Ghosts of Alternatives Past

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This is a transcript of a talk given by Helena Sheehan at the “Democracy Rising” international conference, Athens 16 July 2015

What echoes and shadows of left experiments of the past haunt us as we embark on a new era opened by the formation of a radical left government in Greece? What is the plot of the longer story in which this new episode is embedded? How has the weight of the wider world, the power of the global system, borne down upon attempts to move from capitalism to socialism, whether in rupturalist projects, stemming from the October Revolution, or more protracted programmes of transformation, such as those set out by the ANC in South Africa in 1994 and by Syriza in Greece in 2015? What are the dynamics of attempting to forge an alternative in the face of the hegemony of there-is-no-alternative? How to make history in conditions not of our making? How, with so much going for it, nationally and internationally, has the ANC failed to achieve, or even approximate, the society that those who fought and died for it set out to achieve? How could Syriza, in the face of far more formidable obstacles, advance both its immediate programme and a new path toward socialism?

There is now a long history of left alternatives, even of left governments. From the Paris in 1871 to Athens 2015, we have seen hopes rise and the prospect of a new order come into view.

Some left governments have come and gone with little attention from outside their borders, such as that of Akel in Cyprus so recently, whereas others have captured the imagination of the world, even to the point crossing borders to be a part in it, eg, to Spain in 1936, to Greece in 2015.

The storyline looming largest in our story is the October revolution of 1917. It went farthest and lasted longest. It is a foundational myth of our movement. We have varying versions of it, not only about what happened, but about what might have happened.  I have imagined and written my way through its early decades and witnessed its later decades.

If you looked at a map of the world in 1989, countries defined as socialist covered vast territories of this planet. It is not so now.

Why? Volumes have been written by now answering this question. Through 1989 and 1990 I was often in Eastern Europe, exploring the meaning of this vast overturning in its world historical implications. I never accepted the postmodernist ban on grand narratives. There was a dominant grand narrative in play and I believed it needed to be met with a counter-narrative on the same scale. Their story was one of capitalist triumphalism, captured in the mocking joke that socialism was the longest, most painful, most inefficient path between capitalism and capitalism.

Much of the left retreated in dismay and disarray, unable to overcome confusion and to conceive of an alternative narrative or even to believe in the possibility of an alternative narrative. Others carried on, even though our philosophy of history had been dealt a massive blow. We had believed that history, in however complicated a way, was moving from capitalism to socialism, and then we beheld the opposite happening before our eyes. I saw lives turned upside down and nations disappearing from the map of the world.

So why our defeat? Many reasons have been given. There were monumental mistakes within our own movement. There was murder, treachery, suppression, fear. There were honest voices silenced. There were alternative paths not taken. There was an unfavourable balance of forces. There were conditions of underdevelopment. Socialism was meant to be built on other side of advanced capitalism. Not only its economic productivity, but its parliamentary democracy, mass media and complex civil society. It was meant to be a further development, not a suppression, of these advances in history.

Nevertheless, there had been expropriation of the expropriators, social ownership of the means of production, distribution and exchange, relative equality of opportunity and a radical shift in the balance of power in the world.

The existence of a socialist bloc made the hegemony of capitalism incomplete, but the intensifying hegemony of capitalism made the existence of a socialist bloc increasingly precarious. An advancing globalisation shaped by capitalism was all the time tightening its grip and extending its hegemony into territories and into psyches previously outside its dominion.

Socialism was all the time in a world dominated by capitalism. It was not only the internal failures of these regimes, which made their populations turn against them, but the lure of an imagined other of freedom and plenty that eluded them in reality when they moved towards it. Most fundamentally, It was the external pressure of an increasingly integrated global capitalism exerted upon an inadequately achieved socialism that brought its downfall.

So what then? We had to re-think and re-coup, to analyse our defeat and to seek a new path. Our glorious and tragic past had to yield to a new paradigm. One thing we had to face was that socialism could only be built on consent and in ever more complex conditions. The left would have to stop dreaming of storming winter palaces, of imagining ruling through decrees, purges, guns and gulags.

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No Country for Young People

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So you’re young, ready to take up work, make a bit of money and, most of all, make the social contribution that is expected of all members of the homo economicus species.  There’s only one problem.  You live in Ireland.

Following on from my previous blog on the weakness of our market economy to produce jobs – except in the construction sector – let’s look at employment growth by age.  Overall employment is rising, even if it is patchy.  But not for young people.   For young people, the jobs recession continues apace.


Employment grew by 2.2 percent overall.  But for young people – between 20 and 34 years – it fell by 1.5 percent.  Among older groups – over 50s – employment grew by 5 percent.

