The Real News interviews Leo Panitch on the Irish crisis. Panitch is the author of many books and articles and is a Distinguished Research Professor at York University. We’ve reviewed the most recent edition of his Renewing Socialism and In and Out of Crisis: The Global Financial Meltdown and Left Alternatives, which was published earlier on this year. Leo Panitch is also the co-editor of the long standing and highly respected Socialist Register journal. The latest edition, The Crisis This Time is dedicated to the ongoing global financial crisis and is available in Ireland from Connolly Books. The preface of the current edition is available here and the list of contents and links to abstracts on each of the articles are here.
Extracts from the interview are provided below. The full transcript is available on the Real News Network.
JAY: Brilliant system. So what are Irish people demanding? What do you think they should be? What’s the alternative for Ireland?
PANITCH: You know, the austerity program involves raising the sales tax–the value added tax, as it’s called there–to 23 percent (look at the hysteria here in Canada when we have a combined sales tax of 15 percent), that at a time when corporate taxes in Ireland are famously at 12 percent and it is being pledged that they will not be raised. And I might point out that the American corporations that have been the largest investors in Ireland in terms of manufacturing investment and exports from Ireland are threatening they’ll pull out unless this 12 percent corporate tax is maintained.
So you see the enormous class inequity that’s built into this, the enormous demonstrations that have taken place in Ireland. And they’re not new. They occurred last year when austerity measures were introduced as well, and being led by a very, very moderate corporatist trade union leadership, which doesn’t want to engage in any class mobilization–less radical than the AFL-CIO, but they’re being forced into undertaking these demonstrations by virtue of the anger of the people. They’re not demanding nearly enough. It’s a very, very defensive set of demands they’re engaged in. As I’ve argued before, the only real solution here is for Ireland to lead the way by defaulting on the debt, to do what Argentina did at the beginning of this century.
But that will mean, and I hope it will mean, a much more radical set of responses in Europe, not only in Spain and Portugal and Greece, but much more broadly, whereby people are given a lead in terms of not just socializing the private banks’ bad debts but actually nationalizing the banking system and turning it into a public utility. It’ll mean breaking up the European Union, but reconstructing it on a basis of democratic and cooperative economic planning, where the money, our money that passes through the banking system, the people’s money, is actually allocated in a democratic way.
That–we have had a banker’s Europe, a Europe based on free capital flows. It is inevitably one that was highly volatile, inevitably producing one crisis after another. And Ireland is facing the brunt of it at the moment. Greece faced it a few months ago. Portugal’s [inaudible] to face it at all.
JAY: But what do you make of the argument that the reason these countries are in difficulty is ’cause there’s too much entitlement programs, the pension age is too low, unemployment insurance is too high, and so on?
PANITCH: I think it’s ludicrous. This isn’t the problem. The problem is not that Irish workers are too well off. The problem is the enormous wealth inequality, and above all inequality in power, and irrational investment that has gone on in these countries. And it will mean, if people are going to try to maintain something like the civilization that we’ve known, it’ll mean redefining what our standard of living is.
It will mean that we will not be able to engage in the kind of individual consumption, and have to turn to the kind of collective services that would be so rational and so needed–much more, much more extensive public transit and freer public transit, rather than private transit through automobiles that reproduces the ecological crisis and worsens it. But the answer is not that, you know, the Irish working class (give me a break) is so well off and wealthy, much less the Greek one.
Now, it’s true that many of these states are corrupt and are indeed the kinds of states that are built on clientalism. The type of democracies we’ve had there, the types of capitalist democracies we’ve had there, have involved bribing people, bribing people to–through agreeing to let them not pay as much taxes or any taxes, through giving them kickbacks, etc.
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