 2011: 23-24).

Low competitiveness (Table 4), a large and inefficient administration with costly pension and healthcare systems, lack of checks in the system, lack of law enforcement, over-staffing of the public sector alongside with poor productivity and a huge informal economy accounting for 25 to 30 per cent of GDP are only some of the pathogenies of the Greek economy.

According to OECD, Greece is one of the most regulated countries “with the most complex administrative procedures and ownership barriers among OECD countries” (Mitsopoulos and Pelagidis 2011: 133), making it even more difficult to attract foreign investment. Indicative is that despite EU directives that arose from the Single European Act21 (SEA), Greece refused to comply and up to the end of 2010 was using the “cabotage” rule (Manolopoulos 2011: 90-93).

Furthermore, Greece suffers from high levels of structural unemployment, that coined with the “shrinking income share of wages and paired with impressively long working hours […] which is much higher than the average of the other developed countries” and on top of that “very high taxes” with Greeks “breaking the law because laws are either impossible to adhere to or have already been infringed” (Mitsopoulos and Pelagidis 2011: 140-141 and 11).

With a first glance at the above mentioned a paradox seems to arise: how can a country with low-employment rates work so long hours? This is the result from the long working days of a very large population of self-employed. According to Mitsopoulos and Pelagidis (2011: 141) the long workdays of the self-employed reinforce “the picture of an economy that tries to limit the number of employed people, while at the same time stretching to the limit the use of each individual who is actually employed”. Thus, the state is solely responsible for the structural unemployment depriving the youth the chance to pursue their life with an adequate income and a chance to live with dignity.

Additionally, in Greece there is a long history of clientelism and corruption, with successive governments not only having failed to respond to this endemic problem but most of the times exacerbating it.

Accordingly, Article 62 of the Greek constitution, grants immunity from prosecution to members of the government “even for unlawful acts that are unrelated to their duties and activities of the parliament” (Mitsopoulos and Pelagidis 2011: 46; Manolopoulos 2011: 81-82). The cornerstone of democracy is based upon the notion that no one should be above the law. Indicative of this lawless political environment is that for over 30 years no minister has ever gone to jail despite the immense number of scandals.

In many occasions borrowing was used to maintain public spending, in part to favor interest groups. Suggestive is the Olympic Games scandal of 2004. The Olympic Committee along with the government announced a budget for hosting the Games of $1.3 billion, but the official cost existed $14.5 billion (Lynn 2011: 115-116).

Nonetheless, these corrupt practices go beyond the political sphere and into society. A “fakelaki” is an accepted way to speed up a service in Greece and a “miza” relates “to kickbacks or introduction fees, typically for procurement-say a briefcase full of banknotes or a wire transfer” (Manolopoulos 2011: 90). Another widespread problem is massive tax evasion. According to the Federation of Greek industries “in 2009 the government was losing $30 billion a year through tax evasion” (Lynn 2011: 121). And, these are only some of the internal problems that the country faces.

While, the institutionalization of the political life is at large responsible for the current situation in Greece, there are also international factors that were involved in the accumulation of this unsustainable debt.

International Causes:

Toussaint (2011) summarizes some of the major economic scandals that surfaced in Greece involving foreign parties:

“Several contracts were signed with the German transnational Siemens – accused both by the German as well as the Greek courts of having paid commissions and other bribes to various political military and administrative Greek officials amounting to almost 1 billion euros. These scandals include the sales made by Siemens and other international associates, of Patriot antimissile system (in 1999 accounting for 10 million euros in bribes), the digitalization of the OTE – the Hellenic Telecommunications Organization – telephone centers (accounting for 100 million euros), the “C4I” security system bought on the occasion of the 2004 Olympic Games and which never worked, sales to the Greek railway of the Hermes telecommunications system to the Greek army, of very expensive equipment sold to Greek hospitals”.

Between 1999-2009 German and French banks lent vast amounts of money to successive governments but with a catch: in order for Greece to attain the loans it would have to purchase armaments from these countries. A recent example comes at the beginning of 2010 and at the zenith of the crisis. Turkey’s Prime Minister visited Greece and proposed a “20 per cent cut in the military budget of both countries”. Greece refused the agreement and right after it purchased: 6 frigates accounting for 2.5 billion euros and armed helicopters for 400 million euros from France and 6 defective submarines (the listing was to the left and were equipped with faulty electronics) for 5 billion euros from Germany (Manolopoulos 2011: 147; Toussaint 2011).

