Legitimation Crisis 2.0

Cue London Calling references:

But let us not play clueless here. Things have been brewing for a while in England. Remember the Vodaphone protests? Or the anti-university fees protests?

So, whatever the initial reason for the uprising in Tottenham, it is clear that many of the countries where austerity policies are being imposed from above on the general population are facing socially explosive situations.

Israel:

“About 250,000 Israelis have marched for lower living costs in an escalating protest that has catapulted the economy onto the political agenda and put pressure on the prime minister, Binyamin Netanyahu.

Netanyahu planned to name a cabinet-level team on Sunday to address demands by the demonstrators, who in under a month have swollen from a cluster of student tent-squatters into a diffuse, countrywide mobilisation of Israel’s burdened middle class.

Israel projects growth of 4.8% this year at a time of economic stagnation in many western countries, and has relatively low unemployment of 5.7%. But business cartels and wage disparities have kept many citizens from feeling the benefit.

“The People Demand Social Justice” read one of the march banners, which mostly eschewed partisan anti-government messages while confronting Netanyahu’s free-market doctrines.

Police said at least 250,000 people took part in Saturday’s march in Tel Aviv, Jerusalem and other cities, a greater turnout than at marches on the two previous weekends.

Demonstrations on such a scale in Israel – which has a population of 7.7 million – have usually been over issues of war and peace. In a Peace Index poll conducted by two Israeli academics, around half of respondents said wage disparities – among the widest of OECD countries – should be the government’s priority, while 18% cited the dearth of affordable housing.”

Chile:

“It began as a series of peaceful protests calling for reform of the Chilean government’s education system, with students staging mass kiss-ins, dressing up in superhero costumes and running laps around the presidential palace. But on Thursday these surreal protests exploded into violence as school and university students clashed with police and seized a TV station, demanding the right to a live broadcast in order to express their demands.

The Chilean winter, as it is being called, appears to have captured the public mood, just as the Arab spring did six months ago.

After a day of street clashes, 874 people had been arrested and department store in the capital was smouldering after being attacked by protesters. Outrage against the rightwing government of Sebastiàn Piñera boiled over, with polls showing he is more unpopular than any leader since the fall of former dictator Augusto Pinochet.

Striking school students led the charge as they tried to march on the presidential palace early on Thursday, only to be thwarted by hundreds of police in riot gear and clouds of teargas. Tucapel Jiménez, a member of the Chilean congress, called for sanctions against government authorities who authorised what he called “brutal repression” by riot police.

“This is unacceptable, the centre of Santiago is a state of siege,” said university student leader Camila Vallejo, tears rolling down her face after being doused in teargas. “The right to congregate has been violated.”

And one must not forget the protests in Greece and Spain as well as the Arab Spring.

What we see is the global civil society rising up against what is clearly exposed as the alliance of the corporate sector (as opposed to small businesses who are as much on the receiving end of austerity policies) and Western governments (along with global governance institutions, the BCE, etc.). What we are are witnessing, to borrow Habermas’s phrase, is a major crisis of legitimation, where governments are blamed for making everybody pay for the failures and excesses of the financial sectors.

It is not just that national government are complying with corporate demands but that they turn repressive in the process leaving the image of the state-as-institution in cahoots with the wealthy and ready to strike at the slightest sign of process or even anticipating trouble through massive surveillance. The message is clear: dissent will not be tolerated as the whole anti-terror apparatus is used not against terrorists but against cyber-dissenters and protesters:

“DOJ indicted 16 alleged hackers today, 14 of whom were purportedly involved in hacking PayPal after it refused to accept payments for WikiLeaks.

(…)

Now, I’m not surprised DOJ indicted these folks. I’m not arguing that, if they did what DOJ alleged they did, they didn’t commit a crime.

But I can’t help but notice that DOJ has not yet indicted anyone for the DDoS attacks–the very same crime–committed against WikiLeaks 8 days earlier than the crime alleged in this indictment.

