Voice From The Back: Between $373 billion and $1.6 trillion (2000)

The Voice From The Back Column from the July 2000 issue of the Socialist Standard

Between $373 billion and $1.6 trillion 

. . . is what it will cost to clean up the sites polluted with uranium in the USA, depending on how thoroughly the job is done. But there is a much cheaper way, according to Sandia national laboratories of Albuquerque, New Mexico—leave it to nature, which will neutralise the radioactivity—in time, a very long time. In other words, do nothing, as millions of other capitalist firms are doing with their pollution.

In Lewis Carroll’s madcap world, 

. . . Humpty Dumpty declares, “A word means what I say it means”. It seems that Brian Souter, the Scottish multi-millionaire and homophobic would agree with Humpty Dumpty: “His inspiration comes from the Church of the Nazarene, a fundamental American sect based in Kansas City. Although it takes a harsh line on all matters sexual, it allows him to get on with business. As he explained, the sect’s “ethics are not irrelevant but some are incompatible with what we do because capitalism is based upon greed. We call it dichotomy, not hypocrisy” (Observer, 14 May). In another book, even more fantastic than “Alice”, it states: “It will be easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of heaven.” This has not scared off our Brian from accumulating a reported fortune of £300 million out of the exploitation of the working class. After all, such contradictions in the eyes of the deeply devout Souter, are a “dichotomy not hypocrisy”.

Freedom—as long as you pay 

. . . is the heading of a column in the Irish Independent earlier this year. Gene Kerrigan says, “It’s like there are at least two Irelands, side by side. In one Ireland, an Ireland where fantasies come true, entrepreneurs receive windfall profits of a kind that used to be built up over generations. In the other Ireland, an all-too-real Ireland, people lie for hours on hospital trolleys, untreated, because we have never made up for the health cutbacks of a dozen years ago. Is it unfair to suggest that there might be a cause-and-effect relationship between fantasy Ireland and real Ireland? Ireland is the sixth most “economically free” country in the world, says the Edmund Burke Institute, a ‘right-wing think tank . . .’ The woman in her 80s, who worked hard all her life, paid her taxes, and is now free to gasp her last on a trolley in an overworked hospital, would no doubt find the surveys interesting if she had the breath to comment.”

Sisters of mercy. 

In the 15 January edition of the Irish Independent, a review of an episode in a three-part television documentary, Stolen Lives, recounts the interview with Kathy Byrne who, as a child was placed in one of the industrial schools for girls: “A nun walked in and gave me a whack with her hand and said: ‘how dare you get ink on your dress.’ She was going mad at me and she said, ‘you’re coming with me.’ Kathy breaks into a sob at the memory: She took me to the little place called St Brigid’s and . . . she just beat me and beat me and beat me and beat me. She just beat me everywhere. I was crying for my mum. Please mum, please mum, help me. I missed her so much, I couldn’t believe where I was. And the nun said, ‘You can call your mother all you want. She’s dead.’

Amnesty International, 

. . . in a recently produced leaflet, are appealing for your financial support. On the face of it, it is a powerful appeal. There cannot be a human being worthy of the name, on reading some of the examples of tortures that occur inside modern world society, who is not profoundly moved: “Take the case of Nang Mai. Nang was seized by solders in June 1997, in her township in Myanmar—not for any particular offence, but simply belonging to an ethnic minority. She was repeatedly raped, covered with wood and burnt alive.” Every human being must feel repugnance at such brutal acts. The leaflet goes on to tell us about blowtorches being applied to a person’s face in Algiers. Such barbarities happen all the time inside capitalism. So what is Amnesty International’s solution to such horrors? Send a cheque for £250 or £10 or £other (please tick box). This will enable them to help future Nang Mais or blowtorch victims by “applying pressure to governments around the world”. Our solution? Get rid of the whole awful social system that causes such horrors. We don’t want to apply “pressure to governments”. We want to see an end to the rotten system of capitalism that is the basis for such unspeakable crimes.

Trotskyist tactics summarised 

One learns by failing. Silk Road, Chinese Fortune Cookie.

Irish workers feel the pinch (2000)

From the May 2000 issue of the Socialist Standard

All is not well in the “Celtic tiger”. Just after trade unions, employers and the government were passing the Partnership for Prosperity and Fairness (PPF)—a national agreement on pay and conditions—Dublin bus drivers were taking strike action in support of a 20 percent pay claim with the promise of more to come.

For the employers, government and trade union leaders, the PPF is presented as a genuine attempt to divide up Ireland’s new found wealth equitably between capitalists and workers, but in fact it is an attempt to head off the increasing likelihood of further class struggle as the Irish economy shows signs of slowing down.

The PPF which is set to run for a period of 33 months, allows basic pay to rise by 5.5 percent for each of the first 12-month periods and four percent in the final four-month period. However, linked to pay rises are agreements on productivity increases. This had led to unions such as the Teachers’ Union of Ireland rejecting the deal outright whilst others such as SIPTU (public-sector—including bus drivers) and building workers (BATU) are threatening militant action.

Dubbing Ireland the “world’s fastest growing economy” has almost become a cliché of late. Over recent years a combination of EU membership and subsidy plus massive Foreign Direct Investment (FDI) from American multinationals desperate to set up inside the single market has propelled the economy forward. Last year a growth rate of 7.5 percent was recorded and this year, according to the Economic and Social Research Institute (ESRI) a rate of 7.25 percent is expected. However, with six percent being predicted for 2001 the importance of the PPF for the employing class should be obvious. However, many Irish workers do not feel that they are fully participating in this new prosperity. They are certainly working harder—often in low paid employment—but the capitalists have been the main benefits of the boom.

