nation: European Union

Will Davies, a politics professor and economic sociologist at Goldsmiths, University of London, summarized his thoughts on Brexit for the Political Economy and Research Centre, arguing that the split wasn’t one of left and right, young and old, racist or not racist, but center and the periphery. You can read it in full there, or scroll down for my summary.

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Many of the strongest advocates for Leave, many have noted, were actually among the beneficiaries of the UK’s relationship with the EU. Small towns and rural areas receive quite a bit of financial support. Those regions that voted for Leave in the greatest numbers, then, will also suffer some of the worst consequences of the Leave. What motivated to them to vote for a change that will in all likelihood make their lives worse?

Davies argues that the economic support they received from their relationship with the EU was paired with a culturally invisibility or active denigration by those in the center. Those in the periphery lived in a “shadow welfare state” alongside “a political culture which heaped scorn on dependency.”

Davies uses philosopher Nancy Fraser’s complementary ideas of recognition and redistribution: people need economic security (redistribution), but they need dignity, too (recognition). Malrecognition can be so psychically painful that even those who knew they would suffer economically may have been motivated to vote Leave. “Knowing that your business, farm, family or region is dependent on the beneficence of wealthy liberals,” writes Davies, “is unlikely to be a recipe for satisfaction.”

It was in this context that the political campaign for Leave penned the slogan: “Take back control.” In sociology we call this framing, a way of directing people to think about a situation not just as a problem, but a particular kind of problem. “Take back control” invokes the indignity of oppression. Davies explains:

It worked on every level between the macroeconomic and the psychoanalytic. Think of what it means on an individual level to rediscover control. To be a person without control (for instance to suffer incontinence or a facial tick) is to be the butt of cruel jokes, to be potentially embarrassed in public. It potentially reduces one’s independence. What was so clever about the language of the Leave campaign was that it spoke directly to this feeling of inadequacy and embarrassment, then promised to eradicate it. The promise had nothing to do with economics or policy, but everything to do with the psychological allure of autonomy and self-respect.

Consider the cover of the Daily Mail praising the decision and calling politicians “out-of-touch” and the EU “elite” and “contemptuous”:

From this point of view, Davies thinks that the reward wasn’t the Leave, but the vote itself, a veritable middle finger to the UK center and the EU “eurocrats.” They know their lives won’t get better after a Brexit, but they don’t see their lives getting any better under any circumstances, so they’ll take the opportunity to pop a symbolic middle finger. That’s all they think they have.

And that’s where Davies thinks the victory  of the Leave vote parallels strongly with Donald Trump’s rise in the US:

Amongst people who have utterly given up on the future, political movements don’t need to promise any desirable and realistic change. If anything, they are more comforting and trustworthy if predicated on the notion that the future is beyond rescue, for that chimes more closely with people’s private experiences.

Some people believe that voting for Trump might in fact make things worse, but the pleasure of doing so — of popping a middle finger to the Republican party and political elites more generally — would be satisfaction enough. In this sense, they may be quite a lot like the Leavers. For the disenfranchised, a vote against pragmatism and solidarity may be the only satisfaction that this election, or others, is likely to get them.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

It seems certain that the political economy textbooks of the future will include a chapter on the experience of Greece in 2015.

On July 5, 2015, the people of Greece overwhelmingly voted “NO” to the austerity ultimatum demanded by what is colloquially being called the Troika, the three institutions that have the power to shape Greece’s future: the European Commission, the International Monetary Fund, and the European Central Bank.

The people of Greece have stood up for the rights of working people everywhere.

Background

Greece has experienced six consecutive years of recession and the social costs have been enormous.  The following charts provide only the barest glimpse into the human suffering:

While the Troika has been eager to blame this outcome on the bungling and dishonesty of successive Greek governments and even the Greek people, the fact is that it is Troika policies that are primarily responsible. In broad brush, Greece grew rapidly over the 2000s in large part thanks to government borrowing, especially from French and German banks.  When the global financial crisis hit in late 2008, Greece was quickly thrown into recession and the Greek government found its revenue in steep decline and its ability to borrow sharply limited. By 2010, without its own national currency, it faced bankruptcy.

Enter the Troika. In 2010, they penned the first bailout agreement with the Greek government. The Greek government received new loans in exchange for its acceptance of austerity policies and monitoring by the IMF. Most of the new money went back out of the country, largely to its bank creditors. And the massive cuts in public spending deepened the country’s recession.

By 2011 it had become clear that the Troika’s policies were self-defeating. The deeper recession further reduced tax revenues, making it harder for the Greek government to pay its debts. Thus in 2012 the Troika again extended loans to the Greek government as part of a second bailout which included . . . wait for it . . . yet new austerity measures.

Not surprisingly, the outcome was more of the same. By then, French and German banks were off the hook. It was now the European governments and the International Monetary Fund that worried about repayment. And the Greek economy continued its downward ascent.

Significantly, in 2012, IMF staff acknowledged that the its support for austerity in 2010 was a mistake. Simply put, if you ask a government to cut spending during a period of recession you will only worsen the recession. And a country in recession will not be able to pay its debts. It was a pretty clear and obvious conclusion.

But, significantly, this acknowledgement did little to change Troika policies toward Greece.

By the end of 2014, the Greek people were fed up. Their government had done most of what was demanded of it and yet the economy continued to worsen and the country was deeper in debt than it had been at the start of the bailouts. And, once again, the Greek government was unable to make its debt payments without access to new loans. So, in January 2015 they elected a left wing, radical party known as Syriza because of the party’s commitment to negotiate a new understanding with the Troika, one that would enable the country to return to growth, which meant an end to austerity and debt relief.

Syriza entered the negotiations hopeful that the lessons of the past had been learned. But no, the Troika refused all additional financial support unless Greece agreed to implement yet another round of austerity. What started out as negotiations quickly turned into a one way scolding. The Troika continued to demand significant cuts in public spending to boost Greek government revenue for debt repayment. Greece eventually won a compromise that limited the size of the primary surplus required, but when they proposed achieving it by tax increases on corporations and the wealthy rather than spending cuts, they were rebuffed, principally by the IMF.

The Troika demanded cuts in pensions, again to reduce government spending. When Greece countered with an offer to boost contributions rather than slash the benefits going to those at the bottom of the income distribution, they were again rebuffed. On and on it went. Even the previous head of the IMF penned an intervention warning that the IMF was in danger of repeating its past mistakes, but to no avail.

Finally on June 25, the Troika made its final offer. It would provide additional funds to Greece, enough to enable it to make its debt payments over the next five months in exchange for more austerity.  However, as the Greek government recognized, this would just be “kicking the can down the road.” In five months the country would again be forced to ask for more money and accept more austerity. No wonder the Greek Prime Minister announced he was done, that he would take this offer to the Greek people with a recommendation of a “NO” vote.

The Referendum

Almost immediately after the Greek government announced its plans for a referendum, the leaders of the Troika intervened in the Greek debate. For example, as the New York Times reported:

By long-established diplomatic tradition, leaders and international institutions do not meddle in the domestic politics of other countries. But under cover of a referendum in which the rest of Europe has a clear stake, European leaders who have found [Greece Prime Minister] Tsipras difficult to deal with have been clear about the outcome they prefer.

Many are openly opposing him on the referendum, which could very possibly make way for a new government and a new approach to finding a compromise. The situation in Greece, analysts said, is not the first time that European politics have crossed borders, but it is the most open instance and the one with the greatest potential effect so far on European unity…

Martin Schulz, a German who is president of the European Parliament, offered at one point to travel to Greece to campaign for the “yes” forces, those in favor of taking a deal along the lines offered by the
creditors.

On Thursday, Mr. Schulz was on television making clear that he had little regard for Mr. Tsipras and his government. “We will help the Greek people but most certainly not the government,” he said.

European leaders actively worked to distort the terms of the referendum. Greeks were voting on whether to accept or reject Troika austerity policies yet the Troika leaders falsely claimed the vote was on whether Greece should remain in the Eurozone. In fact, there is no mechanism for kicking a country out of the Eurozone and the Greek government was always clear that it was not seeking to leave the zone.

Having whipped up popular fears of an end to the euro, some Greeks began talking their money out of the banks. On June 28, the European Central Bank then took the aggressive step of limiting its support to the Greek financial system.

This was a very significant and highly political step. Eurozone governments do not print their own money or control their own monetary systems. The European Central Bank is in charge of regional monetary policy and is duty bound to support the stability of the region’s financial system. By limiting its support for Greek banks it forced the Greek government to limit withdrawals which only worsened economic conditions and heightened fears about an economic collapse. This was, as reported by the New York Times, a clear attempt to influence the vote, one might even say an act of economic terrorism:    

Some experts say the timing of the European Central Bank action in capping emergency funding to Greek banks this week appeared to be part of a campaign to influence voters.

“I don’t see how anybody can believe that the timing of this was coincidence,” said Mark Weisbrot, an economist and a co-director of the Center for Economic and Policy Research in Washington. “When you restrict the flow of cash enough to close the banks during the week of a referendum, this is a very deliberate move to scare people.”

Then on July 2, three days before the referendum, an IMF staff report on Greece was made public. Echos of 2010, the report made clear that Troika austerity demands were counterproductive. Greece needed massive new loans and debt forgiveness. The Bruegel Institute, a European think tank, offered a summary and analysis of the report, concluding that “the creditors negotiated with Greece in bad faith” and used “indefensible economic logic.”