When we drill down further, we find that those aged between 30 and 34 years saw employment fell by 3.1 percent.

This is part of a longer trend.employment_growth2jpg

Since the crisis began, employment has fallen by 10 percent.  However, for those aged 20-34, employment fell by a third.  For other age groups, employment has recovered and increased – with employment among 50s and over increasing by 14 percent.

There has been some discussion about bringing Irish people back from abroad.  It has been suggested that a main obstacle is our ‘high’ tax regime (sigh).  As we see above, the problem remains what it has been some time ago – lack of jobs (though there will be some sectors that are undergoing growth).

Young people face more problems than just falling employment.  Since 2008, nearly 475,000 people have emigrated.  Unsurprisingly, the majority who left were young people.  Over 300,000 men and women aged between 20 and 34 years have left the country – or 65 percent of all those emigrating.


For those who stayed behind it’s still tough out there in the labour market.  The unemployment rate for those aged between 20 and 24 years the unemployment rate is 19.6 percent – twice the national average.  No wonder Eurostat estimates that 40 percent of young people are at risk of poverty or social exclusion (for the age group 18 – 24 years).

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Strengthen Ties with the People and Maneuver Cleverly: The Tasks of the Greek Radical Left

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The last few weeks have seen a number of crushing developments in Greece. Especially the Greek referendum and the signing of a new memorandum by the SYRIZA government are historical events which will strongly influence not only the future of the Greek but of the European Left as well. They will also influence the further course of the EU and the Eurozone, which came on the verge of dissolution and showed by the way it dealt with the crisis its true class nature.

SYRIZA’s signing of a new memorandum cannot be called otherwise but a heavy, unacceptable compromise and a capitulation. This is all the more true, since the Greek people, with its decisive “No” had expressed a massive support for a break with the memorandum policies in the Greek referendum just a week ago. The SYRIZA leadership, however, and Alexis Tsipras personally, chose to come in line with the spokesmen of “Yes”, the bankrupt bourgeois Greek political forces that supported the previous memoranda and the corrupt Greek and European elites.

This choice of the SYRIZA leadership does not in the least diminish the importance of the daring “No” raised by the Greek people in the referendum. This was a “No” not only to the EU agreement proposals, but the memorandum and austerity policies as a whole. The Greek people stood up against unbearable pressures by the Greek mass media, the parties of the ruling class and the EU leaders and showed, by their stance and vote, that they are ready and willing to support another road and overthrow the austerity policies. This result, unexpected even to the most optimistic commentators of the Left, is a proof of the possibility and a call for resistance of the European peoples, as the only force capable of producing radical change.

The decision of the SYRIZA leadership to compromise at all cost with the lenders must be criticized by all Left activists and Marxists in particular. However, it is essential to provide a serious criticism, which points exactly and explains its mistakes.

A number of ultra-Left forces here in Greece, and perhaps elsewhere too, respond to SYRIZA’s compromise by shouting “betrayal”, arguing it proves the bankruptcy of reformist tactics and the fact that the revolutionary overthrow of capitalism is the only road. However, this kind of criticism misses the fact that the situation in January, when the SYRIZA-ANEL government was formed, was not revolutionary, and it is neither so now. In such a situation it is necessary to maneuver and arguing that focusing on maneuvers and reforms leads to a deadlock, is the wrong way to argue. While this is true on the long run, it does not rule out the necessity to deal seriously with the phases of the struggle when maneuvering predominates and this cannot be done by calling for the immediate application of revolutionary tactics.

In fact, the SYRIZA leadership must be criticized not for maneuvering in general, but for maneuvering badly. It must be criticized for the vacillations and lack of planning it showed during this phase of maneuvers, leading it to a position where it was forced to accept an intolerable compromise. In particular the following points should be noted:

  • SYRIZA lost too much time in meaningless negotiations for months. The dragging on of these negotiations was just a means for the ruling circles of the EU to drive the Greek economy to the present financial suffocation, after exhausting its reserves. The supposed progresses during these negotiations, like the Greek 47 pages proposal, were all sham, a plot intended by the German ruling circles to bring about the present situation.
  • The election of Prokopis Pavlopoulos as President of the Greek Democracy was also an unnecessary concession. It indicated SYRIZA’s leadership readiness for further moves to the Right, when the situation called for cautious moves to the Left.
  • The payment of roughly €8 billion in February-June from the Greek reserves to the EMF was also a step leading to direct capitulation. If the SYRIZA government wanted to base itself on the people, it should have led things to a referendum in February or March, when it had still the means to resist for some time the economic sabotage from the EU. Obviously, if the Greek government had some billions € in reserves this might not suffice to support a break with the EU, but it could help endure for some months a situation with closed banks, etc, and this would put the EU ruling elites under pressure, as the consequences of the protracted instability would begin to be strongly felt by their economies too.
  • Apart from these Right mistakes, the SYRIZA leadership made, in our opinion, a “Left” mistake when it rejected the conciliatory proposal made by Merkel just before the decision for the referendum. This proposal for an extension of the present memorandum for 5 months would have provided the Greek state €15.5 billion for this five month period. It would have been a harsh compromise, including an “evaluation” by the “institutions”. However it would last for only 5 months leaving further options open, while not including the devastating, enslaving conditions of the new memorandum, like the sell-off of public property. During that time the Greek government would build up some monetary reserves from various sources (EU inputs, tourism, taxation etc). Moreover, the end of this five month period would coincide with the parliamentary elections in Spain. A Greek referendum at that time, together with a possible victory of the Left forces in Spain (especially if they are able to unite), would have given a strong thrust to popular movements across Europe.

All this comes to show that, despite all negative aspects, this would have been an acceptable compromise. The reason the SYRIZA leadership failed to take advantage of that opportunity is its fear of the people, together with its illusions about the real intentions of the EU leading circles. As a result it never considered seriously the prospect of a rupture at a suitable moment and of preparing the people for it, but chose to reach a “final” agreement at all costs, falsely hoping it would not be so harsh.

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The defeat of Syriza and Its Implications for the Irish Left

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The EU has enforced a humiliating surrender on Greece.  The Syriza government that was elected to end austerity has been forced to implement it.  The meaning of Wolfgang Schauble, the German Finance Minister’s infamous phrase ‘we can’t possibly allow an election to change anything’ is now clear.

The scale of the brutality is astounding.  To take just one example:  there will be a ‘significantly scaled up privatisation programme’ to generate a fund of €50 billion. This fund will then be effectively controlled by the EU to ensure that bank debt and bondholders are paid off.  Up to now €7 billion worth of privatisation has been pushed through by other governments in Greece.

The Irish government helped humiliate the Greeks. The former Greek Finance Minister, Yanis Varoufakis, has stated that Ireland – along with Spain and Portugal – were among his ‘energetic enemies’. He explained why,

the “greatest nightmare” of those with large debts – the governments of countries like Portugal, Spain, Italy and Ireland – “was our success”. Were we to succeed in negotiating a better deal, that would obliterate them politically: they would have to answer to their own people why they didn’t negotiate like we were doing.

This attitude became public when the Labour Minister, Alex White, welcomed the ‘fair’ deal. The Taoiseach, Enda Kenny, went further and claimed that, under the deal Greece, would ‘thrive and prosper’

The Irish government tried to invoke an undertone of nationalist rhetoric to bolster its position. ‘The Greeks are looking for more money from us – they should take their medicine like we did’ was the message. But the issue cannot be framed in such terms because the original €7.5 billion that the Greek government requested as a loan was never going to be used to fund public services. It was earmarked to repay previous loans because Greece had been put on a treadmill of austerity from which it could escape.

In 2012 the Troika intervened in Greece to safeguard wealthy private creditors. In return for a haircut on their loans, these investors got EU institutions and the IMF to fund a Greek loan that guaranteed them re-payments. These ‘loans’ triggered further austerity and created the latest crisis.

So the issue was never about Greek people begging from others in Europe. It was about a devious mechanism to make the Greek people pay for debts to wealthy bondholders. Which is precisely what happened the people of Ireland.

The Irish government’s strategy of using ‘quiet diplomacy’ to get  the Irish debt reduced has proved an abject failure. But by backing Germany’s brutal approach, it has copper-fastened debt re-payment from Ireland until 2053.


Stathis Kouvalakis, a member of Syriza, has described the outcome as ‘the most resounding defeat of any leftwing government in Europe after the war’. It certainly represents a turning point in leftwing politics.

Ever since the crash of 2008, there has been an increasing call among activists to forget ‘old’ debates about reform or revolution. Yet the betrayal of Syriza re-opens this very question. To understand the implications for future socialist strategy, it is necessary to analyize the motivations of both the EU elite and the political strategy of Syriza.

For Paul Krugman, the actions of the EU in humiliating Greece are an act of ‘madness’. The assumption that the EU acted irrationally also finds an echo in Varoufakis’ efforts ‘to save capitalism from itself’. He had aimed  to put ‘forward an analysis of the current state of play that non-Marxist, well meaning Europeans who have been lured by the sirens of neoliberalism, find insightful’. In other words, to present a rational case for why austerity policies would harm capitalism. More generally, Syriza’s strategy was premised on the fact that it could persuade its European ‘partners’ to move away from austerity.

Once they came into government, Syriza found that their words literally fell on deaf ears. Here is Varoufakis’s description of what occurred when he spoke to eurozone finance ministers

‘there was point blank refusal to engage in economic arguments. Point blank. You put forward an argument that you’ve really worked on, to make sure it’s logically coherent, and you’re just faced with blank stares. It is as if you haven’t spoken. What you say is independent of what they say. You might as well have sung the Swedish national anthem – you’d have got the same reply.”

There were a number of reasons why it was not possible to even get them to listen.

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Growing the Economy the Robin Hood Way

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Who said the following?

‘ . . . if the income share of the top 20 percent (the rich) increases, then GDP growth actually declines over the medium term, suggesting that the benefits do not trickle down. In contrast, an increase in the income share of the bottom 20 percent (the poor) is associated with higher GDP growth.’


‘The poor and the middle class (middle income) matter the most for growth.’


‘ . . enhanced power by the elite could result in a more limited provision of public goods that boost productivity and growth, and which disproportionately benefit the poor.

The Socialist Party of the World?  The European Zapatista League?  The People’s Front of Judea (or the Judean People’s Front or the Judean Popular People’s Front)? 

No, it was the International Monetary Fund, that crazy gang that gave us poverty, deprivation and economic deterioration to just about wherever they went (now playing in Greece).

The IMF has recently published Causes and Consequences of Income Inequality: A Global Perspective – a strongly argued study that concludes that increasing equality is one of the best things a country can do to promote sustainable growth (that, and investment).  They propose a number of channels – fiscal redistributive policies, investment in education and health, and financial inclusion policies (e.g. basic bank accounts, etc.).

A particularly noteworthy finding is an estimate of the impact of redistribution on growth. 


If the income share of the poorest 20 percent increases by one percentage point, GDP grows by 0.4 percentage points.  However, if the income share of the highest income group, the top 20 percent, increases, GDP growth actually falls.

In other words, redistribution that leads to greater equality is good for the economy; redistribution that favours the highest income groups is bad (Britain after the Tory budget, take note).  You want to grow the economy?  Do a Robin Hood on it – take from the rich and give to the poor.

So what can we make of the Minister for Finance’s latest comments

noonan1‘I use the Budget for economic management purposes and I’m going to cut personal taxes in this Budget . . . I’m going to cut the Universal Social Charge (USC) by at least 1 per cent and maybe a bit more.’

The ESRI estimated the impact of cutting the USC’s standard rate of 7 percent on income groups.  This is what they found.


A cut equivalent to €500 million (cutting the USC standard rate from 7 to 5.35 percent) has almost no impact on the poorest 20 percent.  There’s not much of an increase in the second quintile group (the 3rd and 4th deciles).  However, the greatest gains go to the highest income groups – the 9th and 10th deciles.

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Ireland’s Lean Mean Job Creating Machine is Looking a Bit Flabby

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You’d think, listening to Ministers reeling off employment numbers and media reports of new job announcements, that Ireland was some lean, mean job creation machine. Well, in comparison with other EU-15 countries we are neither mean nor lean. Indeed, we fall well behind in key sectors.

Let’s leave aside the arguments over the 2013 employment numbers.  I suggested that they were inflated due to a statistical re-alignment between the Quarter National Household Survey and the Census (you can read those arguments here andhere).  If people want to believe that job growth in 2013 (when domestic demand fell) was higher than in 2014 (when domestic demand rose by nearly 4 percent) – well, sure, go ahead.  I prefer to take on board the CSO’s warning about interpreting job creation trends in 2013.

Robust comparisons can only start with the last quarter of 2013.  That’s when the CSO finished its statistical re-alignment.  Therefore, we have two year-on-year periods to compare.  We should be cautious interpreting this data; it would be preferable to have a longer time-series.  Therefore, any conclusions are tentative and subject to revision.

The following looks at the market, or business, economy.  This is essentially the private sector, excluding the public sector dominated sectors (public administration, education and health) and the farming sector.  Here are the year-on-year figures for 2014 to 2015 Quarter 1.


This doesn’t look so bad.  Ireland’s employment growth is above the EU-15 average and ranks 4th in the table.  However, something interesting happens when we exclude the construction sector which is non-traded and which in the past the Irish economy overly-relied on for job creation.


Ireland falls well down the job creation table when construction is excluded  – below the EU-15 average.

In the last year, the Irish market economy generated 29,700 jobs.  Of this, 19,500 jobs were in the construction sector – or 66 percent.

When we look at the previous quarter – the 4th quarter of 2014 – we find a similar pattern.

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Austerity Mark II, same as Mark I

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This article was originally posted in Socialist Economic Bulletin on Thursday, the 9th of July. 