Another problem for the capitalist class is that the Irish economy is facing a potential labour shortage which on its own terms threatens the growth of the economy. This has led to the government actively recruiting skilled labour from overseas (including Irish emigrants) to bridge the gap. Some economists have pointed out that such a policy is likely to put intolerable pressure on public and private housing in terms of provision and surging house prices (especially around Dublin). However, a labour shortage puts the working class in a strong position and clearly the employers wish to counteract this.

The labour shortage problem was foreseen by the government as early as 1995 when it passed immigration legislation deliberately widening the definition of “refugee” in order to recruit skilled labour. This, however, has not prevented anti-asylum seeker outbursts from leading politicians and headlines in Irish newspapers talking of “floods” in much the same way as tabloid newspapers do in Britain. Asylum-seekers have been blamed for the shortage of public housing, but a cursory look at the government’s own figures reveal that this problem already existed. The Labour Party leader Rory Quinn has even suggested that asylum-seekers with skills should be integrated into Irish society for everyone’s benefit, which is reassuring for everyone but especially the capitalists who can smell profit from asylum-seeker labour power.

As boom turns to recession, which under capitalism is as inevitable as night following day, expect to hear more from the Emerald Isle as workers begin to fight for a bigger slice of the pie and the capitalists remind everyone of “social partnership” and the PPF, not to mention the asylum-seekers—the usual scapegoats.

Dave Flynn

A ‘Socialist’ Leader (2005)

From the February 2005 issue of the Socialist Standard

Bertie Aherne calls himself the last ‘socialist’ in Irish politics, but the media don’t take him seriously and neither, argues Kevin Cronin, should we

In November of the year gone by, Bertie Aherne, the Taoiseach (Prime Minister) of the Republic Of Ireland, celebrated his tenth anniversary as leader of Fianna Fail, the largest party in the state and the dominant partner of the current coalition government. Such occasions are meant to inspire reflective contemplation and Aherne used the event to announce publicly that he is and always had been a socialist. Indeed he further claimed that he was ‘one of the last socialists left in Irish politics’ and always had ‘a very socialist view of life’. This point was embellished in a number of subsequent interviews where he pronounced that the current regime ‘was the most left-wing government in the country’s history’, was ‘the party of real workers’ and as evidence for all this said that the government’s actions ‘helped spread wealth more evenly’ and simultaneously ‘helped the deprived’. This barrage of nonsense was crowned with some rhetorical philosophy where Aherne gave his definition of socialism: ‘What is the best form of equality? It is the fact that the richest family in the area can go on a Sunday afternoon to the [publicly owned] Botanical Gardens and the poorest can too, for free!’. Actually with this last statement, though with an entirely different intention in mind, Bertie Aherne had unwittingly stumbled towards a rudimentary but crucially correct definition of Socialism; free access to everybody of everything.

To the media commentators all of this was a welcome ‘bit of sport’. The ‘coming-out’ of Aherne wasn’t taken seriously amongst the pundits and rival politicians treated it with derision. There is a good reason for this. Aherne has built a formidable reputation for himself for his innate cunning, adroit manoeuvring and endless ability to wrong foot opponents. His sudden revelation of his socialism was seen very much in this vein. Bertie Aherne was first elected to the Dail (Irish Parliament) in 1977 and within a few years achieved ministerial rank. He held a number of important cabinet positions before becoming Taoiseach in 1997. Due to the electoral success of Fianna Fail, he has more or less been at the summit of the power pyramid for the last 20 years. However in the most recent local and European elections his party did badly, being perceived (quite justifiably) as having implemented policies that proportionally benefited the wealthy and making Ireland one of the more unequal societies in the developed world. Of particular concern was the loss of votes from their urban ‘working class’ electorate to the growing Sinn Fein movement with its leftist pretensions. Aherne’s announcement was generally considered to be a cynical and tactical exercise to reposition Fianna Fail leftwards for the general election that is expected in 2007. Much populist rhetoric can be anticipated combined with paltry amendments to the social welfare codes and other ‘caring’ aspects of government policy. Needless to say, the rich financial backers that Aherne has cultivated over the years won’t be alarmed, knowing that these games are part of ‘democratic politics’ and won’t seriously threaten their position.

One accidental outcome of this whole episode has been the raising of the question ‘what is socialism?’ as a public issue, something which many people thought was moribund. This occurred because the ‘real’ socialists in Irish politics couldn’t stand by while Aherne shamelessly grabbed the proletarian spotlight. First up was Pat Rabbitte, leader of the Irish Labour Party. Pat’s freedom of manoeuvre was limited because he is currently engaged in building a potential rival government alliance with a variety of decidedly pro-business parties. So rather than engaging in any serious policy or ideological debate with Aherne, which could in future times embarrass him more than the Taoiseach, he restricted himself to a few sarcastic cracks at Aherne. The next challenge came from Joe Higgins, sole member in the Dail for the so-called Socialist Party (formerly Militant). Joe set a test for Bertie asking for his views on public ownership, imperialist invasions and social equality. While the nature of these questions betray the Trotskyite nature of the ‘Socialist Party’, at least they were an attempt to tie down in some definite form what socialism could mean. In response to these questions, Aherne waffled through a garbled analysis about ‘extreme communism’ confirming to any observer that for Aherne at least ‘socialism’ is just a convenient phrase to be aired for a while when convenient and then, having served its purpose, quickly forgotten about.

