The Legacy of Social Partnership: Part 2
This article originally appeared in the August edition of Socialist Voice published by the Communist Party of Ireland. The first part appeared on ILR here. Click here to access the current edition of Socialist Voice.
Neo-liberalism with Irish characteristics
INDEED this is pointed in other ways. As we have outlined, the shift from labour to capital in the social partnership era was marked. Whilst Ireland does not appear to have experienced an increase in wage inequality, we have nonetheless one of the highest rates of earnings inequality in the OECD and one that is significantly above other EU member-states (OECD, 2004 and 2007).
For all the noise about influence on policy, Irish unions delivered nothing on this front in the partnership era. As with the lack of any concrete development on workers’ rights, this demonstrates that national wage agreements served principally as a vehicle for neo-liberalism and the advancement of corporate profitability. This may not have been “pure” neo-liberalism, as popularly understood in the Thatcher or Reaganite sense, and to a degree explains why many Irish economists of the neo-classical school have a long-entrenched antipathy to the regime in Ireland.
However, there are many ways to skin a cat. Neo-liberalism in Ireland and in the way it underlined the architecture of social partnership has reflected the particular hue of its principal political progenitor and champion, Fianna Fáil, and the complex historical-ideological make-up of class relations in our country.
For example, the Irish approach to national wage agreements has stood out markedly from approaches elsewhere. In many Nordic countries, unions participating in national agreements have typically traded wage moderation for increases in public expenditure on the welfare state, skill formation programmes, or statutory company-level employee involvement mechanisms. Had Irish unions been able to direct partnership in this direction, a case might be made that such policies had a progressive character. Yet partnership, as we have outlined, was built upon the needs of Irish capitalism at a particular historical juncture: the political and economic elites in our society had no use for it-indeed such policies would have undermined their particular neo-liberal strategy of capital accumulation.
The trade union movement, however, must take some of the blame in this regard too. Whilst perhaps reflecting the low level of political consciousness among the Irish working class more generally, they appeared quite happy to trade wage moderation for increasing private consumption by means of reducing tax rates. Such a policy is now coming home to roost and has been a core component of the country’s fiscal crisis.
All eggs in one basket
They too readily bought into one particular strategy-we might call it the “shareholder model”-which relied heavily on exercising representation at the state level, on the assumption that this was the best way to return gains to its members. The alternative strategy-what we might call the “growth and investment model”-based around local-level organisation and mobilisation, was left to atrophy. In particular, it went to wrack and ruin in the 1990s, as budgets for union organising at the time will testify.
Some efforts were made in the early part of this decade but have left much to be desired. Unfortunately, this legacy lives on; work-place shop steward arrangements in most unions nationally are now in disarray. Most activists have no experience of essential union functions. Failing to appreciate the nature of the regime they were participating in and how it was principally shaped by needs of capital, union strategists seemed to have devised no Plan B and instead put all their eggs in one basket.
In many respects it was a short-sighted, reactive strategy. It is clear that they did not have their eye on the ball with regard to local organisation. For example, to have acquiesced in Government policy on union recognition in the 1990s demonstrates the lack of foresight on their part. This will now come back to haunt them in the post-partnership world. Weakly organised unions in the private sector, without any statutory backing, simply lack the industrial muscle to push home claims for recognition on the basis of voluntarism. No wonder, then, that some senior union officials have desperately clung to the gates of Government Buildings.
Croke Park deal: Strategic retreat or strategic defeat?
By the time the financial and economic crisis hit Ireland hard in 2008, a confluence of factors, made it appropriate for employers and the state to withdraw from the arrangement.
In the face of economic crisis, social partnership, successful in part in distributing the spoils of growth, proved unable to negotiate retrenchment. The Government, along with public and private-sector employers, was able to abruptly drop social partnership in the hope of appeasing global capital.
In the case of the state, the abandonment of social partnership has, arguably, been central to its strategy of dealing with the crisis. This strategy has included a comprehensive and generous rescue of the banks and their bondholders and the establishment of fiscal rectitude through deep cuts in spending as the basis for a recovery of competitiveness. The abrupt abrogation of social partnership is central to the Government’s attempt to balance the budget through substantial cuts in public-sector pay.
The Croke Park agreement is a further political manoeuvre to generate some resemblance of co-operative dialogue in the midst of the crisis. The agreement essentially copperfastens previous unilateral pay reductions while containing a tentative commitment to avoid additional pay-cutting measures, save for a further deepening of the crisis. Significantly, the agreement also presumes a degree of co-operation with the dismantling of public-sector working conditions at some point in “the future.” It has been claimed by sections of the union movement that this agreement, while unpalatable, represents a “strategic retreat” for Irish trade unionism: a confrontation with the state now, it is proposed, would invite serious defeat and possible collapse; better to marshal one’s resources and strengthen for winnable battles in the future.
While having an intuitive plausibility, this argument suffers from an inherent weakness. Strategically, for the Government, the outcome of the Croke Park agreement will consolidate a further weakening of organised labour, one of the key conditions of global neo-liberalism. Cut-backs in public-sector wages and conditions are the new salvo in a strategy of restoring enterprise competitiveness and restarting accumulation. The Government is signalling the acceptability of extending wage-cutting measures to the private sector.
Over twenty years of permissive voluntarist industrial relations has meant that existing union structures are poorly positioned to resist the assault. It is an irony that the first consequence of the crisis has been the rapid disintegration of precisely that element of the Irish social structure that served to distinguish Ireland from the overall pattern of global neo-liberalism. In the face of the crisis the institutions of Irish industrial relations have been forcibly realigned with the market fundamentalism of an evolving capitalist accumulation structure.
We welcome and encourage lively discussion from the public about articles on Irish Left Review. You can leave a comment using the form at the bottom of the page. Please read through the existing comments before posting your own.