Some of you might consider this article to be a little pointless; after all, what's the big deal with finding a locksmith to change a lock on your door? The job might be as easy…
Monthly Archives For April 2015
The following statement has been agreed between the People Before Profit Alliance, the Anti-Austerity Alliance and some independent activists including Cllr Brendan Young.
The anti-water charges movement, which has seen hundreds of thousands mobilise and become active in campaigning, has transformed politics in this country. It has forced climbdowns by the government and given people confidence and hope that the austerity agenda can be defeated. It has opened a potential to build a significant Left, working class political movement.
We welcome the initiative by the trade unions involved in Right2Water to host conferences in May and June to discuss a political initiative. The fact that a number of significant unions are discussing launching a political platform and considering support for a range of candidates is a very important development. It could create a political pole of attraction for many who are fighting austerity and oppression – and who are looking for a political formation that fights for genuine social equality.
For a democratic, bottom-up, participative approach
In order for this to have the best chance of achieving its potential, we think it is essential that the process of deciding on a political platform and an approach to the general election is participative, open and democratic. The mobilisation and democratic self-organisation of people in their communities is vital to the strength of the movement against the water charge. Their involvement is essential for the development of mass support and participation in any new political initiative which could have an impact similar to Syriza or Podemos.
We welcome the initiative of the unions to organise events in May and June. But it is vital that these events do not remain limited and invite-only. Instead, they should become conferences involving all sections of the anti-water charges movement, anti-austerity groups and those active in fighting for democratic rights who favour taking a political initiative on an explicit anti-austerity basis.
In advance of the 13 June event, we think there should be local open meetings or assemblies of everybody active in the anti-water charges movement or other active social movements, meeting to discuss the issues and to decide on delegates to send to the event. The meeting on 13 June should therefore be a much larger meeting than 200 people: as well as including trade union representatives and political representatives, it should include representatives of campaign groups across the country, selected by those involved in campaigning on the ground. On foot of this, the June gathering should be able to decide for itself the political positions it adopts and how to proceed – not simply endorse previously determined statements.
Non-payment of water charges is key
We believe that this political initiative should complement the crucial struggle against water charges in the coming months – not become an alternative to it. In order to advance the actually existing struggle against austerity – the movement against the water charge – and to draw on its strengths and develop mass support, the political initiative should champion the demands of the movement, openly call for non-payment and use its forces to organise non-payment and active resistance to water metering on the ground. This should be part of a general approach, which is to use elected positions to encourage struggle from below, rather than focusing on elections and parliamentary positions.
Principled positions against austerity and for democratic rights
We think that the initiative should adopt a principled anti-austerity position. That means committing to oppose and organise to fight against any more austerity and for an immediate reversal of key austerity measures such as water charges, property tax, USC for those on average or low incomes, health, education and welfare cuts. It also means developing a strategy for repudiation of the bankers’ debt; for a write-down of residential mortgages; for taxation of wealth and big business profits; and against privatisation of public services and natural resources.
Instead of putting money into bank debt, we think there should be public investment in housing, healthcare, education, childcare, public transport, water services, renewable energy and environmental protection – as the start of re-orienting economic activity to meet social need and provide useful work for young people and the unemployed.
A new political initiative should stand for the separation of church and state; and commit to extending democratic rights to all oppressed groups: women, the young and the old, LGBT people, Travellers, migrants, asylum seekers and people with disabilities. As a first step, it should commit to campaigning for a Yes vote in the upcoming marriage equality referendum; and to campaign for repeal of the 8th Amendment and lift the ban on abortion in Ireland.
We also think a political initiative should champion the right of workers to defend their jobs and living standards. It should support solidarity action with the likes of the Dunnes workers and action to scrap the anti-union laws. Opposition to austerity should not stop at the border: we think austerity must be fought both in the North and the South. The implementation of Westminster cuts by Stormont is no more acceptable than the implementation of Troika cuts by the government in the South.
Reject coalition with Fianna Fail, Fine Gael or Labour
This kind of real change requires a political alternative that will break the rules that impoverish working class people. We cannot do that if we accept the approach of Fianna Fail, Fine Gael and Labour – the proponents of austerity, inequality and oppression. So a new political initiative must publicly commit to reject any coalition or deals with Fianna Fail, Fine Gael or Labour.
What was the point? Two documents with over 100 pages between them. Hours spent in the Dail. Many more hours of commentary in the media. And the whole thing boiled down to only one substantive policy statement: the Government will have between €1.2 and €1.5 billion available for tax cuts and spending increases, which they intend to disperse on a 50/50 split. That’s it. Would have taken a Minister a few seconds to stand up and say that. Instead, we got bells and whistles and the Spring Statement.
While we were led to believe the Government would outline their plans for the next five years, they did no such thing. Tables feature budgetary projections up to 2020 but after 2016 they are, in policy terms, meaningless. All they show is what would happen to revenue and expenditure if there were no policy change; in other words, no spending or tax changes. So we have to take the Government’s intentions in 2016 and extrapolate from that based on Ministerial nods and hinds. Let’s go through a few points.
We are now entering Phase Two of austerity. The first phase involved Ministers announcing actual cuts in government spending. The second phase will see public spending cut in real terms; that is, after inflation. Public spending will struggle to maintain pace with inflation. And this at a time when we have (a) a massive social repair job after the damage of years of recession and austerity; and (b) growing demographic pressures. And none of this considers trying to move to a modern European social state.
In 2016, we can see this pattern starting.
Primary spending (which excludes interest payments) will rise by approximately €400 million in net terms. This no doubt includes €200 million in reductions in unemployment-related payments. However, using the GDP deflator as a proxy for inflation, we see an actual cut in spending – because spending would have to double just to keep pace with inflation.
Austerity is dead. Long live austerity.
Playing the Fianna Fail Card
Prior to the crash, Fianna Fail slashed all manner of taxes. They got away with this because the coffers were filling up with revenue from the speculative boom. When boom turned to bust, the weakened revenue base was exposed and public finances collapsed.
An important question that those opposing the water charges, austerity, growing inequality and those looking for an alternative to the establishment political parties are asking is; what exactly are we looking to achieve and how are we going to do it? There are immediate changes needed such as getting rid of the water charges and Irish Water, reversing austerity and cuts and standing up to Europe (and with Greece) on the immoral debt. There are also more profound changes being sought such as achieving the right to housing, health, education, decent jobs etc for everyone. These will require the creation of a real Republic of equality and a genuine democracy where people are treated with dignity and have a real say in the running of their community, their country and Europe. But the most important change is already happening; that is the active participation and empowerment of the (extra) ordinary citizens at the grassroots who are changing their world by standing up for themselves through protest and political action.
It is becoming clear to more and more people that a government dominated by the establishment parties (Fine Gael, Fianna Fail, Labour, Renua & other ‘fake’ independents) will not achieve these necessary radical reforms. Ordinary people have to do it themselves by creating a government that is made up of the people’s representatives – without any of the establishment parties involved. A people’s government would be anti-austerity, anti-establishment, rights-based, and progressive. Let us learn from previous mistakes and understand that it is not sufficient to be a minor player in government – for real change the people’s representatives must be the government. To do this anti-establishment and anti-austerity groups and parties will have to convince the majority of people in Ireland (particularly the undecided voters from a wide breadth of societal groups) to vote for anti-establishment candidates. The task then is not just to protest and resist but also to try win the coming general election. In order to win we must believe that we can win and we must plan to win. But winning is not just changing the faces in government, it is bringing about a New Republic – a real democratic transformation by an empowered citizenry.
This means that electing an anti-establishment government is only one part of a process of empowerment of ordinary people to transform Ireland. That process must also take place in communities and workplaces, creating new forms of socially caring and enterprising employment that can make solidarity and cooperation the key values of any New Republic. It also means that election and government processes should be led by the citizens, communities and ordinary people. It should continue the new wave of citizen empowerment from the water movement. This also means that if anti-establishment opposition do not win the coming election at least we will have been further empowered to pressure whatever new government is elected to take these issues seriously. Importantly, it will ensure that a solid foundation is put in place to be the major opposition (in the Dail and on the streets) and to be in a much better place to win in the subsequent election, which could come much sooner than expected, and to continue to protest and campaign on a wide range of issues.
Convincing a majority of the population to support an anti-establishment political alternative is going to be extremely difficult and challenging. Multiple approaches and strategies are required. None of the anti-establishment groups, the trade unions, independents, Left political parties, or the communities can achieve this on their own. Therefore, unity and coherence is required amongst as many of these as possible in order to offer a clear alternative to people in the election. This will show people that we are serious and that there is a credible, serious and coherent alternative that is worth voting for.
