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Civil Power and the Partner State – Keynote Address, Good Economy Conference, Zagreb

Posted by John Restakis on March 25, 2015 in Uncategorized |

I want to speak today about a crisis that has gripped Europe, and the western democracies, over the last 30 years.

I describe the crisis as the inability of our governments to protect the interests of their citizens. It is a crisis of legitimacy that is undermining the foundations of liberal democracy. Its most recent manifestation is the doctrine of austerity, and the rapid destruction of democratic civic life.

These realities – the imposition of austerity, the end of national sovereignty, and the destruction of democratic accountability are the inevitable consequences of the neo-liberalism that commenced with Thatcherism over 35 years ago. Neo-liberalism is the return of the free market ideology that dominated economic thought at the end of the 19th century. With it, have returned the economic attitudes, social injustices, and inequalities, of that time. Especially, the class hatred against the poor.

At the heart of neo-liberalism is the demand that government remove itself from the market. The withdrawal of governments from a regulatory role in the economy was the end of the Keynesian experiment and a return to the free market ideology of the pre war era. And, if we take the long view, we can see now that the Welfare State – and the policies of public investments that made it possible – was an exception and a temporary detour on the road to the corporate capitalism we are witnessing today.

The control of societies through debt – the imposition of austerity, the privatization of public wealth, the destruction of democratic institutions, and the criminalization of dissent to these policies are all essential aspects of the new order that has spread across Europe and, increasingly, the globe. It has not gone unchallenged.
But how effective has the challenge been?

I come to you today from Greece where I have been living since last summer. I was invited there to help develop a national strategy for strengthening the social and solidarity economy as an alternative to the neo-liberal paradigm I have been describing

Debtocracy is the name of a Greek documentary on the origins of the debt crisis in Greece. But not only Greece. Argentina, Ecuador, and all the periphery countries of the European Union such as Portugal, Ireland and Spain are infected. Debtocracy is a powerful word. It describes a situation where a nation loses its sovereignty to its creditors.

Greece is the classic example of a debtocracy. The debt crisis in Greece and the attempt by Greece to challenge the roots and the rationale of this debt is a very visible drama that is being played on the European stage – but its implications are global.

For example, what will the results of this struggle mean for the creation of alternative visions for political economy? What role does the social/solidarity economy have to play? What is the role of the State? Can State and Civil Society find common cause, or must they always be at war? Does the reality of Europe today prevent such a possibility?

Having been in Greece during this time, I have also been asking myself what does this crisis means for social change in Europe? Or rather, is progressive social change even possible today? What would this change look like? What would it take?

The social economy and a mobilized civil society are central to this process. But so is a new conception of the State. The two are necessary and essential aspects of a single process. They are also crucial for a leftist movement to have any meaning and relevance for today. I will try to describe what I mean and use Greece as an example.

With Syriza’s rise to power, everyone is wondering what the future will hold for Greece. Whether disaster or deliverance, it is hard to ignore the potential for game-changing repercussions from a Syriza government.

The international media routinely describes Syriza as a far left radical party. This is false. Syriza’s proposals for economic and social reform are moderate and rational by any previous standard. But there are reasons why it is portrayed this way. One is a deliberate distortion for propaganda purposes. This is to discredit the party.

The second is because even a moderate left-of-centre party like Syriza must be portrayed as radical because all political discourse has shifted radically to the Right. The political spectrum has narrowed. Anything that challenges free markets and neo-liberal ideology in any meaningful way must be considered radical.

Like other parties of both the Right and Left in Europe, Syriza is paying attention to the role that the social & solidarity economy can play in the current crisis. This is natural when traditional polices and resources, such as taxation and public investment, are no longer available.

Even the Conservative Cameron government in the UK, has promoted the social economy as a sector with a role to play in job creation, in improving public services, and in reforming the role of government.

It all sounds very nice, until it becomes evident how little right wing governments understand, or care about, what the social economy is and how it functions. For the Cameron government co-operatives and the social economy became a cover and a way to promote public sector privatizations, for weakening job security, and for reducing the role of government.

Thousands of public sector workers have been coerced into joining pseudo-co-operatives to save their jobs. The same was happening in Greece with the last government through Social Enterprise Co-operatives.

This is a travesty of the nature and purpose of co-operatives whose memberships must always be voluntary, whose governance is democratic, and whose purpose is to serve their members and their communities for their common benefit – not the ideological aims of government. It’s a lesson that few governments understand.

For the Right, the social economy is often viewed as a refuge for the discarded of society and the victims of the capitalist economy. It is one reason why the Right always chooses charity as the proper response for the poor. Never solidarity or justice. Charity perpetuates dependence and inequality. Solidarity promotes empowerment and equality.

More recently, the rhetoric of the social economy has been used to expand the reach of capital into civil spaces. For these reasons co-operatives and social economy organizations in the UK, and elsewhere, have condemned the distortion of social economy principles for vested political interests.
But what are these principles?

