The Political Economy of the Egyptian Revolution

Mubarak, Economic Reforms and Failed Hegemony

R. Roccu

• Publisher: Palgrave Pivot
• Year: 2013
• Print ISBN: 9781137395917
• eBook ISBN: 9781137395924
• Topic: Politics & International Relations
• Subtopic: Middle Eastern Politics
• Index: Politics & International Relations

While the 2011 Egyptian revolution has already become the subject of much debate, the roots of the socio-economic context which made the revolution possible have seldom been explored. Roberto Roccu addresses this gap and in doing this provides the first detailed study of the deeper causes of the Egyptian revolution. Relying on an innovative understanding of Antonio Gramsci's thought, He argues that economic reforms implemented since the late 1980s provided the conditions for both the emergence of a capitalist oligarchy within the regime and an unprecedented rise in socio-economic inequality in society at large. These two processes substantially eroded any remnants of hegemony, leaving the Mubarak regime ill-equipped to face the global economic crisis. By alienating sections of the ruling bloc while impoverishing vast strata of the population, neoliberal reforms provided a necessary, although by no means sufficient, condition for the Egyptian revolution to occur.

1

A Gramscian Approach to the Study of the Political Economy of Reforms

Abstract: This chapter establishes the rationale for developing an approach to the political economy of reforms based on Gramsci’s thought. Particular emphasis is placed on the method of articulation, which provides a more reliable basis than that offered by existing neo-Gramscian approaches to the study of the constitution, consolidation, reproduction, transformation and at times crisis of hegemony in authoritarian contexts.

Keywords: Gramsci; method of articulation; hegemony; neo-Gramscian IPE; neoliberalism

Roccu, Roberto. The Political Economy of the Egyptian Revolution: Mubarak, Economic Reforms and Failed Hegemony. Basingstoke: Palgrave Macmillan, 2014. DOI: 10.1057/9781137395924.

Since its introduction to International Relations (IR) and International Political Economy (IPE) in the early 1980s, Gramsci’s writings have become an important reference point for scholars interested in bridging the analysis of economic structure and political and ideological superstructures. This common interest has led to a proliferation of neo-Gramscian approaches, with scholars relying on Gramsci to support arguments as disparate as the emergence of a global civil society (Lipschutz 1992), the prospects of a post-liberal democracy (Golding 1992) and the cultural turn in post-colonial theory and subaltern studies (Harris 1993). However, despite the positioning of his work right at the crux where the international and the national, the economic and the political, the material and the ideational meet, Gramsci has rarely been invoked to address the political economy of reforms in the developing world, and more specifically in the Middle East. This is unfortunate for two reasons. Firstly, Gramsci’s work allows us to study the consequences of neoliberal economic reforms by still focusing on the conditioning power held by the economic structure and the relations of class forces underlying it, while at the same time avoiding the shallows of deterministic Marxist approaches (Germain and Kenny 1998). Secondly, the suitability of Gramsci’s insights to the study of the political economy of the Middle East has been seriously underexploited. In the past decades, Gramsci has increasingly been called upon to discuss specific elements of the international relations of the Middle East, ranging from the US foreign policy towards Iraq and its relation to state autonomy (Dodge 2006), to the reproduction of cultures and identities in Egypt as an obstacle to meaningful democratisation (Pratt 2005). Despite these valuable contributions, to my knowledge the only systematic attempt to develop a Gramscian framework for analysing the political economy of the region came from Nazih Ayubi (1995). However, the explicit focus on the regional dimension of his study means that little attention was paid to the international dimension, both with respect to the globalising tendencies of capital accumulation and to the specific policies adopted by social groups and institutions active on the international scale. Yet, Gramsci’s peculiar biography, with a childhood in then underdeveloped Sardinia followed by university studies in Turin, one of the outposts of European industrial capitalism in the early twentieth century, suggests that he might have something to tell us about how developed and developing countries interact with each other, and what are the social relations mobilised by these interactions.

