Parts of our economies, societies, and states in Europe are being stripped bare by an extreme form of predatory capitalism. And this stripping can coexist with growth in much of our economies. The majority of workers and economic operations keep functioning, even if at reduced levels.
The language of low growth, unemployment, inequality, poverty, is not enough to capture what is going on in the current phase of capitalist political economies. All of these are present, but then they always have been part of capitalism. There is a specific difference I want to capture: something far more brutal and acute that we cannot capture with the usual language. Further, I want to argue that these dynamics are not only hitting Greece, Spain and Portugal, but in fact are present throughout Europe, including Germany and the much admired Scandinavian countries.
Table 1. European countries with either highest or lowest number of foreclosures, 2007-2009. View larger version.
Table 2. Poverty and Social Exclusion, 2008-11. View larger version.
I think of this stripping bare as systemic expulsions, and in being expelled these extreme conditions become invisible to our standard measures and categories. The unemployed who lose everything—jobs, homes, medical insurance—easily fall off the edge of what is defined as 'the economy' and counted as such. So do small shop and factory owners who lose everything and commit suicide. And so do the weakened and ill newly poor who can no longer access basic medical services. All are stripped from what gets measured as 'the economy.'
This process of expulsion entails extreme conditions that begin at the edges of systems, in micro-settings. This is important, because much of this sharp shift I am seeking to capture is still invisible to the statistician. It is also often invisible to the passerby—the impoverished middle classes may still be living in their same nice houses, with their losses hidden behind neat facades. Increasingly these households have sold most of their valuables to afford payments, have started to sell their basics, including furniture, and are doubling up with grown-up children. Modest increases in employment growth are not enough to eliminate this shrinking. These are radical eliminations of types of workers, types of economies, and types of places that are no longer needed or worth the costs.
Such expulsions are not innocent events. The redefinition of 'the economy' makes it possible to assert that there is growth and that we are back on track.
The reality at ground level is more akin to an economic version of ‘ethnic cleansing’ in which specific kinds of negatives are dealt with by simply eliminating them from view. Thus in early January 2013, the European Central Bank announced that Greece’s economy was on the path back to growth, and Moody’s upgraded Greek debt by a point; the country’s rating is still low, but such shifts matter to investors, always desperate to find destinations for their capital. It meant that Greece was again becoming safe territory, and largely meant the buying up at very cheap prices of what had been valuable parts of the national economy. We saw a similar process in South Korea and Thailand during the so-called Asian financial crisis.
Greece’s 30% of workers who had lost their jobs, countless broken firms and neighbourhoods were left out of the picture. This economic cleansing works, but it does so on the backs of all those who have been expelled.
A second major issue in my analysis is the view that Greece is a unique case according to diverse European Union institutions and governments heading the ‘rescue’ effort. Greece is indeed a poor country with extreme tax fraud by its rich elites and a dysfunctional government bureaucracy. But that does not preclude that high unemployment, impoverishment of the middle classes, and shrinking state budgets for the social question are hitting much of Europe. The crises in Portugal and Spain are also seen as somehow exceptional, as not reflecting the rest of Europe.
I argue that we cannot assume that Greece, Spain, and Portugal are unique cases. We need to examine whether they are. What takes an extreme form in Greece, and to some extent in Portugal and Spain, may well also be present elsewhere in Europe and beyond. This would alert us to a deeper structural condition in this phase of advanced capitalism, which took off in the 1980s and became entrenched in the 1990s. The explanation would thus not be confined to exceptional conditions, such as Greece’s poverty and corruption, but would have to address structural features of the political economy present throughout the European Union.
This shrinking and redefining of the economy holds for a growing number of European countries (and elsewhere!). In Expulsions I have detailed data making this case (see Ch 2). Here I limit myself to two tables, one that shows foreclosures on homes are not only happening in Spain but also in Germany…and in 15 other European countries. The second chart shows that poverty is far higher than is generally understood, including in the Scandinavian countries. The purpose of these and other such data is to show that what takes acute forms in Greece and Spain and Portugal, is happening in milder forms in countries that are doing well – but also there these trends are invisible, perhaps more so than ever.
1. In the book on which this is based I also examine Global South countries along similar lines of analysis (see Ch 2). Further, I examine domains beyond the economy. See Expulsions: Brutality and Complexity in the Global Economy Cambridge, Mass: Harvard University Press/Belknap, June 2014. I will be giving a talk at the Edinburgh Book Festival on August 10, at 12.30.
2. This enabled a massive wave of acquisitions by foreign investors of all sorts of firms and other assets in both countries at a seriously discounted value.