Monthly Archives For December 2013

The Irish Media – Cheerleaders For Austerity

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This article by Julien Mercille first appeared on the Social Europe Journal on the 17th of December.

A study of Irish press coverage of austerity between 2008 and 2012 conducted at University College Dublin confirms that the media have been relentless cheerleaders for austerity. The case is so overwhelming that it may even surprise proponents of austerity. The full report is available here.

Ireland has distinguished itself among European countries by implementing austerity at the outset of the current crisis, while a number of other governments reacted by first enacting Keynesian stimulus packages, in parallel to bailing out their banks, before turning to austerity. Austerity might be good for elites, but it attacks ordinary people by cutting government spending on social services, health care and welfare. It seeks to make labour more ‘flexible’ by dismantling and downgrading work conditions and protections to give more power to employers over employees. On top of that, it raises regressive taxes like the VAT and encourages privatisation of state-owned enterprises and assets, often sold to investors at bargain prices.

European authorities themselves have announced explicitly, and even proudly, that austerity is used to attack the welfare state and ordinary people. Mario Draghi, the ECB president, declared in an interview with the Wall Street Journal that the European ‘traditional social contract is obsolete’ and that ‘there is no escape from tough austerity measures’. He further said that continuing ‘shocks’ would ‘force countries into structural changes in labor markets’. Accordingly, Europe’s population faces repeated attacks from corporate and political elites, a fact noted by the New York Times recently when it observed that ‘Americanized labor policy is spreading in Europe’. It remarked that in 2008, 1.9 million Portuguese private sector workers were covered by collective bargaining agreements, but that the number is now down to 300,000. Greece has cut its minimum wage by almost a fourth, Ireland and Spain have frozen it, and in general labour protections have been reduced in peripheral Europe, so that austerity is ‘radically changing the nature of Europe’s society’. The developments will transform so deeply the social fabric that the chief economist of the International Labour Organisation described them as ‘the most significant changes since World War II’.

Therefore, in order for elites to convince the population that austerity is good for them, or to reduce the intensity of protests against it, a lot of ideological work is needed. This is when the media step in.

Ireland might be a somewhat special case on the European media landscape because all its major news outlets are right-of-centre. While that’s bad for those who want to know what is really going on, it’s good for the Irish and European elites who want a favourable spin on their policies.

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Socialist Party Resignation Statement

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This statement has been drawn up by the following recently resigned members of the Socialist Party: Andrew Phelan, Megan ni Ghabhlain, Richard O’Hara, Pamela Rochford, Stephanie O’Shea and Jimmy Dignam.

Notes:

Tragically, Rob Ryan passed away before this statement was completed but he played an important role in the debates that took place around the process of its writing. He repeatedly expressed agreement with the key issues contained within this statement and we feel it is vital that we acknowledge his contribution. We have included links to articles that elaborate further on some arguments made within this document as many of the topics described have been written on extensively before.

After our recent resignations it became clear to us that whilst differing on some issues there were some core reasons behind all our resignations. We hope that this document can be a contribution to the debates currently taking place around what kind of mass Party is needed to rebuild the workers’ movement and play a crucial role in overthrowing Capitalism. While not claiming to have the answer to this question we feel it is important for us to offer our criticisms not just of the Socialist Party or the Committee for a Workers International but Trotskyism1 as an ideology.

We are aware that the political movement that has been defined as Trotskyism has a wide and varied history, however for the purposes of this statement we will discuss mainly Trotskyism as practised by the dominant Trotskyist parties in contemporary polity and especially the version of Trotskyism dominant in the Irish and British left; that is the Committee for a Workers’ International, the Internatonal Socialists and the Workers’ Revolutionary Party. These parties and international groupings share tendencies discussed below that we believe point to serious issues with the ideology of contemporary British and Irish Trotskyism itself.

The reality is that none of us can stand over calling ourselves Trotskyists. Furthermore we feel that Trotskyism by its nature can in many instances act as an obstacle to the development of a truly mass and democratic workers’ party. This is not to malign the contribution of many individual Socialists who are members of Trotskyist parties but to recognise the inherent sectarian nature of these parties and the damage they can do to the wider movement.

In this statement we would like to raise tactical differences that emerged between ourselves and the SP but more importantly criticisms of Trotskyism that seem to permeate such organisations to varying degrees.

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Non-Fiction of 2013

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A selection of the best non-fiction read by Seán Sheehan in 2013. Also see the best fiction he read in 2013.

