All posts by focaal_admin

Blog, Features, The Social Life of Inflation

Alexandrine Royer: ‘In Kigali, life is expensive’: how everyday inflation talk gives voice to political and class frustrations 

Image 1: Food vendors at Kigali’s central Kimironko market, photo by author

I encountered the phrase ‘in Kigali, life is expensive’ everywhere during my 15 months of fieldwork within the tech ecosystem of Rwanda. Official government figures stated that the price of common food staples had increased by 35% but residents estimated it to be much higher. Gas, electricity and housing prices were also soaring. My interlocutors asked whether I knew the cost of potatoes, bus transport, and rent, wondering if as a muzungu (white foreigner), I was shielded from these economic pressures. In Rwanda, where politics is an uneasy and potentially threatening topic, inflation was a shared device through which individuals across social classes could comfortably voice critiques of rising social and class inequality. I build on Amri’s (2023) concept of ‘inflation-talk’ to argue that small talk on the rising cost of living, with its outward apolitical nature and indefinite causes, provided a safe discursive space for disclosing class and political frustrations.

When I asked around the tech ecosystem why life in Kigali was getting so expensive, responses generally converged around the hypothesized causes of inflation, such as the war in Ukraine, low local agricultural productivity, and the continuous devaluation of the Rwandan franc. As one person commented, ‘there’s huge inequality now. The rich get richer, and the market follows the haves’. The rising inequality in Rwanda sat awkwardly with the Government of Rwanda’s confirmation of the country’s teleological trajectory towards becoming a prosperous ICT-based economy as outlined in the guiding policy document Vision 2050. During tech conferences, held in nicely air-conditioned halls with swanky Afro-fusion decorations, international delegates and heads of state would praise President Paul Kagame for his vision in transforming Rwanda from a country once torn apart by genocidal violence towards becoming a continental leader for ICT development. Yet, outside such spaces, interlocutors commented on how the rising cost of living made their participation in this tech universe more difficult. Founders let go of staff, cancelled their coworking memberships and confessed their worries about possible consequences for their social and business reputations.

In the economic literature, financial crises and a rapid rise in food prices are frequently correlated with civic action and social unrest (see Bellemare 2015). But very few of my interlocutors in Kigali openly criticized the Rwanda Patriotic Front (RPF), Rwanda’s ruling party for the past 30 years. Returnee diaspora, which made up a sizeable portion of the tech ecosystem, would actively participate in the online defence of president Kagame, most virulently on X, with hashtags such as #TeamPK. Following the announcement on 15 July 2024 of Kagame’s re-election with 99% of the vote, Rwandans were quick to defend the results after Human Rights Watch reported a lack of genuine political competition. As one tweet stated, “Rwanda is a sovereign country and its President doesn’t have anything to answer to Western colonisers trying to impose their so called order on it…”. The RPF’s post-genocide ‘Ndi Umunyarwanda’ (Kinyarwanda for ‘I am Rwandan’) strategy of national reconciliation criminalized references to ethnic identity and further obliged Rwandans to reject all forms of social division (Purdeková & Mwambari 2022) to embrace a front of unity. Lists of permissible and forbidden citizen behaviours were pasted on the walls of schools and at the entrance of villages. Talking negatively about the country was identified as subject to discipline and punishment. Publicly voicing political critiques could result in accusations of anti-patriotism or worse, of harbouring genocidal ideologies.

In studies of Rwanda, scholars, most notably Thomson (2013), have sought to identify through James C. Scott’s ‘weapons of the weak’ (1985) instances of resistance towards the Rwandan state. Yet, as Rollason (2019) underscores, such studies pre-suppose defiance in citizens’ engagements with authorities and reify a division between the ruling and the ruled. Yet, many of my interlocutors, like Rollason’s, navigated the same social circles as government functionaries and held varying levels of political privilege gained through patronage or familial connections. In private conversations, they expressed an ambivalence towards the country’s politics rather than a stark opposition or deference to power. Some Rwandans expressed continued indebtedness to Kagame for allowing their families’ return, whilst other African nationals saw restricted political freedom as part of a trade-off for government effectiveness, saying ‘here at least you know where the money is going’. Paul Kagame’s presidency was part of an accepted order that could just as easily be toppled over. As a friend related, ‘everyone here says that they are for the president. But the last president, before the genocide, he also got 99% of the vote’. There was a longer history of dissimulation in Rwanda and maintaining an image of stability in contrast to its more turbulent neighbours.

It is in this climate of ‘quiet insecurity’ (Grant 2015) that conversations about the cost of living, first described in apolitical economic terms as concerns over rising food prices or other essentials, became an avenue by which people voice political and class frustrations. When housesitting for friends in a predominantly expat neighbourhood, I was approached by their cleaner, Hope, who asked whether I was looking for additional house help. I awkwardly replied no but promised to keep an ear out. Mopping the floors of the study, Hope would occasionally pause to volunteer bits of her familial history. She narrated the loss of her father and siblings during the genocide, with herself and surviving members fleeing to Uganda before eventually settling back in Kigali in the early 2000s. Hope struggled to cover her monthly rent and feared eviction. As usual for discussions on politics in Rwanda, she began with praise for the President to avoid reproach before delving into frustrations. She said, “I like Kagame because he saved many people, but Rwanda has too many rules…working three days a week is not enough, the cost of food in Rwanda is now very high. I support my mother…. It’s very difficult being poor in Rwanda, the genocide was not nice, very sad. In Uganda, the poor can sell food on the street, the women can make money, but in Rwanda it’s illegal, you can get into big trouble…” Hope was referring to the RPF’s criminalization of hawking, petty trading and street food vending (Finn 2017). Such measures aimed at making Kigali a ‘clean and modern city’ constrained the urban poor’s ability to multiple hustles and weather rising costs.

More privileged Rwandans also felt government policies were often out of touch with the socio-economic realities of most Kigalians. I met up with a founder friend over lunch, Shema, who recounted how his startup had experienced some recent financial setbacks. He mentioned that the new school budgets introduced by the Ministry of Education were barely adjusted for inflation, leaving little room for schools to spend on ed-tech products. School directors were more concerned with retaining quality teaching staff than investing in e-learning. As Shema explained, “the cost of Irish potatoes for one 1kg has now gone up to 1500 Rwf [approx. 1.50 USD] but the average salary for a teacher in Rwanda is now 70 000 Rwf [approx. 70 USD], how can people afford that?”

Being the youngest child of a single-parent household, Shema was proud of how he had risen from kitchen staff to managerial positions in the hospitality industry before dedicating himself to his startup. He felt the city’s rich kids, who often occupied key positions in the Presidential office, would likely not understand his, or his clients’, financial struggles: “It’s almost as if these guys are not Rwandans, they can sometimes barely speak Kinyarwanda and in their summers, they go on vacation to France or the US or Canada…these guys have probably never shopped at Nymirambo market, they go and get their groceries from Sawa Citi or Simba [supermarket chains]… They are the ones who then go study abroad and come back and make policies, but they don’t know what life is like in Rwanda. You know Claire Kamanzi [CEO of Rwanda Development Board], she wasn’t even in Rwanda before, how can they know the country, they only know about it from reading reports…”. Picking up on his comments, I inquired further as to what needs to change in Rwanda, to which he replied, “it would be if the system was for the masses, here it is the elites who in charge”. As reflected in the conversation with Shema, talk on the felt effects of inflation opened a portal to discussions on middle-class and elite urban divides and how such schisms mapped onto political decision-making.

The rising cost-of-living further hindered my interlocutors’ aspirations to attain or preserve middle-class living in Kigali and its accompanying social norms. Like Nairobi’s peri-urban population studied by Lockwood (2020), current socio-economic inequalities in Kigali were not seen as a permanent condition, but as part of a challenge to ‘make it’ and achieve the standard of living possessed by others. Foreign entrepreneurs from the Global North could weather the franc’s continuous devaluation and primarily resided in upmarket neighbourhoods.

But local young founders, predominantly men, complained about how it was now impossible to save for a house within your twenties, adding that girls now were more interested in dating older men with money. Male homeownership in Rwanda remained a prerequisite for marriage and the social transition to adulthood. Many mentioned how their irregular incomes had caused issues with their girlfriends, as they cynically joked that ‘it was becoming too expensive to adult’. Some were equally forced to relocate to neighbourhoods on the outskirts of Kigali and expressed feeling squeezed out of the city. Economic pressure further caused a series of aches and pains, as colleagues and entrepreneurs complained of burnout, fatigue and anxiety.

In a context where politics is laden with couched terms, speaking on inflation and its felt effects allowed interlocutors to share pointed political critiques and reveal class-based social tensions. The cost-of-living crisis threatened the aspirational livelihoods of my predominantly middle-class interlocutors and undid the image of a prosperous nation that the government endeavoured to maintain. For my interlocutors, commentary on inflation did not stand alone; it provided a means of contextualizing and reflecting on the socio-economic, gendered and political make-up of life in post-genocide Kigali and its resultant inequalities. It further opened questions on who would ultimately profit from the country’s push towards modernization.

This text is part of the feature The Social Life of Inflation edited by Sian Lazar, Evan van Roeckel, and Ståle Wig. 

Alexandrine Royer is a doctoral candidate in Social Anthropology at the University of Cambridge. Her work centres on digital economies, startup culture and development practices in East Africa, with a focus on Rwanda.

References

Bellemare, M. F. (2015). Rising Food Prices, Food Price Volatility, and Social Unrest. American Journal of Agricultural Economics, 97(1), 1–21.

Grant, A. M. (2015). ‘Quiet Insecurity and Quiet Agency in Post-Genocide Rwanda’. Ethnofoor 27(2): 15-36

Finn, B. (2017). Quietly Chasing Kigali: Young Men and the Intolerance of Informality in Rwanda’s Capital City. Urban Forum (Johannesburg), 29(2), 205-218.

Lockwood, P. (2020). The Greedy Eaters: A moral politics of continuity and consumption in urbanising central Kenya [Apollo – University of Cambridge Repository]. https://doi.org/10.17863/CAM.65545

Purdeková, A. & D. Mwambari (2022) Post-genocide identity politics and colonial durabilities in Rwanda, Critical African Studies, 14:1, 19-37, DOI: 10.1080/21681392.2021.1938404

Rollason, W. (2019) ‘Motorbike People Power and Politics on Rwandan Streets’. Lanham: Lexington Books. 

Thomson, S. 2013. Whispering Truth to Power: Everyday Resistance to Reconciliation in Postgenocide Rwanda. Madison: University of Wisconsin Press.

Cite as: Royer, Alexandrine 2024. “‘In Kigali, life is expensive’: how everyday inflation talk gives voice to political and class frustrations” Focaalblog 10 December. https://www.focaalblog.com/2024/12/10/alexandrine-royer-in-kigali-life-is-expensivehow-everyday-inflation-talk-gives-voice-to-political-and-class-frustrations/

Blog, Features, The Social Life of Inflation

Steffen Köhn: Tokens of survival: the rise of crypto gaming in Cuba’s inflationary economy

Image 1: Screenshot of elTOQUE’s daily listing of average exchange rates for various currencies and cryptocurrencies on the informal market as of August 28th, 2024

Cuba is currently facing one of its most severe economic crises in decades. The island nation is contending with the compounded effects of a global pandemic, tightening U.S. sanctions, and its own mismanaged monetary reforms, all of which have created a perfect storm of high inflation, scarcity, and social unrest. As the Cuban peso (CUP) loses value at a rapid pace, Cubans are increasingly turning to alternative currencies and unconventional economic activities to survive. Among these, play-to-earn crypto games like Axie Infinity have emerged as an unexpected source of income, offering a connection to the global digital economy for those who do not have access to remittances from abroad. However, the game’s economic model, which requires significant initial investment and relies heavily on exploitative “scholarship” arrangements, ended up reinforcing pre-existing social inequalities rather than addressing them. Moreover, Axie Infinity faced severe inflation issues itself, with the in-game currency devaluing rapidly due to an oversupply. Over time, its structure began to resemble the characteristics of a Ponzi scheme, where new investments were needed to sustain returns for existing players. This forced players to navigate an increasingly unstable digital economy, where opportunities for profit were outweighed by rising risks.

To understand the emergence of play-to-earn games as a significant economic practice in Cuba, we must first grasp the current economic landscape. Cuba’s economy has been hit hard by several overlapping crises. The Covid-19 pandemic brought tourism—the country’s economic backbone—to a near standstill. Concurrently, U.S. sanctions, particularly those tightened under the Trump administration, restricted remittances, cut off access to international financial systems, and further isolated Cuba from global financial flows.

Internally, the Cuban government’s decision to implement the Ordenamiento Monetario in January 2021—intended as a comprehensive monetary reform—eliminated the longstanding dual currency system that had kept the economy afloat. Before this reform, the Cuban peso (CUP) was used for domestic transactions and salaries, while the dollar-pegged convertible peso (CUC) was used for tourism, luxury goods, and international trade, which allowed the government to control access to foreign currency and manage economic disparities. By making the CUP the sole legal tender and devaluing it against the U.S. dollar, the reform triggered runaway inflation. The artificially low exchange rate of the CUP against the dollar could not be sustained, leading to a spiraling devaluation of the national currency.

Amid the financial turmoil, many Cubans are turning to alternative currencies to protect their savings in more stable forms and to manage everyday transactions. Cryptocurrencies, particularly USDT, a stablecoin pegged to the U.S. dollar and (theoretically) backed by dollar reserves, have gained significant popularity as a tool for receiving remittances and facilitating cross-border payments. Meanwhile, digital credits—ranging from balances on apps like Zelle and Tropipay to phone credits—emerged as vital tools within Cuba’s expanding informal economy. During the pandemic, the Cuban government introduced its own digital currency, the moneda libremente convertible (MLC), pegged to the dollar and meant to serve as a substitute for foreign currency in state-run stores selling essential goods. The MLC was specifically designed to capture hard currency for the state, as it could only be acquired through foreign currency deposits or remittances. However, as its acceptance became limited to a shrinking number of outlets and a thriving black market developed for exchanging MLC into other currencies, its value eroded, declining sharply against both the U.S. dollar and digital credits denominated in dollars on payment apps.

The Currency Black Market: A Disorderly Landscape

This monetary disorder has led to a burgeoning informal market for currency exchange, which operates largely through digital platforms like Telegram and WhatsApp. Here, Cubans negotiate the value of dollars, euros, MLC credits, and various cryptocurrencies, often using intermediaries to facilitate exchanges. elTOQUE, an independent news outlet based in Miami, has become a key player by publishing the informal exchange rates of these currencies daily. These rates are determined by bots scraping buy and sell offers from major Telegram groups, yet they remain contentious, with frequent accusations of manipulation, particularly from the Cuban government.

Image 2 : Screenshots of elTOQUE’s daily listing of average exchange rates for various currencies and cryptocurrencies on the informal market as of August 28th, 2024.

In this chaotic environment, cryptocurrencies offer another refuge from the collapsing Cuban peso, but they also introduce new complexities, particularly in converting digital assets into usable cash. Many Cubans now use stablecoins like USDT to preserve value and facilitate international payments, while digital platforms have become essential tools for managing remittances and cross-border transactions. However, the real challenge lies in bridging the gap between these digital currencies and local cash. On platforms like Telegram and Revolico, brokers facilitate exchanges from digital tokens to cash, often charging high fees and adding another layer of volatility and risk to an already unstable financial landscape.