I’m guessing DOJ has a very good idea who committed that crime. But for some reason (heh), they haven’t indicted those perpetrators.

In fact, I’ll bet you that DOJ also has a better explanation for why PayPal started refusing WikiLeaks donations on December 4, 2010–two days before this alleged crime–than they describe here.

But we mere citizens are privy to none of that. As far as we know–because of choices about secrecy the government has made–a crime was committed against a media outlet on November 28, 2010. That crime remains unsolved. Indeed, DOJ has never made a peep about solving that crime. Meanwhile, today, 14 people were indicted for allegedly committing the very same crime the government–inexplicably, at least according to its public statements–has not pursued.

According to the public story, at least, the rule of law died with this indictment today. The government has put itself–the hackers it likes, if not employs–above the law, while indicting 14 people for the very same crime committed just weeks before those 14 people allegedly committed their crime.”

And this as well:

“In March this year, more than 150 UK activists were arrested while occupying Fortnum & Mason in a protest against tax avoidance. They were held in cells overnight and charged with aggravated trespass. Earlier this month, the charges against all but 30 were dropped, as it emerged the chief inspector at the store had given protesters assurances they would be allowed to leave the store unhindered.

The incident generated widespread fear about crackdowns on the right to protest, against a backdrop of strikes and protests against government cuts. Similar cries have not occurred in the wake of arrests of individuals allegedly linked to the hacker collectives Anonymous and LulzSec in the UK, United States and Europe.

Yet if the criminalisation of dissent is happening anywhere, it is here.

The maximum penalty the Fortnum & Mason activists faced for aggravated trespass is three months in prison. Participating in even the simplest of hacking operations is punishable by up to 10 years in prison in the UK, and up to 20 years in the US.

Since December, Anonymous and LulzSec have engaged in a series of politically motivated hacks, often in support of WikiLeaks, including attacks taking the Visa and Mastercard websites offline in the wake of the WikiLeaks blockade, a hack on security firm HBGary revealing a proposal to Bank of America to discredit hostile journalists and activists, and attacks against the CIA and the UK’s Serious and Organised Crime Agency (Soca).”

And, as any reader of Max Weber knows,the most essential monopoly of the state is that of legitimate physical violence. In order to exercise power, the state must have the ability to force compliance with laws and judicial decisions. Ultimately, then, the state monopoly over physical violence is considered legitimate. For Weber, this is the monopoly that all states have in common and it is a considerable resource as it allows the state to enforce all its other monopolies. In most states, violence is not the main means of governance, especially in democracies but it is a means available nonetheless. Indeed, in most societies, except in rare cases of self-defense, most members of society or groups are not allowed to use physical force against others. Only the state, through its agents and specialized institutions (law enforcement and the criminal justice system,) has the right to arrest, incarcerate or even execute. However, for this monopoly over physical force to be considered legitimate, it must be (1) moderate and controlled, and (2) exercised within the limits of the law. If state violence goes beyond these limits, then, it tends to not be considered legitimate by members of society and to trigger adverse reactions against the excesses of the state. Practices of repression (such as kettling) and secret jurisdiction fail on both count. And without legitimacy, violence is just violence.

And in aligning its interests and policies with that of the financial sector (the “banksters”, for short), the state has chosen a partner that has no more legitimacy and has been exposed in all its dysfunctions. Three examples will suffice:

Will Hutton:

“”No major advanced economy is doing anything to promote growth and jobs,” says George Magnus, a senior policy adviser to investment bank UBS. He is right. Wherever you look, it is an economic horror story. Put bluntly, too many key countries – the UK in the forefront, with private debt an amazing three and half times its GDP, but followed by Japan, Spain, France, Italy, the US and even supposedly saint-like Germany – have accumulated too much private debt that cannot be repaid unless there is exceptional global growth.

(…)

The markets’ reaction is made worse by herd effects – magnified by the many instruments, so-called financial derivatives, that have been invented supposedly to hedge and lower risks but which in truth are little more than casino chips. Long-term saving institutions such as insurance companies and pension funds now routinely lend their shares – for a fee – to anybody who wants to use them for speculative purposes. The financial system has become a madhouse – a mechanism to maximise volatility, fear and uncertainty. There is nobody at the wheel. Adult supervision is conspicuous by its absence.

