Articles

latt

Hardship never lasts forever…

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In 2006 I concluded my review of Reem Kelani’s debut album Sprinting Gazelle with the phrase “I believe it’s a masterpiece.” That belief has subsequently matured into a certainty, and the disc has become one of my favourite albums in any genre. A full decade later Kelani‘s follow-up album Live at the Tabernacle, on Leon Rosselson’s Fuse label, could easily have proved an anti-climax. Instead, it complements its predecessor admirably while also being a masterpiece on its own terms.

Kelani refers in the album booklet to “live concerts” as “the essence of what my musical journey is all about”. This journey has hitherto also entailed composing, teaching, musicology, and performing in works by classical western composers with the Royal Philharmonic Orchestra and the Bergen Philharmonic Orchestra, so it is hardly surprising – if frustrating for her growing legion of fans – that she regards recording as something of a sideshow.

The performance recorded here took place at the 2012 Nour Festival of Arts in London (the Tabernacle, Notting Hill), and the double-album eventually materialised thanks to a Kickstarter campaign of which Kelani says: “In an age in which music is structured according to the laws of the market place, and political narratives are suppressed, nothing is more comforting and assuring than grassroots support which can be neither bought nor sold.”

Concerning Sprinting Gazelle, I wrote that Kelani “shuns political rhetoric, preferring to allow the music to speak for itself”. This is as true of the Palestinian material on the new album as it is of Kelani’s comments both on stage and in the excellent booklet accompanying the recording (I really recommend buying the hard copy, as the whole thing is so beautifully produced). Of course Kelani is hardly apolitical. She is a member of the Anti Capitalist Roadshow, a “collective of singers and songwriters… opposed to the ideologically driven austerity programme imposed by this [UK] millionaire government”. Some of the material on the second Tabernacle disc relates overtly to the 1919 Egyptian revolution and the 2011 Tunisian revolution. However, she seems content to allow Palestine’s interminable trauma the status of an implicit if unmistakeable backdrop.

So has a political narrative been suppressed here after all? An informative and sympathetic Guardian interview from 2008 clarified that Kelani “initially struggled to get a record contract here [the UK] because of her [Palestinian] subject matter.” She admits that on the cover of Sprinting Gazelle “I was very careful…I did not say ‘from Palestine’. I said ‘from the motherland’. I’m walking on eggshells all the time.” Nonetheless, she asserted that “[t]here is a message that Palestinians don’t exist, so my narrative is… my existence, both personally and collectively … As a human being, as a woman, as a Palestinian.”

By now Reem Kelani’s existence and hence her narrative is so firmly established that she could probably afford to kick aside the eggshells, although admittedly the defamatory energies of the Israel lobby are inexhaustible. In the CD booklet Alan Kirwan, curator of the Nour Festival in 2012, writes that “[a]t the heart of her work is the recurring image of Palestine”, and the album’s epigraph – cited in English and Arabic – is a defiant quatrain from the jubilant traditional Palestinian song Il-Hamdillah:

                                                Praise God, that evil is no more

                                                We planted peppers in the heat

                                                Our foes said they wouldn’t turn red

                                                Praise God, our peppers grew and turned red.

This song, which euphorically closes both this album and Sprinting Gazelle, contains lyrics “collected… from field recordings of Palestinian refugee women in Lebanon and Jordan”. The  opening track on Disc I, Let us in! (Hawwilouna!), was “recorded from a group of Palestinian refugee women, originally from the village of Sha’ab near Acre” (in present-day Israel).

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DDCI calls on New Government to Strictly Regulate Vulture Fund Acquisitions

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DDCI calls on incoming Government to prioritise strict regulation of controversial funds

A new report  released today (Tuesday May 3rd) by Debt Development Coalition Ireland highlights the manner in which vulture funds have aggressively bought up large volumes of debt in recent years, and how this form of financial speculation has had hugely negative social impacts both in Ireland and the Global South.

