TheMarketForIdeas

In most contexts, the name Catalonia is typically associated with the world of culture, arts, architecture and sports. It evokes the splendour of the Sagrada Familia, the distinctive styles of Antoni Gaudi and Salvador Dali, the venerable Montserrat Caballé and, of course, the famous Barcelona FC. Yet, in the aftermath of the declaration of independence passed by the Autonomous Community’s Parliament on October 27, 2017, the name is now also associated with the increasingly prominent trend towards fragmentation that has defined socio-political dynamics in the Western world in recent years, in particular Europe.

The declaration followed a highly controversial referendum held on October 1^st, deemed illegal by the Spanish government, while international observers stated it was marked by many irregularities and poor organisation. Of the 2 million or so Catalans who responded (roughly 43% of Catalonia’s population), 92% declared themselves in favour of Catalonia becoming an independent republic. The Spanish Government rejected this result as well as the government of the newly-declared state along with its head, Carles Puigdemont; the latter was expelled from office and later detained in Belgium following several allegations related to this affair. The matter remains to be settled in December, when new elections are to be held to vote a new government into office.

The political front

The referendum itself occurred in a very troubled context, marked by stiff opposition from the Spanish government, who intervened against the organisation of the process, with the Spanish police force cracking down on polling stations and arresting numerous members of Catalonia’s Administration, prompting mass demonstrations from the local population in support of the arrested officials which resulted in clashes between citizens and the police. Meanwhile, international reactions have been largely against Catalonia’s independence, with most countries declaring their support for an undivided Spanish state; others have preferred to abstain from any comments on the issue, which they stressed was a domestic matter of Spain, while others still stated was that the problem should be settled through dialogue between the parties.

This year’s referendum is not the first of its kind. A similar process was undertaken back in 2014, when the Catalan authorities organised a “self-determination referendum”, during which citizens were consulted on their preference for a Catalan state and whether this state should be independent or not. The results did not vary much from this year’s outcome: 80% of the 2 million people who voted opted for an independent Catalan state, while another 10% were in favour of Catalonia becoming a state, although they did not feel it should be independent. Previous unofficial referenda had taken place in earlier years, between 2009 and 2011, which yielded a 30% turnout and revealed that a vast majority of Catalonia’s voters supported the community’s independence from Spain. On a few occasions, the population demonstrated against Spanish interference in Catalan affairs, with six mass protests and marches occurring between 2010 and 2016, drawing each time between 500,000 and 2 million people out in the streets clamouring for Catalonia’s independence and right to self-determination; these protests have been accompanied by increasing frictions between the Spanish government and Catalan authorities.

The Islamic State-inspired attacks that took place in three Catalan cities (Barcelona, Alcanar and Cambrils) on 17-18 August 2017, killing 16 and injuring 152, were analysed in relation to Catalonia’s quest for independence. While some writers believed that Catalonia’s response demonstrated that it has the capability of running its own affairs as a sovereign state (and some pro-secession activists went so far as to say that these attacks would not have happened had Catalonia been independent), others took the opposing view, arguing that the attack is a sign that Catalonia has a major security problem and to address it properly, it needs direction or, at the very least, aid from Spain. A noteworthy incident took place when King Felipe of Spain attempted to march alongside Catalans in solidarity with the victims, and was instead booed and rejected by the crowds.

Historical roots

To better understand the matter at hand, we need to view it through three different sets of lenses: the historical context underpinning Catalonia’s long-standing desire for independence; the current context of a shift in the Western perception of identity, where individuals, minorities, ethnic groups and nations reassert their identities and the wedges between the whole and its components become wider; finally, the geopolitical and geoeconomic consequences of the recent events and what they mean on a greater scale.

To better understand the matter at hand, we need to view it through three different sets of lenses: the historical context underpinning Catalonia’s long-standing desire for independence; the current context of a shift in the Western perception of identity, where individuals, minorities, ethnic groups and nations reassert their identities and the wedges between the whole and its components become wider; finally, the geopolitical and geoeconomic consequences of the recent events and what they mean on a greater scale.

So, who are the Catalans and what do they want? The Catalans are Spain’s third largest ethnic group and second largest minority, comprising over 16% of Spain’s population and occupying 6.3% of the country’s area. The Catalans speak a Romance language with a geographic coverage ranging from Spain to regions in Western France and is an official language in Andorra. They have a very well-defined cultural heritage, with their distinct music, symbols, traditions, literature, arts, cuisine and dances. It is worth noting that there are autonomous regulating bodies as well as festivals and events that standardise and preserve aspects of Catalan culture, such as language or music.