What is required is a paradigm shift in the way we think and act. The idea transfixing the west is that governments get in the way of otherwise perfectly functioning markets and that the best capitalism – and financial system – is that best left to its own devices. Governments must balance their books, guarantee price stability and otherwise do nothing.

This is the international common sense, but has been proved wrong in both theory and in practice. Financial markets need governments to provide adult supervision. Good capitalism needs to be fashioned and designed. Financial orthodoxy can sometimes, especially after credit crunches, be entirely wrong. Once that Rubicon has been crossed, a new policy agenda opens up. The markets need the prospect of sustainable growth, along with sustainable private and public debt.”

Ha-Joon Chang:

“The debate focuses on how budget deficits should be controlled, with the dominant view saying that they need to be cut quickly and mainly through reduction in welfare spending, while its critics argue for further short-term fiscal stimuli and longer-term deficit reduction relying more on tax increases.

While this debate is crucial, it should not distract us from the urgent need to reform our financial system, whose dysfunctionality lies at the heart of this crisis. Nowhere is this more obvious than in the case of the rating agencies, whose incompetence and cynicism have become evident following the 2008 crisis, if not before. Despite this, we have done nothing about them, and as a result we are facing absurdities today – European periphery countries have to radically rewrite social contracts at the dictates of these agencies, rather than through democratic debates, while the downgrading of US treasuries has increased the demands for them as “safe haven” products.

Was this inevitable? Hardly. We could have created a public rating agency (a UN agency funded by member states?) that does not charge for its service and thus can be more objective, thereby providing an effective competition to the current oligopoly of Standard & Poor’s, Moody’s, and Fitch. If the regulators had decided to become less reliant on their ratings in assessing the soundness of financial institutions, we would have weakened their undue influence. For the prevention of future financial crises we should have demanded greater transparency from the rating agencies – while changing their fee structure, in which they are paid by those firms that want to have their financial products rated. But these options weren’t seriously contemplated.

Another example of financial reforms whose neglect comes back to haunt us is the introduction of internationally agreed rules on sovereign bankruptcy. In resolving the European sovereign debt crises, one of the greatest obstacles has been the refusal by bondholders to bear any burden of adjustments, talking as if such a proposal goes against the basic rules of capitalism. However, the principle that the creditor, as well as the debtor, pays for the consequences of an unsuccessful loan is already in full operation at another level in all capitalist economies.

When companies go bankrupt, creditors also have to take a hit – by providing debt standstill, writing off some debts, extending their maturities, or reducing the interest rates charged. The proposal to introduce the same principle to deal with sovereign bankruptcy has been around at least since the days of the 1997 Asian financial crisis. However, this issue was tossed aside because the rich country governments, under the influence of their financial lobbies, would not have it.

There are other financial reforms whose absence has not yet come back to haunt us in a major way but will do so in the future. The most important of these is the regulation of complex financial products. Despite the widespread agreement that these are what have made the current crisis so large and intractable, we have done practically nothing to regulate them. The usual refrain is that these products are too complicated to regulate. But then why not simply ban products whose safety cannot be convincingly demonstrated, as we do with drugs?

Nothing has been done to regulate tax havens, which not only depriven governments of tax revenues but also make financial regulations more difficult. Once again, we could have eliminated or significantly weakened tax havens by simply declaring that all transactions with companies registered in countries/territories that do not meet the minimum regulatory standards are illegal.

And what have we done to change the perverse incentive structure in the financial industry, which has encouraged excessive risk-taking? Practically nothing, except for a feeble bonus tax in the UK.

A correct fiscal policy by itself cannot tackle the structural problems that have brought about the current crisis. It can only create the space in which we make the real reforms, especially financial reform.”

David Harvie and Keir Milburn:

“Neoliberalism no longer “makes sense”, but its logic keeps stumbling on, without conscious direction, like a zombie: ugly, persistent and dangerous. Such is the “unlife” of a zombie, a body stripped of its goals, unable to adjust itself to the future, unable to make plans. It can only act habitually as it pursues a monomaniacal hunger. Unless there is a dramatic recomposition of society, we face the prospect of decades of drift as the crises we face – economic, social, environmental – remain unresolved. But where will that recomposition come from when we are living in the world of zombie-liberalism?

In the midst of such hopelessness the phone-hacking scandal seemed to offer a moment of redemption, but as the news cycle moves on we are left wondering what effect it will really have.

Hackgate cannot be treated in isolation. Since the financial “meltdown” of 2007-08 we have witnessed similar scenes, and similar outrage, around MPs’ expenses and bankers’ bonuses. We have witnessed not one but two media feeding frenzies around the repression of protest. The first followed the police attack on the G20 protests in 2009 and the death of Ian Tomlinson, with the second erupting around the outing of undercover police officer Mark Kennedy, leading to the unprecedented unmasking of another five undercover police officers acting within the environmental and anti-capitalist movements. The refusal of the Metropolitan police to investigate the full extent of phone hacking is, then, the third scandal revealing the political character of contemporary policing.

The phone-hacking scandal, and particularly the web of complicity revealed in its cover-up, is undoubtedly more significant than some of these other scandals, but positioning it among them allows us to raise a question that has rarely been asked: why now?

The answer is inescapable: we are living through something epochal. These scandals are part of a more general social and economic crisis sparked by the financial crisis. What’s less clear is the exact nature of the relationship between crisis and scandals, and therefore the scandals’ political significance.

Hackgate reveals the mechanisms of a network of corruption whose broad outlines were already understood. What we see, however, is not a distortion of an otherwise functional system but one element of a system that can only operate through such corrupt mechanisms. What we are seeing, through its moment of decomposition, are the parochial arrangements through which neoliberalism was established in the UK.

Neoliberal governance has common traits across the planet. But its instantiation in each country has been shaped by the peculiarities of that country’s history. In each, a different (re)arrangement emerged between sections of the ruling class that would enable the imposition of neoliberal policies on populations that, on the whole, didn’t want them.

Rupert Murdoch, and the tabloid culture he helped to establish, was central to this process in the UK, not least with the defeat of the print unions at Wapping. Other elements of that compact include a Thatcherite Conservative party and a neoliberalised Labour party, a highly politicised police force and, especially after 1986’s big bang deregulation of the stock market, the dominance of finance capital. It is no coincidence each of these elements has been racked with scandal in the past few years.

Neoliberalism, however, requires more than the internal realignment of a national ruling class. Every semi-stable form of capitalism also needs some sort of settlement with the wider population, or at least a decisive section of it. While the postwar Keynesian settlement contained an explicit deal linking rising real wages to rising productivity, neoliberalism contained an implicit deal based on access to cheap credit. While real wages have stagnated since the late 1970s, the mechanisms of debt have maintained most people’s living standards. An additional part of neoliberalism’s tacit deal was the abandonment of any pretence to democratic, collective control over the conditions of life: politics has been reduced to technocratic rule. Instead, individuals accepted the promise that, through hard work, shrewd educational and other “life” choices, and a little luck, they – or their children – would reap the benefits of economic growth.

The financial crisis shattered the central component of this deal: access to cheap credit. Living standards can no longer be supported and, for the first time in a century, there is widespread fear that children will lead poorer lives than their parents. With the deal broken, parochial ruling arrangements in the UK have started to lose coherence.

The scandals, therefore, are symptoms not of renewal but rather of neoliberalism’s zombie status. The scandals represent the zombie’s body decomposing even as it continues its habitual operation.”

