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This article was downloaded by: [University of Windsor]On: 20 November 2014, At: 14:54Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registeredoffice: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK
Mediterranean PoliticsPublication details, including instructions for authors andsubscription information:http://www.tandfonline.com/loi/fmed20
Why did the Egyptian Middle ClassMarch to Tahrir Square?Hazem Kandil aa Department of Sociology , University of California Los Angeles(UCLA)Published online: 18 Jul 2012.
To cite this article: Hazem Kandil (2012) Why did the Egyptian Middle Class March to Tahrir Square?,Mediterranean Politics, 17:2, 197-215, DOI: 10.1080/13629395.2012.694044
To link to this article: http://dx.doi.org/10.1080/13629395.2012.694044
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Why did the Egyptian Middle ClassMarch to Tahrir Square?
HAZEM KANDILDepartment of Sociology, University of California Los Angeles (UCLA)
ABSTRACT Building on the extensive literature on relations between the state and socialclasses, this article examines the reasons leading important sectors of the middle class torevolt against Egypt’s Mubarak regime. The role of the middle class in the Egyptian uprisingis both crucial and somewhat paradoxical. It is crucial because it was the middle class thatoverwhelmingly mobilized against Mubarak, with workers and peasants remaining, at leastinitially, on the sidelines. It is also paradoxical because the Mubarak regime had courtedthe middle class for a long time and the latter did benefit from its privileged relations with theregime. However, the neo-liberal reforms undertaken more recently undermined many of thematerial and political achievements of the middle class, favouring instead a new class oftycoon capitalists linked to the regime. This created extensive dissatisfaction within themiddle class, which seized on the opportunity provided by the circumstances of the ArabSpring to demand political change.
Introduction
Revolution theorists agree that economic hardship alone does not drive the masses to
revolt. And only the most hopelessly idealistic believe that a popular uprising could
accomplish anything tangible if the army was willing and capable of repressing it.
The Egyptian revolt of January 2011 was no exception. It could neither be wholly
attributed to the economic deprivation of the great majority of Egyptians, nor
could it have succeeded if it had been met with overwhelming military force.
Having discussed elsewhere why the military acted with such restraint during the
preliminary stages of the revolt (Kandil, 2011, 2012),1 here I turn to the motivation
of the participants in this decidedly middle-class uprising. Why was the middle class
at the forefront of the demonstrations while the peasants remained conspicuously
absent, while the workers hesitated, while the slum dwellers watched from the
sidelines, and while one half of the upper class defended the regime fiercely and the
other half had their jet engines running?2 Perhaps more importantly, why would
1362-9395 Print/1743-9418 Online/12/020197-19 q 2012 Taylor & Francis
http://dx.doi.org/10.1080/13629395.2012.694044
Correspondence Address: Hazem Kandil, Department of Sociology, University of California Los Angeles
(UCLA), 264 Haines Hall, 375 Portola Place, Los Angeles 90095-1551, USA. Email: [email protected]
Mediterranean Politics,Vol. 17, No. 2, 197–215, July 2012
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a class which had for decades been courted by the regime end up demanding its
overthrow?
Even more interesting theoretically, why would a class that is supposed to remain
docile in modern industrial societies revolt at all? Though writing at the heels of the
most spectacular bourgeois revolution in Europe, Alexander De Tocqueville still
insisted that the middle class is essentially composed of ‘isolated individuals
preoccupied with the well-being of themselves, their families, and immediate
friends . . . Their passions are involved in making money, and hence do not usually
become political, let alone revolutionary’ (quoted in Richter, 1967: 110). So how did
the Egyptian middle class transcend (at least momentarily) its narrow-minded
individualism and obsession with stability, which normally inclines it towards
gradual reform, lest it be overthrown by a radical lower class? Why did it lose faith
in a society where the economy was liberalizing, where the margin of free speech
was relatively wide and where political reforms, though agonizingly slow and
revocable, were not entirely lacking?
Advocates of the democratization paradigm preached that socio-economic
development places opposition parties and civil society groups in a position to
pressure (inherently unsustainable) authoritarian regimes to mend their ways and
move toward democracy. Sceptics, by contrast, insisted that neo-liberal reforms
guarantee the loyalty of a hopeful middle class, and thus help produce an upgraded
and more resilient authoritarianism (Heydemann, 2007). Neither of those schools,
however, predicted that the economic policies of the regime might erode its social
basis and provoke unintended reactions from the very beneficiaries of these reforms
(a notable exception is Cavatorta & Haugbølle, 2011). This is because few nowadays
treat social classes with sufficient analytical rigour, although, as Michael Mann
(2012: 111) stressed, whether or not it is considered fashionable ‘class always
matters’, and its recent neglect by social scientists is simply ‘indefensible’.
This article aims to contribute to our theoretical understanding of the
revolutionary potential of the middle class in economically open and politically
closed regimes – what many neo-liberals consider ‘good enough liberals’. By
tracing the long and complicated relationship between the regime and the middle
class in Egypt, this study shows how the political elite shaped and reshaped the
middle class repeatedly to sustain authoritarianism, and how this process allowed
the uppermost crust of this class to encroach on the seat of political power and upset
the established social balance, driving the rest of the middle class into the streets to
deliver the final blow. In other words, this article does not attempt to explain how the
Egyptian regime was decapitated (rather than overthrown), but to understand why
the middle class, with its mildly reformist temperament and long-standing role as
a bulwark of the regime, sparked such a massive revolt. More generally, what
happens to patronage-based regimes and rentier states once patronage networks
become overstretched and the financial resources needed to sustain them inevitably
diminish? After briefly surveying the prevalent views on the nature of the middle
class and its relationship with the state, historical institutional analysis is utilized
to highlight how this relationship unfolded in Egypt between the July 1952 coup
and the January 2011 revolt.