Similarly, Western private European banks were taking loans provided by the European Central Bank and the US Federal Reserve with 1 per cent interest rate in order to profit from countries with higher rates such as Greece. Toussaint (2011) observes that between December 2005 and March 2007 the volume of loans by private European banks to Greece increased by 50 per cent. Whereas, between June 2007 and the summer of 2008 there was again an upward increase by 33 per cent. Subsequently, Germany, France and European private banks profited the most from the financial crisis in Greece.

In the wake of the Greek sovereign debt crisis, Goldman Sachs was accused of having helped the country to conceal the level of its debt. Lynn (2011: 115) noted that “8 out of the 9 years between 2001 and 2008, the government budget deficit” exceeded the “3 per cent set by the Stability and Growth Pact”, and “averaged over 6 per cent of GDP over the whole period”. Therefore, the lack of enforcement – as much from Greece and EU bodies – of the Stability and Growth Pact can be seen as a contributing factor to Greece’s high debt level (Nelson et al. 2010: 6).

Social Movements in Argentina

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by C.L

During the 1960s and the 1970s social movements in Argentina created an “insurrectional revolutionary social force that gained strength” which performed a vital part in collective and political-party battles. Social movements rose that period due to the presence of a significant middle class, and the upsurge in the breach of the income distribution. Over the last 25 years this trend has shifted with an increasing rhythm: “in 1975 the first 10 per cent got 24 per cent of the total income, in 1990 33.6 per cent and in 2000, 36.9 per cent, while the last 10 per cent got 3.2, 2.1 and 1.4 respectively” (Carrera and Cotarelo 2003: 203). These dissimilarities further amplified in 2001.

Protests and contentious strategies are embedded in the culture of Latin American countries. Throughout history people in countries like Argentina, Bolivia, Ecuador and Peru have used streets protests as a way to influence government programs and to express policy demands. Contentious practices as a means of participation are an intrinsic characteristic of weak states. As Machado et al. (2011: 342-345) stressed “the more institutions lack the means to perform their duties well, the higher the incentives for citizens and groups to affect policy making process through more direct channels, such as protests and demonstrations”.

During the course of Argentina’s history, people have tried to respond and challenge the shifts of power and capital by inventing and adopting new forms of collective action. For Carrera and Cotarelo (2003: 204-206) what shaped the current form of social struggles in Argentina were the 1993 riots in Santiago del Estero – what came to be known as “Santiagazo”.
“Food riots, strikes, roadblocks, marches and meetings were the forms and means of struggle that shaped the protest movement in Argentina” (Carrera and Cotarelo 2003: 206). Demonstrations and road blocking is still the most widely used practice in order for people to show their disapproval to the new social struggles that they face.

The economic slump of late 2001 brought to the forefront an increased desire for social change. Argentinians were fed up with the political parties and specifically politicians and regarded them as having horribly failed to respond to society’s needs and demands.

By December 2001, Argentina was plagued by a series of mass protests. The nights of 19th – 20th December were marked by massive protests, riots and violent clashes with the police that came to be known as Argentinazo, and brought the country into unprecedented turmoil. Tedesco (2002: 469) noted that the Argentinazo revealed “the limits of Argentina’s democratic culture” and “the absence of political channels capable of providing for the more systematically and proactively deliberative articulation of interests”. What was different was that the middle class also run to the streets and united with the “have-nots”, “the unemployed, the slum dwellers, and the majority of the poor” where citizens were protesting against “the neoliberal policies” that brought society to its knees (Toussaint and Millet 2010: 217-227).

In the capital city of Buenos Aires the angry crowd destroyed the municipal building. Argentines came to the assumption that it was “the politicians fault, not a particular leader or specific party or ideology”. These emotions were also visible in their slogans: “Let’s get rid of them all” (Que se vayan todos) and “Don’t let a single stay” (Que no quede minguno) (Armony and Armony 2008: 35-37). “It was a moment when people bypassed politics as usual” (Levy 2004: 10).

Argentina started to rise as a “political laboratory” (Dinerstein 2003: 187), as an unparalleled expression of “bottom up mobilization” were a variety of alternative methods of party-political involvement would emerge. These included “asambleas populares” (spontaneous neighbourhood assemblies), “clubes de trueque” (barter clubs), “empresas recuperadas” (worker-occupied enterprises) and “piqueteros” (organized groups of the unemployed). These alternatives forms of party-politics arose in post-crisis Argentina and unfolded in what Brock (2001 cited in Carrera and Cotarelo 2003: 181) terms “autonomous spaces: spaces that have opened not in interface with the state but rather against or in indifference to it”.