It is indeed ironic that neoliberals have been harping for the last three decades on the need for a flexible workforce, for the need for individual adaptation to market diktats against agents of stability (seen as bad and archaic) such as unions and anyone reluctant to embrace the brave new world of work. And yet, neoliberals are the most rigid people in their thinking and policy-making. The policies they demand are always the same, albeit with different names. But whether one calls one’s preferred policies austerity, shock therapy or structural adjustment, it is the same model imposed the world over, with the same disastrous consequences: people on the streets, repressed by failing states whose main functions are now to appease the financial sector through continuation of the Great Risk Shift, cool the mark out, and failing that, good old-fashioned repression (and then, you can use prison labor as the ultimate flexible workforce).

And the article mentioned above does emphasize the role of the cultural and information industries in the neoliberal project as well as its dark underbelly. But what is also striking is the lack of accountability all around while making other people pay in a variety of ways:

As Ian Welsh has mentioned many times, in the US, the only acceptable form of stimulus is military spending. indeed, this matches Michael Mann’s prescient view of the US based on his typology of power: a military giant, an economic backseat driver, a political schizophrenic and an ideological phantom. Hence, there has to be a next war (except, they won’t be called wars because that does not sound very nice) because that is all the political class accepts and understands. File that under the militarization of everything:

“The United States is expanding its role in Mexico’s bloody fight against drug trafficking organizations, sending new C.I.A. operatives and retired military personnel to the country and considering plans to deploy private security contractors in hopes of turning around a multibillion-dollar effort that so far has shown few results.

In recent weeks, small numbers of C.I.A. operatives and American civilian military employees have been posted at a Mexican military base, where, for the first time, security officials from both countries work side by side in collecting information about drug cartels and helping plan operations. Officials are also looking into embedding a team of American contractors inside a specially vetted Mexican counternarcotics police unit.

Officials on both sides of the border say the new efforts have been devised to get around Mexican laws that prohibit foreign military and police from operating on its soil, and to prevent advanced American surveillance technology from falling under the control of Mexican security agencies with long histories of corruption.

(…)

The United States has trained nearly 4,500 new federal police agents and assisted in conducting wiretaps, running informants and interrogating suspects. The Pentagon has provided sophisticated equipment, including Black Hawk helicopters, and in recent months it has begun flying unarmed surveillance drones over Mexican soil to track drug kingpins.”

And in case it’s not clear enough:

“Several Mexican and American security analysts compared the challenges of helping Mexico rebuild its security forces and civil institutions — crippled by more than seven decades under authoritarian rule — to similar tests in Afghanistan. They see the United States fighting alongside a partner it needs but does not completely trust.

(…)

When violence spiked last year around Mexico’s industrial capital, Monterrey, Mr. Calderón’s government asked the United States for more access to sophisticated surveillance technology and expertise. After months of negotiations, the United States established an intelligence post on a northern Mexican military base, moving Washington beyond its traditional role of sharing information to being more directly involved in gathering it.

American officials declined to provide details about the work being done by the American team of fewer than two dozen Drug Enforcement Administration agents, C.I.A. officials and retired military personnel members from the Pentagon’s Northern Command. For security reasons, they asked The New York Times not to disclose the location of the compound.

But the officials said the compound had been modeled after “fusion intelligence centers” that the United States operates in Iraq and Afghanistan to monitor insurgent groups, and that the United States would strictly play a supporting role.”

So, in more and more countries, the nasty mechanisms of the neoliberal state – reduced to its repressive functions on behalf of financial interests – are being exposed, should we really be surprised that the world is catching fire? (Well, except the US for reasons already discussed) It still remains to be seen whether the much-vaunted civil society is up to the challenge.

Ananya Roy on Poverty Capital

Ananya Roy provides critical assessment of microfinances:

In particular, she challenges the idea that microfinance represents the democratization of finances as a form of bottom billion capitalism, but rather represents the extension of capitalist accumulation and markets to previously excluded populations.

She also discusses the role of the World Bank in managing and controlling the poverty agenda and the way microfinance is done through the World Bank agency, CGAP.

Bottom line: as it is done, microfinance is predatory lending rather than financial inclusion, and may very well be the next sub-prime meltdown as it is a perfect example of sub-prime market.