Historically speaking, Catalonia was first documented as a distinct region in the 12^th century, thus preceding the birth of Spain as a cohesive political entity by a few centuries, when the Principality of Catalonia became a subject of the newly-formed Kingdom of Spain, with Catalonia retaining nevertheless its autonomous legal and political institutions. Spain and Catalonia later diverged on several political matters, such as the War of Spanish Succession or the Franco-Spanish War, escalating at times into armed conflict. By 1716, Catalonia had lost its legal and political autonomy and was placed under direct Spanish rule. Following the Renaixença, or Catalan cultural Renaissance, a newly-revived sense of Catalan identity and nationalism began sowing the seeds for what is now known as the Catalan independence movement. Heavily repressed under Franco’s regime, the re-democratized Spanish state under King Juan Carlos adopted an increasingly decentralized mode of organization (the 1978 Constitution) that allocated further privileges to the Catalan community with the adoption of its Statute of Autonomy in 1979, later reconfirmed by referendum in 2006.

Economically speaking, Catalonia is one of Spain’s powerhouses and one of the four most industrialised regions in Europe together with Lombardy in Italy, Auvergne-Rhône-Alpes in France and Baden-Württemberg in Germany, collectively known as the Four Motors of Europe which have formed a partnership for increased cooperation. Greatly benefitting from the so-called Spanish economic miracle from the 1960s and the 1970s, it currently has the highest regional GDP in Spain and accounts for 20% of the country’s total GDP, one of the highest GDP per capita (about $30,000, compared to Spain’s national average GDP of $24,000), having experienced a recovery after the recession of the last decade. Catalonia draws in one quarter of Spain’s total inbound foreign direct investment (in the region of €37 billion) and boasts a very powerful tourist sector as well as a well-developed financial markets, coupled with lower unemployment and income inequality compared to the rest of Spain. Moreover, the region exports €65.2 billion worth of goods and service, or roughly 25% of Spain’s exports.

The shape of things

Catalonia’s desire for independence is based on its distinct cultural identity and a fierce desire to preserve it, a large degree of pre-existing political and legal autonomy and a powerful economy which gives it confidence and allows it to appeal to rhetoric of economic subsidisation of Spain.

In a nutshell, Catalonia’s desire for independence is based on its distinct cultural identity and a fierce desire to preserve it, a large degree of pre-existing political and legal autonomy and a powerful economy which gives it confidence and allows it to appeal to rhetoric of economic subsidisation of Spain. The picture, however, is more complicated than that. We need to ask ourselves, why now? There have been, as previously stated, numerous occasions on which the Catalans manifested this impetus; the composition of the local administration illustrates this much, but at no point has Catalonia so straightforwardly asserted its independence via a formal declaration, nor has this stance been met with such stiff force and opposition from the Spanish central government. Why now?

In the simplest possible terms, we can state that the decision of a subgroup to splinter off from the main group it is part of is based on the presumption that it will be better off on its own than as part of the larger unit; in econ-speak, the opportunity cost of separation is lower than that of maintaining the status quo. However, what do we mean by ‘better off’? As we look into history, we can find various drivers that have led various groups and nations to opt for independence from their conglomerates of origin. Some were spurred on by abuse, discrimination and oppression, as well as the fear of annihilation as a culture and/or group, while others still stemmed from long-standing, deep-seated animosities – for instance, religious, cultural or ethno-nationalistic disputes; interestingly enough, economic considerations can also come into play (e.g. Scotland today or, a decade ago, Catalonia itself). Most poignantly, however, all separatist tendencies have in common the distinction between one group as defined by a set of common characteristics, as opposed to the larger group it is part of and which is no longer capable of responding adequately to its needs. Even in the case when economic reasons are invoked, it is a stark sense of collective property that lies at a heart of the matter, with one group believing that the ‘others’ are taking unfair advantage of that group’s resources while giving nothing back.

In analysing the current context, we need to look at three main levels: individual, most relevant to the US, where we witness divisions based on individual and, to a certain extent, collective characteristics – religious faith, political stance, gender, sexual orientation, ethnicity, even disability; national, as is the case in certain European countries, where the phenomenon is centred more on collective rather than individual characteristics – ethnicity, religious faith, cultural identity and ethnicity; lastly, the inter-state level or, more specifically, the European Union.

The trend towards decentralisation and fragmentation has defined socio-political dynamics during the past few years, most visibly in the West, where a phenomenon known as identity politics is on an upward trend.