That is not to say everybody has to be part of the one organisation or alliance. There is the opportunity for multiple organisations to be part of a new alliance or there might be a number of alliances and parties co-ordinating together. There will be some who do not wish to be part of any of these and that should be respected just as the desire for those who want to work together on this new alliance should also be respected. The politics of new alliances must be inclusive and respectful of each other and the principles or plurality and diversity. If we are not trying to be the very change we want to see in the world then we have failed from the start.
One idea could be to form a new umbrella alliance or political movement like Syriza in Greece, Podemos in Spain or the SNP in Scotland. This new alliance could be made up of some of the Left parties, new movements, independents, communities, trade unions, and individuals. Let’s call it the Movement for A New Republic for the moment. In the election the people would have a real choice between the Movement or the establishment parties. The Movement for A New Republic would say to the people ‘we are standing for election to become a government of the people that will not involve any of the establishment parties’. This new political movement would aim to represent the ideals and vision of the 1916 Proclamation- in a meaningful way – for a sovereign, democratic, New Republic, New Ireland of equality and social justice, based on the protection of the vulnerable, community and fairness and assertion of the rights of all.
One single major political alliance or movement appears to be a key part of gaining majority public support for a new radical politics in Greece and Spain, rather than lots of smaller groups. The experience of other countries also suggests that the success of new political parties and movements is exactly that – that they are actually new and are not dominated by their past. A new movement that is clearly anti-establishment, standing for the ordinary people against the cronies and elite, made up of leaders that are new (or clearly independent from) to the political system, could gain significant additional support, and therefore, increase the possibility of an alternative government and a new politics in Ireland. This movement should also play a key role in representing the desire for a completely new politics in Ireland for the long term beyond the coming election.
Ideally then the Movement for a New Republic would include the broadest possible alliance from Sinn Fein to Says No Groups, trade unions, independents, communities and socialists, similar to the successful water movement. While there are many differences between these groups – the only realistic way an alternative government is going to be formed is to work together. Anti-establishment candidates should be supportive of each other against the common enemy of the establishment parties. There has to be an end to divisive actions and attacks on each other, and removing dogmatic approaches that alienate potential supporters beyond the ‘true believers’, and an agreement that we want to be in government and not just permanent opposition. There would need to be Movement candidates in every constituency in order to get sufficient TDs to gain the majority to form a government. The media will also be an important battle ground and, therefore, leaders and spokespeople are required who can represent the message of the new movement in a way that connects with the majority of people.
This article originally appeared on Socialist Economic Bulletin on Friday the 24th of April.
The world economy is not strong and the President of the United States is sufficiently concerned about new shocks to it that he recently met the Greek Finance Minister to urge ‘flexibility on all sides’ in the negotiations between the Syriza-led government and its creditors. US concern is fully justified.
In any attempt to reach agreement it is important both to have an objective assessment of the situation and to understand the perspective of those on the opposite side of the table. In Mythology that blocks progress in Greece Martin Wolf, the chief economics commentator for the Financial Times argues that negotiations to date are dominated by myths. He demolishes some of these key myths in turn: that a Greek exit would make the Eurozone stronger, that it would make Greece stronger, that Greece caused the crisis driven by private sector lending, that there has been no effort by Greeks to repay these debts, that Greece has the capacity to repay them, and that defaulting on the debts necessarily entails leaving the Eurozone.
Together, these provide a useful corrective to the propaganda emanating from the Eurogroup of Finance Ministers and ECB Board members. Some of this is slanderous, in repeating myths about ‘lazy Greeks’ (who have among the longest working hours in Europe). Much of it is delusional, based on the notion that Greece can be forced to pay up, or forced out of the Euro without any negative consequences for the meandering European or the world economy.
A genuine belief in a false idea, or a demonstrably false system of ideas constitutes an ideology in the strict meaning of that word. Inconvenient facts are relegated in importance or distorted, and secondary or inconsequential matters are magnified. Logical contortions become the norm.
All these are prevalent in the dominant ideology in economics, which is supplemented by another key weapon, the helpful forecast. In Britain for example, supporters of austerity argued it would not hurt growth and the deficit would fall. Now there is finally a recovery of sorts, they argue austerity worked, ignoring all the preceding five years and the unsustainable nature of the current recovery (and the limited progress in reducing the deficit).
For Greece the much more severe austerity and its consequences means that supporters are still obliged to rely on the helpful forecast to support their case. The Martin Wolf piece includes a chart of IMF data on Greek government debt as a percentage of GDP, which is reproduced in Fig.1 below.