Most media coverage of the Budget is predictably sycophantic and wrong. An objective assessment is that the amount of fiscal tightening planned in this Budget is exactly the same as outlined in the June 2010 Budget. The June 2010 Budget planned tightening of £40bn, but £3bn of this was the projected fall in interest payments. Total austerity measures were £37 billion. This time George Osborne has announced total fiscal tightening of £37 billion, with further details to be added in future Budgets.

Therefore the same result should be expected. The British economy is now 14% larger in nominal terms than it was in 2010, but the international economy is growing more slowly. Circumstances are not exactly the same then and now, but the impact of £37 billion in austerity will be broadly the same. If these plans are implemented growth is likely to slow as it did previously.

At that time in 2010 the economy was growing at a 2.2% annual rate. The imposition of austerity measures slowed that to just 0.7% in 2012 and the economy only narrowly avoided a rare ‘double-dip’ recession[i]. The stronger growth in 2013 and 2014 arose because there were no new austerity measures in the run-up to the General Election.

In that same 2010 Budget Osborne claimed the public sector net borrowing would fall to £37bn in 2014/15, or 2.1% of GDP. The outturn was actually £80 billion and 4.4% of GDP.[ii] In fact the deficit was on a rising trend in 2012 to £111 billion from £92 billion in 2011 as the economy slumped. It only started to fall once new austerity measures were halted and the economy could recover. Austerity did not cut the deficit. Growth did.

Austerity transfer of incomes

Austerity is the transfer of incomes from poor to rich and from workers to big business. Social protections (so-called welfare) are cut in order to drive workers to accept ever-lower pay. If people with disabilities can barely subsist, if the sick have subsistence incomes cut, if women have lower pay, increased burdens from worse public services and greater responsibilities as carers, this is regarded only as collateral damage, if at all.

In the £37 billion in combined tax increases and spending cuts over this Parliament, only £17 billion of that is specified in the latest Budget. Very large departmental cuts will be announced in the Autumn Statement and future Budgets, totalling £20bn. £12 billion of that £17 billion will come from cuts to social security protection, and another £5 billion is said to come from clampdown on tax evasion.

The claim that any of this has as its primary aim deficit reduction is belied by the cut in Corporation Tax to 18%. Even before this cut, businesses paid a token amount of total taxation. In the current year corporate tax receipts are expected to be £42 billion. This compares to a total £331 billion paid in income tax, VAT and council tax.

There is also a host of benefits to companies and the rich including more measures on Help to Buy, and rent a room relief to add fuel to the house price bubble. The Inheritance Tax threshold is raised to £½ million per person, up to £1 million per family on homes. Shareholders can receive £5,000 in dividend payments tax-free. Along with other changes, rich savers can now receive £17,500 a year tax-free. There is an increase in tax-free personal allowances and the main beneficiaries of all such measures are high taxpayers.

For the poorest, there are only ‘welfare cuts’. After 2017 there will be no additional tax credits, Universal Credit or housing benefit for families with more than two kids. New applications to Employment Support Allowance will be curbed, which is for people who are not fit to work. A string of further cuts to entitlements will only emerge slowly. The Financial Times has already shown that cuts to tax credits will hit ethnic minority communities hardest.

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Supporting Syriza

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Question: which Eurozone government has 61 percent public support for their position in the Greek bailout negotiations?  Answers on a small postcard.  

Last January Syriza won 36 percent of the vote, which allowed them to enter government as the senior coalition party.  Yesterday, 61 percent of the Greek people supported Syriza’s rejection of the terms laid down by the 18 other Eurozone governments.   There can be no doubting the Syriza Government’s mandate. 

The next week will be crucial in hammering out a deal – if that is possible given the intransigence of the creditors to date.  How can we, in Ireland, provide concrete assistance to the people of Greece?

We can look to the honourable behaviour of the Greek Finance Minister Yanis Varoufakis as a guide. This is not the time, however tempting, to use the referendum result for domestic political purposes.  The Greek people need concrete support.  We should be calling on the Irish Government to take up the following positions in the upcoming negotiations. 

First, we should demand that the Irish Government now engage constructively in the negotiations with Greece:  first, by calling on the ECB to comply with their own commercial mandate and provide the necessary liquidity to allow the Greek banks to open.  In the short-term capital controls and withdrawal limits would have to remain, but re-opening the banks would take the pressure off businesses and households.  Failure to do this is a coercive political act.  Opening the banks should be the Irish Government’s first diplomatic stop.