 

An Armenian Sketchbook, Vasily Grossman (Maclehose Press)

Grossman  made a two-month trip to Armenia in 1961. Some accounts say he needed the money, travelling there as part of an official commission to edit an overlong novel by an Armenian writer, but he also needed to get away from Moscow where officers had arrived at his apartment and confiscated the manuscript of his great novel Life and Fate. Not only had his magnum opus been ‘arrested’, his marriage was in tatters.

He writes of how one never forgets arriving  in a foreign city for the first time, in this case Yerevan:  ‘Its autumn leaves have their own unique way of rustling; there is something special about the smell of its dust, about the way its young boys fire their catapults.’ Sometimes you worry the prose might slip into swooniness but Grossman’s  romanticism is always tempered by the real, even at his most Dylanesque —

I saw warriors, knights, thinkers, swindlers, hucksters, poets, builders, astronomers and preachers. I saw collective-farm chairmen, physicists and engineers who built bridges.

— and it sits alongside an impish sense of humour: arriving in Yerevan, he notices the washing lines with ‘sail-like brassieres of hero-mothers’ and market stalls with eighteen-inch-long radishes ‘that seemed to be belong to some phallic cult’. He is  cynical about the criticisms being unleashed against Stalin, not because they are untrue but because they are expressed by those who previously worshipped him.  Grossman can be hard-nosed but is always alive to the contradictions of existence: Armenia’s always stony landscape yielding orchards of peaches; ordinary lives afflicted with tragedies yet loyalties surviving eternal (like the wife he meets who turned up at the Siberian camp where her husband was serving nineteen years and lived in a hut outside the gulag). His travelogue ends with an Armenian wedding, a tour de force that leaves more famous literary travel writers in a dull shadow. No other writer of our times has expressed with more unsentimental admiration the nature of what it means to live with a sense of nobility.

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From Alpha to Omega: #043 The Falling Rate of Learning

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The guest on this years Christmas edition of From Alpha to Omega is David Blacker. David is a Professor of Philosophy of Education and Legal Studies at the University of Delaware. His academic background is in the history of philosophy, and his writings pursue insights from that tradition within the context of contemporary education problems. His essays have appeared in the Monthly Review magazine, and he has just released an excellent new book, called, ‘The Falling Rate of Learning and the Neoliberal Endgame’, which looks at how the educational world is being affected by Marx’s law of the falling rate of profit. We discuss many of the themes of the book, including: determinism vs free will, base vs superstructure, the ‘Ye Deluder Satan’ Act, student debt and neo-feudalism, radical youth movements, and the utility of a stoic pessimism.

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The Terrible Debate that is in Store for Us in 2014

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We know what one of the big battles will be in 2014.  Ministers are making declarations.  Demands are being made.  Analysis (after a fashion) is being put forward.   Its tax cuts.   Daily we are being fattened up for tax cuts.

Let’s cut to the chase.  Wages will be depressed as part of the ‘wage-competitiveness’ strategy.  To compensate for this, taxes will be cut to give some increase in disposable income (take-home pay).  And with tax cuts, public spending will also be cut – public services, social protection, investment.  If this sounds familiar – tax cuts in compensation for low wage rises – that’s because it is; back to the future with a low-tax, low-spend, low-resourced economy.  If nothing is learned, nothing changes.

To clear the ground for this it has to be shown that Irish public spending his high. We had this last week with a highly misleading analysis.  Now we have, courtesy ofChris Johns in the Irish Times, an article with the sub-heading:  ‘Evidence does not support view Ireland is low tax economy’, Johns makes some incredible statements:

‘The data on international income tax comparisons do paint a very clear picture: we are at, or very close to, the top of the league tables in terms of effective tax rates . . . those who do pay tax and social insurance in Ireland shoulder a disproportionate burden, at least compared with other countries . . . if you are paying income taxes as well as PRSI and USC, you are amongst the hardest hit in terms of EU and OECD tax league tables.’

It would be nice if Johns put forward some evidence for this but, alas, that is missing.  He only refers to the fact that there are a lot of people who don’t pay income tax.  Therefore, he assumes that those who do are high-taxed.  This is pretty thin (and that’s putting it mildly).

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Regaining Our Sovereignty: A False Trail by a Sham Government

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Statement from the Communist Party of Ireland

Today (15th December) the Irish establishment loudly proclaims that this state, and by extension the Irish people, has regained its sovereignty. This is as far from the truth as one can get. The Irish establishment has long since abandoned the little sovereignty this state ever had.

The Maastricht, Nice and Lisbon Treaties copperfastened the straitjacket on the democracy and independence of Ireland, and the current talks on banking union are for tightening the straps even further.

The EU-ECB-IMF troika and the “markets” are controlled by the same forces, the same financial speculators and the same transnational corporations.   The direct  and open control by identifiable global financial institutions and individuals is no longer considered desirable or necessary, but the same class and the same forces remain in charge  – with the complete and abject acquiescence of the internal political troika  Fine Gael, Fianna Fáil and Labour, and the Irish business interests they represent.

The indebtedness of this state to the amount of 125 per cent of GDP by the socialisation of the odious corporate debt imposed upon our people, is simply unpayable.  The programme of privatisation of  state owned companies and public service will continue.  The people’s wealth will be sold off at bargain basement prices.  The so-called “markets” will have first call on the wealth created by Irish workers in the form of debt servicing.

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Fiction of the Year

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A selection of the best fiction read by Seán Sheehan in 2013.

Top Fiction of 2013

Something Like Happy, John Burnside (Jonathan Cape)

Frank O’Connor wrote how the short story is marked by ‘an intense awareness of human loneliness’ and given the unsettling mix of memory and melancholy that haunts the stories of John Burnside it is tempting to locate the genre in such a desolate landscape.  But Burnside’s canvas is larger: his writing has an acuity that goes deeper than a sense of the isolation of the individual’s existence. What F.R. Leavis said about Lawrence helps bring out more carefully the special quality of Burnside’s stories. Leavis, wanting to defend Lawrence against those who saw him as an arrogant and uncouth genius, applauded his reverence towards life. It found expression, he said, in a certain tenderness; not ‘tender-minded’ or soppy, he hastens to add, but something strong and clairvoyant and incorruptible in its preoccupation with realities of living. There is reverence in Burnside too and it exists alongside his ability to evoke the pain of just being alive, of remembering loss and the lacerations of time. This sensitivity – what Keats in ‘The Fall of Hyperion’ calls ‘the giant agony of the world’ —  verges on the morbid and risks crossing over into the unrepresentable but Burnside always keeps this side of the border; he also avoids gratuitousness.  In ‘Peach Melba’, one of the unforgettable stories in this remarkable collection, he doesn’t surrender to the gestural. Instead, he orders his language to recall with precision the narrator’s memory of someone he once worked with and had known – but only too briefly.

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Celebrating the Exit

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The bailout for Ireland has been a resounding success.  The austerity programme that has been in place since 2008 has brought us back from the brink and piloted the economy back into recovery and economic sovereignty.  Let us rejoice.  Let us spread the word among the nations.  We have succeeded.  We are the solution to everyone’s problems everywhere.

And we have so much to celebrate.

Nearly 300,000 jobs have been destroyed, – more than one in every twelve jobs.  Our job destruction rate is five times the rate in the Eurozone.  We lead the EU in precarious work.  We have one of the highest level of low-pay.

One-in-seven of our young people have fled the island due to the recession.

25 percent of the population suffer multiple deprivation experiences – over one million people.  Over 30 percent of our children live in deprived conditions, while one-in-five people at work suffer deprivation at home.

One-in-ten people suffer from food poverty – it’s called hunger.

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Public Spending Cuts Have Been a Waste of Time

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Now that the Troika is leaving town it is a good time to take stock.  We don’t do that very well.  We don’t evaluate, we don’t compare inputs with outputs.  We have policy by feeling, intuition, inertia.

Take public spending; since the beginning of the crisis we have been lectured daily about bringing the deficit under control.  To do that it was asserted that we had to cut public spending.  There was rarely any evidence put forward as to whether public spending cuts would actually result in deficit reduction, or by how much – it was just assumed.  As I said:  feeling, intuition, inertia.

Dr. Rory O’Farrell from the Nevin Economic Research Institute has produced a working paper to help us assess the efficiency of spending cuts – The Effects of Various Fiscal Measures.  And there is no doubt about it:  we have been taken for a ride.  Cutting public spending is one of the most inefficient and wasteful means to reduce the deficit.

Rory produces a number of budgetary examples:  a €1 billion cut in social transfers, investment, public sector wages, public sector employment and non-wage public consumption (purchases of goods/services from the private sector).   Using the HERMIN model which was created to examine the effects of EU cohesion and structural funds throughout Europe, Rory assesses the impact of these measures on a number of indicators:  GDP, consumer spending, employment, balance of payments, the deficit, etc.

It should be noted that this is a model.  It is not an empirical investigation and, just as with the ESRI’s HERMES model, it has limitations and caveats.  So the following should be treated as indicative.