The social economy is composed of civil organizations and networks that are driven by the principles of reciprocity and mutuality in service to the common good – usually through the social control of capital. It is composed of co-operatives, non-profit organizations, foundations, voluntary groups, and a whole range of associations that operate both inside the market, as many successful co-operatives do, or in non-market provision of goods or services. These include cultural production, the provision of health or social care, and the provision of food, shelter, or other necessities to people in need.

In its essence, the social & solidarity economy is a space and a practice where economics is at the service of social ends, not the other way round.

It is not hard to see why Greece today is experiencing an unprecedented growth in the size and diversity of its social economy. Here, as elsewhere, co-operatives and social benefit enterprises have arisen as a form of social self-defense against economic recession and austerity.

The co-operatives and solidarity organizations of today are playing the same role that co-operatives and mutual aid societies played at the beginning of the Industrial Revolution in the 1800s when capitalism was enclosing, dispossessing, and exploiting people and communities at that time. The rise of the social economy today is in part, a self-defense against the new enclosures. These include the privatizations of public goods and services and the theft of natural resources – land, water and minerals.

With the spread of globalization, the logic of enclosure, dispossession, and exploitation that was the basis of capitalism in the 18th century has become the basis of corporate capitalism today. And societies the world over are reacting in the same way – by creating co-operatives and other forms of solidarity economics to resist this process.

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

A third, more complex reason, has to do with the manner in which civil society and the state have evolved in Greece. Unlike other Western European nations, Greece remained relatively untouched by the Enlightenment and the Industrial Revolution while under Ottoman rule.

Today, Greece is still struggling to establish a political culture that has moved beyond the autocratic clientelism that characterized the political system after the Ottoman era. Autocracy breeds hierarchy, individualism, and relations of dependence, not mutuality and social solidarity. The emergence of a healthy civil society, of democratic civil institutions and a democratic culture, has been undermined by this fact.

Clientelism has been deadly in Greece and it has been catastrophic for the healthy evolution of the social economy, as has been shown in the case of its co-operatives. Just as the Right uses the social economy as a proxy for the promotion of capital and markets, so does the Left consistently view the social economy as a vehicle for the advancement of the aims of the state.

When a culture of clientelism is added, it is a recipe for failure on a grand scale. This is what happened during the 80s when state support and subsidization of co-operatives produced a corruption that not only failed to achieve legitimate economic ends, but also destroyed the image and reputation of co-operatives among the public.

Today, the work of promoting co-operation as a viable strategy for economic and social development has to fight this false and negative public image of co-operatives as inherently corrupt.

Greece is not alone in this. This has been the case everywhere “leftist” governments have tried to use the co-operative model to pursue government aims without regard to the purpose and nature of co-operatives as autonomous civil associations whose primary role is to serve their members and their communities.

Just as in Greece, the co-operative model has had to be retrieved from a ruined reputation in the former Soviet nations, in many nations of Africa, and throughout Latin America where governments see co-ops, and the broader social economy, as instruments and extensions of government power.

Ironically it is the Left, and “socialist” governments, in their manipulative “support” for the co-operative model that have done most to ruin the image and reputation of co-operatives in the minds of millions.

The reason for this is that the Left has often viewed the state as the sole legitimate engine of social and economic reform. It is the mirror image of the Right that sees legitimacy for economic and social development only in the market. Both views make the same mistake in ignoring or manipulating the institutions of civil society that are essential to realizing the radical changes that are needed if any alternative to the present paradigm is to succeed.

And this will be the true test of the character of Syriza in power. How will it relate to the broader civil society, and to the organizations and institutions of the social economy as it tries to rebuild the economic and political complexion of Greece? Will it revert to the statism of the Old Left, or will it seek to expand and re-imagine a new kind of leftist program for change that mobilizes the institutions of civil society and the social economy as meaningful partners in nation building?

Will it understand and utilize the social and economic principles of co-operation, of mutuality and the common goo to re-build the economy and society? Will the Greek government recognize and mobilize the vast potential of civil power in realizing a new vision? If it does, it will be the first in Europe to do so.

Part Two

In Greece, as everywhere else, one of the things that distinguish political parties is their relation to the social economy. That the government is taking the social economy seriously is a good sign. The social economy represents one of the very few bright spots in Greece, with hundreds of new groups being formed to provide goods and services in a way that is entirely new.

Often rejecting organizational hierarchy, promoting inclusion and democratic decision-making, focusing on service over profit, these organizations see themselves as models for a new economic and political order. And they are.

But many of these groups want little or nothing to do with political parties, or the state. This is not good news for progressive parties, both inside Greece and across Europe as they struggle to articulate a vision and a method for a new political economy. They need a new approach if they are to build a progressive vision for a new age that moves beyond statism. The old ways of party and state control have been discredited and rejected.

