From the March 2016 issue of the Socialist Standard
The CIA World Fact Book is a useful resource for looking at how our masters view the world. Ireland, it says, ‘is a small, modern, trade-dependent economy’. It notes that between 1995 and 2007 the Irish economy grew at an average of 6 percent a year, which, compared to the trend rate for the UK of about 2.5 percent is very healthy indeed. It took Ireland from being one of the poorest countries in Europe to one of the wealthiest.
This was part of what was known as ‘the Celtic Tiger’, a moniker that linked the growth there to that being achieved by the Asian Tiger economies, such as Malaysia. The link was more than just symbolic, there were structural similarities. The growth was achieved through state-driven social partnership, low corporate taxes and inviting foreign investment (chiefly American, taking advantage of the shared language and the membership of the European single market to turn Ireland into a corporate base for American firms in Europe). Also, the European Union has transferred vast amounts of money in structural fund payments to develop Ireland’s economy.
Further, as an article in the Spring 2004 Quarterly Bulletin of the Central Bank of Ireland noted ‘While the level of Irish GDP per worker [was] second only to Luxembourg in the European Union, GNP per worker is roughly equal to the EU average. However, this means that productivity levels, measured as GNP per hour worked, are still somewhat below the EU average because of the higher average hours worked per employee in Ireland.’
All of this reflects the relatively low level of development in Ireland previously, and that it was part of a worldwide spread of industrialised production. This meant Ireland could not escape the worldwide trends, and while GDP growth was over 9 percent up to 2000, after that it fell to 5.9 percent up to 2007.
When the Great Crash came in 2008, Ireland was particularly vulnerable due to internal factors (such as the very large housing and mortgage debt market) and also exposure to foreign markets. Further, due to the over-expansion of the property sector, Ireland like countries such as Spain ended up with a property bubble, and ghost estates full of habitable houses that no-one could buy. As the CIA Factbook notes: ‘economic activity dropped sharply during the world financial crisis and the subsequent collapse of its domestic property market and construction industry. Faced with sharply reduced revenues and a burgeoning budget deficit from efforts to stabilize its fragile banking sector, the Irish Government introduced the first in a series of draconian budgets in 2009. These measures were not sufficient to stabilize Ireland’s public finances. In 2010, the budget deficit reached 32.4 per cent of GDP - the world's largest deficit.’
Ireland since has successfully imposed harsh austerity measures, as part of an international bail-out, to eliminate that deficit, and it has largely succeeded, and has managed to successfully balance its budget, but at considerable price. It has not yet returned to the productivity rates it had at the height of the Celtic Tiger period. This was falling even before 2008, as the real economy began to dry up; and even now, the profitability of Ireland has not returned to 2005 rates.
At the height of the crisis, Ireland had an unemployment rate of 14 percent. This however, whilst being lower than, say, Spain’s horrific unemployment rate, is slightly distorted. Ireland has historically been able to export population in times of crisis: to nearby Britain, or the United States, Canada or Australia (due to historic connections), as well as the wider EU.
The chart below, released by the Irish Statistical Office last April, shows net emigration in Ireland over the past ten years. The advent of the crisis clearly shows the switch away from net immigration to emigration, and around 45 percent of those leaving the country are Irish nationals. It represents an average rate of about 70,000 leaving per year.
As unemployment falls to 8.8 percent today, people are returning. This rate of unemployment, though, remains relatively high, and is the rate at what could well be the top of the current economic cycle (for example, the unemployment rate in the UK is about 5 percent).
Further, there may be distortions in the official figures: ‘an additional 22.8% of the working age population are ‘inactive’, arising from disability or illness, care duties, full-time education, full-time parenting or early retirement. In order to sign on to the Live Register, a person has to be available for full-time employment, an eligibility criterion that discriminates against those who cannot be available full-time, particularly women.' That’s about 120,000 people who might want to work but aren’t counted. (www.tasc.ie/download/pdf/tasc_cherishing_all_equally_web.pdf).
Even those who are working aren’t benefitting. As the Irish Times noted last year (16 February), ‘a third of all income [is] concentrated in the hands of the top 10 percent of earners. When taxes and benefits are taken into account, though, this is just about the European average. Further, ‘Estimates of wealth distribution give the Top 10% between 42% and 58% of all wealth, and the Top 1% between 10% and 27% of all wealth.’
As demonstrated by the below graph (from the same website):
So, for the vast majority of the Irish, they do not own Ireland, nor Ireland’s wealth. They are not invited to share in growth in good times, and they are politely shown the door in bad times. That is what independence has meant for the workers of Ireland.
What it means for the top dogs in the country is that they have been able to shop around for patronage. No longer tied to the capital of John Bull next door, they can become the clients of European and American capital instead. The Tiger economies were known for their crony capitalism, and Ireland has had its fair share of that. Charles Haughey was legendarily corrupt when in office in the 1980s, Bertie Ahern (who was Taoiseach throughout most of the Celtic Tiger years) eventually fell due to revelations of brown-paper enveloped ‘dig out’ funds. The Mahon Tribunal found that he was not alone, and numerous public officials and councillors had been engaging in corrupt practices.
Legitimate business people are largely benefitting from foreign capital inflows. As Paul Sweeney noted in the Irish Times (16 January): ‘[The Irish] State is highly interventionist and spends between €4.7 billion and €6.2 billion a year supporting enterprise (half to agribusiness and farmers under the European Union). The equivalent of 5,200 full-time public servants supports such firms. Foreign firms play a key role in all small, open economies, but here their role is disproportionate because we do not have enough successful indigenous firms of scale.’
It’s worth noting that, according to the CIA World Fact book, agriculture in Ireland makes up about 1.6 percent of economic activity, so its share of state aid represents a hang-over of the status of farm and land owning in the Irish Republic.
Independence has not benefitted the working class of Ireland. It has not freed them from wage slavery. It has not freed them from exploitation and inequality. The Irish economy is not run on behalf of the people who live in Ireland, but on behalf of the owners of capital. For all the state intervention, it is still subject to the anarchy of production and the vagaries of the market.
In the good times Ireland’s wealth grows based on the work of its citizens, most of which is stolen from them. When the market turns sour, they are shown the door, or robbed some more to balance the books.
Ireland is enmeshed in a worldwide capitalist system, and only by joining a general struggle to emancipate the working class of the whole world, and turn the planet into the common property of humanity will people in Ireland liberate themselves.