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Redistributing Work Hours
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Are creditors pushing Greece deliberately into default?

Los Indignados


These days indignation is a right and proper, indeed compelling, not to say compulsory, sentiment. It was forcefully advocated by Stéphane Hessel, the 93-year-old former French resistance fighter, in his influential though somewhat over-rated pamphlet Indignez-Vous (2010). “ In this world of ours – Hessel writes - 'there exist intolerable things… Indifference is the worst of all possible attitudes… One of [man’s] indispensable capacities is the capacity to feel outraged, and the commitment that derives from it”. Gramsci said it long before him.

In Spain at the beginning of March, a minor social network connected via e-mails, Facebook and Twitter, that called itself Democracia Real Ya, gathered mounting consensus and called on its adherents to take to the streets on 15 May. Which they did, punctually and massively, over 60,000 of them, in spite of the extant prohibitions due to the coming administrative elections of 22 May. They became El Movimiento 15M; they called themselves Los Indignados. In Madrid they occupied Plaza del Sol, in Barcelona Plaza de Catalunya, as well as the main squares in most of Spain’s provincial cities. They responded to provocations with peaceful and orderly meetings, discussions and free collective catering. They left on the last week-end, after cleaning up the square after themselves, but planning repeat action.

On 15 June they met again in front of the Catalan parliament in Barcelona. El Pais reported that “the protests were among the most violent since the restoration of democracy”, but a Youtube video provides incontrovertible evidence that the violent demonstrators were agents provocateurs. An identifiable small group of young people who turned nasty, in the end left 'under police escort' (sic); the peaceful demonstrators had chanted at them “Secreta, idiota, te crees que no se nota” [You are from the secret police, you are idiotic if you think we don’t know].

Who are Los Indignados? They are “the excluded” ( Los excluidos) – mostly educated, unemployed youth and those in precarious short-term employment – and their sympathizers. Los mileuristas (as christened by Espido Freires) and los zero-euristas, i.e. those earning 1,000 euro a month, or nothing at all. El Pais celebrated cartoonist El Roto – who is also a very good economist judging from his take on the global crisis - sums it up thus:

- The excluded are rebelling
- Sack them!
- No way, they don’t have jobs
- Cut their subsidies!
- We can’t, they don’t get any
- Demolish their homes!
- Impossible, they haven’t one
- Then, we are lost!

The socialist government led by Zapatero since 2004 initially made good economic and political progress, with a booming economy, high employment, secular distance from the Catholic Church, the protection of civil rights, and income redistribution. But in 2009 the global crisis hit Spain particularly hard, in spite of its earlier record of virtuous fiscal policies (as was Ireland’s). It was its worst setback since EU accession: real estate and the construction boom came to an abrupt end, investment fell by a quarter, consumption and exports were badly hit. In 2009 GDP fell by 3.6%, in 2010 GDP growth was only 0.8%; the Economist predicts 0.6% in 2011 and 1.1% in 2012.

The crisis had a devastating impact on the labour market. In the last three years Spain, with a population of 46 million, has lost more than 2 million jobs - 623,000 in 2008, 1.21 million in 2009, and 238,000 in 2010. By the end of 2010 Spain had 20.3% unemployed, or 4.69 million – more than twice the European Union average of 9.6%. In the first quarter of 2011 Spain had 21% unemployment, and youth unemployment reached 45% (860,000 people among 16-29 year-olds; 15% of youth in the 16-24 age bracket are the "ni-ni generation”, short for ' ni estudian, ni trabajan' —neither study, nor work). Those employed hold precarious, short-term jobs. They are educated, they are “the lost generation”. In their view, power is in the hands of “markets” and the bankers (as exemplified by Santander President Emilio Botin), in whose hands, they believe, politicians are simply puppets.

Zapatero’s expenditure cuts (recortes), aimed at reducing the government deficit from 11.1% in 2009 to 5.5% by the end of next year, have destroyed the confidence of the Indignados. Furthermore, in 2010 pensions were frozen and retirement age raised from 65 to 67, civil servants salaries were cut, the cheque bebé of €2500 and a planned €426 increase in unemployment benefits were shelved. A labour legislation reform that made layoffs easier to carry out generated Zapatero’s first general strike last September. The long-term viability of the banking system, and especially the savings banks (the cajas) is in doubt. The rich become richer, while there is no money for education and health. The Partido Popular would be no better. On the eve of the elections Zapatero declared that Spain would “very probably” have needed a bail-out by the European Union last year without the government’s imposition of a harsh austerity plan, but the Indignados did not accept that this was the case.

