The city and its crises*
Francesco Indovina
Since the
crisis of the city is above all a crisis of resources, it seems appropriate to
start by referring to a text that was very successful when it was published (in
1973 in the U.S.A. and in 1977 in Italy): James O’Connor’s The fiscal crisis of the State. The author maintained that the
fiscal crisis of the State, caused by growth in public expenditure without an
equivalent rise in revenue, was not the result of some abnormality in the
system, or the outcome of bad administration, but constituted a need for
“monopoly capitalism”. Nowadays we can safely, and with good reason, expand the
author’s point of view: the reference should no longer be to “monopoly
capitalism” but rather to “financial capitalism”.
O’Connor’s
conclusion, which Federico Caffè adopted as his own in the introduction to the
edition of 1979 of the essay, was: “To conclude, in the absence of a socialist
perspective able to propose alternatives for every aspect of the capitalist
society […], trade union militancy, organisers and activists will continue to
proceed in a relative theoretic void. […] what it is felt is required is a
socialist perspective that will make the effort to redefine needs in collective
terms. In actual fact, even if the working class were to manage to nationalise
the whole share of national income absorbed by profits, the fiscal crisis would
reappear in a new form, unless both social investment and social consumption
were redefined as well as individual consumption and individualist life
models”.
Times have
changed, conditions have undergone great transformation and the forms of fiscal
crisis of the State have taken on new, more dramatic aspects, but both the
reference to the “theoretic void” and the need for a socialist perspective fit
for the present time still seem to be valid.
1. The conomic crisis
If we wish to refer to the economic crisis we
must necessarily try to outline its features.
That it is
not a question of a, let us say, short-term crisis seems very clear and this
has been stated by many, just as it appears equally clear that the “policies”
adopted to overcome it seem to be totally inefficient. But this inefficiency
cannot be attributed only to the aberrant austerity policies which, imposed by
Germany, have characterised the interventions of the group of European
Community countries (an indirect confirmation exists of the relation singled
out by O’Connor). The instruments proposed fit into “tradition” and do not seem
to grasp the novelty of the crisis; this is the reason for their inefficiency.
The negative outcome is the result of a refusal to look directly at the nature
of the crisis that is afflicting all economies (including those not adopting
austerity policies). Just as virgins were offered to the Minotaur to keep it
happy, so men, women and entire countries are offered in sacrifice to the
crisis, while no Theseus can be seen on the horizon who will be able to kill
the beast.
The
economic crisis is the offspring of a systemic change in capitalism. It was not
the excess of credit that led to the “bubbles” which caused the crisis as they
burst; the excess of credit is the effect, not the cause, while the latter was
to be found in the new (speculative) way of accumulation of wealth issuing from
the production system. Within the logic of the functioning of the social
relations of production in capitalism explanations are found for the continuous
increment in “capital” to the detriment of “income”, and it is in this outcome
that the base of the current crisis is to be found, which corresponds to a
change in the substance of capitalism. The accumulation of capital appears to
continue to occur according to the well-known formula ‘money-commodity-money’
(M-C-M), but actually the larger part has separated itself from this mechanism
to create growth in capital without the production of commodities. Money has
become the direct means to produce other money (we could write M-M). The value
of World Finance is ten times greater than World GDP.
At the origins of the modern age, merchants,
or the richest of them, acted as a “bank” and lent money to kings, princes,
emperors, etc. for their adventures (mostly warlike) in exchange for a tax,
often exorbitant, or for trade concessions or other advantages. Modern financiers
do the same today (including some State financiers, like China); they lend to States,
regions and municipalities, encourage the middle classes to get into debt
(house mortgages, consumer good finance schemes, etc.) and cover themselves
against certain insolvency (the famous “bubbles”) by inventing financial
mechanisms (derivatives) to find who they can unload their insolvency on.
It appears
obvious that this is a route leading to suicide of the social system itself,
which we call capitalism; we are not saying that we are at the end of
capitalism, but that the structural conditions are favourable for a change in
the social regime (while political subjectivity in this direction is lacking –
who, how, what, when – for ideological reasons). Buffer measures can be taken,
and are, in a contradictory way, being taken, which do not reverse the tendency
underway but may constitute “rest” stations along the route of the crisis
train; but the convoy goes on.
For example
– and this has to do with the specific theme of the city – not understanding
that the crisis is not the offspring of the public finance break-up (sovereign
debts), but that this break-up was born of the needs and impositions of
finance, which constitutes a power in itself, and has deprived all national
dimensions of strength. When national politicians are incapable and corrupt,
they let their hand be taken by international finance; when they are capable
and not very corrupt, they practically put themselves at its service, laying
claim to both the objectivity of processes and the alleged future improvement
in the situation of peoples. After colonial occupation the whole world has been
colonised by financial capital. The supranational political institutions that
should protect peoples against the excessive power of finance, protect the
latter against peoples, also because these institutions have techno-structures
at their disposal that often come directly from the financial institutions.
Common
sense also suggests – and this holds not only for public finance but also for
families – that debts paid with other debts cannot be the solution: the debt
actually ends up taking on such a size that it will never be possible to settle
it. The example of Greece, which, despite having obtained a reduction in their
debt, will not manage to pay what is left, and will therefore be punished
further with new restrictions, is a demonstration of how the mechanism revolves
on itself.
The so-called “chain letter” is not just the
expedient of those who want to cheat their clients by paying old clients’
interest with new clients’ subscriptions (like Bernard Madoff), but a benchmark
that has been revived, though in a different form, at all levels of
international finance. Creative
“finance” and its specific instruments, which, though resisted, are continually
renewed, are used by international finance that has determined a new economic
structure in which it adds to “wealth” production by direct exploitation of
workers, peoples being shorn to pay debts, and “builds” a world of depression
and ever greater inequality. The ‘financialisation’ of the economy and the
speed of technical progress are clenching the world social-economic system in a
deadly grip, in which superfluous capital and superfluous labour do not find
(and cannot find, the way things are) real employment.
Real
economics, in this picture, seems like an appendix to financial economy, at the
same time insignificant and useful. Useful for accumulating those resources
that the contraction of demand still permits, to then be “withdrawn” by
finance; insignificant because it is an increasingly modest share of total
“wealth” (which actually does not exist, but whose existence is determined by
the decision to “want to settle debts”).
Awareness
is increasing in many observers that the social pyramid of various countries is
undergoing deep tensions and changes. The middle class has become greatly
compressed, an outcome that is taking away one of finance’s privileged
“markets” (this was the class that supplied the various forms of demand for
getting into debt: house mortgages, loans for consumer goods, etc.), while the
market of the old and new rich does not guarantee general accumulation. The
compression of the middle class, moreover, produces a fracture in continuity
between the different social strata, often compromising, but also a source of
conflict and contrast, of development and organization of mass struggles.
2.
The city in the crisis
The
reverberation, so to speak, of the phenomena mentioned above (though briefly)
on the government of the city and territory is one of the dramatic aspects of
the current situation, also because the policies that are adopted end up
unloading their outcomes precisely on urban organisation.
Local Authorities have always been praised as
the political link that more than any other could exercise the promotion of
democracy. The “closeness” between political decision and the people should
(could), in fact, constitute a virtuous relationship, making politics (the
Local Authorities) more sensitive to the needs of the population and, at the
same time, making it possible for the population to pay greater attention to
politics and to their electoral choices (voting with their ‘feet’). It is
wellknown, however, that this virtuous relationship did not work anything like
as much as hoped for, with both sides being responsible, and especially due to
indifference and uneasiness on the political side. The latter, basically, did
not like the oppressive control of the population and did not accept that
conflict, an expression of the needs of the people, could become a fundamental
fact for “good politics”. The crisis of democracy is not, in effect, just
national, but also local.
The worsening
of the situation of cities, as an effect of the economic crisis, has actually
made local politics less self-referential in some cases, due both to the
obvious privations in the life of many men and women and to the growing
pressure of the population and respective organisations (traditional and new,
structured and casual) for decisions to be taken that would help alleviate the
situations of hardship. But this change in attitude has not, generally
speaking, had positive outcomes.
The
hardships the population face because of the crisis are added to the structural
ones produced by traditional economic mechanisms. In particular, the most
important phenomena concern: poverty, unemployment, growing demand for economic
support, increased demand for services, the housing issue (its absence and
cost), assistance for the elderly and disabled. Fundamentally, the phase in
which each one could imagine cancelling out the shortfalls arising at an urban
level (dissatisfaction with services, housing situation, quality of the
environment, etc.) with his own resources (a sort of privatisation of
solutions), seems to be followed by a phase in which the demand for more
cities, a better city and an increase in public intervention is strong and
significant.
Note that
relative poverty in 2013 at a national level was at 12.6% of the population,
while the figure for absolute poverty was 7.9%. The data are worse for the
south of Italy, and for large families and those with an elderly head of
family.
That the
crisis is deeper in Southern Italy is confirmed by other data: in this area the
number of people in a state of absolute poverty rose by 725,000 in 2013, to
reach a level of 3,072,000. The relative poverty figure also has a severe
influence in Southern Italy, reaching 26%, compared with 6% in the North and
7.5% in the Centre. The worst situations are seen in families resident in
Calabria (32.4%) and Sicily (32.5%), where a third of the sample is relatively
poor.
This is not
all: monthly expenditure fell by 4.3% between 2012 and 2013, while 65% of
families reduced the quality and quantity of their purchases. Credible
statistics do not exist for homeless people, forced to live on the street or in
makeshift living spaces. Only the Caritas, a Catholic church facility,
distributes meals and offers some beds for the night; in its reports the
Caritas highlights that immigrants are diminishing in proportion to an increase
in Italian citizens, that it is often a case of families and not individuals,
that the Italians have a mean age double that of immigrants and are mostly
unemployed, and so on. A dramatic picture (if we consider that in Orvieto and
Todi, two cities of average size not considered at the epicentre of poverty,
last year the Caritas distributed 30,000 meals).
In Milan, the economic capital of the country,
average monthly expenditure in 2013 was 2,874 euros, against 3,068 in 2012.
Faced with
this situation, Local Authorities have less and less resources at their
disposal. Whereas the reduction in State transfers continues to be constant,
fiscal revenue (direct or per share of national taxes) is lower due precisely
to the economic crisis and, in the economic difficulties of families and
businesses, the tendency towards tax evasion is greater. Then a number of Local
Authorities are in debt both with banks and suppliers (and while the former are
those that impose settlement according to the commitments made, the latter tend
to get postponed over time, thus contributing to depressing the economy).
Finally,
the stability pact is a burden on regional boards, imposed by the European
Community on Member States and passed on to the regional boards by the Italian
government, introducing an expenditure ceiling also for those Authorities that
had their own resources (the more virtuous local boards end up suffering
greater penalisation). The result is that many municipalities (a couple of
hundred) find themselves in difficulty, on the verge of “bankruptcy”. We are
not just speaking about large municipalities like Naples, Catania, Reggio
Calabria, Messina, etc. but also small and medium-sized ones. And if the
government intervened to save Rome (with the Rome capital law), for the other
municipalities it does little.
In this
situation, which will certainly last a long time (each year the end of the
crisis is announced but then postponed till the following year), the
Authorities are in a cleft stick between limited resources and the growing
demands of the population, with no capacity to intervene. “Pressure” on Local
Authorities often becomes intimidation against administrators or technical
office staff: wrecked cars, threats against people and their families, car
tyres slashed, front doors burnt down, etc. In 2013 the ascertained cases of
intimidation were almost 300 (nothing being known of those not verified). Being
closest to the population, the Local Authorities end up being pinpointed as
responsible for the social disasters.
It is
useful to give a brief outline of the situation in many Italian cities:
• growing
social polarisation and a reduction in the “middle class”. This is a condition
that tends to disintegrate the “social continuity” which, though it made
turning demands into conflicts more complex and less straightforward,
guaranteed them a manageable political outlet;
•
deterioration of collective services with increasing phenomena of exclusion of
the most needy social strata, thus substantially reversing the actual purposes
of those services;
•
abandoning of any urban maintenance action, with consequent worsening of
liveability of the city;
•
deterioration of the environment (quality of the air, for example) due to a
reduction in controls and to the choice of more outdated technological
solutions that cause greater pollution (e.g. means of transport), etc.
Each of these situations could be subdivided
into various sub-items able to specify better the condition referred to, but
for the purpose of this article the list proposed appears adequate.
At a
municipal level, too, the crisis does not hit everyone in the same way, to the
extent that social segments can be singled out that have obtained economic
advantages, and continue to do so, from the crisis. In this situation it would
be advisable to go into detail as regards the hardships, so as to define coherent
political action; territorial authorities also have the knowledge to define
ranges of realistic hardships.
Segments of population exist, in fact, that
for their demographic condition alone prove more at risk than others (the
elderly, large families, unmarried mothers, the disabled, etc.). If the grid of
economic situations (unemployed, pensioners, temporary workers, etc.) is
superimposed on the previous breakdown, then the conditions of hardship are
multiplied but their features become clear. The formation of a map of hardship conditions
should be a reference point for organising Local Authorities’ interventions.
But this singling-out operation is not always carried out.
The
conditions the local boards work at concern: the universality of collective
services (even if weakened by part-payments and the like), progressive nature
of taxation (never respected), liability towards creditors (more or less upheld
depending on the power of the creditor), administrative transparency (virtually
a fantasy), proper administration (‘after’ spreading corruption), defence of
common assets (often neglected and abandoned), democratic nature of decisions
(subordinate to the power of strong contracting parties), responsibility for
urban quality (best not mentioned). These conditions are expressed and applied
in a variety of ways in the different situations and actually contribute to
determining the quality of the different cities, also creating their capacity
to intervene.
“Good politics” in this situation should
suggest to the Local Authorities that they increase their economic availability
and aim at reducing their citizens’ claims. Neither of which is easy.
Regional
Authorities, encouraged by the European Community and the government, as well
as being drained by mass media pressure, picked out the sale of their property
assets as the first operation to be carried out. The sale of these assets
(social housing, abandoned buildings, ex barracks and factories, land and
endless other kinds) is truly absurd: it impoverishes the seller (i.e. the
community) giving short-lived “relief” that cannot be repeated (a part of these
assets, not actually useful at an operative level and insignificant from the
cultural and historic point of view, could also be sold with discernment).
But
precisely because the seller is “forced” to get rid of some assets, the buyer
finds he has a handful of good cards that he uses first of all to undervalue
the property and then to place “straightjacket” conditions. The Public
Authorities (local and national) are practically forced, in these conditions,
to undersell rather than sell. But this is not enough, the buyer’s interest, as
is obvious, is to transform the acquired property functionally and
volumetrically, so the purchase is strictly tied to a change in intended use
and an increase in size. Change in future use and volume is not a “crime” in a
city that is changing, but it is nevertheless a case of very delicate
operations, which change the pressure of population in that specific zone
(including traffic), requiring services to be provided that were not envisaged,
etc. Altogether, “changes in use” do not respect a “project for the city” but
are just an opportunity to make “cash”.
With
discerning politics Local Authorities’ property assets (but also national ones)
could partly be reactivated for collective, social and productive purposes
without the need to sell, perhaps by proposing selfrestoration and
self-renovation mechanisms on the part of those who will use them in the future
(housing, handicraft production, innovative businesses promoted by young
people, etc.).
But the
municipalities’ assets do not only consist of property, under the greedy eye
and claws of finance; there are also many services that the authorities provide
for citizens through their own, or participated, companies (water, electricity,
refuse collection, etc.).
It was stated in a report submitted by the
Deutsche Bank to the European Commission (2011) that Italian municipalities
show high potential for privatisation. This bank, as is well-known, is an
expert in financial operations that dispossess peoples. Essentially, the
European Union suggests this and the national government presses for it; they
would like many of the services provided by local companies belonging to the
municipality to be privatised, too. A trend all to the advantage of the
citizens: services will be managed better, companies will achieve adequate
levels of efficiency, citizens will have better services and, perhaps, will pay
less for them. Moreover, the possible losses of these private businesses will
not weigh on the Local Authorities’ budgets (but will end up weighing on family
budgets). This efficiencyminded ideology has been contradicted by experience:
private companies that took over to achieve the desired levels of remuneration
for capital invested have raised tariffs or caused services to decline
(contradicting the fact that privatisation is to the advantage of the people).
We cannot
fail to acknowledge that management of these services has often constituted
centres of waste (and not infrequently of corruption); departing from this
situation, however, it would be easy to improve their efficiency and the
satisfaction of families. The fiscal crisis of the organisations and the
subsequent reduction in the capacity of Local Authorities to create investment
in these companies have thus become the justification for boosting
privatisation. It is precisely the lack of resources that tempts Local
Authorities to put these companies on the market, with a consequent
impoverishment both of the Authority and the citizens forced to cope with
rising tariffs. We are basically faced with an attempt to take the companies
providing services away from the communities, so as to make money machines of
them, with no respect for meeting the needs of the people, especially the
weaker strata.
The
situation of indebtedness to the banks is different (‘rubbish’ bonds included)
and constitutes another painful issue in their financial circumstances.
Reorganisation of the debt should at least be obtained: repayment periods,
reduction in rates, etc. But the contractual power of the Authorities is weak
also due to the absence of central support from the State. As already said, many
are the authorities on the point of collapse.
Expenditure
reduction that many municipal authorities are “forced” to take into
consideration causes deterioration in services and makes the economic situation
worse (less employed, less consumption, more depression). To counter the
reduction in expenditure some municipalities are adopting an increase in
tariffs (for example at nurseries), thus causing exclusion of strata of
population unable to pay possible increases.
Help for
needy families is also being reduced: authentic assistance for poor families,
rent contributions, “credit” vouchers, home-helps, etc. This phenomenon also
tends to affect employment, with cuts in a large number of “auxiliary” staff,
even if temporary (ranging, for example, from traffic controllers, refuse
collectors, nursery school teachers, etc.).
Moreover,
municipalities in difficulty tend to reduce investments in city maintenance
(public spaces, public buildings, etc.). This non-intervention trend not only
affects the quality of the city but also employment levels.
Confined
between the lack of resources and pressure from citizens (electors) and lacking
in instruments coded for suitable intervention, the scarcity of resources tends
to prevail, namely a “cuts” policy. Consequently, the hardships caused by the
critical situation tend not to be counteracted in the work of local government.
There is therefore an accumulation of negative situations of the crisis upon
individual citizens: unemployment, reduction in available income, etc., to which
cuts in Local Authority services are to be added.
Is it
possible to follow different paths to meet the needs of the people halfway? We
would need to reject the “realism” ideology” (this is the situation and nothing
can be done) to face “reality” (a line that some Authorities are trying to
follow, albeit with some contradictions). These are the paths that should be
followed:
• take
resources where they are available;
•
temporarily suspend the universal nature of collective services;
• develop
and increase democratic mobilisation processes.
The city
and its crises 119 Territorial Authorities have very limited tax-raising
ability (nowadays on the increase) and are therefore not able, even if they
wished, either to follow equalising, forward-looking politics and thus have an
influence on growing inequality, or to collect enough resources. Various paths
could be followed in this case.
If, for
example, one of the factors causing hardship was the housing question
(eviction, impossibility of access to the free market, etc.), the Authority
could lead some initiatives for agreements with property owners, fixing lower
rents, suspending evictions, etc. or, in the absence of collaboration from
property owners, proceed to requisition empty houses, assigning them to the “homeless”
(at agreed rents). The opening up in this case of a possible dispute should not
be feared, also because it might be the opportunity to make it clear that
“ownership” does not solve the problem of housing and that the reduction of
social hardship in this sector constitutes a priority element in a responsible
society. It would, moreover, be a case of an intervention aimed at opposing the
unjust inequalities that are criticised in words both from the point of view of
“civilisation” and because of their depressive effects on the economy, but
which are actually on the increase.
Those
measures that momentarily suspend the universal nature of the rights of
citizenship assured of collective services should move in the same equalising
direction. The new conception of welfare that is trying to find a way into our
society envisages that collective services be guaranteed only for the “needy”,
a decidedly adverse conception of the rights of citizenship which violates the
principle of universality, uniformity and accessibility to those rights. What
is proposed does not exclude anyone from the use of collective services but
should temporarily modulate rates in relation to the economic condition of the
family and the individual, especially because of the crisis. Poor transparency
of the distribution of wealth creates doubts on the applicability of this
principle, but the Local Authority might have direct knowledge of the economic
situation of each family and try to define parameters that will be more
accurate than tax statements very often are.
Furthermore, the cost of many municipal
concessions, such as, for example, stall-renting, could be modulated following
an evaluation of the differences in profitability such concessions produce.
These and
other similar measures may be deployed based on the wideranging group of
activities and services provided by the Local Authority. In order that these
initiatives do not take on overtones of arbitrariness, however, commitment is
needed for considerable development in democracy, which is not to be assumed
just as an instrument of “control” over who is governing, but for the positive
contributions it can produce in terms of reciprocity of solidarity.
By this
term we wish to denote something very different from what the simple term
solidarity refers to, i.e. in this case individual members of the community
taking on tasks, including management, which guarantee everyone collective
continuity and quality of, for example, a service, and direct support of the action
of the population following the paths mentioned above.
Mobilisation of the population is meant, aimed
at enhancing the democratic tone of a given territorial reality by means of
specific instruments and initiatives. Concrete forms of “direct democracy”,
with a deliberative capacity, can be linked and related to the traditional
forms of “delegated democracy”, reviving the latter. Just as forms of direct
collaboration in the administrative management of services and the different
operative functions of a territorial board can enable greater levels of
efficiency and efficacy.
Nowadays an
aversion to delegated democracy, historically given, is increasingly manifest;
I do not believe we can do without this form of democracy but it needs to be
revived, linking it with forms of direct democracy (decisional and managerial).
Voluntary
experiments that have been carried out over time are wellknown, such as the
“time bank”, and also the good “council” results (think of schools), as long as
these had power; just as well-known are the chances to save created voluntarily
by the “farmers’ markets”, or by the autonomous organisation of the GAS
(ethical purchasing groups), etc. We have no problem with the capacity of
single groups to voluntarily organise themselves and be operative, but a leap
in quality and quantity seems necessary, precisely because of the crisis: local
Authorities can and must help these initiatives with contributions to
organisation. It is not a case of a route out of the crisis or of outlining
different social set-ups, but they do undoubtedly contribute and help to
alleviate the discomfort.
It is with extended mobilisation engaging the
different groups in specific actions and functions at the disposal and for the
use of everyone that what we have called reciprocity of solidarity comes into
being.
3.
Conclusions
If people who find themselves in growing
numbers in conditions of discomfort, on the one hand, hope and request global
solutions (national and international), they can, on the other, immediately
transform their discomfort, so to speak, into demands to the Local Authorities
(the close level of government). Local Authorities, however, have been hit by
the same fiscal crisis as the State, with a reduction in resources. Growing
“demands” and lower “resources” constitute the claws that tend to crush the
Local Authorities’ capacity to operate.
The latter
are the stage upon which the devastating effects of the crisis are more
obviously manifest and where, with just as much evidence, the incapacity and
impossibility of giving satisfactory answers to the situation are shown.
Authorities also tend to follow lines of intervention that are not only ruinous
but tend to worsen the present situation (reduction in services, increase in tariffs,
exclusion of maintenance, etc.) and the following one (alienation of own
assets). National governments have unloaded the growing social contradictions
the crisis was producing onto the Local Authorities (politics has an unbearable
level of cynicism).
From what
has been said, it is clear that the Local Authorities are not able either to
combat the crisis, or to tackle the hardships generated by it. Yet some slight
possibility of alleviating the discomfort does exist: by rejecting the
prevailing pathways, opposing privatisation processes, using one’s own property
assets appropriately and appealing to the social forces on the grounds of a
principle of reciprocity of solidarity, administrators can mitigate the effects
of a crisis, the end of which, despite the predictions, is not in view. Some
Authorities are trying, but they are few.
Reference
O’Connor, J. (1973) The fiscal crisis of the state. New York: St.
Martin’s Press
·
da
City of crisis, F. Echardt e R. ancchez (a cura di) ( giugno, 2015)
