Political Economy

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Make the Economy Better – Abolish Zero-Hour Contracts

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Minister Ged Nash launched an investigation into the extent of zero and low-hour contracts in the labour market.  This is most welcome – we need this information which is not available in official surveys (though it should be noted that the investigation into low-hour contracts could be extremely limited as they are only examining eight hour or less contracts – whereas low-hour contracts can go as high as 20 hours).

But what would be even more welcome would be an announcement that zero-hour contracts will be abolished.

I will refer to zero and low hours contracts as precarious contracts.  These contracts require employees to be available for a certain number of hours per week, or when required, or a combination of both – but without any guarantee of work.

Under Irish law, if the employee gets no work, then the compensation should be either 25% of the possible available hours or for 15 hours – whichever is less. If the employee gets some work, they should be compensated to bring them up to 25% of the possible available hours.   Here are a couple of examples:

  • Janet is required to be available for work for 20 hours a week.   She gets no work.  She must be paid, nonetheless, for 25 percent of the available hours – five hours (this is less than 15 hours).
  • Bob is, also, required to be available for work for 20 hours a week.  He gets four hours’ work.  Since he is entitled to five hours payment (25 percent of his work availability), he get an extra hour payment.

I don’t intend to list all the negative impact of precarious hour contracts on workers.  Suffice this piece from Paul Mills writing in the Examiner:

‘The ‘employee’ is effectively reduced to a commodity like a tin of beans on a shelf waiting until someone comes to pick him or her up. It is not sustainable and is effectively immoral.

This type of contract means that the employee has no guaranteed hours or roster but must be available for work.

Whilst the system is undoubtedly beneficial to the employer, it puts the ‘employee’ at a serious disadvantage. It means there is no sick pay, only limited holiday pay, and getting a loan or a mortgage is impossible. In fact there is no guarantee of any work, so no guarantee of any pay and all that leads from that.

It takes us back to the days when fruit pickers, dock workers, farm labourers and general workers stood at a designated corner and waited for an employer to come by in the hope of being selected to work that day.’

Well put.

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Water Charges and TTIP!

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The water charges can and must be defeated by resistance and non-payment but water, as a human right, must also be secured as a publicly owned and controlled resource universally available. Remember, we had to fight water charges in the 1980’s and again in the 1990’s so let’s make this win a permanent one.

The origin of the present water charges lies in the EUs Water Framework Directive (2000) which provided for full cost recovery for water use and whose Article 9 states:

Member States shall take account of the principle of recovery of the costs of water services …’

It also required Member States to have in place water-pricing policies by 2010. The Directive was transposed into Irish Law in 2003.

So, the origins of these punitive charges, this time around, are the Water Framework Directive which seeks to commodify water provision through the establishment of the principle of recovery of the costs of water services. The EU took advantage of the ‘bailout’ to make it a condition of the ‘loans’.  This will open the way for the sale of Irish Water either in whole or in part, ostensibly to complete the single market or to promote competition ‘in the interests of the consumer’. This is just one reason why there is such resistance to a constitutional referendum to permanently retain Irish Water in public  ownership – the other is TTIP.

The Transatlantic Trade and Investment Partnership (TTIP), is currently being concluded in secret by the EU and US. Both sides have made clear their intention to use TTIP to get access to what is described as “public monopolies;” that is, public utilities including water. These services would then be vulnerable to greater outsourcing and private tendering for service delivery and eventually, to privatisation.

TTIP would open up public procurement contracts to the private sector, meaning that social, environmental or “public good” goals in public procurement would be removed. A private monopoly can fix its price at an unaffordable level, as Bechtel did in Bolivia, leading to a popular uprising; the termination of the contract and replacement of the government.

It would also make the nationalisation (or renationalisation) of services or resources virtually impossible, as incredibly, corporations would be able to sue for loss of future and expected profits. This is facilitated by the inclusion of an (ISDS) Investor – State Dispute Settlement clause in TTIP.