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‘The Embarrassment of the Middle Class’: A Theoretical Review
The middle class has always been a problematic social category. We have certainly
come a long way from the traditional Marxist reduction of the middle class into the
exploiting bourgeoisie, with everyone else (other than labourers, landlords, peasants
and intellectuals) lumped together into the residual category of the petite
bourgeoisie. We have also learned from analysing specific historical situations that
the bourgeoisie itself is divided into competing fragments depending on the type of
activity it conducts, and that many of these fragments are riven by significant
individual antagonisms. Still, Erik Olin Wright (1989: 6–7) argues that post-World
War II societies present Marxism with what he refers to as the ‘embarrassment of the
middle class’, a dilemma posed by the fact that the ‘concrete class structures of
contemporary advanced capitalist societies look anything but polarized’. The
growth of bureaucracies, civil society organizations and large economic enterprises
produced countless numbers of managers, administrators, bankers, stockholders,
teachers, professionals and others who accumulate wealth in return for ‘cultural
capital’, in Pierre Bourdieu’s (1996: 273) words, rather than economic capital. The
hope of most members of this irrepressibly expanding class rests on a system of
social mobility that allows them to improve their fortune over time.
If we move away from the advanced economies of the West to the postcolonial
world, we notice an even sharper upsurge in the size of the middle class following
the modernizing coups, which offered their emancipated populations free education
and a chance to serve in rapidly growing bureaucracies and public projects.
Moreover, the political influence of this state-nurtured middle class was immense
due to the relative weakness of industrialists in colonized economies. The socio-
economic failures of many postcolonial regimes, however, turned this aspiring
middle class fragment into what Asef Bayat (2011) terms ‘the middle class poor’:
a social group harbouring middle-class aspirations by virtue of its white-collar
education and modern outlook, but whose income is steadily diminishing. This all
leads to the conclusion that the middle class had become much broader, more diluted
and impoverished than traditional definitions of the bourgeoisie suggest.
Yet this should not be an invitation to abandon the relational aspect of the Marxist
approach, which centres on the objective conflict of interests in society. The key
element we need to retain in our analytical toolbox is ‘exploitation’. Wright (1989:
8–10) explains that contemporary societies involve ‘complicated combinations of
different kinds of exploitation relations, and this generates a particularly complex
map of corresponding class relations . . . [with many class fragments becoming]
simultaneously exploiters and exploited along different dimensions of exploitation
relations’ (emphasis original). He also extends the concept of exploitation from the
narrow confines of economic exploitation to any type of objective relation where
one social group benefits at the expense of another. Particularly important, for our
purposes, is political exploitation of the middle class at the hands of the ruling elite.
This brings us to the even more problematic issue of determining the relationship
between the state and the dominant social class. Conceptualizing this relationship
has initially followed two opposing logics. One school of thought divests the state
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of any autonomy, and considers it a passive instrument in the hand of the dominant
class. The other school conceives the state as an autonomous institution that
exercises full control over society. Both approaches regard the state as an
independent entity that enters into an external relation with various social classes,
one of either submission or subjugation. More nuanced readings highlight the
interdependence between the economically dominant class, which is ‘politically
helpless and unable not only to lead its nation but even to take care of its particular
class interests’ (Schumpeter, 1942: 137), and the state, which is ‘nothing more
than the organization of social forces that have a political significance’ (Mosca,
1939: 158). It is only normal, according to this view, for the political and economic
elite to be integrated into a coherent power structure that serves them both
(Domhoff, 1990: 21). Later formulations granted the increasingly powerful state
more and more autonomy. Goran Therborn (1982: 243) held that sometimes the state
could act against the wishes of economic magnates, even though he still maintains
that these actions ultimately further the dominant mode of production. Nicos
Poulantzas (1978: 155–7) championed the view of ‘relative autonomy’, whereby
state officials could clash with the economic elite to preserve their political
hegemony. Theda Skocpol (1985: 9) went further by advocating that state rulers
could formulate and pursue their own agendas regardless of the interests of the
influential social classes.
In order not to get held up in this debate regarding who pulls the strings in
modern societies, we should try to qualify some of the above suppositions. Instead of
discussing the role of a reified ‘state’, we could focus on the ruling bloc, and, among
those, we could further distinguish between members of various state institutions.
For, according to Mann (1993: 55), the state is most usefully analysed as a
‘differentiated set of institutions and personnel’. Also, Poulantzas (1978: 127)
reminds us that every state branch or group of officials could constitute the power-
base of a favoured social faction. This focused approach helps us realize, for
example, that among ruling institutions, the military is particularly given to
defending its corporate interests, whether in conjunction with or in opposition to the
capitalist elite. This is because of officers’ ‘marked superiority in organization . . .
highly emotionalized symbolic status, and . . . monopoly of arms’ (Finer, 1962: 6).
Military men perceive themselves as the custodians of the state’s national interest,
and are therefore extremely sensitive to being manipulated by ‘moneymakers’
(Mills, 2000: 222).
Another qualifier is temporal. One should be mindful of the difference between
times of stability and those of crisis. In a stable environment, state decisions usually
reflect the interplay of various social forces. But during crises, members of the ruling
clique tend to take matters into their own hands. Fred Block (1987: 67) notes that
war, revolution, economic depression and other momentous episodes cause a
‘dramatic increase in the state’s role’. In times like these, the political leadership
exerts its utmost effort to prevent its dislocation by hitherto subordinated groups.
Crises therefore ‘precipitate the formulation of official strategies and policies by
elites or administrators who otherwise might not mobilize their own potentials for
autonomous action . . . [in an attempt to reinforce the] authority, political longevity,
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and social control of the state organizations’ (Skocpol, 1985: 14–15). It is in the
course of these power struggles that state policies could generate new relations of
production or curtail existing ones. This is why Mann (1993: 52) suggests that states
are governed, for the most part, by the ‘autonomous logic of definite political
institutions, arisen in the course of previous power struggles and . . . constraining
present struggles’.