The leaders of the Troika were insisting on policies that the IMF’s own staff viewed as misguided.  Moreover, as noted above, European leaders desperately but unsuccessfully tried to kill the report. Only one conclusion is possible: the negotiations were a sham.

The Troika’s goals were political: they wanted to destroy the leftist, radical Syriza because it represented a threat to a status quo in which working people suffer to generate profits for the region’s leading corporations. It apparently didn’t matter to them that what they were demanding was disastrous for the people of Greece. In fact, quite the opposite was likely true: punishing Greece was part of their plan to ensure that voters would reject insurgent movements in other countries, especially Spain.

The Vote

And despite, or perhaps because of all of the interventions and threats highlighted above, the Greek people stood firm. As the headlines of a Bloomberg news story proclaimed: “Varoufakis: Greeks Said ‘No’ to Five Years of Hypocrisy.”

The Greek vote was a huge victory for working people everywhere.

Now, we need to learn the lessons of this experience. Among the most important are: those who speak for dominant capitalist interests are not to be trusted. Our strength is in organization and collective action. Our efforts can shape alternatives.

Cross-posted at Reports from the Economic Front.

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.

This November, a wave of student activism drew attention to the problem of racism at colleges and universities in the US.  Sparked by protests at the University of Missouri, nicknamed Mizzou, we saw actions at dozens of colleges. It was a spectacular show of strength and solidarity and activists have won many concessions, including new funding, resignations, and promises to rename buildings.

Activists’ grievances are structural — aimed at how colleges are organized and who is in charge, what colleges teach and who does the teaching, and what values are centered and where they come from — but they are also interpersonal. Student activists of color talked about being subject to overtly racist behavior from others and being on the receiving end of microaggressions, seemingly innocuous commentary from others that remind them that they do not, as a Claremont McKenna dean so poorly put it, “fit the mold.” That dean lost her job after that comment. Many student activists seem to embrace the policing of offensive speech, both the hateful and the ignorant kind.

Negative reactions to this activism was immediate and widespread. Much of it served only to affirm the students’ claims: that we are still a racist society and that we, at best, tolerate our young people of color only if they stay “in their place.” Other times, it was confusion about the kind of world these young people seemed to want to live in. Why, some people asked, would anyone — especially a member of a marginalized population — want to shut down free speech?

Well, it may be that the American love of free speech is waning. The Pew Research Center released data measuring attitudes about censorship. They asked Americans whether they thought the government should be able to prevent people from saying things that are “offensive to minorities.” Millennials — that is, today’s college students — are significantly more likely than any other generation to say that they should.

In fact, the data show a steady decrease in the proportion of Americans who are eager to defend speech that is offensive to minorities. Only 12% of the Silent generation is in favor of censorship, compared to 24% of the Baby Boomers, 27% of Gen X, and 40% of Millennials. Notably, women, Democrats, and non-whites are all more likely than their counterparts to be willing to tolerate government control of speech.

Americans still stand out among their national peers. Among European Union countries, 49% of citizens are in favor of censorship, compared to 28% of Americans. If the Millennials have anything to say about it, though, that might be changing. Assuming this is a cohort effect and not an age effect (that is, assuming they won’t change their minds as they age), and with the demographic changes this country will see in the next few decades, we may  very soon look more like Europe on this issue than we do now.

Re-posted at Pacific Standard.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

President Obama continues to press for a form of fast track approval to ensure Congressional support for two major trade agreements: the Trans-Pacific Trade Partnership Agreement (with 11 other countries) and the Trans-Atlantic Trade and Investment Partnership Agreement (with the entire European Union).

Both agreements, based on leaks of current negotiating positions, have been structured to promote business interests and will have negative consequences for working people relative to their wages and working conditions, access to public services, and the environment.

These agreements are being negotiated in secret: even members of Congress are locked out of the negotiating process.  The only people that know what is happening and are in a position to shape the end result are the U.S. trade representative and a select group of 566 advisory group members selected by the U.S. trade representative.

Thanks to a recent Washington Post post we can see who these advisory group members are and, by extension, whose interests are served by the negotiations.  According to the blog post, 480 or 85% of the members are from either industry or trade association groups.  The remaining 15% are academics or members of unions, civil society organizations, or government committees.  The blog post includes actual names and affiliations.

Here we can see the general picture of corporate domination of U.S. trade policy as illustrated by the Washington Post.

In short, corporate interests are well placed to directly shape our trade policies.  No wonder drafts of these treaties include chapters that, among other things, lengthen patent protection for drugs, promote capital mobility and privatization of public enterprises, and allow corporations to sue governments in supra-national secret tribunals if public policies reduce expected profits.

Cross-posted at Reports from the Economic Front and Pacific Standard.

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.

Thomas Piketty has just published a massive new book tackling the explosive growth in income inequality.  Here’s what it looked like in Europe and the United States in 2010 (source):

A New York Times review of the book, Capital in the Twenty-First Century, begins as follows:

What if inequality were to continue growing years or decades into the future? Say the richest 1 percent of the population amassed a quarter of the nation’s income, up from about a fifth today. What about half?