Image 3: Listings of currency exchange offers posted in various Telegram groups

Gaming the System: How Axie Infinity Became an Economic Lifeline

Amid Cuba’s ongoing inflationary crisis, an unexpected means of accessing digital tokens emerged: play-to-earn crypto video games like Axie Infinity. Developed by the Vietnamese company Sky Mavis, Axie Infinity allows players to breed, battle, and trade digital pets known as Axies, which are unique digital assets or non-fungible tokens (NFTs) stored on the blockchain, enabling players to own, trade, and speculate with their in-game holdings. The game broke into the mainstream in many low- and lower-middle-income countries in the summer of 2021, at the height of the COVID-19 pandemic. It became a widespread phenomenon across much of the Global South, permitting players to earn substantial income in the game’s cryptocurrency, Smooth Love Potion (SLP). As global lockdowns cut off traditional jobs and informal income opportunities, the game (at least for a while) enabled players in countries like the Philippines, Venezuela, and Indonesia to earn hundreds of dollars per month—often well above their local median wage—and offering economic opportunities that their physical economies could not.

Image 4: Screenshot of a battle in Axie Infinity’s arena mode, where players from around the world compete using their Axies.

For thousands of Cubans, especially those without access to remittances, Axie Infinity quickly became a potential economic fallback. With traditional income sources disrupted by the pandemic and ongoing inflation, the game offers a rare opportunity to earn cryptocurrency, which can then be traded on the black market for pesos or other more stable currencies. However, participating in Axie Infinity is not without its challenges, and many Cuban players have had to navigate a complex landscape of intermediaries, scams, and volatile markets to turn their virtual earnings into real-world value.

Image 5: The study notes of an Axie Infinity scholarship holder

The entry barrier to Axie Infinity is steep. At its peak, in July 2021, even the cheapest team of three Axies required to start playing cost around $1,000—an impossible sum for most Cubans. This led to the emergence of a parallel economy where affluent players and companies, often based in wealthier countries, granted “scholarships” to aspiring players. Gaming guilds emerged on Telegram, offering training sessions and conducting entrance exams for those seeking scholarships. These scholarships involved lending Axies to players who couldn’t afford them in exchange for a share of their earnings, often up to 70 per cent. This system allowed Cuban players to participate in the game, but it also mirrored exploitative labor practices, with the scholars—typically from the Global South—bearing the brunt of the risk while the asset owners in more developed nations took the lion’s share of the profits.

Scholars were required to play for several hours every day, with their performance closely monitored—either by coaches hired by NFT owners to provide training but also to surveil them, or through surveillance software that tracked their activity. In my friend Juan’s guild, there were even two competitive leagues, and members could be relegated like football teams. Those who failed to meet performance targets were quickly replaced by other aspiring players, reinforcing a precarious labor market marked by a harsh hire-and-fire culture. In this context, Axie Infinity’s promise of decentralized and equitable opportunities increasingly resembled a new form of digital serfdom, perpetuating existing inequalities rather than alleviating them.

Trust and Mistrust in the Cuban Crypto Economy

Beyond the game itself, Cuban players encountered significant challenges when trying to convert their in-game earnings into usable currency. Due to U.S. sanctions, centralized cryptocurrency exchanges like Binance and Coinbase block users from Cuba, forcing players to depend on informal and often opaque networks for transactions. In the Telegram currency exchange groups where Cubans from across the country participate, the primary challenge was establishing trust, as no one wanted to be the first to send cryptocurrency or fiat money and risk relying on the trading partner to follow through. This led to the development of new intermediaries and trust mechanisms. To mitigate the risk of fraud, some Telegram groups set up their own escrow systems, where admins held funds from both parties for a fee until the exchange was finalized. Other groups introduced a VIP system, granting trusted status to users with multiple successful transactions who provided personal information to the group’s administrator and paid a monthly fee. While these systems offered a semblance of security, they also underscored the inherent contradictions of a supposedly “trustless” blockchain-based economy that, in reality, relied heavily on middlemen and trust-based social networks to work.

Despite the often exploitative working conditions and the complicated process of cashing out game tokens, Cuban Axie Infinity players demonstrated considerable agency in navigating these challenges. They used platforms like Discord or Telegram to create grassroots solidarity networks, actively sharing information about scholarship opportunities and educating others on gaming strategies. This sense of community and mutual support became a crucial resource for many players striving to make the most of the game’s economic opportunities.

For many Cubans, Axie Infinity also represented a rare chance to engage in the global digital economy at a time when Cuban society had only recently come online. It enabled some players to transition from mere participants to asset owners and investors by purchasing their own Axies. Many of the players I interviewed had eventually invested in the game, buying their own digital pets and exploring the speculative potential of this virtual economy. For these players, the game marked their first encounter with a global financial market, pushing them toward speculative behavior and exposing them to its inherent risks. The SLP token—like many cryptocurrencies—proved to be even more volatile than the Cuban peso, making it a highly unpredictable asset. Nevertheless, this volatility did not deter them from hoping to strike it big; rather, it underscored the precarious yet captivating nature of their engagement with digital economies.

Precarious Play

The experience of Cuban Axie Infinity players sheds light on a broader trend in the digital economy: the merging of play, work, and investment in ways that challenge traditional definitions of labor. Concepts like “gamification” (Robson 2015) and “playbor” (Kücklich 2005) have been used to describe how game-like elements are incorporated into non-game contexts to enhance engagement or extract value. However, play-to-earn games like Axie Infinity take this a step further by directly integrating financial incentives into gameplay, creating a highly speculative and precarious form of digital work.

Image 6: Screenshot from the website CoinMarketCap, showing the market trend of Axie’s highly volatile in-game cryptocurrency Smooth Love Potion (SLP).

For Cuban players, the volatility of the SLP token added another layer of uncertainty. In the early days, some players earned substantial sums, far exceeding local wages. But as new player growth slowed after the hype in the summer of 2021, the game’s revenue—and thus the value of in-game assets—plummeted. The in-game inflation began to mirror real-world inflation: the more players sought to extract value from the game without reinvesting, the faster the currency’s value declined. When North Korean hackers stole $620 million from the game’s blockchain in March 2022, the already fragile Axie economy collapsed further, leaving many players with worthless tokens (Harwell 2022).

The Fragile Promise of Blockchain

The case of Axie Infinity in Cuba exposes the limits of the promises made by blockchain evangelists (e.g. Tapscott and Tapscott 2016, Domjan et al. 2021, Kshetri 2023). Far from bringing financial inclusion and economic empowerment to the Global South, the game’s ecosystem often reproduced existing inequalities and inflationary dynamics. In theory, blockchain technology is supposed to offer a decentralized, transparent alternative to traditional financial systems. Yet, in practice, Cuban players found themselves entangled in a web of intermediaries, trust-based networks, and volatile markets, which reinforced rather than dismantled power imbalances.

The rise and fall of Axie Infinity in Cuba provides a stark reminder of the limitations and risks inherent in new digital economies. This became especially evident when Axie Infinity’s in-game inflation eventually surpassed the inflation in Cuba’s real economy that had driven many players to the game in the first place. While the game initially offered a lifeline to some, it also exposed the precarious nature of digital work, where players are subject to volatile earnings, insecure contracts, and exploitative conditions. The experience of Cuban players thus challenges the narrative that blockchain technology will bring about a more equitable global economy. Instead, these systems can easily replicate and even exacerbate existing inequalities, creating new forms of digital labor exploitation and financial speculation.

This text is part of the feature The Social Life of Inflation edited by Sian Lazar, Evan van Roeckel, and Ståle Wig.

Steffen Köhn is a filmmaker and associate professor of visual and multimodal anthropology at Aarhus University. He is the author of: Island In the Net. Emergent Digital Culture and its Social Consequences in Post-Castro Cuba (forthcoming with Princeton University Press) as well as Mediating Mobility. Visual Anthropology in the Age of Migration (Wallflower/Columbia University Press 2016). His films have been screened at the Berlinale, Slamdance, Rotterdam International Film Festival, BFI Film Festival London, and the Word Film Festival Montreal, among others.

References

Domjan, Paul, Gavin Serkin, Brandon Thomas, John Toshack. 2021. Chain Reaction: How Blockchain Will Transform the Developing World. Basel:Springer International Publishing.

Harwell, Drew. “U.S. Links Axie Infinity Crypto Heist to North Korean Hackers.” The Washington Post, April 14, 2022. https://www.washingtonpost.com/technology/2022/04/14/us-links-axie-crypto-heist-north-korea/.

Kshetri, Nir. 2023. Blockchain in the Global South: Opportunities and Challenges for Businesses and Societies. London: Palgrave Macmillan.

Kücklich, Julian 2005. Precarious playbour: Modders and the digital games industry. fibreculture 5 (1): 1-5.

Robson, Karen Kirk Plangger, Jan H. Kietzmann, Ian McCarthy,and Leyland Pitt. 2015. Is it all a game? Understanding the principles of gamification. Business Horizons 58 (4): 411-420.

Tapscott, Don and Alex Tapscott. 2016. Blockchain Revolution: How the Technology behind Bitcoin Is Changing Money, Business, and the World. New York: Penguin.

Cite as: Köhn, Steffen 2024 “Tokens of survival: the rise of crypto gaming in Cuba’s inflationary economy” Focaalblog 10 December. https://www.focaalblog.com/2024/12/10/steffen-kohn-tokens-of-survival-the-rise-of-crypto-gaming-in-cubas-inflationary-economy/

Blog, Right-wing Populism

Pablo Semán and Ariel Wilkis: Rebellion of the bastards: the rise of the extreme right in Argentina

The growth of extreme right-wing forces in the Argentine political process expresses the combination of global trends and specific trends associated with local political history. It also expresses the need to understand the embeddedness of these political preferences in the social experiences shaped by the generalized decline of the middle and popular classes, sedimented in a long cycle of forty years and currently intensified by the derivations of the pandemic and the leaps in annual inflation in 2017 and 2021 (in which it passed, respectively, from 25% to 50% per annum and from 50% to 100% per annum).


It is impossible to deny the correspondence with those right wing processes taking place in different world regions and countries (see Engelen, 2023; Henkel et al., 2019; Kalb, 2020; Pasieka, 2018). The longer-term trend that explains these triumphs is the complex and contradictory reconfiguration of economics and politics since the fall of the Berlin Wall, if we need an iconic date. The global dynamics of capitalism no longer just erode national democracy but have started to generate alternative proposals to re-establish social order on a national scale, underwritten by the cultural fragmentation and economic discontent produced by economic (neo)liberalization.

Image 1: A 2002 demonstration against the financial “Corralito” in La Plata, Argentina, photo by Barcex

The expressions of the extreme right represent a form of illiberalism claiming political institutions at the limits of democracy that would overcome the fragmentation of national units suffering from the international mobility of capital. The accumulation of unresolved problems is changing the social structure and the political process: the rising vulnerability of working classes leads to the abandonment of traditional parties. The result is radicalizing tendencies within the elites as well as the replacement of incumbent political elites with new ‘populist’ ones.

Capitalism and democracy have become divorced from each other. Now, the crisis of the national states and their political systems has finally become politically visible, in a deep and organic sense.

What happens in Argentina or Brazil, in this context, involves patterns that are different from  the dynamics of the northern hemisphere.  In the region there are no transnational institutional aggregations such as the European Union. In Europe, the EU is both a target and a moderator of the illiberal turns in Poland, Italy or Hungary. The supranational powers, without being totally determinant, tend to moderate the character and pace of political and economic reforms. A coup d’état like those that occurred in Honduras (2009), Paraguay (2012) Bolivia (2019), or Brazil (2023) is highly improbable in Europe today.

This is due not only to a difference in the political regimes, but also to a socio-economic process that has been producing especially in South America a deep discontent among a very volatile electorate. In countries such as Brazil and Argentina, the transitions to democracy in the 1980s were accompanied by hyperinflation and external debt crises, followed by monetarist stabilization and exclusionary ‘modernization policies’ in the 1990s, followed by new compensatory policies in the 2000s. The overall result of these processes was transformation of social structures marked by the growth of inequality, the growth of economically fragile popular classes, and the polarization of the middle classes. The long cycle of social transformations in these countries has coexisted with short cycles such as the 2000s where an emerging “new” middle class experienced a social mobility. As a result, in countries such as Argentina and Brazil the states have less capacity to respond to growing popular demands, which themselves tend to be more urgent than in the global North.

Analysts have noted a rightward lurch in the political options available to Argentine voters in recent years. In the analysis, however, insufficient attention is given to the impact of the popular experience of high inflation: the constant tightening of belts, growing household debt, an inability to budget, a political tunnel vision focused exclusively on inflation, with great impact on the expectations for the future, which are  increasingly negative and desperate.

The pandemic triggered inflation in countries around the world that had experienced price stability for decades. In 2022, the war in Ukraine drove inflation even higher. The case of Argentina was exception: the country had been suffering from spiraling inflation for over a decade. After a relative drop in inflation in 2020, in which annual inflation reached 36.1%, Argentina suffered another year of high inflation (50.9%) in 2021 (INDEC, 2021). In 2022, it reached 94.8% for the year, leaving Argentina fifth on the ranking of countries with the highest inflation worldwide behind Venezuela (305.7%), Zimbabwe (244%), Lebanon (142%), and Sudan (102%) (Infobae, 2023). Local factors exacerbated the situation: a shortage of dollars (a historical problem magnified by the pandemic), the pressure from the IMF to address the fiscal deficit eliminating subsidies to public services and a monetary culture shaped by inflationary inertia contributed as well.

This inflationary dynamic intensifies the erosion of politics by multiplying the mismatch between social demands and state capacities. At this point it is necessary to underline the socio-political element that is part of the inflationary dynamics. The trade unions in the first Peronism (1946-1956), and the trade unions and social organizations in the later Peronism that was part of the “progressive wave” of the 2000s, have been the political agency of social and economic protections that guaranteed welfare levels for the working class. The flip side of these arrangements has been a lack of foreign exchange earnings (external restriction is the constant of the Argentine economy since the middle of the last century) to sustain them. Nor did the unions and social organizations have the necessary political strength to transform the performance of the economy. The scarcity of foreign exchange has turned the dollar price over time into the anchor of all prices in the economy without it being a dollarized economy in the strict sense of the term (Luzzi and Wilkis, 2023). The chronic devaluations of the Argentine peso – and the concomitant inflation – are the short term escape from the structural contradiction between strong working class forces on the one hand and an economic organization that hollows out their effective power at the same time.  

At the time of writing these notes and six months before the presidential elections, the libertarian candidate Javier Milei has a vote intention of around 20-25%. He is the main promoter of the dollarization of the Argentine economy. It is in this context that the rise of candidate Milei can be understood.  His position implies the rejection of “everything that is there” and its replacement by a utopian free competition that rewards the best without the parasitic intervention of the state. This program of denunciation channels towards the Right the multiple contemporary dissatisfactions. On the one hand, it is not clear at this stage of the electoral process that Milei will either triumph or just survive as a candidate. On the other hand, it is clear that he has extended the possibilities of political articulation so that other candidates, who perhaps have more potential, can follow his path. It reflects the popular exhaustion with inflation, relegating to a second place demands that used to occupy a central place in the public agenda, such as unemployment or insecurity. Dollarization continues and completes the exclusionary and polarizing dynamics of the neoliberal reforms of the 1990s. The promise of a stable currency is going to have a very high social cost.

