Tuesday, March 17, 2009


By P. Bowman and Seamus Loughlin

On February 21 some 200,000 workers and their families took to the streets in Dublin, to demonstrate their opposition to the government's decision to impose a pension levy (€ 2 billion) on 300,000 Public sector workers. The huge success of the march however, resulted from various factors such as the deepening economic crisis, rising unemployment, the ditching of the social contract by the employers and the government and savage government budget cuts. But what most concerns the majority of workers is that the situation is likely to worsen.

Between 2002 and 2007 Irish GDP grew at an average of 5.6 percent. In 2008 the economy contracted by over 2%. Forecasts for 2009 show a 6% contraction in GDP. The effect on the unemployment rate has been dramatic. Two years ago there were about 150,000 unemployed in Ireland. Last February the figure reached 354,000, 10.4 per cent of the population. The government is expecting to reach the end of 2009 with 450,000 people unemployed, over 14 per cent.

The decline in economic activity has affected the revenues of the state. In July last year the government decided to cut the state budget by 1.4 billion euros. In October, they introduced a new cut of 2 billion, with a further cut of 2 billion in February. These cuts will affect education, health and social benefits. The government has also announced that taxes will rise, but not for corporations, which at 12.5 per cent are the lowest corporate taxes in the European Union. However the impact of the crisis is going to be brutal on the pockets of workers. In the public sector, for example, the teaching unions have estimated that workers will see their wages cut by 14 per cent.

Government and employers have also unilaterally cancelled the agreement that has regulated social relations in Ireland since 1987 and was renewed every three years. Last year, employers, government and unions agreed on wage increases of 6 per cent in 21 months to apply after a 3 months wage freeze in the private sector and a nine month freeze in the public sector. In practice the covenant implied a drop in real wages, because they fixed the increase below the rate of inflation. But the workers won’t even get that now. Various sections of the employers have even called for the removal of the minimum wage.

The unions, through ICTU (Irish Congress of Trade Unions), are now demanding a national ‘solidarity pact’ in which all social sectors will contribute according to their abilities. The trade unions have stated that the government and employers are trying to escape the crisis and restore the rate of profit at the expense of sacrificing the interests of the workers. But it is a completely utopian to attempt to resurrect a ‘social partnership’ in times of crisis. Even during the economic boom between 1995 and 2007 the workers didn’t gain from ‘social partnership’. The share of wages in total national wealth, as pointed out in a previous post, went down from 71.2 per cent during the period 1980-1990, to 54 per cent in the period 2001-2007. This, coupled with high economic growth, gives an idea of the huge transfer of wealth into the pockets of the capitalists in recent decades. That is what the ‘social partnership’ has delivered. But in times of crisis there are not even crumbs for the workers. There is no room for reforms. The crisis has buried reformism, which has been essentially on its last legs ever since the crisis of the 70s.

However, in order to compel government and bosses to return to negotiations, the unions have threatened to mobilise the workers. After nearly two decades of relative peace between the social classes (‘social partnership’, for example, stipulated that workers could not go on strike to demand wage increases), the situation has become explosive. ICTU has called upon all its affiliated unions in the public sector and private, to organize simultaneous strikes on March 30. That would in reality be a 24 hour general strike. But the trade union leaders are still confident that the government is willing to negotiate and the strike can be avoided. The Labour Party leader, Eamon Gilmore, has even repeatedly asked the workers not to strike because they could worsen the economic situation and the credibility of the Irish economy in international markets. The working class lacks leadership.

But it is not so easy to contain the mood of the workers. In education, some 60,000 workers have voted to strike as have the transport workers. On February 26 the lower paid sections of the civil and public servants struck with a 100% turn out on the day. They have decided to join the strike from March 30. Across the country, unions are organising votes for a mandate to strike.

The most significant in recent months may have been the occupation of workers by Waterford Crystal. This company at one point had a workforce of over 3,000 workers. In recent years the workforce was reduced to less than a thousand, and in January the owners announced the closure of the company. The workers, on their own initiative, decided to occupy it. A section of workers have demanded its nationalisation. UNITE, the union representing 90 per cent of the workers; however, didn’t nail their colours to the mast of nationalisation. After more than a month of negotiations a U.S. buyer emerged. But they are likely to dismiss half of the workforce. The workers are continuing with their struggle.

The class struggle, therefore, is growing in Ireland and the union leaders are under pressure. In this situation, particularly if the government refuses to negotiate, the leaders may be forced to go further than they wanted. For now they are trying to reach a compromise. The government, moreover, would only negotiate with the unions if the strike threatens to run out of their control. They are currently known to have consulted the main opposition parties, Fine Gael and Labour Party in respect of the forthcoming emergency budget.

The most important task for socialists and Marxists of Ireland is to organise and intervene within the labour movement and the working class. We must raise our demands to extend and arm the movement with the ideas of Marxism. The program of nationalisation and workers' control of banks and key sectors of the economy must be integrated with the fight against attacks on workers by the government and employers.

Friday, March 13, 2009





In a closed-door speech to Dublin Chamber of Commerce last month, Taoiseach, Brian “Biffo” Cowen, waxed lyrical on his “Save the Nation” plans but, unfortunately, the whole thing is misconceived, misguided and totally useless in our current situation. A situation for which Cowen, as Minister for Finance for years was a principal contributor to with his facilitation of rampant property speculation, no tax on the wealthy and total reliance on foreign direct investment and EU subsidy policies to shore up the fraudulent “Celtic Tiger” economy. Cowen and his cronies swallowed whole the American neo-liberal, anti-regulation, market fetishist, destructive philosophy and imposed it here. They rolled over in the Galway Tent to all the gung-ho developers, privateers and three-card-trick men of the so-called “Celtic Tiger” while all the time it was becoming clear that the entire international economy was running not on values created in production, but, on the odor of paper.Piles of paper. Bundles of mortgages and mysterious “securities” and “derivatives” of unknown origin and value. Paper that stated its own worth and signed by some hand no one could quite identify though if looked at closely it might have looked like Lehman Bros or J.P. Morgan Chase.

Now, like Captain Ahab, on the “Pequod” in “Moby Dick”, Biffo Cowen has conjured up a fantasy, a White Whale, which if we follow him in chasing after it we will achieve salvation. Cowen’s proposals are based not on the actual needs of the people for productive employment, decent public services in Health, Welfare, Education, and Utilities but, on a desperate and ultimately futile attempt to shore up a system which has actually collapsed. The US Dollar, which is the world’s reserve currency, is failing in its role. The present financial crisis which has its roots in Wall Street and at the US Federal Reserve, has demonstrated that the dollar must be replaced as the world's "reserve currency" and that the US must be deposed as the de facto regulator of the global economic system. Leadership implies responsibility and the US must be held to account for its failings. The deliberate reduction of the value of the dollar is, in effect, a tax on those countries who have massive reserves of US currency in their central banks. This US scam must be ended immediately..The international system can be re-stabilised on the basis of the Euro, the Russian Rouble and the Chinese Yuan. The sooner practical measures for achieving this are put in place the better.

The G20 Economic Summit, which will take place in London 02 April, is supposed to tackle these issues but, given past evidence, Washington is still trying to retain control of the financial empire it considers is its sole right, regardless of the costs to the rest of the world. Therefore, there is no likelihood of any comprehensive agreement which would ameliorate the current crisis.The EU must not surrender to Washington’s demands. Now more than ever, Europe’s interests are aligned with our neighbours on the Eurasian land-mass; Russia, China and India. This combination, not the USA, holds the future of world civilisation in its grasp. The greatest concentration of land, productive resources, labour, science, technology on Earth is here, on our doorstep. Yet, the European political elite are still bound up with last-century Cold War attitudes and beliefs which have served mostly the political and economic interests of the USA and its Corporate Empires.

Meanwhile back at the Ranch……

Cowen and Co. are deliberately delaying nationalisation of the Banks because they know that nationalisation would lead to the land and property assets on which the credit bubble was based would revert to the State. The Government has inspired deliberate and vicious attacks on public service workers such as the attack on public service workers in the Electricity Supply Board getting an agreed pay increase under the terms of the Partnership Agreement for 2009. This was agreed by the Trade Unions (ICTU) with the Government and IBEC. Profitable companies would pay the increases but companies not in profit could claim inability to pay and defer any increases. Now IBEC and others have attacked the ESB decision although they agreed the terms only months ago. In the Seanad, the charge was led by poseur-in-chief Senator Shane Ross, a well known gambler on the stock exchange, who, from his €60,000 a year perch condemned the ESB for paying out the increase.

The stupidity of these people and the “economists” whose nonsense they parrot are one of the reasons why we are in the mess we are in currently. As seen in previous crises going back to the 1929 Crash, wage cuts do not lead to higher output or increased demand; lower wages may lead to lower prices because companies are under severe competitive pressure. As a result, buyers will expect further price reductions and thus postpone their purchases, reducing aggregate demand and therefore employment. To the extent that wage cuts do not translate into price cuts of the same magnitude, however, they always lead to lower real wages, lowering the purchasing power of working class households. The effect is the same either way: decreases in aggregate demand and employment can turn a cyclical recession into a depression with devastating social consequences, which is what happened in the 1930’s and was ended, not by Roosevelt’s ‘New Deal’ agenda but the massive destruction of life and property of World War 2. This is why the Government’s policy, following only the IBEC employer group demands, will do nothing to ease the present crisis but, more likely, make it much worse.The Government now plans another emergency budget which will gouge working peoples’ incomes even further. Workers and their Unions must prepare for stiff and resolute resistance to these schemes of the Celtic Rats who have led this country into the mire. The rich must pay for their follies and irresponsibilities whether they like it or not.

Arise the New!

The scale of the crisis today provides an opportunity for a new round of radical politics that puts forward onto the political agenda a systemic alternative to capitalism. What is needed is not just a reining in of the delinquent financial institutions which have brought about the crisis, but a fundamental re-structuring of how credit is created and used in a new type of economic formation suitable for the 21st Century. What is, in fact, needed is to turn the whole banking system into a public utility so that the distribution of credit and capital would be undertaken in accordance with democratically established priorities rather than short term profit.

It hard to see how anyone can be serious about converting our economy to green priorities without understanding that we need a democratic means of planning through new kinds of public institutions that would enable us to take collective decisions about allocating resources for what we produce and how and where we produce the things we need to sustain our lives and our relationship to the environment. The reasons trading in carbon offsets as a solution to the climate crisis is a dead end is shown in this financial crisis. It involves depending on the kinds of derivatives market that are so volatile and are so inherently open to financial manipulation and to financial crashes. The Economy must change from being an engine of blind consumerism and profit taking and enrichment of a tiny minority of the world’s population, to being a democratically controlled tool for the betterment of our lives individually and the progress of human civilisation as a whole. In terms of immediate reforms, in a situation where the only safe debt is public debt, this should start with demands for massive programs to provide for collective services and infrastructures that not only compensate for those that have been wrecked by privatisation but, meet new definitions of basic human needs and come to terms with today's urgent ecological challenges.

Such reforms would soon come up against the limits posed by the reproduction of capitalism. As in previous history of social and economic transformation, the old regimes will resist to the bitter end the loss of their positions of wealth, power and influence This is why it is absolutely necessary to demand not merely the regulation of finance but the transformation and democratisation of the whole system. This would have to involve not only capital controls in relation to international finance but also controls over domestic investment, since the point of taking control over finance is to transform the uses to which it is now put. And it would also require much more than this in terms of the democratisation of both the broader economy and the state.

Of course, without rebuilding popular class forces through strengthening and expanding the political parties which, broadly, represent working people, this will fall on barren ground. Essential to this rebuilding is to get people to think inspirationally again. However deep the crisis, however confused and demoralised the financial elite inside and outside the state, and however widespread the popular outrage against them, this will require hard and committed work by a great many activists. We will need to put our minds to the serious questions of what the new institutions of democratic public finance would look like and what kinds of movements would be needed to build them.

FearFeasa Mac Léinn

Áth Cliath/DUBLIN, 13 Marta/March 2009.

Watch video of ICTU mass protest here: