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The Egyptian Uprising: The Mass Strike in the Time of
Neoliberal Globalization

NOTE: The following article is from the Fall 2011 issue of
New Labor Forum (http://newlaborforum.cuny.edu) and is being
re-posted with the permission of New Labor Forum

The Egyptian Uprising: The Mass Strike in the Time of
Neoliberal Globalization

By Michael Schwartz

New Labor Forum
Fall 2011 issue


As the Arab Spring became an Arab Summer, the failure of
other uprisings to replicate the regime changes in Tunisia
and Egypt has raised important questions about these
increasingly impressive successes.

With this in mind, I want to scrutinize Egypt carefully,
looking for the points of leverage that allowed and impelled
the movement to oust Hosni Mubarak in only eighteen days of
protest with low mortality counts, particularly in light of
the much longer and far more lethal and less successful
uprisings in other countries.

The outcome in Egypt was in large part a conjunction of
several visible, but rarely scrutinized, aspects of the
Egyptian political economy:

* Egypt is the poster child of neoliberal reform in the
Middle East. Its rapid integration into globalized
capitalism since 1990 made it vulnerable to a savvy mass
movement that could exploit the pressure points in the
current world system.

* Egypt's recent history produced a legacy of working-class
militancy and organization that provided a tangible
foundation for the Tahrir Square movement.

* This combination of political-economic vulnerability and a
savvy mass movement created a strategic bind for Egyptian
and global capitalism in which abandoning Mubarak was the
least dangerous exit from an intractable crisis.

What is notably absent from this list of key factors is the
most visible feature of Egypt's almost-peaceful regime
change. The Egyptian armed forces, unlike their Libyan and
Syrian counterparts, decided not to attempt to crush the
rebellion; this forbearance may have been a key factor in
enabling the protest to succeed.

However, making military forbearance a central explanatory
factor in Egypt's outcome doesn't answer the causal
question. It simply raises two related issues:

* Why was the military so restrained this time around, when
- as Egyptian scholar Shashank Joshi put it - for fifty
years Egypt's army had "stood at the core of a repressive
police state"?

* Why couldn't the government, with or without a military
ready to turn its guns on the protesters, endure a few more
days, weeks, or even months of protest, while waiting for
the demonstrators to exhaust themselves, and - as the BBC
put it - "have the whole thing fizzle out"? This waiting
game has been applied with at least some success in Yemen.

The answers to these questions began to appear at the start
of the uprising on January 25, 2011.

The Initial Economic Impact

Once the Tahrir Square demonstrations in Cairo attracted the
world's attention, the international media began recording
and decrying what the BBC called the business "paralysis
induced by the protests" and its "huge impact on the
creaking economy" of Egypt. As Finance Minister Samir Radwan
complained after fourteen days of protest, the economic
situation was "very serious" and "the longer the stalemate
continues, the more damaging it is."

It is important to note that this complaint was not
registered with any regularity in the many other countries
that were subsequently swept up into the Arab Spring. Even
in Libya, where the uprising inspired a $30 rise in world
oil prices, the New York Times coverage of the price
increase carried this ironic headline: "Turmoil in Libya
Poses Threat to Italy's Economy." No mention was made of the
Libyan economy.

Unlike comparably large rebellions in neighboring countries,
the Tahrir Square uprising had the sledgehammer effect on
the Egyptian economy of a general strike or - perhaps more
appropriately - the impact and demeanor of the "mass strike"
codified in Rosa Luxemburg's classic analysis. Starting on
January 25th, the first day of the protest, tourism - the
largest industry in the country, which had just begun its
high season - went into free fall. After two weeks, it had
"ground to a halt," leaving a large portion of its two
million workers with reduced or nonexistent wages, many
horses dead due to lack of food, and the few remaining
tourists rattling around in empty hotels and resorting to
viewing the pyramids on television.

Since Egyptian sites attract more than a million visitors a
month and account for at least 5 percent of the Egyptian
economy, it is not surprising that news reports soon began
mentioning revenue losses of up to $310 million per day. In
an economy with an annual GDP of well over $200 billion,
each day of disruptive protest produced a tangible and
growing decline in the annual GDP. After two weeks of this
ticking time bomb, Cr,dit Agricole, the largest banking
group in France, lowered its growth estimate for the
country's economy by 32 percent.

The Neoliberal Contradiction

These devastating losses were initially concentrated in the
tourist, hotel, and travel sectors of the Egyptian economy,
industries dominated by huge multinational corporations and
major Egyptian business groups. Tourism was also a showcase
for the success of the neoliberal reforms engineered by the
Mubarak regime starting in the early 1990s. During this
twenty-year period marked by drastic privatization and rapid
economic growth, previously state-owned enterprises were
integrated into domestic and international business
networks. The exemplar was the industrial empire of indicted
billionaire Ahmed Ezz, built upon the acquisition of the
state-owned steel industry in the 1990s. By 2010, he had
achieved a virtual monopoly in supplying structural steel to
international investors in tourism and related industries.

With tourism as its core sector, the neoliberalized Egyptian
economy was particularly vulnerable to the kinds of
disruptions the Tahrir Square demonstrations created. One
element in this vulnerability is the specific nature of
globalized tourism. With vacationers from around the world
planning relatively brief sojourns, the reality that
sightseeing might (or would) be impractical leads quickly to
the sort of cancellations that Egypt experienced. When this
critical cash flow dies, vast expenses remain: hotels must
still be heated, airline schedules must still be kept, and
many employees - especially executives - must still be paid.
In such a situation, even the largest companies can face a
crisis quickly. In tourist-driven sectors, the situation is
especially ominous; even a short hiatus can cancel the whole
tourist season.

This fast-breaking crisis was made considerably more severe
by the global integration of the Egyptian economy,
especially the tourism-related industries which had been
fueled by infusions of international capital eager to
participate in what some called "the Egyptian miracle." In
the neoliberal universe, the costs of expansion are paid
from current revenues, and therefore the crashing tourism
industry deprived Egyptian and foreign capitalists of the
cash flow needed to pay lenders, construction companies, and
other economic components of their expanding domains. The
disruptive protests therefore threatened much more than
profits: they threatened the viability of various new
projects, while raising the specter of loan defaults turning
into widespread bankruptcy.

Very quickly then, the demonstrations in Tahrir Square
undermined the financial standing of major capitalist
interests inside and outside of Egypt. The most influential
representatives of this business community were the captains
of Egyptian business groups, recently nurtured by the
privatization process, which gave them control of various
domestic industries.

These activists of the capitalist class might have urged the
government to suppress the protests. This option, however,
was precluded by the emergence of a mobilized civil society
shedding thirty years of passivity. The protesters' brave
response to initial police attacks - in which repression was
met by masses of new demonstrators pouring into the streets
- made it clear that brutal suppression could not quickly
silence the protest. Once the demonstrations involved
hundreds of thousands, approaching millions, a huge and
bloody suppression guaranteed long-term economic paralysis
that could threaten the tourist season in 2012.

When Do Armies Become Pacifistic?

The paralysis of the tourism industry was, in itself, an
economic time bomb that threatened the viability of the core
of the Egyptian capitalist class. Recovery could only begin
after a "return to normal life."

For President Mubarak the equation was somewhat different.
His grasp on power was at stake, he was under the threat of
prosecution and imprisonment, and he feared the confiscation
of his estimated $70 billion financial empire. These factors
must have made the economic calamity of suppression the
lesser evil. It is therefore not surprising that, in the
early days, Mubarak attempted to clear Tahrir Square with
successive waves of violence involving police, security
forces, and hired thugs. When these efforts failed, it
became clear that only the army could possibly suppress the
growing mass strike.

However, the traditionally compliant military leadership
refused to order an attack. This refusal may have been based
on the plausible fear that the enlisted personnel - faced
with firing on demonstrators with whom they sympathized or
to whom they were even related - would mutiny. Indeed, this
may well have been decisive in Tunisia; though the same
threat failed to deter military leaders in Libya and Syria.

But beyond the fear of mutiny, the Egyptian military had a
unique set of interests that helped account for its
reluctance to undertake a massive repression. Unlike any
other military in the world, the Egyptian army's peculiar
development had made it a central institution in the
neoliberal expansion underway since 1990. By 2008, it had
become, as a U.S. diplomatic cable put it, a "quasi-
commercial enterprise" at the hub of a "large network" of
"military-owned companies often run by retired generals . .
. particularly active in the water, olive oil, cement,
construction, hotel, and gasoline industries."

In other words, the military as an institution was itself
integrated into the globalized Egyptian economy, including
the ultra-vulnerable hotel industry. To offer just a few
examples of its far-reaching interests, the following should
be noted:

* The military's involvement in the tourism industry
involved major hotel holdings, vast Mediterranean beachfront
properties under development as tourist destinations, and
key construction companies involved in tourist-oriented road
building and other projects.

