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The €2 Billion Start

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Today, Unite has published its 2016 pre-budget submission.  You can read the full submission here and the summary here.  In short, it calls for a €4.8 billion budget package comprising a €1.9 billion increase in expenditure on public services and social protection, a €550 million increase in public investment and focused tax reductions on the low paid (e.g. reform of the PRSI step-effect, refundable tax credits and indexation) worth €220 million.  This is to be paid for by tax increases on wealth and capital, along with increases in the social wage (employers’ PRSI) and the fiscal space allowed under the EU fiscal rules.

However, I want to focus on one particular proposal in the submission:  the temporary, once-off investment programme of €2 billion for social housing; in particular, focusing on the homeless and households with special needs.

This has been discussed previously on this blog.  Back in April 2014 I suggested that instead of the Government spending €7.1 billion on paying down debt, it should invest half of this into a special once-off investment programme in social housing.  The actual turnout for 2014 was €5 billion used to pay down debt.  At that time I wrote:

‘Let’s start with the conclusion: if by this time next year if there are people still homeless, it’s because the Government made a policy choice.  And the policy choice was to tolerate homelessness.’

Back in May 2014 Fr. Peter McVerry warned of a ‘tsunami of homelessness’:

‘In all the years I have been working with homeless people; it has never been so bad. We are, even I would say, beyond crisis at this stage.’

16 months later the situation has become worse. 

A comprehensive housing programme, one that addresses the myriad of issues such as homelessness, local authority waiting lists, rising rents and limited supply, house prices, planning, land prices – this is a big, big subject and is not amenable to sound-bite policies.  It will require joined-up strategies, long-term thinking and the intellectual courage to go beyond the ‘housing as just another market good’ thinking that dominates policy-making.

However, with winter coming on and more people becoming homeless, sleeping rough and / or living in wholly inadequate accommodation, we need short-term stop-gap remedies.  That’s the thinking behind Unite’s proposal for a €2 billion once-off investment programme – to address this immediate crisis. 

There are any number of options open to the Government in using this €2 billion:  fast-tracking refurbishment, acquisitions of short-term tenancies, conversion of idle buildings, extensions of current emergency accommodation, etc.  The key is that accommodation can be brought on stream quickly and efficiently.  One hopes that it is not too late.

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Reflections on Irish Water

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Despite its small size, the Emerald Isle, situated between England and America, boasts more than 12, 000 lakes, or loughs. The largest lake in the British Isles, Lough Neagh, is in Northern Ireland, reputed to be formed when the sod of earth that Fionn MacCool dredged up to throw in combat at a fellow giant, displaced water inland from the Irish Sea.

Lough Corrib and Lough Mask contend for first place in the Republic. Strangford Lough, a bird sanctuary, and Lough Hyne, a Marine Nature Reserve, are both sea-water lakes. The rest are regularly refilled by famously high levels of precipitation that seep into the ground. An abundance of streams and rivers are also found. No other country in Europe contains more bog-land. Twenty per cent of Ireland’s territory once consisted of bogs.

Ireland is completely surrounded by water. It is divided from Britain and Scotland by the Irish, or Manx, Sea, containing the Isle of Man, Anglesey and other islands. The Irish Sea meets the Atlantic Ocean, lapping remaining shores, through the North Channel, or Straits of Moyle, facing Scotland. It meets the Celtic Sea at the southerly St. George’s Channel, stretching out to France.

The copious rainfall irrigates the land to grow vegetation decked in forty shades of green. The temperate oceanic climate keeps the weather mild and moist, preventing temperature extremes. The North Atlantic Current flowing nearby bestows the year-round advantages of an ice-free coastline, and warmer temperatures than are enjoyed in other places on the same latitude. There are between 151 and 225 recorded wet days, receiving more than 1mm of rain, out of every 365 days of the year, with most falling in the west. Ireland is not short of water.

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Einstein’s Socialism

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Einstein’s progressive views inevitably made him face the fundamental in our times question of socialism. He dealt with it in his extremely important article “Why Socialism?”1, published in the first issue of Monthly Review in 1949. In it Einstein explicitly declares in favor of socialism, recognizing its superiority over the capitalist system.

Einstein came to be interested in socialism through realizing that the present social order does not promote culture and through his understanding of the deep despair and hopelessness experienced by many people. He recounts in the article an enlightening incident from a conversation he had with an acquaintance, who had expressed his indifference about the eventual destruction of humanity after a relevant remark by Einstein. He makes an accurate diagnosis of the social crisis: “Innumerable voices have been asserting for some time now that human society is passing through a crisis, that its stability has been gravely shattered. It is characteristic of such a situation that individuals feel indifferent or even hostile towards the group, small or large, to which they belong”.

From this starting point, Einstein came naturally to the question of the feasibility and the historical need of another, socialist order. And with his usual mental integrity, he replied it in the affirmative when he was convinced that there is no other way to save human civilization.

In “Why Socialism?” Einstein does not only sharply condemn capitalism. Even more significantly, he adopts, to a large extent, the Marxist analysis of the capitalist system, criticizing its exploitative character and its other derivative afflictions, such as the concentration of wealth in the hands of a few, crises, unemployment and the manipulation of public opinion. His judgments on the principle of profit and other currently dominant values of wild market capitalism are quite interesting

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September Edition of Socialist Voice Out Now

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September Edition of Socialist Voice Out Now

Much ado about nothing:  
The “peace process” in the North is going through one of what appear to be regular spasms, this time resulting from the killing of two men who the press claim were former members of the IRA in Belfast. The fall-out from the killing of Kevin McGuigan on the 12th of August rumbles on as a result of comments made by the chief constable of the PSNI, George Hamilton, which sowed confusion and provided the pretext for current developments…………

Lansdowne Road (the Haddington Road Extension)  
Alan Hanlon
This headline sums up the proposed Lansdowne Road Agreement. Brendan Howlin and union leaders have been making a lot of noise about pay restoration and the end of the so-called financial emergency. It has been hyped in the bourgeois yellow press that civil and public servants would receive a pay increase of €2,000 per annum under the deal.      Howlin and the Labour Party spin doctors have tried to give the impression that but for them the nasty Fine Gael party would have given nothing. This is nonsense. The Labour Party is a willing partner in the austerity programme.

Don’t privatise the banks?  
Nicola Lawlor
Very early in the present crisis the CPI argued against nationalising the banks, on the grounds that this would be socialising tens of billions in debts, would bankrupt the state, and would create conditions for a general downward restructuring of the economy. The party introduced and popularised the slogan “Repudiate the debt” as the clearest anti-imperialist class position, which attempted to challenge both the Irish establishment and the European Union and indeed the global financialised economy.

All is not quite what it seems:   
Tommy McKearney
According to an article by Hugh O’Connell on the web site journal.ie, our now ailing and tetchy Labour Party leader has commissioned a company called Marmalade Films to produce a series of short social-media-based advertisements commending the party’s performance in government.1 These short film clips deal with the themes of jobs, families, and business, asserting that the Labour Party is good for all three, though offering little evidence to support the claim.

One step nearer to privatising schools    
Dónall Ó Briain
The national school on the island of Inis Meáin, Co. Galway, needs a second teacher—not because of the number of pupils (there are only nine) but because of the number of subjects to be taught. Up to now the solitary teacher has been expected to teach the whole national school curriculum.

Samir Amin: A life that continues to be lived:
Nicola Lawlor
Samir Amin is recognised as one of the most important and most inspiring living Marxist theoreticians and philosophers. I would strongly recommend that people read his regular articles in Monthly Review (posted on the MR e-zine) and his books, most notably his recent publications The Law of Worldwide Value (second edition, 2010) and The Implosion of Contemporary Capitalism (2013).

Reasons why I am not a capitalist
Richard Bryant
1. It is not the perfect system that it has been advertised to be. It had a beginning and a middle, and we are now at the end. It will not self-perpetuate into the indefinite future. The responsible solution is to search for alternatives not rooted in austerity and oppression.

The Pope calls capitalism’s bluff:  
Tomás Mac Síomóin
Pope Francis is no 21st-century Karl Marx. But when it comes to the critical analysis of modern monopoly capitalism and its role in the creation of human suffering on a massive scale, the Italo-Argentine and the German Jew sing from the same hymn sheet.

The case against the privatisation of water  

Paul Doran
Here are ten reasons—among many—why the privatisation of drinking water could spell doom for the Irish people and many of the world’s 6 billion-plus people:

No reproductive freedom in Ireland, North or South:   

Scarlett Hoy
The availability of safe, legal abortion and affordable, reliable contraception is really good for women. Being able to decide if and when to have a child (or more children) improves women’s educational outcome, our career prospects, our health, the health of our relationships, the well-being of our…….

Trade Union Campaign to Repeal the 8th Amendment:    
Therese Caherty
Abortion is a work-place, equality and human rights issue. Since its formation in September 2014 the Trade Union Campaign to Repeal the 8th Amendment has argued that this is the case.

Democratic Programme for the 21st Century:  

Comrades
The Democratic Programme for the 21st Century is timely, not just in its connection to the many coming centenaries and memorials over the next number of years, kicked off with the recent O’Donovan Rossa events……..

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Corbynomics and Crashes: Investment Versus Speculation

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This article originally appeared on Socialist Economic Bulletin on the 2nd of September

Words matter. But in economic discussion as elsewhere they are frequently abused. In economic commentary one of the most frequent falsehoods is to describe speculative activity as investment. Stock market ‘investors’ are in fact engaged in speculative activity. There is no value created by this speculation. The claim made by its apologists that it provides for the efficient allocation of capital to productive enterprises is laughably untrue in light of both recent events and long-run history. In fact, a vast number of studies showthat that there is an inverse correlation between the growth rate of an economy and the returns to shareholders in stock market-listed companies.

The chart below is just one example of these studies, Fig. 1. The research from the London Business School and Credit Suisse shows the long-run relationship between real stock market returns and per capital GDP growth. The better the stock market performance, the worse the growth in real GDP per capita. The two variables are inversely correlated.

The Economist found this result ‘puzzling’. But it corresponds to economic theory. The greater the proportion of capital that is diverted towards speculation and away from productive investment, the slower the growth rate will be, and the slower the growth in prosperity (per capita GDP).

Fig.1 Stock market returns and per capita GDP growth
 

This is exactly what has been happening in all the Western economies over a prolonged period. SEB has previously identified adeclining proportion of Western firms’ profits devoted to investment. The uninvested portion of this capital does not disappear. Instead, it is held as cash in banks and the banks themselves use this to fund speculation and share buybacks by companies (which simply omits the banks as intermediaries in the speculation). The effects of this are so marked that some analysts believe ‘financialisation’ is the cause of the current crisis, when instead it is an extreme symptom of the decline in investment and the consequent growth of speculative activity.

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No China’s economy is not going to crash – why China has the world’s strongest macro-economic structure

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This article originally appeared in Socialist Economic Bulletin on Tuesday, 1 September 2015.

A great deal of highly inaccurate material is currently appearing in the Western media about the ‘crisis’ of China’s economy – an economy growing three times as fast as the US or Europe. This follows a long tradition of similarly inaccurate ‘crash’ material on China symbolised by Gordon Chang’s 2002 book ‘The Coming Collapse of China’.

The fundamental error of such analyses is that they do not understand why China has the world’s strongest macro-economic structure. This structure means that even if China encounters individual problems, such as the fluctuations in the share market or the current relative slowdown in industrial production, which are inevitable periodically, it possesses far stronger mechanisms to correct these than any Western economy. This article is adapted from one published in Chinese by the present author in Global Timesanalysing the greater strength of China’s macro-economic structure compared to either that of the West or the old ‘Soviet’ model. The original occasion of the article was the next steps in the development of China’s next 13th Five Year Plan. The analysis, however, equally explains the errors of material currently appear in the Western media.

*   *   *

In October a Plenary Session of China’s Communist Party (CPC) Central Committee will discuss China’s next five-year-plan. This provides a suitable opportunity to examine the reasons for China’s more rapid economic development than both the Western economies and the old Soviet system.

Taking first the facts which must be explained, China’s 37 years of ‘Reform and Opening Up’ since 1978 achieved the fastest improvement in living standards in a major country in human history. From 1978 to the latest available data real annual average inflation adjusted Chinese household consumption rose 7.7%. Annual average total consumption, including education and health, rose 8.0%. China’s average 9.8% economic growth was history’s most rapid.

As China’s ‘socialist market economy’ achieved this unmatched improvement in human living conditions it is this system which must be analysed. Its difference to both the Western and Soviet models explains why China’s economic development is more rapid than either.

