Gombeens, Spivs and Bankers
As previously mentioned, Look Left 9 or Vol.2 No.7 is now available in Easons and other outlets both north and south. There is plenty in there for everyone, but I thought as Look Left have published it on their site that I should link to Conor McCabes’ piece Gombeens, Spivs and Bankers. It provides a very neat and well written summary of the argument presented in Sins of the Father. But its also a good way of putting down a marker for the new year. Rather than falling back on or complaining about the interpretations of the “crisis” that are provided by the majority of commentators, it’s time, surely, to look more closely at how power has always worked in Ireland and examine why these decisions are being made.
There have been many attempts to explain why the Irish banking crisis developed the way it did, and the argument that it was due to a breakdown in moral standards is quite a popular one. The Irish Times has talked of a “frightening lack of morality” within Anglo Irish Bank, the most indebted of the Irish institutions, and how the actions of its chairman “cast a shadow over the ethical culture of the bank he ran for most of the past 33 years.” The newspaper’s senior business correspondent, Arthur Beesley, said that the directors of Irish Life and Permanent inhabit an “ethical cocoon in which the sense of right and wrong is at odds with standards in the outside world”, while the economist Brian Lucey talked of the immorality of the government’s actions in pouring money into Anglo Irish Bank in a desperate attempt to keep it going as a business concern.
Yet, the banking crisis in Ireland was not caused by pockets of immorality in an otherwise reasonably well functioning system. The ruthless pursuit of profit is not personal; that is the way business works. And what is condemned as immoral in times of crisis, is often praised as savvy and pragmatic in times of prosperity. Similarly, there is nothing particularly unique about the ethical cocoons of Irish bankers, their frightening lack of morality, or lack of restraint and sense of propriety. This was a worldwide financial crisis, after all, not a regional or a Celtic one. In other words, it was not the implosion of speculative debt, but the ability to transfer that debt wholesale onto the shoulders of the State, which marked out Irish bankers as a step above their worldwide contemporaries.
The decision by the Irish government on the 30th September 2008 to guarantee almost all the liabilities of six Irish financial institutions was not an economic decision but an exercise in power. “The deeper truth exposed by the present crisis” wrote the journalist and politician Shane Ross, “is that Ireland harbors more powerful forces than Fianna Fáil.” And while this is true, it is not enough to point out that banks and property developers are indeed powerful in Ireland, but to explore why that is the case. What is it about the Irish economy that financial and property speculation is a core activity and not, say, fisheries or gas? Why are builders and insurance salesmen fêted as entrepreneurs, while indigenous exporters outside of agriculture and tourism struggle to find support? How did this situation arise, and how deep are the roots?
Read the rest of Gombeens, Spivs and Bankers on Look Left.
Discussion
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.
Comment by: Des Derwin
Jan 4th 2012 at 12:01
Donagh, thanks for reposting this. The more of Conor about the better. There is a major review by Maeve Connaughton of ‘Sins of the Father’ in the current issue of ‘Red Banner’ magazine. I’m sure ILR readers will be interested. As is often the case Maeve produces an unexpected yet substantial and thought provoking critique, and of a work that has been otherwise wholeheartedly embraced across the left.
A principal argument is that it is not a wondrous thing that Irish capitalism developed ranching and finance rather than industry because its initial development was stunted by imperialism and it could never catch up competitively. I’ve heard this responded to with the one liner, ‘what about Singapore’? Well?
Look forward to a productive exchange.
Comment by: Conor McCabe
Jan 4th 2012 at 15:01
Thanks Des, is the review available online at all?
I don’t understand the point about imperialism and ranching and catching up. Could you elaborate?
Comment by: Des Derwin
Jan 4th 2012 at 15:01
Don’t think it’s on line. Available in print at Books Upstairs and Connolly Books.
Oops! I hope I didn’t misrepresent the article. What I meant is that in part it seemed to be saying that as Irish industrial developemnt had been constrained by colonial domination, and was not in a position to catch up, the ‘independent’ economy centered around, and investment - naturally not delinquently - went into, live cattle and later financial speculation.
Comment by: Conor McCabe
Jan 4th 2012 at 15:01
But the point I make in the book is that it is not the live cattle industry which held back the irish economy per se, but the fact that the cattle were exported on the hoof to be slaughtered in England. I also make it very clear that I do not see it as a case of underdevelopment but as part of a highly-developed industrial-scale assembly line which started in connemara and ended in London.
What is natural about having slaughter houses for irish cattle in London and not in Dublin? What’s natural about having that type of an assembly-line where the raw material is extracted from Ireland and profit made in England?
What is natural about having hides from Irish cattle sold back to Irish factories by British producers?
The main breed used in Ireland at the time was the dual-purpose shorthorn, which was used for beef cattle and dairy production.
What’s natural about using the dual-purpose shorthorn for milk?
Comment by: Conor McCabe
Jan 4th 2012 at 15:01
Also, my book traces the development of the irish bourgeoisie. Is Maeve arging that there is something ‘natural’ about the development of the Irish bourgeoisie? That this was a ‘natural’ process?
Even apart from that, when does imperialism become a ‘natural’ process?
Is it once the system of exploitation is securely in place? After that’s in place what happens after that is simply a ‘natural’ development? where is the line of demarcation between imperialism and ‘natural’ process?
I don’t think I understand the point being made by Maeve at all.
Comment by: Conor McCabe
Jan 4th 2012 at 16:01
Here’s a graph of the number of cattle in Ireland, and the number of dairy cattle. Was it also natural to have cattle bred for beef at the expense of dairy cattle?
Ireland may be great for grazing - indeed ‘natural’ for it - but that alone doesn’t explain why the cattle that are grazing are for beef and not dairy produce. And it certainly doesn’t explain why it was natural to have those calves shipped over to Britain for slaughter.
The point I’m making here - and the point I make in the chapter on cattle in Sins of the Father - is that it misses the point entirely to see Irish agriculture as a ‘natural’ process - even if it be one brought on by imperialism (and how the effects of imperialism can be labelled ‘natural’ I simply don’t know) - it’s the economic relations which are taking place WITHIN the Irish cattle industry which are of importance.
Take this graph here, of farm size and the raising of cattle.
To see Irish agriculture as the ‘natural’ outcome of an imperialist project is to miss entirely the class relations which are taking place WITHIN Irish agriculture - class relations which have an enormous effect in the shape and direction of the Irish free-state. (And again, this is even without taking on board the strange idea of an imperialist project as somehow the kick-start to a ‘natural’ development.)
What is natural about small farmers raising cattle as a cash crop, and forced to sell calves after a year or so due to the fierce limitations of the size of their farms, thereby ensuring that all the risk is carried by the small farmer, and all the profit at the live cattle stage of the process is scooped up by the rancher?
Laws are passed in the Irish Free State to ossify this system of production, it’s the rock of economic policy in Ireland up until the 1960s - indeed it’s one of the pillars of the Whitaker plan of the late 1950s, the so-called modernizing marker in modern Irish history - it’s the class relations WITHIN Irish agriculture which are key to understanding the Irish Free State, not the fact that Ireland had an Irish agricultural sector, natural or otherwise.
In other words, it’s not the existence of an Irish agricultural sector which is crucial to understanding the development of the Irish Free State, but the economic class relations taking place WITHIN that sector which are key.
however, an understanding of rural class relations is one of the blind spots of modern Irish left thinking, which is incredible when you think about it.
The paucity of writing on agricultural capitalism and the effect of rural class relations on the development of the Irish state is embarrassing to say the least.
Comment by: LeftAtTheCross
Jan 4th 2012 at 20:01
“The paucity of writing on agricultural capitalism and the effect of rural class relations on the development of the Irish state is embarrassing to say the least.”
Conor, will that be the theme of your talk at the Jim Connell seminar in Kells on the May Day weekend
Comment by: Conor
Jan 5th 2012 at 02:01
A bit of an overreaction on my part alright, but the argument about how there was no alternative (TINA) is straight out of Irish bourgeoisie historical analysis.
The Irish left needs to look more at Irish rural class relations. There’s been a lot of work done on this by the sociology department out in NUI Maynooth, by John Feehan in UCD, and by Tony Varley in NUI Galway. It needs to engage with the historical evidence uncovered and the analysis being put forward, instead of just taking TINA arguments from the mainstream.
Oh well, ranting again.
Comment by: LeftAtTheCross
Jan 5th 2012 at 10:01
Conor, I wasn’t slagging you, that was a genuine question. Rural class relations, would be a suitable subject for that talk, especially seeing as the venue is in Meath, the home of the cattle ranch.
Comment by: Conor
Jan 5th 2012 at 10:01
Oh I know you weren’t slagging me LATC, I was slagging myself!
I think you’re right about the jim connell school and rural class relations. It’s the perfect venue for such a talk and discussion.
Comment by: Des Derwin
Jan 5th 2012 at 11:01
I meant naturally in the loose sense of what is naturally or easily the most profitable or even viable for capital in a given circumstance.
We may be at cross purposes. I was drawing attention to an interesting article that might not have been widely read and deserves to be, not championing it. I’m glad to see some vigorous response to it and look forward to you grappling with the author. I.e Maeve Connaughton.
Comment by: Conor
Jan 5th 2012 at 11:01
Thanks Des, I’ll pick it up next week when I’m in Dublin and see what it has to say.
Comment by: Conor McCabe
Jan 6th 2012 at 20:01
I just read the review and apart from the one I dealt with above, the other main points seem to be:
1. I don’t slag off the unions
2. I’m a bourgeois liberal
I don’t know how I’m supposed to engage with a review like that, to be honest.
I’m not sure of the best way forward in order to grapple with a debate on the economic development of the Irish bourgeoisie which has been framed by the reviewer through an ‘ author is a bourgeois-liberal who wont slag off unions’ prism. That’s quite a glass darkly.
Well, here goes.
The point made by Maeve about finance capital, the irish bourgeoisie and the falling rate of profit is ahistorical. it argues with a calvinist rigour that the Irish bourgeoisie kept the link with sterling in 1922, refused to set up a central bank until 1943, and kept deposits in London - because somehow they had knowledge of the (predetermined) 1970s stagflation and the collapse of the bretton woods agreement. Not only that, Maeve argues, more or less, that the Irish bourgeoisie which attached itself to finance in the 1980s was then able to somehow travel back in time to form the state in 1922, in order to make sure that finance capital was central to the interests of the native bourgeoisie and that those interests would remain secure - all driven by the knowledge that the post-WWII boom would fizzle out and the falling rate of profit would kick in.
Is this type of ahistorical reasoning the norm on the Irish left? It sits around and discusses with great intensity counterfactual universes instead of rolling up the sleeves and analysing the world that actually exists? Is this how it spends its afternoons when it’s not shouting ‘tax the rich’ and ‘Jack O’Connor is a sellout’ outside the Dáil and the GPO? Irish history is not Slaughterhouse Five, and the irish bourgeoisie is not Billy Pilgrim. They do not see the entire scope of irish history all at once. nor are they the passive recipients of outside forces. But, that’s the argument being made to counter the development of the Irish bourgeoisie from the 1840s to the present day as outlined in Sins.
I have argued both here on ILR and in the book that in the 1980s in many ways the rest of the world caught up with Ireland with regard to the centrality of finance capitalism to the economic power of the bourgeoisie and the private control of social services, not the other way around. The chapter on finance lays that out - it also happens to be a chapter that Maeve does not engage with in any real detail in her review. nor does she mention commercial property, tax havens, and the IFSC - all crucial to understanding the economic power of the irish bourgeoisie, and how that power, and the centrality of finance to that power, is intertwined with the foundation of the southern irish state itself. The story of the irish currency is told in the book for that reason - but again, completely missed by Maeve in her review.
Anyway. The main body of the review is focused on the observation that in my analysis of the development of the economic interests of the Irish bourgeoisie I don’t slag off unions and I display bourgeois liberal tendencies myself - as seen by my use of quotes from Shane Ross. Oh, and it’ll take real socialism to sort everything out.
Real socialism. That’s served at room temperature, isn’t it?