Sunday, May 29, 2011

Two Generations and Democracy

Branko Milanovic, who contributed a recent guest post on Inequality and the Global Crisis, spent the last month in Madrid, living at a stone’s throw from La Puerta del Sol. He contributed this guest post on the current rebellion by Los Indignados. This is to start the ball rolling, no doubt others will wish to argue. By all means comment via e-mail if you must, but it is much preferable to comment directly on the post.

Several weeks ago the Spanish newspaper “El Pais”, one of the leading dailies in the world, held a party to celebrate the 35th anniversary of its foundation. "El Pais" has appeared in the days of the Spanish "transition" from Franco's dictatorship to democracy, and has throughout remained consistently pro-democratic and center-left. The daily perhaps best reflects the period of remarkable transformation of Spanish society from dictatorship to one of the most tolerant democracies in the world; from the country of emigrants to the country in which foreigners, coming literally from everywhere, account for 12 percent of the population; from a middle-income and in some respects even an underdeveloped country to an affluent country with first-rate quality railroads and highways. In a display of commitment to democracy and tolerance, the “El Pais” party was attended by all Spanish prime ministers since the transition, whether of the left or the right. The tone of speeches was celebratory and somewhat smug. Praise for democracy and the transformation in Spain was not excessive, considering what was achieved in the previous three decades, yet perhaps a bit deafening", reminding one of rather formulaic declarations about the importance of democracy that can be heard in the United States on every 4th of July. I thought that, except for Poland, the Czech Republic and perhaps the Baltic states, it would be difficult to imagine such optimistic tones on similar occasions in Eastern Europe. The reason is simple: democracy is a good thing and there is reason to celebrate it, but only if it goes together with economic development and higher incomes. And in that Spain was indeed very successful, so the generation that has accomplished this historic feat had many good reasons to celebrate. Or so it seemed.

But just ten days after the celebration and on the eve of local and regional elections in Spain, thousands of young people began rallying in the main squares of Spanish cities. The largest gathering, which attracted the attention of world media, took place on the central square in Madrid, La Puerta de Sol, just a kilometer or so from the headquarters of "El Pais" and the building where its party took place. Young people´s discontent was driven not only by the fact that youth unemployment hovers around 40 percent, that most of those who are employed hold very precarious jobs (working on time-limited contracts), or that salaries are stagnant, but by discontent that has spread to the democratic system itself, as it functions in practice. In contrast to the praise we heard at the "El Pais" gathering, now the speeches were very different: democracy ignores the opinions and interests of a large part of citizenry who have become alienated and no longer participate in the process; all political parties, regardless of their name and professed affiliation, pursue similar economic policies; the real power is in the hands of big capital and bankers who finance all political parties, not in the hands of “people”. These are all criticisms that would be subscribed by most young people throughout both “old” and “new” Europe. So, one might think, there is really something deeply flawed with democracy as we know it, and one of key slogans of los indignados said precisely this: "Real democracy-now!". In other words, "partocracy" and "bancocracy" are not acceptable.

But while the young were attacking the current Spanish "system" from the left, the Spanish right, which, because of the economic crisis and high unemployment which it blames on the socialist government, expected a major victory in the elections, retorted with its own slogan, published on the election day on the front page of a newspaper close to Partido Popular: "Real democracy-today." The message to the youth was clear: if you want to have your voice heard and believe that you have a majority, this is your moment, defend your ideas as everybody else does, go to the polls and see if you can win. "People" is not just you: “people” is others as well.

A lot of young people chose not to go to the polls and these unexpressed votes, that would normally go to the Socialists, made a difference and gave a huge victory to the right. Zapatero´s government is on its deathbed, he will not run again, and early general elections may be called. Here, then, the weaknesses in the position of los indignados began to be revealed. While they, on their posters, did not associate themselves with the soixante-huitards (of which they strongly reminded me) but to the demonstrators in Cairo and Tunis, the differences between them and the Arab youth were glaring. Demonstrations in Cairo and Tunis had a clear objective: to end dictatorships and allow for a meangful universal suffrage, multiparty system, and freedom of speech and association. These were clear and simple demands. The protesters knew what they wanted, and eventually won in both Egypt and Tunisia. But the demonstrators in Madrid were not able to clearly say what they wanted: indeed, they desire a better democracy, but what exactly does it mean? Of course, they also want a less corrupt “system" but this is what we all want. How to achieve it is a problem, and they offered no solution. When los indignados finally formulated their 8 theses, all of them except perhaps two (on changing the electoral system and the financing of political parties) were so general in nature, lacked any clear "addressee" responsible for them, or indication of the way in which things need to be improved, that they were made in fact irrelevant. Anyone would sign on these demands any time, and nobody could do anything with them.