The neo-liberal demands that after the 2001 crisis in Argentina had been left almost without an audience, are returning with a vengeance: dollarization is inevitably accompanied by demands for the privatization of institutions such as education and health care. They celebrate individual initiative and denounce the crisis of public services as of their own making. The mood of society towards the performance of the state – increasingly questioned before the pandemic, much more so by the end of it, and even more intensely after – is very favorable to the right wing libertarian privatizers: “si no me vas ayudar por lo menos no me molestes” (“if you are not going to help me, at least don’t bother me”). The promise of dollarization suits these sentiments. The U.S. dollar is a currency devoid of the arbitrariness of the Argentine state (and the governmental elite that commands it), a state that is perceived as guilty of disorganizing and worsening daily life through its inability to provide stability to the national peso. In a society in which people did the impossible to get through the long months of lockdown while weathering inflation, the pandemic left people with the distinct feeling that the state was coming up dramatically short. The controversial dynamics of an unknown virus affected the state and rendered it increasingly illegitimate. The pandemic, by damaging the civic bond of trust with the state, strengthened the anarcho-libertarian thesis.

Image 2: Javier Milei in 2014 at the World Economic Forum on Latina America in Panama City, photo by World Economic Forum

The pandemic and spiraling inflation are in Argentina intertwined processes in which sacrifice became a common currency. Argentine society emerged from the pandemic with an ideology that was family-oriented, anti-state, and anti-politics. More people had been convinced that government spending was the primary source of inflation, demanding in some cases extreme state cutbacks. The rise of right-leaning or extreme right options, the declining interest in politics, and a growing dissatisfaction with the political class all predate the pandemic and the high inflation, but the latter have profoundly accelerated existing trends.

The Right has renewed and sharpened its own repertoire of actions. During the last 12 years, a political consensus that established certain prohibitions began to be explicitly challenged: notes of racism, of vindication of the last military dictatorship, of macho vindictiveness in the face of gender agendas that many had believed to be in retreat are reborn with force in the public space. However, the growth of the Right is not only due to the ideological radicalism of some of its promoters, who have accumulated significant political capital to establish themselves as an autonomous force in relation to the mainstream right wing that governed in the period 2015-2019. That growth is also predicated on the weariness of the voters of the traditional parties (Left and Right).

Despite its cultural predominance, Peronism today in government has been losing since at least 2008 the battle for the interpretation of economic life in growing sectors of the population. A social majority, which includes part of the popular classes, identifies with its antipode in a dialectic in which the libertarian Right takes on a specific local meaning.

A great part of this electorate cannot be described as furious, pragmatic or reactive to all political positions equally. They want to improve economically, they believe in their own efforts, they demand order and market. And they do so less because of agreement with right-wing intellectuals and publicists than because of a long experience in which those right-wing ideas seem to become preferable.  There is an authoritarian liberalism which, following Richard Hoggart (1957), must be seen as a contemporary development of the subaltern classes. These, contrary to what the political elites expect, especially those of the left, embrace the Right. This is also a  reaction against the deference that the progressive forces have tried to impose on it, presuming moral superiority and capacity for leadership beyond the prosaic issues of everyday life.  Thus, the process in which inclusive consensus is dissolved clearly contains a popular reaction against the Left progressivism of the traditional Peronist leadership.

Politics in Argentina has a specific intensity that makes it more than a simple reflection of what is happening in the world. In the 1970s, few countries in the world took state terrorism as far as Argentina. In the 1980s, the trial of the defeated dictators became an exemplary case for human rights. In the 1990s, the intensity of the neoliberal experiment in the country was exceptional when compared to Brazil and Mexico in terms of the scope of privatizations and economic and financial openness. It is worth asking whether this right-wing emergence will not have the same exceptional intensity as its precedents. The antecedents are already in place.

Pablo Semán  is Professor at Universidad Nacional de San Martín and principal researcher at CONICET.

Ariel Wilkis is Professor and Dean at Escuela IDAES, Universidad de San Martín and  researcher at CONICET.

References

Engelen, Ewald 2023. “Another ‘populist’ shake-up in the Netherlands: the BBB revolt” Focaalblog 24 April. https://www.focaalblog.com/2023/04/24/ewald-engelen-another-populist-shake-up-in-the-netherlands-the-bbb-revolt/

Henkel, Heiko, Sindre Bangstad, and Bjørn Enge Bertelsen. 2019. “The politics of affect: Anthropological perspectives on the rise of far-right and right-wing populism in the West.” FocaalBlog, 14 March. http://www.focaalblog.com/2019/03/14/heiko-henkel-and-sindre-bangstad-the-politics-of-affect-anthropological-perspectives-on-the-rise-of-far-right-and-right-wing-populism-in-the-west/

Hoggart, Richard (1957) The uses of literacy: aspects of working-class life with special references to publications and entertainments. London: Chatto and Windus

INDEC (2021) “Índice Precio al Consumidor”, Vol. 6, No 1, december 2021

Infobae (2023) “La Argentina termino cuarta inflación del mundo”, 23 January 2023. https://www.infobae.com/economia/2023/01/13/la-argentina-termino-con-la-cuarta-inflacion-mas-alta-del-mundo-en-2022-detras-de-venezuela-zimbabue-y-libano/

Luzzi, Mariana and Wilkis, Ariel (2023) Dollar: How the U.S. Dollar Became a Popular Currency in Argentina (1930-2019). Alburqueque: New Mexico University Press.

Kalb, Don. 2020. “Covid, Crisis, and the Coming Contestations.” FocaalBlog, 1 June. http://www.focaalblog.com/2020/06/01/don-kalb-covid-crisis-and-the-coming-contestations/

Pasieka, Agnieszka. 2018. “Who is afraid of fascists? The Polish independence march and the rise of the (far?) right.” FocaalBlog, 12 December. www.focaalblog.com/2018/12/12/who-is-afraid-of-fascists-the-polish-independence-march-and-the-rise-of-the-far-right.

Cite as: Semán, Pablo and Wilkis, Ariel 2023. “Rebellion of the bastards: the rise of the extreme right in Argentina” Focaalblog May 11. https://www.focaalblog.com/2023/05/11/pablo-seman-and-ariel-wilkis-rebellion-of-the-bastards-the-rise-of-the-extreme-right-in-argentina

Blog, Right-wing Populism

Ewald Engelen: Another ‘populist’ shake-up in the Netherlands: the BBB revolt

The shock among the Dutch chattering classes on 16 March was palpable. The right-populist Farmer–Citizen Movement (BBB) – established in 2019 by a small communications firm, bankrolled by the powerful Dutch agrifood complex and led by a former journalist for the meat industry – had in one go massively increased its vote share in the country’s provincial elections. It is now the largest party in all twelve provinces, and expected to achieve the same status in Senate in April. This would give BBB huge veto power at both national and local levels, potentially bringing an already hesitant green transition programme to a standstill. Faced with this prospect, an irate commentariat has begun to denounce the farmers as enemies of green progress, and speculate that voting restrictions – on the elderly, the lower educated, those in rural constituencies – might be necessary to override their resistance.

The casus belli for the farmers’ revolt was a 2019 ruling by the Dutch Supreme Court that the government had breached its EU obligations to protect 163 natural areas against emissions from nearby agricultural activities. This prompted the centre-right coalition government, led by Mark Rutte, to impose a nationwide speed limit of 100 km/h on highways and cancel a wide array of building projects intended to alleviate supply shortages on the Dutch housing market. Yet it soon became apparent that such measures could only be a short-term stopgap, since transport and construction contributed a pittance to national nitrogen emissions while agriculture made up a whopping 46%. A structural solution would therefore have to involve a substantial reduction of livestock. The suggestion long put forward by the peripheral ‘Party for the Animals’, to slash half of the aggregate Dutch livestock by expropriating 500 to 600 major emitters, was suddenly on the table. The unthinkable had become thinkable.

Image 1: Dutch farmers protesting in The Hague in October 2019, photo by Steven Lek

The number of Dutch workers employed in agricultural activities has declined precipitously since 1945, from around 40% during the Great War to only 2% today. Yet, over the same period, the Netherlands has become the second biggest food exporter in the world after the US. Its highly capitalized meat and dairy industry plays a pivotal role in global supply chains, which makes its ecological footprint unsustainably large. Hence the gradual realization among the Dutch political class – accelerated by the Supreme Court ruling – that meeting climate goals meant reorienting the national economy. For the rural and small-town oriented Christian Democrats in the coalition that was hard to swallow; for the eco-modernist, meritocratic social liberals in the coalition (D66) this came naturally; while for Mark Rutte’s own People’s Party for Freedom and Democracy, even though naturally in favor of ‘growth’, it was simply the pragmatic thing to do. As one centrist MP remarked, ‘The Netherlands can’t be the country that feeds the world while at the same time shitting itself.’

These green proposals triggered a wave of farmer protests – farmers blocking roads with their tractors, occupying squares and other public spaces, breaking into government buildings and turning up at the homes of politicians – as well as the formation of the BBB. After a brief pause during lockdown, the movement has now reached new levels of intensity. Since spring 2022, along the roads and highways leading into the forgotten parts of the Netherlands, farmers have hung innumerable inverted national flags: a symbol of their discontent, sprouting up like mushrooms after an autumnal shower.

Almost one fifth of the electorate, approximately 1.4 million people, turned out to vote for the BBB – a significantly larger number than the 180.000 farmers who comprise its core constituency. This suggests that more is at stake here than simple nimbyism. Pensioners, the vocationally trained and the precariously employed are overrepresented among the BBB’s supporters, and its largest electoral gains were in peripheral, non-urban areas which have been hit by falling public investment over a long time. Such groups have rallied around a class of farmers who present themselves as victims, but who are in fact among the most wealthy and politically well-connected in the country: one in five of them is a millionaire. It is clear that this heterogeneous bloc could only be assembled as a result of deep disenchantment with mainstream politics in the Netherlands – which has long been blighted by the arrogance and incompetence of its ruling stratum.

A number of historical factors laid the groundwork for the farmers’ movement. First, the Netherlands underwent an extremely rapid neoliberal makeover since the early 1980s, resulting in the fire sale of public services, the marketization of childcare, healthcare and higher education, a steep decline in social housing, the emergence of globalized banks and pension funds, and one of the most flexible labour markets in the EU, with one in three employees on precarious contracts. Next, the 2008 financial crisis led to one of the most expensive banking rescues in per capita terms, followed by six years of austerity which punished the poor and served to redistribute wealth from everyone else to the rich. The four lockdowns imposed between 2020 and 2022 had the same effect: workers lost their jobs, saw their incomes fall and died in greater numbers. Rising consumer prices, sparked by the war in Ukraine, subsequently pushed many Dutch households in the provinces into fuel poverty.

All this was interspersed with constant bureaucratic failures across a range of government departments: childcare, primary education, housing, the tax office, transport and gas extraction. At the same time, regressive subsidies were handed out to middle-class environmentalists to reimburse heat pumps, solar panels and Teslas, which of course only they could pre-finance. Add a constant trickle of high-handed insults about the lower classes from the putative experts who dominate public debate, and you end up with a festering and combustible mixture of resentments. The situation was finally ignited in 2019 by the mentioned court ruling, after which latent regional-cultural identifications of the provinces against the city (the ‘Randstad’, the Western urban conurbation that accommodates circa half the Dutch population) provided the raw symbolic material for the farmers’ adversarial narrative: core versus periphery, elites versus masses, vegans versus meat-eaters. With the help of some savvy political entrepreneurs, this message began to resonate far beyond the farmlands.

The French writer Houellebecq once wrote that the Netherlands is not a country but a limited liability corporation. It perfectly captures the view of Mark Rutte’s People’s Party for Freedom and Democracy. For thirteen years now it has reimagined the Netherlands as a European Singapore on the Rhine. It is a form of mercantilist neoliberalism that aims to attract as much foreign capital, both financial and human, to the Netherlands as possible. The tax rule book is arranged with that goal in mind, transforming the Netherlands into one of the largest tax havens in the world. The social security regime has been redesigned to serve highly educated expats, turning the city of Amsterdam into an Anglophone outpost where shopping and dining requires one to speak English, while refugees and asylum seekers are locked away near some of the poorest villages in the Dutch outback. Public investment has been rechanneled into the shiny metropolitan areas in the West, while largely surpassing the peripheries along the German border. Last week it took me nearly four hours to go from Arnhem to Veenhuizen in the North of the Netherlands by public transportation, a distance of less than hundred miles.

As in the UK where everything goes to London and the home counties, this was legitimated by the mercantilist narrative of the triumph of the city and the creative class, peddled by hip geographers like Richard Florida and Edward Glazer, that told post-ideological, neoliberal politicians to stop backing losers and start picking winners and steer massive amounts of public funding to cities. For that is where human capital resides, so the story goes, and that is what is key to national economic success. And so it went: while hospitals, schools, fire stations and bus lines slowly but gradually disappeared from the periphery, the metropolitan core was sprinkled with massive public investments in glittering metro lines etc, Amsterdam on top.

The one that has overseen it all, Mark Rutte, who is in the race to become the longest sitting head of state in the two hundred years history of the Kingdom of the Netherlands, fits to a tee with the reckless opportunists so wonderfully described  by the New Zealand sociologist Aeron Davies (2018): Rutte is the ultimate expert in surviving the political game but totally lacks the vision that is required in times of crisis. In fact, Mark Rutte famously quipped that voters who want vision should better go to an optometrist.

The disaffection of a growing slice of the electorate is not a performative effect of media framing, as some maintain, but is based in real, material neglect. As was hammered home two days after the election results came in by a report from one of the Dutch public think tanks: there are large discrepancies in life expectancy between core and the periphery of the country as well as huge gaps in terms of wellbeing and trust in politicians (2013). The report concluded that this was the unintended effect of decades of underinvestment in the provinces: the places that, in the worldview of people like Mark Rutte, do not matter

Demography, balanced budgets, the euro, Covid-19, war, climate change: these are the imponderabilia that centrist politicians, backed by their battery of experts, have used to discipline voters into submission. Nitrogen emissions fit seamlessly into this technocratic pattern. The plan to halve livestock numbers in the Netherlands was not drawn up after a lengthy process of democratic debate; it was a summary decision made by politicians hiding behind an unaccountable judiciary and a set of scientific numbers.

Hence, it may be necessary to revise the famous observation by the German poet Heinrich Heine: ‘In Holland, everything happens fifty years late’. Here, it seems, the backlash against the green technocracy has come early (though France’s yellow vests had been there already). The Dutch (and French) conjuncture foreshadows the fate of other countries in the global north – as centrist governments, striving to assert their green credentials, begin to make heavy-handed policy reforms with major redistributive consequences. This, after forty years of neoliberal upward redistribution, and in a situation where governing elites in the preceding decade had already felt very uncertain in the face of the ‘populist’ revolts.