The rejection of representative democracy and the withdrawal from formal politics by many social activists is understandable. But it is also a tragic mistake and a delusion. The only ones who will benefit from this attitude will be the status quo, and if things get bad enough, the parties of the extreme right.

You may be sure that if progressives don’t take part in politics, the fascists will. Golden Dawn in Greece, Le Front Nationale in France, UKIP in the UK, – they are all waiting for their chance at power. If they do win power, it will not be with tanks and truncheons – it will be through the ballot box.

Our task is to fashion a political vision, and a political narrative, that is a compelling answer to neo-liberalism and the ideology of competition, free markets, and the primacy of capital. We need a political economy of co-operation, of solidarity, of mutual benefit. And we need to show that it is only an economics of co-operation and shared benefit that can save Europe from its continuing decline in the face of Asian competition and the global race to the bottom.

This must be a vision that does not pit one region against another, Europe against the world. It must be an economics of co-operation, of sustainability, of local control, and of global collaboration and responsibility. If ruthless competition and corporate greed are destroying our planet, it is only co-operation and mutual responsibility for our common fate than can save it.

For a truly effective party of the Left today, the social economy represents a crucial resource and ally. The principles of economic democracy in service to the common good are practiced here. The most innovative, entrepreneurial, and socially productive young leadership is active here. The organizational forms and practices that have the potential to reform the closed, bureaucratic, dysfunction of government services are also being developed here.

This is where communities are learning to work together to recover what has been lost in these past years – of community clinics, of food markets and mutual help between farmers and consumers, of residents collectively preventing a neighbor’s electricity or water from being cut off. And this points to an unlooked for light in the midst of this crisis – that these hard times have sparked a renewal of community and genuine human connections between people. The social economy is where these connections are flourishing.

What then, must a progressive government do with respect to the social economy?
First, it must move beyond traditional statism to develop a role for government that understands how to democratize and share power with its citizens. This means understanding that the primary role of government in a new model is the empowerment and support of civil society for the production of social value – the creation of goods and services that place social needs ahead of private profit.

A vibrant and mobilized civil society is essential for this. We must learn from the experience of so-called progressive governments that came to power through the radicalization and mobilization of civil society, only to co-opt and destroy the leadership and organizations of civil society once they had political power. This is the familiar pattern of political events in Ecuador, in Brazil, in Venezuala – in fact everywhere civil society expects representative democracy, on its own, to change the patterns of power.

For this to be avoided, it means the creation of institutions, both legal and social, that can sustain the development and growth of the social economy and civil society – independently of the party that is in power.

This means the reform of co-operative and social economy legislation, the creation of financial instruments for the social and ethical financing of social economy organizations, the establishment of educational and training institutes for the study of the theory and practice of co-operation, reciprocity, and service to the common good that are fundamental for a new political economy and the advancement of a new social contract.

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

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

What we are talking about is a new conception: The idea of the Partner State. At its essence, the Partner State is an enabling state. It facilitates and provides the maximum space and opportunity for civil society to generate goods and services for the fulfillment of common needs.

It is a State whose primary orientation is the promotion of the common good, not private gain. And, in contrast to a view of the citizen as a passive recipient of public services, the Partner State requires a new conception of productive citizenship. Of citizenship understood as a verb, not a noun.

What is required is generative democracy – a democracy that is re-created constantly through the everyday mechanisms and decisions that go into the design, production, monitoring, and evaluation of the goods and services that citizen’s need to construct and live a truly civic life. For this, the organizational models of the social economy – the co-operative, reciprocal, and democratic organization of relationships and decisions – are the prototypes of a new political economy.

Greece, like the other indebted nations, has no option but to try new approaches to solve its social, economic, and political problems. At the macro level, the government must do everything it can to address the questions of debt restructuring, of trade relations and export policy, of taxing capital, and of addressing the humanitarian crisis.

The social economy can help.

But it cannot be an engine of recovery on its own. It needs the support of a government that understands its strengths – and limitations. The danger here is that false expectations of the social economy will set the stage for failure and disappointment.

In the past, unrealistic expectations arising out of ignorance of how social economy organizations work, and to what ends, have provided ammunition to those who like to criticize the “inefficiency” and “utopianism” of co-ops and the social economy when they fail to do what they were never meant to do. (They conveniently ignore the fact that the survival rate of co-ops is more than twice as high as that of private companies).

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

The building of social and solidarity economy institutions is crucial. This is true whether the new government succeeds in re-negotiating the debt, and even more so if it does not.

There are serious doubts whether the changes that Greece needs to make toward a more humane and socially responsible economics can be developed within Europe as it is currently structured. The ideological and institutional dogmatism of neo-liberalism is suffocating any prospects for reform.

Regardless, Greece can learn from the wealth of experience that has already been accumulated in other countries where the social economy has played an important role in advancing economic and social development – particularly in times of crisis. Greece is a latecomer to this field, but that has its advantages. Greece can learn from the experience of others.

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

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

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

And this is the key point. The social economy is a model of political economy in which economic democracy places capital at the service of society.

Much has been written about the origins of the debt crisis in Greece. Some point to the availability of cheap money and unethical lending that followed Greece’s entry into the Eurozone. Some point to the lack of oversight and lax regulations. Some point to the role of corruption and the huge waste of public funds. All contributed to bringing Greece to the precipice. And exactly the same pattern has been evident in the other debtocracies – in Argentina, in Ecuador, in the countries of the European periphery. But few point to the fundamental lack of democracy and public accountability that has made all this possible.

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

This is why the policies of Greece’s masters, its servile political class and the European powers that have supported it, are so tragic and shortsighted. They are destroying the very institutions that are most needed to reform and remake Greece – its public and civil institutions. This is not accidental – the regrettable casualties of austerity. Their destruction is precisely the aim of austerity.

The point is, they don’t care. The destruction of public institutions and civil power suits our elites very well. The priority of social values or the wellbeing of people over those of capital doesn’t fit into their schema. In their schema what really matters is the perpetuation of a system that is working just fine for some – just not for people like you or me, or the vast majority of the citizenry that is now paying for the sins of others.

The dysfunction of western capitalism today, and the myopia of its free market ideology may have reached a point where it is no longer able to save itself. Having lost the capacity to freely exploit the resources and labour of third world colonies, having to face the growing competition of Asian state capitalism, western capitalism is now devouring its own foundations and returning to the ideas and practices of a time we had all thought was behind us. The Third World is being recreated in the heart of Europe. We are witnessing a form of cannibalistic capitalism.

In its thirst for short term profits, in its need for cheap and defenceless labour, in its dependence on unlimited access to natural resources, the public interest – and the role of governments in protecting that interest – must be destroyed. Ultimately, this is the end result of liberal democracy – a process that while achieving the democratization of politics was unwilling to sanction the democratization of economics.

In the end, the lack of democracy in economics will always destroy democracy in politics. This is the hard lesson that liberal democracy – and the modern age – is teaching us.

Today, the task of undermining democratic institutions is nearing completion. The criminalization of dissent and the introduction of pervasive surveillance under the guise of national security and anti-terrorism are essential tools in this process. With the decline of profits in the market economy, the enclosure, annexation, and colonization of the public economy is the next logical step. Governments, in the pay of capital, have become the maidservants in this process.

Unless this is stopped, the natural, social, and political foundations of capitalism itself will be consumed. And unlike what some would prefer to believe, what follows after its demise, in the absence of a humane alternative, could be far worse. Thankfully the models and the ideas already exist for a viable alternative, for a co-operative political economy in which capital serves the common good instead of the other way round.

The time has come for a convergence of movements to unite around a common agenda for a political economy of the common good.

The dynamics of such a movement have begun in the rise of Syriza, in the success of Podemos, in the growing resistance in Portugal, Italy, Ireland, and yes, even in Germany. Austerity is fueling a new radicalism. Austerity, and the anti-social ideology that drives it, means not only the destruction of democratic institutions and civic life – liberal democracy as we have known it – but very likely the destruction of capitalism itself.

What our radicalism needs is both a vision for a new political economy, and the political movement to implement it. And, besides a political economy that is capable of serving people and their communities instead of profit, the rise of civil power is necessary for saving capitalism as well. This is the strange irony of our times.
I would like to finish my talk by reflecting on the origins of democracy.

Everyone knows that democracy was invented by the Greeks in ancient Athens. But not everyone knows the relation of debt to the origins of democracy. In the 6th Century BC, debt slavery had become the condition for many poor Athenians who had to use themselves as collateral for the credit they needed to survive and to work their small farms. These unpayable debts were owed to wealthy landowners and the oligarchy that ruled Athens. Over time, unable to pay their debts, many small farmers became debt slaves, having sold themselves and their children into bondage.

But then the people rose up. A series of debtor revolts in Athens threatened the city with revolution. Fearful for their wealth and power, the oligarchs appointed Solon to devise a new constitution for the city. Solon was an aristocrat. But he surprised them. First, he cancelled all debts and abolished the practice whereby a person can make themselves a slave to someone else. Then, he gave political rights to the poorest of Athens’ citizens. This was the beginning of democracy.

Some things don’t change. The power of a small minority to enslave the majority through the control of credit, through the creation of unpayable debt, and through the monopolization of political power is the perpetual pattern of oligarchy and plutocracy.

It was true in ancient Athens in the 6th Century and it is true today. And just as in ancient Athens, what is needed for a rebirth of democracy today is a new form of debtor’s revolt.