And since real democracy took place on the election day and the right won overwhelmingly, while the demands of protesters appeared so general and vague, the demonstration turned into a fiesta, young people having good time in the central city squares, discussing, chatting, drinking beer, smoking marijuana, listening to jazz and rock music for most of the day and night. At 3 a.m., La Puerta del Sol was full of young men and women who enjoyed themselves the way they enjoy themselves at any music festival. Love blossomed—which is indeed excellent, except that it had nothing to do with politics.

And while some youngsters were speaking passionately about the evils of the "system", at the edges of the square, real poor people slowly emerged trying to sell beer or cigarettes, and to make some extra euro. And so it turns out that the older generation, gathered at the "El Pais" party, was indeed right - although when one looks at these young people, in a good mood, kind, pleasant and decent, and compares them to the well-situated, smug and self-congratulating democratic bourgeois, one is torn between sympathy and reason. But the twentieth century has taught us not to trust what our heart tells us.


Alberto Chilosi said...

I quite agree with Branko's persuasive picture of the Spanish indignatos. But it seems to me that the difference with the grievances of the North-African youth have been somewhat exaggerated. What they wanted is not only or perhaps even not mainly democracy. I still remember at the beginning of the Tunisian disturbances a youth showing a diploma in Interior Design, lamenting that notwithstanding his diploma he was unable to find a job for a number of years. But how many Interior Designers were required by the Tunisian economy? Was he available to accept a more modest and lower paid job than that to which he aspired given his diploma? And in the end what was the substantial value of his Interior Designer diploma?

Branko said...

Alberto is right that unemployment and perhaps some lack of perspective among the young played (and continue to play) a big part in Spanish demonstrations. (Last night, a taxi driver told me with lots of bitterness how he wants to leave Spain and move to England, a new land of opportunity. Today’s El Pais has several pages on the young Spaniards moving to Mexico and Brazil.) The difference, however, is that Tunisian and Egyptian protesters believed (I think) that with democracy their diplomas will cease to be useless, that opportunities will expand. But Spanish protestors cannot believe that since they already live in a democracy and, as I wrote, their demands seem to me of the most vague nature. So, in that sense, their position is more difficult because they are unhappy and yet cannot define a clear alternative project which would solve their woes.

Jacob Richter said...

This weekend marked the 140th anniversary of the brutal suppression of the Paris Commune and the butchering of numerous tens of thousands of Parisians who struggled in the midst of worsening working conditions and for a radical democratic project covering the politicians of the Communal Council, the civil bureaucracy, the military-turned-National-Guard, and the police.

In that same commemoration are the lessons of forming a Committee of Public Safety earlier, marching on Versailles in an organized fashion, and expropriating the State Bank (hello, "bankers").

Carmen said...

I do not agree with Branko when he says "the demands of protesters appeared so general and vague"..."Anyone would sign on these demands any time"

The proposals included:

A reduction of working hours. Keynes proposed it (1930, "Economic possibilities of our grandchildren"), but the EU rejected it.

Curbing financial speculation - we may all sign on this, but there has been no attempt to implement it.

Fighting tax evasion, but there is no will to do it.

I agree that there is no plan, nor is there to be one, it has to be built. We can collaborate, make ourselves available and participate in the construction of the most humane society as possible, if we break the taboos of established thought, demystify the lies about economic policy imperatives and if we unite in the search for a different model of society.

Branko said...

I think that Carmen is only partially right. I do not criticize these young people to have been unable to come up with ready-made solutions. Their inability is just a reflection of a much broader inability of anybody (parties, academics, intellectuals, you name it) to define feasible alternatives. The left (and I am obviously of the left) has largely run out of domestic ideas, that is, of those applicable to rich countries.

A reduction in working hours is fine. But will they also accept a reduction in wages? If not, is this a feasible option?

Curbing financial speculation. Everybody seems to be in agreement with that but almost nobody (certainly not I) understand what it implies technically. I understand the Tobin tax, but chances for implementing this seem zero so long as financial capital has such a stronghold on politics. If they would propose nationalization of the failed banks, or all banks, or capital controls, I would understand it, but "better regulation" is vague, and I do not see if it as any different from what US, EU, Basel etc. are doing anyway.

