News and Articles

John Restakis

Civil Power and the Path Forward for Greece

By John Restakis

With the prospect of a Syriza government, everyone is wondering what the future holds for Greece.  Whether disaster or deliverance, or just the normal chaos, it is hard to ignore the potential for game-changing repercussions from a Syriza government. On the street however, embittered by the failures of governments in the past to change a corrupt and dysfunctional political system, few people are expecting big things from Syriza. The feeling of popular cynicism and fatalism is palpable. How different will Syriza be?

One thing is certain. If Syriza does what it says, it will be forging a courageous and desperately needed path in Europe, not only in opposition to the austerity policies that are devastating the country, but to the neo-liberal ideas, institutions, and capital interests that are their source and sustenance. For such a path to succeed, an entirely different view of economic development, of the role of the market, and of the relation between state and citizen is necessary.

It is in this context that the social economy has become an important aspect of Syriza’s plans for re-making the economy. Like other parties of both the right and left in Europe, Syriza is taking cognizance of the role that the social economy can play in the current crisis. Even the Cameron government in the UK, the epicenter of European neo-liberalism, has promoted the social economy as a sector with a strategic role to play in job creation, in improving public services, and in reforming the role of government. In the last election, Mutualism and the Big Society were its slogans.

It all sounds very nice, until it becomes evident just how little right wing governments understand, or care about, what the social economy is and how it functions. For the Cameron government co-operatives, and the social economy more generally, became a cover and a means for public sector privatizations, for weakening job security, and for reducing the role of government. Thousands of public sector workers have been coerced into joining pseudo-co-operatives to save their jobs. Under the current government, the same is beginning to happen in Greece with the newly formed KOINSEPs. This is a travesty of the nature and purpose of co-operatives whose memberships must always be voluntary, whose governance is democratic, and whose purpose is to serve their members and their communities for their common benefit – not the ideological aims of government. It’s a lesson that few governments understand.

For the right, the social economy is often viewed as a final refuge for the discarded of society and the victims of the capitalist economy. It is one reason why the right advocates charity as the proper response for the poor. Never solidarity or equity. More recently, the rhetoric and principles of the social economy have been used to expand the reach of capital into civil spaces. For these reasons co-operatives and social economy organizations in the UK, and elsewhere, have condemned the distortion of social economy principles for vested political interests. But what are these principles?

The social economy is composed of civil organizations and networks that are driven by the principles of reciprocity and mutuality in service to the common good – usually through the social control of capital. The social economy is composed of co-operatives, non-profit organizations, foundations, voluntary groups, and a whole range of associations that operate both inside the market, as many successful co-operatives and fair trade groups do, or in non-market provision of goods or services. These include cultural production, the provision of health or social care, and the provision of food, shelter, or other necessities to people in need. In its essence, the social economy is a space and a practice where economics is at the service of social ends, not the other way round.

It is not hard to see why Greece today is experiencing an unprecedented growth in the size and diversity of its social economy. Here, as elsewhere, co-operatives and social benefit enterprises have arisen as a form of social self-defense against economic recession and austerity. For many young people, the formation of a co-operative or a social enterprise is the only way to secure a job with some autonomy, and dignity. Something more rewarding than serving tables for tourists.

The social economy is growing – but compared to other European nations, Greece lags far behind. This weakness is due to many factors. One reason is the absence of institutional supports such as sources of social investment, of professional development and training, of representative organizations to unite, develop, and give voice to the sector. Outdated, fragmented, and inadequate legislation is another reason.

A third, more complex reason, has to do with the manner in which civil society and the state have evolved in Greece. Unlike other Western European nations that underwent the revolutionary processes of the Enlightenment and the Industrial Revolution that provided the seedbed from which modern political, social, and economic institutions emerged, Greece remained relatively untouched by these developments while under Ottoman rule. Today, it is still struggling to establish a political culture that has moved beyond the autocratic clientelism that characterized the political system that reigned immediately after the Ottoman era. Autocracy breeds hierarchy, individualism, and relations of dependence, not mutuality and social solidarity. The emergence of a healthy civil society, of democratic civil institutions and a democratic culture, has been undermined by this fact.

The inheritance of clientelism has been deadly in Greece and it has been catastrophic for the healthy evolution of the social economy, as has been shown in the case of its co-operatives. Just as the right uses the social economy as a proxy for the promotion of capital and markets, so does the left consistently view the social economy as a vehicle for the advancement of the aims of the state. When a culture of clientelism is added, it is a recipe for failure on a grand scale. This is what happened in the PASOK era when state support and subsidization of co-operatives produced a corruption that not only failed to achieve legitimate economic ends, but more disastrously, destroyed the image and reputation of co-operatives among the public.

