Day-to-day process and the consequences of institutional deterioration (day 6)

Halandri, Day 6

Too often discussion of events and the consequences is dominated by opinion, crowding out deeper understanding of the forced changes in processes that affect people’s lives. The debate about Greece, the bailout, reform and referendum, is no different.

On Saturday, Aimee Plakas, an anthropologist living in Greece, and I talked in detail to local Greeks trying to understand better the processes of business and the way they are changing. We were most interested in small, local businesses, serving Greek customers using Greek inputs and talked in depth to an entrepreneurial young Greek, let’s call her K., developing a retail outlet specialising in Greek designed (and frequently Greek manufactured) fashion.

K’s story is has elements that will be familiar to young entrepreneurs everywhere, and other elements that reflect the challenges faced by Greece, and other societies with spluttering institutions.

Running a small business in Greece is, in many respects the same as in other places. There are the problems of how to start small but face the lack of economies of scale and, for more entrepreneurial types, how to balance adapting to the market with the desire to move it.

Like many entrepreneurs, K is acutely aware that the success of her business depends on her spirit and personality — the character that she puts into her enterprise. That character is wonderfully present in the merchandise, aesthetics and service in her store. But the success of her business is also constrained by factors beyond her control.

The low adoption of electronic commerce in Greece slows the circulation of money (see earlier post). The bank would not approve her application for a credit card machine until she convinced them she was ran fashion retail business rather than cafe or restaurant. Many supplier work on a cash-on-delivery basis, in keeping with stories we heard from other small businesses. K typically only was able to pay electronically for rent and utilities.

Frustrations dealing with the bureaucracy echo those we heard elsewhere. K, for example, needed to take a copy of the government gazette to convince the local taxation office that she didn’t need two tax numbers to have the type of combined cafe and retail outlet we take for granted in the fashionable districts of other capital cities.

The trust in institutions seems to have collapsed significantly. A large local butcher, supplying retail as well as commercial clients had a prominent sign noting electronic payments were no longer accepted.

Contrasting with these difficulties with institutions was a rather more positive stories of dealing with Greek suppliers, who understanding the difficulties of business could be flexible. The sort of personal trust and flexibility reported by K is typical where institutional voids need be filled. Personal relationships compensate for the lack transparency, reliability and accessibility of the state and markets.

This flexibility, however, is evaporating quickly. Over the previous week, K’s trade creditors had been, “very nicely and politely” calling in credit. This is worrying, if ‘cash and carry’ is the primary mode of business, it suggests both an absence of trustworthy formal institutions and a breakdown in the informal mechanisms (at least those more broadly than family). Any deterioration in interpersonal trust that papers over the institutional cracks and facilitates economic exchange will add friction to the economy and further hamper economic growth.

This leads Greece into a quandary. Clientelism has thrived, and arguably has served society well, because networks of interpersonal obligation in Greece, just as elsewhere, facilitate economic activity in the absence of trustworthy institutions.

The bitter irony in recent events is that just as there is broad public and political acceptance that clientelism is a problem that leads to suboptimal solutions, the conditions that make it essential to individual survival are being revived.

However hardworking, principled and creative are Greeks like K, and there are many, the broader context my thwart the good they can do.

Yes or No, Greeks lose

Friend and journalist Menelaos Tzafalias:

“And even if Tsipras proves that he is not the Che Guevara his supporters believe him to be, he may well have played a role as an instrument in a wider awakening. People instinctively realise something is wrong, even though they do not know what exactly. But the masks are off. And that is a start.”

Read his full article on Al Jazzera

Emotional and not technical choices (day 4)

Halandri, day 4

Both the yes and no campaign don’t appear to engage in any serious elaboration on “what happens next.”

There is no obvious discussion of the practicalities of establishing a new currency, how to deal with the collapsing banks, the legal status of the assets used to guarantee the capital injections, how to allocate the remaining euro reserves for importing essential pharmaceuticals, fuels, etc.

If yes wins, there is no substantial discussion of what how the demanded reforms will happen and at what pace and what additional compromises could be made if it all must be renegotiated.

Rather, and rather frighting, is the way of that the discussion of options in the forthcoming referendum is dominated by emotional language.

This is a flyer from the yes (to accepting the bailout agreement). The flyer presents itself at first glance as a balanced position saying, on one side: “Yes to freedom. Yes to dignity. Yes to growth opportunities for us and our children. Yes our European future.”

Yes campaign flyer, "yes" side
Yes campaign flyer, “yes” side

On the other side, “No means uncertainty. No means humiliation. No means division. No means isolation. No mean the drachma.”

Nai campaign Oxi side
Yes campaign flyer, “no” side

The no campaign uses just as emotive language: “Vote no to the creditors proposal that: Undermines the recovery of the Greek economy and society. Attacks the world of work and the healthy forces of society. Bequeaths debt and its catastrophic consequences for future generations.”

No flyer for the forthcoming referendum.
No flyer for the forthcoming referendum.

And on the other side:

“Reply no to authoritarianism and tough austerity with  democracy, temperedness and determination.  Vote no for the dignity of the Greek people and the peoples of Europe.”

A no flyer for the referendum (second side)
A no flyer for the referendum (second side)

Oxi flyer one no

As for impact and presence. The no campaign started stronger, their base of activists better equipped and prepared for grass roots activism and mobilisation.

Wall of 'no' posters
Wall of ‘no’ posters

The yes campaign made a later start and has much lower presence.

Yes poster on a pole in Halandri
Yes poster on a pole in Halandri

The communists want to see Greece leave Europe and are encouraging citizens to cast an invalid vote.

The Greek Communist Party says 'no' to the European Union
The Greek Communist Party says ‘no’ to the European Union

It would seem a vote either way is a vote for dignity and a vote against humiliation. A vote either way would seem to be a vote to ignore the realities that need to be addressed quickly. To be fair, these observations are just based on the material in flyers, discussion on television and radio could be far more engaged with technical matters.

[Updated 5 July, 2015 to correct Communist party position]

New blog

Previously this site was used to document some of the thoughts about China, especially when taking students there. Unfortunately, I’ve been taken off the module and so am planning to use this to document some of my thoughts about higher education more generally (teaching, research and administration). I’m prompted to do this because the UK is going through considerable change in the sector with introduction of high fees for home UG students and restructuring of research funding.