The trend towards decentralisation and fragmentation has defined socio-political dynamics during the past few years, most visibly in the West, where a phenomenon known as identity politics is on an upward trend. Identity politics refers to stances and positions taken based on those of the social groups with which an individual identifies; the gaps between individuals and the groups they adhere to, on the one hand, and those of the larger group, on the other, become deeper and wider as a result. In the United States and some Western European countries, for example, we see such a tendency, with individuals feeling more and more detached from society at large, and instead seek solidarity with and ascription to groups of individuals with similar characteristics and opinions, virtually creating echo-chambers that reinforce their beliefs and generate animosities towards anyone who would disagree with them. It is indeed starkly ironic how the quest for enhancing the expression of one’s own individuality has led to enforcing a greater degree of conformity both within the outlying groups themselves and in society in general, and how the fight to promote open-mindedness across society has engendered a rather rigid, narrow-minded stance towards people who have different opinions.

Civil society without civility

In a column for the NY Times, Bret Stephens highlights how identity politics have come to dominate contemporary political discourse and, in a twist, how minority groups who have striven for their right to express themselves freely now shout down any opinion that does not fall in line with their worldview. He notes that, whereas agreement is the basis for any community, disagreement is the strongest hallmark of individuality. Columbia University professor Mark Lilla underlines the effect that identity politics has had on creating divides among the US electorate and discredited the liberal left in the eyes of voters. In response to Lilla’s analysis, Kenan Malik draws attention to the change of the role of identity politics, from promoting identity diversity as part of social transformation to promoting identity diversity as an end in and of itself, and that the real challenge was restoring solidarity when the trend points towards fragmentation.

The subtler form is that of nationalistic tendencies among the general populations that have gathered speed against the backdrop of the immigration crisis, the Islamic State’s repeated attacks in European countries and a growing dissatisfaction with the multi-cultural model, with many decrying the latter’s failure to accomplish what it was meant to do and the risks it entails.

In certain European countries (e.g. Spain, the UK, Italy, the Netherlands), this phenomenon manifests itself in two ways: the first one takes the form of regions or subdivisions that desire to gain independence from the main countries they currently belong to for a variety of reasons (old, deep-rooted ambitions; frustrations generated by asymmetric economic configurations; diverging foreign policy goals etc.). The second, more subtle form is that of nationalistic tendencies among the general populations that have gathered speed against the backdrop of the immigration crisis, the Islamic State’s repeated attacks in European countries and a growing dissatisfaction with the multi-cultural model, with many decrying the latter’s failure to accomplish what it was meant to do and the risks it entails (e.g. the local workforce being crowded out by the cheaper labour; security risks associated with the likelihood of a terrorist attack; higher crime rates; growing alienation from an unfamiliar cultural environment; the fiscal burden of immigration etc.). Lastly, at the level of the European Union, these tendencies materialised in dissatisfaction with the European unity model, as evidenced by the rise in popularity of right-wing, euro-sceptic factions and, of course, last year’s Brexit.

An intriguing comparison is that in the US, the most vocal groups tend to be those that already enjoy certain liberties and protection from authorities, whereas in Europe the landscape tends to be more nuanced, with a stronger trend towards secessionism and nationalism; on the one hand, there are cases such as Catalonia and Scotland arguing for their right to sovereignty against Spain and the UK, respectively; on the other hand, it is the majority populations of countries (e.g. Sweden, France) that feel bereaved of their status and rights. One should take note of the fact that the countries where these issues manifest more strongly are highly industrialised countries, ranking at the top of the Human Development Index, where inequality, discrimination and poverty are generally on the low side.

A case of affluenza?

It may seem surprising, but if we look at Maslow’s pyramid of needs, we note a few interesting aspects. As is known, Maslow’s pyramid places the most basic, physiological needs related to survival and safety at the bottom, gradually progressing towards the higher needs of one’s ego, which he termed ‘self-actualisation’.

Through this lens, we can begin to comprehend some of the root causes for these phenomena. We can see the segregation of an individual from the society he is part of as a form of expressing this need of self-actualisation, as well as the need for belonging, acceptance and validation. At the other end of the spectrum, nationalistic tendencies and aversion towards minorities can be linked towards a more basic need – that of safety, as minorities are most often viewed in such contexts in light of the dangers and risks they bring. Nonetheless, this lens is still insufficient for gaining a clearer understanding of the issue. We can therefore invoke two defining characteristics of a person that drive the way they interact with others.

Homo homini lupus

Through cultural transmission of symbols, rituals and information across generations, these aspects became the basis of social norms and encoding morality in laws and customs, extending beyond survival-related concerns and weaving complex relationships between man and his fellows, as well as between the various components of man’s own personality.