 

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Spatial Justice and the Irish Crisis

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Book Review: Spatial Justice and the Irish Crisis, eds: Gerry Kearns, David Meredith, and John Morrissey, Royal Irish Academy (2014) 

The new book Spatial Justice and the Irish Crisis, edited by Gerry Kearns, David Meredith, and John Morrissey and published by the Royal Irish Academy is extremely timely given its extensive analysis and detail on the causes of the Irish financial crisis, its socio-spatial impacts on inequality and suggestions for alternative, social-justice based, economic development. The Irish elite, government, big business and media are trumpeting that ‘austerity’ and ‘neoliberalism’ have worked. The Irish economy is now fully in ‘recovery’ it is claimed, ‘austerity’ will be eased with tax breaks again to be given out to the middle classes, employment is rising and we have a mini property boom in Dublin to celebrate. Even potential social partnership agreements are floating in the political air. However, it is now more than ever that critical political, economic, and socio-spatial justice analysis of the Irish economy is required. Rather than cheerleading blindly into another boom and bust cycle based on inequality and spatial injustice there is a need for academics and policy makers to engage in rigorous analysis and reflection on the crisis and the political economic trajectory for the coming decades.

Prof Gerry Kearns, of the Maynooth University Department of Geography, in the Introduction to the book, draws on President Higgins’ reflection on the importance of ‘critical thought’ in the wake of ‘failed orthodoxies’  as ‘the crisis is one of ideas as well as of policy’. Now more than ever, space and time must be given in the academic and public sphere in Ireland to identify the causes of the crisis, its impact on inequality, and alternative (non-capitalist) policies and approaches based on the common good and social justice rather than the interests of the minority elite – the 1%.

This book does this by placing social and spatial justice as an urgent consideration in all areas of social and economic policy. Interestingly, Kearns highlights how government responses to the current crisis go against Articles contained in the Irish Constitution including commitments of the state to ‘promot[ing] the welfare of the whole people by securing and protecting as effectively as it may a social order in which justice and charity shall inform all institutions of the national life’ (Article 45.1). Significantly, this also includes ensuring that ‘the ownership and control of the material resources may be so distributed amongst private individuals and the various classes as best to subserve the common good’ (Article 45.2.ii).

The book covers the origins of the financial crisis, its political and territorial implications such as the outsourcing of state power to international credit rating agencies, the links between crisis, housing and planning, the uneven impacts of the crisis in different parts of the country and unevenly within cities such as failed regeneration, impacts on equality of opportunity, marginalization of migrants, and sustainability. Within these areas it addresses the questions of spatial justice and where the pain of crisis and the opportunities of recovery are distributed, geographically and socially. It highlights the uneven development that was at the heart of the Celtic Tiger in the inequalities that persisted through that period, how they were worsened by the crash and the forms in which they continue today.

The chapter by Prof Danny Dorling, Professor of Geography at the University of Oxford, on Spatial Justice, Housing and the Financial crisis makes important links between rising inequality and housing crises internationally. This chapter is very interesting for an Irish audience as it highlights how the current housing crisis in Ireland has similar causes to other countries and there is much we can learn in regard to social justice based responses. Dorling argues that “we really need to think of housing again as a way in which we feel safe about where we are: not as a source of investment or a pension or something that can be used for profit, but instead as primarily a source of shelter”.  He offers suggestions to address this such as a mansions tax, rent control, and using second and third homes for housing for those who need it. He explains that “housing is fundamental. It is what lies at the bottom of this crisis. Housing is one of the basic things that everybody needs and that policies can work out a way to guarantee.” He surmises that the reason this is not the case is because current policy appears to be ”trying to protect the equity interest of a small proportion of people who happen to own quite a lot of very expensive housing”.

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Greek EU Elections: A Clear, Historical, But Still Not Decisive SYRIZA Victory

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The Greek EU elections have produced what is clearly a historical result, not only for Greece but for the European Union as well. SYRIZA won by a clear margin of almost 4% (3.8% to be more precise), scoring 26.5% against 22.7% of ND, the governing right party. Moreover, in the municipal and regional elections SYRIZA gained an impressive victory in Attica district with Rena Dourou, though it failed to elect Sakellaridis in Athens, who lost by a small margin to Kaminis.

SYRIZA’s victory is widely discussed by the European mass media, together with Marine Le Pen’s impressive first place in France, as the two most striking and weighty EU elections results. But while important on a general level, SYRIZA’s success is even more important for the European Left. It is the first time in recent history of Western Europe that a party of the Left gains first place since 1984, when the Italian Communist Party had achieved the same, just after Enrico Berlinguer’s death. However, SYRIZA’s victory comes at a much graver occasion, when the specter of fascism, racism and reaction hangs heavily over the continent. In this connection, it is crucial in showing that there is another road for Europe apart from the turn to the ultra Right, observed not only in France but in several other EU countries (Austria, Denmark, Sweden, Hungary, etc.) as well.

Yet, precisely because it is historical, SYRIZA’s victory must be analyzed in a serious way and not be idealized or overestimated. This is not only because it was accompanied by a new rise of the neo-Nazi Golden Dawn party, but also because, if closely viewed, it points to some weaknesses of SYRIZA, without which it could have been even larger. Moreover, the Greek EU election results show some interesting tendencies with regard to the other parties as well, reflecting underground social trends which may be relevant for other EU countries too.

We will proceed therefore to a commentary of the Greek EU elections, hoping to highlight some of these aspects. But first of all let us give the results themselves (we also cite the May and June 2012 parliamentary elections results for the sake of comparison).

Party

%

Seats

May 2012

June 2012

SYRIZA

26.5

6

16.8

26.9

ND

22.7

5

18.9

29.7

Golden Dawn

9.4

3

7.0

6.9

Elia

8.0

2

13.2

12.3

Potami

6.6

2

-

-

KKE

6.0

2

8.5

4.5

ANEL

3.5

1

10.6

7.5

LAOS

2.7

2.9

1.6

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Trying to Learn from What Works

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This article was originally posted on Socialist Economic Bulletin on Sunday May the 4th.

Facts can be a very severe judge. Either economic structures, the models used to explain them and economic policies work, or they don’t. The factual verdict alone can determine who was right, what was successful, what economic system works best.

The chart below is reproduced from The Economist. It shows the change in the IMF’s own estimates and forecasts of the level of US and Chinese GDP. Previously the IMF’s projections were that China would surpass the US as the world’s largest economy in 2019. Its revised estimates are that this will now occur at the end of this year. From 2015 onwards, when anyone refers to the world’s largest economy this will be China, not the US.

Chart 1. IMF Estimates & Projections of US & China GDP, PPP $ trillions

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By any standards, this is a momentous economic event. The leading position in the world economy does not change with great frequency. The US surpassed China’s GDP at some time around 1890, having already overtaken Britain in in 1872. (The Financial Times is incorrect to place this earlier data as the key turning-point – it seems to have ignored China altogether).

In this sense the current reversal is a return to the norm. China’s economy, with a population of 1.3 billion people should be larger than the US. At the same, this higher population level means that per capita GDP is still much below countries like Britain or the US, although this gap too is narrowing rapidly.

As a result, it would be foolish to argue Britain should ‘copy’ China. Different geographies, different relationships with the world economy, different histories and different levels of current economic development would make that an impossibility.

But the Chinese economy has delivered exceptionally strong growth, and grown much more rapidly than the Western economies over a very prolonged period. In 30 years of the process of reform and opening up from 1978 to 2008 it has raised average living standards from the British level of the 15th century to the same as Britain in 1948. No doubt the advance since 2008 has been equally impressive (probably to something like the early 1960s in Britain).