“Clubes de Trueque”:

In 2002, followed by the events of the economic collapse and with the population suffering from poverty thousands of barter markets emerged throughout Argentina. Barter markets opened up spaces for people to take part in their self-help solution to the new economic and social realities. Trade was enacted inside the markets using coupons, called “creditos” which at the initial stage, their use was limited within the “trueque”, with the country’s national currency having no part at all at the market. In the clubs, people exchanged clothing, school supplies, homemade food, household repair jobs in carpentry, bricklaying and electrical work, medical and dental services, tutoring and tourism, among other goods and services.

With the peso collapse the use of “creditos” had spread to the mainstream economy. Wholesale markets, law firms, insurance companies, psychiatrists began to accept “creditos” as an official payment method.

By 2009, the number of barter clubs operating in Argentina has dropped dramatically to less than 500 but it still is a viable alternative solution for millions of people. Going beyond the economic solution that the clubs provided, barter clubs mark a successful new social model, where people organized themselves, their economy, their own currency, their own social system, their own production, proving that societies and production can and do exist without capitalist policies (TAOA project).

Cooperatives:

Another alternative that arose through the protests and strikes that took place in “Jujuy, Santiago del Estero, Neuquen, Tierra del Fuego, Cordoba, Santa Fe, Rio Negro, Greater Buenos Aires, Salta and other parts of the country” laid the foundations for the emergence of the movement of the unemployed (“piqueteros”) which came to be the “symbol of resistance to structural adjustment program” (Armony and Armony 2008: 31-35).

Cooperatives came as a reaction to the massive erosion of jobs throughout the 1990s. With more than half of the population living under poverty line and with soaring unemployment rates people took the initiative to “look themselves and their surrounding communities for job security and dignified living conditions” (Vieta and Ruggeri 2007: 4). Hence, the formation of self-management arose from “pragmatic needs”, “in order to feed their families, keep jobs and safe-guard workers’ self-dignity in the face of a collapsing neoliberal system (Vieta 2008: 3-4). In that sense they replaced the role of the state in providing the safety for human security. And, though, there was no guarantee that the formation of cooperatives would reach “optimal fulfilment”, it gave workers the opportunity to re-enter factories and enterprises and initiate or continue production. Thus, offered them a chance to pursue their inherent right to live “free from want”, to “live in dignity” and solidarity.

Argentina is a country with a long past of cooperativism. According to Vieta and Ruggeri (2007: 9) “cooperativism is linked to the country’s long history of European economic influence and the waves of immigrants from all corners of Europe that flooded in with new ideas of how to organize working life in the last quarter of the 19th century”. Shaffer (1999: 149) noted that the first cooperative society in Argentina was founded in 1875 whereas; Vieta and Ruggeri (2007: 9) observed that there was an upward trend in the number of cooperatives “4,204 in 1985; 8,142 by 1991 and 16,008 by 2002”. However, the current form of these cooperatives is something more than just a consequence of the neoliberal policies pursued during the 1990s and the profound shock of the new economic realities that emerged after the country’s economic collapse. It’s a rejection of the existing political system and its representatives.

The new wave of manufacturing and enterprise employee organizations were fundamentally spawned in “the run up and during the massive popular societal demonstrations of December 2001” (Ranis 2010: 8). Atzeni and Ghiliani (2007: 653-654) stated that these newly formed cooperatives (“empresas recuperdas por sus trabajadores” ERT) differ “in principle from well-established and traditional ones in several aspects”, with one obvious and crucial point being the reason why they surfaced: “they are the outcome of the occupation of private property”.

By late 2001, more than 2,600 firms were in the verge of declaring bankruptcy. Once in default Argentina’s bankruptcy laws favoured the “primacy of the creditors and the rapid auctioning of the factory or enterprise, its machinery furnishings and supplies”. Kulfas (cited in Ranis 2010: 81) highlighted the fact that many owners used the industrial crisis “fraudulently to attain millions of dollars in government credits for nonproduction-related financial speculation” aiming to “ultimately deprive the workers of their earned wages” and illegally “emptying” the factory of its assets and inventory. As a result, workers started occupying failing companies for weeks sometimes months in the hope that they were going to get paid. Gradually, this form of occupation evolved and workers eventually put the enterprises into operation under the principle of self-management (autogestion).