If we combine these institutional and contextual qualifiers, we can see that the
coup-installed regimes of the postcolonial world tend to be particularly autonomous.
The ruling bloc is composed of officers who seize power using military support
and remain dependent on it for quite some time. They also perceive their coming to
power as a clear break from conventional politics, and constantly justify this rupture
by reference to a seemingly perpetual state of emergency. Their ‘revolution from
above’, which aims to create a strong, independent and modern state, requires the
total submission of all social groups, including the economically dominant class.
And in the course of this extended state-formation process, several unintended
consequences arise.
But although these regimes usually succeed in subduing all economic agendas to
their grand political vision, they still need to ally themselves with one or more social
classes in order to consolidate their hold over society and create a loyal support base.
In postcolonial societies, their choice is limited. Traditional landowners are usually
co-opted by the colonial master to tame the peasants, and keep the raw material
flowing to the imperial centre. Rich industrialists and their workers are held in check
by the distrustful colonial authority, lest the country becomes too economically
independent or politically radical. Coup makers thus find themselves driven toward
the lower sections of the middle class. That is not to claim that they carry out the
coup on their behalf, for in those settings the middle class is too rudimentary to
prompt a military takeover. But it is precisely this embryonic status that allows the
new rulers to incorporate the middle class into their political orbit, and reinvent it
continuously to fit political imperatives and demands. Expectedly, changing
political contingencies splinter the middle class, since different fragments prove
useful in various circumstances. And as the new regime produces more and more
fragments, it becomes no longer capable of satisfying them all. Those who fall out of
favour gradually move toward opposition, thus narrowing the regime’s social basis.
In the end, only the tiny fragment linked directly to the political apparatus remains
loyal, while the majority of the middle-class fragments become rebellious after the
state rescinds its longstanding promises to them. Revolt, in this case, seems
inevitable. As Antonio Gramsci (1971: 210) wrote almost a century ago, the ‘crisis
of the ruling class’s hegemony’ occurs when ‘huge masses have passed suddenly
from the state of political passivity to a certain activity, and put forward demands
which taken together . . . add up to a revolution’.
Invented and Unleashed: The Story of Egypt’s Middle Class
Now that we have considered various theoretical approaches to the relationship
between the state and social classes, let us analyse the concrete historical situation,
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which crystallized over time through the intercourse and struggle of Egypt’s
political leadership and the various middle-class segments it nurtured between 1952
and 2011. Such a detailed historical analysis is decreed by the fact that the origins
and trajectory of each of the fragments that participated in the uprising were
different. Exclusive focus on the Mubarak era provides an incomplete and certainly
distorted picture of the motivations of those who took to the street on the morning of
25 January 2011.
Dragged in Chains: The Middle Class under Nasser
The 1950s saw Egypt’s aspiring capitalists in an unenviable position. The traditional
elite remained politically dominant, as evidenced by the fact that landowners
constituted 63 per cent of the last parliament elected in 1950 before the coup, with
capitalists tailing behind with 14 per cent (Helal et al., 1986: 243). Moreover, the
landed class not only resisted land reform or the commercialization of agriculture,
but it also squandered its revenues on imported luxuries, thus hurting domestic
production and demand (Abdel-Malek, 1968: 39). A modernizing coup that would
industrialize the economy was certainly in the interest of capitalism, and its
likelihood increased with the infusion of middle-class elements (mainly the sons of
professionals and middling landowners) into the army after the 1936 Anglo-
Egyptian Treaty. Nonetheless, Egyptian capitalists, similar to their counterparts on
the eve of the French and Russian revolutions, expressed only lukewarm support for
an extra-legal takeover of power. They believed there was still time for reform. The
working class was too small and fragmented to warrant concern and peasant revolts
were rare and ineffectual (Al-Bishri, 2002: 282–4). So while some capitalists
welcomed the Free Officers cautiously, none of them had a role in either prompting
the July 1952 coup or influencing its early policies.
The first far-reaching economic policy adopted by Gamal Abd al-Nasser and his
colleagues was the Agricultural Reform Law, on 9 September 1952. The law might
have reflected the Free Officers’ modernizing vision, but we know for sure that it
was implemented under considerable pressure from the Americans, who believed
that revolutions in Russia and China could have been avoided if the position of the
peasants was not so dismal. Three weeks before the law was drafted, the State
Department sent a telegram to its ambassador in Cairo to instruct the new rulers on
the urgency of land redistribution in order ‘to lessen the causes of agrarian unrest
and political instability’ (Ahmed, 2007: 131). Another highly symbolic step in
Nasser’s attempt to win over Egyptian capitalists (as well as the Americans) was his
brutal suppression of the first workers’ strike following the coup (the Kafr al-Dawar
Strike) on 13 August 1952.
Despite these capitalist-friendly attitudes, it soon became obvious that neither
local nor foreign investors could provide solid support for the regime. Industrialists
and wealthy merchants held back investment under what they considered to be
a whimsical and arbitrary political order, preferring to freeze their assets in real
estate, which consumed three-quarters of all private investments in 1956. Out of an
estimated 45 million Egyptian pounds (LE) directed away from agriculture in the
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first five years following the coup, over 85 per cent went to real estate, with only
13 per cent directed to industry. At first, Nasser seemed set on luring them back
to productive investment by reducing taxes on commercial and industrial profits,
and encouraging exports. But their continued scepticism compelled him in 1957
to nationalize foreign companies and entrust the economy to a High Committee
for National Planning. Then the silk glove came off. With the proclamation of
the Socialist Laws of July 1961, dozens of banks and private companies were
nationalized, the properties of hundreds of capitalists were sequestered and 40
prominent investors were imprisoned on charges of subversion (Abdel-Malek, 1968:
81, 108, 160). By 1967, the Supreme Council for Public Organizations ran the
economy through 48 public organizations, which in turn supervised 382 affiliates
(McDermott, 1988: 121–2).