This is what is happening in Greece today against the oligarchs and the plutocrats at home and in the boardrooms and government ministries of the centres of capital abroad.

The debtor’s revolt and the rise of democracy in ancient Greece spread and become the foundation for a new conception of politics in which people matter more than money. Civil power became the foundation of political power.

Perhaps the same can happen today.

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Civil Power and the Path Forward for Greece

Posted by John Restakis on February 25, 2015 in Uncategorized |

John Restakis, January 2015

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

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

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

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

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

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

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

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

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

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

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

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

And this, in very large measure, will be the true test of the character of Syriza in power. How will it relate to the broader civil society, and to the fledgling organizations and institutions of the social economy as it tries to rebuild the economic and political complexion of Greece? Will it revert to the traditional statism of the Left, a command and control government, or will it seek to expand and re-imagine a leftist program for change that mobilizes the institutions of civil society and the social economy as meaningful partners in nation building?

Moreover, will it understand and utilize the social and economic principles of co-operation, of mutuality and common good, as central to the re-building of the economy and the society? In short, will the party recognize and mobilize the vast potential of civil power in realizing its vision? If it does, it will be the first in Europe to do so.

Part Two

In the cacophony that passes for political debate in Greece, one of the things that distinguish the contending parties is their relation to the social economy. That Syriza is taking the social economy seriously is a good sign. The social economy represents one of the very few bright spots in Greece, with hundreds of new groups being formed to provide goods and services in a way that is entirely new. Often rejecting organizational hierarchy, promoting inclusion and democratic decision-making, focusing on service over profit, these organizations see themselves as models for a new economic and political order. And they are. But it is for this reason too, that many of these groups want little or nothing to do with political parties, or the state

This is not good news for the parties of the Left as they struggle to articulate a vision and method for a new political economy. They need a new approach if they are to build a leftist vision for a new age. The old ways of party and state control have been discredited and rejected.

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

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

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

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

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

And fourth, it means the reform of public services through the provision of control rights, transparency, accountability, and decision-making power to the users of these services. The insular, autocratic power of bureaucracy must be broken.
Greece has no option but to try new approaches to solve its social, economic, and political problems. At the macro level, a Syriza government will have to do everything it can to address the fundamental questions of debt restructuring, of trade relations and export policy, of increasing revenue through tax policies aimed at capital, of resurrecting agricultural and industrial production, and of addressing the humanitarian crisis.

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

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

The building of these institutions is crucial. This is true whether a new government succeeds in re-negotiating the debt and its relations to its European counterparts, and even more so if it does not. There are grave doubts whether the changes that Greece needs to make toward a more humane and socially responsible economics can be developed within the Eurozone as it is currently structured. The ideological and institutional inertia of neo-liberalism is suffocating any prospects for reform

Regardless, Greece can learn from the wealth of experience that has already been accumulated in other countries where the social economy has played an important role in advancing economic and social development – particularly in times of crisis. Greece is a latecomer to this field, but that is not without its advantages. It can learn from the experience of others. For example:

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

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

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

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

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

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

3

Imagining Utopia – Ecuador’s Gamble on a Social Knowledge Economy

Posted by John Restakis on January 7, 2014 in Uncategorized |

It is now six weeks since I arrived in Ecuador as part of an international team of researchers and activists that are working with the government to radically transform the nation’s economic model.

In what may be one of the most innovative change programs in Latin America, the administration of Rafael Correa is proposing to transition from a neo-liberal, free market economic model to what they are calling a social knowledge economy based on a combination of commons-based economics and the promotion of open knowledge systems. It’s heady stuff and the project is placing Ecuador at the forefront of global efforts to advance human knowledge as a commons and to apply this knowledge to the creation of a new economic model based on the commons, co-operative models of production, open-source systems of sharing, and free access to information.

Housed at the National Institute for Higher Learning (IAEN), the FLOK Society project (Free/Libre Open Knowledge Society) is conducting the research and developing the policy ideas that will underpin this effort. I and six other researchers form the team at the heart of this project. Supporting this effort is a motley, misfitted, but highly motivated pack of thinkers, hacktivists, political operators, digital geeks, and determined idealists from around the world who see in FLOK a chance at crafting a progressive vision of economics for the 21st Century and, even more enticing, a chance to put such a vision into effect. It is a project to imagine utopia for real world application.

But…what does all this mean? Is it a digital age fantasy or a prescription for transformative change? Is there a political will to drive the radical changes we are envisioning? Will our work move from vision to reality?

My intention in this blog series is to reflect on this effort, to share what I myself am learning in the process, and to explore what this really means for re-imagining a humane and sustainable economics in the Age of Google and in the context of the political puzzle that is Ecuador.

As we enter into 2014, in a time of deep cynicism, of entrenched and growing inequality, and amidst the ongoing global train wreck that is capitalism, what could be more fun?

So here we all are in Quito.