Finally, Kieran Allen, editor of the Socialist Worker was given an opinion slot in the newspaper the Irish Times  to give his perspective. The article began well, pointing out that under capitalism we vote every four to five years on ‘how to run the country’ but that’s the end of our input into the organisation of society. In continued in this sensible course by explaining that the former regimes of Eastern Europe were not socialist and also talked about the growing power of multinational firms in a globalized world and the enormous remunerations that their CEOs receive. However, it then degenerated into into proposals for nationalisation of development land, taxes on wealth to fund the health service and taking banks into public ownership. Ironically, although Kieran Allen presumably thought that with these last three ideas, he was illustrating the gulf between his and Aherne’s definition of socialism, what Allen missed is that Aherne himself with a lifetime of political expediency behind him would have no ideological problem with any of these suggestions if that’s what it took to stay in power.

We in the Socialist Party were not invited to give our views on this issue. We could send Aherne a copy of our pamphlet Socialist Principles Explained, though without any great optimism that it would be read. Nonetheless the affair does indicate that after almost ten successive years of Aherne and the Celtic Tiger and the complete absence of genuine alternative political analysis by the mainstream media, the issues thrown up by society continue to perplex our leaders, forcing them into opportunistic radical poses.

Kevin Cronin

The Archbishop is Right (2011)

From the July 2011 issue of the Socialist Standard

“We are being committed to radical, long-term policies for which no one voted” (The Archbishop of Canterbury Rowan Williams).

He is right. The government is implementing policies for which no one voted, or would vote for. No one voted to cut care services for the old and the disabled. No one voted to close hospital departments or to delay repairing schools or to close libraries and sports facilities or to reduce rubbish collection. Yet this is all happening as a result of what the government is doing.

It’s what governments always do when capitalism goes into one of its periodic crises. If nothing else this shows that capitalism is not a system geared to improving people’s lives. If it was, this sort of thing would never happen. As productivity went up (as it does slowly but surely each year) then society would be able to produce more and so be more able to provide better care for the elderly and better amenities for everyone.

That is what the increasing surplus of wealth over and above meeting basic needs would be used for. Under capitalism, however, it takes the form of profits, and competition between profit-seeking enterprises forces most of these to be reinvested in production rather than in improving people’s lives. Any government that tried to do this by diverting profits from capital accumulation would soon find itself in economic difficulties. Governments that have tried have been forced by capitalist economic reality to do a U-turn and give priority to “growth” as they call capital accumulation. But this growth is not a steady process but a series of fits and starts, of periods of booms ending in a crisis and a slump when amenities and living standards have to be cut as a way of creating the conditions for capital accumulation to resume.

Which is where we are now. People getting what they didn’t vote for also shows that capitalism is incompatible with democracy as an expression of “the people’s will”. This is not because there are no procedures in place for people to decide what they want, but because the way the capitalist economy works prevents some of these decisions being implemented. Capitalism is not geared to doing what people want. People want the problems they face to be solved but capitalism simply can’t do this. And no amount of making the decision-making process more formally democratic can alter this because that’s not where the problem lies. It’s that capitalism is a system geared to making profits and accumulating capital irrespective of people’s decisions and needs.

This is not happening just in Britain. In some other countries it’s even more blatant. In Iceland a law was passed during the financial bubble guaranteeing the savings of depositors, whether from Iceland or abroad, in Icelandic banks in the case of a bank failing. No one expected that banks would fail but they did. The Icelandic government didn’t have the money to hand to honour this promise so the British and Dutch governments stepped in and sent the bill to Iceland. The government there told these creditors that it would find the money by drastically worsening the life of the people in Iceland. And did so. The people of Iceland have voted twice in referendums to reject the terms of the deals. To no effect. In the end the Icelandic government will have to pay up and cannot reverse its austerity programme.

It’s the same in Ireland where the government had given a guarantee to underwrite bank losses. Fintan O’Toole made a valid point in the Irish Times (3 May) when he criticised the twisted logic used to justify making things worse for people there:

  “The basic proposition is that ‘the Irish’ borrowed loads of money and ‘the Irish’ must pay it back. Each and every citizen of a particular nationality is responsible for the misdeeds of others who hold the same nationality. National identity trumps everything else. It doesn’t matter that you didn’t borrow the money or that you had no way of knowing what decisions private banks were making. You’re Irish, the banks are Irish, so you’re all guilty. (…) so the nurse in Ennis and the factory worker in Portlaoise have to pay it back.”

The Irish government will have to honour its guarantee, and nurses and factory workers and others will have to suffer. The Irish voted to kick out the previous government but that hasn’t made any difference. The new government will have to continue doing the same, as will the new government in Portugal and as the old government in Greece has been doing. It’s what managing capitalism – whichever party or coalition of parties is in office – involves at the moment, what the Archbishop (who seems to be rather perspicacious) described in his article in the New Statesman (9 June) as “managerial politics, attempting with shrinking success to negotiate life in the shadow of big finance”. He described this as “not an attractive rallying point”, but that’s all that’s on offer and can be on offer.