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1,230,000

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1,230,000. This number should be burned into the debate.  This the approximate number of people included in the CSO’s enforced deprivation rate.  This is the number of people who suffered two or more deprivation experiences in 2012.  This is more than one-in-four – 26.9 percent – of all people in the state.  This is a number that should drive the debate from here on.

The CSO sets out eleven enforced deprivation experiences:

Without heating at some stage in the last year * Unable to afford a morning, afternoon or evening out in the last fortnight  * Unable to afford two pairs of strong shoes * Unable to afford a roast once a week * Unable to afford a meal with meat, chicken or fish every second day * Unable to afford new (not second-hand) clothes *  Unable to afford a warm waterproof coat * Unable to afford to keep the home adequately warm * Unable to afford to replace any worn out furniture * Unable to afford to have family or friends for a drink or meal once a month * Unable to afford to buy presents for family or friends at least once a year

Those who suffer two or more of these experiences are officially categorised as deprived.

Deprivation has been rising since the beginning of the recession.  In 2007, 11.3 percent were categorised as deprived.  In 2012, it rose to nearly 27 percent – more than doubling.  In absolute numbers, it has increased by nearly three-quarters of a million.

In this overall number there are approximately 375,000 children, aged 17 and under.  Since 2007, this number has increased by 180,000.

There are sections of society that are under severe pressure.  The following is the deprivation rate for particularly vulnerable sectors:

  • Social housing tenants:  50.7 percent
  • Lone parents:  49.5 percent
  • Unemployed:  49.4 percent
  • Not at work due to illness or disability:  48.5 percent

In these groups, one-in-two people live in deprivation.

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Paper Tigers and Real Ones

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This is a guest post by Michael Burke.  Michael works as an economic consultant. He was previously senior international economist with Citibank in London. He blogs regularly at Socialist Economic Bulletin.  You can follow Michael at @menburke . It was originally posted on Notes on the Front.

Most people don’t care much about GDP (Gross Domestic Product) or most other acronyms that get bandied about on the economy. For good reason.

The purpose of economic policy is, or ought to be, about achieving the optimal sustainable improvement in living standards for the population. If businesses produce goods that no-one buys and they accumulate as unsold inventories, or if the buying power of businesses or households declines so that imports fall, both of these count as increases in GDP.

What really matters is if the economy and society as a whole is moving forwards, if people see an increase in their living standards and reasonably expect that the next generation or two will see the same.

In that light, the latest forecasts from the Central Bank of Ireland are not very encouraging. Sure, there is a forecast of 2.1% real GDP growth for the economy in 2014. But in terms of real wages, on average they will be zero as a projected 0.5% increase in wages is effectively wiped out by the anticipated level of inflation. Government current spending is also expected to fall in 2014 more than it did in 2013, so living standards for most people will actually decline again.

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A Dialogue on Democracy and the Republic, Part 2

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Here is the second part of a dialogue with philosopher Juan Domingo Sánchez Estop on the idea of the republic. This is a continuation of the discussion started here on the 29th of October last.

Juan Domingo Sánchez Estop taught modern philosophy in the Universidad Complutense de Madrid from 1981 to 1986. He translated Spinoza’s correspondence into Spanish and, as a member of the Association des Amis de Spinoza, has taken part in seminars and congresses in France and Italy. He is currently working as a senior translator in the Council of the European Union and is specialized in foreign policy matters. He is an advisory editor of the review Décalages (on Althusserian studies). He writes in European and Latin-American publications on Spinoza, Althusser, modern philosophy and political philosophy. His latest book is La dominación liberal (Liberal Domination. Essay on liberalism as a power apparatus) (Tierra de Nadie, Madrid, 2010). He is currently linked to the Philosophy Center of the Université libre de Bruxelles, where he is preparing a PhD on Spinoza in Althusser. His blog, in Spanish, is Iohannes Maurus.