In May 2002, the Argentinian state “revised” the bankruptcy law and appointed the “bankruptcy court trustee” in order to judge if employees can resume the manufacturing procedures under the state of autogestion plus, giving the right to the workers of the occupied enterprises to expropriation. Hence, setting a legal framework were workers are protected “from the auctioning off the building and its contents” by the “creditors demands upon the previous owner who incurred the debts” (Ranis 2010: 85).

To further strengthen their position and provide inspiration for more workers to take over the closed enterprises Argentinians developed two workers organizations. In 2002, the “Movimiento Nacional de Empresas Recuperadas” (MNER) was created having as a slogan “Occupy – Resist – Produce” stressing in that way the need for solidarity and decisiveness of the workers cooperative. In 2003, the “Movimiento de Fabricas Recuperadas por los Trabajadores” (MNFRT) was founded. It focused on independence and self-government which was evident in their slogan “Work – Produce – Compete”. The creation of both organizations had a common objective: to create “a belt of worker cooperatives throughout the country” (Ranis 2010: 81).

Workers within the recuperated enterprises do not base their discourse in the establishment of cooperatives, but favour a more horizontal organizational form and decision making procedure, with the promotion of the same wage for every worker, the regular constitution of assemblies and the refusal to admit managerial cadre in the organization.

“Zanon” ceramic factory (under the auspices of “Fabricas sin Patron” – Factories without Bosses) is only one of the success stories of the ERT movement, providing services to the public and not the marketplace. With the owner declaring bankruptcy in 2001, the workers took over the premises with the prospect of protecting their professions and earning their living.

The strategies of the factory are set down through weekly majority votes, and once a month the manufacturing process is halt to establish further goals and resolve any difficulties that has risen. They operate through a rotation scheme, which in essence means, that “no position is long-lasting” and that everyone holds different levels of responsibilities at regular basis. The payment system operates within a fixed amount for all positions and if production goals are met the workers receive an added bonus to the fixed amount. In addition, there is a mandate that 10 per cent of the workforce should be held by women, that relish paid maternity leaves and those with children are able to start one hour later and leave work one hour earlier (Ranis 2010: 88-91).

However, the true success of the Zanon factory is that it inspired societal changes by creating outstanding relationships with the local community. It enjoys excellent relations “with the local university, the piquetero organizations and the civil society at large by way of its community centre, health clinic, employment of those in need, and multiple cultural, artistic, and recreational outreach programs”. Moreover, it is an active part fighting side by side in every protest and struggle other people face by even stopping production in order for the workers to be present.

Workers at Zanon cooperative have managed not only to fight successfully for their fundamental rights, but also to create new job positions for the unemployed. And in August 2009, the courts granted that the factory belongs to its workers cooperative to manage legally and indefinitely.

A hallmark in the evolution of the ERTs was the “First Latin American Meeting of Recuperated Enterprises” that was held in Venezuela with the support of Hugo Chavez in October 2005. The three days that preceded the meeting “75 commercial agreements were signed among various Latin American worker enterprises”. Though, very few of these agreements have been materialized , the most important ramification from this meeting was the “legitimization of this worker-managed enterprises in Argentina as well as in Venezuela, Brazil and Uruguay” showing for the first time a path that can be followed away from the mandates of the neoliberal policies.

What is more important still, is that ERTs have provided new expectations for social change. They arose as a vindication high unemployment and poverty rates and the despair of Argentina’s people. However, they evolved to be more than just means to making an end and rather they represent a new form of working relations and societal realities. According to the National Institute of Associations and the Social Economy up to 2009, 15,000 cooperatives existed in Argentina giving work to more than 8,000 people and accounting for “9 percent of the country’s GNP” (Ranis 2010).

Argentina’s Case Study

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by C.L

In 1978 there were only three democracies in Latin America: Colombia, Costa Rica and Venezuela. By the end of the decade almost every government in the region was democratic or semi democratic. This democratic explosion across Latin America was accompanied by a free-market revolution, with Argentina posing as the “poster child” of those reforms.

From 1860 to 1930 Argentina was one of the 10 richest countries in the world, and the second largest economy in South America. What led a country like Argentina in December 2001 to suffer one of the biggest defaults in history? Argentina is a country with great pathogenies. It has a long history of political instability, with corrupted governments unable to enforce fiscal discipline, a military rule terminated in the brutally repressive military dictatorship of 1976 – 1983, a war over the Falkland Islands and stark economic difficulties counting “4 defaults since 1820s” reaching the 5th and most staggering default in late 2001 (Blustein 2006: 31; Techman 2004: 43).