Is there contagion from the North-African Arab spring? Avenue Habib Bourguiba in Tunis, Tahrir Square in Cairo, and the Pearl Roundabout in Bahrain provide images similar to those of Madrid’s Plaza del Sol, but there is a significant difference: “In the Arab world, they are demanding the vote,” former Socialist prime minister Felipe González said on Spanish television. “Here they say there is no point in voting.” As in Italy, in Spain voters cannot pick and choose among individual candidates.

Their slogans are telling:

Adopt a politician. Educate him!
Violence is 600 euro per month.
We are excluded by neo-liberal decree; we are rebels by human dignity.
They piss on you then tell you it’s raining.
When the doors of justice close, those of revolution open.
Democracy now is voting for those you despise to stop government by those you fear.
Parliament is on brain strike.
Politics for the people, but … without the people?
To kick them out, do not vote them.
Wanted – a decent politician.
Bankers!!! As we did not vote for you, why do you govern us?
Problems do not arrive by boat, they arrive in limousines.
If you don’t let us dream, we won’t let you sleep.
We are not anti-system, we want system-change.

What do they want? At first they didn’t know. Slowly they hammered out some kind of manifesto in their open assemblies, committee and sub-committee meetings and working groups. On 19 May, Los Indignados put up their proposals to re-generate Spain, calling for: the elimination of the privileges of the political class; measures against unemployment; housing rights; quality public services; control of banking; a more egalitarian taxation; greater participation, and reduced military spending.

Some of their proposals are straightforward and desirable, such as the expropriation of unoccupied houses to be let out at a controlled rent, or the proposals on the elimination of privileges for the political class: sanctions for absenteeism and dereliction of duty by political appointees, abolition of privileged tax regimes, pension and pensionable services, indexation of their salaries to the average wage, abolition of immunity for actions taken on duty, and of proscriptions for corruption charges. But nobody really knows how to limit corruption of politicians. Should they be banned from working in the private sector (as so many do) once they leave office? The US have a two-year ban, which really does not achieve much. Perhaps they should be banned for life, but this creates a real caste of politicians, like in India and Greece, which is no better.

Some of the proposals are ambiguous, if not outright economically naïve, for instance work-sharing and a reduction of working hours to reduce unemployment – without specifying a parallel earnings reduction without which higher unit labour costs would raise unemployment instead of reducing it. Most proposals are expensive: the welfare state of Western Europe of the 1960-70s, i.e. 40 years ago, has been unsustainable for some time, given both globalization, i.e. the mobility of capital and the willingness of poor people elsewhere to work for much lower real wages, and the public debt accumulated by maintaining the welfare state under such adverse conditions. Some complaints are contradictory: you cannot have Europe and complain of a European democratic deficit and then ask that every EU decision be subjected to a national referendum. And what does “street democracy” (democracia de la calle) mean? Are we to reproduce Soviets? And how on earth can abstentions and spoiled ballots achieve “representation in the legislature”?

Four comments are in order:

First, the Spanish Indignados mis-timed their demonstrations terribly, just in the run up to administrative elections in which they could – and many did – demonstrate their feelings without occupying public space.

Second, there were large scale abstentions (34%) and the number of spoiled ballots doubled to 4% representing the third largest “party” in Spain after the Socialists and the People’s Party, which contributed to the PP victory.

Third, the Spanish electorate – as happened virtually everywhere after the crisis, with the exception of Turkey – was not particularly discerning and did not match its votes with its aspirations. Indiscriminately electorates have voted against the incumbent government, right or left, in debtor as in creditor countries (in Greece, Ireland, Portugal, as well as in Germany and Finland), supporting, instead, parties which were most unlikely to pursue their desiderata. They cut off their noses to spite their faces. Thus in the regional and municipal elections of 22 May José Luis Rodríguez Zapatero’s PSOE lost 19% of votes with respect to the previous round, and was resoundingly defeated by the opposition conservative People’s Party led by Mariano Rajoy, that gained 7% involving a 10% lead that gave them control of 9 out of 17 regional governments, and 36 out of Spain's 50 provincial cities, including several traditional PSOE strongholds like Barcelona and Seville and the regions of Castilla La Mancha and Aragon; while in the Northern Basque country a new radical separatist party, Bildu, won 25% of the vote. Last April Zapatero had announced that he would not lead his party into the general election next year, but any repeat performance by the PP is bound to hand them a parliamentary majority.