The Financial Class – Hypermasculine, Cultish and Class-Conscious

The great Yves Smith (have you gotten a copy of her book yet?) over at Naked Capitalism (which should be in everyone’s newsreader) has posted a great demonstration of the ways in which financial class behaves in a fashion very similar to cults and very class conscious. The post is a bit longish but worth everybody’s time if one wants a greater understanding of our overlords.

A snapshot:

Smith does not go into the gender aspects of this but there is certainly no doubt that hypermasculinity plays a major part in what she discusses. Combined with the cultish and class-conscious, quasi-Randian aspects, this makes for a very dangerous mix, obviously.

Book Review – Euroclash

Neil Fligstein‘s Euroclash: The EU, European Identity, and The Future of Europe is an application of Fligstein approach to economic sociology developed in his previous book, The Architecture of Markets (which, if I were remotely consistent, I would have reviewed first). A very simplified version of this approach is that markets do not fall from the sky but are institutionally grounded and developed by social actors.

Markets are also fields, in Bourdieu’s sense, where dominant actors try to establish rule to promote the stability with respect to the newcomers in the fields who might try to establish different rules. Markets are social structures defined by property rights, governance structures, rules of exchange, and conceptions of control.

“A field can be defined as an arena of social interaction where organized individuals or groups such as interest groups, states, firms and non-governmental organizations routinely interact under a set of shared understandings about the nature of the goals of the field, the rules governing social interaction, who has power and why, and how actors make sense of one another’s actions.” (8)

By definition, fields are dynamic in that power and resources are unevenly distributed among social actors and there are potential lines of tension and conflict over how the field is organized and function. And so, with the emergence and evolution of the EU, there has been the emergence of Europe-wide fields in a variety of social domains.

“Firms have moved from being participants in national markets to being involved in Europe-wide markets. They have come to invest all around Europe and employ citizens of many countries. Interest groups and social movement organizations have been part of constructing European political domains both in Brussels and occasionally emergent across national borders.  National nonprofit associations have pushed forward cooperation for professions, trade associations, charities, and hobby and sports groups on a trans-European basis. What these social fields have in common is that national-level organizations have formed larger groupings that have reoriented their attention from nations or single states to their counterparts across borders. These fields of action have brought people together from across the continent and now form one of the main supports for a more integrated Europe. Indeed, these horizontal linkages that cross borders form the basis for what can be described as a European society.” (1-3)

Indeed, the institutionally-based EU integration has facilitated an increasing variety of social interactions (beyond trade) between different kinds of actors: education, human rights, tourism, sports, to name a few. As people travel for work or leisure or education, they develop great social networks with like-minded Europeans with shared interest. These horizontal networks  contribute to changing the way these actors see themselves: as more European.

At the same time, those individuals who feel the most European are those who have developed the denser social networks of interactions within the EU, that is, those who have benefited the most from it: business people, academics and students and various categories of professionals. Those are the winners of the EU integration. Unsurprisingly then, being European has become a greater part of their identity as functioning within the structures of the EU is part of their lives.

On the other hand, the EU integration has also generated losing categories of people who have not benefited from integration (blue-collar workers, seniors) and have also less interaction with the institutions of the EU. They are more likely to perceive the EU as a threatening force responsible for dismantling national structures that used to protect their status. They are what is known as the “Euro-sceptics”. They still identify mostly with national interest and tend to see EU integration as a threat to national sovereignty.

The winners of EU integration are more likely to analyze social issues within a Europe-wide frame and push for EU solutions whereas the losers of EU integration see the EU as a source of problems that should be solved nationally. And so, the social distribution of winners and losers structure potential tensions and conflicts when it comes to further EU integration. In between these categories of people is an “on-the-fence” group (roughly, middle-class) whose views on the EU vary depending on issues and this group can sway EU-related vote one way or the other, for instance, in the case of France, they voted for the Maastricht Treaty, but against the EU Constitution.

