False Premises of Austerity Measures

This past year we have seen an explosion of social unrest throughout the Global North – in Greece, France, states in the US, the UK – as austerity measures continue to be imposed on debt-ridden states. The debate about debt is often framed as one in which governments need to pay their bills and the way to do this is by slashing government spending.

There are a number of problems with how this ‘debate’ is framed. In a balance sheet there are credits and debits, or revenue earning activities and expenses, so if one is indebted, one can raise revenues and/or cut expenses. Austerity measures are sold on the premise that ‘paying one’s bills’ will happen by cutting expenses – not by gaining revenues. In other words, it is assumed that states like Greece will not pay their bills by earning more.

This is a convenient ‘assumption’ because many debts came from policies that stripped governments of revenue-generating capabilities. Governments around the world got into trouble by offering tax breaks, tax holidays, low tariffs and subsidies to the private sector – and usually to its biggest players. In this environment companies have been hopping from one tax scheme to the next, from one lower than the previous one, and on and on.

And not just. Under a system of “corporate welfare” states subsidize private industry through infrastructure development, all at considerable cost. Walmart is one exemplary beneficiary.

And not just. Under privatization governments have sold public assets, which in the short run actually translates into a windfall in state coffers. (Take, for instance, Egypt’s GDP figures in the late 1990s and early 2000s: The country’s GDP growth skyrocketed as it sold huge public assets into private hands.) But the huge surpluses don’t last long before being eaten up by public-private contracts. The government puts up for bid private contracts for the delivery of (currently or formerly) public services. Private contractors bid to provide a service that the government used to provide or could have provided. The government pays the contractors, often at exorbitant rates, often going into debt, to do something it could have done itself. (See this previous blog entry on public-private partnerships in Egypt.)

Take the US state of Wisconsin and the debacle of austerity that in early 2011 led the state legislature to end collective bargaining rights and cut funding for public services, including education. This was forced through under the premise that the state’s pension and other employee benefit trust funds were bankrupting the government. A closer look revealed however that the fund is nearly entirely funded and that it was not entirely so in part because of $195 million annually in Wall Street investment manager fees. If Wisconsin managed its own fund rather than contracting out management to Wall Street, then the fund would require a modest contribution from the government. And the government would be in an even better shape to ‘pay its debts’ if Governor Walker hadn’t early in the year pushed through $127 million in tax cuts!

These austerity measures have been the raison d’être of multilaterial agencies (International Monetary Fund, World Bank) in the Global South for the last thirty or more years, pushing debt-ridden countries like Egypt into slashing government spending in a way that led to major social dislocation and unrest. Without hard currencies (dollars, Euros, yen) countries in the Global South were sold the promise of devaluing their currencies in order to make their exports cheaper. The idea would be that they would earn hard currencies needed to buy industrial equipment with revenues from primary commodity exports. But this policy led to a rise in imports, especially essential staples, accompanied by a drop in the prices of commodities exported.

These ‘structural adjustments’ ushered in the ‘developing world’ an era of rising inequality, lower living standards, and heightened political repression (as ruling regimes undemocratically adopted policies that were unpopular). It is in this context – of decades of austerity – that we are now witnessing the Arab Spring and growing dissent to the last push of ‘adjustments’ in countries in the North (the US, European Union, Canada).

And it is based on false premises. If debt-ridden states ended corporate welfare in the form of subsidies, tax breaks and the like, then this would be the start of getting out of debt. If governments ended public-private contracts, then states would stop going further into debt by accumulating massive expenses in the form of contracts. If states ended currency devaluations, then trade imbalances may begin to correct themselves.