RMcA: I’d like to relate what you’ve been saying here to the present situation in Europe. Before I do, a couple of comments. I think you -and the rest of the line of the damned!- are right about the common-wealth as an originary reality underlying capitalism itself. Indeed, the legal architecture of a capitalist State rests, at a very basic level, upon a conception of something that is common to all. And it’s also true about the way neoliberalism puts knowledge of this originary reality to its own ends.

 

JDSE: There is much to say on common-wealth or even on communism as the very fabric of any society, even of the one which most utterly denies it, capitalism. What we, on the “line of the damned” construe as the commons, has in bourgeois legal terms, an equivalent: the “public” as synonymous with State-owned and/or -managed. This is, of course, a mystification of the common ground of society, placed as a transcendent One above the multitude. This is exactly the way Hobbes thinks of the union of a Commonwealth in his political works. Against this we consider the multitude as rooted in the common, as an ever open set of incomplete singular individualizations as the French philosopher Simondon put it, in a very Spinozist way (even if he never was aware of this connection). From this point of view, the common is always-already political, and the relevant question is not the one about the origin of the political or the common, but the one about individualization and its modes.

Neoliberalism is an effort -possibly the last effort- by capitalism to get asymptotically as close as possible to the communist fabric of society, and even of the human species, in order to exploit it. That’s why it has been identified by Michel Foucault as “biopolitics”. Life and the reproduction of capital are getting ever closer to each other. The very span of labour time or space is nowadays indefinite and becomes identical to human individual and social life. There is no longer a closed space and a definite time for labour, as was the case in the classical Fordist or even pre-Fordist (Dickensian) factory. Today, life reproduction and labour are the same: Marx would say that we have entirely completed the “real subsumption” of labour under capital.

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Tales of Ireland the Tax Haven: To Hell or to Arthur Cox

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Joanne Richardson is stepping down as head of the American Chamber of Commerce Ireland. To mark the occasion the Irish Independent are providing the usual frothy interview. First all, she says that the level of US investment here is all about the tax regime:

“…but it’s no secret that the favourable tax regime makes it particularly appealing.”

The recent controversies, US Senate Subcommittees and international debates on Ireland as a tax haven are mentioned but brushed aside. Their impact is apparent, however, in the reference to ‘regime’ rather than the 12.5% ‘rate’.

No one believes that one any more. A well-publicised report, published on the 25th of November 2013 by the World Bank and the large accountancy firm PricewaterhouseCoopers, claims Ireland has an effective corporate tax rate very close to the official rate of 12.5%. From the headline of the press release:

“Ireland has an effective corporate tax rate of 12.3% compared to an EU average of 12.9% and 16.1% globally.”

Feargal O’Rourke, Head of Tax, PwC Ireland said:

“The survey further demonstrates that Ireland’s statutory headline rate on profits is broadly similar to the effective rate. For many EU countries, the statutory headline rate is significantly higher than the effective rate.”

Feargal was described by Jesse Drucker in a recent Bloomberg profile erroneously as a ‘local hero’ who made Ireland a ‘tax avoidance hub’, but people might recognise him as the son of Fianna Fail politician Mary O’Rourke and nephew of the late former Minister for Finance, Brian Lenihan.

But, PwC, as a leading accountancy firm in making this claim is running at odds with the advertising made available on the websites of the Irish offices of other prominent accountancy firms.

The most well known in an Irish context is Arthur Cox, who the Irish Independent suggested were the legal brains behind the 2008 Irish bank guarantee. They have been saying that Ireland has a 2.5% effective corporate tax rate in their advertising since at least 2011:

“Intellectual Property: There are numerous advantages for multi-national companies with large Intellectual Property (“IP”) portfolios who locate and manage these portfolios in Ireland. The effective corporation tax rate can be reduced to as low as 2.5% for Irish companies whose trade involves the exploitation of intellectual property. The Irish IP regime is broad and applies to all types of IP. A generous scheme of capital allowances as well as a tax credit for money invested in research and development in Ireland offer significant incentives to companies who locate their activities in Ireland.