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Cameron’s Swarm is Europe’s Solution

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David Cameron labelled them a ‘swarm’. Thousands of them have died in the Mediterranean.  Border fences are being built to keep them out:  Hungary, Spain, Bulgaria, Calais.  The Slovakian Government will take a handful of them but only if they are ‘Christian’ (apparently they don’t do Muslims or Mosques).  And all the while millions are being spent  on aperverse mini-stimulus – as ‘defence contractors, outsourcing companies and security forces find willing buyers for their security-based “solutions”, bringing new surveillance systems, patrol vessels, co-ordination centres and detention facilities to the market with little scrutiny or due diligence.‘  A rational political and economic response gives way to militarisation.

This is what has been labelled the ‘migration crisis’ – as hundreds of thousands are seeking refuge, asylum, work and a better life while risking oppression and even their lives to come to Europe. 

Much has been written on this subject – including this insightful analysis by Dr. Vincent Durac.  I don’t intend to survey all the issues or appropriate responses as this crisis has many origins and dynamics and will require substantial doses of enlightened national policy combined with international cooperation.  But here are a couple of thoughts.

First, the men, women and children that make up Cameron’s swarm – they are not a problem, they are a solution.  They are a solution to Europe’s ageing demographic, skill base and employment crisis.

A key part of this is the fact that Europe is growing old.  Using the EU’s main scenario demographic projection, we see that the EU’s total population will rise by 17 million while the number of over 65s will rise by 54 million.  Working age population will fall by 34 million.  12 of the 28 EU countries are actually projected to experience an overall fall in their populations.  With a higher proportion of elderly and a falling number of working age men and women, Europe is set to suffer a slow age crash.

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Who Was Right? The Magic Trick of Austerity

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The Irish economy has finally recovered 8 years after the slump began. This is the longest depression in the history of the State.  Since its inception the economy has grown at around 3% a year. So the lost output over 8 years means that the economy is now about 25% below its trend growth rate.

Supporters of austerity will claim that growth is a result of austerity. But this is a conjurer’s trick, asking us to suspend disbelief. The reality is very different. The Irish economy experienced a change of policy and a change of circumstances. It was these that produced recovery. Everything else is sleight of hand.

When Fine Gael/Labour came to office they implemented their own version of austerity. The response of the economy predictably was to re-enter recession from mid-2012 onwards for 4 quarters, creating the rare phenomenon of a double-dip recession. This is shown in Fig. 1 below. Recovery only happened later.

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Fig.1 Real GDP

The policy response was marked, if little publicised. From the end of 2012 onwards there were no new net austerity measures. Instead government spending was actually increased. This was a turn towards stimulus spending, not austerity and is shown in Fig.2 below.

It is not possible to claim that austerity led to recovery. Government spending was increased after the end of 2012 and recovery began 6 months later.

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Fig.2 Real Government Spending

The change of circumstances was even more dramatic and had a bigger overall effect on growth.  Since early 2014 the Euro has fallen by 25% against the US Dollar, providing a boost to exporters across the Eurozone and especially to very open economies like Ireland. Many other currencies are linked to the US Dollar in one form or another, notably the Chinese Renminbi. Together, these two economies alone account for 30% of all EU trade.

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Housing Policy is More Than Pulling Levers

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This article originally appeared on Eoin O’Mahony’s blog 53 Degrees on the 17th of August

In the new online newspaper, Dublin Inquirer, Lorcan Sirr stated that the most serious problem ”with housing in Dublin…is this:  at the state level, housing policy is dominated by an inappropriate and politically motivated rural ideology…” This ideology is made manifest by a constant drive for home ownership.  This leads to discrimination against urban housing and elected politicians who are concerned only with ”road frontage  and planning permissions.” I understand that Lorcan’s article was a version of a talk he gave at the MacGill Summer School in late July. But there are a number of problems with his argument as presented, the biggest one of these being that you cannot talk about housing in Ireland unless you talk about social class.

Houses  and flats are built, rented and bought.  People live in housing of all sorts and sizes and communities develop around these forms of housing. We find things in common with people around us and we build and sustain communities. These are productive relations  and housing is one outcome of these relations.  In this way, housing is not simply a matter of sufficient  units being built but decisions taken about how we should live.  It is a matter of politics, not technical capacity.  Lorcan’s argument about a rural ideology owes more to the second than the first.  Recent research  has pointed significant changes to housing over the years. In a report for hardly radicalised Jesuit  Centre for Faith and Justice  (JCFJ) earlier this year, the authors wrote that:

The  prolonged  period  of growth in the owner-occupier  sector reflected State-driven tenure strategies [since the mid-1940s], employing a range of direct and indirect incentives.