Entitled “From Puerto Rico to the Dublin Docklands: Vulture Funds and debt in Ireland and the Global South”  the report shows how the Irish government has actively facilitated vulture funds through both the IBRC and NAMA.

For example, Texas based Lone Star Capital bought 60% of all assets brought to market by IBRC, while 90% of assets sold by NAMA went to US firms, the majority to private equity firms.  

DDCI Director, Maeve Bateman, said:  

“Vulture funds have earned their nickname through the aggressive and unusual tactics they pursue. The government has welcomed vulture funds into the Irish property market, without properly considering the impact. We would call on the incoming government to prioritise this issue. Immediate steps need to be taken to find out just how many mortgages are owned by vulture funds unregulated by the Central bank, and to ensure that the tenants and homeowners living in these homes are better protected.

The relatively recent role of vulture funds in the Irish market highlights the ongoing impacts of our own debt crisis, and shows the case for an independent global sovereign debt resolution mechanism has never been clearer”. 

The report’s author, Dr Michael Byrne of the UCD School of Social Policy, said: 

The funds’ history of aggressive asset management strategies poses significant risks for tenants and homeowners in Ireland whose homes are now simply assets on balance sheets for the funds, highlighted by the recent case of tenants in Tyrrelstown and business closures such as Clery’s.”

The report recommendations include:

  • The creation of an international sovereign debt resolution mechanism;
  • Legislation to bring about much improved transparency regarding the actions of vulture funds and to bring them under the regulation of the Central Bank
  • Greatly strengthened legal protections for mortgage holders.

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Warning: Ultra-Low Spend Economy Ahead

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We are potentially heading down a dangerous stretch of road ahead –leading us into the Ultra-Low spend zone.  In this zone, investment declines and, so competitiveness and productivity; health and education services suffer; income supports falter adding fuel to the inequality engine.  A low-service, low-waged, low-productivity future awaits.

Of course, spending a lot of money doesn’t guarantee you optimal results.  But spending too little certainly won’t get you optimal results.  So how far behind are we falling?  Let’s compare public spending (excluding interest – this is called ‘primary’ expenditure) in the EU-15 countries.

I’ll use the method devised by Seamus Coffey who hangs out at Economic-Incentives.  He excluded elderly-related expenditure and then compared Ireland with the rest of Europe.  He did this because Ireland has an advantage here – we don’t have to spend as much on pensions and related expenditure because we have a smaller proportion of elderly.  In the EU-15, the over 65 cohort makes up 19 percent of the population; in Ireland, this cohort makes up 13 percent. 

2014 is the latest year we have data for old-age expenditure.  In the following, old-age expenditure is subtracted from total primary spending.  For instance, Ireland spent 37.2 percent of its adjusted GDP (adjusted per the Irish Fiscal Council’s hybrid-GDP estimate that factors in the accounting practices of multi-nationals).  It spent 4 percent on the elderly, leaving an expenditure level of 33.2 percent excluding elderly-related spending.  Figures for European categories are mean averages. 

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Ireland ranks below all the European averages.  What difference would it have made in 2014 in actual Euros and cents?

  • To reach the average of other EU-15 countries, we would have had to increase public spending by €6.5 billion
  • The next comparison is with other Northern and Central European economies (other NCEE). This is the EU-15 excluding the poorer Mediterranean countries like Greece and Portugal.   To reach this average, we would have had to spend an additional €9.6 billion.
  • The final comparison is with Other Small Open Economies, a category used by the IMF. These are economies with a small domestic market and a high reliance on exports.  Austria, Belgium, Denmark, Finland and Sweden are in this category.  This is arguably our peer group.  To reach this average we would have had to spend an additional €15.5 billion.

[Note:  some will say that defence spending should also be factored in as other European countries spend more than us.  This is true.  In the EU-15, defence spending makes up approximately 1.3 percent of GDP; it’s 0.4 percent in Ireland.  In any event, defence spending is a policy choice and, in my opinion, shouldn’t be excluded from comparisons.  But if you insist, knock off about €1.5 billion off the numbers above.]

In 2014, it could be argued that we are already a low-spend economy but as I wrote here, the situation could actually be worse.  I have reservations about Seamus’s method.  Excluding old age expenditure not only removes the demographic driven part of overall spending, it removes policy choices.  Most other EU-15 countries spend more on elderly per capita than we do.  Second, if we are to adjust for the elderly population, then we should also adjust for youth demographics.  In Ireland, under-20s make up 28 percent of the population, compared to 21 percent in the EU-15. 

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May Issue of Socialist Voice Out Now

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The May issue of Socialist Voice is now available online.

Water: Scarce commodity or valuable natural resource?  Jimmy Doran:

As Fianna Fáil and Fine Gael agree to set up another committee to manage the affairs of the rich, water charges and Irish Water have been used as a political football between them. In this centenary year it just goes to show that James Connolly got it right when he wrote: “If you remove the English army to-morrow and hoist the Green Flag over Dublin Castle, unless you set about the organisation of the Socialist Republic your efforts would be in vain.

Opinion: Two strategies: Connolly’s (1916) and Sinn Féin’s (2016)D. R. O’Connor Lysaght

James Connolly is presented as the ideological inspiration of the majority of the politically committed in the 26-county Republic of Ireland. Of that state’s four main parties, only Fine Gael would deny him this role, tracing its roots to a compost of John Redmond and Michael Collins. Its rivals, Fianna Fáil, Sinn Féin, and Labour, each describe themselves as the keeper of Connolly’s flame.

Tories’ attack on doctors is only the beginningTommy McKearney

Do you, like me, subscribe to the view that Britain’s Conservatives are an unscrupulous lot, forever searching for new ways to make the rich even richer? With this in mind, and in spite of the absence of documentary proof, it strikes me that the intensely bitter dispute between junior doctors in Britain and the Tories’ secretary of state for health, Jeremy Hunt, is about more than just pay.

Time to get rid of special courts: Paul Doran

With the election now over, the issue of the Special Criminal Court has been largely forgotten—that is, unless you are stuck in one of Europe’s most disgusting prisons, namely Port Laoise, where “slopping out” is still the practice.

Irish GDP: The great con trick: Eoghan M. Ó Néill

Capitalism has been in stagnation for decades. Economic growth has been sluggish, rarely rising above 2 per cent. Ireland, on the other hand, is once again the poster economy of capitalism. Having cast off the shameful remnants of the “Celtic Tiger” years and the financial crisis of 2008, Ireland is once again an economic powerhouse, with the growth in its gross domestic product (GDP)

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Time to Get Real

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The Stability Programme Update, the latest economic and fiscal projections, signals the start of the budgetary politics that will inform the next Government.  In particular, it shows the level of money available for the Government for spending increases and tax cuts.  Speaking in the Dail yesterday, the Finance Minister stated:

‘On foot of these changes, my Department currently estimates the net fiscal space to be somewhere in the region of €10 billion to €11 billion over the period 2017 to 2021.’

Remember all that stuff about the fiscal space during the election?  It was stated that there would be €8.6 billion available over the next five budgets.  This has been increased by approximately €2 billion due to changes in the complex calculations.   So, we have €10.5 billion.

 An extra €2 billion:  sound good?  Not really – not when you look at the detail.

Let’s compare two main budgetary projections that were presented in Budget 2016 – only a few months ago – and the current projections published in the Stability Programme Update:  investment and expenditure on public services (Government consumption).

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Spending on investment and public services has been revised downwards in the current projections.  The differences may seem small but it puts the increased €2 billion in ‘fiscal space’ the Minister referred to in perspective. 

For instance, in the budget last year the Government projected investment spending over the five years to be €25 billion.  They have revised this downwards to €23.5 billion – a cut of 6.2 percent.  We’d have to increase investment by €1.5 billion just to get back to the projections in the budget – and that was already one of the lowest levels of investment in the EU. 

Regarding expenditure on public services, over the five years the Government has revised this downwards by nearly €4 billion.  Get the picture?  Now let’s factor in inflation (using the GDP deflator – unfortunately, we don’t have an inflation projection for public services). 

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Turning Failure Into Hope

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The Sunday Business Post’s investigation into JobBridge was devastating.  The programme has been used to staff the HSE, Hewlett-Packard, public enterprises, supermarkets and universities.  A large number of interns report frustrations, especially as they have almost no workplace rights, while the investigation showed a scheme that grew out of control lacking robust monitoring and compliance mechanisms. 

It’s time JobBridge was closed down.  The youth section of Unite the Union has long campaign for its abolition; Impact has recently called for the programme to go.   It’s already being reduced.  The programme will be cut from €70 million last year to €51 million this year.  Cut the rest of it. 

And let’s use the money to create a real programme of work, targeted at people who are having a hard time in the market.  Long-term unemployment can be a dismal experience.  The longer you are out of work, the more difficult it can be to get back in:  your current skills may be become degraded, previous work routines are undermine, there can be mental health issues, you get stuck so far into a rut that it is difficult to pull yourself out.  Training programmes work best when the person is motivated and there is a belief that a job is possible at the other end.  Long-term unemployment is the ultimate de-motivating experience, leaving people with little hope.

In 2015, long-term unemployment (without a job for more than a year) averaged 114,000.  That amounts to 5.3 percent of the labour force.  By contrast, long-term unemployment in the EU-15 makes up 4.7 percent.  

When we turn to what can be called ‘chronic’ long-term unemployment – two years and longer – we find, on average, 83,000 stuck in this situation and, of this, 50,000 have been unemployed for four years or longer.

So let’s redirect the resources – approximately €85 million – from the JobBridge and Gateway programme) into a guaranteed real job programme.  In other words, the state should become an employer of last resort; when people cannot find work in the labour market, the state will provide that work.  What would such a programme look like?

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3_MT3

Ask the Right Questions

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The National Competitiveness Council (NCC) has released its latest Cost of Doing Business in Ireland.  It is always an interesting compilation of graphs, charts and statistics that compare Irish competitiveness against other countries.    The current release has been accompanied with a media bustle about ‘high-cost’ Ireland.  This, of course, has long been the case.  The NCC lists a number of culprits:  transport, utilities, credit and childcare.

And what would a ‘competitiveness’ review be without mentioning ‘labour costs’ (I think they mean ‘employee compensation’ which is not a cost but I’ll let that go for now).  Once again, the NCC has produced a misleading picture about labour cost trends. This has resulted in media reports referring to the ‘high cost’ of wages.  The NCC has even produced a graph to give the appearance that labour costs have been rising faster than the Eurozone average. I reproduce the graph below.

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You might think, from a first glance, that since 2010 Irish workers have been getting pay rises that exceed the Eurozone average.  The general picture is that, while wages fell between 2007 and 2010, since then they have been rising at a pretty swift pace.  Thus, we have to watch out; otherwise our wage levels will become ‘uncompetitive’.  Thus, we have to be more moderate, or ‘sustainable’.

The only problem with this picture is that it is wrong and misleading.  The NCC graph is based on the data from Eurostat’s Quarterly Labour cost index which can be accessed here (it would be helpful if the NCC actually sourced the data source and not just the agency that produced the data).  In this dataset, you can choose different types of measurement.  I’m assuming the NCC is using the ‘percentage change compared to same period in previous year’ not seasonally adjusted (it works in some respects). 

The measurement that the NCC uses tells you what it tells you but, at the same time, it can distort the picture.  Here is an example.  Let’s say that wages fall by 1 percent in year-on-year quarter.  Then the next quarter it falls by 0.5 percent.  Well, you’d say that wages are still falling though at a slower rate– and you’d be correct.  However, using way the NCC measures it, it would show wages rising since the ½ percent fall is less than a 1 percent.  This is the stuff of statistical battles.

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Spring Reading Selection

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Spring Reading: A review of some of the book I have enjoyed so far this year. 