Fourth, Los Indignados did not really know what they wanted and – as indicated above – most of their proposals were vague, or infeasible, or outright contradictory.

These may sound highly critical, even adverse comments on Los Indignados, but they are not. Their approach and strategy may be debatable, but are perfectly legitimate and right and proper political behaviour. Lack of intra-party democracy debases the contest between parties leaving the electorate feeling unrepresented and frustrated. Abstentions and spoiled ballots are a wasted opportunity – and there is little point claiming that they should be counted and count – but, again, a perfectly respectable strategy, though not one that most voters (including me) would advocate. Alternation in power facilitates renewal of the political class – though not enough by itself; Gordon Brown's re-election would have been as much a tragedy for the British left as his self-imposition, and for Great Britain at large, though Brown’s protégé Ed Miliband has yet to learn any lessons from Labour’s defeat. At least Zapatero has not, like Blair/Brown Labour, launched an imperialistic war, presided over increasing inequality, liberalized and subsidized the financial sector and attacked civil rights, but he has certainly failed to honour the social contract with those who have elected him. And dissenters have no duty (though it would be in their interest) to provide well-developed credible alternatives: this is what parties, professional politicians and their think-tanks are supposed to provide, garnering and formulating as policy the wishes of their electorate.

Democracy allocates votes to alternative political ends - like markets allocate resources to the production of alternative competing goods and services. And just like markets, democracy can function too slowly or too fast, over- or under-react, produce cycles and unwanted results. At least democratic processes, at their simplest, are égalitarian, one person one vote, in theory, while markets are equivalent to multiple voting weighted by wealth; though in practice income and wealth inequality naturally biases and perverts democratic processes. But both markets and democracy - though defective - are the best instruments we have to organize our societies.

Indignation has proven to be contagious. The Spanish example has been followed across Europe: young people, though in much smaller numbers, have taken to the streets in Hamburg, Vienna and Rome. The lost generation has voiced its indignation in Lisbon, Paris, Athens and elsewhere. In Paris 2,000 young demonstrators occupied the entrance to the Bastille Opera and half the Place de la Bastille, demanding "démocratie réelle" and measures against a 20% rate of youth unemployment. Eventually they were dispersed by tear gas.

In Portugal as early as 12 March, 200,000 people marched down the Avenida de Liberdade in Lisbon - the biggest demonstration in Portugal since the 1974 Carnation Revolution. Again, it started with an appeal on Facebook by students of Coimbra University, calling upon the Geração [à] rasca (or the “troubled generation") to join together in protest. "We, the unemployed, the underpaid and the interns, are the best educated generation in the country's history," they wrote. "We are protesting so that those responsible for our precarious situation quickly change this untenable reality." (See “The Rage of the 'Indignants' - A European Generation Takes to the Streets”, Spiegel Online, 7 June). “Portugal is the fourth-poorest country in the euro zone. Even in Greece, the per capita gross domestic product is higher. Unemployment has almost doubled to 12.6 percent in six years; among people under 25 the jobless rate is 27 percent. Of those who do have jobs, more than half are working in temporary positions. Many are pseudo self-employed, earn very little and must pay a tax rate of up to 50 percent. They receive no social insurance benefits.” (Ibidem).

In Greece resistance to the austerity measures forced on Papandreu’s Socialist government by EU authorities and the IMF, to reassure financial markets, last Sunday elicited the eleventh general strike. More than 50,000 protesters, self-professed “Indignant Citizens” after the Spanish model, gathered around Syntagma Square and were involved in violent clashes. It is certain that this kind of resistance will raise the interest rate spread on Greek sovereign debt over German bonds (already of the order of 15%), and the probability of sovereign default. Yet if this is the cost of popular sovereignty, which is what democracy means, it is still cheap at the price.