But while capitalists fell from favour, and while intellectuals and independent-
minded professionals and merchants could not be counted on, two other middle-
class fragments gradually came to represent the regime’s social backbone: middling
landowners and bureaucrats.
Over half of Egypt’s population (around 21 million in the 1950s) was employed
in agriculture. Yet only 12,000 of them controlled a third of the country’s arable land
(an estimated 2 million feddans). Nasser’s successive land reforms set a ceiling on
ownership, starting at 200 feddans in 1952, down to 50 in 1965. But instead of
redistributing the land to peasants, the government allowed large landowners to sell the
surplus on the openmarket to wealthy peasants. Politically, a token amount of divested
land was enough to win the sympathy of the peasants, but the regime opted against
emancipating them from traditional authority structures, preferring to create a rural
middle class to occupy the apex of the patronage networks that were already set in
place by large landlords, and thus inherit their predecessors’ political control function.
In other words, the new regime tapped into the existing power structure, rather than
disrupting it. Between 1952 and 1965, these new kulaks (perhaps 25,000) expanded
their holdings by almost 30per cent, and through receiving 80per cent of state subsidies
and loans managed to increase their income by 25 per cent (Yunis, 2005: 69). Clearly,
the function of these village notables was to block independent mobilization by
the peasants, the same function the large landlords performed under the ancien regime.
The July 1961 Socialist Laws further enhanced the position of the rural middle
class by undermining the economic power of the wealthy urban stratum. But more
important perhaps, these laws inflated the public sector considerably, especially
after the regime pledged to hire all university graduates. Public employment
swelled from 770,000 to 1.1 million between 1962 and 1967 (Brooks, 2008: 72–3).
Immediately, middling owners got into the habit of sending their offspring en masse
to state-funded schools so they could later join the bureaucracy. The new managerial
class provided rural notables with access to state funds, jealously guarded permits
and business opportunities. Now that they were strategically located in the city and
the countryside, these two state-nurtured middle-class fragments could both serve
and benefit from the new regime to the fullest.
On the economic front, the results were disappointing. Although economic
growth during the first Five-Year Plan (1960–65) reached 6.9 per cent, it still fell
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short of the projected 9 per cent. Also, the price for such an expanded bureaucracy
was administrative corruption and chaos. More alarming was the soaring budget
deficit, which reached LE 417 million in 1967, and the recession that followed
(Yunis, 2005: 64). The state had clearly taken on more commitments than it could
fulfil. From a political viewpoint, however, the regime’s alliance with wealthy
landowners and their state bourgeois progenies proved invaluable. These were the
people who manned the regime’s political apparatus, delivered the necessary votes
in elections and popular referendums, and organized pro-Nasser demonstrations. It
is true that the Nasserist middle class did not represent a new ruling class in the full
sense, but its role in building and maintaining authoritarianism was indispensable. It
acted as a ‘second stratum of the ruling class’, mediating between regime and
society without aspiring to control the political order (Binder, 1978: 13). But even
though the rural middle class and its urban offshoot in the bureaucracy remained
influential well into Hosni Mubarak’s reign, beginning in the 1970s, they were
forced to share the spoils of state patronage with a newcomer: the new business elite.
Facing Westwards: Sadat’s New Business Elite
President Anwar Sadat, who came to the helm after Nasser’s premature death in
1970, felt compelled, due to a host of internal and external factors, to dramatically
swing Egypt from a non-aligned (though slightly pro-Soviet) country to a loyal
American asset.3 The price was high: the United States expected (and received)
numerous political and military concessions, and on the economic front, it insisted
on opening up the economy to foreign investment. This last demand coincided with
Sadat’s analysis of what was needed on the home front. Nasser’s village notables
and bureaucrats proved unreliable in the intra-regime struggles the new president
confronted. Civil servants became paralysed when their superiors bickered, and
notable landlords remained provincial in outlook and interests. Both middle-class
fragments could cast their votes for the regime, and demonstrate in support if
necessary, but this type of passive backing was deemed insufficient for the rocky
road ahead. The political apparatus now required the devotion of an active social
force, a faction invested in the regime deeply enough to identify with and
aggressively defend it.
But where could one find these desperately needed power brokers? Relying solely
on military or security officials would end the hard-won autonomy of the political
apparatus, and was therefore ruled out. Who then? Sadat’s strategic realignment
with the US, as well as the fact that leftists led opposition at home, dictated
a rightward course designed to win over a powerful bourgeois fragment, a business
elite with strong American connections and a real stake in the authoritarian regime.
There was a slight problem, however: there was no such business elite. Once again,
the political leadership was forced to tailor a middle-class fragment to fit its needs.
This was the aim of the president’s notorious open-door policy, known as Infitah,
beginning in 1974.
The president supervised Infitah personally, creating an economic group within
the cabinet to facilitate business. When prime minister Abd al-Aziz Hegazy,
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a business professor, proved too cautious, he was replaced in 1979 with interior
minister Mamduh Salem to, in Sadat’s words, ‘tear down all measures and
constraints that inhibit economic freedom’ (Kandil, 1986: 90). The fast results Sadat
required, in addition to American pressure, determined the aim: to transform Egypt
from a potentially ‘industrial state to a service state’ (Bahaa al-Din, 1987: 90). A vast
sum of cash was sucked into real estate speculation, tourism, and foreign trade.
During the 1970s, 53.5 per cent of the land owned by the state on the Mediterranean
Sea was ‘passed into private hands without any payment being made’ (Heikal, 1983:
183–4), and resold on the private market for LE 4 billion. Construction increased by
107 per cent, with over 90 per cent devoted to luxury housing and vacation cabins.