The Opacity of Narrative by Peter Lamarque (Rowman & Littlefield)

We all like to tell stories but narrative is invested with meanings that make it more serious and questionable than we ever imagined. There is something called narratology –a term that Word 10 flags up as a spelling mistake – because a story isn’t simply a representation of a world that does or could exist. Fictional or not, a narrative is an artefact, not some entity in the natural world, and a postmodernist like Hayden White writes of historical narratives shaping the relationships that turn facts into a story with a particular significance. This isn’t saying historians constitute the actual facts but it does get close to saying the resulting narrative is not altogether different to a story that might emerge if they did. The historian shares something with the novelist: both recount and shape events within a temporal dimension, imposing a structure, and creating a narrative. Herodotus is a historian but what he writes is also a work of literature and the first Penguin edition classified it as fiction;  Thomas Keneally’s Schindler’s Ark was published as nonfiction in America but fiction in Britain; Hitler’s Diaries turned out to be fiction but this doesn’t make it literature. The Opacity of Narrative sets out with admirable lucidity the questions and queries and the tricky issues in the fields of epistemology, philosophy and aesthetics that arise when narrative loses any claim to transparency. It becomes important to work on identifying kinds of narrative practice, the different conventions they follow and the nature of the truth claims involved and this book succeeds in making you think about what is involved in doing so. A story is never just a story.

 

China Miéville critical essays edited by Caroline Edwards and Tony Venezia   

Art and Idea in the Novels of China Miéville by Carl Freedman (Gylphi)

The form of fictional stories that monopolize the subject matter of newspapers’ book reviews and the display tables in bookshops is representative realism, filling in a story in reassuringly familiar ways as if there is a readily knowable world out there and a novel can capture it verbally just as a photograph shows us what it is a photograph of. A photograph or a realistic novel, we naively feel, stands in a causal, mimetic relation to their subject matter but, as the essays brought together by Edwards and Venezia and the critical study by Freeman show, there is a narrative complexity to China Miéville’s novels that rejects such a model of transparency  In place of a fixed line leading to a determined destination, Iron Council describes a train line (and the journey along it) that is always in the making: ‘Miles of track, reused, reused, it is the train’s future and its present, and it emerges a fraction more scarred as history and is hauled up again and becomes another future.’ In The City & The City the ability of
language to cement an ideology of seeing and unseeing is on show in a single city of two psychological halves, the inhabitants of one literally not seeing what is in front of their eyes. In Embassytown, a species incapable of understanding metaphor, for whom each word can mean one thing only since meaning does not depend on a system of differences, discovers what it means to use words non-literally. For Miéville, the issues raised by his imaginative stories are packed with political intent and this is what makes him the most interesting of all contemporary novelists.

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Victory to all Retail Workers

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Workers at Tesco’s have voted overwhelmingly for industrial action to resist the proposed wage cuts that management is demanding.  The issue is now going to the Workplace Relation Commission.  This post is not about the details of the Tesco dispute (you can read about it here).  However, it is timely to take a step back and look at wages that not only Tesco but all retail workers earn.  And when you sneak that peak you will find that retail workers in Ireland are some of the poorest paid in the EU-15. 

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According to Eurostat (the baseline figures are from 2012, brought up to 2014 with the Labour Cost Index), Irish retail workers rank 12th in the EU-15.  And these wages are well behind European averages.

  • Irish retail workers would need a 20 percent increase to reach the EU-15 average.

But when we compare Ireland with our peer group, the comparison deteriorates dramatically.  One peer group are Northern and Central European economies (NCEE).  This is the EU-15 figure excluding the poorer Mediterranean countries (though it’s worth noting that Italian retail workers earn more than Irish).  In this comparison:

  • Irish retail workers would need a 35 percent increase in the hourly average wage.

A second peer group is other Small Open Economies (other SOE).  This is a comparison used by the IMF and it refers to economies with small domestic markets and a high reliance on exports, just like Ireland.   This category includes Austria, Belgium, Denmark, Finland and Sweden.  In this comparison:

  • Irish retail workers would need a 54 percent increase in the hourly average wage.

