There is much in Michael Taft’s ‘Towards a New Economic Narrative‘ that most socialists can agree with. The state must take measures to protect the majority of its population from the ravages of unemployment and recession.
So, yes, we need a new social housing programme, a school building programme, a conservation maintenance programme for older housing, a huge investment in the infrastructure necessary to switch to green energy. Additionally, for those who do not find work immediately, we need minimal measures such as a re-introduction of pay related unemployment benefit.
So far the debate in the Irish media has been set in a narrow economic framework dictated by the failed policies of neo-liberalism. While some right wing governments across Europe openly acknowledge the need for a return to Keynesian policies, the Irish political elite repeat the old mantras about cutting the public sector and allowing ‘market forces’ – with a little state help – to deal with the banking crisis. The Left needs to challenge the nonsense of Fine Gael and Fianna Fail and present a genuinely radical alternative.
Words of course are cheap and we also need a determination to bring change. That starts by breaking with the policies of the political establishment. No one on the left could now possibly contemplate coalition with either FF or FG as these parties hang on to the leftovers of the neo-liberal era. The Labour Party may indeed have promoted ‘strong policies’ on the construction sector, as Michael suggests, but these mean nothing if the party does not rule out coalition immediately with the parties of the Right. You also need to reject the Thatcherite economic dogmas that are still enshrined in the Lisbon Treaty, Unfortunately, while tacking left, the party leader, Eamonn Gilmore, refuses to do either of these.
If coalition with the Right is off the agenda, then this raises the question of how to implement an alternative economic agenda. One can certainly suggest that Labour should lead a coalition of the Left, but many left wingers will question whether, given its past record, Labour could give such a lead. More immediately, the votes necessary to support such a parliamentary majority would require a profound social transformation. It is only in mass struggle that political allegiance on a grand scale change and a different approach to left politics is therefore needed. To put it succinctly, the Left should encourage active resistance from below on a scale rarely seen in this country.
A Left economic programme can, therefore, not just be a putative programme for governmental office, but an action plan that inspires and encourages resistance now.
If the current government, for example, decides to cancel wage rises for public sector workers, we will need strikes, occupations and a social upheaval of a sufficient scale to drive them back. If firms throw workers on the scrap heap to save their profit margins, the Left should support sits-ins and occupations to seize their assets. If we want to see union recognition imposed on employers during this recession, as Michael rightly suggests, we will need to bring action on a similar scale to what occurred in US car factories in the 1930s. Such a mobilisation from below is the surest guarantee that the Dail would give legislative effect to the modest right of a worker to union representation.
Michael’s Economic Narrative does not discuss these matters but I shall assume that he favours an approach that combines such radical action with electoral activity.
The disagreements I have with him lie in different direction. Essentially, the philosophy, which underpins his programme, is a form of Keynesian economics. This assumes the permanence of capitalism and sets out to mange its problems – or as Michael puts it to ‘get it over the hump’. Despite calling for a bold, audacious approach, he therefore makes too many concessions to the right and his proposals are set within the parameters of capitalism.
Yet the scale and speed of the global crisis currently is stupendous. The arch speculator, George Soros, has argued that we have entered the worst financial crisis since the 1930s and there can be little dispute about that. But the roots of this crisis go deeper than just the financial system. Despite the growth of a literature on ‘financialization’, the present crisis arises from the wider mechanisms adopted by the system to deal with its twin problems of over-accumulation and a falling rate of profit. The Irish version of this global crisis will be even deeper and a 4 percent decline in GDP looks a distinct possibility next year.
In this situation, the left cannot simply advance a programme to manage a system that is clearly failing. At the very least, it must leave itself open to an alternative logic that implies other ways of organising an economy than neo-liberal or Keynesian versions of capitalism. There is, unfortunately, no indication that Michael’s draft programme does this.
Let’s take a few specific examples.
1. Public Safety Committees
Michael appears to suggest that the Left should support a Jacobin version of Bord Snip to ‘stress test’ every line of public expenditure. The population do, of course, need an assurance that public money is spent wisely. But Michael fails to locate where the problem lies.
Over the past two decades, neo-liberalism has led to a shift from a ‘trust culture’ – which assumed that doctors, teachers, nurses etc had internalised a sufficient professional ethos to do their job properly – to an ‘audit culture’ where everything has to be measured, benchmarked and subjected to Key Performance Indicators. As private business was deemed to be the paragon of efficiency, the public sector was forced to recruit business leaders – on inflated salaries and bonuses- to key positions to bring this change about.
The result is that public sector workers currently sink under mountains of paper work and are forced to watch impassively as a layer of over-paid managers speak a peculiar business language of constantly ‘going forward’.
Herein lies the roots of the current wase around inefficiency in the public sector and the Left should shout about it from the roof tops rather than apologising for itself
Instead of a Public Safety Committee, which imposes more paper work, we need to root out this bloated managerial layer. We need to expose the ways in which the public sector has become a milk cow for consultants and business people who use it as a captive market to over charge at will.
Against both the older ‘trust culture’and the ‘audit culture’ favoured by the neo-liberals, the Left has to champion workers democracy and self management as the key to efficiency.
If the combined staff of hospitals or schools were given targets set by society and allowed to use democratic structures to discuss how to meet them, they would do a far better job on efficiency and delivery of service than all the MBA gurus who speak a peculiar business gobbligook.
But this implies going beyond the hierarchical logical of capitalism – which is precisely what we should do.
2. The Banks
In line with the dominant consensus, Michael wants to ‘re-capitalise’ the banks to get credit going. If one sticks with the logic of capitalism, this is no doubt necessary. But from a broader perspective, it is absurdly mild.
Consider only the current situation. The Irish banking sector has run up bad debts of between €15 billion and €30 billion. (The former is Morgan Kelly’s estimate and the latter is David McWilliams). Their share prices have collapsed and they are now collectively valued at €3.5 billion. Yet the state wants to re-capitalise these economic criminals to the tune of ‘up to €10 billion’.
Would it not make far more sense to seize their assets to save jobs and people’s homes? If that sounds too radical, then why not take them over at current share process – or less, if a bold government were wiling to play games with the stockmarkets.
But that is only the first step. The banks should be permanently nationalised and their lines of credit socialised so that every application for credit is ‘stress tested’ to ensure that it increases employment and furthers the good of society.
How? By electing representatives of the people for this purpose. Such representatives would need some training in accountancy and more simplified form of ‘financial engineering’ than the current mysticism that surrounds hedge funds, speculation and leverage. We manage this to a limited extent with local credit unions and they do not appear to do a worse job than the CEOs who claim to be worth €3 million a year. Hopefully, such elected representatives will not include business people and corporate lobbyists such as Dick Spring and Alan Dukes.
Only the nationalisation of banking and the socialisation of credit can uproot the current practice of speculation in the global casino and prevent a return to it in the future.
But such a proposal again runs counter to the logic of our current socio-economic system.
Conventional Keynesians have championed borrowing during economic recessions and the social democratic left had given it an apparently more radical twist by calling for even more. I have no particular problem with any measure that will alleviate the social suffering but there are a few restrictions.
Garret Fitzgerald pointed out recently that the level of borrowing currently being undertaken by the government will require cuts that are two or three time greater than the current budget for the next three of four years. The state is already finding that it must pay a higher rate of interest to borrow than others.
We could, of course, adopt a perfectly rational approach and imply that we will not pay back these debts in the short run. But, given the restrictions of capitalism, this might suggest that Ireland will find it even harder to borrow.
Borrowing is favoured by social democrats as an attempt to circumvent the inevitable intensification in class conflict that occurs during an economic crisis. The big question facing society becomes who should pay: workers or the capitalists who currently hold the wealth? In my view this issue cannot be postponed indefinitely.
If society at large is to gather together the resources required to protect itself from immense social suffering, we will need to take ever more assets into public ownership. We may, indeed, have to additionally borrow – but we should not imagine that it provides a magical solution to overcoming the crucial questions of which class shall pay to overcome the recession.
In brief, the Left needs to take a hardline with the very capitalists whose system is now in decline.
- Any firm that refuses to cut its profits and makes workers redundant, should be taken into public ownership. In our current desperate situation, economic activity can no longer be undertaken to secure the profits of a few. The state has to step in and, via a nationalised banking system, take into its hands the levers of economic power.
- We should immediately – no matter what the EU or anyone else thinks- take our natural resources back into public ownership and use them to fund the transition to a new economy.
- We should close off all the tax scams that have turned this country into an Atlantic tax haven and acknowledge that the ‘race to the bottom’ in tax dumping has helped destroy the welfare state across Europe.
It is not my intention to produce a comprehensive anti-capitalist programme at this point. That will require some thought, much discussion and real debate.
But I use these examples to indicate that my central critique of Michael’s approach. It is too mild because it sticks too closely to the logic of capitalism.
When you face a New Orleans style disaster, there is little point getting out the umbrellas. You need to declare an emergency and use the full powers of organised society to protect itself – no matter the cost to those who think that private ownership and profits are sacrosanct.
Dr. Kieran Allen is head of the school of sociology at UCD, and has been prominent in SIPTU and the Socialist Workers Party for many years.