The number of agents for foreign companies increased from a few dozen in 1974 to
16,000 in 1981. ‘Cairo became a city of middlemen and commission agents for
Europeans and Americans . . . shuttling between luxury hotels and government
ministries, wheeling and dealing on an ever-increasing scale’ (Heikal, 1983: 185). In
a country that had no millionaires, over 17,000 sprang into existence during Sadat’s
single-decade rule (Heikal, 1983: 183–91, 85–91). The short-term effects were hard
to miss. An economic study conducted in the mid-1980s revealed that Egypt’s non-
industrial sectors (mainly services and construction) represented 60 per cent of GDP
and employed 53 per cent of the workforce, while industry represented a mere
19 per cent of GDP and employed 14 per cent of the workforce (Oweiss, 1990: 9).
As a prominent Egyptian economist commented, the country’s de-industrialization
under American tutelage in the 1970s surpassed the de-industrialization forced
upon Muhammad Ali by European powers after his 1840 defeat (Abd al-Fadeel,
1983: 27).
Expectedly, the US won the lion’s share. American investors were both the
architects and benefactors of Infitah. The president himself proudly celebrated the
fact that his primary advisor on economic affairs was David Rockefeller (Bahaa
al-Din, 1987: 114). American goods flooded the Egyptian market; imports from
the US between 1974 and 1984 were estimated at $2.8 billion, over a third of all
Egyptians imports, while American non-oil imports from Egypt were worth
a ridiculous $5 million (Al-Mashat, 1986: 61). In addition, US investors acquired 70
per cent of the profits made in the Egyptian oil business, and during the first five
years of the open-door policy, a mushrooming of American banks (that had never
operated before in Egypt) drew $9.9 billion worth of foreign currency deposits.
In short, from an American viewpoint, Infitah brought about ‘phenomenal growth
in exports to Egypt . . . as well as large profits from its investments in Egypt’s
petroleum and banking sectors’ (Handoussa, 1990: 122). This could not have been
possible without the political leadership’s forceful lobbying for American interests.
The president frequently intervened to close deals, such as the ones with Boeing and
Chase-Manhattan (Heikal, 1983: 182–5; Kandil, 1986: 91). Thus, through making
itself useful, the regime secured US support for its authoritarian rule, highlighting
the importance of international support, which provided over time significant
resources to solidify authoritarianism. In this respect, the cases of Tunisia and
Morocco examined in this special issue are quite similar, as foreign actors condoned
authoritarianism in exchange for favourable economic policies.
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In bringing forth the new business elite, the top echelon of the state bourgeoisie
was cast in the role of catalyst. Some 34,000 public sector managers, and 11,000
senior administrators were allowed to forge alliances (mostly illegal) with a select
group of local and foreign entrepreneurs, where in return for lucrative commissions
investors received public land, trade and building permits, business licences, tax
breaks, discounted loans from public banks and valuable inside information about
future economic decisions (Waterbury, 1983: 424–5). The state bureaucracy was
being transformed from the leader of economic development to some sort of
middleman, letting out business to a new class of capitalists. One observer described
this more accurately as ‘state-fostered corruption’ than state-fostered capitalism
(Saleh, 1988: 16).
The new business elite was an amalgam of truly incompatible human material.
There were pre-1952 landed elites (some 600 families), which Sadat decided in
December 1970 to rehabilitate by returning most of their sequestered land and
property, in order to turn yesterday’s landowners into today’s capitalists and give
character to his rising bourgeoisie (Abd al-Magid, 1998: 111). These old moneyed
families operated side-by-side with the nouveau riche: mostly poor migrants
(numbering 58,000 in 1970, and reaching 5million by 1980) whomade huge fortunes
through serving in Gulf countries and invested their petro-dollars back home (Abd al-
Fadeel, 1983: 11). What this odd combination produced was a parasitic bourgeoisie
‘unprepared to give up opportunities for commercial and speculative enrichment or to
trim its new life of consumption’ (Hinnebusch, 1990: 192–3), a class which ‘devoted
their activities to short-term trade, reaping high cash profits that have . . . often been
hoarded in the form of cash or jewellery, or spent on unnecessary luxuries, lavish
consumption, or otherwise invested or saved abroad’ (Oweiss, 1990: 34). This was
Nasser’s greatest fear. He believed that a country ‘which only furnishes rawmaterials
to industrialized nations, and whose own “capitalists” are largely traders (as opposed
to manufacturers), shortly has on its hands an unpatriotic, corrupted wealthy class
which contributes nothing substantial to the product of the country and which is
inclined to export its profits to Switzerland’ (Copeland, 1970: 216).
All the above notwithstanding, Sadat finally had his new elite of state-nurtured
capitalists, wholly invested in the regime, and towering over the two middle-class
fragments from before, middling landowners and public administrators. The political
vessel of this new alliance was a revamped ruling party, renamed in 1978 the National
Democratic Party. Little did Sadat realize that he infested the ruling party with
a germ whose covetousness would eventually pull the roof down in January 2011.