Fighting tax evasion.Yes, we all agree on that and we all engage in the activity: from people who do not pay VAT to those who hide millions in fiscal paradises. But how do we crack down on it? Should we reintroduce capital controls, or threaten to expel from the UN the Bahamas, Switzerland etc, arrest Lichtenstein's bankers?

Recently, I read in an English paper that a billionaire Lord X was appointed to head a commission on government waste. After a long labor, they identified savings of so many billion pounds. Excellent--until you read that the very same Lord X has moved all his UK activities to shell companies in the Caribbean and has paid almost no taxes on his UK income. His own unpaid taxes amounted to more than government waste that his committee identified. And it was all legal. What do you do?

Anonymous said...

If I do understand correctly, Brankos’s text points outftour items:

1 .- The Spanish youth is not like the Tunisian and Egyptian ones
2 .- The Spanish youth have no clear demands
3 .- Due to its acts, the right wing won the elections
4 .- Most of them are like hippies in the sixties having fun

I will try to provide further thoughts to these four points

1 .- It is true that young people in Spain is not like the ones in Egypt and Tunisia, mainly because Spain is –as a former franquist Minister use to say- different, though both young people share two things:

a) Both of them are an educated youth (as never were in Spain), but dramatically unemployed

b) They do not feel part of the transitional agreement, as Egyptians or Tunisians do not identify with Naserism or Pan-arabism

2 .- Maybe they do not have clear demands, but clearly they had a complaint. At some point, politically, this is relevant. Otherwise it would be very difficult to understand how in few hours these childish people were able to collect hundred thousands of signatures backing them up.

3 .- As a Spanish citizen I strongly disagree. On the one hand the percentage of participation in elections was slightly higher than in the last municipal ones. On the other one, it was not the right, which win, but the PSOE that lost. This is quite a different thing. I wonder if democracy it is not also to punish those who did wrong and who betray the majority’s will, though there are others who would do worse. Not to punish them because we are afraid would be, just, a blackmail.

4 .- Some of them are having silly fun, but most of them are young people, very sober, maybe a bit naive, but eager to learn how real politics works. Maybe at the beginning of the Nineteenth Century the revolutionaries were like they are right know. Maybe who it is not like there were, then, are either non-existent intellectuals or the political leaders. Who knows?

Jacob Richter said...

"A reduction in working hours is fine. But will they also accept a reduction in wages? If not, is this a feasible option?"

You didn't consider rebalancing the share of national income away from capital and towards labour.

"If they would propose nationalization of [...] all banks, or capital controls, I would understand it."

Not only am I in line with that, I'm for an ECB monopoly on all financial services within the EU.

Carmen said...

Jacob already answered to the question of reduction in working hours. It is distribution of gains from productivity increases between wages and benefits.

As for the technical difficulties to implement the proposals, there really is no such. It is relatively easy to find published studies, there are many, about how it could be done. It is not a technical problem but of will.

D. Mario Nuti said...

Hold it, Jacob and Carmen. Suppose workers reduce working hours, without raising unit labour costs, by taking the benefits of higher labour productivity in the form of shorter working time instead of higher wages.

They cannot, at the same time, raise the wage share in national income. If they did raise their share, on top of reducing working hours, they would necessarily raise unit labour costs and lose international competitiveness. In an open economy, employment would be bound to suffer.

Jacob Richter said...

"International competitiveness" can only be mitigated by a strong treaty system. It's no class secret that there's more enforcement of free trade treaties than of labour treaties (the main one of which the US either is not a signatory to or is in violation of).

Nation-based pro-labour solutions have seen their twilight.

Jacob Richter said...

To say the least at the EU level this means a dedicated, "coached" mass party of Europe's workforce and pensioners (and the precariat amongst them, of course) returning to:

1) the No-Coalitions opposition principles of the International Workingmen's Association
2) the institutional principles of the original Socialist International (Second International) and the International Working Union of Socialist Parties
3) the class-specific left-populist principles behind Chavez's aborted attempt to form a new International

Speaking of the EU level, I am curious about the lack of comments on an ECB monopoly of all financial services within the EU.

D. Mario Nuti said...

"an ECB monopoly of all financial services within the EU" ?

The provision of financial services is not a Central Bank function in any country. Their provision under ECB monopoly would also be illegal.

Jacob Richter said...

Like I said, Dr. Nuti, things need to change, including constitution-based issues such as oversight, control, etc. over the money supply which can't be solved by mere regulation. "Political will" can't be had with the current generation of so-called "politicians" or the so-called "technocrats" in the civil bureaucracy.