Today, the work of promoting co-operation as a viable strategy for economic and social development has to contend with this false and negative public image of co-operatives as inherently corrupt. Greece is not alone in this. This has been the case everywhere “leftist” governments have sought to use the co-operative model to pursue government aims without regard to the purpose and nature of co-operatives as autonomous civil associations whose primary role is to serve their members and their communities. Just as in Greece, the co-operative model has had to be retrieved from a ruined reputation in all the former Soviet nations, in Africa, and throughout Latin America where governments see co-ops, and the broader social economy, as instruments and extensions of government power. Ironically it is the left, in its manipulative “support” for the co-operative model that has done most to ruin its image and reputation in the minds of millions.

The reason for this is that the left has traditionally viewed the state as the sole legitimate engine of social and economic reform. In this, it is the mirror image of the right that sees legitimacy for economic and social development only in the market. Both make the same tragic mistake in ignoring or manipulating the very institutions of civil society that are essential to realizing the radical changes that are needed if any alternative to the present paradigm is to succeed.

And this, in very large measure, will be the true test of the character of Syriza if it comes to power. How will it relate to the broader civil society, and to the fledgling organizations and institutions of the social economy as it tries to rebuild the economic and political complexion of Greece? Will it revert to the traditional statism of the left, a command and control government, or will it seek to expand and re-imagine a leftist program for change that mobilizes the institutions of civil society and the social economy as meaningful partners in nation building? Moreover, will it understand and utilize the social and economic principles of co-operation, of mutuality and common good, as central to the re-building of the economy and the society? In short, will the party recognize and mobilize the vast potential of civil power in realizing its vision? If it does, it will be the first in Europe to do so.

That Syriza is taking the social economy seriously is a good sign. The social economy represents one of the very few bright spots in Greece, with hundreds of new groups being formed to provide goods and services in a way that is entirely new. Often rejecting organizational hierarchy, promoting inclusion and democratic decision-making, focusing on service over profit, these organizations see themselves as models for a new economic and political order. And they are. But it is for this reason too, that many of these groups want little or nothing to do with political parties, or the state. This is not good news for the parties of the left as they struggle to articulate a vision and method for a new political economy. They need a new approach if they are to build a leftist vision for a new age. The old ways of party and state control have been discredited and rejected.

For a truly effective political party of the left today, the social economy represents a crucial resource and ally. The principles of economic democracy in service to the common good are practiced here. The most innovative, entrepreneurial, and socially productive young leadership is active here. The organizational forms and practices that have the potential to reform the closed, bureaucratic, dysfunction of government services are also being developed here. This is where communities are learning to work together to recover a portion of what has been lost in these past years – of community clinics, of food markets and mutual help between farmers and consumers, of residents collectively preventing a neighbor’s electricity or water from being cut off. And this points to an unlooked for grace in the midst of this crisis – that these hard times have sparked a renewal of community and genuine human connections between people. The social economy is where these connections are flourishing.

What then, must a progressive government do with respect to the social economy?

First, it must move beyond traditional leftist statism to develop a role for government that understands how to democratize and share power with its citizens. This means understanding that the primary role of government in a non-paternalistic and non-clientelistic paradigm is the empowerment and support of civil society for the production of social value – the creation of goods and services that place social needs ahead of private profit.

Second, it means the creation of institutions, both legal and social, that can sustain the development and growth of the social economy independently of any political party that is in power. This means the reform of co-operative and social economy legislation, the creation of financial instruments for the social and ethical financing of social economy organizations, the establishment of educational and training institutes for the study of the theory and practice of co-operation, reciprocity, and service to the common good that are fundamental for a new political economy and the advancement of social and economic development.

Third, it means the application of these principles beyond the non-profit and community service sector to the support and development of the wider economy, in particular for the small and medium firms that form the bedrock of the national economy. The principles that animate the social economy are a framework for the recovery and reform of the whole economy.

And fourth, it means the reform of public services through the provision of control rights, transparency, accountability, and decision-making power to the users of these services. The insular, autocratic power of bureaucracy must be broken.

Greece has no option but to try new approaches to solve its social, economic, and political problems. At the macro level, a Syriza government will have to do everything it can to address the fundamental questions of debt restructuring, of trade relations and export policy, of increasing revenue through tax policies aimed at capital, of resurrecting agricultural and industrial production, and of addressing the humanitarian crisis.

The social economy can help. But it is obviously not able to act as an engine of recovery on its own and without the support of an astute government that understands its strengths – and limitations. The danger here is that false expectations of the social economy will set the stage for failure and disappointment. In the past, unrealistic expectations arising out of ignorance of how social economy organizations work, and to what ends, have provided ammunition to those who like to criticize the “inefficiency” and “utopianism” of co-ops and the social economy when they fail to do what they were never meant to do. (They conveniently ignore the fact that the survival rate of co-ops is more than twice as high as that of private companies).