An Orwellian

It didn’t occur to me until I re-read George Orwell’s Animal Farm that I have an Orwellian lesson to teach and a warning to issue. The lesson is simply one of the miseducation of Americans. After reading Animal Farm for the first time since I was in grade school, I realized how ironic it was that most children in America read this book in school. I read Ann Patchett’s forward of the book’s 2003 centennial edition after reading the book, and then it became clearer to me the source of this irony. She writes:

“We live in an age, in a country, where the right to question authority is so much a part of our societal fabric that the remainder to do so comes on bumper stickers. Perhaps we are far enough away from the publication of Animal Farm, with enough generations having been permeated by its logic, that it’s time to ask ourselves the question: to what extent did Orwell create us? The book is no longer a red flag shot out toward fascist regimes, but an introduction to fascism and totalitarianism.”

That Patchett so brazenly claims that the “we” know so deeply our right to question authority, when many just recently nodded with approval as the US government launched an invasion and occupation of two countries on blatantly false pretenses, is hysterical. But more, by narrowing its lessons to the horrors of fascism and totalitarianism, she and the American school teachers who teach Animal Farm miss half the story.

Orwell is clearly warning us against fascism and totalitarianism, but he is also taking a deadly stab at capitalism. After all, he is not just showing the horrors of what happened in the Soviet Union following the revolution, but he is in effect equating the Soviet Union with its neighboring capitalist societies.

This becomes clearly spelled out at the end of Animal Farm, but even before the end Orwell paints an unseemly image of the farm’s neighbors, Mr. Pilkington of Foxwood and Mr. Frederick of Pinchfield – the two neighbors of the Soviet Union, England and Germany, respectively, or what we may generally refer to as the Allies and the Axis in the context of World War II. Mr. Frederick and his men storm Animal Farm (Germany invades the Soviet Union), and toward the end of the war Napoleon/Stalin and his pigs form a cozy alliance with Mr. Pilkington, the Allies.

There they are sitting together snuggly by the dining room table in the farm house, Napoleon, the other pigs, Mr. Pilkington and his farmer friends. Mr. Pilkington stands to give a toast, exclaiming how pleased he is that any mistrust and animosity has come to an end.

“Too many farmers had assumed, without due enquiry, that on such a farm [one owned and operated by pigs] a spirit of license and indiscipline would prevail. They had been nervous about the effects upon their own animals, or even upon their human employees.”

But, he explains, all these fears have been dispelled. From their visit to the farm that day they witnessed an exemplary discipline and orderliness on the farm. The animal workers on Animal Farm did more work and received less food than even on their own farms – and this would surely be introduced in their own farms!

Pilkington was toasting to the pigs and once again dismissed the differences between them:

“Was not the labour problem the same everywhere?”

“If you have your lower animals to contend with, we have our lower classes!”

Those at the table roared. Pilkington once again congratulated them “on the low rations, the long working hours, and the general absence of pampering which had been observed on Animal Farm.”

The friendship was sealed. The ruling classes on both farms not only came to an agreement, but it became difficult to tell the difference between them. And it is on this note that Orwell chooses to end:

“The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.”

By the end of World War II, for Orwell the Soviet Union had failed in its attempt at the socialist project, not only because it had turned into a horrific dictatorship, but because it had become even more oppressive and exploitative than its capitalist neighbors. This is not a surprising conclusion from an author who was a life-long, committed anti-imperialist and socialist.

An Orwellian warning is simple: Absolutely don’t blindly listen to what your leaders tell you. At this historical moment of popular uprisings and revolutions, don’t listen to the fear-mongering regime that is telling you of foreign agents causing unrest. Don’t listen to political leaders telling you that the only solution to the economic crisis is lower wages, less security for workers. Only listen to the heart that guides you to justice.

A recap of these weeks: From the stupendously stupid to the infuriatingly vicious

So much is going on that it is mind numbing, heart palpitating. One thing is clear: state ‘policy’ is infuriating and at best frustrating.

Japan faces a nuclear catastrophe as an earthquake-induced tsunami devastatingly destroys parts of the country, killing thousands, and destabilizing a nuclear plant – that was brilliantly built in an earthquake zone.