A Time for Plunder: The Long Road to Tahrir Square
Mubarak’s first task, upon assuming power in 1981, was to deal with the country’s
disastrous economic situation. Sadat’s ten-year reign increased Egypt’s civilian
foreign debt from $1.3 billion to $19.5 billion, with three-quarters of this debt
wasted in financing consumption. Eager to provide Egyptians with a quick taste of
the prosperity he associated with peace with Israel, Sadat had placed himself at
the mercy of foreign aid. A decade into the tenure of his successor, debt had reached
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the incredible figure of $53 billion (Mitchell, 2002: 276). Worse still, the country
had shifted from being a net exporter to a net importer of food, as agricultural
exports fell from 41.4 per cent to 15.5 per cent of total exports between 1973 and
1980. By the time Mubarak took office, Egypt was importing 60 per cent of its food
requirements (Abd al-Mo’ty, 2002: 174, 145). Furthermore, the non-productive
nature of Sadat’s business stratum failed to generate jobs, leaving the state with
the role of primary employer. Despite talk of downsizing the public sector, state
bureaucracy swelled from 1.2 million in 1974 to 4.8 million in 1986 (Springborg,
1989: 136–7), eventually reaching 5.5 million by 2000. Meanwhile, public wages
could not keep up with the rising inflation (reaching a record 35 per cent in 1979, and
remaining at a two-digit level ever since), nor could the government afford the sort
of social subsidies promised by the July 1952 regime. Sadly, this came at a time of
staggering inequality. According to World Bank statistics, while the income share of
the top 5 per cent of earners rose from 17 per cent to 22 per cent during Sadat’s rule,
and while the richest 10 per cent controlled a third of the national wealth, the income
share of the lowest 20 per cent of earners dropped from 7 to 5 per cent (Ahmed,
1993: 474–5). For the first time since 1952, society was neatly divided between ‘the
“fat cats” and their hangers-on, perhaps 150,000 people at most, on one side, and the
rest of the population on the other’ (Heikal, 1983: 88).
Mubarak was initially inclined to reverse some of these trends, and rebuild the
welfare state that kept the regime in place since 1952. At the very least, he thought
he could freeze the structure Sadat had put in place, whereby state-nurtured
businessmen would remain under the control of the ruling party. His greatest
concern was to see the party ‘colonized by the bourgeoisie’ (Springborg, 1989: 137).
But Sadat’s parasitic businessmen gave way to a select group of monopoly
capitalists, who had no intention of limiting themselves to the subsidiary role they
have been cast into. For the first time, a middle-class fragment fostered by the state
began to articulate clear political demands. While the countryside bourgeoisie, like
most peasants (rich or poor), wanted to be left alone; and while the state bourgeoisie
aspired to move up the bureaucratic hierarchy, and maybe make a little fortune on
the side; and while the parasitic bourgeoisie of the 1970s and 1980s were satisfied
with amassing wealth through shabby deals with public officials (i.e. flourishing in
the shadow of power), the billionaires of the 1990s wanted to move up the political
ladder, to bend the regime to their purposes rather than being manipulated by
it, and they had the power to secure their ambitions. The predatory behaviour of
members of the president’s family or inner circle find a parallel in the Tunisian case,
as Cavatorta and Haugbølle detail in their contribution to this themed issue.
Where did this new class fragment come from? And from where did it derive
its power? In terms of social origins, the new oligarchs belonged to the merchant
and construction class, whose business was kicked off through state contracts and
partnerships with foreign (mostly American) corporations. Before the end of the
1990s, the country’s economy came under the control of perhaps two dozen family-
owned conglomerates. The construction, tourism, telecommunication, transpor-
tation, food processing and other dynasties employed a relatively small workforce,
and catered mostly to the upper class (an estimated 5 per cent of the population),
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which they quickly came to dominate. No other middle-class fraction could hope to
compete with, let alone dislodge Egypt’s new economic masters – not even the
political leadership dared resist.
That is because the country’s super-rich drew on five major sources of power.
First, opening the doors wide for free commerce and foreign trade created a
consumer society that the state could no longer satisfy. Politically, the most
dangerous segment of this new demand curve was bureaucrats. Though the political
leadership had initially encouraged state employees to partner with the rising
parasitic bourgeoisie (62 per cent of public sector projects were subcontracted to a
handful of entrepreneurs during the 1970s), the links between bureaucracy and
business could no longer be disrupted (Abd al-Mo’ty, 2002: 117–27). Endemic
corruption became a way of life for the overwhelming majority of civil servants,
who have, in turn, become avid consumers and would not surrender their new
lifestyle under any circumstances. In short, the regime could no longer block
capitalists out of the state bureaucracy, even if it wanted to.
Second, though Mubarak managed to resist the pressure to privatize the economy
by relying on oil revenue, derived mostly through oil exports, remittances of workers
in oil-rich countries, and traffic in the Suez Canal, once oil prices plummeted (from
$36 a barrel in 1980 to $12 in 1986), oil exports were cut in half (from $2.26 billion
to $1.2 billion), and Suez Canal tariffs quickly fell (from $1 billion to less than $900
million). The persistence of Egypt’s high import bill led to a crippling drop in
foreign currency reserves, and the ensuing debt crisis forced the government to
declare its bankruptcy in 1989 (Suleiman, 2005: 54, 9). A cornered political
leadership now had to adopt a 1991 International Monetary Fund (IMF)-tailored
Economic Reform and Structural Adjustment Programme, which dictated
reductions in subsidies, but more importantly the privatization of the public sector.
In less than a decade, the government sold 124 of its 314 companies (Mitchell, 2002:
280). The regime was thus losing its grip over the economy.
Third, during the 1960s the state remained solvent by relying on sequestered
properties and financial assets, nationalized companies and generous Soviet aid.
The hope was that state-led industrialization and large agricultural projects would
produce enough revenue for welfare policies to continue once these resources
dried up. But the alliance with the West replaced Soviet aid with the expensive and
condition-ridden US aid, and America’s economic liberalization requirements
not only eroded state revenue, but moved the economy away from industry and
agriculture. Mubarak thus inherited a country with deteriorating finances. For a host
of reasons, including corruption, the government failed to collect the taxes needed to
cover public expenses. As a result, domestic debt rose from 67 to 90 per cent of
GDP between 1992 and 2002. And because ruling-party finances were merely an
extension of the state’s finances, both were now running on debt. The need to remain
solvent compelled the political leadership to draw on the support of the wealthy
businessmen, who had first relied on the ruling party to make their fortunes, but were
now becoming its creditors (Suleiman, 2005: 192–6, 218). Gradually, politically
motivated philanthropy gave way to concrete political demands. Egypt’s monopoly
capitalists now expected to have a say in public policies.