In other words, there is nothing natural or essential about an increase, post-1940s, in the proportion of the population living in owner-occupied  tenure. It is a matter of policy, an effort by strategy and tactics reflecting particular relations within a class, to achieve particular ends.  As the authors of the JCFJ demonstrate, owner-occupation is actually in decline since the early 1990s. The NESC has written recently on social class and tenure in Irish housing. They have noted a trend amongst different social groups:

Mortgage-holding is declining most among young people in the un- skilled, semi-skilled and skilled manual classes, particularly the former.

… [And] with the sharp decline in local-authority housing construction and other supports for low-income buyers from the mid-1980s, this option is no longer available for many younger people in socio-economic groups with lower incomes.

Sirr states that ”housing [policy] is regarded as being about three things only: planning, selling price and construction cost.” He is correct to point out that professions like planners have an overweening influence on housing in Ireland but local authority housing sections are not ”endured” by their staff. The electoral cycle is also a powerful influence on decision making. Local authorities are constrained by decisions by the last few governments, and particularly the current one, that are determined to starve social housing of funding. The last time the Irish government completed over 1,000 local authority houses was in 2010.  In the four year period since (for which data is available) about 1,300 local authority houses have been completed (source: CSO). In contrast,  during the same time period, over 35,000 units of private housing have been completed.

What this research and much more show is that these are the results of choices and political ones at that.  When  sufficient political pressure is brought to bear, much like the water tax struggle since 2013, things get changed.  It is not a matter of personnel and the over-familiarity among housing associations and local councils. Levers don’t get wearily pulled out of habit; political choices are argued for and, at times, forced. An argument that relies on an abstract sense of housing form, for ex- ample one-off housing, and the capacity of people to reproduce living conditions are both problems. We only have to drive through Leitrim, Longford and Roscommon to notice the longer-term effects of trying to cluster houses at the edge of villages ill-suited to suburban  housing forms.  These  are, however, the results of political decisions, not individual choice. It seems to me that Sirr’s argument relies on blam- ing ordinary people for putting themselves in poorly-planned housing. Decisions on housing are made on many scales.

I agree with him when he argues we need better data but a housing policy must serve people first, not a technocratic process of ’build and they will be housed’.  There is no sense that this ’rural ideology’ can be seen in material terms other than its rep- etition for want of an alternative just appearing.   I argue therefore that we need to understand social class when housing is considered,  particularly from a formal policy point of view. The use of adequate data is a necessary step. So too is avoid- ing unhelpful categories like rural and urban or more importantly between renters and owner-occupiers.  Housing in Ireland, particularly right now, is a more dynamic process of class relations than is evident from Sirr’s analysis.

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Return: A Palestinian Memoir

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Everyone wants to get home: at the end of the day, a place of comfort and security, repose. It’s not the magnitude of the space – a bedsit can be remembered with affection – but the space itself, somewhere you fit in.

For Ghada Karmi home is Palestine, the place she left as an infant in 1948, and she returns there in 2005 to Ramallah in the West Bank, the seat of the Palestinian Authority (PA), after half a century spent living in Britain. She secures a job as a consultant for the Media & Communications  ministry of the PA, which at that time also administers Gaza although a Hamas government is about to emerge there and challenge Fateh’s long-standing claim to represent Palestinian aspirations to statehood. Hamas is prepared to launch rocket attacks on Israel; Fateh is accused of subservience to the occupying power and its ongoing building of a high concrete wall to divide up the West Bank and screen off Jewish settlements from the Arab areas around them.

Fateh’s energies are caught up in the myriad NGOs that emerged in the aftermath of the Oslo Accords, when Palestinian statehood seemed only a matter of time. Israel plays with time, waiting for the generation who fled their homes in 1948 to die out and bury with themselves the right to one day return to their land. After a massacre in the village of Deir Yassin, when Jewish militias killed some 120 inhabitants, Ghada Karmi’s family departed, thinking to return when the situation calmed down. That was fifty-seven years earlier. In Ramalleh in 2005, political priorities have changed and  Karmi sees the formation by the PA of an 8,000-strong ‘counter terrorism force’ which brings murderous attacks on Hamas members and the gratitude of Israel.