In order to get a better understanding for the new realities that emerged it is essential to recognise the factors and the underlying problems that caused Argentina’s economic collapse and the upheaval of Argentina’s society reaching the emergence of social movements.

The history of Argentina’s foreign debt and its close cooperation with the IMF has its roots in the junta period. However, researchers trace the most important period for the last financial collapse of the country in the deep recession that settled in the country during 1998.

Political Background Analysis:

The starting point for the massive lending in Argentina can be traced back to the last period of the Argentine dictatorship in 1976 – 1983. By the end of the military junta in 1983, the Argentinian external debt rose from $7.9 billion to $45 billion, with the majority of the loans contracted with private international banks. These loans were primarily invested to finance energy or infrastructure projects “that were very often inappropriate or megalomaniac, and nicknamed “white elephants”” (Toussaint and Millet 2010: 63-69; Klein 2007: 156-158)

Moreover, the purchase of weapons and military equipment by the junta in order to oppress people contributed even further to the indebtedness. Likewise, private Argentinian companies “helped” in the accumulation of debt with the support of the government officials. In 1982 the president of Argentina’s central bank Domingo Cavallo declared that the state would “absorb the debts of large multinational and domestic firms” which in essence meant that “these companies continued to own their assets and profits” but the public had to pay off between “$15 and $20 billion of their debts” (Klein 2007: 156-158).

Consequently, the origins and the way that this money was “invested” can be termed “odious7” since the international law defines as such any loan that does not rip any benefit for the society and is used by military regimes to repress people. In 1983 when the military regime collapsed, the government of President Raul Alfonsin (1983 – 1989) took up the debts accumulated during the junta years. In order to repay these debts the government constantly took up new loans hence throwing the country into a vicious cycle of borrowing. The main creditors of the loans the IMF, the World Bank and private US banks (Klein 2007: 156-158).

In June 1985, in an effort to fight the country’s chronic inflation and stabilize the economy president Alfonsin introduced the “Austral Plan”, followed by the “Primavera Plan”. Both Plans were backed up by the international organizations and while they were successful in bringing down inflation it was only temporarily. In the following years inflation soared once more with prices for necessities reaching unprecedented levels. That resulted in the eruption of society with massive food riots while money lost so much of its value that “Argentine restaurants were using the currency as wallpaper because it was cheaper than actual paper” (Klein 2007: 160).

The inability of the government of president Alfonsin to implement successfully policies that would result in economic stability led to his resignation before the end of his term in July 1989 and Argentina to early elections.

In 1989 Carlos Menem became the first Peronist10 president since the end of the junta. By the time of his election, Argentina’s inflation was soaring. In an attempt to fight the country’s chronic hyperinflation Menem on January 29, 1991 appointed Domingo Cavallo as Argentina’s Finance Minister.

In early 1991, Menem reverted from the traditional Peronist style of politics and became the advocate of free market ideas. With the guidance of the IMF, the World Bank and private investment banks, Argentina embarked on a program of structural reforms, macroeconomic discipline, free trade and investment flows, market deregulation and massive privatization. In March 1991, Cavallo announced another monetary program called “Convertibility Plan” to combat inflation and stabilize the money system. Under this new economic model one peso equalled one dollar (1 peso = 1 dollar) and each currency could be used interchangeably. The system was based on a “modern version of the Gold Standard” that required a “currency board in which each peso in circulation was backed by a dollar in reserves” (Manolopoulos 2011: 4; Krugman 2011).

By pegging the peso with the dollar Cavallo, in essence limited the ability of the central bank to increase the supply of pesos in the economy, and thus, giving up one of the “tools” that governments use to boost growth during periods of weakness or recession. Moreover, this currency board tied the peso with a hard currency that lead to an overvaluation of its currency thus, making Argentina’s products more expensive and less antagonistic in the markets.

During the 1990s, Argentina with the guidance of the IMF followed an aggressive privatization program. By 1992, Argentina had abolished all price controls and by 1994, 90 per cent of all state enterprises were sold to private companies. Altogether, liberalization of trade initially boosted both imports and exports, allowing capital to enter the country. Besides, the “stable prices the market efficiency and the booming economy” due to the privatization program improved the living standards of millions of people in the Argentine society with the number of people living under poverty line from “41.4 per cent in 1990 to 21.6 per cent in 1994” (Blustein 2006: 23-26).