Set deep in the folds of the Andean highlands, the city of Quito extends along a narrow 35 km ribbon between the steep green slopes of Volcán Pichincha on the west and the Valle de los Chillos on the east – the beginning of a long descent to the Amazon basin. In the blue distance to the south rises the high, solemn, snow capped peak of Cotopaxi – the world’s highest active volcano.

It is only when one views the city from above, from the silent and desolate savanna slopes of Mount Pichincha, that the true remoteness of Quito becomes apparent. Until recently this valley, now covered over with office buildings, malls and cement housing blocks, was the site of a small but significant Spanish colonial outpost and the epicentre of the revolutionary ferment that gripped Latin America in the bloody, protracted struggle to free the continent of Spanish rule.

It was in Quito that Latin America’s first declaration of independence from Spain was announced in 1809. The intellectual leadership that interpreted and cultivated the political ideals of the Enlightenment for Latin America was here. Quito’s intellectual and political leadership was indispensible to the rise of anti-colonial sentiment for the rest of the continent. Today, the extraordinary revolutionary history of this small country remains largely unknown to the outside world. It lies buried beneath the concrete blocks and sprawling commercial malls that seem here, like everywhere else, to characterize the prevailing spirit of the country.

But Ecuador is nothing if not a land of contrasts and contradictions. The stark beauty and brooding silence of the Andean plateaus rising above Quito contrast sharply with the rampant development and noise that have overtaken the colonial charm of the old city. The drive for development and commerce is everywhere apparent. The Correa government is deeply committed to an extraction strategy based on oil, but it is also embarking on a bold experiment to change the governing principles of Ecuador’s economy.

So we must ask: how does one reconcile a policy of extractivismo with the aspiration to a social knowledge economy that promotes sustainability? This is just one of the contradictions that immediately strikes the observer. Another is the contrast between policies that promote open knowledge and social innovation and the highly controlling instincts of a government that has little tolerance for dissent and severely limits the autonomy and freedom of civil organizations.

This is an area I am becoming familiar with as my work here is focused on the creation of social institutions that can support an open knowledge society and a commons-based economics. The tension between state control on the one hand and the civic requirements for open knowledge on the other, constitutes one of the key contradictions between what the government says it wants and what it does in practice.

With respect to environmental protection and sustainability, the primary source of opposition now confronting Correa is rooted in the government’s decision to extract oil from the Yasuni national reserve in the Amazon basin. The area is home to the last remnants of uncontacted tribes in Ecuador and oil extraction here is like a death warrant for them. Moreover, wanton contamination of the area over the last 30 years by oil giants Texaco and Chevron has spawned bitter and widespread opposition to continued drilling. Huge tracts of the Amazonian rainforest have been poisoned or wiped out by indiscriminate and unscrupulous oil drilling.

How does one square such actions with the professed aim of sustainability?

And alongside its oil policies, the government’s commitment to protecting tribal knowledge from commercial exploitation at the hands of global corporations is without question a step in the right direction.

The contradictions abound.

It remains to be seen how the government juggles the need to raise cash for public programs through oil revenues while pursuing a groundbreaking economic path that, on the face of it, runs directly counter to this policy. Then again, nothing in Ecuador is straightforward. The political crosscurrents that display one facet of the government at one moment reveal something completely incongruous the next.

Ultimately, so far as the FLOK project is concerned, the real question may be not whether the government is serious about transforming it’s economic model according to its vision of a 21st century socialism. There are clearly progressive forces in the government that are committed to substantive, systemic change. It is also clear that there are determined opponents, both inside government and without, that will do everything in their power to defend the status quo and protect entrenched interests. Nothing new there.

The test will be whether the competing claims of commercial and industrial development and the satisfaction of consumer wants from an emerging middle class will outweigh the promise, and the attendant risks, of a model that is still formative and reliant on a vision that is still in need of a coherent framing theory and the empirical evidence of success.

That’s where we come in.

0

Bio Me – A Co-operative Response to the Greek Crisis

Posted by John Restakis on November 14, 2013 in Uncategorized |

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Three years have now passed since the Greek debt crisis exploded in Europe.

By now, the “rescue” imposed by the International Monetary Fund was to have triggered a growth in the economy of 2.8 per cent. Greece was to be basking in a  “heightened sense of confidence”, new access to markets, and a declining ratio of debt to GDP.

It was this kind of false optimism, and adherence to the easy moralism of their austerity policies, that has enabled the pundits of the IMF, The European Central Bank, and of course the German Bundessbank, (the so-called Troika) to transform farce into genuine Greek tragedy as the nation’s economy continues to spiral downward.

Unemployment rates hit 27 per cent this year and suicide rates have quadrupled since 2009. Among youth, unemployment stands at an eye-watering 70 per cent. On the once busy shopping avenues, 40 per cent of the stores have closed. No-one has any sense of where this will end.