Starting from these considerations, this chapter is organised in the following way. The first section discusses mainstream explanations of the relation between liberalising economic reforms and the impact they are expected to have on the political regime, in order to show where they fail in accounting for the political impact of economic reforms in the specific Egyptian case. The second section fleshes out the Gramscian approach adopted in this study, with specific emphasis on the use of articulation as a method for understanding the different dimensions on which hegemony is constructed, affirmed and consolidated, but also transformed, challenged and undermined. The final section discusses how the Gramscian method used here can be reconciled with a study that focuses mostly on Egyptian elites.

Why Gramsci? The limitations of mainstream approaches

The mainstream literature on the relation between economic reforms and regime change is composed of two broad traditions of thought that are often pitted against each other. The first one can be traced back to modernisation theory, with democratisation theory as its main offspring.¹ The second tradition instead focuses more specifically on the role of elites in authoritarian contexts and on how they tend to exploit the position within the existing regime in order to neutralise the potentially transformative impact of economic reforms. As discussed in this section, neither of these conceptual frameworks is able to account adequately for what has happened in Egypt. This is the first and foremost reason for looking beyond these established traditions in order to develop an alternative narrative of the political economy of reforms in Egypt.

According to modernisation and democratisation theory, there is a positive relationship between liberalising economic reforms and the chances of democratisation of the political regime. Being interested in explaining the conditions of successful economic development, in Rostow’s seminal formulation modernisation theory did not have direct interest in the study of democracy and political regimes (1960). However, it is not difficult to read an argument between the lines. As economic development occurs, societies become functionally more complex and socially more mobilised, thus putting centralised forms of government increasingly under strain and increasing the likelihood of more open political regimes. This argument is fleshed out more systematically within democratisation theory, and particularly in the work of Lipset (1959) and Huntington (1991). While Rostow’s account erred on the structuralist side almost to the point of determinism, democratisation theory identifies the middle class as the key agent emerging from liberalising economic reforms and with an interest in opening up also the political regime. More specifically, there is a set of three interrelated claims emerging from this literature with respect to the relation between economic development, democratisation and the role of the middle class. Firstly, capitalist development leads to the emergence of a strong and autonomous middle class. Secondly, in virtue of being both strong and autonomous, the middle class has a strong interest in leading democratic transition. Thirdly, both in times of recession and rapid economic growth, as they both unsettle the existing order, economic opening is likely to improve the prospects of democratic transition.

Unfortunately, ‘the middle class’ as such remains undefined. Indeed, as Luciani put it (2007: 163), ‘the middle class per se has no other distinguishing feature except that it finds itself between a top class, comprising the elites, and a lower class, comprising the masses’. If one is to take such a definition, then the middle class can become the main agent of democratisation because it has both the capabilities and the will to support democracy. This clearly does not happen for the upper and the lower class. The former might have the capabilities to support regime change, but being the main beneficiary of the current political arrangement it obviously lacks the will. The latter might want to change the state of affairs, but lacks the capabilities to do it.

Despite the prima facie validity of this account, breaking down the middle class in its various components shows immediately that its composition varies greatly from case to case. In advanced democracies, the crucial case study for Lipset, the middle class is mostly composed of small and medium entrepreneurs, self-employed professionals and private sector employees, with the public sector constituting a relative minority. In the case of Brazil, on which Huntington insists, at the time of transition the middle class was mostly composed of medium-size entrepreneurs and private sector employees, with a sizeable yet not overwhelming public sector (Martins 1986; Cardoso 1986). In Middle Eastern post-populist countries, with Egypt being the most prominent among them, public sector employees constitute the bulk of the middle class, with small and medium entrepreneurs and self-employed professionals having a limited weight. Following from this, the structure of incentives and opportunities with respect to democratic transition may change considerably.