Protestors are shot down, arrested and terrorized in Yemen, Bahrain, Syria, Oman, Morocco. Am I forgetting anywhere else? Peaceful protests have turned bloody, as state forces use violence against their own people demanding reform.

Gaddafi’s forces continue the reign of terror against revolutionaries, one opposition stronghold after another falling to the forces’ brutal warfare. And I keep thinking…Where is the equivalent of the mujahedeen who came from all over the world to fight the Soviet occupation of Afghanistan? Or the leftists from Western countries who fought in the Spanish Civil War against the fascists?

For weeks I shed back tears, tears of sadness, tears of anger.

And today is Egypt’s much heralded constitutional referendum. A day of celebration and a day of concern and caution. The Military Supreme Council has seemed to get a referendum (from the committee it formed) asking the public to approve exactly what it has said it would do – quickly turn to elections and dismantle parts of the emergency law.

Sounds good, huh? Well, as is clear now from the yes-no voting split, the constitutional reforms would likely benefit those who are already strong politically, namely the National Democratic Party (or whatever parties its members form in its place) and the Muslim Brotherhood. While opposition groups struggle to build their parties and their movements’ agendas in a short timeframe of several months, the Egyptian People’s Revolution gets siphoned to shallow ‘free and fair’ elections. (Uh, ‘free and fair’?)

Not only does this referendum reveal what everyone already suspected – the Muslim Brotherhood’s embrace of a limited democratic revolutionary transformation (if it can even be called ‘democratic’) – but it begs the question of what kind of relationship the ruling military is trying to shape with the Brotherhood. My hunch is that quick elections will lead to a Brotherhood victory and will provide an excuse (and a Western-sanctioned one, at that) for the military to annul the elections and maintain power.

The military command’s unfettered co-option of the Egyptian revolution has been brazen and clever. Take the dissolution of the Amn Dowla, the much hated secret police. A week after Tunisia’s historic dissolution of the secret police and the Ministry of Information, the Egyptian government announces that the Amn Dowla will not just be abolished but replaced by a national security agency to combat terrorism. Come again? A what? Yeah, that sounds familiar – aka, Homeland Security – US Ministry of Interior and Secret Police Order wrapped into one.

Meditation for Peace and Freedom -- This Weekend!

A call from Mt. Sinai, Egypt:

MEDITATION FOR PEACE AND FREEDOM WITHIN OURSELVES AND IN THE REGION

Join us in meditation, at your place or wherever you may be, on:

Friday, 4 March: 8-9am, 2:30-3:30pm, 6-7pm
Saturday, 5 March: 8-9am, 2:30-3:30pm, 6-7pm
Sunday, 6 March: 8-9am, 2:30-3:30pm, 6-7pm

These times are in Egypt and are:
6 hours behind Taipai, Taiwan
The same time as Istanbul, Turkey
1 hour ahead of Berlin, Germany
7 hours ahead of New York, USA

Please coordinate your schedules to meditate together, globally

Feb 20: A day in the early life of revolutionary Egypt – worker demonstrations, petition drives, volunteer cleaning crews

After weeks now of military efforts to enforce ‘normalcy’, life in Cairo is anything but. Leading up to the first day of the work week (today, Sunday), the military’s Supreme Council issued a statement threatening worker activism with a “no tolerance” edict. Were workers intimidated? Maybe some, but not all.

What would have been a ‘normal’ hop on the metro (underground transport) to Cairo University and then to the Main Post Office, to take care of errands today, turned out to be quite different…

The metro stopped, passengers got off and waited. The Sayeda Zeinab platform filled with hundreds and with no metro in sight, hundreds left the station, streaming out of the metro, from Sayeda Zeinab to Saad Zaghloul. In my two and a half years in Cairo, at times relying heavily on the metro, never before has the metro stopped for thirty plus minutes.