The IMF includes not only data recorded in previous years but its own projections for future years. From a government debt level of 176% of GDP in 2014, the IMF forecasts a fall to 174% this year and 171% in 2016 and much sharper declines in future years. The IMF has also forecast an imminent decline in Greek government debt ever since austerity was first imposed in 2010, which has not materialised.
Note venue: Pearse Centre (27 Pearse Street)
Saturday 25 April
Esther en Alguna Parte [Esther Somewhere] (2013)
The peaceful life of Lino, a widower who keeps busy with the simplest everyday things, is turned upside-?down when Larry Po, another quirky old man who has multiple personalities, tells Lino that his late wife, Maruja, led a double life: by day a housewife, at night an impressive singer of boleros. Given the possibility that perhaps he had not really known her, he becomes a detective obsessed with finding the truth. ? Directed by Gerardo Chijona. ? In Spanish with English subtitles. ? Running time: 95 minutes.
Tarde para Ramón [Too Late for Ramón] (2013)
Nerve-racking, unforeseeable events throw a Havana taxi-driver for a loop, rushing to finally settle an issue haunting his relationship with an estranged daughter before she flies away that afternoon. ? Directed by Daniel Ramón Chile. ? In Spanish with English subtitles. ? Running times: 10 minutes.
Habana Station [Havana Station] (2011)
Filmed in a slum in western Havana, this film addresses inequalities in Cuba through the relationship between two children of different social strata. The film was selected for Best Foreign Language Film at the 84th Academy Awards. ? Directed by Ian Padrón. ? In Spanish with English subtitles. ? Running time: 95 minutes.
And lots more…
Fianna Fail has announced that it will bring in a new childcare tax credit f it gets elected. On that basis alone we can only hope they don’t get elected. And any other party that offers such a sop.
It seems that whenever there is a problem in our economy, some party or group of experts have a ready-made response: tax break. An under-performing enterprise sector? Tax break. A problem with housing? Tax break. Poor take-up of costly and uncertain private pensions? More and more tax breaks. It’s easy to understand. With tax breaks, policy-makers don’t even break out into a sweat. No detailed analysis, no innovative thinking, no attempt to build an infrastructure (which is truly hard work). Nope. Just close your eyes and throw the tax brteak at the economic dartboard. And if it misses? Throw another, throw more, convince yourself that you’re solving the problem.
Let’s cut to the chase: if tax credits are introduced it won’t do anything to make childcare affordable. It will probably increase the cost of childcare, thus wiping out some/most of the cash given to households through the taxation system. There is nothing to suggest it will increase quality of care. And it will have the least impact for the low-paid. Here are some of the arguments.
Childcare is costly – labour-dense and, thankfully, tightly regulated which can drive up costs. A model that is based on economic charging – which means revenue must at least equal expenditure – has to charge high fees. Deloitte’s Review of the Cost of a Full-Day Childcare Placement (which doesn’t seem to be on-line) estimated that the weekly cost per child is between €215 and €254 per week. And that was in 2007. Inflation index that up now and the costs will have increased. For a 45 week placement, the costs could reach €10,000 per year.
Let’s say a tax credit of €2,000 is provided. While that sounds high it would only mean a tax break of €400 (€2,000 at the 20 percent tax rate). This wouldn’t even pay for two weeks for a full-day childcare place.
If the tax credit was increased to €5,000 – a hefty amount – the cash amount would be €1,000. Again, sounds like a lot but would only amount to a few weeks cost. This could assist households that only use childcare part-time (e.g. after-school) but it is the households that need full-time childcare that face the greatest costs.
In short, the tax credit could be substantial but would still have little impact on households most in need.
Then there is inflation. Childcare providers are experiencing considerable cost pressures; most notably in the area of wages. Some are using JobBridge and the Community Employment Scheme to lower costs while others have been suppressing wages to near minimum wage level. Many community non-profit providers have experienced cuts in public grants and subsidies. There would probably be pressures related to delayed investment as well as providers would be trying to minimise costs during the recession and stagnation.
Which is why it would be understandable and economically rational (if not necessary) if providers increased their fees were households to receive a subsidy. In effect, the tax break would subsidise the provider, not the household.
We can see how this works when looking at the historical trajectory of childcare inflation. In the periods between 2000 and 2008, child income support increased dramatically (e.g. Child Benefit, Early Childcare Supplement). So did childcare costs.
- Between 2000 and 2006, overall inflation increased by 12 percent; childcare costs increased by 32 percent.
- Between 2006 and 2008, overall inflation increased by four percent; childcare costs increased by 11 percent.