A well-known global company recently moved the ownership and exploitation of an IP portfolio worth approximately $7 billion to Ireland.”

(Michael Hennigan suggests that the company in question is Accenture.)

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On the Irish government’s “precautionary credit line” and “exiting the bailout” – The Emperor has no clothes

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Statement from the Communist Party of Ireland

The Communist Party of Ireland today warned Irish workers not to fall for the latest ruse by the bankrupt political establishment with its announcement that this failed state will leave the “bail-out programme” — which is in fact a restructuring programme — by 15 December with or without a “precautionary credit line.”

This will not mean an end to any of the current or planned cuts in health, education, or social welfare, nor end the drive for privatisation. Nor will it prevent the need for continuous cuts in the future. The servicing of the debt is costing the Irish people nearly €9 billion per year — similar to the annual education budget. Austerity will be a permanent feature of the lives of working families far into the future.

Debt has become the principal political means for strengthening external mechanisms of control by the EU Commission – dominated by Germany – not just of this state but all member states and in particular over the other heavily indebted peripheral states. The capacity of the peoples across the European Union to democratically affect political and economic changes is being rapidly diminished. Democracy is being hollowed out.

It is simply not in the interests of the Irish political and economic establishment to assert independent actions, their interest lies in ensuring that the current process continues and deepens.

Ireland continues to be at the mercy of “the markets” – those who control the markets are those who control the troika.

Debt is also being used to push through the long-term strategic imperative of economic restructuring that is intended to restore lost inequalities and to impose new ones, not only in Ireland.

The announcement today has more to do with appearances than with reality. Just as we were the poster boy for economic development during the “Celtic Tiger” period, we are now being touted as the poster boy of good behaviour for accepting austerity without a whimper.

The European Union has to show to the people of Greece, Spain, Portugal and other EU member-states that if they take the austerity medicine without resistance, it works.

The system itself is in a deep and deepening structural crisis with debt and stagnation just the latest manifestations.

The emperor has no clothes.

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The November Issue of Socialist Voice is Out Now

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The November issue of Socialist Voice is out now. Download it here, or view it online. Also available to read below.

  • Will we or won’t we? [EMC]
  • Departments I, II and III and economic crisis [NL]
  • Pension benefits wiped (part 2) [Brendan Ogle]
  • Printing money to support the debt bubble [NL]
  • James Connolly and 1916 [NOM]
  • There is an alternative (part 2) [EON]
  • Time for more independent leadership [NOM]
  • Rail and bus transport: Why nationalisation was the obvious answer [RNC]
  • Political statement
  • International Meeting of Communist and Workers’ Parties, Lisbon: Speech by Eugene McCartan, general secretary, CPI
  • The unseemly rise of Qatar [BG]
  • A serious defeat for workers and their union [TMK]
  • Willie Walsh floats again [MA]
  • Letter: Ionad Buail Isteach

Will we or won’t we?

It is now clear that the Irish state will leave the “bail-out” or restructuring programme some time in December. The Government is spinning the argument that when we eventually get the EU-ECB-IMF supervision off our backs we will “regain our sovereignty” and independent action.

The question has to be asked, When have we ever had full sovereignty and independence?

They are claiming that Government policies have worked to such a degree that they may not need any “precautionary credit line” from the European Stability Mechanism, the euro-zone rescue fund. For this state to get access to such funds would require parliamentary approval from a number of countries, including Germany.

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From The Republic of Confiscation

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After Seamus Heaney’s death, the Irish Times sought contributions from its online readers about what Heaney meant to them. One reader recounted meeting him at a reading at Harvard:

After the reading, I joined the throng that inched its way toward him bearing my copy of Opened Ground. When I finally reached him, to my surprise he looked me over and asked, “Ah, now. what do you do.” Flabbergasted, I told him I was a Boston Public School teacher. His response: “Ah, now, that’s a real job.” He scrawled the words, “Keep going” in my book.