On the downside, an important ramification of this privatization program was the dramatic increase in unemployment since the privatized enterprises proceeded in massive firings shrinking the number of “unemployed by half” (Blustein 2006: 23-26; Klein 2007: 165-168). In addition, privatization exacerbated the already corrupt “regime” that existed in the political life of Argentina, with Carlos Menem himself facing “charges and accusations of corruption” as corruption scandals erupted on a monthly basis (Manolopoulos 2011: 8; Cavallo 2004: 142-143).

As Blustein (2006: 53) stressed another factor that contributed to the “bleeding out” of Argentina’s economy is the amount of provincial deficit and spending especially in Buenos Aires that soared from $4.1 billion in 1991 to $10.7 billion in 1998.

Reaching the mid-1990s Argentina was about to be “hit” by a series of external shocks that in combination with the country’s underlying problems would put further pressure in the already problematic economic sector and eventually would prove disastrous for its economy.

In 1994, the “Tequila Crisis” caused the collapse of the Mexican peso. Contagion from the Mexican crisis resulted in an increase in the V.A.T from 18 per cent to 21 per cent, interest rates and taxes to shoot up, and Argentine banks to lose 18 per cent of their deposits (Blustein 2006: 28). In 1996 and with country showing signs of recovery Domingo Cavallo departs from the Economic Ministry.

In 1998 the devaluation of Brazil (1998) resulted in higher domestic prices and real currency appreciation, consequently increasing the price of Argentinian exports affecting in that way its competitiveness. Coined with the increase of the dollar value on foreign exchange markets made Argentinian products even less competitive in international markets, leading Argentina to a cycle of deep recession and lost investor confidence (Blustein 2006: 37 & 57-60; Manolopoulos 2011: 27 & 123).

In 1999, Fernando de la Rua becomes President (1999-2001). By the end of October 2000, Argentina’s debt was over $130 billion. In an attempt to ease off the markets the government under the auspices of the IMF embarked on a series of harsh austerity measures that brought Argentine society to its knees.

In November 2000, Argentinians massively withdrew their money from the banks causing the central’s bank reserves to contract by more than 6 per cent. In December, the Economy Minister, announced a weekly withdrawal limit of $250 in order to stop the run (corralito), followed by a further ban on transferring money abroad (corralon).

In 2001, Cavallo came back as economy minister announcing his plan about “zero-deficit1” politics and made massive scale cuts on pensions and salaries, increased taxes that further aggravated Argentinian society. In a last effort to avoid default, Cavallo backed by the IMF, organised a “debt swap”, expanding the repayment time in the years after 2005. In that way the government would save “$12 billion in debt payments from 2001 to 2005 while adding $66 billion in payments from 2006 to 2030” with a 16 per cent interest “for lengthening this maturities” (Blustein 2006: 125-129; Manolopoulos 2011: 127).

In late 2001 Argentina defaulted on its debts, de la Rua resigns and within ten days the country changed 3 Presidents. By the end of 2001 Argentina was a country in siege and social upheaval was the new reality of everyday life. The economic collapse left the country with hundreds of companies in a state of bankruptcy and thousands of workers facing unemployment.

Unemployment skyrocketed, and the percentage of people living under poverty line reached 58 per cent in October 2002 from 38 per cent in October 2001 (Cornwall and Coelho 2007: 180). In light of these events many provinces issued “quasi currencies”, and with more than 17 currencies circulating, the country slid into chaos shadowed by extensive riots (Setser and Gelpern 2006: 470; Blustein 2006: xx-xxi; Manolopoulos 2011: 127).

In 2002, Argentina suspended payments to private creditors for 3 years. In 2003, President Nestor Kirchner moved forward to another debt swap. In 2005, after lengthy negotiations 76 per cent of private lenders agreed to “waive more than 60 per cent of the value of their securities” (Toussaint and Millet 2010: 217-227).

Even though the government succeeded in a reduction of external debt, its domestic debt increased, bringing up with it the country’s public debt. Argentina is still regarded as an outcast in international markets, but with the help of Venezuela, and with governments having sold off a large part of its national heritage, by the end of 2005, it managed to repay in advance the whole of its debt to the IMF amounted for $9.8 billion.

Role of International Organizations:

“For 14 of the 20 years preceding Argentina’s crisis in 2001, its economic policy was operated within an IMF program” (Setser and Gelpern 2006: 465-467). The IMF continued to finance with huge loans the country throughout the years, disregarding the fact that Argentina’s debt continued to rise in dangerous levels.