Some may object to this, claiming that if a company is not profitable, it cannot increase wages.  This is true enough.  But we are confronted with a problem:  the last year we have comparative enterprise data in the retail sector is 2012 – a bottom point in the retail business cycle with the economy still mired in a domestic demand sector.  Although profits per employed was about 15 percent below the EU-15, profits in the foreign-owned sector (such as Tesco) was the highest in the EU-15.  So even with the consumer economy at rock bottom, a substantial part of the retail sector was doing ok.

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The Experimenting Government

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We will soon have a government.  What kind will it be?  Time and a Programme for Government will tell.  But what we really need is an experimenting government; one that uses resources and creativity to experiment with different proposals.  There are many good ideas out there but it is hard to know how they might impact on the economy and society were they introduced in one go.  Commissions, green papers and studies can only tell you so much.  We should experiment – trialling ideas for a limited period in different contexts and sectors.  We can then assess the results to see if they are runners.  Here are a few examples.

1.    Shorter Working Week

I wrote about this here.  In Sweden a number of trials are being conducted to assess the impact of a shorter working week in terms of cost, productivity, firm or agency performance, customer satisfaction and the health and well-being of the employees.  Why not trial it here?  We could select public and private sector workplaces to run 18-24 month experiments in reducing the working day.  A study of productivity and all other elements would be done before and after the trial period and the results made public for study and debate.

2.    Basic Income

Basic Income – a guaranteed payment to everyone regardless of employment status – is attracting more attention and discussion.  Arguments centre around a new era of reduced formal work opportunities, the growing complexity of welfare states, strengthening workers’ bargaining power (if I have a living income to fall back on, I can walk away from the boss’s grief), etc.

But there are downsides:  the high cost of implementation, inflation, unknown impact on the labour market.  This is complicated by right-wing arguments that with Basic Income we can abolish the welfare state and minimum wages. 

It is unlikely that a Government would introduce Basic Income all at once, or across the board.  If it didn’t work out it would be very expensive to undo the policies and repair the damage.  However, some places are conducting experiments – for instance,Utrecht and other Dutch cities.  It will be limited to a certain cohort but the hope is to discover how it changes people’s behaviour and what the fiscal and bureaucratic impact would be.  So why don’t we do the same thing – we could model it on the Dutch experiments so we don’t have to re-invent the wheel.  It could be run out in urban and rural areas for a time-limited period with the effects to be studied afterwards.

3.    Labour-Managed Enterprises

There has been increased academic interest in the performance of labour-managed enterprises (workers’ cooperatives, employee-ownership and other models).  While extremely limited in Ireland, there are a considerable number operating in other countries – notably France, Spain and Italy – throughout the industrial and service sectors.  Proponents argue that such enterprises increase productivity and firm performance while generating higher investment and reduced wage inequality. 

Here is an opportunity to run a trial programme – through Enterprise Ireland, local enterprise boards or a new agency if that is seen a better fit.  It would provide funding and training, and work with firms that are closing down due to poor performance or owner-retirement as well as greenfield start-ups.  This experiment would take time – a firm may survive the first and even second year but could fold soon afterwards.  However, this could be an on-going process, with periodic reports and analysis.  This shouldn’t be too contentious – after all, it is about generating indigenous enterprises and putting people back to work.  What we might find is that labour-managed firms are a better route to those goals, with positive spill-over effects in the community.

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From Alpha to Omega Podcast #068 Knowing The Future

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This week I am delighted to welcome back Derick Varn to the show. After listening to the previous show about Cultural Marxism with Doug Lain, Derick sent me an email saying he’d like to come on the show and give his two cents. What followed was a wide ranging discussion on ideology, value theory, and the historical emergence of capitalism. We also discussed the possibility of a revolutionary movement based on a system without abstract value, Marx’s critique of the Gotha Program, and Star Trek as a Marxist Tract. And top of all that, the possible productivity of a communist state, game theory and alternative histories, and the Spanish revolution. You can find Derick’s blog here: https://symptomaticcommentary.wordpress.com/ You can find Derick’s and Amogh’s Podcast here:http://sympthomaticredness.libsyn.com/ The music on this episode was: ‘The Order of the Pharaonic Jesters’ by Sun Ra and his Arkestra ‘If Not For Money’ – The Wytches

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landsdown_rd

Open Season on Public Sector Pay (Again)

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It’s starting.  When the penny drops and the incoming Government finds there is less money in the kitty than their manifesto promises were based on, the scramble for scarce resources will be on.  And the scramble to have a go at public sector workers – that will be on, too.  This from management consultant Eddie Molloy in the Sunday Business Post (behind a paywall):

‘That (the Lansdowne Road Agreement) was clearly a sweetener with the prospect of an election ahead.  Before disability, homelessness, flooding or anything else got a look in, a big chunk of the available funds had already been given away.  The government chose pay restoration over services restoration.’

Ah, c’mon; public sector workers – in particular, the low-paid (the Lansdowne Road Agreement gave these workers an additional boost) – took from the disabled and the homeless?  Interesting that Molloy didn’t write: ‘The Government chose tax breaks for high income groups over services restoration’ or ‘massive subsidies to the corporate sector over services restoration.’   No, just public sector workers.   This is the type of argument we’re going to get – and it will probably get even more extreme.

Colm McCarthy, too, is not too keen about public sector pay increases.  But at least his argument is one that can be engaged with.  He rightly states that there’s little fiscal space; that’s probably an overstatement.  He goes on to say:

‘Should a government be formed, an immediate priority should be to inject some reality into the discussions about public service pay. Are public servants poorly paid, relative to those in the private sector and in comparable public employment in the UK and elsewhere? The best way to compare, taking account of pensions and job security, would be a thorough benchmarking exercise, done openly and with all details published.’

Ok, let’s throw some reality into this discussion.

First, let’s measure public sector pay (employee compensation) as a percentage of GDP.  For Ireland, I use the Irish Fiscal Council’s hybrid-GDP measurement, a compromise between GDP and GNP.

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Ireland is well into the bottom half of the table, below the average of other countries.  It should be noted that in some countries like Germany not all public sector pay is on the books.  For instance, in the public health system, public sector pay is off-the-books, courtesy of quasi-public corporations (money spent is categorised in different ways). 

It should also be noted that according to the Irish Government, public sector pay will fall from 9.8 percent in 2016 to 8.4 percent by 2021 (using the hybrid-measurement).  And that’s including the full cost of the Lansdowne Road Agreement. 

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Are We Getting a Fair Deal?

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With all the talk about industrial action and wage claims and wage offers and summer of discontent, etc. etc. etc. it is worth taking a step back and to look at the big picture.  Are Irish workers paid too much in comparison with other EU-15 countries?   This blog written by the Director of the Nevin Economic Research Institute, Dr. Tom Healy, looks at the adjusted wage share in the economy.  That’s one way of measuring wages – and it shows Ireland performing pretty badly in comparison. 

Here I am going to approach this issue by quantifying the proportion of the economy that goes on wages.  But whenever you go down this route you are faced with a big question.  Do we use GDP which is inflated by multi-national profits which are not generated here but are imported to take advantage of our corporate tax regime?  Do we use GNP even though this is also inadequate as it excludes actual productive activity?  Or do we use the Irish Fiscal Advisory Council’s hybrid-GDP which attempts to measure our actual economic or fiscal capacity?

Let’s take a cautious, conservative approach and use GNP.  In terms of EU comparisons this means using Gross National Income (GNI) which is essentially GNP including payments from the EU (CAP funding, etc.).  When we do this we find Irish workers, collectively, are paid a small percentage relative to workers in other EU countries.