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August Socialist Voice is Out Now!

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The August Socialist Voice is now available online

In this issue:

Greek and all European workers paying a heavy price

Eugene McCartan

As events unfold in Greece it’s clear that the EU is determined to make Greek workers pay for the crisis now engulfing the country.
The Greek debt, like the Irish debt, is simply unsustainable and unpayable. The impact and renewed assault on Greek workers will be felt throughout the European Union: it will not be confined or contained within the borders of Greece.

http://www.communistpartyofireland.ie/sv/01-greece.html

International Development Bank set up by BRICS states

The “BRICS” countries (Brazil, Russia, India, China and South Africa) stepped onto the stage of global finance last month with the launch of the New Development Bank in Shanghai. The six BRICS countries had agreed to set up the bank at the group’s sixth summit meeting in Brazil in July 2014.

http://www.communistpartyofireland.ie/sv/02-brics.html

Social democracy tries to reinvent itself

Tommy McKearney

Just as capitalism has the knack of changing its shape, social democracy also displays an extraordinary ability to reinvent itself, and almost always to the detriment of the working class.

http://www.communistpartyofireland.ie/sv/03-soc-dem.html

Racist crime raises its ugly head

Paul Doran

There is nothing more detestable than the hate some people have for people of colour or people of a different ethnicity. This disgusting trait has recently raised its ugly head in Clondalkin, Co. Dublin.

http://www.communistpartyofireland.ie/sv/04-racism.html

Maria’s story (continued)

Readers may recall “One woman’s experience of Job Bridge” from the November 2014 issue

I have a new job, working in a call centre. They recommend that we come to work fifteen minutes before every shift, so we can clock in and have our computer turned on, ready for action.

http://www.communistpartyofireland.ie/sv/05-maria.html

Painless “postcapitalism”—a utopian dream

Nick Wright

Paul Mason has conjured up a very 21st-century formula for the replacement of capitalism. It combines all the elements of a problem-free route to “postcapitalism,” rather than the old techniques of revolt, revolution, and working-class power, and relies—it seems—on the facility of the internet to permit the free transfer of information combined with the ability of human beings to devise forms of exchange that evade the capitalist market.

http://www.communistpartyofireland.ie/sv/06-mason.html

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LookLeft 22 in Shops Now!

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LookLeft 22 is in Easons stores and hundreds of selected newsagents across the country now.

Only €2.00, the highlights of this issue include:


Greek Lessons
– What can be learnt from the referendum and negotiations in Greece? Gerry Grainger and Ronan Burtenshaw debate.

You Can’t Eat a Flag – Chris Bailie and Paddy Wilson take a look at the state of Protestant working class politics in Northern Ireland.

Spotlight on Denis O’Brien – A critical look at the controversial business man and media baron’s career.

Take Back the City – LookLeft looks and how working class communities are seeking to assert control of their cities.

Leading the charge – Dara McHugh looks at the next steps for Right2Water and the water charges movement.

Can we organise now? – The union movement will not be saved by planned collective bargaining legislation alone. Richard O’Hara investigates.

Bomb Girls – Hugo McGuinness on the social and political effects of WW1 munitions factories on Dublin’ Northside

Paving Paradise – A community garden in West Dublin digs up problems of church and community relations.

A different vision of society – LookLeft talks to the Cuban Ambassador about talks with the US, the Cuban social model and medical internationalism.

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Eurostat Has Done Us a Favour

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We should not under-estimate the impact of the Eurostat ruling. It completely removes the rationale for Irish Water and the water charges.  After Eurostat, there is no policy, no direction, no strategy.  Ministers will downplay the ruling with a ‘move-on-nothing-to-see-here’ rhetoric, punctuated by a ‘there-is-no-alternative’ but all this does is expose the inability to grasp how fundamentally the landscape has changed.

Eurostat was never going to rule in any other way than it did.  The Government admitted this last April in the Spring Statement when it put all water expenditure back on the books in its projections up to 2020.  The fundamental issue is not whether enough people paid the charges.  It was the ‘market corporation’ rule:  did Irish Water look like and act like a commercial company in a market economy?  Eurostat said no – and this is all down to the Government’s headless-chicken response after the mass Right2Water protests last October and November.

The Government capped charges, froze them until 2018, and introduced an indirect subsidy through social transfers (the water conservation grant).  The lack of ‘economically significant prices’ (i.e. charges that reflect the cost of producing water) and government control led Eurostat to rightly label the whole exercise as a mere reorganisation of non-market activities.  Given all this, what company in the world could be considered a market entity?

The main rationale for the Government’s water policy was not charges; this could have been introduced as a stand-alone revenue-raising measure.  Nor was it the creation of a single water authority; that could have been done as a public agency rather than a corporation. The over-riding issue was to take the estimated €5.5 billion of desperately needed investment over the next seven years ‘off-the-books’.  Everything flows from this:  to take investment off the books you need to create a corporation, you need to charge a ‘market-like’ rate for the service.

Remember those lectures from Government Ministers and commentators with that ‘common-people-just-don’t-understand’ attitude?  Without the investment there would be water shortages while we would all be walking through sewage.  And the only way to get this investment was through Irish Water and charges.

Eurostat has killed that narrative.  Investment will be on –the-books.  With that foundation removed, the edifice – and the rationale for that edifice (the corporation, the charges) – crumbles.

What now?  Whatever they say in public Ministers must know its game over.  The only way to pass the Eurostat test is introduce ‘economically significant prices’.  This would mean reverting to prices based on usage with no cap determined by an independent regulator.  Is that likely?  No, not with the potential to bring another 100,000 to 200,000 on the streets.  The people didn’t win many victories during the austerity days; they won the battle over uncertain charges, PPs numbers and cut-offs.  No political party is going to challenge that.

How do progressives react to this?  The safe ground would be to call for the scrapping of the charges and the reform of Irish Water.  Fianna Fail is already calling for that.  Progressives can and must go further.  We can’t effectively challenge the current ‘steady-as-it-goes’ Government approach with a ‘steady-as-it-went’ that dominated past policy.  We need creative and innovative thinking that can not only address the issues but present an exciting, inclusive alternative to water supply and all public provision.

Investment

We need to increase investment to €600 million annually to modernise our infrastructure.

Water investment has been a bit of a roller-coaster ride.  We are now slightly ahead of 1995 levels after peaking in 2008.  We need to do better.

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On the “Unelectable” Jeremy Corbyn

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Anyone who has glanced at a copy of the Guardian this past week, or the latest issue of the New Statesman, will have found themselves inundated with a wave of opinion pieces arguing against the possible victory of Jeremy Corbyn in the upcoming Labour party leadership election. The spectre of Corbyn has forced the hands of the commentariat, who must now state plainly that anyone who votes for such a leftist candidate is naive, deluded or simply mad. They will have, as Polly Toynbee put it, taken leave of their senses. What was a shadow of discontent during Ed Miliband’s timid efforts at turning left has now become an open and unabashed damnation of socialism and its advocates. There is no left but the hard left, and the only way is forward is to be as “pragmatic” as the Tories.

The have been a couple of constants in the media’s portrayal of Corbyn. First, the assertion that his rhetoric appeals primarily to naive youngsters, the disengaged youth who had given up on politics until Occupy, Syriza or Podemos came along to inspire them back towards the fold. While there is little doubt that Corbyn is the overwhelming favourite of young Labour party members, many of who have joined in the aftermath of this year’s election, his appeal is certainly not limited to those born post-Thatcher. Corbyn’s primary issues – renationalising the railways and the utility companies, taxes on wealth to pay for free third-level education, maintaining the NHS, ending Britain’s nuclear program – are all popular across the board. Even Tories are split on the railways, and the SNP have shown how much support there is for not wasting billions of pounds on nuclear weapons that will never be used. Meanwhile, Ed Milliband’s indecision on the same topic was deadly.

The media’s off-hand dismissal of Corbyn’s support base as passionate but misguided youth also contradicts their claim that Corbyn’s ideas are “out-dated”. One Guardian editorial says that his solutions to social crisis “long pre-date the challenges of the 21st century”, but does little to elucidate any actual issues with those apparently ancient policy positions. This is perhaps the first time that the much sought-after youth vote has been derided as backward, nostalgic and out of touch. 

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