What Andreas Malm (2016)calls the ‘energetic regime’ of global capitalism has so far taken up most of our political attention; but as the environmental fallout of its ‘caloric regime’ becomes impossible to ignore, livestock farming (among other forms of industrial agriculture) will enter the crosshairs of governments and climate activists. Recent data from Eurostat show that livestock densities are particularly high in Denmark, Flanders, Piemonte, Galicia, Brittany, Southern Ireland and Catalonia. Soon enough, these regions will have to introduce measures similar to those currently under discussion in the Netherlands. And if the Dutch case is anything to go by, technocracy will hardly do the trick. A state that has imposed privatization, flexibilization, austerity, disinvestment and regressive environmental subsidies on its citizens for years cannot expect to be trusted when it comes to climate politics. Instead, it will have to redress the ruinous effects of these policies, while slowly building support for the green transition through a process of engagement that does not shy away from democratic disagreement and the hard work that entails.

Ewald Engelen is professor of financial geography at the University of Amsterdam and a feature writer for De Groene Amsterdammer.

This text first appeared on NLR’s Sidecar (6 April 2023).

References

Davis, Aeron. 2018. Reckless opportunists: Elites at the end of the Establishment. Manchester: Manchester University Press

Malm, Andreas. 2016. Fossil Capital: The Rise of Steam power and the Roots of Global Warming. London: Verso.

RLI. 2023. Elke regio telt! Een nieuwe aanpak van verschillen tussen regio’s, https://www.rli.nl/publicaties/2023/advies/elke-regio-telt

Cite as: Engelen, Ewald 2023. “Another ‘populist’ shake-up in the Netherlands: the BBB revolt” Focaalblog 24 April. https://www.focaalblog.com/2023/04/24/ewald-engelen-another-populist-shake-up-in-the-netherlands-the-bbb-revolt/

Blog

Giorgos Poulimenakos & Dimitris Dalakoglou: Disaster Infrastructures and the Inverted Shock Doctrine in Greece

On March 1st 2023, an impromptu protest rally took place outside the headquarters of Greece’s only railway company, Hellenic Trains (HT). HT is the passenger carrier of the recently privatized and formerly publicly owned carrier of Hellenic Organization of Railways. The word ‘Assassins’ and the phrase ‘Your profits, our deaths’ were written on the walls of the headquarters amidst clashes with the police.

On the morning of that day, Greece had woken up to devastating news. During the night, a passenger train headed to Thessaloniki from Athens, mostly carrying students, collided with a freight train traveling in the opposite direction. The collision was so fierce that the first two wagons were literarily pulverized, leaving 57 dead. As it turned out, an inexperienced Stationmaster with limited equipment at his disposal had manually put the two trains on the same track by mistake. For a full twelve minutes, passengers and personnel on both trains were on collision course without any human or non-human intelligence detecting it. In the following days much more serious and larger rallies and riots followed.

 ‘Mitsotakis, fuck you!’ – the original condition

The crowd, amongst others, was chanting a melodic slogan ‘Mitsotakis, fuck yοu!’. This vulgar slogan had first emerged during the big forest fires of 2021 when the wooded northern region of Evia Island and the forests of Parnitha mountain in the north of Athens had been abandoned to burn due to a peculiar “general evacuation” policy. New Democracy, the conservative governing party, had won the elections of 2019 to an extent by utilizing another horrible catastrophe, the fires of Eastern Attica in 2018. At that time, New Democracy blamed the governing SYRIZA party for failing to save the lives of the 103 who died in the fire. However, instead of trying to reinforce the civil protection infrastructures and increase the budget for fire brigades and forestry service, New Democracy has preferred to recruit a few thousand new police officers and thus enforce a heavy policing of forest fires. With the new policy, entire municipalities are evacuated by force so as to avoid deaths by all means in order to come out with a lower body count than the previous government.

The consequence of this policy of evacuation and abandonment was not only the destruction of forests, but also of agricultural land, flocks of animals, bees and entire villages that burned to ashes as nobody was there to protect them (on the fires and the archaeological heritage see Poulimenakos & Dalakoglou 2021 in FocaalBlog). As TV channels sent their crews to report from the evacuated towns and villages of Evia, someone videobombed a live broadcast and stood behind the reporter shouting, ‘Mitsotaki, fuck you!’, in a spontaneous expression of anger towards the evacuation policy that had destroyed his livelihood. Soon, “Mitsotakis, fuck you!”, became a slogan with a melody, chanted by football fans during games and by audiences at music concerts. To understand the rapid nationwide spread and popularity of this anthem, we now take a closer look at the New Democracy government record.

The Mitsotakis government had applied the same principle of minimum death tolls at any cost during the Covid-19 pandemic by enforcing one of the hardest lockdowns in the western world with curfews and severely restricted mobility under state surveillance. For many months, every citizen had to send a text message to the Ministry of Interior Affairs and give a “valid” reason before leaving their house. Defectors were heavily fined by the police. As with the forest fires, now the systematic destruction of health care infrastructures under the austerity regime imposed after the financial crash was offset by calling in the police as a civil protection mechanisms and the government’s main tool for controlling the pandemic.

“Mitsotakis, fuck you!” – the current condition

These structural continuities of policing (rather than resolving) an infrastructural crisis explain why one week after the train crash tragedy, on March 8th, Greece saw the biggest popular mobilization since the 2010-2015 era of insurrections against the imposition of structural adjustment programs by the IMF-EU-ECB troika. The main rallying cry of the protests was the phrase “text me when you get there”, a reference to the overprotective Greek family relations symbolized by frequent parental requests to send messages when travelling (even for over-30s). Now used by the protesters, the phrase is a tragic and powerful reference to mourning parents who will never receive a reply from their children who were on the train.

Image 1: Photo from one of the many demonstrations on the 8th of March. The sign reads: “text me when you get there”. Source: alphavita blogspot

The protests were so massive and persistent that they forced the Prime Minister to postpone the upcoming elections for an undetermined period. Meanwhile, the government’s political communication experts massively underestimated the train tragedy’s impact on Greek public opinion. Mitsotakis’ initial government statement blamed the accident on the stationmaster and omitted any reference to years of chronic under-investment in traffic infrastructures during the privatization of the railway company. This only increased public anger. An alliance of trade unions declared a general strike, whilst pupils occupied their schools and students their universities. Within five days, the government’s public relations experts advised Mitsotakis to accept partial responsibility to calm things down. Yet again the obnoxiousness and arrogance of the PM and his cabinet led to another PR catastrophe when Mitsotakis stated that the 57 victims of the train crash had ‘sacrificed’ themselves in order to improve national railways, flanked by the Minister for Development who called the 57 deaths ‘an opportunity’ for the country. With no time left for the government or the railway company to come up with another damage control strategy, people on social media, in neighborhoods and work places saw the train crash as an emblem of the precarization of everyday life after more than 13 years of extreme neoliberal government budget cuts.

“Don’t you dare to put the blame on an isolated human error”, or, “we live by chance in this country”, and, “this was not an accident but a murder”, were popular expressions that linked mourning and anger with a demand for exposure of underlying causes of the incident such as chronic degradation of railway infrastructures, budget cuts, staff shortages, lack of automated security systems that could correct human errors and prevent accidents. The poor state of other hard infrastructures came to light, contradicting the neoliberal mantra that service standard would skyrocket after privatizations. The German-owned airports in Greece’s peripheral cities suffer from staff and electronic equipment shortages while foreign equity investment in the Chinese-owned port of Piraeus never reached the promised level. The carefully crafted hegemonic narrative of private sector supremacy over the old state-controlled economy that had gradually gained control of hearts and minds (Mavris 2017) since the Greek crisis fell apart like a house of cards. Recent opinion polls show a reversal of political preferences with the ruling party losing significant ground amongst a general decline of trust in capitalist democracy.

Greece’s Inverted Shock Doctrine

What is happening in Greece today seems to be the exact opposite of what Naomi Klein argued in her stellar book on the “Shock doctrine” (2007). According to Klein, the severity of an immense collective trauma leads to numbness and disorientation that freezes collective action and presents excellent opportunities for the ruling classes to impose otherwise highly unpopular policies. In Greece, disorientation and numbness characterized society during the long period of inflation, privatizations, budget cuts, and impoverishment since 2008. Yet, these processes seemed abstract, confusingly linked to both local and global economic processes, and, hence, difficult to pinpoint in space and time. That vagueness certainly ended with the collective trauma of the train crash. The tragic crumble of a very material and tangible element of public transport infrastructure, similar to the earlier case of the Evia Island forest fires, turned into a metonymy for the crumbling relations between the Greek public, society, on the one hand, and the alliance of private capital and the state apparatus on the other hand. As we know from ethnographic research, “infrastructures are a principle materialization of the relationship between people (citizens and non-citizens alike) and otherwise abstract state and supra-state authorities” (Dalakoglou 2016:823). Infrastructures consist of the realm where the social contract between a state and its citizenry is taking tangible forms and is felt in the everyday life. It is the realm where the game of hegemony is most likely to be gained or challenged (Srnicek 2014).

Another crucial dimension of the conjuncture within which the massive mobilizations against the state-capital ruling class alliance now take place is that in recent weeks Greeks learned that for the first time in history residential properties are no longer protected by law from dispossession even at rather insignificant household debt levels. The Greek Supreme Court recently ruled in favor of private equity funds, allowing property auctions to redeem household loans purchased from banks as initial lenders, leaving hundreds of thousands who have struggled to repay their mortgages in despair about their future and another crucial aspect of the national social fabric in distress.

The residential house in Greece is more than bricks and mortar that put a roof over one’s head. It represents intra-generational solidarity and strong family bonds, with parents struggling to buy a house to provide economic security for their children. In other words, the house represents a form of informal social security provided by the family rather than the state. Typical to the substitution of an absent welfare state with informal family solidarity in Mediterranean societies, Greece never had significant numbers of council housing like the UK for example. Family solidarity provided a safety net in difficult times and certainly so during the recent 13-years long crisis with people in their 30s or even 40s living with their parents or grandparents.

Infinite density and the specificity of neoliberal austerity

We argue that the tragic train crash made visible the specific and tangible failure of public infrastructure and thus gave austerity specificity in time and space. The disaster encapsulates an “infinite density” of societal deadlock between the protagonists of privatization and austerity on the one hand and the very fabric of the social contract in Greece on the other hand, in which every form of social consensus is collapsing. With the neoliberal state’s privatized public services failing to fulfill the promises of upgraded public infrastructures to the benefit all and the informal forms of social reproduction gradually dismantled, the Greek nation-state moves towards a power vacuum. It is no coincidence that the majority of protesters are young people from the so-called generation z. This generations feels that all aspects of the social contract are expiring and they will not enjoy the benefits and stability of the public sector that their parents had. Instead, they will have low-paid jobs in the private sector and will probably not inherit a house to live in because they cannot afford to pay the increased inheritance taxes (Knight 2018) or because their parent’s house will be disposed by private equity funds. The train accident made shockingly evident that in today’s Greece even a routine train journey is not safe, that nobody “is there” for the people. “We live by chance in this country”, one of the protest slogans states.

Yet, a careful observer of public transport users after the train disaster sees this realization of state negligence turn into an increased care for each other. People now help older passengers and others in need on and off busses in the absence of special ramps. They talk to each other and give courage to each other for the day ahead while ranting against the government (perhaps even using the public slogans discussed in this article). “We are the infrastructures” is what we are often told during recent ethnographic research. Maybe this new confidence will create a vision of new social organization beyond the state, capital and also beyond the family. One new slogan points in this direction; “Mono o laos tha sosei ton lao” (“only people can save the people”).

References

Dalakoglou, D. (2016) “Infrastructural gap: Commons, State and Anthropology. City, 20:6, 822-831, DOI: 10.1080/13604813.2016.1241524.

Dalakoglou, D. and Poulimenakos, G. (2021). “The Past is on Fire: Wildfires, (Un)imagined Communities and the Shift to the Tourism of the 1%.” FocaalBlog, 30 September. https://www.focaalblog.com/2021/09/30/dimitris-dalakoglou-georgos-poulimenakos-the-past-is-on-fire/

Klein, N. (2007) The shock doctrine: the rise of disaster capitalism. London: Allen Lane.

Knight , D M 2018 , “The desire for disinheritance in austerity Greece “, Focaal , vol. 80 , pp. 30-42 . https://doi.org/10.3167/fcl.2018.800103

Mavris, G. (2017) “The Rise of Conservatism: Political Ideologies in Greece after the Memorandum” (in Greek), available online at https://www.mavris.gr/4943/political-ideology/.

Srnicek, N. (2014) “Infrastructures and Hegemony: The Matter of Struggle” in Fall Semester. Available at https://static1.squarespace.com/static/56ec53dc9f7266dd86057f72/t/581f3f704402439b560ff0b4/1478442864809/BookletNS.pdf

Dimitris Dalakoglou is Professor of Social Anthropology at Vrije Universiteit Amsterdam. He is director and PI of the research project infra-demos (funded from NWO-Vidi grant) and co-director of the Lab on Infrastructures Sustainability and the Commons.

Giorgos Poulimenakos holds a Bachelor’s degree in Social Anthropology from Panteion University and a MA from University of Sussex, UK. He is currently a PhD fellow in the ERC-funded project PORTS, based in the department of social anthropology of the University of Oslo. He is investigating the increasing significance of ports and maritime logistics in globalized, contemporary capitalism through the case study of Piraeus, an emerging Greek port in the global market bought recently by Chinese interests.

Cite as: Dalakoglou, Dimitris & Poulimenakos, Giorgos 2023. “Disaster Infrastructures and the Inverted Shock Doctrine in Greece” Focaalblog 14 April. https://www.focaalblog.com/2023/04/14/giorgos-poulimenakos-dimitris-dalakoglou-disaster-infrastructures-and-the-inverted-shock-doctrine-in-greece/

Blog

Tomaso Ferrando: Beyond Speculation

On May 21, 2022 the cover of The Economist left no space to the imagination: a set of skulls replaced the grains of a wheat straw, and the world was soon going to experience a ‘Coming Food Catastrophe’. Although there is no doubt that the prospect of world food security looks anything but pleasant, I cannot ignore the normative power of framing problems in a certain way. Depending on the questions that we ask and the elements that we consider, our thoughts and options will move in a certain direction. Therefore, even without questioning the idea that the world and its people are experiencing a food and climate related catastrophe, it is important not to normalize the most recurrent explanation.

There are at least three main interconnected reasons to question the approach adopted by The Economist and several other media and policy makers: for millions of small-scale producers and eaters around the world, almost a fifth of them, the food catastrophe is not just coming, it has been going on for a while; the absence of a critical reflection on the structural fragilities of a globalized food system for food commodities is translated into techno-optimist support for lab-based solutions and an intensification of free trade, without considering the way in which agrarian capitalism and the attempt to create a just-on-time global food system are the backbone of contemporary misery; the focus on high prices as a reflection of a sudden and exogenous shock overlooks the way in which food commodities’ price formation operates and, in particular, the role of financial actors and the financial return that they – and some corporations – have been accumulating.

Image 1: Grain elevator along the Tapajos river in Brazil, photo by author

My intervention focuses on speculation and speculative practices as the third overlooked point in mainstream accounts of the current state of food, but embeds them in the broader phenomenon of financialization of the food system as a transformation of all aspects of food into an asset class. Global food actors and institutional investors (including pension funds where we may have our savings) constantly extract rent from the food system, often profiting from hunger, food shortages and the consolidation of a food system that is unjust and unsustainable. Because there is nothing truly exceptional in what food prices have witnessed in the last months, it is important to start with a bit of history and go back to the period between 2008 and 2011, when the world faced a series of spikes in the price of grains and food riots.