In other places it’s yet worse still. The government of the Maldives in the Indian Ocean decided recently to float its currency against the dollar as “essential to cut the country’s ballooning budget deficit and stabilise the economy” (Times, 6 May). As a result “almost overnight, the price of staples such as rice and bread soared by 30 per cent”. Hence the news item’s headline: “Violence in the holiday island intensifies as food prices soar.” The opposition party there is trying to use the unrest to get back into office but even if they succeed they would still have to attempt to negotiate life in the shadow of capitalism. This is all governments everywhere can do.

People don’t take this lying down and, rightly, try to resist their lives being made worse. But if government action cannot overcome the iron laws of capitalism, neither can strikes, street demonstrations or riots. The most these can do is slow down the worsening a little but not reverse it. The cruel fact is that within the context of capitalism, as Mrs Thatcher said to the archbishop, there is no alternative. That’s the case for socialism.

Adam Buick

Irish Election result: no change (2011)

From the April 2011 issue of the Socialist Standard

  This was an election about which set of politicians was to impose austerity. The Outs got the job.

There was a text doing the rounds in Ireland a few weeks ago which tried to capture the financial issue paralysing the country. ‘American tourist goes into a hotel in a small Irish town and, requesting to view the room, leaves €100 deposit with the manager. The hotel owner runs across the road to the butchers to pay off €100 account owed, the butcher immediately goes to the pub to clear €100 bar tab, the barman goes next door to the town prostitute to pay €100 he owes her from the night before, she goes to the hotel to pay the €100 she owed in room rentals. Just as she leaves, the American tourist comes back to the reception saying he doesn’t like the room and takes his €100 back. The tourist leaves town with everyone having cleared their debts’

The story illustrates nicely what socialists have always known; that the fiscal merry-go-round of capitalism is an illusion. However it is precisely that illusion that became the centre of the debate leading up the recent general election in Ireland as the electorate became fixated by the apparent choices put before them by the main parties as to who could better manage the necessary negotiations with the EU and the IMF on the countries €85bn debt and who was best able to fill the gapping €15bn deficit in the nation’s budget.

This was the first general election since the Celtic Tiger had taken its last roar, lost all its teeth, became mangy and thin and eventually lay down and died. An economy that had enjoyed an average of 8 percent growth during the boom was found to be built on sand. After 2002 growth had been driven disproportionately by a madly over-heated property and construction sector funded by banks who believed that valuations would go up forever.

Ireland was building 75000 residential units a year, for a population of fewer than 5 million when the UK was building fewer houses than that for a population 10 times the size. We had 5-star spa Hotels opening every other day and the main cities were a forest of construction cranes. Developers were the new aristocrats, living in ostentatious luxury supported not by the proceeds of their businesses but from more and more bank borrowings.  Fianna Fail (FF), the main party of government, were complicit with their ill-conceived property tax breaks, Europe’s lowest corporation tax and a virtual absence of financial regulation. When the global banking crisis hit, the Irish house of cards fell quicker and harder than most. For the coalition government of Fianna Fail and their minority Green Party partner, most of 2010 was spent lurching from crisis to crisis whilst sorting out a bail out the EU and the IMF.

The Soldiers’ Destiny

Brian Cowan, the Taoiseach saw his ruling Fianna Fail party routed. The Party which has been in power for longer than any other since the establishment of the state saw the writing on the wall. Cowan resigned as leader in the run-up to the election and in the days that followed, his Ministers and TDs (MPs) formed a long and disreputable queue to announce that they would not be seeking re-election. They did so in the sure and certain knowledge that they were facing humiliation in the polls and so took the chance to benefit from the soon-to-be-cut severance payments to outgoing TDs, although most claimed health reasons for their decision not to stand – proof if proof was needed that this had indeed been a sick government. Their lacklustre newly-elected leader Micheal Martin bore the expression of the condemned man. His natural political arrogance however enabled him to attempt to convince the electorate that, despite the fact that he had been a long standing minister in the outgoing government, really none of the mistakes were down to him, that he had a brave new plan and the experience to deliver it. Actions though belied his words. His Party didn’t even field enough candidates to form a majority administration – a first for an outgoing governing party.

All the opposition parties could smell blood. It was clear that the parties of government were going to get a hammering. The main opposition parties Fine Gael (FG), under the leadership of Enda Kenny and the Labour Party under Eammon Gilmore knew that this was their big opportunity for power and the smaller parties such as Sein Fein could see the chance of a land grab.

The election was extraordinary if the result merely predictable. Not extraordinary in the usual boring predictable way that a disreputable government gets routed by the opposition, in the way Blair’s New Labour did to the Tories or as was done in turn to Labour last year by the shiney posh boys of Conservative/Libdems. This was different in a number of respects.

Firstly, the outgoing Fianna Fail/Green government managed to get cross-party support for the passing of a Finance Bill in the last few days of government. The need for a quickly agreed Finance Bill was a condition of the EU/IMF bailout. That the main opposition parties were complicit in letting it get passed was a result of their desperation to grab power at any cost and knowing that any delay in the passing of the bill would only delay an election being called. In doing so they enabled a Bill which ranks amongst the most vicious attack on the poor in recent memory. The cavernous budget deficit was to be brought under control to meet conditions imposed by Europe. The principle was that the gap would be closed by budget cuts and tax increases to the proportion of 60:40. The 60 percent that is to come from budget cuts will see swinging cuts to social benefits, health services, education and every conceivable social and cultural subsidy. The tax elements overwhelming hit the poor including the cynically named universal social charge set at 7 percent.

So any perspective party of government, in their indecent haste to get into power, in effect committed themselves to the fiscal and budgetary policies of the outgoing government.

Another extraordinary feature of the run up to the election was the level of public anger and disillusionment at party politics and the lack of belief that any of the parties provided a plausible alternative. This became reflected in the unprecedented number of independents who stood. Indeed, there was a point in the early days of campaigning that it even appeared that there may have been a coalition of independents into a brave new political party. That was not to be but it was to prove the strongest ever showing for independents, winning almost 3 times as many seats than in the last general election.

New faces, same policy

The lack of faith by the electorate in a plausible opposition was evidenced by the respective leaders. The most positive thing that the collective media were able to say of FG leader Enda Kenny after each of the televised leadership debates was that he hadn’t messed up. Kenny, who is now Taoiseach, is a man untroubled by deep thought. He appeals, as does his party, to rural catholic Ireland, boasting recently that he ‘ate his dinner in the middle of the day’; a nod to his farming constituents. The Labour party Leader, Eammon Gilmore, in all his pompous self importance, was a man determined to lead his party into government at any cost; principle was a small price to pay. The Labour Party knew this was their big chance but they also calculated correctly that their only real hope of achieving that, was as a minority coalition partner to the right of centre FG party. Such a potential ethical dilemma troubled them little so, not only did they facilitate the passing of the pernicious Finance Bill but it was clear that they were having coalition negotiations with FG from the earliest days of the election.

A more principled Labour Party may have seen the obvious anger and desperation of a country which might have welcomed a more radical Labour alternative. It’s not like the peril of minority coalition wasn’t obvious to them. The minority Green partner in the outgoing coalition had in recent month become a national laughing stock and got their just deserts in the election in which they lost every single seat – obliterated! And Labour must also have looked across the water at the pathetic spectacle of the Liberal Democrats writing their political obituary for a term in office.

Labour’s lack of edge was truly stunning. Gilmore’s apparent outrage at the fiscal irresponsibility of the last government has been exposed as only skin deep. Labour’s election stance was different by imperceptible degrees. They made major principles out of the smallest detail such as the timeframe over which the deficit was to be managed, the proportionality of cuts versus tax increases or the extent of public sector reform. What they demonstrated was that their intent, just like FF and FG, was to run the system in the interest of the capitalist class. No proposal on a wealth tax or an immediate cessation of the tax breaks for the wealthy. Indeed it is remarkable that not one party, let alone Labour, proposed an increase in the disproportionately low Corporation Tax in Ireland. At 12.5 percent it is significantly below the rest of Europe (UK 21-28 percent) and is the principle driver of foreign direct investment into the country. Even a small increase in that tax would make a significant contribution to the deficit but all of the parties bought into the threats of the business community of a mass exodus of overseas investment. It is an empty threat and that all of the parties bought it exposes both their spineless self interest and basic economic ignorance. The idea that Google, Intel, HP et al would unwind €100’s million of investment and infrastructure to avoid a few percent of increase is an empty threat.

Neither has either the main opposition parties proposed any risk to the International Bond Holders who funded the Irish Banks in their drunken gorge fest. When the Irish government bailed out these criminally irresponsible banks, it made sure there was fair play in protecting not just the life savings of Mr and Mrs Murphy but also the bond investments of international capital. That commitment to these wealthy hedge funds and their like is to be protected in the next government paid for by the Irish people through savage cuts.

Themselves alone

The only sizable party which tried to articulate anything resembling an alternate voice was the reformed terrorists of Sinn Fein (SF). It was however a very feeble attempt at being radical as their illiteracy in even bourgeois economics was exposed. Their leader Gerry Adams, who gave up his UK parliamentary seat to stand in the republican heartland of Co Louth, showed just how much of a one issue politician he is, as he struggled with the basics of economics, social policy and even cultural life South of the border. His incredulous continued denial of having been a former member of the IRA did not trouble his hard-line supporters who voted him in. It has however fastened his reputation as a fraud.

Five “far left” TDs were elected under the umbrella of the United Left Alliance, an election pact between Irish sections of Militant and the SWP. It will be instructive to see whether or not they use their seats to act as a megaphone for socialism or simply to press for reforms (actually, we know the answer). The others are a complete rag bag ranging from right wing euro-sceptics to traditional rural conservatives who solely deliver ‘favours’ to their constituents in the expectation of being re-elected.

The result has been quite extraordinary as shown (see chart). The effect however will prove to be very much less extraordinary. FG and Labour spent 10 days in talks agreeing a coalition and programme for government. The media have welcomed this programme uncritically ignoring the fact that it reflects for the most part the conditions as imposed by the IMF and the terms of the Finance Bill, passed by the outgoing government.

What is a cast iron certainty is the Irish working class face many years of the most severe punishment for the unbridled free market sins of capitalism. What is also certain is that the new government will pay the price of taking on the job as whipping boy for the system.

Brian Montague

The Irish Euro Referendum (2012)

From the July 2012 issue of the Socialist Standard

Voting one way or the other was not going to change the reality that capitalism in a slump means extra austerity.