What the social economy offers are the ideas, the methods, and the models by which an alternative paradigm may be built. The social economy is the experimental ground of a new political economy, and its organizations are the social antennae of a possible, and more humane, future. Today, this prefiguring of another paradigm is perhaps the most important contribution that the social economy can make in Greece, particularly since basic institutional supports are still lacking.

The building of these institutions is crucial. This is true whether a new government succeeds in re-negotiating the debt and its relations to its European counterparts, and even more so if it does not. There are grave doubts whether the changes that Greece needs to make toward a more humane and socially responsible economics can be developed within the Eurozone as it is currently structured. The ideological and institutional inertia of neo-liberalism is suffocating any prospects for reform. Regardless, Greece can learn from the wealth of experience that has already been accumulated in other countries where the social economy has played an important role in advancing economic and social development – particularly in times of crisis. Greece is a latecomer to this field, but that is not without its advantages. It can learn from the experience of others. For example:

In the region of Emilia Romagna in Italy, the principles of co-operation and mutual help are the reason why its small and medium enterprises have been able to flourish in a global marketplace. It is among the top ten performing economic regions in Europe. Italy’s 40,000 social co-ops have succeeded in remaking and expanding social care in that country while working in close partnership with local municipalities. They employ over 280,000 people.

In Argentina, following an economic crisis in 2001 that was almost identical to what Greece faces now, over 300 abandoned factories were taken over by their workers to restart production. Nearly all are still in operation. Schools, day cares, clinics, libraries, and community centres were also taken over and run by the people who use them. Even in Cuba, the archetype of state socialism, the government is supporting the growth of autonomous co-operatives to breath new life into its agricultural sector and to stimulate the growth of new enterprises and new services.

The reform of government is a central theme in this movement. In Brazil, Columbia, Spain, Italy, and a growing list of countries and cities around the globe, participatory budgeting, shared policy making, and civilian monitoring of budgets and public programs is a key role that the social economy is playing in reforming the way in which governments operate – making them more transparent, more accountable, more democratic, and more responsive to the real needs of citizens.

And this is the key point. The social economy is a model of political economy in which economic democracy places capital at the service of society. Much has been written about the origins of the debt crisis in Greece. Some point to the availability of cheap money and unethical lending that followed Greece’s entry into the Eurozone. Some point to the lack of oversight and lax regulations. Some point to the role of corruption and the huge waste of public funds. Of course, all contributed to bringing Greece to the precipice. But few point to the fundamental lack of democracy and public accountability that made all this possible.

What are most needed today are the building of democratic culture and the strengthening of civil institutions that generate and expand democracy – in politics, in social life, and above all in the economy. This is the role that an enlightened state should play, in partnership with civil power. It is a delicate and difficult role to get right, especially in the context of a political culture like that of Greece. But that is precisely why it is so urgently needed. It is a way forward that won’t perpetuate the criminal negligence and wrongdoing of the past.

How tragic and shortsighted therefore, that the policies and prescriptions of Greece’s masters, its servile political class and the European powers that support it, are destroying the very institutions that are most needed to reform and remake Greece – its public and civil institutions. The point is, they don’t care. The destruction of public institutions and civil power suits them very well. The priority of social values or the wellbeing of people over those of capital doesn’t fit into their schema. In their schema what really matters is the perpetuation of a system that is working just fine for some – just not the likes of you or me, or the vast majority of the population that is now paying for the sins of others.

John Restakis, January 15, 2015


Image by Maximilien Nguyen

5 Comments

  1. Michael Lewis

    This is an excellent exposition. John Restakis, this is a short space, weaves together a contextualized analysis powerfully and sets out the signposts that enables us to judge whether we are making progress. We are watching Greece closely, even bar from Europe. Thanks for taking the time to write this piece.

  2. Ed Mayo

    The right man in the right place – excellent piece.

  3. Yvon Poirier

    Yes, this is certainly the path for an alternative economy, for and by the people themselves.

    I especially appreciate the comments eplaining the problems with «leftist» goverments that think they have power and can tell people what to do.

  4. Paul Glover

    Whether or not Greece returns to the drachma they’ll need to create a national system of regional currencies, to maximize grassroots productivity. My book “Hometown Money” explains how to start and manage such cash. http://www.paulglover.org/currencybook.html At the same time, they’ll need to evolve beyond trying to be middle class and create the “mutual class.” http://www.paulglover.org/1105.html

  5. Matheï

    Great article! In the context of austerity, notably in Southern Europe, new forms of social enterprises have emerged. But are they ad-hoc and temporary solutions to shortages, or really the first signs of a new ways of producing, consuming and exchanging?

Leave a Comment

Your email address will not be published. Required fields are marked *