Second, the key short-term issue is budgetary – allowing the Greek government to run a deficit.  Given the humanitarian crisis and the collapsing of the productive economy, the demand for a primary surplus (i.e. more revenue than expenditure when interest payments are excluded) is not only penal and irrational; for creditors it is the surest way to guarantee that debts will never be repaid.  Greek businesses need space to start growing and employing; fiscal policy should be assisting, not thwarting this.

Third, the Irish Government should support the establishment of a European Debt Conference.  This does not commit any government to a particular position but it at least provides a space, outside the day-to-day politics of the Eurogroup and the EU, to consider medium-term solutions – not only for Greece and the peripheral regions – but for the entire Eurozone.  My own preferred solution would run along these lines, but the Irish Government need not take up any position prior to such a conference being held.

And, fourth, the Irish Government should support the release of structural funds already committed to Greece to kick-start a badly need investment programme.  This could also involve reframing the National Strategic Reference Framework to allow Greek businesses to access the funds allocated to them but denied because of inflexible rules.

These should form the core of any progressive campaign to re-align Irish Government policy:

  • Open the banks
  • Suspend austerity (the first step in getting rid of it)
  • Support a European Debt Conference
  • An investment programme for the Greek economy

The Greek government would still be under strict supervision and required to make progress on reforms:  rehabilitating the tax collection system, ending corruption and patronage, and ending the dominance of oligarchical control over economic sectors.  But this wouldn’t pose a problem for the Syriza government.  These policies already form the core elements of the programme they were elected on.  These reforms will take time and can only succeed when the economy and society are given the fiscal and political space to implement them.  Hard to do much when your banks are closed.

Let’s not demand too much.  The Irish government does not bring the biggest battalion to the Eurogroup.  But it has a potentially influential voice given our experience of a bail-out.  And given the importance of this issue (keeping the Eurozone intact) it is amazing there has not been a parliamentary debate over what position the Government should adopt in these negotiations.  This should change immediately.

The Irish Government should be required to come into the Dail and explain and debate its negotiating position.

We have an opportunity to push the default button.  When Syriza was elected in January, the Eurozone governments should have been relieved: for finally, there was a Greek government that was intent on tackling the issues of reform – corruption, the patronage, the oligarchical controls; reforms which the previous New Democracy and PASOK failed at (or didn’t even try).  That didn’t end well.

There has now been, in effect, a second election in the form of a referendum.  There is no doubting Syriza’s mandate.  Nor is there doubting their continuing commitment to the reform and modernisation of the Greek economy. 

Let’s start anew.  There is still time.  And the Irish government can play a pivotal role in that.

That is the least we should demand of our elected representatives the EU.

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Greece; Deathplace of Democracy

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The word Referendum comes from the Latin referre (to bring back) anddemos is Greek for the people as a political unit; demos is the root of the word Democracy; so a referendum brings a decision back to the people. As representative democracies European States hold elections to choose their governments giving elected representatives a mandate to represent their political choices. The Greek people chose Syriza to represent them in the broken institutions of a European Union in crisis; the Greeks chose to end Austerity. If representatives can’t make a political decision, because it is contrary to their mandate, the decision can be brought back to the demos in a referendum; or at least that is how things used to work.

Welcome to post-crisis EU democracy.

Since 2009 and the financial crisis in the EU, decision-making has been deferred to a financial triumvirate, the Troika, and to the Eurogroup. In latin triuviratus means unofficial coalition of power. Julius Caesar, Pompey and Crassus were the first triumvirate. When the Senate told Julius Caesar to step down as military leader of Rome, he crossed the Rubicon. He proclaimed himself “dictator in perpetuity”. Triumvirates are not known for love of democracy.

The Eurogroup works with the Troika’s mandates (called Memoranda of understanding). The group is democracy light, or rather, it used to be. This flexible ad-hoc ‘group’ has one representative (a finance minister) for each nation in the Euro currency. Neither Denmark nor the UK are members because they don’t use the Euro. As and from Monday the 29th of June, neither is Greece.

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Irish Living Standards Fall Further Behind Europe

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In 2014, GDP increased by 4.8 percent – as often said, the fastest growing economy in Europe.  In 2014, employment increased by 40,000.  In 2014, the recovery started.

In 2014, living standards fell even further behind the EU-15 average.

Eurostat measures living standards through actual individual consumption.  Unlike private consumption, or consumer spending, actual individual consumption

‘ . . . encompasses consumer goods and services purchased directly by households, as well as services provided by non-profit institutions and the government for individual consumption (e.g., health and education services).’

It, therefore, measures consumption not only of goods and services, but public services provided by the government.  As Eurostat states:

‘Although GDP per capita is an important and widely used indicator of countries’ level of economic welfare, (actual individual) consumption per capita may be more useful for comparing the relative welfare of consumers across various countries.’