The IMF supported an unsustainable currency plan and rigorously pursued policies towards free-market disregarding the consequences in society. Even in the heart of the economic crisis instead of differing from its neoliberal plans it kept pumping the economy with loans and prescribing unsustainable programmes for fiscal discipline exacerbating the country’s problems. As Weisbrot (cited in Roos 2011) stated “the IMF’s role in Argentina prescribing policies that only prolonged and deepened recession made things even worse”.

For Dine and Fagan (2006: 303) the IMF and the World Bank took advantage of the vulnerable position of Argentina’s dependency on loans and debt restructuring “in order to influence Argentinian economic policies”. They demanded Argentina to put as its first priority the repayment of the loans to the foreign creditors over the pressuring need for social policies and poverty reduction measures to improve the economic and social situation of the majority of the population. Thus, intentionally ignoring the mandates of international law for human security.

Social Movements

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by C.L

When the role of the state as provider of human security for its community becomes obsolete and when international organizations fail to intervene effectively, societies are apt to develop alternative ways of responding to the new social realities that emerge.

Through the course of years numerous definitions have been provided by sociologists in order to define social movements. Gusfield (1968) defined social movements as “socially shared demands for change in some aspect of the social order” (University of Wisconsin). Moreover, McCarthy and Zald (1973) defined them as “voluntary collectivities that people support in order to effect changes in society” (ibid). In 1977, they further elaborated, that social movements are “a set of opinions and beliefs in a population which represents preferences for changing some core elements of the social structure and/or reward distribution of a society” (ibid). Furthermore, Tarrow (1998: 4) defined social movements as “collective challenges, based on common purposes and social solidarities, in sustained interaction with elites, opponents and authorities”. What the above definitions have in common is that they all outline social movements’ desire to change whether that is within the society or change societal institutions.

Anti-war movements, feminist movements, the gay rights movements and many more brought about an “explosion of theoretical and empirical writings” during the last 20 years (Morris and Herring 1987: 138). This new social movements challenge the existing political and social norms. Evans (2011: 18) noted that “employees’ movements, feminists, ecologists, human rights activists” have been trying to create innovative programmes “in order to resist the direction the global economy has been taking and all its negative consequences that come with it”.

The uprising expansion and the difference in nature of social movements led researchers to divide them between old and new pointing out the fact that new social movements developed largely after the 1960s. The reason for this transformation according to Smelser (1962) is “the side effects of over rapid social transformation as a response of urbanization processes, large scale economic crisis” and “moral shocks when deeply held rules and norms are broken and institutions are unable to respond” (Jasper 1997: 107-114). Whereas, Melucci (1982, 1989, 1996) views new social movements as a “defence mechanism to oppose the intrusion of the state and the market into social life, reclaiming individual’s right to define their identities and to determine their private and affective lives against the omnipresent and comprehensive manipulation of the system”. In his view new social movements differ from old in the sense that they do not limit themselves to seeking material gain, but “challenge the diffuse notions of politics and of society themselves”.

In the last decade where the “voices” of the public and especially the “poor” has been increasingly sought”, the world has seen an expansion of social movements (Cornwall and Coelho 2007: 4; Sitrin 2006: 2). Consequently, the new social movement are about the widespread dissatisfaction of the society towards the lack of response from the existing institutions. They exist in every corner of the world from the autonomous Zapatista communities in Mexico, the landless movement in Brazil (MTS), in India, in Ecuador, in Bolivia, in Italy, in the US and Canada, to the shabby towns in South Africa. They try to find space to express their concerns, alternative ways to interact so as to fulfill their needs.

In the present times of globalization where the neoliberal model of governance prevails, and with the state no longer willing or unable to attend the interests of the majority people create spaces and networks in order to serve their own needs. Their goal is to challenge the existing notions of politics and society, to resist the expansion of political intervention and as a consequence, seek their personal autonomy and aim at the transformation of societal priorities. Barlow and Clark (2002: 208) state that the only possible way to resist “corporate globalization” and the prevalent economic system is through people centred practises that derive from the social movements.

Therefore, the emergence of social movements emanates as a response to the assault of people’s lifestyle, which is mainly created by the political decisions of the existing governments. Hence, social movements counter the inability of the government to assert their inherent right to personal security as stated by the UNDP Development Report 1994. From this viewpoint, movements are “the outcome of a particular conjuncture such as an economic crisis or contradictions within the system” (Melucci 1996: 13), thus social movements act “as the manifestation of feelings of deprivation” and aggression that result from “a wide range of frustrated expectations” (Della Porta and Diani 2006: 5-8). According to Stiglitz (2002: 3) for decades people use repertoires of action as a means to oppose to “the policies of and actions by institutions of globalization”, but what is new now is the volume and the “wave of protests in the developed countries”.