At Saad Zaghloul there was a large gathering in front and along the street of the Ministry of Housing. It was a well organized petition drive, attracting hundreds. I didn’t quite understand what the petition concerned (and maybe it could not even be called a ‘petition’?), but I understood that their efforts concerned apartments. This would not be surprising considering that buying and renting apartments is out of reach for many.

And then I caught a cab to Cairo University, picking up a famous TV personality on the way. (We didn’t know from which channel, but the driver assured me she was ‘known’.) Back to zahma, zahma, zahma (crowds, traffic) – Qasr el-Aini, Tahrir, Dokki were full of cars, for the first time since the uprising perhaps.

Then at Cairo University I try to go to the student bookstore to pick up textbooks and am told that the workers are demonstrating. It is closed today!

Trying my luck at the metro again, I head by foot to a metro station and find a crew of uniformed volunteer youth cleaners painting the street curb black and white, painting over faded colors. The metro is working and I then head to the Ramsis (main) post office. Knowing that they close at 2, I arrive a little after 1 and find a group of workers demonstrating with signs, shouting slogans, in front of one of the main entrances. And the office is not ‘open’. The employee informs me that they close at 1 – definitely a new ‘policy’ as I have been there before at closing time, at 2. Sounds like it could be new, shorter working hours, self-determined perhaps.

I take the metro back to Maadi, to take care of a couple of more errands, planning to mail a letter via the post office there. I get to the post office after 3, but as far as I know it is usually open until 5. Today, though, it is closed.

The military, in its statement that it will confront workers who are striking or demonstrating, declared that those participating in labor activism are damaging the economy. Yeah, well, the economy does depend on worker exploitation to thrive. The army high command has said it itself.

And today workers are saying – and have been saying since 1996 in Egypt – that the economy is damaging them. This international order that has reduced public employees to the working poor in Egypt over the last twenty years is harshly exploiting them. The only gains that they have won have been through strikes, sit-ins, demonstrations.

‘Normalcy’ means convenience for some and drudgery for many more.

The unreality of reality: emotion as performer and experience in the Egyptian revolution

Un-du-lating, penetr-at-ing, re-leas-ing. How does one go about writing of emotions? It doesn’t seem suitable to write about emotions in a matter-of-fact, logical way. They are not logical. They do not follow a known path, except to arise and fall yet again.

How we experience them though shapes our reality and how they come to us is shaped by images of reality, perceptions of reality, expectations.

How may we describe emotions at an intense moment like a revolution? Palpable, earth shaking, surfacing at the finger tips, culminating, shared.

On Friday the 11^th, after Vice President announced Mubarak’s resignation joy, elation, intense pride are felt at the sites of protest – in Tahrir, in Alexandria, in Suez, in Port Said. In neighborhoods in Cairo cheer rings out, honking cars, drummers in the street, flags waving from the windows of passing cars. Tears stream, collective tears of elation, of relief. Tears that keep coming, shedding hurt and pain.

The next morning the door is still locked. The door that used to be left unlocked at all times and that the doormen locked after curfew is kept locked during the day. Mixed faces of consternation, fatigue, disbelief, pride. Giddiness, groups gathering and chatting. Groups meeting to go downtown.

More celebrations on the streets of downtown. Joy, contentment, recollecting how it came to be. Um Kaltoum’s nationalist tunes ring out. Mounir’s “song of the revolution” playing over and over, people singing as loudly as they can. A march here, a march there. “We are cleaning up Egypt!,” as a march of ‘cleaners’ with brooms held high circles Tahrir. Mourners gather with long faces, tears. People ‘at work’, painting the wall to sketch on “Revolution Jan 25”. People are cleaning the streets with signs “Don’t mind the inconvenience. We build Egypt.”

The next day, the first day of the work week, the state attempts to create an aura of normalcy, the military makes way for traffic through Tahrir Square, the curfew continues but at reduced hours (12-6). But it doesn’t feel ‘normal’. The door is still locked. The usual streets of the busy workdays are relatively empty. So quiet.