Heaney himself, of course, was a teacher. He trained as a teacher at St Joseph’s Teacher Training College in Belfast, and taught at a secondary intermediate, St Thomas’s, in Ballymurphy, West Belfast. He then trained other teachers at St Joseph’s, and when he moved south, got a job teaching trainees at Carysfort College. His wife was a teacher too, as were his sister and brother.

By becoming a teacher, Heaney was taking advantage of possibilities created by the 1947 Education Act in Northern Ireland. In his superb book of interviews,Stepping Stones, Heaney recognised that neither he nor his brothers and sisters would have gone to university were it not “thanks to the system put in place by that Labour government in Britain.”

This isn’t strictly true: the 1947 Education Act, though introduced in Northern Ireland under a Labour government in Britain, was modelled on the 1944 Education Act in England, brought in by R. A. Butler under a Conservative government. However, it’s certainly true that prospects for disadvantaged young people in Northern Ireland in the 1950s were shaped for the better by the building of the Welfare State that occurred under the Attlee government elected by landslide in 1945, so the gratitude isn’t misplaced.

Nonetheless, Stepping Stones reveals Heaney’s unease at the inequalities that the new system imposed: between those who went on to a grammar school education and those who didn’t. In recalling his time spent teaching at St Thomas’s, a school for the supposedly “non-academic”, he saw how “instead of a school where equal attention was paid to all abilities, there was this favoured upper stream and then the great non-academic flow-through. My job, for the year I was in the school, was to teach English at first-year and fourth-year levels, to two of the exam-oriented classes. And I had a PE class with a group of really low-ability first years, 1G, for God’s sake, in a ranking that began with 1A.”

He said the “school was attempting to inculcate a regime of respectability and conformity, a kind of middle-class boarding-school style, but the home culture and the street culture of working-class Belfast was very different”, and recognised “disadvantaged homes and impoverished conditions generally as a barrier to growth and self-realization”.

For all its drawbacks and inequalities, the education system in the North of Ireland for working class children, sustained by gains won by the labour movement in Britain, compared favourably to what was available south of the border.

It wasn’t until 1966, the fiftieth anniversary of the Easter Rising, that free secondary education was formally introduced in the Republic. But despite its constitutional claim to be a democratic state, the Irish State continues to fund teaching at exclusive private schools. In Enough is Enough, Fintan O’Toole highlights the fact that a fifth of all university students had paid fees at second level in 2008, and that 43% of students at UCD came from either fee-paying or grind schools. The attitude of the current government to education in line with democratic principles can be glimpsed in the fact that the 2012 Finance Bill allowed high earners to write off private school fees of up to €5,000.

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Bloody Disaster

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A good friend of mine took one look at the CSO’s National Quarterly Accounts released today and described it in two words:  ‘f****** awful’.  As this is a family-friendly blog I’ll just content myself with ‘bloody disaster’.

Ireland’s recession is continuing and even accelerating.  GDP has fallen for three quarters – with the first quarter of this year registering a fall of 0.6 percent.  Since the summer of last year the economy has fallen by 1.8 percent.  Let’s put that in perspective.  This is the biggest fall over three quarters since 2009 when the economy went ballistic.

Let’s survey the main points:

  • Consumer spending has fallen through the floor – falling 3 percent in one quarter.  This is the biggest quarterly fall in the recession.
  • Investment is continuing to fall – over 7 percent.
  • Exports fell by over 3 percent.  They have fallen in three out of the last four quarters.  So much for the export-led recovery.

We are in now in the middle of a perfect storm – falling exports (due to irrational austerity being pursued at EU level) and fall domestic demand – due to our home-grown irrationality.

Let’s knock this GNP-thingy on the head.  No doubt, supporters of austerity and government policy will try to claim that the 2.9 percent increase as somehow ‘more reflective of the domestic economy.’  This is not true.

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