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Shrinking economies, growing expulsions. We need Greece's Syriza. (Part One)

What takes extreme forms in some countries, including Greece, is actually taking place in milder ways in many developed countries considered to have recovered from the crisis--from the US to the Netherlands. See part two here.

Alexis Tsipras’ first pre-election speech, December 29, 2014. Alexis Tsipras’ first pre-election speech, December 29, 2014. Giorgos Panagakis/Demotix. All rights reserved.Economic growth can get constituted in diverse ways with diverse distributive effects. Today we are seeing a resurgence of what we referred to, in a much earlier era, as primitive accumulation. The format is no longer the enclosure of farmers’ fields in early England, which took place so that the sheep could deliver their wool to satisfy the emergent manufacture economy rather than provide an all around resource to farmers' households. [1]

Today, enormous technical and legal complexities are needed to execute what are ultimately equally elementary and brutal extractions. It is, among others, financial firms that enclose a country’s resources and citizens’ taxes. What they are doing is repositioning expanding stretches of developed countries, and increasingly much of the rest of the world, as sites for the extraction of resources. What we see alongside this is the regearing of government budgets in liberal democracies away from social and workers’ needs.

Today, both of these practices take their own specific forms in the parties (still) in power in Greece and Spain. Both countries have secured various advantages for their upper sectors, along with the active shrinking of the incomes and social services for the middle and working classes. They have done so, especially Greece, to a point we would not have thought possible in the developed world only a few years ago.

And these shrinkages are spreading to many countries, including some in rich Europe (see my Expulsions, ch 1 and 3 for detailed data on Europe).

Economic growth has never been benign. But the escalations of the past three decades mark a new epoch in that they threaten a growing number of people and places throughout the world.

Such growth still takes on distinctive formats and contents in the mix of diversely developed countries we refer to as the Global North, versus the mix of less or differently developed countries we refer to as the Global South. For instance, predatory elites have long been associated with poor countries that have rich natural resources, not with developed countries. Yet increasingly we see some of this capture at the top also in the latter, albeit typically in far more intermediated forms.

We are seeing the making not so much of predatory elites but of predatory “formations,” a mix of elites and systemic capacities (with finance a key enabler) that push toward acute concentration. Concentration at the top is nothing new. What concerns me is the extreme forms it takes today in more and more domains across a good part of the world.

Rich individuals and global firms by themselves could not have achieved such an extreme concentration of the world’s wealth. They need what we might think of as systemic help: a complex interaction of these actors with systems regeared toward enabling extreme concentration. Such systemic capacities are a variable mix of technical, market, and financial innovations, plus government enablement. They constitute a partly global condition, though one that often functions through the specifics of countries, their political economies, their laws, and their governments. They include enormous capacities for intermediation that function as a kind of haze, impairing our ability to see what is happening, with finance a key example.

Part of my argument is that there is something distinctive in a system with the capacity to concentrate wealth on this scale and to destroy so much of the middle sectors of its economy. It is not simply "the economy”. It is different, for instance, from a system with the capacity to generate the expansion of prosperous working and middle classes, as happened during most of the twentieth century in the Global North, in much of Latin America, and in several African countries, notably Somalia.

This earlier system was far from perfect: there were inequalities, a concentration of wealth, poverty, racism, and more. But it was a system that moved towards generating a growing middle sector that kept expanding for several generations, with children mostly doing better than their parents.

Also, these distributive outcomes were not simply a function of the people involved. It took specific systemic capacities. By the 1980s, these earlier capacities had weakened, and we saw the emergence of capacities that push toward concentration at the top rather than toward the development of a broad middle.

What takes extreme forms in some countries, including Greece, is actually taking place in milder forms in many developed countries considered to have recovered from the crisis--from the US to the Netherlands.

Greece is not alone, even if it is among the most acute cases. And yes, a new leadership should fight the current extreme austerity policies. They will not help create growth. This is made clear by the 20 year old "austerity" programs for the Global South --which were described as "restructuring" programs. The morality of "austerity" for the Global North, and the "retraining" for the Global South.

See part two here.


[1] This is extracted from the author's new book Expulsions: Brutality and Complexity in the Global Economy (Harvard University Press 2014).

About the author

SS

Saskia Sassen is professor of sociology at Columbia University, New York. Her latest book is, Expulsions: Brutality and Complexity in the Global EconomyCambridge, Mass: Harvard University Press/Belknap, June 2014. 

Expulsions


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