The first characteristic is the individual’s requirement to reconcile two different needs: one is their own need, directed towards their own person and interests as opposed to those of the others. Man, however, has never evolved to be isolated, completely divorced from others, a lone island in a vast ocean peppered with similar autarchic islands, with whom he would only engage in transactional relationships. It is in fact man’s nature to seek to be a part of a whole, to seek the companionship and support of others who share certain relevant characteristics. It was such cooperation and the creation of enduring partnerships that enabled man’s survival in harsh environments; millions of years of evolution and natural selections have embedded prosocial behaviour in man’s genes, manifesting now as deep-lying tendencies, outlooks and needs in one’s own psyche. Through cultural transmission of symbols, rituals and information across generations, these aspects became the basis of social norms and encoding morality in laws and customs, extending beyond survival-related concerns and weaving complex relationships between man and his fellows, as well as between the various components of man’s own personality.

In more pragmatic terms, gaining acceptance in a group through prosocial behaviour increases an individual’s chances of success, be it through greater access to resources and opportunities, the possibility of attaining higher social status, or through stronger protection against adversity. In return, the individual needs to acquiesce to the group’s norms and uphold its values and objectives. Thus, the individual assimilates collective identities, occasionally manifested in the manner that certain opinions are expressed in a given context when prefaced by the individual’s membership to a group (e.g. as a member of the scientific community, I strongly disapprove of X, Y and Z). The individual’s group identity is also a means of self-defence, i.e. it can be used to distinguish between allies and adversaries. A group may restrict access among its ranks through various means; one well known technique is the Shibboleth, a custom, tradition or action that only members of the community in question can perform. More dramatic demarcations between groups have been known to be enacted, such as racial segregation in the US during the 1950s, however the more common version is self-segregation of communities, not a top down imposition.

When King Felipe of Spain wanted to show solidarity with the victims of the terrorist attacks, he was instantly perceived as the exponent of Spanish authority and thus the chief opposition to Catalonia’s prospects of independence and the Catalan group interest.

The downside of this phenomenon is that it entails inter-group discrimination and an ‘us against them’ mentality; in other words, people are at risk of viewing people from other groups as somehow fundamentally different from the members of their own group. A more serious form occurs especially in the context of a conflict of interests, when people are no longer judged as individuals in their own right, but simply through their belonging to one group or another. They are no longer seen as persons with all the attributes of personhood – sentience, cognition, individuality, a multilayered personality, with the same capacity for emotion and reasoning as anyone else. Instead, they are seen as exponents of a rival group, one-dimensional beings whose essence is exhausted by their membership the other group; at its extreme, it takes the form of dysfunctional behaviours such as reflexive hostility and xenophobia. When King Felipe of Spain wanted to show solidarity with the victims of the terrorist attacks, he was instantly perceived as the exponent of Spanish authority and thus the chief opposition to Catalonia’s prospects of independence and the Catalan group interest.

The second important issue that helps explain the matter at hand is the sense of property, of the right to possess something. In the framework of group identity, an individual belonging to a group will feel entitled to that which is accessible to members of said group, especially if the object of possession is one of vital importance (such as economic resources), or as threats to the group identity itself. The sense of property extends beyond items that can be owned in the literal sense and encompasses norms, tradition, customs, language etc.; here we can cite the aversion of some minorities in Western countries towards ‘cultural appropriation’, or the borrowing of elements (i.e. foods, clothing, customs etc.) from one culture without being part of that culture, seen as a violation of collective property and an insult to the original culture. It is this sense of property and an injured sense of propriety that serves as fodder for conflicts between different groups. In a broader sense, whenever members of one group are perceived to be inappropriately taking something that another group values and deems as its rightful possession, the latter respond with strong opposition.

Sources of frictions

These two aspects help explain the frictions across American and European societies alike; when the financial crisis hit almost ten years ago, Catalans felt that other regions of Spain were profiting from their economic success to alleviate their own economic grievances; the same happens now in Italy, where Northern regions constantly outperform their Southern counterparts and feel that they cannot enjoy the desired level of welfare because the fruits of their labour are used to help keep afloat the poorer parts of the country. Scottish people find it unfair that the rest of Britain should profit from their oil resources, especially taking into account the latent animosities resulting from the wars of independence of past ages. Finally, more and more Europeans and Americans feel that immigrants are taking away that which is rightfully theirs – their jobs, their resources and, in the long run, their exclusive habitat, both territorial (neighbourhoods, cities) and cultural.