In short, actual individual consumption can be treated a proxy for living standards.  So what is the relative welfare of consumers (i.e. everyone) across Europe?  The following captures the relationship of real (after inflation) living standards in purchasing power parities between EU-15 countries and the EU-15 average.

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Free Education: A Really Modest Proposal

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Sometimes a proposal comes along that is so sensible and so modest that you wonder why it doesn’t feature high up the public agenda.  Take the proposal made recently by Barnardos:  at a very small cost the state could actually provide what it is constitutionally mandated to do:

‘Article 42.4:  The State shall provide for free primary education  . . . ‘

In its briefing, Providing Free Education for all Schoolchildren, Barnardos proposes that primary and secondary education be made free. They first outline the costs of education that are not covered under the current system, costs that are borne by families.

  • School books:  The cost of schoolbooks is estimated at €60 million.  However, the School Book Scheme only receives a subsidy of €15 million – leaving parents to pay out the rest.
  • Voluntary contributions:  Based on the Barnardos School Cost Survey 2014, parents are paying €89 million in voluntary contributions and €38.5 million for classroom resources.
  • School transport:  For a primary pupil availing of school transport, parents pay €100.  This rises to €350 for secondary pupils.  In total, parents are paying €27 million to transport their children to school.
  • Capitation grants:  these grants paid to schools on a per pupil basis have been cut by 15 percent since 2010 – or €35 million.

So how much would it cost to make education free?  Here are Barnardos’ estimates.


Providing the resources to ensure free primary education would cost €103 million; for secondary education, €127 million.  The total is €230 million.

Barnardos is proposing that in 2016, the centenary of that document that mentioned something about cherishing the children, the Government make primary education free.  Free secondary education would be phased in over three years.

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Syriza’s Moment of Truth


Syriza came to power on the back of an impossible pledge – namely, to end austerity whilst keeping Greece within monetary union. The party’s pre-election Thessaloniki Programme promised to write-off most of the country’s €330 billion public debt through a European Conference. They also promised €4 billion in public investment, the creation of 300,000 new jobs and a rebuilding of the welfare state.[1] Politically, Syriza is committed to remaining within European Monetary Union (EMU) in an effort to democratise it. As a heterogeneous organisation with roots in Euro-communism, Syriza wants to move towards socialism through the existing institutions of the European Union. Instead of setting out to smash the capitalist state and exit the euro, they are trying to prise them open from the inside out. This is not an insurrectionary strategy based on mass struggle and workers councils. Rather it is one that emphasises the building of a dominant (hegemonic) block with parliamentarians in the vanguard of the struggle. One of their leading thinkers, Stathis Kouvelakis, recently defined it as “seizing the state from outside and inside, above and below”.[2] Economically, their policies are best described as left-wing Keynesianism. Here the idea is to use the state to engage in public investment projects whilst redistributing resources through progressive taxation. If successful, the results of this process should be twofold. Firstly, the great humanitarian crisis should start to be relieved. Secondly, the economy should be freed from the current spiral of debt and deflation through higher levels of ‘economic demand’. This strategy basically amounts to saving capitalism by ending neoliberalism. In the words of Greek Finance Minister, Yanis Varoufakis, we must remember “capitalism’s inherent failures while trying to save it, for strategic purposes, from itself”.[3]

The problem for Syriza is that none of this is remotely compatible with the intentions of European capitalism. Since the early 1980’s, the European project has been hardwired with neoliberalism to ensure that profits and political power are accumulated by capitalist elites. Syriza may have costed their proposals in line with EU rules, but they are not taking cognisance of the ‘real politik’ of the European project. Even if they wanted to, the European elites could not allow Keynesian expansionary policies. European capital has worked hard to institutionalise neoliberal policy making, with the likelihood of them suddenly changing tack negligible at best. Be-that-as-it-may, the EU elites are actually out to smash their opponents. Syriza’s election represented genuine hope for millions of people across the continent. If they are seen to be successful, the effects on worker’s organisations in other parts of the Eurozone would be transformative. For this reason, the Troika are determined to crush Syriza regardless of the wider effects on Greek society. Focusing on changing the EU from the inside out therefore becomes an extremely dangerous strategy, particularly if Syriza are not mobilising the Greek working classes in sufficient numbers to support them.

What has happened since the election?