Significant and persuasive evidence of excessive speculation

In 2009, the U.S. Senate Permanent Subcommittee on Investigations issued a Report concluding that:

“there is significant and persuasive evidence to conclude that these commodity index traders, in the aggregate, were one of the major causes of “unwarranted changes”—here, increases—in the price of wheat futures contracts relative to the price of wheat in the cash market. The resulting unusual, persistent, and large disparities between wheat futures and cash prices impaired the ability of participants in the grain market to use the futures market to price their crops and hedge their price risks over time, and therefore constituted an undue burden on interstate commerce. Accordingly, the Report finds that the activities of commodity index traders, in the aggregate, constituted “excessive speculation” in the wheat market under the Commodity Exchange Act.”

Despite the acknowledgment, financial actors with no interest in the actual trade of commodities continued to flood the commodity markets with bets and liquidity, aiming at scraping some percentage points and the consequent profits. This was the consequence of the liberalization of the financial markets and the creation of the possibility for everyone, including investors who would never like to receive a bag of coffee or a container of wheat, to trade in financial derivatives (e.g. futures) that had originally been conceived as a form of insurance for farmers, traders, elevators and processors. Rather than providing a guarantee against excessive fluctuations, the trading in future contracts by non-food actors left grain chains at the mercy of financial considerations and objectives, creating a domino effect that subverted the functioning of the supply chains and reverberated across the world. Especially given that futures prices for wheat remained “abnormally high compared to the cash prices for wheat,” a condition that pushed “real” cash prices up and significantly impacted people’s capacity to access food and feed themselves.

For the US Subcommittee:

“The inability of farmers, grain elevators, grain merchants, grain processors, grain consumers, and others to use the futures market as a reliable guide to wheat prices and manage their price risks over time has significantly aggravated their economic difficulties and placed an undue burden on the grain industry as a whole.”

While millions of people went hungry and rioted for their ratios, a bunch of financiers and shareholders registered unprecedented profits. A decade later, the lack of adequate policies and countermeasures means that history is repeating itself. However, with few exceptions, media and policy makers have given no attention to the role of finance and financiers in amplifying the effects of the invasion of Ukraine and artificially inflate prices. The world may be facing a “Coming food catastrophe” – to use the vocabulary of The Economist – but someone will be benefitting from it and has inherent incentives to make sure that it lasts as long as possible. Or, at least, the media continue blaming the high prices only on invasions, climate change and logistic, rather than speculation and higher profits on food-related investments.

Speculation, record profits and the radicality of the obvious

On January 7, 2022, an online magazine aimed at non-institutional investors published an article with a straightforward title: “It’s Time to Invest in Commodities. How to do it.” In the picture that was chosen, a pig is lifted high in the sky by a couple of balloons along with gold and a barrel of crude, a sign of the promising times for bullish investors and of the way in which finance sees food: like any other good that is internationally traded and where price differential across time can  be used to accumulate profit. Similar advices had been given for quite long time by specialized platforms, all convinced that a combination of dynamics, including uncertainty in logistic and climate change, would have created a condition of scarcity and a surge in prices, and that the increase in price of energy (oil and gas) would have also be driven up the price of producing food. The Bloomberg Commodity Index (i.e. a derivative product whose price mirrors the fluctuation of a combination of different commodities prices), for example, rose 27% in 2021, marking its best year in decades. The invasion of Ukraine was not the final straw that broke the back of the camel, but a windfall opportunity for anyone invested in energy commodities, food commodities and commodity indexes.

Image 2: The Chicago Board of Trade headquarter, the largest agri-commodity derivatives exchange in the world, photo by Marco Verch

Like in 2008-2011, there is clear evidence that February 24th was followed by an intensification of financial speculation, and that the surge in purchase of indexes and futures fueled by the expectation of higher prices provided a clear signal to the market:  that they should wait before selling or increase the price of their commodities to follow the trend of the financial market. Purchases of shares in agricultural and commodity funds, purchase of futures and AI-driven high frequency trading of derivatives intensified, and no immediate action was taken.

According to a May 2022 investigation by Lighthouse Reports, by early April 2022,

“the top five agriculture commodity-linked ETFs had received US $ 1.3 billion in net flows (or investment). Two funds – Invesco’s agriculture fund and Teucrium’s wheat fund – attracted net investor investment of US $ 1.2 billion dollars in the first three months of 2022 compared to US $ 197 million for the whole of 2021. Teucrium wheat fund, set up in 2011, saw net inflows of $ 377 million in March. Its previous monthly record high was $ 17 million in 2016. Invesco’s agriculture fund raked in US $ 273 million on March 7 alone, more than half of the total investment it received in the previous two years (US $ 478 million).”

As investors buy derivative products rather than the products themselves, each million that is invested represents hundreds of thousands of bushels of grain, sometimes manifold the amount of grain that that amount of money could actually buy.

The surge in speculative investments has not been exclusive to the United States, but has been an European affair too. According a study by The Wire, speculators’ share in the Paris milling wheat market, the benchmark for Europe, increased from 23% in May 2018 to 72% in April 2022. In particular, their presence in the buy side of the wheat futures market passed from 4% in 2018 to 25% in April 2022. Moreover, by April this year, seven in 10 buyers of futures wheat contract were speculators in the form of investment firms, investment funds, other financial institutions and commercial non-hedgers whose aim was to profit from the rise in prices. Furthermore, Euronext reported that between January 2020 and March 2022, investment funds increased their net buying positions by almost four times.

On both sides of the Atlantic, finance bet on the increase in the price of wheat and created the condition for this to become a self-fulfilling prophecy. And this had a global repercussion given to the use of US and European prices as benchmarks for the real economy. As Luigi Russi already wrote in 2013, “investors’ expectations create conditions where the future price is higher than the price of the underlying commodity. If market participants believe that the price of a certain product will rise at a later date, this will also be reflected in the price of futures. This is a contango.” And contangos generate wealth for the few, create financial profits and produce food insecurity.

If food is life, it cannot just be a matter of ‘excessive speculation’

History often repeats itself. Sometime it is a tragedy, sometime it is farce. Often both together. Similar to 2008-2011, civil society organizations and academics have been pointing at the need to curb the role of financial investors in defining the price of food, asking for speculation to be identified as one of the drivers of the price surge. Yet, institutional voices – including the Chief Economist of the Food and Agricultural Organization – have rejected the idea that speculators were involved in the ongoing price spike, claiming that there were no evidence of ‘excessive speculation’ meaning the excessive increase in trading of futures by financial speculators vis-à-vis the rest of the market. Like several years ago, the response of financial actors is that speculation per se is providing liquidity and is reducing the risk, and that it is only the ‘excess’ in derivative trading that should be limited. Speculating on food is not a problem. The problem is when speculators who enter the market only to gain from fluctuations of prices and volatility, are too greedy.

However, what is ‘excessive’ in the case of speculation versus high prices and food insecurity? Who defines it and what are the implications? The answer is extremely technical, but at the same time political. As a matter of fact, since 2010 there have been some attempts to re-introduce position limits against excessive speculation, which have been the object of fierce (although never too visible) conflicts and lobbying efforts. The intensity of speculation in the last months shows, if needed, that the existing rules are not adequate and that – as discussed below – maybe the regulator is starting from the long premises.

In 2010, the Dodd Frank Act tasked the Commodity Futures Trading Commission to introduce “position limits” –  limits on the contracts which could be held by individual traders and classes of traders, such as index speculators. When the CFTC introduced a new position limits rule in 2020, however, then-commissioner Dan Berkovitz wrote that the rule “fails to achieve the most fundamental objective of position limits: to prevent the harms arising from excessive speculation” and that it, “appears more intent on limiting the actions and discretion of the Commission than it does on actually limiting such speculation.” As a matter of fact, what was considered to be ‘excessive’ for the CFTC was not consider to be enough for the commissioner. And what has been happening since February 2022 is the evidence that the Dan Berkovitz may have been right.

In Europe, since 2013 there have been reports highlighting the need to review the Markets in Financial Instruments Directive (MiFID2) and introduce limits to excessive speculation that would limit the risk of food speculation. In 2016, the European Commission required the European Security and Markets Authority (ESMA) to increase the severity of the rules on position limits with regards to food commodities. In 2018 the ESMA issued new guidelines and identified that specific attention should notably continue to be paid to commodity derivatives with an underlying that qualifies as food for human consumption, as is currently the case. Spot month limits and open interest limits were set, considering the EU production, the export and the dynamics of the market. Moreover, despite the suspension of position limits in 2021 as an attempt to increase liquidity, position limits continued to apply to agricultural commodity derivatives and critical or significant commodity derivatives. Yet, the extra care paid with regards to food did not prevent the intensification of speculation on the French market, the generation of significant profits out of derivative trading and the

Slowly, the role of speculators in driving commodity prices (including of energy) is making its way back into political spaces and debates. As it stands, I envisage two options for policy makers, academics and the parties interested in this conversation. The first one is the easy response to a financial problem: it implies the technical attempt to define what is ‘excessive’ and what is ‘normal’, with the aim to find a way to curb a certain kind of speculation while still allowing the principle of speculating on food. Although not mainstream  – given the fact that the mainstream is not discussing the role of finance in the food crises – this is the only conversation that is gaining a bit of traction and gathering attention by Parliaments and international organizations. In this context, the solution is sought in the identification of the threshold that allows speculator and their liquidity to enter the commodity market and bet on future prices, but without reaching a level that could provide confusing or unsupported signals to the food actors and the underlying price. In continuity with the regulatory interventions that took place in the last years, the issue would thus be that of percentages, calculations and the identification of new position limits that still encourage speculative capital but are not seen as problematic. For example, the ECON Committee at the European Parliament voted in favor of an increase the level of transparency and reporting by clearing houses where commodity derivatives are traded.

On the other hand, there is the minority position of what is already marginal conversation: reconsidering the legal, economic and ethical acceptability of speculation over food commodities. At the core of this approach there is the recognition that food cannot be considered a financial commodity and that trading in derivatives by non-food actors is inherently incompatible with the content and processes of a food system aligned with fundamental human rights and the Sustainable Development Goals. If de-financializing food is the objective, there are some immediate steps that can be achieved by means of regulation, but the real game is a long-term one.

Image 3: Evolution of wheat price after the Ukraine war

The first action should thus be the prohibition of any form of food derivative trading by financial operators such as asset managers, pension funds and hedge funds that lack any connection with the physical trading in goods and with the underlying market. Secondly, the regulator should exclude the possibility of adding food to commodity indexes and ban agri-food indexes as artificial multipliers of opportunities for financial actors that provide an opportunity to bid on quantities of food that go significantly beyond the actual amounts that are produced on an annual basis. Thirdly, transparency should be key, with high level of disclosure required to the players who are actually allowed to invest in derivative products, so that existing positions are known for all players and it higher scrutiny can be exercised with regards to their link to actual underlying transactions and trading volumes. Fourth, de-financialization also means to curb the use of algorithms and high frequency trading when it comes to food, reducing the speed of trading and the risk of algorithmic induced spikes in prices. Fifth, governments should consider profits generated out of food speculation and the rapid increase in food prices as windfall events to be taxed heavily: if hedging is about protection from risk, the use of derivatives should not generate higher returns than the trading in the commodity would. Sixth, no company active in food derivative markets should receive or manage public fundings or incentives, including pensions. Seventh, public support should be provided to the use of alternative forms of risk management that do not impact prices and accessibility, such as climate change related insurance, and make sure that they are available for those players that are most in need.

Start with speculation, tackle financialization and promote a systemic transformation

Although limiting financial speculation in the food sector is urgent, the final goal must be a more ambitious one. Trading in derivatives and profiting from high index prices is just the tip of an iceberg of financial interests, motives and control over the food system. In its 2021 Annual Report, for example, Cargill registered the biggest profits in its 156-year history – up 64%. During the same financial year, Louis Dreyfus Company announced that their Earnings before interest, taxes, depreciation, and amortization (EBIDTA) were up to US$1,623 million, 22.6% higher compared to the same period in 2020. In May 2022, when the invasion of Ukraine had intensified the inequality of the global commodity market, Bunge announced a 19%, increase in the regular quarterly cash dividend to per share as result of the fact that earnings per share were more than 25% higher than the first quarter of 2021. Bunge witnessed a “stronger-than-expected Q1 results.”

And exceptional financial returns on the ongoing collapse of the global food system are harvested also by companies operating at other levels of the food chains, with Canada-based Nutrien (the world’s largest fertilizer producer) declaring that net earnings in the first quarter of 2022 more than tripled to a record $3.60 billion, or $6.51 a share. On the other side of the Atlantic Ocean, while European farmers have been struggling to access fertilizers, K+S Group, a German leader in the sector, registered revenues of €1,510 million in the second quarter of 2022, up more than twice from the €664 million of the second quarter of 2022. Throughout the food systems, corporations have been utilizing their economic position to extract extra revenues and profits from commodity chains that were increasingly incapable of feeding the world population.

For months, while The Economist was talking about the impending catastrophe, dividends, bonuses and exceptional financial returns have not only been experimented by speculators and financial traders, but by the managers and investors behind the companies that prop the global food system, whose attitude has been to profit from scarcity and make sure to pass the exceptional circumstances onto consumers and their limited purchasing power. Asset managers like BlackRock, Vanguard and Fidelity, all of which administer commodity trading funds, have been extracting and appropriating dividends and revenues from holding shares of corporations that produce fertilizers and commodities, trade them and distribute them across the world. And the same may be the case with pension funds and other institutional investors. The problem is wider than just mere speculation, and has to do with the incompatibility between profit maximization and the essential role that food has for humans and the ecosystem.

If our worries concern that there are actors that benefit from high food prices and may have an incentive in creating or not addressing the conditions behind them, it is important that our attention moves beyond food speculation and addresses the role of financial capital in shaping and defining the global food systems. From the stock markets to the over the counter exchanges of derivatives that are not officially happening in regulated spaces, financial instruments are a key element of the global and commodity-based food system that has been created by centuries of trade integration, uniformization and competitiveness. For each speculative rush and record profits, a large percentage of the prices that people pay for food may thus be remunerating a bunch of actors, whether shareholders or speculators, who thrive out of scarcity. Speculation and financialization are forms of extracting rent that will always find fertile ground on the existence of a global market for a limited amount of homogeneous commodities, large-scale players that control its hubs, and the possibility of moving high volume of liquidity and receiving high returns. Beyond position limits and windfall taxes, the real matter of the game is, therefore, a transition away from a food system that feeds finance rather than people and planet.

Tomaso Ferrando is a Research Professor at the Faculty of Law and IOB, University of Antwerp. For more than a decade, he has researched the interactions between food, law and finance, and promoted policy and regulatory changes.