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Fourth, besides their money, the regime’s new business cronies had another
valuable asset to trade with: their close contacts with Western investors and
governments (foreign investment in Egypt tripled between 2004 and 2007). These
contacts eased pressure on the regime to democratize – a function typically
performed by capitalists on the periphery of the world system vis-a-vis the countries
occupying its centre. This leverage was enhanced in 2004, when USAID resolved to
bypass the state and hand out aid to the private sector (Amin, 2009: 93). At a time
when many Western governments (occasionally including the American) threatened
authoritarian regimes with sanctions, remaining on their good side seemed crucial
for Egypt’s rulers.
Fifth, all the above notwithstanding, the most dangerous aspect of this new
stratum of businessmen, with their shabby alliances with bureaucrats and their
partnership with global power centres, was their eagerness for independent
organization. Throughout the 1990s, they not only infiltrated the chambers of
commerce and industry, and created lobbies and associations to defend their
interests, but they also began to encroach on the ruling party itself. In the mid-1990s,
they developed links with a valuable asset: the president’s son. Gamal Mubarak was
an investment banker who returned home in 1995 after a short stint at the London
office of the Bank of America. In 2000, his new friends convinced him to form his
own platform, the Future Generation Foundation (FGF), to promote his political
ambitions. Soon, his father had him appointed as the head of the ruling party’s Youth
and Development Committee, and in 2002 he and his business cronies and self-
styled neo-liberal intellectuals formed a new apparatus within the party: the Policies
Committee (PC), which under Gamal’s chairmanship became the nerve centre of the
entire political apparatus.
Then the sledgehammer came down. In 2004, the country followed in shock the
formation of Egypt’s first businessmen cabinet. The prime minister had studied
business in Canada, and along with other neo-liberal intellectuals (including future
executive director of the World Bank, who headed the Economics and Investment
Ministry, and a long-time IMF executive, who was entrusted with the Treasury),
he presided over a cabinet with six monopoly capitalists, put in charge of ministries
directly linked to their business portfolios. For example, the Ministry of Tourism
went to the owner of a tourism conglomerate; the Ministry of Industry and Trade
went to the head of the Middle East affiliate of one of the biggest multinational
corporations; theMinistry of Transportationwent to the chairman of one of the largest
car dealerships in the country; and so on. Those who were not included in the cabinet
were placed in charge of parliamentary committees, and the majority leader in
parliament was none other than Egypt’s iron and steel tycoon Ahmed Ezz, Mubarak
junior’s political mentor. The seizure of the cabinet and parliament was naturally
followed by an earnest ‘bourgeoisification’ of the entire political leadership, now
facilitated byGamal’s appointment as Assistant Secretary-General of the ruling party
(Amin, 2009: 207–11). The manoeuvring space of the regime’s professional
politicians thus shrunk considerably, as they stoically awaited their demise.
The stage was finally set for the most daring step of all: the presidency. Through
a series of highly controversial constitutional amendments in 2005 and 2007,
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conditions for candidacy for the top executive post were tailored to fit no other
candidate than Gamal. The transition was set to take place in September 2011,
which – as it turned out – was a little too late.
The policies pursued by this formerly parasitic bourgeoisie, which rose to the
rank of upper-class capitalists under Mubarak, alienated all middle-class fragments.
Egypt’s disheartening inequality did not deter the new economic barons from
violating the social contract that underwrote the July 1952 regime from its very
beginning: whereby the people exchanged their political rights for social benefits
(in the form of subsidies, free education and healthcare, cheap housing and services,
and so on). Egypt’s capitalists-turned-politicians seemed determined to restructure
the economy along neo-liberal lines. Ignoring the country’s severe poverty,
unemployment, illiteracy, deteriorating public services, urban congestion, pollution
and all the rest, they formulated policies that offered the people little more than
a ‘rhetoric of management, financial soundness, and market forces’ that basically
depoliticized the country’s economic troubles and ‘transformed questions of social
inequality and powerlessness into issues of efficiency and control’ (Mitchell, 2002:
230). Whatever surplus the state could use to fulfil urgent social needs was being
sucked into their pockets, thus straining the legitimacy of the political apparatus to
the limit, and eroding its social base.
Whether or not Egypt’s new dominant class believed in the healing power of
neo-liberalism, its interests required the state to deregulate the economy, privatize
public enterprises, reduce subsidies for the poor and taxes for the rich and allow
chosen investors cheap access to public resources. A new tax regime imposed 60 per
cent of the tax burden on the general population via indirect taxes and tariffs that
do not discriminate between rich and poor, and halved taxes on business revenues
from 40 to 20 per cent; the currency exchange rate was floated, costing the Egyptian
pound 25 per cent of its value vis-a-vis the US dollar, thus skyrocketing the price of
imported goods; and over 67,000 square kilometres (an area equivalent to the size of
Palestine, Lebanon, Kuwait, Qatar and Bahrain combined), worth an estimated LE
800 billion, was allocated to a select few for nominal prices (Ghoneim, 2005: 98;
Al–Gahmy & Abd al-Qawy, 2011: 7).
Egypt’s dark days were getting even darker. As the middle class followed
celebratory statements about howGDP increased from$92.4 billion in 2000 to $187.3
billion in 2009, pushing economic growth from 3.2 to 5 per cent during the same
period, the standard of living for almost all Egyptianswas getting progressivelyworse
(Abd al-Aziz, 2011: 89). Per capita income dropped 7 per cent between 2000 and
2006, and World Bank reports exposed how 47 per cent of Egyptians were making
less than $2 a day (Wahid, 2009: 134–42). In 2010, unemployment skyrocketed
to 26.3 per cent, and perhaps 3 million people were forced to join the dangerous and
unpredictable underground economy (Shatz, 2010: 6). Even more than the final
days of Sadat, the economy was now divided into two spheres: one servicing
the conspicuous consumption of the top 10 per cent, and the other throwing
breadcrumbs at the barely surviving masses. The middle class not only saw their
aspirations crushed, but to add insult to injury, they were forced to watch powerlessly
as Egypt’s minuscule upper class sent its children to exorbitant international schools,
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received treatment in highly equipped hospitals, resided in lavish compounds,
vacationed in extravagant beach resorts, drove luxurious cars and shopped at some of
the most expensive malls in the region (Amin, 2009: 12).