To believe Thomas Piketty of the Paris School of Economics, this future is not just possible. It is likely…

His most startling news is that the belief that inequality will eventually stabilize and subside on its own, a long-held tenet of free market capitalism, is wrong. Rather, the economic forces concentrating more and more wealth into the hands of the fortunate few are almost sure to prevail for a very long time.

Piketty’s pessimistic view is based on his argument that income generated from capital normally grows faster than the economy or income from wages.  This means that the private owners of capital benefit disproportionately from growth, which makes it easier for them to increase their asset holdings and by extension future income.  And, since wealth and income translate into political power, we face a self-reinforcing dynamic leading to ever growing inequality.

This suggests that embracing a system based on maximizing the returns to private owners of capital is a mistake for the great majority of working people. A recent study by the investment bank Credit Suisse provides more evidence for this conclusion.  As Michael Burke explains,

The study… shows that long-term growth rates of GDP in selected industrialized economies are negatively correlated with financial returns to shareholders.

That is, the best returns for shareholders are from countries where GDP growth has been slowest, and vice versa. Where growth has been strongest, shareholder returns are weakest…

The negative correlation [seen in the chart below] does not prove negative causality. But it does support the theory which suggests that the interests of shareholders are contrary to the interests of economic growth and the well-being of the population.

All this information is worth keeping in mind the next time business and political leaders tell us that the key to our well-being is boosting business confidence, the market, or private returns on investment.

Cross-posted at Reports from the Economic Front.

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.

Two recent events had a strikingly similar theme.  Kenichi Ebina won America’s Got Talent and Nina Davuluri won Miss America.  In both instances, other Americans objected to their victories, claiming that they were not really American because Ebina and Davuluri are of Japanese and Indian origin respectively.   Still other Americans objected to this reaction.  And yet, as I’ll argue below, most of us share their bias.

First, thanks to Public Shaming, we have examples of the reaction on Twitter.  Reactions to Ebina’s win:

Reactions to Davuluri’s win:

These are stark examples of people who believe that only white people count as American.  It’s a bizarre position, of course, because people of European descent are immigrants to America, and an overtly racist one as well.  I don’t lose any sleep over publishing their identities on this blog.

But, the truth is, the majority of us — even those of us who oppose racism and embrace the idea that the U.S. is a nation of immigrants — hold the belief that America = white.  We just believe this subconsciously.

Project Implicit is an online psychological test that measures implicit beliefs, ones we hold that we’re not necessarily conscious of holding.  One test is of the association of Asian-ness with American-ness.  It works by measuring how long it takes us to sort Asian and European faces and American and Foreign famous sites into the proper categories.

First they ask you to sort faces and places with Asian and Foreign together on the left and European and American together on the right. Like this:

Then they switch the bottom designations so that Asian and American are on one side and European and Foreign are on the other.  For most people, the harms their ability to sort faces and places: it slows down and includes more errors, revealing that their brain implicitly sees Asian and foreign as one category and American and European as another.

Here’s the aggregate data.  Almost a quarter of people make no association either way, 60% implicitly believe that Asians are less American than Europeans, and 17% think the opposite.

The take home message is: even though it’s easy to condemn the twits making overtly racist comments, this is a problem that is much more pervasive and pernicious.  Even those of us who are horrified by those tweets likely carry the bias behind them.

Cross-posted at Pacific Standard.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

Ok, so this isn’t an image, but it seemed like something our readers might be interested in, so I’m making an exception. Larry (of The Daily Mirror) sent in a link to this story in the New York Times about efforts by the European Union to discourage sex stereotyping in ads (I think another reader also sent in the link, but I’m afraid I’ve lost the email; if it was you, let me know and I’ll give you credit!). From the article:

The European Parliament has set out to change this. Last week, the legislature voted 504 to 110 to scold advertisers for “sexual stereotyping,” adopting a nonbinding report that seeks to prod the industry to change the way it depicts men and women.

Interestingly, the author of the article refers to the measure as “laughable as a gesture of political correctness.” Advertising industry leaders call into question the link between stereotypical images and actual discriminatory or problematic outcomes in actual life. It brings up a recurring issue cultural critics face–it can be extremely difficult to show that, say, sexualized images of women leads to any particular negative outcome. We may strongly believe that the ubiquitous presence of ads that show stereotypical gender roles reinforce them…but since we haven’t yet created a society similar to our own except without the stereotyping, it’s hard to isolate the effects of such cultural messages because we can’t compare what our culture would be like without them.

Thanks, Larry!

Ghanimah A. sent us these images for Cordaid, an “international development organisation” that specializes in “emergency aid and structural poverty eradication.”  We would love to know what you think.