In order to understand these fields. of course, one has to understand how the EU was created and evolved, the different institutions that structure markets. Fligstein, probably keeping in mind that his audience will be mostly US, devotes a couple of chapters to these topics. Indeed, the dynamics of EU integration and conflicts are impossible to understand without such background as these institutions shape (and have shaped) the current state of the EU and what domains are regulated at the EU level (trade, movements of goods and people) and which are still governed at the national level (welfare, labor and pensions, for instance), and which ones are somewhere in between (education and sports). After all, the EU is not like the US.

Fligstein also devotes a fascinating chapter on three examples of market creation within the EU: defense, telecommunications and football industries. For each case, the reader is treated with a thorough description of the field, the different actors, the EU institutional framework that restructured these industries and the current state of these industries (as the EU integration is an uncertain and unfinished project). The complexity involved in EU integration has to do with the fact that national states within the EU have different systems of governance and different interests. There is no such thing as capitalism but national capitalisms and a great deal of the EU institutional apparatus is dedicated to negotiating directives and treaties agreeable by all the member-states (and as Fligstein shows, this does not always end up with a race to the bottom).

These case studies perfectly illustrate how the struggles for power by different actors (say the UEFA, the G-14, individual players and national leagues) using EU institutions (such as the Court of Justice) to shape the structure of the field (EU football) to their advantage, in the context of technological developments and media restructuring that considerably increased streams of revenues for leagues.

“The three case studies were chosen because they represent cases where European firms became organized on a European basis. They show clearly the dynamics by which previously nationally oriented firms turned toward a Europe-wide market as opportunities emerged, governments changed policy, and the EU intervened to create new collective governance. These processes have been messy and are not yet complete, but they demonstrate how organizing on a European wide basis provides for growth in firm size, revenues, and markets.” (122)

Fligstein then turn to the issues of European identity. Who are the European? That is, who are the people who identify as European to varying degrees alongside their national identity. I have already hinted at the answer above, so, I’ll just provide a longish quote that summarizes the confirmed hypothesis:

“As European economic, social, and political fields have developed, they imply the routine interaction of people from different societies. It is people who are involved in such interactions that are most likely to come to see themselves as Europeans and in a European national project. In essence, Europeans are going to be people who have the opportunity and inclination to travel to other countries, speak other languages, and routinely interact with people in other societies in the Europe-wide economic, social, and political fields. They are also going to be amongst the dominant material beneficiaries of European economic integration. They include owners of businesses, managers, professionals, and other white-collar workers who are involved in various aspects of commerce and government. These people travel for business, live in other countries for short periods of time, and engage in long-term social relationships with their counterparts, either in their firms or among their suppliers and customers, in their cohorts in other governments, or in the practice of their professions. Young people who travel across borders for schooling, tourism, and jobs (often for a few years after college) are also likely to be more European. Educated people who share common interests with educated people around Europe, such as similar professions, interests in charitable organizations, or social and cultural activities. (…) Finally, people with higher income will travel more and participate in the diverse cultural life across Europe. They will have the money to spend time enjoying the good life in other places.

If these are likely to be the people who are most likely to interact in Europe-wide economic, social, and political fields, then it follows that their opposites lack either the opportunity or interest to interact with their counterparts across Europe. Most importantly, blue-collar and service workers are less likely than managers, professionals, and other white-collar workers to have work that will take them to other countries. Older people will be less likely to be adventurous than younger people, and less likely to have learned other languages, or to hold favorable views of their neighbors; moreover, they will probably remember who was on which side on World War II. They will be less likely to want to associate with or have curiosity about people from neighboring countries. People who hold conservative political views that value ‘the nation’ as the most important category will be less attracted to travel, or to know and interact with people who are ‘not like them.’ Finally, less educated and less rich people will lack attraction to the cultural diversity of Europe and be less able to afford to travel.” (126-7)

The data do indeed confirm these trends even the pro-European numbers are still small, but then, the European project is still quite recent compared to the centuries of nation-building.