Most importantly, if one is to look at how the economic reforms implemented in Egypt since the late 1980s, clearly informed by neoliberal principles, impacted on these different sections of the middle class the causal chain hypothesised by modernisation and democratisation theory breaks down. Despite limited data availability, in this respect it is reasonable to assume that professions were able to hold their ground, and on occasions even improve their relative position, in the past two decades. This has most likely left self-employed professionals with enough resources, mostly earned outside of the regime circuit, to be mobilised in the political sphere. Thus, traditional modernisation and democratisation theory are proven right in this respect and the emergence of middle class protest movements such as Kefaya (Enough) already in 2005 further witnesses this. At the same time, the largest component of the middle class was significantly squeezed by these reforms. Public sector employees have seen their real wages deteriorating substantially (Said 2009), and have increasingly resorted to moonlighting and the informal labour market to cope with financial difficulties (Moktar and Wahba 2002; Wahba 2009). Thus, it is difficult to maintain that their participation in the 25 January protests is due to increased affluence and independence from the regime. On the aggregate level, as discussed in the following chapters, economic reforms produced a significant increase in inequality, with the emergence of a new business class whose wealth is comparable to those of the Western super-rich and the impoverishment of large sections of the middle class and virtually all of the working class. In other words, if liberalising economic reforms were meant to bolster the middle class and push it to support democratisation, then modernisation and democratisation theory are only able to account for a small section of the middle class, and we need to seek for a better explanation for Mubarak’s fall.

Accounts based on the predatory elite thesis, on the other hand, suggest that rent-based behaviours typical of elites in authoritarian contexts act as an effective guardian of the regime, appropriating most of the benefits deriving from reforms and neutralising any substantial restructuring of political relations. In other words, the political logic of power maintenance is said to take precedence over the logic of economic efficiency.² Regardless of whether elites are conceptualised as distributional coalitions or informal networks,³ the common assumptions of these accounts are that in authoritarian contexts actions by members of the elites influence outcomes disproportionately more than actions by non-elite members and that these actions are based on considerations of self-interest and welfare maximisation. Following from these assumptions, and given the positional advantage that elites enjoy by definition, rent-seeking becomes the way by which they can attempt to consolidate their position within the reformed economic system. Thus, the basic argument here is that new economic policies do not have a systemic impact on the political regime, but at best force well-positioned actors to adapt their behaviour so that they can maintain and whenever possible consolidate their privileged position. Through these processes of adaptation and consolidation, spill-overs in the political sphere would then be avoided.

The significant room enjoyed by well-placed political agents in shaping to a good extent the final outcomes of the reform process is what these accounts are best able to account for. As we will see in Chapter 3, the correlation between being a member of the infitah bourgeoisie in 1990 and being one of the main beneficiaries of the reform process is quite neat. Those that did not belong to that section of the private sector and yet made it into the ruling bloc over the past two decades did so by forging alliances with members of the regime, and often through personal friendships, for example with the president’s son Gamal. In Egypt, politics is a key factor in determining the effect of economic reforms on your position in the social structure, and accounts focusing on rent-seeking elites account for this aspect remarkably well.

However, these accounts suffer from two major deficiencies which suggest that the quest for an alternative approach be undertaken. Firstly, there is a tendency to apply the concept of rent in an undifferentiated way over the entire ruling group, at times entirely falling under the predatory category (Levi 1988). Following from this, it becomes difficult to account for the evolution of relations within the ruling bloc. In the specific Egyptian case, these approaches tend to overestimate the role of intra-regime alliances between potential winners and losers acting as a veto that either stifles or derails the reform impetus (Kienle 2001 and 2003; Wurzel 2009), while systematically overlooking deepening fractures between the different components of the ruling bloc, which are discussed at length in the following chapters. Secondly, the exclusive focus on elites produces a very damaging neglect, from an analytical perspective, of the unintended consequences that economic reforms can have on society at large. In Egypt, these are visible once again in the impoverishment of middle and lower classes, and the increasing gap with the 5 per cent of the population holding more than 40 per cent of the country’s wealth (Osman 2010: 115).