Cite as: Ferrando, Tomaso 2023. “Beyond Speculation” Focaalblog 29 March. https://www.focaalblog.com/2023/03/29/tomaso-ferrando-beyond-speculation/

Blog

Gavin Smith: Peru: the Uncertain State

Zavaleta: “[Apparent states] appear to be Western… in all respects but somehow they are not. What misfires here is a structural concept of sovereignty that is ultimately incompatible with the condition of non-centrality in the world, at least in history such as it has occurred until now…. They have only a vague sense of self-certainty, that is identity. We can therefore also call them uncertain states.” (2018: 69 Itals mine)

In the 28 January issue of Viento Sur Pepe Mejia writes, “The dismissal of [Peruvian President] Pedro Castillo, on 7 December, was the starting signal for the organization and celebration of mobilizations that began in Puno, a territory rich in lithium and uranium and the target of large extractive companies.” (Mejia, 2023) He goes on to provide a concise summary of the situation in Peru and sets it within a brief history of the relationship between the rural people of the Andes and the Lima pitucracia on the one hand and the contracts with foreign-owned extractivist corporations that go back to the guano era on the other.[1] By contrast, in an article by Tom Phillips in the Observer two months after the outbreak of events, headed ‘My city is destroying itself’: Juliaca under siege as death toll rises in Peru’s uprising, a kind of crazed self-destruction is described as victims of ‘corruption’ burn tires and the military holes up at the airport. There’s no discussion of Peru’s history, no exposure of the contracts Mejia mentions nor the least attempt to explain to the unfamiliar reader why the re-writing of Peru’s constitution is a central demand of these people.

On the other hand, perhaps the reason the established press writes so little about Latin America’s fourth largest nation is because Peru, as such, does not really exist. Writing about Bolivia and Peru’s war with Chile from 1879 to 1884, Rene Zavaleta Mercado, ‘the Bolivian Gramsci’ as he was sometimes called, ascribed Chile’s victory to the failure of its allied adversaries to constitute coherent states, the ‘integral state’ to which Gramsci had referred. For Zavaleta the effect of the war was to produce for Chile what he called a ‘constitutive moment’ the elusive essence that may or may not bring forth a coherent national social formation, “something potent enough to interpolate an entire people….it must bring forth a replacement of beliefs, a universal substitution of loyalties, in short, a new horizon of visibility.” ([1986] 2018: 75). His historical method was to seek to identify such moments their momentary success and, so often, the failure of their promise.

Image 1: “Even despite Argentinian promises Chile outweighs Peru and Bolivia.” (Cartoonist. El Barbero. 1879; Source: Wikimedia Commons

For Peru it may be that there has never been such a constitutive moment, elusive, temporary or otherwise. Writing of the hundred years following the war the economists Thorp and Bertram subtitle their book, Peru 1890-1970 (1978) ‘an open economy’. It was a society controlled from Lima that was open for business and closed for the ninety-percent of its citizens living in the Andes or their kin struggling in the shanty towns of the capital. In the strictest sense, in the Durkheimian sense, it wasn’t even a society. Perhaps it still isn’t. Writing a quarter century after Thorp and Bertram Debbie Poole and Gerardo Renique (2003) referred to it as “the privatized state.” And here we are twenty years later with Peru scarcely ever mentioned in the European or North American press and when it is the treatment is superficial and pathetic, an ignorance of history and a kind of willful refusal to ask the kinds of questions one would need to know about an open economy and a state so privatized as to be incoherent.

Dismissing Castillo to renew the ‘surplus without a state’

Apparently, the rural working people of Peru and their kin and comunaros/as living in Lima’s shanty towns are unhappy with the school-teacher president they elected, Pedro Castillo, being declared a traitor and thrown in prison by the Congress. Why? Is there some history that might help us to understand – even quite recent history like the fact that the President of the distrusted Congress that impeached Castillo is José Daniel Williams Zapata, an ex-army general who at the rank of colonel was involved in the massacre of 61 people (23 of them children) in Accomarca back in 1985? Or still more recently, the fact that the constitution for which they want the same kind of re-working that got so much attention in the western press when it occurred in Chile, is the one Fujimori, like Pinochet before him, produced to give legal form to his authoritarian neo-liberal regime.

Meanwhile in a country so entirely open to foreign privatized interests surely more useful for the inquisitive reader than the burning of tires and the frying of a cop in his car, is the fact that 2023-24 will be the period when a vast array of the contracts Fujimori signed with foreign companies will come up, not just the extractive ones in oil, gas, copper, lithium etc. but the banks and hedge funds that financed them. There are more than 900 contracts up for renewal. Could this be newsworthy for the likes of the Observer and other western media? Apparently not. Yet, speaking of the proposed renewal of these contracts Mejia notes in the above-cited reporting from Viento Sur, “The term of the contract is generally 30 to 40 years and no one can change the term. This contract law cannot be modified for any reason. Nor can it be modified even if the people go on strike or the congressmen want to annul it.” He adds that in these contracts the ratio of the profits retained in the country to those exported is 18:82 (Mejia, 2023)

Image 2: Graphical depiction of Peru’s product exports 2019 (source: By Datawheel – Interactive Visualization: OEC – Peru Product Exports (2019) Data Source: BACI – HS6 REV. 1992 (1995 – 2019), CC0, https://commons.wikimedia.org/w/index.php?curid=107580340)

Zavaleta spoke of “Peru, the paragon of a surplus without a state.” (2018: 71) Reflecting on the elusive ‘abstract state’ that momentarily may achieve a kind of coherence in a conjunctural moment, a bedrock that might give character to subsequent national projects, Zavaleta spoke of the ‘fruitfulness’ of the surplus to produce a constitutive moment. Among other things sterility results from two factors: the inability to produce coherence when such vast amounts of surplus value are being sucked out of the social formation; and the distributive failures by the national bourgeoisie of what little is left (Zavaleta, 2018; see also Marini, 1981, 2011). Is it then possible that it is not Peru that is ’uprising’ but a variety of regions of Peru each having to deal with its own particularities: a past made up of histories of distinctive struggles not as yet combined nationally; and a present characterized by the distinct contracts each has with the capitalist firms extracting local resources be it the decades old experience with copper in the central Andes or the incubating ones around lithium in the south.

I want to put meat on the bones of such a suggestion by first describing a period I am familiar with in the central Andes when, in Zavaleta’s terms Peru failed to produce a constitutive moment, and then provide brief descriptions of the kinds of contracts that are so determinant of regional conditions from one part of the country to another.

Criollos and Montoneros

Let me turn back to that failed ‘constituent moment’ for Peru during the Pacific War of 1879 to 1884 with Chile that Zavaleta spoke of. Lima, that is to say ‘Peru’ fell ignominiously soon after the war began. But when General Caceres retreated into the central highlands a different kind of war ensued. (Manrique, 1981) Apart from anything else just who was fighting whom. On arrival in the Mantaro Valley it was in part through the influence of his cousin the hacendada Bernarda Pielago that he was able to raise a force of guerrilleros from among the pastoralists that worked in and around her properties in the highlands. In those initial days the emerging montoneros referred to Caceres as taita (familiar term: uncle); by the end, in response to a demand that they descend to the valley to report to the general, their leader sent the message, “Tell Caceres I am as much a general as he is and will be dealt with equal to equal.”[2] It’s the kind of story so familiar throughout Peruvian history, one to repeat itself again and again. Speaking of the Pacific War in the highlands in 1989 I wrote, “The war thus gave birth to a fatal combination – a self-confident peasantry and an expansionist landlord.” (Smith, 1989: 67)

Plus ça change: in the context of what we read about today, it sounds familiar: a situation in which expansionist landlords perhaps have been replaced by expansionist extractive companies. As the following paragraph makes clear it was for the highland people of the central region ‘a constitutive moment’.

[As the war wound down] the montoneros, once mobilized, remained so. But the composition of their enemy shifted. At the beginning of hostilities these montoneros were fighting the foreign invaders; at the end they fought alone against a wide range of opponents – landlords, the commercial classes of the valley, and the agents of the state [especially Caceres]. Such an experience made a profound impression on their culture of opposition, colouring their attitude toward political confrontation for the century that followed. (ibid:68)[3]

Nevertheless, the ability to divide and conquer saw the end of that moment then, as perhaps today too.

Yet in a sense the period of the montoneros has the elements of a constituent moment for the highland regions of the central Andes. When Mejia remarks of Peru’s Andean people, “No necesitan tener un título para salir a la calle y conseguir sus reivindicaciones,” he is alluding to the many times when rural people have resisted by simply occupying space: “They don’t need title deeds to go to the streets and recuperate what belongs to them.[4]” In 1948 the Huasicanchinos of the central highlands faced off against the army to occupy the lands of Hacienda Tucle and Hacienda Rio de le Virgen resulting in the concession of considerable territory by the latter hacienda. The 1956 reivindicacion in the province of Cuzco in which Hugo Blanco played a major role was written up by Eric Hobsbawm as a case of neo-feudalism. The labour relations and strategy of resistance was quite different from the 1948 confrontation in the central highlands that I had described (for the framework of resistance strategies see also Hobsbawm, 1969). Yet, it planted the seeds of widespread land occupations in Cusco in 1962. Even within regions themselves tactics differed. On the west side of the Mantaro Valley in the central Andes, the massive campaign of endurance carried out by the Huasicanchinos from 1968 to 1972 resulted in the complete occupation and destruction of Hacienda Tucle and Rio de la Virgen. (Smith 1989; 2014) Yet it differed from the insurgence around Comas to the east of the valley in the late sixties, which itself was different from that of the Tupac Amaru guerrilla close by. (Hobsbawm, 1974; Flores Galindo & Manrique, 1984) A difficulty then, in making a broad assessment of what is going on in ‘Peru’ as a whole is the persistent differences that its many Andean regions face, surfacing time and again in moments of crisis.

From guano to copper to lithium

Currently over forty mining contracts in southern Peru, almost all of them copper, have been paralyzed by popular occupations and blockages, reducing Peru’s copper output by 30% at a time, Bloomberg reports, when copper prices are at their highest. The effect is to halt any attempt at renegotiating Fujimori’s contracts this year. “About $160 million of production has been lost in 23 days of protests” it reported on 27th January. The article concludes “The unrest also jeopardizes the rollout of $53.7 billion in possible investments at a time when the world needs to accelerate decarbonization and boost minerals required for electromobility, according to BTG Pactual analyst Cesar Perez-Novoa.” (Attwood, 2023) The analyst is speaking here of course not of Peru’s longstanding role as a copper exporter but the future contracts for the extraction of lithium.

Agreements for regional resource extraction projects to fund local development such as schools, medical facilities and of course infrastructure (the latter as vital to the miners as to the communities) are pathetic from the outset and unfulfilled to the point of fiction as they unfold. The process is facilitated by mining companies like the giant four, Southern Peru, Yanacocha, Antamina, and Chinalco, signing contracts with Peru’s national police. (EarthRights International, 2019) Use of the police obviously enables the terrorization of locals but has the additional advantage that it allows for the criminal prosecution of protests stoppages and so forth rather than the more cumbersome civil cases that would otherwise be needed.

Meanwhile if brute force isn’t enough, a common practice in sidestepping social contracts of this kind is to offload one mining company to another (often a subsidiary), the conditions of the sale being the abandoning of the obligations of incomplete components an existing social contract. Meanwhile tying up issues of ownership, profit-sharing and social responsibility in lengthy legal proceedings is so common that formulaic contractual obligations to communities can be written into contracts with the full knowledge that they will be held up indefinitely in legal wrangling.  

Typical is the following: in 2021 the Macusani Yellowknife lithium extraction project, the largest in Peru, owned by Plateau Energy Metals, itself recently acquired by the Canadian American Lithium Corporation, was disputing 32 out of the 151 concessions it has in southern Peru midway between Cusco and Juliaca. Even so its CEO was able to reassure Resource World Magazine, “While it is standard practise for the legal departments of regulatory bodies in Peru to appeal rulings such as this, the company is confident that, given the strength of judgements in the past the appeals will not be successful,” assuring investors that “common sense will prevail,” and that anyway, while locked up in the courts, the company would push ahead with the mobilization of drill rigs to commence the next phase of development. (Resource World, 2022)

Meanwhile in the much older copper and zinc mines and refining centres to the north – La Oroya and Cerro de Pasco – where foreign contracts are so longstanding that social responsibility conditionalities have to be fought as rear-guard actions, the issues frequently have less to do with recently unfulfilled obligations than generations-long threats both to rural livelihoods and to the possibilities for ongoing social reproduction, in short life itself. On the one hand the pastures in the highlands proximate to those fought over by the montoneros of the past have been so poisoned or simply disappeared as a result of the smelters at La Oroya that endless legal battles for compensation are simply a way of life. On the other hand, in Cerro de Pasco, one of Peru’s main mining cities, children have high blood lead levels, anemia, learning problems, headaches, and nose bleeding leading to endless requests for medical help given that demands for better living conditions over generations have produced only minor results. (Cabral, E & M. Garro, 2020)

Image 3: The impact of mining on Cerro Pasco (source: https://commons.wikimedia.org/wiki/File:Mina_cerro_pasco.jpg)

The contracts are ubiquitous from one part of Peru to another, be it the southern Andes, the new and old extractive industries of the centre and north, or the oil deposits of Amazonia. But the past histories and present experiences of resistance have their own characteristics.

As the Mexican journalist Luis Hernández Navarro remarks (2023), Peru “is a disabled State that cannot do anything, because everything has to be contracted with private companies.” He refers to Peru’s Quechua name Tawantinsuyo ‘The Four Adjoining Regions,’ And such is the case, four or myriad, Peru remains an incoherent state each of whose regions has had its distinct struggle that from time to time resulted in an all but ephemeral constitutive moment but failed to combine into a synchronous national movement.

Gavin Smith is Emeritus Professor of Anthropology at the University of Toronto and has worked in South America and Western Europe.  Apart from ethnographic monographs he has published two books of essays, Confronting the present, 1999; and Intellectuals and (counter-)politics, 2014.

References Cited

Attwood, James. 2023 “Peru’s violent protests imperil 30% of its copper output.” Bloomberg Anywhere 27 Jan. https://www.bloomberg.com/news/articles/2023-01-27/protest-surge-imperils-30-of-copper-supply-in-no-2-miner-peru?leadSource=uverify%20wall Accessed 23 Feb 2023

Cabral, E & M. Garro, 2020: “The bleeding children of cerro de pasco are expecting justice.” Aliados/as: OjoPublico https://ojo-publico.com/2281/bleeding-children-cerro-de-pasco

EarthRights International, 2019: Convenios entre la Policía Nacional y las empresas extractivas en el Perú. Instituto de Defensa Legal, Lima

Flores Galindo, A. and N. Manrique, 1986: Violencia y campesinado. Instituto de Apoyo Agrario. Lima.

Hobsbawm, E.J. 1969, “A case of neo-feudalism: La Convencion, Peru” Journal of Latin American Studies 1,1: 23- 47

Hobsbawm, E.J. 1974: “Peasant land occupations” Past and Present. 62. 120-52.

Manrique 1981: Las guerrilleras indigenas en la Guerra con Chile. Centro de investigacion y capacitacion. Lima

Marini 1981, Dialectica de la dependencia Ed. Era Mexico D.F.

Marini, 2011 “La accumulacion capitalista mundial y el subimperialismo.” Revista Ola Financiera. UNAM. 4,10: 183-217

Mejia, Pepe 2023: “Un huaracazo a la oligarquia” Viento Sur 28 Jan. https://vientosur.info/un-huaracazo-a-la-oligarquia/ Accessed 23 Feb 2023.

