Crisis, social trust and migratory exit from Lithuania
C. Woolfson[1], A. Juska[2] and I. Genelyte[3]
Paper to
26th Conference of the Nordic Sociological Association, ‘Trust and Social Change’
17 August 2012, University of Iceland, Reykjavik
Session: ‘trust and social capital’15:45-17:45 Seminar room HT-104.
DRAFT ONLY. NOT FOR CITATION.
"Our society more closely resembles <a country> afflicted by disintegrating 18th century feudalism than an evolving liberal society." KrescencijusStoškus(2011).
Introduction
Lithuania is a post-communist country which has been severely impacted by economic crisis since 2008, significantly deeper in the Baltic countries in global terms than even current downturns in the Eurozone peripheral countries. It has triggered sharp increasesin unemployment, massive salary cuts especially in the public sector,and the imposition of harsh austerity measures implemented by government, focused on curtailing welfare provision by reductions in pensions and social benefits.
Lithuanian society has also experienced anattendant erosion of the ‘social fabric’ manifested in a number of ways. Most striking has been a significant “exit” of the populationaccompanying the economic crisis. Within just two years – 2010 and 2011 – around 150 thousand people emigrated from the country. Over the course of the previous decade some 600,000 persons emigrated. Today the population is just over three million. However, this paper suggests that while economic motives may have previously been the primary driver of emigration, the impact of current crisis has led to a new kind of migration driven by a deeper social disenchantment with the current socio-political arrangements of post-communist society, raising questions concerning its longer-term social and economic sustainability. It is a shift increasingly recognized in emergent public discourse and to some extent reflected in statistical data including theEuropean Social Survey (ESS 4.0), Eurostat data and recent surveys on national level. The paper accordingly argues that Lithuania today is experiencing crisis-induced erosion in the relationships between individuals, society and the state, amounting to a social and political “disenfranchisement.”
How has this state of affairs come about? Can it really be said that recent flows of migration represent a migration that is qualitatively new? The contention of this paper is that the mass “exodus” of the population is not a simple reflection of either rising unemployment, far less of administrative changes in the registration system for those leaving the country. It goes beyond a simple response to economic adversity and signifies a deeper crisis-induced rejection by a significant proportion of the population of the very society into which they have been socialized.
In order to grasp the full impacts of this crisis, the changing relationships between individual, society and the state are examined. It is argued that policies of austerity adopted by the Lithuanian government in response to global economic and financialcrisis and the bursting of the housing bubble in 2008, have re-confirmed underlying significant changes in prevailing interpretations of the social compact between the state and society, between individuals and the wider polity.
Some theoretical considerations
Arguably those scholars who have examined social trust and distrust those who have done so in the context of post-communist society have had a particularly keen theoretical edge (Kornai, Rothstein, Rose-Ackerman, 2004; Markova, 2004). A common theme is the identification of the erosion of both “interpersonal” and“generalized trust” in formerly socialist societies and the attendant difficulty of generating trust in the new social and political arrangements put in place following the collapse of communism. The absence of, or at least continuing low level of trustin the new democratic set-up is viewed as an unanticipated and unwelcomeaccompaniment of rapid and tumultuous transition to the free market (Stompka, 1993; 1996; 1999: 174-79).Nevertheless, the concept of trust has on the whole been framed within an optimistic purview in which distrust will be overcome as the institutions and practices of liberal democracy become embedded in society. Yet neither the history of transition nor the ambiguous legacy of the previous era suggests that such an outcome is either likely or even possible.
The process of transition created at the same time thedeep “social shock” of mass unemployment, inflation, new poverty, corruption, the absence of due process and accountability,flawed privatization, growing organized crime and personal insecurity on a scale that was simply not conceivable for most of the citizens of these once stable, if somewhat authoritarian socialist social systems (Berend, 2007). That said, in the socialist era, trust in others was often personalized, confined largely to the intimate circle of the family and work colleagues and often matched by a pervasive distrust of the agencies and institutions of the ruling party and its regime. Nevertheless, “actually-existing socialism” offered educational opportunities to the young, a guaranteed job if not always matching individual desires, a place to live and at the end of working life, a state retirement pension if only modest.In establishing the new social and political order in which these “gains” were quickly sacrificed on the altar of market principles and individual responsibility, and in the “grand sorting out” into “winners and losers” which subsequently took place, arguably social trust, in both a generalized and personalized sense was dissolved in the implosion of an individualism, crafted not so much by an ideological embracing of the new order, but by the needs of survival in desperately uncertain times.The hardships and disappointments of the transition period stood in sharp contrast to exaggerated expectations of a brave new future the populace had been led to believe would accompany the new social system. The initial rationale during the transition years may be summed up as that of a “necessary temporary sacrifice” to clear out the negative inheritance of the previous system, in order to make way for a more democratic future. In reality, this official narrativevery quickly gave way to an increasing social pessimism and pervasive social alienation. Within a few years of the shift to the free market, public opinion polls across Eastern Europe recorded widespread and growing disenchantment with the unrealized material benefits of the new democracies and disengagement from the new democratic institutions.
