Ireland and Economic Depression

Ireland and Economic Depression
by Paddy Hackett

March 5th 2009


The world capitalist economy has plunged into a sustained economic depression. The signs are that this depression shall be deep and prolonged. The principal way by which capitalism can come out of the depression is by reducing both the living standards and employment conditions of the working class. The only other solution is social revolution involving the seizure of power by the working class from the capitalist class necessitating the establishment of a world communist federation. Because of the peculiarities of the Irish situation: booms powered by bubbles and a Fianna Fail dominated government that instead of storing up its surplus revenue, in anticipation of future contingencies, largely squandered it. These funds were largely used to bribe the electorate into voting the Fianna Fail party back into power. It was also used to support its capitalist friends such as Irish property developers and bankers.

Since the outset of the depression the same Irish government has been engaged in a sustained attack on the working class. It endeavours to achieve this by splitting the working class --pitting worker against worker. By maximising the fragmentation of the working class it is rendered more vulnerable to a crushing defeat. Immigrant workers are split from indigenous workers; public workers from private workers; female workers from male workers; unskilled workers from skilled workers etc. In its current attack the government has singled out the public sector workers. To achieve a cutback in the income of these workers it has actively led a sustained campaign against them entailing the polarisation of pubic and private worker. This is the basis from which it has imposed a substantial pension levy on the public worker. Success here will render it easier for the state to reinforce this cutback with follow up cutbacks in the incomes of the entire working class. Its declared intention of widening and further increasing income tax within the next month is irrefutable evidence of this. The government also hopes to continue the reorganisation of the public sector work force. "An Bord Snip" with its mandate to focus on slashing employee numbers and spending within the public service forms part of this plan. The consequent reorganisation and diminution of the public service will lead to a weaker and harder pressed workforce. It is hoped to ultimately reduce the public service worker more or less to the same condition as that of the average factory or shop worker. Then capitalism will have a cheaper and more docile workforce. The European bourgeoisie is watching this conflict with keen interest. Cowan will be Europe’s new hero should he succeed in defeating the public sector workers and indeed the working class in Ireland as a whole. His success may provide them with encouragement to attempt to impose similar conditions on their own public sector. The present struggle in Ireland is not just a local matter. It also has a European dimension that may influence events in the European Union.

In view of this it is imperative that the working class meet this capitalist onslaught, led by its state, with stiff resistance and the correct politics. Working class action must involve strikes culminating in the general strike together with the setting up of workers' councils for the organisation and administration of economic, social and political life. In the struggle the conservative unions must be replaced by communist unions. In connection with this communists must struggle to set up workplace committees as a means of organising against the bosses and the leadership of the conservative trade unions. In solidarity with the working class in Ireland the European working class must strenuously resist their own ruling class too in the struggle for power.

The government has been actively encouraging the mass immigration of workers into the Irish Republic on an unprecedented scale. This is but a further way of promoting more division within the working class. Immigration is a social engineering device intended to drive down the price of labour power through competition. It is also intended to hinder the prospects of the working class in Ireland evolving into a unified revolutionary class force. The working class based in Ireland must overcome this division by endeavouring to create unity among migrant and indigenous sections of the working class in Ireland on a principled revolutionary basis.

None of the political elements represented in the Oireachtas can offer a solution other than essentially the same solution as that of the Fianna Fail Party. They are each bourgeois in character including the Labour Party, the Green Party and Sinn Fein. They simply attempt to dress the same solution up in different clothes. They all actively support a solution to the capitalist crisis at the expense of the working class. The leader of the Labour Party, Eamon Gilmore, has expressed his opposition to strike action and does not reject a pension levy in principle. Neither is he, in principle, against increased taxation being imposed on the working class. He merely calls for “fairness” in taxation. The Labour Party and Fine Gael claim that the cutbacks in the living standards of the working class are necessary and correct. Their difficulty with Fianna Fail is their alleged lack of fairness together with the unscrupulous way in which they are imposed. The opposition of Fine Gael and Labour hinges on matters of ethics. Fine Gael and Labour like to present themselves as corruption free in contrast to Fianna Fail. They oppose the form as opposed to the substance of Fianna Fail's politics. They thereby present a false opposition since ethically there can be no essential difference between the parties. If Fine Gael and Labour were in power as much as Fianna Fail they would exude just as strong a smell as the latter. Again this is a rather derivative difference of no real significance. In effect the main party in power and the opposition are similar. Consequently the Dail opposition concentrates its opposition largely around matters of corruption, ethics and competence. These constitute matters of secondary importance that obstruct the healthy development of class politics.

The voluntary reduction of salaries of high profile figures from the business and media world is chiefly a ploy designed to exert further pressure on the working class to accept falling living standards.

The growing army of the unemployed means that the production of surplus value, total profits, has diminished. This means that fewer resources exist from which to pay for state expenditure. This forces the state to cut spending, increase taxes and borrowing. Borrowing is a form of future taxation with a difference. Interest must be paid which amounts to an addition to future taxation. This constitutes a further deduction from total profits which further adversely affects investment conditions. This tends to bring about a downwards spiral. Consequently the Irish economy is forced to further contract in order to reproduce the conditions for recovery. Spending cuts, taxation and borrowing must be further increased.

The present depression is a result of the bourgeoisie's refusal to let the economic system follow its "natural" cyclical downswing whereby capitalism cleanses itself of less profitable forms of capital. This leads to a restoration of profitability and greater sustained economic activity. Instead the capitalist class through the medium of its state modified the downswings through counter-cyclical interventionist activity. The ruling class fear a generalised depression because its destabilising consequences may lead to revolution. In general the more the cyclical behaviour of capitalism is modified and prevented from completing its "natural" cycle the greater, more intense the crisis. The evidence suggests that the capitalist social system has plunged into depression. No amount of state intervention can prevent it from assuming an acute form this time round. We have now entered a new historical epoch. Politics can never be the same again. Under these new conditions of sustained and deep stagnation the class struggle sharpens. Consequently capitalism's obsolescent character becomes increasingly visible and thereby the need to abolish it.

At present the leadership of the working class (trade union and political leadership) has been offering solutions intended to rescue capitalism from its demise. Capitalism can only be rescued at the expense of the working class. There exist no significant political forces advocating a solution necessitating the transcendence of capitalism. Communists must endeavour to create a communist current within the working class. This can begin by organising circles of communist intellectuals. Such a communist intelligentsia conducts an intellectual struggle to propagate communist doctrine. As this intelligentsia develops and spreads its influence it has the basis for linking into the more advanced sections of the working class to form a communist strand within the working class. This is the basis on which a revolutionary communist movement can be built.

Under the present critical conditions a communist movement would draw up an action plan as the basis for struggle against this sustained attack on the working class.

Paddy Hackett