Wednesday, October 6, 2010

Where we are

The Irish political landscape is dominated by three political parties. Of the three political parties only the Labour party purports to anything approaching an ideological stance and this is quite weak and malleable. Instead the political establishment functions on a sort of patronage system. Politicians function essentially as technocrats, attempting to maximise their outcomes in elections. In practice this comes down to a simple calculation: who is capable of giving the most support or trouble and what do they want. The end outcome of this is that the largest monetary interests can quickly dominate political decisions.

The current economic situation in Ireland is bleak. Between 80 and 90 billion euro are expected to be poured into a failing banking sector. This sector which experienced a huge boom during the years of the Celtic Tiger, now has its losses being covered by public funds. Due to this huge transfer of wealth from public to private hands, the Irish Republic's credit rating was downgraded from AA to AA- reflecting the fear of even greater spending on the banks.

The crisis results from a chain of events going back to the early 1990s. During this period the Irish government took a policy of creating conditions extremely favourable to foreign direct investment. This included extremely low corporate taxes and very lax financial regulations. This policy had the intended affect of increasing foreign direct investment, especially from US and UK companies.

By the late 1990s the success of this policy had caused immigration to climb and emigration to decline to the extent that the net population was increasing [1]. At the same time, land in Ireland was monopolised by a fairly small number of wealthy landowners and this conspired with rising demand to produce a housing price boom. While some measures were taken in terms of tax restructuring, the political establishment, being beholden to the immediate economic interests of their patrons, did little to change the course. The ability to allocate land development by County Councillors became a valuable asset and helped reinforce the interest in political sponsorship by developers and bankers.

By 2001 the Foreign Direct Investment cooled as a result of the Dotcom crash [2] and by 2005 was strongly negative. The property market became the most desirable place to invest funds and not just for the extremely wealthy. The professional classes and those who made significant enough incomes to obtain bank loans also attempted to cash in on the fantastic rise in property prices. The fact that the wealthy, the intelligentsia and the professionals had, themselves, largely become invested in property meant that all parties had an interest in a rise in property price value.

Of course it is now well known that the meteoric rise in property prices was a bubble, leading to the current situation where there are over 300,000 [3] unoccupied houses and where the housing market has collapsed with prices falling by about 40% with no sign of abating. Of course, other industries of importance exist in Ireland outside of property: everything from medical devices and pharmaceuticals to airlines. Some of the very richest have even managed to maintain their fortunes by having diverse assets in countries less affected by the decline. However, the richest 250 in Ireland lost €43.7 billion to make their total worth approximately €41.7 billion [4]. This is, by any measure, a rather staggering loss.

The wealthiest have quite predictably focused on retaining the value that they have left. The National Assets Management Association (NAMA) is part of this strategy, as it not only helps failing banks to move rapidly falling assets off the books, it also avoids a glut of property entering the market all at once as the result of bankrupt banks. Raising the funds necessary for the bank bailouts requires massive cuts to the public budget which would attack services, wages and jobs. The programme has been widely sold as being a necessary social cost with such slogans as "we are all in this together".

The real opportunities for the rich in Ireland to jump-start the economy are, in fact, quite limited. Talks of Keynesian programmes, regardless of whether they are desirable, are completely infeasible. The domestic economy is simply too small. The banks are beholden to foreign bond investors and there is no local currency which can be devalued to fund such an endeavour. This means that the only feasible line of action is falling in line with international investors and the European banks, specifically the Germans. Practically this means a programme of austerity. With the continuing need for bank bailouts, the realisation that the property market has not ceased to sink and the ever increasing dole queues - This austerity programme will have to be quite deep indeed.

At the same time the political establishment which supports the extremely wealthy has become quite brittle. In the polls, the political fortunes have wavered wildly. For a short time the Labour party was the largest party in Ireland, an historic first, only to recede again. A poll conducted by the Sunday Independent showed that 51% of respondents said that a new political party is needed in Ireland [5]. Clearly there is discontent, but none of the political parties can make a strong case for a better direction then the one already being carried out.

Where we want to be

Our task is to create a new inclusive and democratic approach to politics which eliminates gross economic inequalities. This approach must provide us with the tools to deal with the global environmental problems. It will require an egalitarian system with a scale capable of dealing with the scale of our environmental and economic problems. A social system which scales from the very local to the global with the principle that each decision be made at the most local competent authority for that decision. In the immediate term it is too difficult to tell concretely how such a thing will be carried out as it is both too far in the future and we have not had sufficient success at a smaller scale to know what will be possible. But we must keep this vision in mind in order to know at least the vague direction in which we are to move.

Working backward

Working backward from this end goal to what might plausibly proceed it, it is evident that such a restructuring will require a region with sufficient economic muscle to avoid being decimated by the whims of international markets. The region will need the strength to display some level of leverage over other players who do not share the same vision. The possibility of a simultaneous world restructuring is just too far fetched to be believable. It will necessarily happen in stages of unfolding - even if it happens quite quickly.

From our perspective, being in Europe, it is most sensible to focus on the European region, with an eye to changing this first and quickly extending it to those movements most parallel in the global south. We therefor need to aim to at least capture the imagination of Europe and use this as a base from which to move forward. Moving beyond Europe will require a very international vision embedded deep within the project such that the movement is not retarded by Euro-centric currents. The concepts of human rights, anti-war sentiment and the environment, all of which are necessarily global, are the principles most likely to engender such a world encompassing view.

The project of a popular democratic and egalitarian restructuring of Europe is an old one. However, some things have changed in our favour. The European state, while weak, creates an apparatus which we can use as a locus. It is a point on which demands can be placed, and it represents the most likely organ through which any concerted effort by the European wealthy to stop a popular progressive movement will be exercised. Already legal battles against workers are being elevated to the EU institutions, a move which seeks to avoid the inconveniences presented by the more democratic and less technocratic national political systems and to avoid coming into conflict with national movements.

A concerted attempt to remove the reins from the European elite, however, can not yet be done as the idea to do so is not yet present in the general population. An alternative European vision has not been offered and not many practical steps have been made in this direction.

European level solidarity for trade unions has been far and few between. This is partially because of the very different legal climates in which they operate and partly because a lack of vision. In fact the activist alter-globalisation movements have been much more international in both vision and practice.

In Ireland the unions have been in retreat since around the time of Thatcher. The steady decline of industrial action in Ireland has been very marked culminating in a near total stop by the early 90s [6]. At the same time the density of the unions in the work place has declined and shifted quite heavily to the regions most easy to organise, especially the public sector.

In our immediate period, in Ireland with unemployment at 13% and rising, unions become a generally less powerful option. The fear of joblessness and imminent replaceability make fights against employers difficult to impossible to carry out effectively. A one legged focus on the unions in a down-turn is unlikely to reap much in the way of immediate benefits. As such there is a need for a broader approach.

Our tasks

The process of the decaying legitimacy of the Irish political establishment will have some endpoint. This will result either in a re-establishment of legitimacy after some time or the displacement with some new constellation of ideas and foci of power. Ideally we would use this time to promote a new current within the intelligentsia which would promote an agenda of equality - rather than allow this vacuum to be filled with other ideas.

A recent poll by TASC showed that 87% of the people surveyed believed there was too much economic inequality in Ireland. Nearly half believed that there should be a maximum wage. Such revelations are quite shocking when one thinks about how dominant the current economic programme is imagined to be.

In order to make a progressive movement successful in Ireland, it will be necessary to achieve some concessions. In order to capture the national imagination, they will have to be national in scale. While a fight in the trade unions can stave off wage decreases it has proved to result in very little support outside of the trade unions, which no longer carry the sort of general legitimacy in the population that they once did. While the trade unions will be a necessary ally and therefore need to be convinced of any programme to move forward, we will need a broader scale for a successful movement on the scale of Ireland. The alternatives would be to both reduce unemployment and increase union density significantly or to change perceptions of the trade unions in the general population. Those later alternatives are likely to be larger hurdles.

The wealthy can not avoid attacking the conditions of the majority of the population if they are to protect their winnings and there are few financial solutions to our predicament: we are still beholden to international capital investment and must keep multinational corporations by keeping corporate tax competitive. It seems therefor that any progressive movement will have to come squarely on the side of dispossessing the native rich of some of their assets. How this dispossession happens concretely is hard to foretell because we have only a weak grasp of what is possible given our lack of information about attitudes.

In general resistance to the cuts have often been only reactive, choosing to fight each attack as it comes. Waiting for the axe to fall in the current situation and then trying to fight each cut individually will be a losing battle. It will be much easier for the political establishment to divide people against each other, each group fighting in the hopes of getting their own concessions. Even worse, waiting around allows arguments that if stated in juxtaposition to reasonable solutions, would be irrelevant. Anti-immigrant sentiment and attacks on the weakest sections of society are often enticing to the middle sections of society when under pressure, as they can see clearly that a moderate push can shift the burden further down, without having to come into conflict with the political establishment. Much better would be to take an offensive stance and attempt to side-step these divisions as much as possible.

As a supposition, a movement for a wealth tax or wealth max seems a sensible demand on which to pitch battle. It seems a reasonable option to many and it would not be too far fetched to believe that it could be implemented. A restructuring of income tax would not be capable of raising very significant funds and would be quite hard and expensive to assess. Property tax is too indiscriminate in its application and would make suffer many who are nominally owners of expensive properties, but which are not presently salable. In addition it is not really possible even in principle to value land in the current climate with the tremendous rate of decline and it would not be popular with many in the sociologically middle class. A wealth tax could start with the richest and work its way down - incurring an overhead that was not too great in proportion to the funds which could be appropriated. In addition it may be largely ignored by international investors, as it does not affect corporate profits. This could insulate such a movement from too direct interference before the movement was capable of weathering it.

The implementation of such a tax would need to be looked at in detail. In order to be successful it would need to avoid conflict with the small enterprises such as rural pubs and the like which might have nominally large assets but fairly small revenues. If it negatively impacts people who do not seem rich to their neighbors and who are influential, it could likely be defeated as unfair. Research into an appropriate scaling of cut-off would need to be done in order to ensure that the majority of the population was not only in favour, but could be convinced that action was necessary.

While it is true that giving over funds from the richest to the incompetent political regime might seem a hollow victory, it will provide a modicum of protection to the working class from some of the cuts. More importantly it would attack the logic of the assault which hinges on the premise that there are no alternative to diminishing conditions for the general population. If deeper cuts are sought, deeper taxation might be forced into effect which could lead to a chain reaction. A wealth tax would "place the tail of the snake in its mouth". If successfully achieved, a deepening of cuts could cause the burden to fall more greatly on the wealthy.

A democratisation of corporate management should also be advocated. This on the basis that the current economic crisis is at least partly due to a failure of accountability by those in charge of the allocation of investment. The massive over-production of housing and the over-heating of the property market at the cost of investment in other projects much more important to the health of the economy are strong indicators that another direction should be taken. This demand is quite unlikely to be adopted as it would represent a profound break with the independence of investors from public responsibility. However it is useful in promoting the general idea which we hope eventually to implement.

There are of course other demands and tactics which should be assessed. They should be reflected upon according to the criterion of timeliness and impulse. Timeliness means that the demands will not result in disaster if they are achieved, something which must be viewed in relation to our current position vis-รก-vis the rest of Europe. The demands themselves may later become reasonable but are dependent on the environment. Demands which would cause a capital flight in the immediate period should be discouraged, though the populace is quite cognizant of the dangers of such demands and would be unlikely to accept them. The demand must also have impulse, in the sense that the satisfaction of the demand, its partial satisfaction, or indeed its failure to be satisfied should all be capable of providing a movement with momentum. Failure to achieve a maximum wealth demand in the face of a popular movement need not result in a collapse, but could be used as a further demonstration that the political regime is unresponsive and could be outlet into a more direct expropriation. Similarly, a satisfaction of a wealth maximum would in fact lead to a weakening of the ability of the wealthiest to direct policy autocratically and could start the ball rolling on further moves towards democratisation.

An approach making use of a non-partisan volunteer organisation, seems the best vehicle through which to start such a movement. It can present itself as a reasonable political alternative, while bearing a programme which seems plausible. It need not become embroiled directly with electoral politics, but can act independently of the political consensus, while still putting pressure on it. It can avoid the competition over constituents which necessarily arises from the creation of a political party - cross cutting the usual conflicts the electoral approach presents.

In order to gain support we can use organising techniques from union organiser models. The organiser model relies on the capacity to take quite wide grievances and direct them into a unitary solution. In the Union case this solution is a group of fellow workers deciding together on the solutions to their problems. In the case of a progressive economic movement, it should be the wide range of general benefits of equality [7] which will cover grievances relating directly to the cuts, but extends also to crime, health, education and many other factors. With careful training of volunteers and practice it should be possible to quickly develop an active base using these techniques.

Such a volunteer organisation would have to start with quite small exercises of power. Legitimacy would be the key factor to allowing the demand to get some currency. This means that each step has to be taken with only a short lead on public perceptions. Likely the first steps will be fairly soft activities such as polls, petitions, letter writing campaigns and "equality compliance" score cards for politicians. As it becomes apparent that the politicians have no interest in actually doing what the general population wants it will be possible to move to more direct applications of power. The appropriation of unused property in conjunction with sympathetic community groups would be one possible activity. Even if it was unsuccessful, it could serve to further erode confidence in the political establishments sense of good will.

The organisation would also need to cultivate links with prominent journalists, authors and cultural figures. Successfully achieving deep social changes, it is important that there be a network of sympathy amongst the more socially prominent. Without these people, the political establishment will find itself without a voice. The development of contacts and engendering of sympathy by presenting an alternative which is palatable is key to being able to get this group on board. People in the spotlight are unlikely to risk their reputations on something that sounds crazy - so presenting a message in the most palatable fashion is critical.

A broader popular movement might also serve to give some teeth back to the unions. The argument that union members are simply trying to protect their own becomes harder to make if they were being spurred on by a wider group. Creating an environment in which the trade unions feel capable of acting is at least as important as their objective capacity. This is important because the capacity to withdraw labour still represents one of the greatest potential forces that the population possesses.

At the same time we need to be looking at how to push parallel organisations in other localities. If the approach is even moderately successful, it should be possible to get some cooperation for such a movement in the UK or abroad in other areas of Europe. Replicating the model relatively quickly will be important for taking any further step - which really can not be done without a European scale - so it should not wait lest momentum be lost.

There are no guarantees that any strategy can be made to work. The approach described here has the advantage however of being both plausible and appealing to a wide audience. It retains the core aims with an eye to the eventual goal while simultaneously putting them in a form that can be accepted by the general population and which has some chance of being achieved.

World Bank, World Development Indicators
[3] Based at NUI Maynooth, Prof Rob Kitchin the Director of the State-funded academic study

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