It is the key contention of this paper, the dialectic of trust/distrust in post-communist society has undergone a further qualitative transformation in the current global economic and financial crisis. The crisis has produced a new “social shock” on a scale which in many respects outmatches that of the early years of transition. For post-soviet states such as Lithuania, forged around a unified ideology of ethno-nationalism, it has marked a turning point, the “end of the post-communist dream” and a final punctuation point on whatever illusions of a progressive orsocially just future might have existed under the new order of capitalism. The global financial and economic crisis,as experienced in Eastern European countries such as Lithuania represents not so much a crisis of capitalism, but a crisis of post-communism.
Theoretically, we acknowledge seminal insights of Hirschman’s classic exit/voice/loyalty equation, especiallyas applied among others by W. Rogers Brubaker (1990) and latterly by Hirschman himself (1993) to the study of out-migrationin post-communist societies. We examinethe impact of crisisin terms of a qualitative shift in the relations between individuals and society and individuals ant the state. We suggest that the conventional notions of “distrust”are not adequate to grasp the tipping point which this represents in the development of post-communist society. Instead, the notion of “social disenfranchisement”’ is proposed, as an active ‘dis-location’ of the individual from the social fabric of society, manifest in the final dissipation of both political and industrial citizenship. To explore this contentionfurther we focus on one paradigmaticneo-liberal post-communist society, the former Baltic Soviet republic of Lithuania and the contemporary massiveout-migration of its population.
Economic crisis, inequalities and unrest
The economic crisis from 2008 onwards produced a transformative social shock, even more so, as it contrasted with several boom years between 2004 and 2007 in which economic growth at around 7% of GDP per annum was among the highest in the European Union. During the so-called “fat years” the Lithuanian population had come to believe in the miracle of a “tiger economy” with vistas of unending prosperityin an “open” neo-liberal economy (Bohle and Greskovits 2007). At one stage in 2007, property prices per square metre in the capital city of Vilnius exceeded those in Stockholm. The rapid growth that produced this prosperity bubble brought with it significant social inequalities and social costs. Social inequalities in terms of income were increasingly pronounced in this embedded neo-liberal market economy which offered its citizens only the most rudimentary levels of social protection (Figures 1 and 2).
Figure 1.Gini coefficient (2009)
Source: Eurostat
Figure 2. Level of total expenditure on social protection as a % of GDP (2008)
Source: Eurostat
Lithuania, on the eve of crisis therefore was already a society of deep underlying social inequalities and tensions. As the global economic crisis engulfed Lithuania, and the housing bubble burst, the economy entered a free-fall that made the impact of recession in the Baltic region among the most severe of the EU countries (and arguably in the world). Between the second quarter of 2008 and 2009, real wages in Lithuania declined more steeply than any other EU country (Figure 3).
Figure 3. Year on year percentage real change in wages and salaries (2Q 2008- 2Q 2009)
Unemployment, although falling overall slightly in most recent periods, rose during the crisis to among the highest levels in the EU27 compared to the EU average of 9.7% in September 2011, exceeded only by Greece (17.6%) and Spain (22.6%) (seasonally adjusted figures). However, long-term unemployment continued to grow (Figure 4).
Figure 4. Unemployment rate (percentage of active population)
Source: Statistics Lithuania, Eurostat2011
In response to the economic crisis, Baltic governments introduced radical austerity measures, a so-called “internal devaluation” which included steep wage and social benefit reductions, cuts in public expenditure and an extensive re-writing of protective labour legislation. Such radical austerity measures were imposedmainly without popular or democratic consultation with representative bodies such as trade unions, small business representatives or organizations speaking for selected vulnerable groups such as students and pensioners. The result was unprecedented mass protests on the streets both in Latvia and in Lithuania which in January 2009 ended in rioting in the capital city and ongoing protests up and down the country (Mullett 2009, Thomas 2010).
The failure of “voice”
As with many other post-communist societies, Lithuania has seen strikes, protest demonstrations, blockades, prolonged public fastings. However, social disorder on this scale had never before been seen in the post-socialist period and in a fundamental respect was a turning point in the development of the country since its independence from the Soviet Union. Social unrest was a deep jolt to the complacency of the ruling authorities who had relied on the famed “passiveness” of the Lithuanian population. For the government of the day, only organized conspiracy on the part of “Lithuania’s enemies” could explain the scale and intensity of the disorder which saw hundreds arrested and tear-gas and rubber bullets used against demonstrators outside the “Seimas” (parliament). Yet beyond conspiracy theories which largely failed to gather popular traction, there emerged a new set of discourses, entirely incompatible with the previous assumptions of a unified nation liberated from the yoke of Soviet oppression. The material nature of this discourse, i.e., relations among language, ideology and class position highlights understanding of discourse andlanguage as the key to an interpretation and understanding of social struggle (Hall 1997; Voloshinov1973). For the first time, official narratives of a free, socially just and democratic Lithuanian citizenship were thrown into question by a marked shift towards authoritarian state responsesand the suppression of further public manifestations of dissent (Juska and Woolfson 2012a).
The anti-austerity protests in 2009 were markedby unprecedented popular demands for “social justice.” These demands were for social justice for the “tauta” (the ordinary “people”) and/or for respect for the dignity of individuals who felt they were literally “swindled” in broad daylight by the government that they had elected and abused by the “valdininkiai” (the state bureaucrats) who presided over the state system. Yet in the media, those who protested the current state of Lithuania were described more in terms of participating in a spontaneous burst of popular fury, but not as representatives of organized or communal interests (such as labour unions) with legitimate demands and grievances to be addressed by the authorities. Rather they were depicted as representatives of disparate social-demographic categories such as pensioners (especially elderly ladies throwing stones at the “Seimas” could be considered as the epitome of the wrath of the “tauta”, the nation in its righteousness), or at best as fragmented sectional groups such as small business owners, students, workers, and unemployed without common demands. The recognition that there was legitimacy to the protesters’ grievances was at best oblique.What was clearly a new turn of events and a new kind of popular unrest in Lithuania found only a partial discourse to describe its full resonance with long-standing but unrealised claims for social justice (Balockaite2009). Yet beneath official narratives, a second or ‘hidden transcript’ unacknowledged in the official discourse has emerged which has powerfully critiqued the prevailing systemic social inequalities of Lithuanian society (Matonyte 2006).
Social injustice in Lithuania is seen as a twofold phenomenon. On the one hand, there is the perception of “nepotism” or the “protection of favoured individuals”. This phenomenon is rooted not only in the private, but in the public sector as well. Nepotism prevents individuals from having a perspective of career advancement based on merit or personal worth, if they do not have informal network of “important persons”. This especially it harms the careers of young well-educated and high skilled individuals (Udrenas 2011). On the other hand, social injustice is perceived due to the different rights and double standards applied with respect to different social groups. The elite in Lithuania is seen as the privileged group, in particular, businessmen and politicians and other high officials. The sharpest criticisms are devoted to the latter. According to one author, “it is hard to expect that businessmen will share their profits”, but representatives of the government should be more concerned about the nation than about the private interests” (Stoskus 2011). The new and explicit discourse of “them” and “us” is indicative of a growing erosion of trust between classes supposedly formerly “united’ in society and speaks to a wider rupture of previous assumptions and attitudes.
Utilising survey data from the Fourth European Social Values Survey carried out in the first part of 2009, just as the crisis was beginning to peak,allows these developments to be placed in a wider although incomplete context in terms of capturing the dynamic evolution of the problematic of “social disenfranchisement.” They address only the more traditional measures of trust and distrust. For heuristic purposes, we compare Lithuania (as a “low-trust” post-communist society) with Sweden (a representing a “high-trust”Nordic/Scandinavian social democracy)recognising that the latter represents an ideal type. Figure 5 offers an insight into the differing character of interpersonal relations along a number of measures of social distance.Three indicators are composited along an eleven-point scale: ‘Most people can be trusted or you can't be too careful’; ‘Most people try to take advantage of you, or try to be fair’; ‘Most of the time people helpful or mostly looking out for themselves’. The shaded area to the left of the median line (the mid-point between ‘extreme distrust’ and ‘extreme trust’ of other people) indicates the much greater social distance in Lithuania as compared to Sweden, and the correlative much higher level of expressed social trust in other people in Sweden as compared to Lithuania.
Figure 5. Social distance indicators (Lithuania and Sweden compared)
Source: European Social Survey (ESS4), 2009.
Even greater disparities between Lithuania and Sweden when it comes to trust in political institutions of society.Four key scalar indicators are presented: ‘Trust in the country’s parliament’; ‘Trust in the country’s legal system’; ‘Trust in politicians’; ‘Trust in political parties’. Although there is some mistrust in Sweden with respect to political institutions (revealed by the non-shaded area to the left of the median line), overall the two countries present a polar opposite low trust/high trust ‘mirror image’ displayed by the shaded areas each side of the median (Figure 6).
Figure 6. Trust in political institutions (Lithuania and Sweden compared)
Source: European Social Survey (ESS4), 2009.
Acontrastive mirror-image picture is revealed when it comes to satisfaction with the democratic system when comparing Lithuania and Sweden, although in terms of dissatisfaction for Sweden the scores are quite minimal. As above, the shaded areas to the left and right of the median line suggest a stark attitudinal contrast between these two countries.
Figure 7. How satisfied with the way democracy works in country (Lithuania and Sweden compared)