Let’s assume that childcare costs increased by five percent over the two years after a credit was introduced. This would completely erode the benefit of a €2,000 credit and cut the €5,000 credit by half. Households would be running to standstill.
The April issue of Socialist Voice is now available online
Articles in this issue include:
Building the people’s resistance
James Connolly Festival, 2015
The first James Connolly Festival, sponsored by Socialist Voice, will run from the4th to the 10th of May in Dublin. It will be a week filled with music, theatre, talks, films, poetry readings, and performances by singer-songwriters, with lunchtime theatre and film shows in the New Theatre. (For full details see the festival programme at www.jamesconnollyfestival.com.)
Workers in struggle
After the magnificent one-day strike on the 2nd April by the workers employed by Dunne’s Stores, the management have embarked on a vindictive campaign to punish selected workers for going out on strike to protect and advance their rights.
The workers’ trade union, Mandate, has received reports from members all over the country who have experienced dismissal or cuts in hours, changes in job roles, or changes in shift patterns. Election promises, and business as usual
As Britain’s political parties began their general election campaigns with a series of televised debates, two interesting messages emerged from one of the widely watched, albeit less than inspiring, media events.
ITV’s seven-person debate demonstrated that, for the first time since the 1920s, British politics are no longer bipolar. Secondly, it is now very evident that not only is Northern Ireland not “as British as Finchley” but that it is not considered integral to Britain’s political discourse at all.
Creeping privatization, Kieran Crilly
The Government of Fine Gael and the Labour Party is privatising 10 per cent of Dublin Bus and 10 per cent of Bus Éireann. This is only the beginning, as the private sector will not be satisfied until these services are 100 per cent private.
And lots more….
P 1. EU addresses the Democratic Deficit! With a Parliament that cannot initiate legislation and an executive that is unelected, the EU’s attempt under the Lisbon Treaty to get closer to its ‘citizens’ has been a dismal failure.
P 1. WE KNOW WHAT THEY’RE UP TO! Let them know that you are opposed to TTIP and CETA! Do come down to the EU offices in Molesworth St at lunchtime on Wednesday next; 22nd – even if you can spare only five minutes – It is important.
P 2. The Greek lesson; so far! Upon coming to power the Greek Syriza Government wanted to end all existing agreements with the “troika” on the grounds that these had been decisively rejected by the Greek people.
P 3. Commission’s advisory group lets shale gas industry set the agenda. The EU Commission is talking up its climate ambition on the road to the Paris UN climate talks. But a new briefing shows that its advisory group on shale gas is opening the back door to fracking, despite massive public opposition.
The decision by the National Transport Authority (NTA) to franchise out 10 percent of Dublin Bus and Bus Eireann routes for private tendering, which could cause industrial disruption, signals the start of the race-to-the-bottom in the public transport sector.
One of the more interesting aspects is that the NTA did not model their proposals, did not produce a business impact-assessment, did not undertake a cost-benefit analysis to justify the need for, or benefits from for franchising. Now just think on that for a moment. If a private sector company decided it was going to franchise or outsource 10 percent of its business, there would be cost-benefit analyses and business –impact assessments all over the place – upsides, downsides, alternatives. Any senior management attempting to railroad such a franchise initiative through without such analyses would be clearing out their desks by noon.
What the NTA did do was commission Ernst & Young (E&Y) to provide an analysis. And in keeping with that time-honoured tradition of providing the conclusion that the commissioning agency desires, E&Y did not disappoint (just as they didn’t disappoint Anglo-Irish Bank). So what was E&Y’s main argument? That franchising delivers efficiencies and cost reductions. What did they base this on? One academic study.
The OECD’s Privatisation and Regulation of Urban Transit Systems which E&Y relied on is certainly a comprehensive study, gathering evidence from a range of countries that purport to show the efficiency of privatisation of public transport systems. The problem with this approach is that you can find academic studies producing a number of conflicting and contradictory conclusions over the same proposition.
For instance, the OECD study claimed that in Sweden between 1987 and 1993, following privatisation, total bus transport costs fell by 13 percent. However, a more recent study found there is no evidence that the Swedish model of competitive tendering has reduced costs. Rather, the cost per passenger trip increased well above the rate of inflation while efficiency levels fell by over 30 percent. This study was available to E&Y; they decided not to present this information.
Or how about this: a wide ranging international study of bus services covered 73 cities with different types of bus operators in Europe, North America, Latin America Asia and the Middle East. It found no significant difference in efficiency between public or private operators:
‘Statistical tests do not show any significance as regards relationship between efficiency and the type of operator….The efficient cities … are spread over different continents and public administration styles – Anglo-Saxon, Nordic and bureaucratic – and they are not concentrated in any specific type of operator.’
I could go on an on – but you get the point. Pull out an academic study that supports your preconceived position, claim this is what the ‘experts’ find, and ignore all other studies and experts who show something different – that approach hardly instils confidence.
Actually, E&Y gave the game away in a wonderful paragraph:
‘The key advantages associated with a move . . . to competitive tendering stem from elementary economic theory in relation to the effects of competitive pressures and market discipline. In essence, by putting the contract out to tender, market forces are brought to bear to reveal the most economically efficient provider, thereby leading to lower costs and – all things equal – a reduced requirement for subvention.’
There are two things here: first, is ‘elementary economic theory’. There you have it – ‘my ancient neo-classical economics professor said competition is best, so let’s privatise public transport – and ,hey, why not primary education . . . ‘ Never mind that this elementary economic theory is highly disputed – especially in public services; if you repeat it enough times you don’t have to bother with evidence or facts.
No wonder E&Y didn’t include the new wave sweeping through Europe – re-municipalisation of transport systems and public services in general. Local /regional governments – Germany, France, UK to name some – that had previously privatised their public transport are taking them into public control because of poor service and high fares. These places tried elementary economic theory – it didn’t work out.
But it’s the ‘reduce subvention’ argument that is the stunner.
‘A comparative analysis of subvention levels across Europe indicated that levels of public transport subvention vary between 35 and 60 percent of revenue. When all State interventions are taken into account, the level of subvention to Dublin Bus is at the upper end of the range.’
This is an outrageous assertion. The fact is that Dublin has a rock-bottom level of public subsidy.
In the past six weeks two proposals have been presented to Dail Eireann seeking to enshrine neutrality in the Irish Constitution. On both occasions the political parties that have between them formed all governments since the formation of the State voted against the proposals, thereby supporting the ongoing erosion of our neutrality as well as our continued participation in imperialist wars. This is despite the fact that a Red C poll carried out in September 2013 found that 78% of Irish people believed Ireland should have a policy of neutrality.
The first Bill was proposed by Sean Crowe of Sinn Fein on 6th March. In introducing it he said:
“This Bill seeks the insertion of a reference to neutrality in Bunreacht na hÉireann. Essentially, it seeks to amend the Constitution to ensure Ireland could not, and would not, aid foreign powers in any way in preparation for a war, save with the assent of the Dáil. The Bill also affirms that Ireland is a neutral state and that the State would have a policy of non-membership of military alliances. Ultimately, it would give power to the people in that it would trigger a referendum on whether Irish citizens wanted Ireland to be a neutral country. The overwhelming evidence is that they do.”
Fine Gael opposition wasn’t surprising, as they have been trying to move the country closer to NATO membership for decades while hiding behind the notion of “military neutrality”. And since Fianna Fail were the party that gave the use of Shannon Airport to the US military for the invasions and occupations of Iraq and Afghanistan, and subsequently went on to argue that Ireland’s neutrality arrangements would continue under the Lisbon Treaty (while knowing that was impossible), their unwillingness to reinstate Irish neutrality wasn’t surprising either. But considering that the Labour Party voted in favour of the same Bill in 2003, their U-turn was particularly disappointing.
These three parties claim Ireland is already neutral on the basis that we are not part of any military alliance or a permanent military formation. This so-called military neutrality predates World War II and reflects the country’s long struggle for independence. In 1949 Ireland was invited to join NATO but it didn’t accept the invitation because it didn’t wish to join an alliance that also included Great Britain. Indeed a “triple lock” mechanism was devised to give effect to Ireland’s military neutrality policy; this means Ireland cannot send more than 12 military personnel overseas without government and parliamentary approval as well as UN Security Council approval for the mission.
The second Neutrality Bill was proposed by Mick Wallace TD on 27th March. In his speech he emphasised that in reality Ireland does not have a policy of neutrality anymore. He spoke of the need for an active neutrality which, as he said,
“embodies a commitment to the legal definition of neutrality as described by Hague Convention V and to the following values and foreign policy goals – peace promotion, non-aggression, the primacy of the UN and the confinement of state military activity to UN peacekeeping, not being involved in wars, impartiality and maintaining Ireland’s independence, identity and independent foreign policy decision making. These differ from the concept of military neutrality that has allowed us to facilitate the movement of munitions and millions of armed troops who are engaged in invasion and occupation through Shannon Airport.”
Wallace pointed out that the Government says it promotes disarmament and international peace while at the same time allowing the US military to refuel at Shannon, bring arms through Irish territory, go on to a war situation, drop bombs on people and kill a million civilians in a 13-year period. He also pointed out the increasing significance of the very lucrative arms industry, and in particular, its role in the election of Barack Obama as US President.
The Wallace Bill sought to affirm Ireland’s neutrality through adherence to the provisions of the 1907 Hague Convention (V) Respecting the Rights and Duties of Neutral Powers and Persons in Case of War on Land. In defeating it, Fianna Fail, Fine Gael and Labour showed their support for global militarization despite the devastating destruction and loss of life caused by it. They have given effect to this support by facilitating US military expansion and intervention, and by dragging Ireland into an increasingly aggressive NATO-EU alliance.
The US doesn’t need any help implementing its militarized foreign policy but our political elite still feel the need to provide some. With better resourced naval and air forces than any other country, the Americans possess the capacity to act militarily anywhere in the world as they pursue their interests and affirm what their military planners call Full Spectrum Dominance. Of course US politicians on all sides are wary of being sucked into another large occupation, in part because it would kill a lot of Americans, but also because they saw from Iraq that it didn’t work. But that doesn’t stop them from conducting airstrikes, as they are currently doing in Iraq and Syria, or providing aid and weapons to others including rebel forces (like they’ve also done in Syria) to help them engage in ongoing warfare on the ground.
There is widely followed debate between Ben Bernanke and Larry Summers which has important implications for the Irish economy and its trajectory.
Summers, who holds innumerable titles is a Harvard Professor and formerly chief economist at the World Bank, initiated the debate with the view that the advanced industrialised economies were experiencing ‘secular stagnation’ (pdf). Bernanke, who is ex-chair of the Board of the US Federal Reserve Bank, accepts that the industrialised economies have been experiencing weak growth but argues that that this was because of very different and easily remedial problems.
They are both wrong. Those who are interested in their detailed arguments, and the responses and counters, should read their many articles and papers in full. But the debate does shed light on some key problems, and the shortcomings of mainstream answers. Here the particular relevance is to the Irish economy.i
In dismissing the idea of ‘secular stagnation’ (that is, a long-term economic malaise which is distinct from the recent slump and its aftermath) Bernanke argues that it is the imbalances of savings and investment between countries that are the key problems. In a generic sense this would place Ireland in the dock, since the CSO reports a current account surplus in 2014 of €11.4bn, roughly 6% of GDP. Ireland escapes Bernanke’s censure, unlike China, because the scale of the Irish surplus is trivial in a global context.
But this highlights a wider point. The Irish current account surplus barely represents the activities of anyone based in Ireland at all. It is due to the activities of multinational corporations, many of them US-based, who park profits and other activity in Ireland to avail of ultra-low corporate taxes. Any national accounts are the sum of the different sectors, or classes, operating within it.
Risk and reward
Summers’ analysis has the merit of not treating the world as an economic version of the board game Risk. He relates ‘secular stagnation’ to the declining rate of productive investment (plant & machinery, factories, software, vehicles and so on, not housing) by companies operating in the industrialised economies. He also argues austerity is counter-productive, as it reduces their incentives to invest.
But Summers uses the economic jargon the ‘declining natural rate of interest’ to describe the decline of investment. This is in effect a decline in profitable investment or the requirement for investment to achieve profitability (citing companies such as Google and Apple who are hoarding vast sums of cash or WhatsApp which required little productive investment before becoming a stock market darling).
Yet WhatsApp made only losses, not profits before it was bought by Facebook for $22billion. Summers confuses stock market or financial speculation returns with profits. It is also the case that both Apple and Google do invest in new products, and require increasing productive capacity to do so. It is simply that the growth in their profits exceeds the growth in their investment, so that the cash hoard continues to grow. In effect, this is a drain on the economy as profits are realised but this capital is withdrawn from productive use.
How does any of this affect Ireland (apart from many of these companies being based here, for accounting purposes or otherwise)? This is shown in Fig.1 below, the total financial balances of two key sectors of the economy, companies (Non-Financial Corporations, NFCs) and government.
In 1985 President Ronald Reagan declared Nicaragua to be “a threat to the United States”, and proceeded to finance and arm the “contras” in order to overthrow the democratically elected Sandinista government. When, thirty years later the current president of the U.S. declares Venezuela to be “a threat to the United States”, it can only mean one thing – the U.S. is seeking to overthrow the government of Venezuela.
Since the election of Hugo Chávez in 1998 transformed the political situation in Venezuela and Latin America, the U.S. has striven to restore its dominion over the continent. It has supported and encouraged the Venezuelan ultra-right, during the coup d’état in 2002 and since, in all its efforts to destabilise and undermine the Bolivarian Government.
Last year the ultra-right organised street violence resulting in the deaths of 43 people. This year in February, Venezuelan security services uncovered a plot for another coup d’état. You would not know this from the Irish media who take their news from the Washington Post and the New York Times. They would have us believe that the deaths last year were the result of state repression of peaceful demonstrations and that there was no plot, that persons convicted of violent crimes or awaiting trial are political prisoners.
These false reports have been endorsed by the U.S. Senate and the European Parliament. It is on this basis that the Senate orders sanctions and the President issues his executive order.
The threats against Venezuela have been repudiated by UNASUR and by ALBA, representing a majority of Latin American States, who no longer accept the hegemony of the United States. The Coordinating Bureau of the Non-Aligned Movement in the United Nations has stated that they also reject the latest decision of the Government of the United States to expand it’s coercive measures against Venezuela.
The Venezuela Ireland Network is holding a demonstration outside the U.S. Embassy in Dublin from 2pm til 4pm on Sunday 19thApril, to call for the rescinding of the order declaring Venezuela to be a threat to the United States, for the ending of sanctions against officials who were only acting according to the constitution and laws of Venezuela, and for an end to all U.S. interference in Venezuelan affairs.
The ongoing events in the National College of Art and Design (N.C.A.D.) speak to a larger and slowly emerging crisis in the Irish educational system. Having endured increases in fees, an escalating dearth of studio space, and an ever more obstinate college bureaucracy and leadership, the students took it upon themselves to offer a list to demands to the college management. The college ignored the requests of the students, even going so far as to pull out of a meeting with the students where their concerns and objections would be voiced in person. The students responded by occupying a room in the college on Tuesday, March 24th, with further similar actions, including public lectures, having taken place in the last few days, and with more actions planned. A petition has also been circulated and signed by a number of Irish academics and graduate students, declaring solidarity with the students and the need for “another model of what higher education might be — one guided by the pursuit of learning rather than the pursuit of profit, driven by radical enquiry rather than bogus metrics”. Events in the N.C.A.D. are a microcosm of what the education system in Ireland is currently enduring.
Although having to meet certain economic and financial requirements have always been part and parcel of the lives of academics and students, such requirements were not as threatening and all-encompassing as they are now. An obvious starting point for the current attack that the education system is under is the sinking of the economy due to financial malfeasance on the part of banks, civil servants, and governments. In fact, and to my knowledge something that has never been reported on, the education system, particularly third level, was always going to be one of the first areas that would come under attack in order to save the banking system. Reading the transcripts of the MacGill Summer School of 2009, in which over forty Irish intellectuals, government ministers, and elites gathered together to discuss what needed to be done to fix the economy, demonstrates this. Of particular note was the speech given by Dermot Gleeson, the then Chairman of Allied Irish Bank (A.I.B.), and who also happened to have a meeting with the Taoiseach and Minister of Finance on the evening before and night of the bank guarantee. Gleeson, blaming the public as much as the banks for the economy collapsing, pointed out that something needed to be done in order to increase government revenue. He laid out the corrective plan as follows:
“We need to broaden the tax base by cutting out reliefs which are no longer justified; this is very much preferable to raising tax rates. Property taxes need to be less dependent on transactions and a property tax of some sort, needs to replace stamp duty, at least in part. There may be need for more user charges to fund high quality infrastructure in the form of road tolls, water charges and university fees. A carbon tax needs to balance the demands of climate change and competitiveness. In relation to expenditure we need more difficult decisions while maintaining investment in research and infrastructure. The cost of public services needs to be brought into line with costs in the rest of the economy. Excessive regulation and outdated work practices need to be eliminated. We need to reduce the long term inflation expectation back to the Euro average and we are well advanced on that project…. We need to implement public sector reform with real urgency” [emphasis added].
University fees are far from the only thing we have to worry about, however. Third level has not only had fees reintroduced in all but name, as per Gleeson’s suggestion, but cutbacks have been made across the system as a whole. In spite of such cutbacks, student numbers have increased, putting the system under even more pressure. An obvious result of such pressure is that it makes universities and colleges more pliable. They simply need the funding and will do what they can to attract such funding.