From the outset Syriza presupposed that they would be able to negotiate. Specifically, they assumed that support for expansionary policies would be forthcoming in other depressed regions of the Eurozone (France and Italy in particular). Failing this, they believed that the capitalist elite could never afford to let them leave (a so-called Grexit). Unfortunately, the Troika have so far had other ideas. During the first weeks of their tenure, Syriza immediately found themselves on the back foot. First off, the European Central Bank blocked liquidity for the Greek financial system. Thereafter, the Troika strategically withheld €7.2 billion from a previous bailout to force Syriza into another memorandum. Greek capital has also played its part, evacuating billions from the country’s banks, whilst steadfastly refusing to pay their taxes. Safe in the knowledge that the Greek government would soon run out of cash, the Troika have been incredibly aggressive. Meanwhile, Syriza have crossed many of their previously stated ‘red lines’. On February 20 they signed a four month extension of the hated memorandum, effectively relinquishing debt write-down as a policy position. Debt reduction remains an aspiration, but has quietly been dropped as a red line issue. The problem with this is that Greek debt currently stands at a whopping 180% of GDP. Without some way to write this down, Syriza will be forced to implement the austerity they were elected to reverse. Piraeus Port has already been earmarked for privatisation, despite assurances that this would never happen. Syriza have also accepted neoliberal labour market reforms, delayed payments to struggling pensioners and cancelled payments to low paid workers.[4]

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€1 – Because We’re Worth It

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The Low Pay Commission will soon be recommending an increase in the minimum wage.  How much should it recommend?  Let’s start with the conclusion:  the minimum wage should rise by €1 per hour.  Now, let’s go through the arguments.

First, some background:  the minimum wage (NMW) is €8.65 per hour.  This rate was set back in 2007.  In 2011 it was cut to €7.65 but only a few weeks later the current government restored the cut; this would have affected very workers as employers would have been prevented by law from cutting the pay of workers already employed. 

Ireland is the only EU-15 country that has frozen the NMW since 2007 (with the exception of poor Greece where the Institutions demanded a cut).


The average increase (bar Greece) has been 16 percent in other EU-15 countries with a NMW.  A number of other, poorer EU countries have actually doubled their NMW (Romania, Bulgaria and Latvia) – but these countries were starting off a low-base.

Over that period thee has been an alarming rise in deprivation among those at work. 

  • In 2008, when the recession began, 6.6 percent of people in work suffered deprivation
  • In 2013, this proportion rose to 19.2 percent

Approximately 350,000 in work suffer from multiple deprivation experiences.  This is not necessarily confined to low-paid employees; there will be self-employed in this category while many workers higher up the wage ladder may be suffering from deprivation due to debt issues or rising child costs.  Nonetheless, it is reasonable to assume that a significant proportion are low-paid employees.

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We Are Not a Cost

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If anyone is uncertain about the power relationship between employees and employers, I suggest they look to the Dunnes Stores dispute and the closure of Clerys.  These encapsulate the massive imbalance of power in the workplace. 

I won’t get into the details of these ongoing disputes.  Any rational person hopes the workers succeed – in the case of Dunnes Stores, to win the right to negotiate collectively and reduce the level of precariousness; in the case of the Clerys workers, to be given their fair share of compensation – and dignity – after years of services to the company.

So here, let’s take a step back and look at the presentation of the relationship between employees and employers.  This may seem, at first, abstract but it leads us to something fundamental.

It starts with costs.

Labels are powerful things.  For instance, costs; this is usually not a good thing:  ‘that was a costly venture’, ‘a costly holiday’, a ‘costly day out’.  These are things we usually try to avoid, unless the ‘cost was worth it’

‘Profit’, however, is usually something positive:  that was a ‘profitable experience’, I ‘profited’ from that lecture, we are ‘back in profit’.  Profit equals growth and prosperity.  Further, it is considered a good thing because it’s opposite – loss – is not.  Loss is bad for a household, a company, and a voluntary organisation.  Continued loss may result in bankruptcy or closure or poverty.

So when we discuss labour and capital in the economy or in a business, we are already using labels that colour the debate:  costs and profits.  If costs are something to be avoided or reduced in order to maximise benefit, then we must depress the price of labour (i.e. wages and working conditions), and diminish the agencies that champions this ‘cost’ (e.g. trade unions, the collective bargaining power of workers, legislation that benefits workers). 

Likewise, if profits are an unqualified good – we should support the agencies that maximise profits and gear our legal, labour and tax framework to that end. 

Even before we begin discussing the relationship between wages and profits, the former is considered a cost, a burden while the latter is a sign of prosperity, growth.

The interesting thing about this highly ideological reading, is that it is not vindicated by basic economic accounting (here comes the abstract part).  

An enterprise creates income by creating gross value-added.  We can measure this by the following:

Gross value-added equals sales revenue minus the purchase of goods and services needed to produce the product the enterprise is selling (rent, accountancy services, machinery maintenance, etc.). 

The important point here is that employees’ wages and working conditions is not a cost in the measurement for creating value.

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