The following compares a cut of €1 billion with the reduction in borrowing, or the deficit, under the various budgetary measures.  I have averaged the impact over the eight years that Rory measures the cut.

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As seen, most of the austerity measures produce a deficit reduction of less than 50 percent of the headline cut.  The highest deficit reduction rate comes from non-wage public consumption but the level of cuts in this area has been relatively small.

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Tales from Tax Haven Ireland: Irish Property Stuck on Repeat

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“The economy returned to growth in 2011, continued to grow in 2012 and my Department are forecasting continued growth in 2013. In my two Budgets I introduced a number of sector specific initiatives to support this recovery and I am pleased to say that we are starting to see a number of these bearing fruit. Take the commercial property sector for example, recent reports show activity in the first half of this year surpassing transaction in 12 months of 2012. Interestingly, over 50% of the investment is international money coming into the country. We have also just seen the launch of Ireland’s first REIT and I would expect more activity in this area in the years ahead. This is welcome and is supported by Capital Gains Tax incentives in Budget 2012 and the legislation underpinning REITs introduced in Finance Bill 2013.”

–          Minister Michael Noonan’s speech to FSI Annual Lunch July 4th, 2013

I’m sure people think we’re cracked saying Ireland is a tax haven, again and again.

One of the fundamental characteristics of a tax haven is that much of the economy is structured around the managing of hot money from international clients with other elements ignored or neglected. It is essential, if such an environment is to be valuable to their foreign customers, that the vast majority of the money ‘invested’ remains untouched. That is, the quantity of investment going in has to be the same as that going out. However, there is an additional qualification over this movement: the money going out has to be free of any tax obligation – it cannot incur any additional expense once it leaves. This is done in two ways: the first is by nominally taking in money through an opaque structure of sovereign laws backed by OECD credentials and a ‘regulated’ stock market and thereby washing its profits to avoid almost all of its global tax bill. This is complex and requires certain restructuring of the investors’ financials. It also involves buying substantial and expensive advice from suitably qualified tax lawyers. The second, less complex route is to avail of various tax credits and other profit washing mechanisms that are available through property acquisition.

Up to 2008 this washing of profit money via property acquisition occurred largely through Anglo Irish Bank, although the other banks became heavily, and aggressively involved too. Anglo Irish Bank and AIB, and to a lesser extent Bank of Ireland and Irish Nationwide (who were more focused on local rentiers) provided the means of washing profits through the commercial property market in Ireland, the UK and the US. The means of doing this was provided in part by the shadow banking system, mainly based in the UK. Irish regulation had a reputation of not wanting to know too much about the business that international clients were involved in. After all, the business model is based on ensuring that the money that is brought in is able to get back out again in the same condition it entered. They guarantee it will never be taxed while in Ireland. This form of regulation was designed primarily to transform the IFSC into a powerhouse for the management of international financial capital. International investors were also incentivised to invest, either directly or through an SPV, in large Irish properties during the property frenzy where upward only rent reviews and multinational companies as tenants (whether they are highly profitable global software companies or the Irish outlets of large retail chains) provided a state guaranteed return. After all, upward only rent reviews are protected by the constitution! Their usefulness as a financial asset then was assured, as they provided collateral on future rounds of debt creation and profit. And, of course, all of it was tax free and unmonitored.

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South Africa’s Unfinished Democratic Revolution

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Nelson Mandela’s death has elicited fulsome tributes from those who were happy to truck with the apartheid regime when he was in prison. There’s no need to linger over their hypocrisy here. Those who supported the struggle against apartheid before it was easy or fashionable will rightly mourn a great popular leader whose personal sacrifices are well-documented. 

Yet Mandela leaves behind an ambiguous legacy for South Africa. Strongly influenced by the collapse of the Soviet Union and the triumph of neo-liberalism in the West, Mandela and the ANC leadership accepted a peace settlement that left the economic structures of apartheid in place while the political system was being democratized. Two decades after the first multi-racial elections were held, white households still earn almost $50,000 a year on average, compared to $8,000 for their black counterparts. 

This article was first published by the Irish Socialist Network as a pamphlet in 2009. Since it was written, Jacob Zuma has replaced Thabo Mbeki as South African president and ANC leader. More importantly, the massacre of 34 striking miners at Marikana in 2012 has dramatized like nothing else the yawning gulf between the ANC and the people who brought it to power. As Mandela himself warned in 1993: ‘How many times has a labour movement supported a liberation movement, only to find itself betrayed on the day of liberation? There are many examples of this in Africa. If the ANC does not deliver the goods you must do to it what you did to the apartheid regime.’ 