* Its ownership of a Jeep assembly plant, originally funded
by U.S. military aid, had - over the years - expanded into
the major Jeep dealership servicing armies and private
citizens throughout the Middle East.

* A fleet of Gulfstream Jets, also originally part of U.S.
military aid, had morphed into a charter airline, capturing
a substantial share of travel by executives of Middle
Eastern and European corporations.

* A U.S.-funded military hospital had developed into a
regional tertiary-care center, accessible to prosperous
patients who flew in from North African and other Middle
Eastern countries.

These enterprises, and many others, gave the army a huge
stake in minimizing the impact of the mass strike rippling
outward from Tahrir Square. Moreover, the generals had much
less to fear from a victory for the protesters, whose
demands had few negative implications for the military's
role either in the economy or in Egyptian society more
generally. Like the business elite, the military had little
to gain and much to lose from forceful repression.

Why Did the Protest Maintain Its Momentum? Left without the
weapon of an all-out attack on the demonstrators, Mubarak
and his shrinking coterie of institutional supporters might
have tried to wait out the protest. This strategy was indeed
attempted, and made visible by Mubarak's promises to step
down or initiate various reforms at future dates. After a
few days of this waiting game, however, the regime

The failure of these efforts was rooted in the pre-history
of the Tahrir Square protests, especially the way they were
embedded in the working-class institutions that had been
developing for a dozen years. As neoliberalism spread across
the Egyptian economy, workers' material conditions
deteriorated, while their latent institutional leverage
grew. By 2004, these contradictory processes translated into
increasingly viable organizations and growing strategic
savvy. Despite laws that made only government-controlled
unions legal, an "unprecedented wave of wildcat strikes"
swept through the textile industry and into other sectors,
continuing unabated for over two years. The epicenter of
this movement was in the textile city of Mahalla where, in
late 2006, mass rallies of workers faced down police that
had been sent to disperse them. After decades of vicious
repression of even modest demonstrations, the Mahalla
workers reestablished for themselves and others "the right
to assemble in their thousands to protest, debate, and

Inspired by this victory, a new strike wave exploded,
involving hundreds of thousands of workers. This movement
was also centered in the textile industry, but soon
established itself in the railroad, longshore, steel, and
cement sectors (and among the all-important Suez Canal
employees). They cast aside the state-controlled unions,
forming their own, illegal organizations.   Victories began
to pile up: workers at a state-owned factory in Mahalla won
a long-promised pay raise after only a five-day strike;
workers in an Italian-owned cement factory quadrupled their
salaries with only a four-day strike; thirty-five thousand
tax assessors duplicated the cement workers' victory,
achieving a 325 percent pay raise; tobacco workers quickly
won shorter hours, higher pay, and less oppressive working
conditions; and Suez workers reversed the firing of two
union activists, kicking off a sustained union drive in and
around the industrial center of Suez.

During 2007, the working-class movement widened its reach
and appeal, taking up broader political demands while
continuing trade union actions. Mass protests, multi-site
strikes, petition campaigns, and the full range of public
demonstrations marked the Egyptian political landscape for
the first time in decades. On April 6, 2008, when Mahalla
workers - always at the center of ferment - initiated a
nationwide campaign to demand that the national government
establish a minimum wage that would quadruple the pay of a
large proportion of workers, their initial demonstration
attracted tens of thousands of Mahalla residents. Their
march became the target of police violence, leaving two
protesters dead and many injured, a precursor of the attacks
experienced in Tahrir Square. And, as with Tahrir Square,
the police violence did not dampen the protest, but instead
broadened it, inspiring - among other new protest
organizations - the creation of the "April 6 Movement" made
up of middle-class students who, thirty months later, would
be credited by the international media as the "catalyst" of
the Tahrir Square movement. The minimum-wage demand has now
become a major national campaign in the post-Mubarak era.

When the Mahalla textile workers stared down the police,
they triggered an epidemic of civil disobedience. Their
ability to do this was rooted in the structure of the
industry. Once the textile factories were integrated into
the larger networks of global capital, employers could not
endure a long shutdown. Organized workers held the trump
card as long as they were willing to violate the dictates of
their state-controlled official leadership.