Although some writers point to the negative effects in the life of a social movement such as “disillusionment” and “gradual fizzling out of energy and commitment” and the “ambivalent effects of institutionalized participation on social and political energy and thus on further democratization”, others are “optimistic about their potential to stimulate further participation and democratization from below” (Cornwall and Coelho 2007: 10). Toussaint and Millet (2010: 244) point to some recent examples that resulted in positive outcomes. For instance demonstrations in Bolivia in April 2000, December 2004 and January 2005 counter to the privatization of the water and gas industry (in September – October 2003) resulted in victory. The popular mobilization in Niger 2005 instigated the government to revoke a budget law imposed by the IMF and the World Bank. However, the interaction (or networking) between different movements in order to achieve a specific goal has turned into one of the distinctive characteristics of the global movement against neoliberalism. The wave of recent global protests in Seattle (1999), Washington (2000), Prague (2000), Davos (2001), Porto Alegre (2001), Quebec (2001), Genoa (2001), Florence (2002), Mumbai (2004), Gleneagles (2005) and the global protests of March – April 2008 concerning the food crisis also led governments “to distance themselves from neoliberal dogmas and resulted in a new global awareness” thus verifying that united struggle can ensure positive results (Toussaint and Millet 2010: 244; McGrew and Poku 2007: 198-200).

The autonomous social movements in Argentina are only one part of this global phenomenon. They arose as a response to the economic collapse of the government in 2001, where thousands of people were laid off, wages and pensions were cut, and social services degraded due to the level of debt accumulation in the 1990s and severe austerity measures imposed by the IMF. They were middle and working class people taking over factories and running them themselves. They were unemployed, like so many unemployed around the globe rejecting “the hierarchical template bequeathed to them by established politics” (Sitrin 2006: 2-4 & 9).

Another characteristic of the new social movements is the level of networking. Social movements have developed social networks that serve not only as the artefact of collective action3 but also as the means to forge new links to enhance their previous links and develop their activists’ careers (Della Porta and Diani 2006: 115). Another feature of social movements organizational structure is what Kriesi (1996) called “supportive organizations” (cited in Della Porta and Diani 2006: 144). Social movements are elements of a much larger and encompassing process of change. They try to create new realities. In that respect supportive organizations consist of service organizations (newspapers, recreation centres, educational institutions or publishing presses and so on) that subsidize to the movement’s aims but simultaneously work on the open market. “The film clubs, theaters, publishing houses created within several movements in order to further collective mobilization increasingly became market-oriented commercial enterprises with audited accounts, salaried staff, and a competitive market ethos” (Della Porta and Diani 2006: 144).

Social movements differ from other forms of representation in their structure that is based on horizontal networking or horizontalidad4. Pizzorno identified that in this structure participants form “areas of equalities” with a common sense of belonging and a “common destiny” (cited in Della Porta and Diani 2006: 94). As a result, participation in a movement’s life entails also the partaking in “cultural and social activities – music concerts, dramatic performances, happenings” with a critical edge and an element of symbolic and/or political challenge to some kind of authority – rather than of public demonstrations (Della Porta and Diani 2006: 131-132). In that respect they organize themselves in every facet of their lives, “both independently and in solidarity with others: autogestion5 in communities, neighbourhoods, workplaces, schools and universities” (Sitrin 2006: 4-5).

Therefore, social movements develop collective behaviours that reflect not only the inability of institutions and social control mechanisms but also the efforts of the society to react in crisis situations through the development of networks that share common beliefs on which they base new foundations for collective solidarity. As Melucci pointed out “the notion of a social movement is an analytical category. It designates that form of collective action which (i) invokes solidarity, (ii) makes manifest a conflict, and (iii) entails a breach of the limits of compatibility of the system within which the action takes place” (Melucci 1996: 28).

According to Tarrow (1998), though, the intricate piece that lies at the core of all social movements, protests, rebellions, riots, strike waves, and revolutions is “contentious collective action” defined as an action taken by “ordinary people”, which “lack regular access to representative institutions”, confront or challenge the “elites, authorities and opponents”. It is generated by “changing political opportunities and constraints” produce inducements “to take action for actors who lack resources on their own” (Tarrow 1998: 6-7).