On the 31st May, the electorate of the Republic of Ireland went to the polls to decide on the latest European Union fiscal treaty. The referendum was passed with 60 percent of voters in favour and 40 percent opposed. The Treaty (known as the Stability treaty to its supporters and referred to as the Austerity treaty by opponents) is part of the attempt by Europe to contain the turbulence that has engulfed Euro-zone countries for the past three years. In broad terms signing up to the pact, commits the governments of the signatory countries to limit annual deficits and over the economic cycle to maintain a balanced budget. In return for committing to this, the signatory countries are promised access to the EU’s new assistance fund, the European Stability Mechanism (ESM) if needed in the event that countries cannot raise funds from the capital markets. Most countries within the European Union, both within and outside the Euro-zone, have indicated a willingness to ratify the Treaty and it is expected to come into force early in 2013.

Yes and No

Regarding the campaign that preceded the vote in Ireland, the sides lined up in a predictable fashion. Advocating a Yes were the government (a coalition of the centre-right Fine Gael party and centre-left Labour Party) together with Fianna Fail (long a dominant force in Irish politics but currently much diminished due to their abject handling of the economic crisis that overwhelmed Ireland in 2009) and the majority of big business and farming interests. Conventionally these are regarded as the establishment centre ground.

The opposition consisted of Euro-sceptics from the left and right and single issue political mavericks who customarily appear on these occasions. Leftist opposition primarily consisted of Sinn Fein augmented by the Socialist Party, Socialist Workers Party, Communist Party of Ireland and People before Profit (an organisation that could be characterised as a front for the two ‘Socialist’groups). The rightist component of the opposition in the main came from Declan Ganley and his mysterious Libertas organisation (having minimal membership or popular participation in Ireland and yet amazingly well funded) together with some non-party members of the Irish Parliament and further reinforced with certain publicity-seeking economic commentators. As a whole the trade union movement adopted a position of neutrality though individual union leaders could be found on either side.

The whole context of the debate was framed by the fact that Ireland is currently in receipt of a large loan from the International Monetary Fund and the EU to cover both the government deficit and the huge losses sustained by private Irish Banks due to the property boom (formerly called the Celtic Tiger) that took place in Ireland prior to 2008. The fact that the Irish government (popularly interpreted as the Irish taxpayer/citizen) has had to pick up the tab for 40 billion euros of private debt has proved especially controversial and naturally has caused genuine and understandable bitterness across whole swathes of Irish society. While the initial decision to cover the losses on these private speculative loans was taken by the Irish government, to prop up the banking sector, the continuance of the banking guarantee has been insisted upon by the European Union as a condition of the bail out. Over the past three years, this has been the main bone of contention between the government of the day and the opposition; the former regarding it as unpalatable but unavoidable while the latter demand a tougher stance to be taken on the issue with Europe.

For and Against

Given the major uncertainty that now exists about the medium term future of the European economy and particularly of the fate of the Euro itself, a trump card for the Yes side was the fact that Ireland may require a second bail-out when the current IMF/EU assistance ends next year and the thus need to ensure access to the EMU fund in that eventuality by backing the Treaty. This almost certainly swayed people who depend directly on the state for their income such as pensioners, public sector workers and those in receipt of social welfare payments. The government also kept repeating the point that passing the Treaty would instil confidence in Ireland from international investors and the subsequent inflow of funds would promote job creation and help the economy to recover.

The No side’s major argument was that passing the Treaty would copper-fasten a monetarist economic strategy and prohibit future governments from stimulating the economy with Keynesian type initiatives. They declared it would result in many years of unbroken austerity to come with inevitable cuts to social services. A more nationalistic message was also put forward accusing the government of being too timid in defending Ireland’s interests and too willing to fall into line with the wishes of the large powers in the EU (primarily meaning Germany) especially in readily subsuming the massive private bank debt into sovereign debt in order to help stabilise the Euro currency.

While the government won the debate with its clear-cut electoral victory, it derived very little political capital from its success as it just ensures continuance of the status quo. A defeat would have damaged its standing, both nationally and internationally so in that sense the referendum was always going to be thankless for them. It’s generally accepted the big winners were Sinn Fein as the lead mainstream organisation on the No side. Irish electoral rules demand equal access to be given to both sides in any referendum on the constitution irrespective of the relative size of either side. Hence Sinn Fein received huge publicity and air time to expound their ideas and the campaign marked a further stage on their long and calculated transition from being the front organisation and principal apologist for an entirely undemocratic terrorist group (Provisional IRA) to becoming an acceptable alternative to the existing political options. During the campaign their spokespeople blended vaguely radical sentiments about taking a tough line with Bankers (both Irish and European) to defend Irish interests while assuring the electorate of their commitment to financial discipline. From that perspective, they are part of a long history of parties who have moved from a nominal, if unconvincing, opposition to capitalism to outright acceptance of it as the only means of ordering society.

