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“Financial” or “Economic” Crisis? Note on Protests in Bulgaria

Was discussing recent and current protests in Bulgaria with colleagues from there recently, and was given to understand that Bulgaria hasn’t experienced a “financial crisis” in the sense in which it has been intensively discussed after 2007; rather Bulgaria has been suffering from a long-drawn “economic crisis” and perhaps more importantly a “political crisis”. The latter has resulted in the widely reported protests in Bulgaria which happened to coincide with the “financial crisis” in the Eurozone. 

The discourse of crisis, economic and political, obviously goes back a long way and has been a regular occurrence in capitalist economies and, especially in the 1980s and early 1990s, featured as a long-drawn condition leading into a devastating culmination in strongly centralized socialist economies. What makes the financial crisis of 2007 and onwards interesting is that it came after a hiatus of around two decades without serious crises in the USA/Western Europe (nowhere else) and revealed something about what's been going on in the dominant financial sector in the interim. This crisis is “financial” insofar as it refers to the financial institutions where it surfaced (those which profit from moving capital around -- banks, insurers, lenders, investors and speculators of various sorts). But the analysis of this crisis finds three areas which bear upon financial institutions and are complicit in the crisis: (a) deregulatory measures worked through a state-corporation-banking nexus (with the legislative-juridical apparatus at its behest) and the corruption of auto-regulatory mechanisms (such as ratings agencies, interest rate setting, etc.) which remained; (b) unregulated international financial movements and weakening of local regulation, encouraged by international/transnational alignments; (c) a dominant mode of economic thinking which makes every move involved in (a) and (b) seem rational on the balance sheet in the short term while normalizing significant irrationalities, inequalities and insecurities (the basis of “neoliberalism”, the popular term of the moment). As such then “financial” equates to “economic” and “political”, and the fact that financial institutions in a particular country didn't become news doesn't mean that they were not complicit in the crisis.

In terms of regulation and functioning of financial institutions and the role that states play therein nothing much has changed since 2007, even though the financial crisis is declared as done with -- but much has been exposed and widely discussed.

In this context, the recent and ongoing protests in Bulgaria make an interesting case study -- and the distinction made between “financial” and “economic”/“political” in that context is a symptom of something. The 1990s transition from a socialist to a capitalist economy (which essentially involved gradual decentralization of the economy and denationalization, becoming attuned with liberal and international capitalist mechanisms, culminating in joining the EU in 2007) has meant that every crisis and cause for dissatisfaction in the process has pre-determinedly been attributed to the socialist past and the transition itself.  That is, every dissatisfaction has immediately been presumed to derive either from the inertia of a persistent socialist aftermath or put down as the teething troubles of transition -- ultimately reduced to socialist-style corruption and a departure from liberal normality, a “moral crisis”, thus refusing to identify neoliberal corruption in the present. So describing any perceived crisis as “economic”/”political” and not “financial” in Bulgaria has the effect of constantly exonerating the new financial institutions and emerging neoliberal economic order, and constantly apprehending every disparity and irrationality in the present as the result of an ever receding past and its long tentacles.

The current phase of crisis and protest is a particularly interesting juncture because such wilful misrecognition of neoliberal corruption and abnormality (the habit of recourse to socialist past as ultimate cause) is not sustainable. Bulgaria is showing symptoms of dis-ease not from a socialist past but from the capitalist world around and within it and from the neoliberal present, and this dis-ease is shared by other contexts which can't hide behind socialist pasts. But the will to misrecognition is very strong. The recent and current protests in Bulgaria have two features of interest: (a) they started in winter 2012/13 with astronomical electricity bill hikes -- the result of unregulated corporations/financial institutions aligned with an increasingly neoliberal state (the GERB government of the time, soon conveniently forgotten by protesters in favor of anti-socialist sentiment) and concordant international alignments; (b) they were instantiated by high and fluctuating unemployment, falling wages relative to inflation, growing inequalities, diluted social security, and general dissatisfaction with the condition of life especially in view of the rest of EU. To the latter all have been, or should have been, shocked into awareness thereafter by a spate of public suicides since 2013, most recently in November 2014 – but those have not quite been considered worthy of serious analysis, rather quickly tucked away under moral platitudes or put down to individual disorders. These are obvious symptoms of financial crisis, grounded in a neoliberal economic order which is still entrenching itself -- which is the same as an “economic crisis” and a “political crisis”. It surprises no one that it has turned lately, in summer 2014, into a banking crisis in Bulgaria, i.e. of financial institutions.

What is somewhat amazing about the dominant narratives of recent and current protests in Bulgaria is how many contortions have been deployed by protesters and their supporters to avoid having to recognize this: by taking recourse yet again to the socialist past and the teething troubles of transition, by holding up moral platitudes and wishy-washy notions of liberal political integrity, by not talking about deregulation, by not talking about unemployment, by not talking about economic disparities, by not analyzing the incidence of public suicides, by not talking about the legalized role of state functionaries in relation to financial arrangements, by not talking about how the EU regime and international economic agreements affect the structure of Bulgarian finance, etc. It is as if Bulgarian protesters are suffering from and showing the signs of resistance or resentment towards a financial crisis (the protestors are there because of that) but are determined not to examine its financial/economic underpinnings (the protestors are unable to recognize what they are protesting about).

A curious paradox. 

Suman Gupta, November 2014