The textile workers neutralized the army, reduced the police
to sporadic violence, and inspired workers and protesters in
other sectors to test the endurance of their own
institutional adversaries, often discovering that they could
win the contest quickly.

The strike wave that began in 2006 established a triple
legacy: a history of protest that could stare down the
police without fear of overwhelming violence; the knowledge
that sufficient leverage could force concessions from
powerful institutions, public and corporate; and the
organizational experience necessary to mobilize a large
proportion of the productive workforce.

Strangling the Egyptian Economy

The Tahrir Square protesters quickly grasped the lessons of
the labor insurgency, underscored by the visible collapse of
the tourism industry and media calls for a "return to normal
life." Other signs of viable leverage included the
capitulation of Vodafone, the major cell phone provider, one
week into the protest. Told by the government to participate
in a total "Internet blackout" aimed at depriving the
protesters of critical communication capacity, the firm
reopened after only a few days, apparently against the
wishes of the Mubarak regime, delivering a visible victory
to the protesters.

The attack on the tourism industry spread quickly to
collateral sectors. The transportation system, local and
inter-city, became unreliable and sporadic due to a
combination of shutdowns aimed at hampering the protests or
because the protests interfered with normal operations. And
such disruptions quickly rippled outward to many sectors of
the economy, from banking to foreign trade.

As the demonstrations grew, employees, customers, and
suppliers of various businesses became ever more consumed
with preparing for, participating in, or recovering from the
latest protest, or protecting homes from looters and
criminals after the government withdrew the police force
from the streets. On major demonstration days especially,
many people left work to join the protest after noon
prayers, leaving their offices undermanned or closed
completely. As long as the protests were sustained, the
economy continued to stagnate, and business and political
elites became ever more desperate for a solution to the

The Marriage of Political and Labor Protest

Rosa Luxemburg characterizes the most productive instances
of the mass strike as those that combine broad-based
political reforms with concrete economic demands. From the
beginning of the Tahrir Square demonstrations, large numbers
of workers - both previously active and new to the movement
- had participated, but not as workers. After ten days,
however, they began spreading the uprising into their
workplaces, fulfilling Luxemburg's model of combining
political and economic protest.

On February 9th, reports of a widening wave of strikes in
major industries began pouring in, as lawyers, medical
workers, and other professionals joined the traditional
union movement in expressing their grievances with street
demonstrations, sit-ins, and strikes. In a single day, as
many as twenty thousand employees - in textile factories, at
newspapers and other media companies, and in government
agencies, including the post office, sanitation workers, and
bus drivers - began demanding economic concessions as well
as the departure of Mubarak.

Since the Suez Canal is second only to tourism as a source
of income for the country, a sit-in there - involving up to
six thousand workers - was particularly ominous. Though the
protesters made no effort to close the canal, the threat to
its operation was self-evident.

A shutdown of the canal would have been both an Egyptian and
a world calamity: a significant proportion of the globe's
oil flows through Suez, especially critical for energy-
starved Europe. A substantial oil-economy slowdown
threatened a possible renewal of the worldwide recession of
2008-2009, even as it would choke off the Egyptian
government's major source of revenue.

As if this weren't enough, the demonstrators turned their
attention to various government institutions, attempting to
render them "nonfunctional."  The day after Mubarak's third
refusal to step down, protesters claimed that many regional
capitals - including Suez, Mahalla, Mansoura, Ismailia, Port
Said, and even Alexandria (the country's major Mediterranean
port) - were "free of the regime" (purged of Mubarak
officials, state-controlled communications, and the hated
police and security forces). In Cairo, they surrounded the
parliament, the national media, and other centers critical
to the government. Alaa Abd El Fattah, a well-known
political blogger, told Democracy Now that the crowd "could
continue to escalate, either by claiming more places or by
actually moving inside these buildings, if the need comes."
With the economy choking to death, the demonstrators were
moving to put a hammerlock on the political system itself.

By that point, the business elite began deserting the
sinking ship of state. Several large companies took out ads
in local newspapers "putting distance between themselves and
the regime."  The London Guardian reported widespread
"nervousness among the business community," and that "a lot
of people you might think are in bed with Mubarak have
privately lost patience."

Any impulse Mubarak may have entertained to crush the
movement with overwhelming firepower was vetoed by a growing
array of military leaders, major businessmen, foreign
investors, and foreign governments. They saw a far more
appealing alternative solution.