Not at work, not shopping, not yet at school. Many stay home, drenched in feelings of uneasiness about the future. Thirty years of what appeared to be the ‘same’ system, masked by the face of Mubarak, aging but still Mubarak, ended. That face is gone, fear re-surfaces or circulates or dips.

On the day of the street wars, January 28^th, the “Day of Anger,” some who joined the struggle prepared for war. The rush, adrenaline, and more adrenaline, facing police with guns and tear gas. Taking their sticks and glass and rocks. Hiding in back alleys and making Molotov cocktails. Positioning, coordinating, attacking, retreating.

From that day onward many others in Cairo and in cities throughout Egypt were in their homes, in front of the tube. Starting with no internet, then no cell phones. But satellite television remained. When the military took over the streets and instituted a curfew, television and state radio were the only sources of news media.

And just in time: The police were removed from the streets, prisoners were released, gangs looting and vandalizing were unleashed. In front of the tube, flashing all day, images via video footage and the imagination of ragged prisoners, looted store fronts and government buildings, the vandalized Egyptian Museum and its ‘national treasures’, food ‘shortages’ as people rushed to the bread oven and supermarket in fear of the worst.

Chaos! The state and international media report chaos in Egypt, a standstill. And people, Egyptian and foreign, believe it – after all, the state protects us from ourselves. There is no safety without the police! There are prisoners roaming free and heading toward Cairo! There are desperate people who want to take advantage of this lawless situation!

Many swallowed the state-fed idea of lawlessness, a situation that was actually “chaos” for the regime. The ground shook beneath the feet of ‘the people’ but fell for the regime. As Žižek analogizes, it is like in Ben and Jerry cartoons when the cat is running off a precipice, and he keeps running as he doesn’t realize that there is no ground to stand on. But once he looks down and sees there is nothing beneath him, he falls. And so with the regime.

And (again) just in time, Mubarak surfaces. He addresses the nation as his people, his children, and announces that he has come to save them from the tyranny of chaos…? He is the one who provides safety and security in these lawless times. He is the general who kept Egypt out of wars, he is the one who has the military behind him and rejects the police who are reviled by the people.

Sounds good. And it did for many. That was until the next day when thugs were unleashed onto Tahrir Square, terrorizing, injuring and killing demonstrators. And that may still have sounded like a decent plan until Wael Ghonim, a lead online protest organizer, was released from jail and gave a passionate defense of the demonstrators.

On state television and radio, all day, day after day, intense demonization of the protestors: Foreigners who want to destabilize Egypt have infiltrated the opposition. They are damaging our economy. They are scaring away the tourists and the investors. They, the foreign, the, the…

Lies, betrayal. Gasp. More tears, tears of sadness and anguish. Dignity lost and now the struggle for many to restore it.

All day, day after day, in international media – Tahrir, Tahrir, Tahrir. And stories of foreigners being attacked. Another gasp. And the banks not yet opened – will there be a run on the banks? Breath stops. Reports of journalists and demonstrators and human rights workers being detained by the military. Tahrir, Tahrir, Tahrir.

Then we step out, feeling the unusually clean air, hearing the silence, walking the same streets and shopping at the same stores. This is not Tahrir. This is my neighborhood. There have been no reports of looters and vandals here ever, or at least not after the first two days that thugs were unleashed, causing neighborhood vigilance, uneasiness, tremor throughout Cairo.

The continuing unknown. The replay of worse-case scenarios. Not as scenario but as expectation, as the future. The ground continues to shake. And the regime is not quite at the precipice, let alone falsely perceiving itself to walk on air.

One lesson from the Revolution: Recognizing fear as fear! The main struggle of the revolution: The struggle against fear. A main source of inspiration: Confronting the layer upon layer of fear within us and enveloping – and now unraveling within – our societies.