All of this gave me a sense of foreboding about the upcoming trip to visit my family in Athens. The memories of the street riots from a few years before and the plumes of tear gas rising up from the graffiti scrawled streets were very fresh in my mind. It was then that I had first noticed the worrying publications of a new fascist political movement that was gaining strength and making itself felt publicly for the first time. Golden Dawn.

Instead, Athens turned my expectations on their head. Alongside the gloom there was an unmistakable sense of forward movement, of optimism, of people finding new ways of coping where the old patterns had been played out. New models of enterprise were being tried out in which sharing and mutual benefit replaced the established models that many feel have betrayed them. Everywhere it seemed, people – especially youth – were experimenting with new forms of economy.

From groups of friends pooling their money, and the profits, to run coffee houses, to impromptu farmer’s markets, to employees purchasing a popular radio station to run as a co-operative, people were being forced by circumstance (and disgust at a failed system) to venture into what for Greece is uncharted territory. Among the most inspiring of these efforts is the worker takeover of Bio Me in the northern city of Thessaloniki. It is the first worker-run factory in Greece.

Part 1

Bio Me is situated at the outer reaches of the city where the urban centre bleeds into the industrial suburbs that have the typical look of nowhere. Just next to the factory is the vast expanse of a parking lot that surrounds the familiar blue and yellow bulk that is IKEA. I arrived here with Makis Anagnostou on a blistering Monday afternoon to meet the workers that had taken over the factory after it had been bankrupted and abandoned by its owner. That was in July 2011.

Makis is a bear of a man. He sports a thick moustache reminiscent of Nietzsche, and intense brown eyes that give life and force to the passion with which he speaks, easily and at length, about his ideas and his mission at Bio Me. A workingman’s philosopher. And although he has no formal title, he has emerged as a spokesman for the group.

On my arrival in Thessaloniki, Makis had picked me up on a monstrous Kawasaki that carried us off growling through the streets of the city in search of food and a quiet place to talk. He was warm and hospitable and open in that way that only Greeks can be. And he related to me the remarkable story of Bio Me.

Bio Me produced industrial adhesives and glues for the ceramics industry. But in the spring of 2011 it was clear that the factory was in serious jeopardy. Not because it wasn’t profitable. Between 2000 and 2006 sales had doubled and European revenues had held steady despite the recession. Bio Me was at this time one of the top twenty firms of Northern Greece. But the factory was also part of a company group whose owner had taken on a debt of nearly 3 million euros to finance expenditures at Filkera & Johnson, the mother company. This debt was being financed wholly from the revenues of Bio Me. In addition, the holding company was carrying an existing debt of 35 million euro that became impossible to pay when the crisis hit. By April 2009, the revenues of the company were no longer sufficient to carry both the debt and operating costs. Bio Me was unable to pay its workers.

The workers at the factory feared for their jobs. They had seen what was happening and had alerted the owner that not only was the factory being put at risk but that it was unethical to imperil in this way the livelihoods of its employees. Throughout this period, through cost cutting measures initiated by the workers, Bio Me was able to slowly close the gap owed to workers. But on July 27, their worst fears were realized when the owner abandoned the factory and disappeared with the debt still unpaid. The board of directors disappeared shortly after. It was a factory without a head.

Despite the fact that the owner had fled, the workers at Bio Me continued to work to try and save the company. To raise revenue, they started a recycling program that netted them over 36 tons in waste paper alone. With the recycling of this and other waste the factory earned enough money to help pay for the essential living costs of fellow workers who were in most desperate need of help. There were fears that some of their co-workers might take their lives, as had been happening with frightening frequency throughout Greece. And they had understood that a factory operating under direct worker control had to be run along entirely different lines. The idea to form a co-operative took root soon after a small group of workers, Makis among them, began meeting to discuss how to save their jobs.

Part 2

Co-operatives have a long, and largely forgotten, history in Greece. During the Ottoman era co-ops played a crucial role in the Greek war of independence by using their capital to provide arms and supplies for the guerrilla bands that led the revolt against Turkish rule. Nearly a century before Rochdale in the UK, the residents of the small mountain village of Ambelakia just south of Thessaloniki, organized what is now regarded as the world’s first modern co-operative.

“The Common Company of Ambelakia” managed the production and shared the profits from the sale of the scarlet red yarn that was famous in that region. In 1780 over 6,000 residents of this village – men, women, and children – owned shares in a community co-op that had 24 workshops, warehouses, laundries, dyeing facilities, as well as trading agents and co-op branches in Vienna, Trieste, Dresden, Hamburg, Amsterdam and London where the yarn was brought to market by the co-op’s own ship, the “Calypso”.

Now the co-op idea was being rediscovered in this time of crisis. Makis and his friends were inspired by the example of the coffee house where they regularly met – it was owned and operated by the young employees who worked there. If they can do it they reasoned, why can’t we? They took the proposal to a meeting of the workers of Bio Me. “Everyone was there”, Makis said. “Forty-two workers. When a vote was taken to form a co-operative to save the plant, 98% voted in favour”.

Today there are from 25-30 workers who work for the co-op. Everyone receives the same pay regardless of what they do or how long they have been there. All decisions are made in a general assembly by those who are present. And everyday brings with it a host of difficulties and obstacles to overcome. When I was there, the issue of the hour was how to prevent the electricity from being shut off. And here’s the irony.

Despite the fact that there are willing customers for the company’s products, bankruptcy laws in Greece severely limit the rights of workers to benefit from the assets of a bankrupt firm, even if those workers are owed wages. The factory warehouse is filled with unsold product because its sale would generate a government claw back which, when added to the cost of marketing and transport, would result in a net loss. To complicate matters, Greek corporate law has no provision for a worker-owned company.

Most co-ops in Greece are incorporated under legislation that limits co-ops to agricultural or community purposes. Nothing has been done to explore co-operatives as a possible strategy for economic revival. And so with austerity on full throttle, the government is also ignoring the one solution that could actually salvage jobs and help restart the economy. But that would mean challenging the primacy of capital.

Part 3

Bio Me’s first demand is for legislation that would allow it, and the thousands of other firms that have been abandoned by their owners, to operate as worker-owned firms if the workers so choose. They are also demanding that workers be entitled to use the value of owed wages and their unemployment insurance to buy and operate their factories. The changes have been promised by Alexis Tsipras, the young leader of Syriza, the new left-wing party that has emerged as a major force from the turmoil of the crisis. The workers of Bio Me have said to the government, “…we’re here to stay, we’re not going to stop working, and when you’re ready with legislation, we’ll talk.”

Meanwhile survival is a major struggle. A number of banks are prepared to help, but only when the co-op is legally incorporated. Until then, the co-op can’t raise the capital it needs to fully run the plant. And so Bio Me has had to re-invent its business with the resources that are available. Today the co-op is out of the glue business and is surviving by producing small batches of organic household cleaning products that it sells exclusively through the informal networks of the new solidarity economy.

At demonstrations and meetings, at the countless political events and solidarity concerts, Bio Me has become a familiar sight. Support for the co-op is growing. Sales of its organic cleansers are set to triple. It is not only as a symbol of resistance and survival that Bio Me has won such broad appeal. The co-op has also committed itself to supporting community efforts to rebuild the shattered remains of health and welfare services in local neighborhoods and to providing solidarity and advice to other fledgling co-ops and factory workers who are looking to Bio Me for inspiration and guidance. Makis is constantly on the road responding to invitations to speak – and his message is resonating.

Part 4

The solidarity that Bio Me is building is in a very real sense the passing of a torch that the co-op itself received from the recovered factory co-ops of Argentina which came to offer help early in the struggle. Like Bio Me, over 250 bankrupted factories in Argentina have been turned into worker co-ops that are still operating, following abandonment by their owners. The fight for the factory also attracted its share of limelight when Naomi Klein and Avi Lewis came to bear witness to the importance of Bio Me at a time when real solutions to the crisis have been so lacking.

Bio Me is pointing to a radically new direction about how the workers of Greece and other failing economies might rethink the strategies of resistance they need to pursue if they are to achieve substantive, systemic change. Protest strikes and street demonstrations are one thing. Factory occupation and production under worker control is a new ball game altogether. The Bio Me model questions the very idea of the sovereignty of capital. Equally transformative is Bio Me’s vision of a solidarity economy network that operates outside the conventional market system to support the manifold self-help and mutual aid models that rely on a wholly different set of values for serving people’s real needs.

Makis and his fellow co-operators are fully aware of the role they are playing in the effort to re-imagine what an economics of equity and justice might look like. And they are under no illusions as to the enormity of the task ahead. But as he said with a characteristic shrug of his shoulders, “…what alternative is there? What else can workers do?’

On the streets of Athens, amidst the graffiti and the shuttered storefronts, the countless posters cry out their messages of rage, of resistance, of the imperative of change, of bitterness and of hope together. Solidarity concerts seem to take place every other night. Young people fill the plazas every night.

And in the quiet back streets of Monastiraki, the old flea market of Athens, the crowded cafés exhale the warm, fragrant aromas from the hookas that are once again in fashion. What was old is new again. And just so, the old and half-forgotten idea of the co-operative is rising once more from the mountain mists of Ambelakia to give a sense of direction and form and purpose to a desperate and searching populace.

For seasoned workers like Makis and his friends struggling to rebuild what they once had, and most of all for the youth who see no future in the failed policies and politics of the past, the co-operative ethic of Bio Me serves as a slender thread that promises a way out of the dim labyrinth that is Greece today.

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