Wael Ziada, head of research for a major Egyptian financial
firm, spoke for the business and political class on February
11, 2011 when he told Guardian reporter Jack Shenker that:

	Anti-government sentiment is not calming down, it is
	gaining momentum...This latest wave is putting a lot
	more pressure on not just the government but the
	entire regime; protesters have made their demands
	clear and there's no rowing back now. Everything is
	going down one route. There are two or three
	scenarios, but all involve the same thing: Mubarak
	stepping down - and the business community is
	adjusting its expectations accordingly.

The next day, Mubarak resigned and left Cairo.

The Struggle Goes On

The mass strike in Egypt (like its predecessor in Tunisia)
was an uprising, perhaps even an insurrection. But it was
not ultimately a revolution. Its initial accomplishments -
removing an autocrat and laying claim to a huge range of
political rights - were only a small portion of the demands
raised by the demonstrators. As the dust settled on this
initial stage of what promised to be a lengthy process, the
Egyptian economic and military establishments remained in
place. Even Egypt's weakened - but not overthrown -
political establishment had survived, at least until the
forthcoming elections and probably for the foreseeable
future. Nevertheless, Mubarak's departure left behind a
highly experienced mass movement - made up of the Tahrir
Square veterans, their compatriots in other cities, and the
union movement - with a clear understanding that further
change would depend as much on mass action as on
institutional maneuvering.

The Egyptian working class has become the operational core
of the ongoing effort. Days after the fall of Mubarak, the
workers insisted on drastic labor reforms and at least a
partial reversal of neoliberalization. Strikes by newly
independent (but still unrecognized) unions "exploded"
around the country, reraising old demands and issuing new
ones for "wage increases, changes in management, and
solutions to long-running disputes." Textile mills, banks,
airports, electrical facilities, and hospital services were
hobbled. Even police and journalists struck for improved
conditions and higher wages.

Economic demands merged with the broader issues raised by
the Tahrir Square demonstrators. The linchpin of the old
April 6 Mahalla protest, a drastically increased national
minimum wage, became a national campaign. When the
provisional military government failed to respond,
"protesters reiterated their demands to sack Prime Minister
Ahmed Shafiq and the Cabinet, release political detainees,
dismantle the State Security apparatus, and annul the
emergency law."

In response, the provisional government enlisted the
leadership of the Muslim Brothers to join a chorus of
establishment figures calling for the mass movement "to quit
protesting and return to work, for the sake of the economy."
When these appeals failed, the government followed up with a
series of rhetorical concessions, including: a promise that
Mubarak officials would be prosecuted to the full extent of
the law; a declaration that a commission on women's rights
would be established; the creation of a planning board to
develop plans for one million low-cost housing units; a
promise to deny visas to low-wage foreign workers imported
to fill jobs traditionally held by Egyptians; and a
wholesale revision of labor laws (including the critical
demands for union recognition and a national minimum wage).
In the meantime, the government promised an immediate 15
percent increase in all wages across the economy.

None of these promises have yet been fulfilled, and their
implementation is by no means guaranteed. But the struggle
continues in the context of the new reality created by the
Tahrir Square uprising. As long as the mass movement retains
its ability to sustain targeted disruption, it can force the
implementation of already-promised concessions and pursue
new demands.

[Michael Schwartz is the Chair of Sociology and Founding
Director of the Undergraduate College of Global Studies at
SUNY-Stony Brook. His most recent book, War Without End, is
a political-economic analysis of the origins and impact of
the U.S. occupation of Iraq.  He can be reached at
[log in to unmask]

He has written extensively on popular protest and
insurgency, and on American business and government
dynamics. His work on Iraq has appeared on numerous internet
sites, including Tomdispatch, Asia Times, Mother Jones, and
ZNet; and in print in Contexts, Against the Current, and Z
Magazine. His books include Radical Protest and Social
Structure, and Social Policy and the Conservative Agenda
(edited, with Clarence Lo).]


First released in the fall of 1997, New Labor Forum is a
national labor journal owned, edited, and published by the
Murphy Institute/City University of New York. Published
three times a year, New Labor Forum provides a place for
labor and its allies to test new ideas and debate old ones.
Issues we explore include (but are not limited to): the
global economy's impact on work and labor; new union
organizing and political strategies; labor's new
constituencies and their relationship to organized labor's
traditional institutions; internal union reform and new
structural models for the labor movement; alternative
economic and social policies; and the role of culture in a
new, revitalized labor movement.



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