Catalonia’s fierce sense of cultural identity and socio-economic differences from the rest of the country fuel its conviction that it should become an independent state; the Spanish authorities, on the other hand, are well aware that allowing that to happen would send a very negative message. For one, apart from being a potential resounding failure for the current government, it would be interpreted as a failure of the Spanish state to maintain a multi-ethnic administration and impose its law in its own territory. Another effect would be that it would encourage similar movements and tendencies in other European countries, which would bring about a high risk of escalating into violence and instability; it is no surprise, therefore, that the international reactions have been nigh unanimously against Catalonia’s actions.

Geopolitics

A final, natural question, would be what are the geopolitical and geoeconomic consequences of an independent Catalonia? The immediate effect would be the creation of a new geopolitical entity, bordering Spain, France and the Mediterranean. Furthermore, should an independent Catalonia be economically and politically successful, the precedent would embolden other regions, such as the culturally-related Valencia, to join its neighbour as, perhaps, an independent federation, further weakening the Spanish. This may also reignite separatist ideals in the Basque Country, politically known for its ETA organisation, widely considered a terrorist group and author of several violent attacks in a span of over 40 years that have killed and/or injured over 1100 people; in short, a significant security risk.

Another immediate consequence would be that it would effectively separate Spain from one of its most economically powerful zones, and instead create a new, independent state, with access to the Mediterranean Sea and its own exclusive economic zone under the UN Convention on the Law of Sea (UNCLOS). The newly created state would almost instantly represent an economic rival for Spain, absorbing a lot of the FDIs that, for the time being, benefit Spain, especially in crucial sectors that need development, such as the defence sector. With a higher industrial output and a strong tourism industry, Catalonia’s economic growth would rely a lot on exploiting its sea access and developing a powerful network of foreign trade. In the long run, Catalonia’s independence would inevitably evoke comparisons with Yugoslavia’s dissolution, and would cast the impression that Europe is, indeed, on the brink of fragmentation, and that Catalonia would be the beginning of the end for Europe’s dreams of unity.

If Catalonia aims for emancipation, its independence will have to be acknowledged by other countries and it will have to gain their acceptance to have normal relations with it, knowing full well that by doing so, not only do they legitimise the right of a subdivision to break off from a country (thereby condoning secessionist movements), but they would incur Spain’s ire as well.

If Catalonia aims for emancipation, its independence will have to be acknowledged by other countries and it will have to gain their acceptance to have normal relations with it, knowing full well that by doing so, not only do they legitimise the right of a subdivision to break off from a country (thereby condoning secessionist movements), but they would incur Spain’s ire as well. Consequently, Catalonia would need to bolster its diplomacy and argue its case well; in particular it would have to market its assets to any potential partners – its geostrategic position by the sea, its competitive industries and high purchasing power. Yet, Catalonia lacks the diplomatic experience necessary to competently engage other countries, which could prove to be a stumbling block. A potential path would be to attract investors and gradually develop an attractive foreign trade policy, with a view towards overcoming any initial diplomatic shortcomings through economic and commercial boons.

In the event of independence, the status of Spanish citizens in Catalan territory as well as Catalan citizens in Spain is certain to be of great importance. This would be a major problem for Spanish and Catalan policymakers alike, so special rights and liberties for people who would suddenly become foreign citizens in their own country is likely a potential area of negotiations between the parties. The same would go for companies and entrepreneurs with businesses across several regions in Spain, Catalonia included, whose activities would now have to be governed by a potentially different regime, with all the administrative and economic complications that would entail. Last but not least, a major concern for Catalonia and its neighbours alike is related to its own security. As previously mentioned, it is inexperienced in matters of defence and security; therefore, an independent Catalonia would initially be vulnerable to terrorist attacks and even military strikes (for instance, by sea) and would be seen as a breach in Europe’s security framework. To alleviate this issue, security partnerships, joint military exercises, consolidation of military, security and intelligence institutions as well as bilateral and unilateral exchanges are necessary for Catalonia to cover ground, which would entail its normalization as a sovereign member of the international community.

In conclusion

All in all, as lofty an ambition as independence is for Catalonia, so would be the challenges inherent to taking its destiny into its own hands and deciding its own course as a state, without the guidance or direction of Spain. The proportions of victory, should Catalonia see its dream come true, would quickly be sternly matched by those of the opposition it faces from Spain, the lack of support from foreign countries and the problems associated with the responsibilities that come with existing as an independent state. For Europe, the Catalan affair is an instance of a problem it has been facing for some time now – reconciling the maintenance of diversity with promoting unity.