Another limit that Fligstein notes is the lack of strong social movements across European countries, organized horizontally. Indeed, social movements seem to be still organized nationally: groups that have grievance against the EU tend to petition their national governments for redress. [I would add that only movements that seem to have some European footing are those that relate to global issues, such as the opposition to GMOs… my view on this is that SMOs have done a great work to raise awareness globally and therefore scaling down to the EU level is not that hard. Scaling horizontally on EU-specific issues is trickier.]

In other words, there is no European civil society in a strict sense, no more than there is a Habermasian public space but a multiplicity of fora without actual coordination. This means that the groups that positioned themselves early on to have influence over the EU (businesses) are still the vastly dominant segment of the civil society as they have a strong lobbying presence in Brussels. This points to what has been called the “democratic deficit” of the EU.

This lack of horizontally-organized, EU-wide social movements and lack of public space also contributes to a still large lack of European identification and solidarity.

Since economic integration is largely complete, EU members have turned their attention towards building a European society. Fligstein identifies several threads leading to such a project: loosening up of intra-European migration which has increased movement of people within EU countries, the rise of Europe-wide civic associations (although a lot of Europe-wide are trade associations that emerged with the Single market in 1985). Education is the next big work-in-progress for the EU, with the Europeanization of the curriculum, the strengthening of language education and the harmonization of higher education degrees along with specific programs like Erasmus.

Here again, Fligstein notes one of the barriers to facilitating the rise of a European society: the lack of European culture. National cultures still largely dominate the field and popular culture is dominated by US media products. European culture is still largely limited to exchange of national programs between national tv networks along with movie co-productions. Music is still largely a national business with global corporations.

In the political field, national politics still dominates what happens at the European level. However, most mainstream political parties are now pro-integration (with the notable exception of England where resistance to integration has always been the strongest). Anti-European attitudes and platforms are political losers and relegated to nationalist / neo-fascist fringes who see the EU as an infringement to sovereignty and a dilution of the nation, or far left parties that see it as a neo-liberal plot.

On the other hand, certain groups, such as regional groups, have been able to use the EU human rights system to make gains against national states. All in all, the political field is far from stable and this is where the potential for euroclash is the greatest.

This is obviously a very detailed (and chock full o’data) book that perfectly demonstrates the strength of economic sociology and its capacity to bring back the social to explain the economic AND the consequences of embeddedness. It’s not an easy read especially for people completely unfamiliar with the EU but otherwise, it will be equally valuable to organization sociologists.

The Economics of Hostage Exchange and Political Agency

What social factors determined the “value” of this particular hostage?

  • The length of time he has been hostage? (Since 2006)
  • How badly Israel wants him back in one piece because it does not make it look good?
  • The pressure from the soldier’s family to get him back?
  • The strength of the counter-pressure from Israeli groups opposed to the exchange?
  • The possible impact of this exchange on the broader state of the Israel / Palestine conflict?
  • Internal Israeli / internal Palestinian politics?

Another form of calculation os currently taking place regarding the actual identities of the 1,000 Palestinian prisoners to be exchanged as they too carry specific value in the context of this conflict.

The disproportion is unavoidable though, 1 /1000. How close is it to the killing ratio?

In other words, the embeddness of this process is rather obvious.

And note the title too: it seems Israel is the only deciding actor here. And this holds throughout the article: the main actors mentioned are the Israeli government and the German mediation team. Where is the Palestinian side? As if there were no similar calculation on their part regarding the benefits and “market value” of the liberation of this soldier versus getting 1,000 people back (and which ones)? As if they did not see their side of the equation as a liberation negotiation too?

Israel has prisoners (legitimate detention), Palestine has hostages (illegitimate detention).

Scarcity Economics 101

When goods are not easily adopted in countries of the Global South, it does not mean they are rejected entirely. In economics of scarcity, everything get reused, re-directed, purposes are redefined until it is no longer usable for anything.

Case in point 1, note the ILO bags (this was taken in Lusaka, Zambia)

Area 1-6

Case in point 2: