Europe's Malaise: Precarity and the Post Fordist Condition

The financial crisis was only the first of Europe's crises in the last decade. It was followed soon thereafter by the euro crisis and the Greek debt crisis, and then the crisis of Crimea and the migrant and refugee crisis, and finally, most recently Brexit and the crisis of global right wing populism. Each crisis deepens and expands the chasms between classes and groups. In analyzing the popular protests that have sprung up on both the Left and the Right, many scholars connect these movements with longer histories of precarity and the crisis of labor in post-Fordist times. Within this new economic condition, spreading and deepening from the Thatcher years through Blair and Chirac and finding its zenith in our contemporary moment, work has become fragile, temporary, and tenuous.Footnote ² Where once the working classes—either in England's northern periphery or the banlieux of Lyon or Marseille—could find good, steady, unionized employment, now what remains is zero hour contract work or self-employment under the guise of the shared economy. Uncertainty invades these spaces of redundancy.

In describing this moment, however, we often lose sight of the precise changes wrought with shifting economic systems. The new precariat in many of these places didn't earn simply a wage, but a living wage. The living wage implies a host of considerations that extend beyond the purely economic. It enables not only the barest survival, but also an entire lifestyle of consumption and comfort. Throughout many parts of the North Atlantic, a living wage made it possible for workers to participate in an entire urban economic, political, and cultural system. Fordism was not only the wage, the workday, and the factory floor. It was also a particular cultural economy in which workers were remunerated so they might go out and consume, taking part in the pleasures and perils of contemporary society.

But was that the reality for workers in Madrid? In studying the Spanish economy, scholars have often argued that Spain, similar to other parts of Southern Europe, experienced what some call “semiperipheral Fordism” or “partial Fordism.”Footnote ³ But this literature does not consider the actual experience of workers and the porous boundaries between work, home, and everyday sociality. In this piece, I focus on the city of Madrid, where we can better reconstruct the experiences of daily economic life. I argue that Madrid illustrates the incomplete nature of the Fordist project. Housing was key to this project, and the neoliberal project of deregulation and securitization was experienced not as substitution but rather as corrective, allowing nascent aspirations to become realized. Popular protest, then, emerges not because of the decline of a previous mode of urban life. Rather, its power and fury has been unleashed because economic advancement and social mobility—intimately tied to homeownership—were revealed to be fleeting and momentary.

Dreams Delayed

We cannot consider labor, employment, and urbanism in Madrid without paying serious attention to the role of homeownership.Footnote ⁴ Over the last century, property was fundamental to Madrid's urban development and urban economy. When he took power following the brutal Civil War, the dictator Francisco Franco dreamed of transforming the capital into a great European metropolis that might reflect his political might and greatness. The city was decimated after many rounds of bombing and blockades during the war, while the periphery was thick with shantytowns that housed the vast majority of urban dwellers.

This bleak panorama served as inspiration for the inception of Spanish housing policy. Desperate to stimulate a shrinking economy, Franco alighted on homeownership as a tool for a host of ends. Madrid desperately lacked both housing and employment.Footnote ⁵ And yet it could not rely on outside investment to stimulate the economy. Thus, the construction and real estate industries might prove to be homegrown institutions that could right a host of wrongs. Homeownership would be the means by which funds could flow again.

Spain's first, definitive move towards a country of ownership occurred in 1944, five years after the end of the Civil War, as the country was still reeling from that shock. Designed as a means of reducing unemployment among the working class, the Decreto Ley of November 25, 1944, encouraged new housing construction as a means of creating jobs. However, these houses would need occupants, and occupants who would make such an arrangement financially beneficial.

As homeownership proved invaluable to forward progress, the regime increasingly incorporated it into its ideology. In the late 1950s, the housing minister José Luis de Arrese would famously declare that homeownership might convert proletarios into propietarios. In one speech, he declared: “The ideal formula, the Christian formula, the revolutionary formula from the point of view of our very own revolution, is the stable and harmonious formula of property.”Footnote ⁶

Yet, for much of the urban population, this vision of stable domesticity and economic attainment were out of reach. Even as the country opened up to outside investment, the capital city remained mired in poverty. The vast terrains of shanties continued to haunt the urban experience, evidenced in the classic tome Tiempo de silencio.Footnote ⁷ That novel, often held up as evidence for madrileño life under Francoism, portrays a bleak city in which even the emergent middle classes must struggle for shelter. When the regime finally had adequate means by which to address the housing problem, it either built enormous, soulless blocks at the very limits of the city, or simply gave everyday urban dwellers the materials with which to build their own housing. Thus, contemporary peripheral neighborhoods throughout San Blas in the southeast, Villaverde in the south, or Aluche in the west are filled with squat, four story apartment buildings arranged around dusty patios.

This response was cold comfort for the thousands of denizens at the urban margins. The poor were subjected to various iterations of dispossession. First, they were kicked off the land during the depression (and sometimes kicked out of Madrid during autarky because the city was so full). Then they were exploited as disposable wage labor, and finally they were a captive market for substandard, outrageously expensive housing.Footnote ⁸ Their fates were sealed, bodies shunted into peripheral neighborhoods devoid of services.

Here we can note the absence of robust Fordism. The working classes had wage labor and they found employment in light manufacturing and low-skilled services. Yet that wage barely allowed them to take part in the rapidly modernizing city. Far from the center, with little income, leisure was anathema and upward mobility unattainable.

Sudden Abundance

The dawn of democracy was supposed to mark the end of this bleak era in which fifty-four percent of housing was substandard.Footnote ⁹ Instead, Madrid was catapulted into the global age of Europe, and authoritarianism gave way almost immediately to neoliberalism. In the 1990s, as Spain prepared to enter the European Union, housing was still in short supply, and credit didn't flow easily. Thus, the country passed a series of laws in 1992 and 1998 that allowed for the securitization of mortgages. Securitization took off after 2001, driven primarily by “liquidity needs.”Footnote ¹⁰

As credit began to flow more easily, the city of Madrid pursued audacious plans for urban expansion. In the 1990s, Spanish cities experienced housing shortages, which the costly and laborious process for freeing land for urban development made more difficult to address. In response, President Jose Maria Aznar created a new national land use law, opening up vast tracks of virgin land for development.

Now untethered from previous constraints, Madrid created a new general plan that sought to nearly double the city's area. Planners estimated a need for approximately 120,000 to 170,000 new units of housing, which they used to justify the enormous expansion in the urban area—new land was to be devoted almost entirely to building new housing, and 300,000 of these units would populate greenfield sites at the furthest margins of the city. At the same time, similar projects proliferated across the Madrid region, as smaller towns and villages suddenly pursued outsize speculative development.

This explosion of real estate and credit created a climate of acquisition. Easily attainable, the mortgage soon became a means to make possible a host of aspirations. Borja, a working-class interlocutor from south of Madrid, revealed how the bank offered him a seemingly endless line of credit for the realization of middle class goals. The bank not only offered the means by which he could achieve his dream of home and family, but also the cold, hard cash with which to live out an entire middle-class existence: The mortgage could include credit to purchase a new car and to furnish the new home. These trappings of a middle-class lifestyle beckoned seductively to the young family man. He had been with his girlfriend since he was a teenager, and had worked tirelessly since then to make manifest his domestic desires. Now the bank would not only allow for the security of a new home, but also finance an entirely new lifestyle that had previously appeared out of reach, belonging to a different social class.

Despite entrenched wage stagnation, Borja's possibilities were now greatly expanded. The mortgage credit was an agile vehicle through which other consumption opportunities presented themselves, as bankers and financial officers encouraged introducing secondary credit products through the greater balance of the mortgage. Thus, someone like Borja, who initially purchased his house with a mortgage of 100,000 euros, soon inflated his debt to 180,000 euros. Various car loans and credit for future remodels went into that rapidly expanding number. In retrospect, Borja's debt appears staggering in scope, yet the entire climate of the moment created a frenzy of acquisition; daily chatter, the precipitous growth in housing prices, and the memory of material lack incited everyday citizens to buy. In this way, we can see how the mortgage became a sign signifying pride, growth, and promise. The possibility it implied allowed it to take on fictive qualities, the panacea for one's urban aspirations.

As it developed Madrid and its hinterlands, the real estate industry, pushed out traditional economic activity such as small-scale fabrication and manufacturing. In their stead rose housing blocks. While a previous generation found work in factories or traditional service sectors, millennial Spaniards took on employment as real estate agents, small-time developers, financial services professionals, and construction workers. Many, too, worked in related industries that had sprung up as potent auxiliaries. One interlocutor worked as a furniture restorer, while another had a decoration firm with her husband, providing lavish interiors for new homes. The confluence of wage stagnation, increasingly precarious employment, rising prices, and the erosion of the traditional working-class base conspired to render real estate an attractive arena for investment and speculation.

During this period, household finances experienced marked changes that revealed a growing prosperity borne out of credit lending. Released every three years, Banco de España data on household finances demonstrate that during this past decade, Spaniards saw their wealth grow, that growth was the result of rising property values, indebtedness grew significantly, wages stayed largely stagnant, and inequality increased.Footnote ¹¹

Against the backdrop of the Spanish urban boom, ordinary citizens saw their fortunes rise. But a mortgage was the only means by which households could accrue equity. This wealth existed only on paper and was bolstered by the dissemination of credit. Despite this precarious foundation, people were compelled to participate and suddenly, the dream of urban comfort and participation within consumer culture long denied was now an immediate reality.

Boom to Bust

As the global economy began to crumble in 2007 and 2008, the city of Madrid was hit hard. Much of the urban economy relied on the construction industry, which slowed and then ground to a halt. Soon people lost jobs and subsequently found themselves unable to pay their mortgages. The common Spanish mortgage is a recourse loan, allowing the bank to both repossess and claim any other existing assets up to the entire value of the debt. If a debtor has no other assets, the debt might remain until death, when it can be passed down to heirs. Meanwhile, under current Spanish law, there is no form of personal bankruptcy. In the span of a few short years, ordinary citizens found themselves transformed from cosmopolitan urbanites into a new kind of urban poor. The mortgage that had once allowed for the accrual of wealth, material possessions, and a comfortable lifestyle, now served as the motor for their damnation.

The young, single women, and immigrants were often required to use guarantors in order to take out a mortgage, which meant enlisting the help of parents or siblings. In the event of default, these family members were drawn into the economic disaster. Personal default on a mortgage, often configured by existing folk wisdom as the failing of an individual who neglects to manage her finances wisely, nonetheless provoked a series of economic catastrophes for an ever-widening social net.

In interviews with people struggling with mortgage debt, interlocutors often describe their situations as “civil death.” Once in arrears, debtors are placed on a credit blacklist that prohibits a host of economic activity. Yet in describing themselves in such evocative terms, they draw attention to the ways in which economic participation, and by extension the mortgage, is integral to a broader kind of membership within the community. Becoming homeowners was clearly necessary to become full citizens in Madrid, yet it required the acquisition of a mortgage. Foreclosure, meanwhile, means not only economic devastation, but also estrangement from family, intense shame, and the emotional and psychic consequences of sudden poverty.

This civil death is often accompanied by a loss of employment. For men, this has meant a crisis of masculinity and abandonment, divorce, and even domestic abuse, as some men resort to physical violence as a means of reclaiming, albeit fleetingly, some semblance of control. Here we see the dark heart of homeownership's promise, built as it was on notions of domesticity. This is domesticity's perversion, its wretched shadow. Within that darkness, women have been left to ensure the reproduction of the household, its meager finances, and its myriad debts.

Homeownership was supposed to correct for Fordism's long absence. Briefly it allowed for the working classes to enjoy urban consumer culture and the accrual of wealth. It also provided economic advancement in the face of stagnant wages. Yet, with its collapse, thousands of urban denizens now find their futures foreclosed. Rather than correct for the deep inequities within the Spanish urban economy, homeownership instead deepened them, even dragging members of the middle class into penury.

From Death to Disobedience

Against this longer history of exclusion and inequality, the right to housing movement takes on new significance. Begun in the quiet spaces of neighborhood social centers and community associations, the movement was first concerned with preventing evictions as they swept through the population. Soon, however, it elaborated many lines of resistance to contemporary political economic arrangements, including rehousing evicted families in the built refuse of Spain's speculative boom.

Actions such as stopping evictions, occupying empty homes, and protesting in bank offices demand an active participation. As García Lamarca has recently argued, this is a politics of insurgency that insists on recognition.Footnote ¹² In interviews, several interlocutors have described the PAH as “citizenship school.” Indeed, what is evident in the movement's assemblies and protests is a new kind of belonging in the urban polity, which is action-oriented, as opposed to the passive reception of a previous generation. It rejects an urban citizenship of individual consumption, instead centering politics within rights, solidarity, and collective action. Crucially, it locates housing within a broader terrain of urban life and sociality, as something that cannot and should not be turned into a commodity.

The crisis of housing, moreover, reveals the enduring fissures between the working and middle classes and an elite inherited from the Franco-era. That elite, during both the boom and the more recent bust, has lined its coffers with gains many regard as ill-gotten, stolen from the small bank accounts of modest households. The right-wing Popular Party, which had a stranglehold on the municipal and regional Madrid governments for the better part of the last thirty years, is a direct legacy of the Franco regime. Thus, while the logic of crisis has its roots in another, more authoritarian context, so too does the logic of power and finance capital. This reality was brought to bear in a recent case involving toxic assets from the crash. Those assets—thousands of homes from across the peninsula—had passed into the SAREB, the nationalized “bad bank” meant to isolate Spanish financial entities from further ruin, which then offloaded these properties at bargain basement prices to the son of former president Aznar. Because of the endurance of this right-wing elite, inherited from the Franco era, popular opposition must by default embrace a Left-leaning ideology.

Opposition to the conservative right wing is not the only element fomenting left-wing sentiment. Immigrants have played a vital role in fighting these developments. The first to face foreclosure, South American migrants were the first to get organized as the crush of debt felled many in their community. As “civil death” has spread throughout the population, new alliances between migrant collectives, traditional Left groups such as the Communist Party and the workers’ unions, anarchist squats, and neighborhood associations have fostered a new politics of solidarity. Much of the resulting right to housing movement bears a debt to activism inherited from indigenous struggles over land and rights. In a moment of rising xenophobia across the continent, moreover, migrants in Spain are not only fellow travelers in outrage, but also, crucially, sources of activist knowledge. Myriad traditions of resistance have comingled within the space of this movement, producing an exciting repertoire of action, including blocking evictions, protesting banks, reclaiming empty homes, filing lawsuits, and attempting legislative change. This movement thus espouses Left-leaning tenets of tolerance and solidarity.

This diverse landscape of outrage has also, more recently, produced alternative political projects concerned with electoral victories—something that I have argued has emerged from acknowledging the limits of street protest and the need to effect institutional change. Taken with the ever-present dualism between a right-wing elite and the urban majority, this recent history has given rise to a robust project to imagine a more radical democratic praxis, particularly at the scale of the city. Further, it capitalizes on a younger, urban generation that looks to progressive ideals as a means of realizing a modern European cosmopolitanism, against the entrenched conservatism and anti-urban ideologies of previous generations.

While PODEMOS has a number of former housing activists within its highest ranks, it is in the new municipal initiatives where we can see a direct legacy. In May 2015, citizens’ coalitions were elected to govern seven of Spain's largest cities, including Madrid and Barcelona. Barcelona is now led by the charismatic Ada Colau, herself once the spokesperson for the PAH. But such urban initiatives are not simply the newest site of activism, but rather respond to and build upon the work of collectives such as the PAH. They attempt, through local fora and new platforms, to encourage an active citizenry to articulate its vision for the city and its good life. Ahora Madrid and Barcelona en Comu, for example, not only seek to reclaim the city from years of neoliberal rule. They also strive to articulate new ways of dwelling within the city, amongst strangers made intimate by proximity. As old and new traditions of left-wing organizing converge within these political projects, Spain's major cities now grapple with how best to translate progressive populist ideologies into modes of urban governance.