To make matters worse, the nature of the leading class fraction during Mubarak’s
rule did not lend itself to class-based cooperation. Monopoly capitalists behaved
more like competing magnates than a consolidated class leadership, and therefore
failed to incorporate top bureaucrats, middling landowners and small investors into
their fold. Abandoned by the upper class, and left to their own devices by an
incapacitated political leadership, Egypt’s middle class began sinking into the ranks
of the proletariat. At the dawn of 2011, a call went out for a mass demonstration on
25 January. And the middle class had no reason to hesitate.
Conclusion: Why did the Middle Class Revolt?
The fact that the country’s deteriorating conditions were blamed on Gamal Mubarak
and his monopoly capitalists became apparent when weeks after the January 2011
revolt the president’s son and his family and political and business associates
were all imprisoned for financial corruption and abuse of office to amass wealth.
But the question we are trying to answer here is why members of the middle class,
who had for long been nurtured by the regime, suddenly turned against it. And
the answer is that, aside from the uppermost crust of the Egyptian bourgeoisie,
all other middle-class fragments not only suffered, but also believed that the worst
was yet to come.
The rural middle class had become dispensable. The outright rigging of elections
and pro-regime demonstrations were now provided by the Interior Ministry and its
army of thugs, and financed through direct hand-outs from ruling party businessmen,
thus depreciating the value of political patronage networks in the countryside. Also,
the trend towards the capitalization of agriculture, to bring it in line with the large
monopolistic projects of the economically dominant class, threatened middling
owners, who were pressured to sell their land to allow the new super-rich to
consolidate their power.
The state bourgeoisie, the knight in shining armour of the Nasser era, and the
catalyst between aspiring businessmen and the omnipotent state during Sadat’s
reign, also had little left to do. Economic liberalization reduced the role of the public
sector, and the fact that monopoly capitalists assumed the top positions in the cabinet
and parliament made their function as middlemen redundant – the fox was now in
the henhouse. Moreover, the increasingly aggressive neo-liberal reforms promised
further privatization of the public sector, downsizing and streamlining of the
bureaucracy and deregulation of investment, thus stripping them once and for all of
their past influence. Worse still, the inflationary policies associated with neo-
liberalism eroded their purchasing power, while measures to eliminate red tape
limited their chances for extra income through bribes.
As for the country’s parasitic business class, which in the 1970s and 1980s
included small-time contractors, financiers, export-import traders and other small
fry, the concentration of wealth and economic activity in the hands of fewer and
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fewer oligarchies threatened to terminate, or at least impoverish them. The barriers
for entering the market were becoming increasingly higher, and competition with
the tycoons of the ruling party seemed hopeless. Needless to add, the staggering
unemployment and inflation rates, the direct consequence of the above changes, hurt
hundreds of thousands of middle-class youth, whose college degrees could only take
them so far in Egypt’s neo-liberal economy.
It was only natural that the prospects of ending the uneasy power-sharing
arrangement between Mubarak and his son, and transferring power entirely to
Egypt’s monopoly capitalists by September 2011 spelled the total ruin of the
country’s frustrated middle class. In such as dire situation, the chance to resist could
not have been forfeit.
This same disillusionment, however, casts a dark shadow over the country’s future.
If anything is certain regarding Egypt’s disgruntledmiddle class it is this: it is both too
fractured to provide solid support for a coherent economic policy, and too demanding
of state support rely on its own talents in a reformed political system. Themiddle class
rose up in indignation against a political leadership that was not only corrupt (that was
fine bymany), but also a leadership that selfishly refused to provide for its people. For
the revolution to be complete, angry citizens proclaimed, the state has to guarantee
free (and high quality) education for all; provide jobs for graduates; re-empower
the public sector; invest in services; redistribute wealth; in a word, reassume its
patronage role – a difficult task considering the state’s deteriorating finances. More
dangerously, these demands are no longer presented as popular expectations from a
benevolent developmental state (as Nasser and Sadat portrayed their regimes), but
rather decreed as the price that a guilty regimemust be forced to pay to compensate for
its crimes against society and its responsibility for Egypt’s economic collapse. Under
such strain, establishing the social consensus necessary for building a new democratic
regime is apparently remote. The divisiveness and desperation of the middle class not
only confronts the new rulers with seemingly insurmountable challenges, but also
suggests that stabilizing the political situation might take longer than many optimists
anticipate. Unless, of course, the repressive apparatus is recovered and unleashed
against the aspiring citizens, and authoritarian control is gradually reinstalled from
above. Even though this article focused on social classes, one cannot lose sight of the
cardinal role of coercion. As the history of landlordism and capitalism clearly
demonstrates, the social ills one fails to cure through sound economic logic could be
(at least temporarily) contained using the whip, the baton and the gun.
Notes
1 On the eve of the revolt the military perceived itself as the least privileged partner within Egypt’s
tripartite ruling bloc, and saw the revolt as an opportunity to outmanoeuvre the political and security
apparatuses and re-establish its long-lost dominance.2 Several businessmen and ministers escaped during the revolt to London, Madrid and Dubai, and many
attempted to and were arrested at the airport.3 These reasons included his belief that only the US could pressure Israel to sign a binding peace treaty
with Egypt, as well as his conviction that the Soviets (his only other option at the time) had strong links
within the military and Egypt’s leftist opposition, and could destabilize his regime at will.
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