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The EU Commission’s AMECO database estimates for 2016 finds that Irish employee compensation is near the bottom of the EU-15 table.  Employee compensation combines both wages and employer social insurance contributions; this is the standard measurement of wages and, as such, can be taken as a very close proxy to ‘labour costs’.  

Throughout the EU-15, wages make up 48 percent of GNI.  In Ireland compensation makes up only 40 percent – equal to Italy and ahead of lowly Greece (if we used GDP or the Fiscal Council’s hybrid-GDP, the percentage would be even lower).

What would happen if Irish wages rose to the average EU-15 level?

  • Total wages would rise by €15.4 billion, or 20 percent more than today.
  • That is the equivalent of €9,400 per Irish employee.

Of course, economies and wages are never so simple; therefore, you can’t run a slide-rule over gross numbers and extrapolate an optimal wage figure.  Much depends on the bargaining power of workers vis-à-vis employers, the position in the business cycle, the sectoral structure of the economy (high-tech?  medium-tech?), compositional effect, productivity levels, etc.  However, we can’t get away from the fact that Irish wages take up far less of Gross National Income than in almost all other EU-15 countries.

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The April Issue of Socialist Voice Out Now

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The April issue of Socialist Voice is now available online at http://www.communistpartyofireland.ie/sv/index.html

Table of contents:


The 1916 Rising a century later: Eugene McCartan

A century ago this month, on 24 April 1916, members of the Irish Volunteers and the Citizen Army marched out and seized a number of sites mainly in Dublin and a small number of other places around the country. The Rising lasted six days, but its impact still reverberates a century later.

Not a time for diluting our demands: Tommy McKearney

Antonio Gramsci wrote in his Prison Notebooks that “the crisis consists precisely in the fact that the old is dying and the new cannot be born . . .” Although this was written more than eighty years ago and in a very different world, he might well have been referring to the present day.

Venezuela: The struggle continues: Paul Dobson

On 6 December last year the US-backed Venezuelan opposition achieved a victory in the parliamentary elections, winning a two-thirds majority in the National Assembly. As only their second victory in twenty attempts, it must have tasted very sweet following eighteen years of almost continuous losses.

The myth of Irish sovereignty: Eoghan Ó Néill

One hundred years ago Irish men and women lit a spark that they hoped would lead to an Irish Republic, sovereign and free from the stranglehold of British imperialism. The revolutionary forces of 1916 were the product of the economic, political and social oppression visited upon the Irish people by the continued tyranny of Britain.

Strikes and time bombs: Alan Hanlon

The last issue of Socialist Voice referred to the “pensions time bomb.” This is a term dreamed up by the bourgeoisie in the financial sector as part of a campaign to undermine state pensions and defined-benefit schemes. Now some other “time bombs” have arisen.

The Murder Machine: Pearse and education: Graham Harrington

Amid the pageantry of the 1916 centenary, the revisionists and West-Brit media are on overdrive to present the rising as a failed, delusional blood lust. One of the defining characteristics in this is the omission of the real ideas of the leaders, not least Connolly’s socialism and Pearse’s concept of education.

Capitalism is bad for your health: David Hugh Hartery

Going hand in hand with a reduction in the stigma attached to mental illness is a growth in diagnoses. Some of this can be attributed to better health education, leading to fewer sick people going untreated; but with unprecedented numbers now receiving treatment, we have to ask, What part of modern society is making us ill?

Shakespeare today: Jenny Farrell

William Shakespeare died four hundred years ago this month, on 23 April 1616. There is hardly a country or a language in the world that is not familiar at least with his name. Shakespeare’s poetry has had an impact on the English language like no other.

Das Kapital mark 2?: Simon McGuinness

Bernard Murphy’s review of Capital in the Twenty-First Century by Thomas Picketty misses what, for me, is the elephant in the room: the role of the Soviet Union in the expansion of workers’ wealth in the post-1945 period. I can excuse (but not forgive) Picketty, and every single other reviewer for this omission, but hesitate to excuse Murphy, given that his review appeared in the newspaper of the Communist Party of Ireland.

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