Navarro, Luis Hernández 2023: “Movimiento popular destituyente” Viento Sur; https://vientosur.info/movimiento-popular-destituyente/

Poole, D & G. Renique, 2003: “Terror and the privatized state: a parable.” Radical History Review 83:150-63

Resource World Magazine, 2022; https://resourceworld.com/american-lithium-on-dispute-over-peruvian-concessions/ Accessed 23 Feb 2023

Smith, Gavin. 1989:  Livelihood and resistance: peasants and the politics of land in Peru. Berkeley, University of California Press.

Smith, Gavin. 2014 Intellectuals and (Counter-) Politics: essays in historical realism. Berghahn. Oxford.

Thorp, R. and G. Bertram, 1978: Peru 1890-1977: growth and policy in an open economy. Columbia University Press, New York.

Zavaleta Mercado, Rene. 2018: Towards a history of the National-Popular in Bolivia 1879-1980. Trans. Anne Freeland. Seagull Books. Calcutta

[1] Pitucos/as is a familiarity used to describe the posh, lazy and shallow elite of Lima. Guano is the Quechua word for sea dung high in nitrates used for fertilizer. The so-called Guano Era during which nitrates were extracted in vast quantities by foreign companies ran from 1802 to 1884 and was a key factor in the War of the Pacific from 1879 to 1884, sometimes referred to as the Saltpetre War.

[2] This was in response to Caceres’s invitation to descend to Huancayo for a war conference. On arrival he and his lieutenants were put up against a wall and shot.

[3] The extent of the montoneros’ successful mobilization against the haciendas over the period is reflected in the number of livestock held before and after the campaign by the two largest of them. Laive: 38,000 sheep before, none after; Tucle 42,000 sheep before, 3000 after. (Smith: 1989: 74) Needless to say in the period that followed the haciendas of the central highlands, most of them owned by those who had collaborated with Chile, expanded without interruption until the 1960s

[4] There is no proper translation for reivindicaciones a term used frequently in the context of rural labourers’ occupation of lands stolen from them.

Cite as: Smith, Gavin 2023. “Peru: the Uncertain State” Focaalblog 3 March. https://www.focaalblog.com/2023/03/03/gavin-smith-peru-the-uncertain-state/

Blog, War: New Times

Mihai Varga: Crisis-tested, yet forgotten: Family farms in wartime Ukraine

It was often said, in the course of the transition from communism to capitalism in the 1990s and 2000s, that Eastern Europeans are good at surviving. The IMF and the World Bank praised the local population’s capacity to “subsist” through small-scale agricultural production, “relieving” welfare budgets or helping shoulder the liberalization of prices. In fact, this focus on subsistence obscured a broader societal trend in much of post-communist Eurasia, the emergence of what one could term a new ‘great social divide’ between family farms and large corporate farms. Thus, on the one hand, throughout the post-communist region, local mega-corporations grew on the ruins of former collective farms to expand into world-level global producers. On the other, the region also experienced the contrasting trend of large shares of the population returning to or intensifying agricultural production to maintain their livelihoods through a combination of selling and self-consuming their products.

Farms workers harvesting the potato crop in Ukraine in 1991, Photo by Peter Turnley/Corbis/VCG via Getty Images

Ukraine is no exception to this trend of what the World Bank and other international organizations call the dualization of agriculture: together with Russia and Kazakhstan, Ukraine saw the emergence of some of the world’s largest agro-corporations in rural landscapes populated by millions of “subsistence” family farms. “Subsistence” though was somewhat of a romantic myth, here as much as elsewhere in the world. Rural and peri-urban populations were far more diverse than that term suggests. Few survived solely on their own produce. Rural people were getting by through a combination of self-consumption, petty entrepreneurship (selling some produce on local markets), sending family members abroad for work, and collecting meagre social benefits. Some 20% of Ukraine’s approximately four million rural households were selling more than half of their production already in the early 2000s, mostly informally. Many families have amassed enough land for participation in the same markets as corporate actors, sending produce such as soy, maize, and sunflower products to sea ports for export.

A hallmark of the approach advocated by states and international organizations vis-à-vis post-communist populations of small-scale producers was a complete break with the communist procurement system, which had been buying up the production of small farmers in order to process it in specialized units (factories). Post-socialist states have allowed that communist procurement system to collapse, and since the 1990s have either failed or explicitly refused to support family farms by means of buying up their production. They assumed that simply freeing markets for land, energy, and food would miraculously spur an entrepreneurial drive that would lead to the disbandment of collective farms and provide the cure to poverty (or at least limit it). Instead of such an entrepreneurial revolution, post-communist countries experienced in the 1990s a pattern of extreme property fragmentation, the return of small-scale farming, and the survival and transformation of the former collective farms. As of the 2000s, authorities and international organizations (the World Bank in particular) expected that land markets would “consolidate” agriculture to produce farmers more akin to Western European ones, incentivizing those “too small to grow” to sell their land and leave agriculture.

Ukraine, a latecomer to land markets liberalization, faced particularly intense criticism from the European Union, World Bank, and IMF for its agricultural land sales moratorium and finally lifted it following intense IMF and World Bank pressure in March 2020. The argument was that higher prices for agricultural products and land would drive investment and production growth. But the reality is that uncertainties over marketing possibilities, access to credit, subsidies, and leasing schemes abound. Three decades after the collapse of communism and facing a largely unprecedented combination of drought and war-induced cost increases, smallholders in Ukraine and elsewhere in post-communist Eurasia are still virtually on their own in the task of commercializing production from below. In Eastern European EU member states, many are excluded from subventions, which are usually only available to larger actors, above 1 hectare, and have no political representation. Links between corporate actors and the smallest family farms do exist. Still, these do not amount to any marketing or production support for small holders. Instead, rural households lease out their land to corporate actors in exchange for animal fodder, and market their small production surpluses locally, reaching global markets only via numerous intermediaries.

In Ukraine, the war exacerbates the divide between corporate actors and family farms; the latter, on their own in marketing their products, are facing depressed prices. Russia’s blockade of the Ukrainian Black Sea ports (until July 2022) and the occupation and destruction of the Azov Sea ports have made agricultural prices in Ukraine collapse. The impact on export routes was dramatic: before the war, trucks delivered agricultural products to the Azov and Black Sea ports, which had important storage facilities. With the blockade, export routes lengthened over several countries, alternating truck, rail, and river barges, to Danube and smaller Black Sea ports in Ukraine, Moldova, and Romania with far smaller storage capacities. Corporate actors were able to cover the associated costs and were well positioned to profit from steep world price increases; at least until July 2022, when a Russian-Ukrainian deal allowed agricultural products to leave Black Sea ports again (the Grain Initiative). The deal made world grain prices, that had doubled at the start of the war, fall. But not even the Ukrainian producers that actually reached the remaining Black Sea export facilities received world prices for their production, as few shippers risked entering Ukraine’s ports and demand premiums that pushed Ukrainian prices far below world levels.

In contrast to large exporters, Ukraine’s millions of family farms were thus confronted by the collapse of inner-country prices for export-intended goods that could not leave the country. Whatever transport and storage infrastructure is left is accessible only at exorbitant prices, and the prices on local markets for export-intended agricultural production have collapsed. In fact, in the summer of 2022, the cost of storing production was as relevant as the market price, as it became difficult to move produce around given the greatly damaged transport and storage infrastructure. Prices have varied more widely for goods intended for local consumption such as potatoes, a key staple for local survival under crisis conditions. Keeping in mind that potatoes are a favoured crop for smallholder specialization, prices went from 46% increases to the prior year to close to zero by the end of 2022, in both cases making it extremely difficult to sell production. The sudden price fall in October 2022 resulted from producers close to Russia – and Belarus seeking to sell as much as possible rather than store, fearing further attacks and disruptions. Depressed prices did not even cover the cost of seed material and according to market analysts will endanger the harvest for 2023.

The state should act as a last-resort buyer for small holders, especially for crops and products in which small farmers specialize, which are difficult to store and costlier to export. Still, such self-evident steps for which there are many workable global examples in the 20th century are not among the options that have ever been considered in the last three decades. What is also not on the table is a centralized state distribution of seeds and fertilizers. The main strategy advocated internationally for preventing hunger and helping agricultural producers get access to increasingly expensive inputs is to remove trade barriers (also for fertilizers). But this will predictably fail to tackle problems as varied as the collapse of infrastructure or speculation via agricultural derivatives which produce hunger and volatile food prices. 

The little export that Ukraine achieved in the summer of 2022 – at one fifth of its pre-war capacity – required unprecedented efforts of trans-border cooperation. Before the war, Ukraine’s grain, soy, and sunflower oil left the country to Asian and African countries by ship directly from the Ukrainian Black Sea and Azov Sea ports. From March to August 2022, Ukraine’s agricultural products had to pass three countries by truck, train, or river barges: Ukraine, Moldova, and Romania, before reaching the Black Sea. Even with the Grain Initiative corridor opening in August and the accessibility of Ukraine’s Black Sea ports in and near Odessa assured, the three-country land-and-sea route stayed an important export avenue. Authorities had to repair abandoned rail tracks within three months; and expand the storage capacities of – until then – less-used Danube ports. Another new trans-border land-and-sea route now connects Ukraine via Poland by rail to the Lithuanian Baltic Sea port of Klaipeda for Western European markets.

The outcomes of such logistic efforts – as beneficial as they are to the rest of the world – deepen the local divide between export-capable corporate actors and small-scale farmers. While corporate actors have their own transport capacities (“truck fleets”) and can access export routes, the latter continue to face the dramatic situation of exploding production prices for fuel and fertilizers and collapsing prices for locally-sold produce.

Finally, while the drought in Europe drove up prices for the late 2022 and 2023 harvests, Ukrainian producers hardly benefit, as local consumers cannot pay the higher prices and imports of vegetables and fruit to counterbalance the price hikes. In summer 2022, Ukrainian traders were already replacing the lost harvests in fruits and vegetables in the Russian-occupied Kherson area – which they used to market within Ukraine – with products from Moldova and Romania (fieldwork respondents, July and August 2022).

The present-day crisis will, therefore, yet again – such as during the 1990s transition – test and reproduce the local population’s survival skills. Rather than retreating into the imagined peasant subsistence economy of the World Bank technocrats, they will struggle and combine various livelihood sources, from migration remittances and social benefits to small-scale agricultural production. As they are de facto abandoned once more by local and global politics, rural people will above all rely upon each other.

Mihai Varga is a sociologist at the Institute for East-European Studies, Freie Universität Berlin. His latest book is Poverty as Subsistence. The World Bank and Pro-Poor Land Reform in Eurasia.

Cite as: Varga, Mihai 2023. “Crisis-tested, yet forgotten: Family farms in wartime Ukraine” Focaalblog 14 February. https://www.focaalblog.com/2023/02/14/mihai-varga-crisis-tested-yet-forgotten-family-farms-in-wartime-ukraine/

Blog

FocaalBlog: Eric Wolf, Europe, Histories, Capitalism. Where are we now?

This panel was convened by Ida Susser at the American Anthropological Association Annual Meeting 2022 – Unsettling Landscapes. It builds on the workshop Vision and Method in Anthropology: Forty Years of Eric Wolf’s ‘Europe and the People Without History’, on 23/24 September 2022, organized  in the framework of the ‘Frontlines of Value’ project at the University of Bergen by Don Kalb and Susana Narotzky.

Panel convenor: Ida Susser

Presenters: Don Kalb, Jaume Franquesa, Antonio Maria Pusceddu, Don Nonini, and Sharryn Kasmir

Disscusant: Oana Mateescu

It is forty years ago that Eric Wolf published his pathbreaking “Europe and the People Without History” (1982). The book gave an anthropological account of 500 years of European capitalist imperialism, seen from the peripheries. By doing so, it crystallized and clarified multiple debates in anthropology, history, and social theory that had marked the turbulent 60s and 70s of the last century. It was a book that in retrospect prepared the discipline brilliantly for the accelerating capitalist globalization that would mark the next fifty years.

Paradoxically, while path-breaking qua vision and method, the imminent paths opened by “Europe and the People” were almost immediately cut off. Post-structuralism, postmodernism, and “thick description” combined to destroy systemic, global, and historically explanatory visions. Such theoretical ambitions were shoved aside as “grand narratives” and delegitimized as associated with a totalizing modernism.

Under the guises of “anthropology and history” and “political economy” some of the possibilities inscribed in Wolf’s work were conserved in the 1980s and 90s. They came back to life from the 2000s onwards, carried by a younger generation, as neoliberal globalism became ever more crisis prone and new cycles of contestation were emerging. The new work, now often aligned with critical approaches in geography, focused among others on issues of labor, class, surplus populations, post-development, post-socialism, post-colonialism, austerity, new capitalist extractive and oppressive social forms, migrations, and contestations. This led to a re-uniting of  political, economic, and cultural inquiry under a larger dialectical vision and method, and it came with a renewed interest for Marxian approaches next to for example anarchist, Maussian and Polanyian ones.

What sort of questions would a Wolfian anthropology pose in the current world? What is the Wolfian take on Marx and where lies its exact value? What ought to be the role of history and comparison in the anthropological endeavor? What is the value of archival and secondary sources in anthropological research and theory, next to ethnography? If we compare the Wolfian approach to thinking big with other large scale visions in anthropology – Sahlins, Levi-Strauss, Graeber, Godelier for instance – what specificities emerge that remain overly relevant?

Cite as: FocaalBlog 2022. “Eric Wolf, Europe, Histories, Capitalism. Where are we now?” Focaalblog 22 December. https://www.focaalblog.com/2022/12/22/focaalblog-eric-wolf-europe-histories-capitalism-where-are-we-now/

Blog, The Latin American Pink Tide

Elena Maria Reichl: End of Hell? Brazil’s Election and a Community Kitchen of the MTST

On 30/10/2022, Luiz Inácio Lula da Silva (Lula) of the Workers’ Party won an exceptionally close runoff election against the current far-right president of Brazil, Jair Messias Bolsonaro. For volunteers of a community kitchen (Cozinha Solidária) of the leftist Homeless Workers Movement (MTST), Lula’s victory represents an enormous relief and a hope after the long period of anxiety during the election campaign. Nevertheless, his victory does not mean “the end of hell or the entrance into paradise”, as Maria (all names are pseudonyms), one of the volunteers cooking in a Cozinha Solidária noted.

The hell she speaks of means the years of the Bolsonaro government, in which almost 700,000 people in Brazil died of Covid-19, while the president made jokes about patients with respiratory distress. Hell, moreover, means the hunger that the women themselves experience and fight in their volunteer work. In recent years, Brazil has returned to the world hunger map of the United Nations. According to the Brazilian Research Network on Food and Nutritional Sovereignty and Security, circa 30% of Brazilian households are currently food insecure. In addition to the Covid-19 pandemic, suspension of state welfare programs, inflation and price increases have led to this development. The aftermath of this period will not be over when Lula takes office early next year.

Hell and paradise are metaphors that reflect the volunteer’s worldview, which is strongly influenced by the Christian system of belief. The all-female chefs of the Cozinha Solidária where I conduct ethnographic fieldwork since March 2022 regularly frequent Catholic or Evangelical churches. Besides that, the women are also part of the political struggle for housing in demonstrations and occupations of urban land. In their everyday lives, they balance left-wing political militancy and religiosity. They are politicized through the social movement and entrenched in their peripheral community. All the kitchen’s volunteers working there currently are also mothers and most of them work or worked in paid cleaning jobs in addition to their volunteer work.  