Left-wing advice

The debate associated with the campaign highlighted yet again the fact that many movements claiming to be Labour or Socialist or Left Wing ultimately are only offering a re-ordering of capitalism. The Communist Part of Ireland advocated a No vote and suggested Ireland should borrow money from sovereign wealth funds from countries such as Russia, China, Norway and various Middle East funds as an alternative to seeking to obtain loans from the markets or the European Stability Mechanism on the basis that better terms would be available. Such financial advice to the government of the day is a curious activity for a group with the name of ‘Communist’in its title. Kieran Allen a leading member of People Before Profit and the Socialist Workers Party also attacked the Treaty from a financial standpoint on the basis that it was a ‘bad deal’for Ireland and that its costs would exceed its benefits. He may of course be proved correct but again this viewpoint is devoid of socialist content. He also indulged in the common electoral practise of scaring pensioners about the entitlements they might lose if the Treaty was passed which of course is the type of tactic that all political parties engage in as part of the shoddy custom of drumming up votes from sectors of the electorate. Possibly the most poignant aspect to all of this is that May 2012 marked the 100th anniversary of the formation of the Irish Labour Party in a congress in Clonmel in 1912. One of the resolutions at that meeting committed the new party to the notion ‘that labour unrest can only be ended by the abolition of the capitalist system of wealth production with its inherent injustice and poverty’. While it is not news that such revolutionary rhetoric has long been discarded, it does highlight the fruitless path that these social-democratic parties have followed whereby they are now further away from their original goals than when they first started out.

On one level from a socialist view, the campaign and its result is entirely devoid of interest. There has been a boom and now we have the bust; this is an inevitable part of the capitalist system. Voting one way or the other was not going to change this reality and studies revealed that this was tacitly accepted by the majority of the electorate. The referendum was an example of the sham that is democracy under capitalism; as members of whatever electorate we happen to belong to we are constantly being cajoled to take part in the democratic process when it’s clear that voting will not make any meaningful difference to our future. For the case in point, the prospects for Ireland’s economy and the future of the Euro will not be decided by the result of the Irish referendum but will depend more strongly on economic developments in Spain and the political situation in Greece. Fundamentally as regards the common currency it will hinge on the willingness of German capitalism to persevere with the Euro by balancing the great benefits it bestows to its powerful export sector against the costs it imposes on the wider economy and its ability to strike a bargain with France on the issue.

Kevin Cronin

Ireland Under Capitalism (2016)

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.

Pik Smeet

Ireland in recession (2010)

From the December 2010 issue of the Socialist Standard

The only flourishing industry in Ireland now seems to be economic punditry.

A fellow socialist recently sent me an economic article critiquing the contrasting financial approaches of the various governments in Europe to the current crisis. It wasn’t the first article that I’ve read on this subject! Ever since the storm broke in autumn 2008, the media in Ireland has filled the airwaves/newspaper pages with an endless procession of economists commenting on various aspects of Ireland’s severe economic situation and either second guessing the government’s decisions on various policy matters or attempting to persuade the people that they have much cleverer solutions to ‘our’ problems. Part of my weariness with all this analysis stems from the fact that as a socialist I know booms and slumps are an inevitable part of the economic operation of capitalism and there was clearly an unsustainable boom occurring in Ireland over the years 2004 to 2008. So now we have the consequent contraction which is just going to have to be endured as long as capitalism governs our lives.

In fact, the only flourishing industry in Ireland now seems to be economic punditry and whether you open a magazine, turn on the TV, listen to the radio or surf the net for news, you won’t have long to wait until you encounter the predictions of economists mainly drawn from either academia or the financial institutions or on some rare occasions, the trade unions. Because Ireland’s situation is deemed so critical, we even have Nobel prize winning economists from the United States commenting on us, while just a few years ago we wouldn’t have merited any attention from them as they’d probably have been pre-occupied with China.

In fact one popular media economist, David McWilliams, currently has a travelling roadshow where he tours the country, filling halls and theatres with his views. As the publicity blurb for his ridiculous ‘Outsiders’ tour goes “McWilliams believes Ireland’s political and social divide is not so much about rich and poor, young and old, urban and rural, but about Insiders and Outsiders”. This strange mixture of showbiz and economics has climaxed in a ‘Kilkenomics’ festival held in Kilkenny in late November where stand up comedy will be interspersed with economic analysis. On its website one of the topics listed for discussion is to be ’23 Things they don’t tell you about Capitalism’. As the man said, you couldn’t make it up!

What’s tiresome about all the contributors to this public debate, is that in spite of furious argument over some superficial points, essentially they’re all singing from the same hymn sheet. Corrective action is needed to deal with Ireland’s soaring debt and it’s only the time scale (whether it should be over 4 or 6 years) and the areas of public spending to be excluded from cuts (such as old age pension) that are in contention. It is now anticipated that a general election is only months away and it’s noticeable that the main opposition parties have moderated their criticism of the government’s budget approach; they know full well that room for manoeuvre is extremely limited and if elected (which seems very probable at the moment) they will be implementing the hair-shirt budgets over the next four years.

To give some background, it now seems accepted that whatever reality lay behind the Celtic Tiger had by about 2003/2004 been replaced by an old-fashioned, foundation-less credit boom based on the expectation that property (both residential and commercial) was destined to appreciate at a significant level beyond any other type of investment. This led to a frenzy of construction, some clearly insane even to non-socialists, where perfectly functioning warehouses, hotels and office blocks were demolished so their footprint could be used for even more profitable apartment blocks and fancier hotels.

By 2006 the unsustainability of what was happening began to be widely commented upon in everyday life though this didn’t seem to flag any warning bells with Brian Cowan, the then minister of finance, subsequently promoted to Taoiseach (Prime Minister). The crash has highlighted a structural weakness in Irish politics whereby that opaque interaction between the politicians and leading business people (particularly property developers) masked the rationale for economic decisions. By 2008, a huge proportion of Irish government revenue was attributable, directly or indirectly, to the construction sector in terms of which has now all but vanished. This has left an almost twenty billion euro gap between the government’s annual income and expenditure. The problem has been exacerbated by the government’s initial decision to give a very wide ranging guarantee to all the main banks’ creditors. As the scale of loses (fifty billion and counting) has turned out to be much greater than anticipated, this has increased Ireland’s need to borrow. Whether the government naively underestimated the risks from this banking strategy or was responding to the pressing needs of some well-connected business people has been hotly debated since.

The predominant response to date in Ireland has been a fearful resignation rather than any outright ‘resistance’ as has intermittently been seen in the strikes and demonstrations of France and Greece. Partly this is due to an apathy to the potential power of real politics, that has been engendered amongst great swathes of the electorate, resulting from so many broken promises by reformist parties over the years. Unemployment has risen sharply and emigration as a social phenomenon has returned. A reduction in living standards is seen as inevitable in the medium term. There has been a deliberate divide and rule strategy employed by the ruling class with a vociferous campaign, championed by the media outlets controlled by the media tycoons Tony O’Reilly and Denis O’Brien, waged against public sector worker to separate them from private sector employees.

That is not to say that people are not angry about the situation and the heavy penalties and burdens they are now expected to bear as a result of reckless and profligate activities of bankers and developers. What is perceived to be most galling is how when the senior executives in many financial institutions knew that the balloon was going up, they negotiated or arranged legally watertight generous exit packages for themselves, without a care for the consequences to the mass of the people. It certainly has raised questions about the ‘fairness’ of the system which is a clearly welcome development for socialists. Of course some of the discontent is mis-directed, with talk of betrayal by the government, when the recession is an inevitable part of the capitalist cycle albeit in this exacerbated by the greed and incompetence of the local ruling class.

The power of capitalism over people has never been more nakedly exposed. The government’s daily mantra is the need to restore confidence in Ireland’s position to ‘the market’ when we know ‘the market’ is fundamentally that very small number of people who control multi-billion financial investment decisions. So each government action is quantified as to whether it has reassured the markets (which we’re constantly told is a good thing) or has caused uncertainty (‘a very bad thing’) as the more uncertain the markets are, the greater the interest rate Ireland must pay on the loans it needs to raise. The fact that it’s naturally in the market’s interest to either doubt, or at least feign doubt, about Ireland’s economic outlook in order to justify higher loan charges is never commented upon which shows the whole deal is really a gigantic scam. Perceived wisdom is that it should be easier to make socialists in a recession when the shortcomings of capitalism are more evident. This capitalist recession will eventually end and the Irish economy at some time in the future will inevitably return to growth. If there are more socialists in Ireland at that future time, then at least one positive outcome will have resulted from this sorry and preventable mess.

Kevin Cronin

Cooking the Books: Housing madness (2010)

The Cooking the Books column from the July 2010 issue of the Socialist Standard

A photo of a row of empty newly-built houses in Dublin was featured on page 4 of the London Times’s Bricks & Mortar supplement of 14 May. According to the accompanying article, “a recent estimate suggested that there were 345,000 empty homes in Ireland”. Why? Is it because there are no people living in substandard housing in Ireland? Or because the housing problem has been solved there? Neither. It’s because there’s no market – no paying demand – for them. The people who need better housing or to move house cannot afford to pay. It’s as simple as that.

This situation arose in classic capitalist fashion. Houses like everything else under capitalism are produced to be sold with a view to profit. They are not produced simply for people to live in. A few years ago, when the capitalist economy in Ireland was expanding, there was a strong demand for new houses, which speculative builders in Ireland thought was going to continue. In any event, they felt that they rather than their rivals would benefit from the demand for houses. So they arranged for more to be built:

“This nation of builders became a nation of developers. Massive tax incentives encouraged people to invest. You’d have been a fool not to. Buy one day for €100,000 (£86,750), sell a week later for €200,000. Nobody asked if Ireland needed these buildings or whether they were being built in the right places.”

But then came the slump of 2008 (itself sparked off by overproduction of houses in relation to paying demand in the US) and the market for houses collapsed. “Too many” had been built:

“Developers can’t get rid of them, nor can some pay off the bank loans they used to build them. The banks can’t acquire them because they are worth so much less than their loans.”

Meanwhile, the other side of the Irish Sea, banks and building societies have a different problem but still arising from the fact that houses are produced for sale and not directly for people to live in. They can’t get the money to re-lend at a rate of interest that those who want to buy a house can afford.
Banks and building societies are intermediary financial institutions which make their profits by borrowing at one rate of interest and re-lending it at a higher one. They borrow money from two sources: the money market (“wholesale”) and individual depositors (“retail”).

According to the Financial Times (22/23 May) the Council of Mortgage Lenders has

“…warned that its own members – who make roughly 94 per cent of all the mortgage loans in Britain – are facing higher costs as they compete for retail deposits to replace maturing wholesale loans. This is likely to mean that rates on mortgages may have to rise even if the Bank rate remains on hold.”

The “higher costs” are the increased rate of interest they will have to offer depositors to get these to lend them money, but, if they are to make the same rate of profit, this will have to be passed on to those to whom they lend money to buy a house. But, as houses buyers may not be able to afford the higher interest, mortgage lenders are not prepared to give them loans as they wouldn’t make enough profit, with the result that, in the words of the article’s headline, the “housing market recovery shows signs of stalling”. A neat illustration of how banks cannot just create the money they lend. A neat illustration too of how capitalism is not a society geared to meeting needs.