Review: “Repudiate the Debt: For a Better Future” (Communist Party of Ireland, 2011)
There has been no end of discussion and analysis regarding the present financial crisis, yet little on the actual nature of finance within western economies. This applies to both the mainstream and the left-wing where criticism has focused primarily on the moral shortcomings of bankers and financiers, with shouts of ‘greed’ and ‘arrogance’ to cover up the lack in actual investigation of the long-term structural changes which brought this crisis to a head.
This can be seen in Ireland as well, of course, where almost everything is analysed with a portion of Neo-liberalism and moral indignation on the side.
There are exceptions, of course, as can be seen in the work of people such as Michael Taft, Michael Burke, Tom O’Connor, Terrence McDonough and Kathleen Lynch, among others. And Last year the Workers Party brought out a pamphlet which placed financialisation firmly at the heart of its analysis.
The Communist Party of Ireland’s (CPI) new pamphlet, Repudiate the Debt: For a Better Future, is a welcome addition to this list - one that outlines the current crisis as part of ‘a cyclical crisis whose root causes lie in the logic of capitalism in its current financialised phase.’
Repudiate sets out to show that:
as manufacturing stagnated globally because of the limitations of capitalist production - despite post-war reconstruction and increased military spending - the mass of capital accumulated in the system required a new area of investment. Finance provided that opportunity, first in stocks and shares and later in the highly complex financial products that exist today. Finance has become the dominant source of profit and growth for the capitalist system, replacing what is often described as the real economy.
‘Financialisation’ is the process ‘by which finance capital, and financial operations, have become the primary source of investment and growth in the capitalist system.’ This has come about because of the ‘deep stagnation that exists in manufacturing and the productive economy.’ It is the ’shift in gravity of economic activity from production and services to finance.’ (Ireland’s very own IFSC - which is part of the ‘Good Tiger’, remember, the ‘good growth’ before all that bad growth in construction - played a modest role in this shift in gravity by acting as a tax haven for financial services, both domestic and foreign. The business of washing the world’s money is pretty much the main incentive behind the protection of Ireland’s Corporation Tax rate.)
The pamphlet outlines the reality of the European inter-bank lending market, and how ‘the bail-out of the Irish banks, and recently of Irish sovereign debt, is more easily understood as a bail-out of big European lenders and of the euro as a single currency.’ Indeed, Britain and Germany alone hold more than 56 per cent of the total exposure of European banks to debt in Ireland. The EU/IMF bailout is really about saving the European money markets - but one where the Irish people have to pick up the tab.
At the same time, the assault on public services and, indeed, public sector workers, is about the Right taking advantage of the situation for their own ends. ‘Moments of crisis create the prefect conditions for changes that would ordinarily be perceived as too much for the public to stomach.’ In the words of Warren Buffet, ‘There’s class war, all right, but it’s my class, the rich class, that’s making war, and we’re winning.’
Repudiate sets out an agenda for building a transformative economy - including support for indigenous industries, establishment of a State Development Bank, the nationalisation of our natural resources, the development of sustainable energy sources, a progressive tax system, and a genuine democratisation of national and local state bodies. These are strategic demands, it states, ‘in that they challenge the central pillars of the existing economic and political system. Of themselves they do not constitute socialism, but popularising and rallying around these strategic and developmental economic objectives will bring a popular movement into conflict with the reality of the EU and the capitalist state and consequently place socialism firmly on the agenda.’
The key contribution, in terms of the present analysis, that Repudiate brings to the table, lies in the adaptation of the ideas of John Bellamy Foster and Fred Magdoff to both Ireland and the EU, in terms of the stagnation of western economies and the growth in speculative financial endeavours. It is a welcome addition to the growing body of work which sees Ireland in terms of the dynamics of finance capital since the 1970s.
(Repudiate the Debt: For a Better Future is available from Connolly Books, Temple Bar, Dublin, price €2.50)
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Comment by: sanjib sinha
Mar 14th 2011 at 04:03
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