In this article, I portray the period between the first round of voting on 2/10/2022 and the runoff. How did the cooks negotiate the fear of a second electoral victory by Jair Bolsonaro? A look at the Cozinhas Solidárias sheds light on the positioning of hunger and domestic labor within the election campaign. The perspective of the cooks’ stresses the importance of religiosity to people’s lives and political decisions. After localizing the Cozinhas Solidárias within the Homeless Workers Movement and explaining their emergence and functioning, I consider reflections and concerns about the election, starting from the perspective of the cooks, to arrive at an assessment of the consequences of the election results.

Cozinhas Solidárias of the Homeless Worker’s Movement

The Homeless Workers Movement (MTST) was officially founded in 1997 as the urban counterpart of the rural reform movements of the Landless Workers Movement (MST). The first occupation took place in Campinas, a city close to São Paulo. Nowadays, the MTST is present in 13 Brazilian states, but most occupations are still concentrated in and around the city of São Paulo. The strategy of the movement is to occupy unused land in the periphery of large cities and to obtain expropriation with reference to the legally established duty of fulfilling a social function of the inner-city areas.

Victor Albert traces the history of the movement: In the first decade after its founding, it had little success with the strategies of the Landless Workers Movement. This changed, on the one hand, because of social mobilizations during the housing market crisis and the 2013/2014 World Cup, and on the other hand, primarily through cooperation with the Lula government’s state housing program Minha Casa Minha Vida. The movement was often able to obtain home ownership for the squatters through the State Program and thus acted as an agenda for identifying new building land for the state program.

During Jair Bolsonaro’s administration, which replaced the Minha Casa Minha Vida program with the Casa Verde e Amarelo loan program and classified the MTST as terrorism, their construction projects from the Minha Casa Minha Vida era continued to be completed, such as 216 apartments in São Paulo’s West Zone in March 2021.

Figure 1 Kitchen as part of occupation
Figure 1 Kitchen as part of occupation, Photo: Elena Reichl March 2022
Figure 2 Cozinha Solidária at lunch time
Figure 2 Cozinha Solidária at lunch time, Photo: Elena Reichl October 2022

The idea of Cozinhas Solidárias was already inherent in the community kitchens that are part of every land occupation of the movement.  The occupations of new land areas begin with the construction of tents made of tarpaulins and bamboo. In newly emerged occupations, community kitchens are the first shanties to be set up to nurture the squatters and provide a place of political organization and community economy. Each occupation has numerous of these kitchens, which are the heart of the groupings, the small neighborhoods within the barrack settlements. The kitchens inside the squats are primarily for the squatters who run and finance them.

What is new about the Cozinhas Solidárias is that they now address the peripheral neighborhoods outside the occupations. Diverse people from the nearby neighborhoods frequent the cozinhas solidárias, for example schoolchildren, old people, or workers at their lunchbreak. They pick up hot lunches for free that were prepared and distributed by volunteers like the women mentioned in the beginning of this article. The Cozinhas Solidárias acquire their donations in the form of money from large-scale campaigns and as crops by collaborations with, for example, supermarkets and the MST. Cozinha Solidarias’ dependence on food has brought the MST into close contact with its urban counterpart.

The Homeless Workers Movement founded the first Cozinha Solidária in São Paulo in March 2021, during the peak of the Covid-19 Pandemic, under the motto highlighted by MTST coordinator Guilherme Boulos, “we do what the government does not“. The movement now operates 31 of these kitchens throughout Brazil. By expanding to peripheral neighborhoods in general, the movement claimed a direct confrontation of the cutbacks in state welfare programs under the Bolsonaro government.

Hunger was particularly central to Lula’s election campaign, highlighting how his earlier government had helped to remove Brazil from the United Nations world hunger map, on which the country turned back after the election of Bolsonaro in 2018. In fact, it was through Bolsa Família, as Massimiliano Mollona elaborates,that this government from 2003 to 2008 reduced the population rate below the poverty line from 36 percent to 23 percent. Bolsa Família incorporated the preceding Zero Hunger “Fome Zero” program in 2003 and, as Anthony W. Pereira argues, promoted the democratization of citizenship claims through effective, relatively unbureaucratic redistribution. On the other side, Bolsonaro has introduced the social program Auxilio Brasil at the end of 2021, which is modeled on Lula’s Bolsa Familia but without any long-term strategy or monitoring and therefore has beencriticized as an election campaign method.

Before the Runoff Election

A morning a few days after the first round of voting in one of the cozinhas solidárias in the periphery of São Paulo: In addition to preparing rice, beans, chicken, and fried cassava, we talked about Bolsonaro’s visit to the Freemasons. The video is from Bolsonaro’s 2017 election campaign but gained popularity only in October 2022 via its rapid spread on social media. The context mattered little. Bolsonaro had been campaigning for votes among Freemasons and rumors were spread that he might be a member.  We chatted about the experiences some of the women had as cleaners for members of the Freemasons whom they accused of performing diabolical rituals. On the subject of religion, we also came to a remark that one of them had overheard during services in their parishes: Their pastor had announced that whoever voted for Lula would go to hell.

Ludmilla was indignant: “The place for priests is in the church. What is this about politics?” “They won’t vote for him [Jair Bolsonaro] because of the Freemasons” Retorted Maria.  Ludmilla: “I am afraid that they might do it after all.”

Jair Bolsonaro has many evangelical supporters who, as some of the cooks, consider the Freemasons a diabolical sect and hence expressed their disappointment. On a more general level, religiousness played a key role in the election campaign. Padre Kelmon, who was denied the recognition as a priest by the Catholic Church, ran for president as one of the eleven candidates of the first electoral round. He just received 0.07 % of the valid votes and was called a “folkloric candidate”. For Bolsonaro’s election campaign, his candidacy nevertheless had an important function. He supported Bolsonaro during the first TV Globo debate, to which all candidates were invited. Instead of asking critical questions, he accused Lula of wanting to establish an anti-religious dictatorship in Brazil. Lula, meanwhile, tried to win over conservative church followers through critical statements on abortion and Christian affirmations, as he recently did in a letter to evangelicals.

In the community kitchen, I hear different Christian songs sung by the women every day. “God bless you” is a common phrase used by those receiving the hot lunches, to which the cooks respond with “Amen”. Unlike the students and coordinators of the movement, for whom religion takes a back seat to communist utopias, the cooks and squatters balance left-wing political commitment and the struggle for housing with religious affiliations in their work.

A domestic worker comments on the election

For Lula’s election campaign, starvation, but also ‘gusto’, was a central theme. During this election, Lula’s repeated statement that the people must be able to eat picanha and drink beer again became famous. Ludmilla, a cook at the community kitchen before the runoff election, said she talks to Lula when she sees him on TV. “Lula, stop talking about picanha. When did I eat picanha? Lula, I cleaned the toilet of my patron [where she worked as a maid] during your government.”

Figure 3 Banner that says “First domestic worker in the Legislative Assembly of São Paulo” at the event “Women from the periphery with Lula and Haddad”, in which some cooks of Cozinha Solidária participated, Photo: Elena Maria Reichl, October 2022

Although she supports Lula, she feels unrepresented by his promises of the return of expensive barbecue after the huge price increase during the Bolsonaro regime. Actually, picanha has never been part of her lifeworld. Domestic workers, who are for the first time politically represented in Brazil, gain more political and class-consciousness. In the first round of voting, PSOL candidate, former domestic worker, and occupant of the MTST Ediane Maria, won the post of State Representative in the Legislative Assembly of the State of São Paulo as the first domestic worker to occupy this political position. Like Ludmilla, Ediane Maria had migrated to São Paulo from Brazil’s northeast to work as a domestic worker. Ediane Maria will now represent Ludmilla’s perspective in São Paulo. No easy task in a parliament where the PL, Bolsonaro’s party, won by far the most votes.

Anti PT and “anti-establishment” propaganda

The outcome was close, with Lula winning 50.9% and Bolsonaro 49.1% of the vote. Bolsonaro’s party’s most effective campaign method still seemed to be the “anti-corruption agenda” Flávio Eiró already analyzed after the 2018 election.

Although the court case that led to Lula’s conviction was annulled as illegal in 2021, opposition to Lula’s PT party because of corruption scandals remains widespread. This is despite the fact that Bolsonaro has also been accused of institutionalized corruption, namely the use of public funds in the form of secret budgets to buy approval in Congress.

Bolsonaro still manages to position himself as ‘anti-establishment’ in front of large segments of the population, who spread the slogan “PT never again” and in the aftermath of the election “crimes pay off in Brazil” on the internet. Widespread among his electorate is also a rejection of conventional media and academia. Election forecasts predicting a higher approval rating for Lula than he actually received in the first round of voting confirmed this skepticism. The Tribunal Superior Eleitoral’s decision to cut Bolsonaro’s TV time due to fake news also fuels the debate about media bias. Bolsonaro supporters were already acting violently in some cases, such as federal deputy Carla Zambelli, who a few days before the election chased a black journalist with a firearm under the pretext that he had pushed her.

The End of Hell?

During this interim period between the two votes one clearly sensed the fear that Bolsonaro might not recognize the election results, as he had already spread rumors that the ballot boxes were rigged.  On day one after the elections, while Bolsonaro remained without statement about his loss, his supporters blocked roads within the country to protest alleged electoral fraud. Attempts at electoral fraud did indeed occur, but not on the part of PT supporters: The electoral court investigates against the federal police, who blocked roads for hours in the northeast and near indigenous communities, from where most votes for Lula were expected, under the pretext of carrying out road controls.

Even without a coup, Lula’s victory will mean hard work against right-wing fronts in state and federal parliaments, but above all against what is called ‘bolsonarismo’ in society. The cooks of Cozinha Solidária are well aware of this. Nevertheless, there will be relief for their movement when Lula takes office next year. He has already announced his intention to rehabilitate the program Minha Casa, Minha Vida. Fighting hunger was moved again to the center of the political agenda. Currently, discussions are underway within the MTST to make Conzinhas Solidarias a public policy and to hire the cooks on a regular basis until the acute hunger crisis is resolved. This would mean the end of dependence on donations and volunteerism. Lula, who had already visited a Cozinha Solidária this year, nurtured hope for this possibility.

Elena Maria Reichl is a PhD candidate in Social Anthropology of the Johannes Gutenberg-University in Mainz, Germany, and member of the Project „Sorting with Care. Human Categorization in Post-Humanitarian Contact Zones“ that is part of the Collaborative Research Centre 1482 “Studies in Human Categorisation” funded by the German Research Foundation.

References:

Albert, Victor. 2018. “Brazil’s Homeless Workers’ Movement is an assertive social work organization.” FocaalBlog, 30 November. www.focaalblog.com/2018/11/30/victor-albert-brazils-homeless-workers-movement-is-an-assertive-social-work-organization

Balloussier, Anna Virginia; Seabra, Catia and Victoria Azevedo. 2022. Lula Releases Letter to Evangelicals and Rejects Abortion and Lying Pastors. Folha de São Paulo, 20 October. https://www1.folha.uol.com.br/internacional/en/brazil/2022/10/lula-releases-letter-to-evangelicals-and-rejects-abortion-and-lying-pastors.shtml

Boulos, Guilherme. 2021. “Cozinhas Solidárias: fazendo o que o governo não faz” Instituto para Reforma das Relações entre Estado e Empresa (IREE), 22 March. https://iree.org.br/cozinhas-solidarias-fazendo-o-que-o-governo-nao-faz/

Campos Lima, Eduardo. 2022 “Brazil presidential contenders slug it out over who’s the real ‘enemy’ of the church” Crux, 1 October. https://cruxnow.com/church-in-the-americas/2022/10/brazil-presidential-contenders-slug-it-out-over-whos-the-real-enemy-of-the-church

Eiró, Flávio. 2018. “On Bolsonaro: Brazilian democracy at risk.” FocaalBlog, 8 November. www.focaalblog.com/2018/11/08/flavio-eiro-on-bolsonaro-brazilian-democracy-at-risk.

Extra. 2022. Padre Kelmon recebe mais de 81 mil votos pelo Brasil; relembre outros ‘candidatos folclóricos’ que marcaram eleições. Globo Extra 3 October https://extra.globo.com/noticias/politica/padre-kelmon-recebe-mais-de-81-mil-votos-pelo-brasil-relembre-outros-candidatos-folcloricos-que-marcaram-eleicoes-25582731.html

Folha de São Paulo. 2022. O que a Folha pensa: Recauchutagem ruim. Folha de São Paulo, 28 October. https://www1.folha.uol.com.br/opiniao/2022/01/recauchutagem-ruim.shtml

Globo. 2022. Grupo denuncia Carla Zambelli por racismo em caso que ela apontou arma para homem em SP; ‘Eles usaram um negro pra vir em cima de mim’, diz a deputada. Globo, 29 October. https://g1.globo.com/sp/sao-paulo/noticia/2022/10/29/grupo-denuncia-carla-zambelli-por-racismo-em-caso-que-ela-apontou-arma-para-homem-em-sp-eles-usaram-um-negro-pra-vir-em-cima-de-mim-diz-a-deputada.ghtml

John, Tara. 2022. Brazil’s election explained: Lula and Bolsonaro face off for a second round in high stakes vote. CNN, 27 October.

Mollona, Massimiliano. 2018. “Authoritarian Brazil redux?” FocaalBlog, October 6. www.focaalblog.com/2018/10/06/massimiliano-mollona-authoritarian-brazil-redux.

Netto, Paulo Roberto. 2022. TSE cobra explicações da PRF sobre operações durante eleições após decisão. UOL, 30 October. https://noticias.uol.com.br/eleicoes/2022/10/30/tse-explicacoes-prf.htm

Pereira, Anthony W. 2015. Bolsa Família and democracy in Brazil. Third World Quarterly 36 (9): 1682-1699, doi: 10.1080/01436597.2015.1059730

Phillips, Tom. 2022. Fears Bolsonaro may not accept defeat as son cries fraud before Brazil election. The Guardian. 27 October. https://www.theguardian.com/world/2022/oct/27/jair-bolsonaro-brazil-election-fraud-claim

Romani, André. 2022. Com Bolsonaro ainda em silêncio, bloqueios de caminhoneiros ganham força e se espalham pelo país. UOL Economia. 31 October https://economia.uol.com.br/noticias/reuters/2022/10/31/protestos-interditam-br-163-e-trecho-da-dutra-apos-eleicoes.htm

Rizek, Cibele and André Dal’Bó. 2015. The Growth of Brazil’s Homeless Workers’ Movement. Global Dialogue. 22 February https://globaldialogue.isa-sociology.org/articles/the-growth-of-brazils-homeless-workers-movement Soprana, Paulo. 2022. Bolsonarists Freak Out over Video of President in Freemasonry. Folha de São Paulo. 4 October. https://www1.folha.uol.com.br/internacional/en/brazil/2022/10/bolsonarists-freak-out-over-video-of-president-in-freemasonry.shtml

Cite as: Reichl, Elena Maria 2022. “End of Hell? Brazil’s Election and a Community Kitchen of the MTST.” Focaalblog 2 November. https://www.focaalblog.com/2022/11/02/elena-maria-reichl-end-of-hell-brazils-election-and-a-community-kitchen-of-the-mtst/