As both modernisation theory and elite-centred accounts tend to underestimate the nuances of the differentiated impact that economic reforms have had both within the ruling bloc and in broader society, it is worthwhile to turn our attention to a theoretical tradition that instead has made of his attention to social groups, usually defined in terms of classes, one of its main points of strength. Within the Marxist fold, referring more specifically to Gramsci allows us to look at the material impact of economic reforms on social classes without forsaking the way in which superstructures, among which regime type, do have a significant influence with respect to which reforms are adopted, in which way and for the intended benefit of whom. However, the IPE literature inspired by Gramsci very seldom ventures outside of the comfort zone of the developed world, focusing mostly on issues concerning US hegemony or the emergence of a transnational capitalist class.⁴ Whenever the developing or underdeveloped world is touched upon from this perspective, these approaches tend to fall back towards a form of Western-centric diffusionism, with actors on the national scale in developing countries largely seen as void of political agency. Following from this, the analysis tends to overemphasise the coherence of global or transnational hegemonic projects. However, the Egyptian case suggests that the national scale, both with respect to its ruling bloc and to broader society, does have a significant role in articulating external pressures and trying to bend them to pursue genuinely domestic goals.

There are also significant exceptions already within existing neo-Gramscian approaches, with more and more studies focusing on the developing world and exposing the ‘travelling problem’ of the dominant interpretations by Robert Cox on the one hand and Kees Van der Pijl on the other hand.⁵ Adam Morton (2007 and 2011) is arguably the scholar who has gone further in developing a new understanding of Gramsci that does without the Eurocentrism characterising the first generation of neo-Gramscian studies. Taking Morton’s work as a fundamental reference point, but also departing from it in some significant respects, the next section presents a novel approach to the study of the political economy of reforms in developing countries, which relies on one of the most pivotal yet hitherto neglected concepts in Gramsci’s thinking, that of ‘philosophy of praxis’, and the method of articulation that stems thereof.

Which Gramsci? Philosophy of praxis and the method of articulation

It is plausible to assume that ‘philosophy of praxis’ was used as a surrogate for historical materialism and Marxism in the first Prison Notebooks, in order to mislead suspicious yet not particularly well-read censors. However, as time went by and notes became more elaborate, one can see how this concept starts to take a life of its own and be charged with peculiar elements, beyond – and sometimes away from – classical historical materialism as developed by Marx and Engels. Thus, the phrase ‘philosophy of praxis’ is ‘an accurate characterisation of his theoretical perspective as part of a long-standing tradition opposed to positivist, naturalist and scientific deformations of Marxism’ (Piccone 1976: 37). And indeed, already in its own semantics this expression is an attack against mechanistic versions of Marxism, in that – by referring to praxis – Gramsci emphasises the importance of agency and of the strategies that political actors devise in order to achieve what they wish for. In much the same way, by linking philosophy to praxis, it is also an attack on speculative forms of idealism, that divorce theory from practice, leading to ‘a mutilation of Hegeli...

Table of contents

• Cover
• Title
• Introduction: Bread, Dignity, Social Justice and Economic Reforms
• 1  A Gramscian Approach to the Study of the Political Economy of Reforms
• 2  The Egyptian Way to Neoliberalism? IMF, World Bank and Reforms in Egypt
• 3  Of Success and Greed: The New Business Class Turns into Capitalist Oligarchy
• 4  Ideology Resurgent? Neoliberalism as EconomicCorporate Project for the Few
• 5  From Hubris to Debris: Global Crisis and the End of the Mubarak Regime
• Conclusion: Gramsci, Failed Hegemony and the Fall of Mubarak
• Postscript: Back to Square One? Considerations on Egypts Uncertain Future
• References
• Index