Writing in 1989, the journalist Heidi Holland concluded her sympathetic history of the African National Congress (ANC) with a warning about economic policy in the post-apartheid era: ‘The greatest threat to future economic prosperity under majority rule is that blacks may have become so disillusioned by the capitalist system, identifying it with repression, that they will demand sweeping nationalization of industry.’ Two decades later, her concerns appear totally misplaced. But they would have found support in the early remarks of Nelson Mandela after his liberation from Robben Island: ‘The nationalization of the mines, banks and monopoly industry is the policy of the ANC and a change or modification of our views in this regard is inconceivable.’

We know now that a reversal of the ANC’s commitment to public ownership was anything but ‘inconceivable’. The movement that led the struggle against apartheid for half a century has embraced the orthodoxy of the ‘Washington Consensus’ and governed in strict accordance with neo-liberal tenets. Whether this move is considered a welcome embrace of pragmatism or a shameful capitulation, its emphatic nature cannot be denied. Thabo Mbeki’s willing description of himself as a ‘Thatcherite’ could readily be applied to his party and government as a whole.

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December Issue of Socialist Voice Out Now

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The December issue of Socialist Voice is out now.

Read it online or download it here.[pdf]

Articles in this issue include:

  1. “Reform or revolution?” [NL]
  2. A stealth treaty to further erode national rights [TMK]
  3. Health worsens as mandarins thrive [MA]
  4. Is charity the enemy of justice? [RCN]
  5. Transatlantic trade and investment: Governments to be legally subordinate to corporations [PD]
  6. Bagenalstown Credit Union and its problems [MA]
  7. Guidelines for common or convergent action (15th International Meeting of Communist and Workers’ Parties, Lisbon)
  8. Venezuela in the firing line [TMS]
  9. Venezuelan students to receive laptop computers and free wifi
  10. Pensions and pay reduction [JM]
  11. A moral choice: choose war or peace
  12. Time to fight back against monopoly [PD]
  13. Frank Conroy commemoration
  14. Dublin Community TV: the latest victim of cultural cut-backs

“Reform or revolution?”
This is the question presented by elements of the left, as if that’s it: that’s the sum total of what the so-called left can offer working people. We can either reform elements of capitalism but maintain its essential features, and this will solve the unemployment crisis, inequality, and a variety of other systemic but undesirable features of the system, or we can “call for” a revolution, and the workers, once freed from their union-bureaucrat oppressors, will down tools and seize state power—usually without questioning the role of the European Union. With a ten-point plan to accompany it, we’re all set to save humanity.

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On the Death of Nelson Mandela

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Statement by the Communist Party of Ireland, 5 December 2013

The Communist Party of Ireland expresses its great sadness at the death of one of the great anti-colonial leaders of the late twentieth century, Nelson Mandela.

Mandela was a towering and inspirational figure, a leader of the oppressed of South Africa and beyond. Together with other liberation leaders he was convicted in the Rivonia Trial, concerning two charges of sabotage, one under the Suppression of Communism Act and one under the General Law Amendment Act. Their arrest and trial provoked worldwide solidarity, with money being collected in Ireland and around the world in the early 1960s to be sent to the International Defence and Aid Fund to assist Mandela and the other liberation prisoners in their legal defence.

At this moment it is important to acknowledge the major contribution made by working people around the world to Mandela’s liberation.

Despite spending decades incarcerated in apartheid prisons, he remained unbowed and unbroken. His walk to freedom, with his wife, Winnie Mandela, beside him, was a defining image of the late twentieth century. The white apartheid regime, which for decades nestled snugly under the protective wing of western governments, did not and could not break him or the people’s resistance.

In one of his first speeches Mandela paid tribute to the unbreakable and unselfish solidarity given to the oppressed masses of South Africa by the Soviet Union and the socialist bloc, as against the inaction and active collaboration of almost all western government with the apartheid regime that incarcerated him for twenty-seven years. Mandela also paid tribute to the heroic Cuban internationalists who defeated the invading South African army on the battlefields of Angola, which marked the beginning of the end of apartheid South Africa. No doubt those same western governments will now heap false praise on this champion of human liberation, though they did nothing to help during his long incarceration.

With his passing we also remember the thousands of ordinary citizens, both inside and outside South Africa, who campaigned for his release and for the imposition of sanctions on the apartheid regime but whose demands fell on deaf ears for many decades.

With the death of Nelson Mandela humanity has lost a deeply humane and committed liberation leader. We salute him and all the great leaders and fighters who struggled, and those who are still struggling, for freedom and social liberation. The long walk to freedom still has many miles to go.

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