24th Desmond Greaves Weekend School

An economy for the common good


Eugene McCartan

General Secretary, Communist Party of Ireland

16 September 2012


Firstly I would like to thank the organisers for the invitation to speak this morning at the 24th Desmond Greaves Weekend School, an event that has become an important arena for discussion and debate, raising issues and presenting challenges to all those who believe in and are committed to the struggle for national unity, sovereignty, and democracy.
     This debate is timely, coming at a time when many of our fellow-citizens are struggling to make ends meet, a period in which inequality is growing, unemployment is growing, and mass emigration is laying waste towns and villages around the country.
     The whole fabric of our society is being pulled asunder, with a crude and growing commodification of all areas of human life. So for us to be debating “an economy for the common good” is absolutely central, as we know that our people will experience even greater hardship in the coming years.
     Our planet can no longer sustain monopoly capitalism. We now stand on the precipice of what may well be an irreversible process of significant climate change that is already affecting us as a people and will have devastating consequences for hundreds of millions, if not billions, of people.
     This great crisis of the system has exposed to millions of people the true nature of the system that governs their lives. The crisis has also shattered the illusion, carefully crafted by the mass media and other apologists for the system, that capitalism has overcome and has passed beyond its structural weaknesses and cyclical crises of slump and boom.
     We are also witnessing how really shallow this democracy is, although flaunted and touted around the globe by the imperialist elite, backed up by massive military firepower and imposed as the best and indeed the only possible form of democracy there is. Yet we have witnessed two elected governments removed within the EU—the Italian government and the previous Greek government—two more removed in Latin America, and the surrounding of Venezuela with numerous military bases.
     The living standards of the majority are being reduced, and public services are cut to shreds in order to sustain and enrich a financial oligarchy and to bolster the profit margins of corporations. James Connolly put it well in 1915: “Governments in capitalist society are but committees of the rich to manage the affairs of the capitalist class.”
     If we reflect back on the ninety years of partition we can see that we have two failed entities. This state has failed our people economically. The Irish ruling class has overseen mass emigration, generation after generation of people seeking work in other countries. Large sections of our people have experienced generational poverty, chronic bad housing, and constant high levels of unemployment, interspersed with brief economic spurts.
     The class that won out with the victory of the counter-revolution in 1922 were happy to maintain and sustain the economic structures and relations built up over centuries of colonial plunder, resulting in uneven economic and trade relations.
     This relationship of dependence was built in to the partitionist settlement, because it was in the interests of people like William Martin Murphy and his class: it was in their class interests, just as it was with unionism in the North, whose industrial basis was dependent on its links to the British Empire and its global network of exploitation. Neither this state nor the statelet in the North has served our people well.
     The development of public companies in the South did advance economic development and stabilise the decline in population and emigration. The state developed aspects of the economy that Irish capitalism was unwilling to develop. But these were developed to bolster native capitalism. This economic strategy ran its course and was replaced with a policy of opening the country up to mobile transnational capital.
     We need to understand the forces at work in the present crisis, otherwise an “economy for the common good” is merely a utopian idea, doomed to fail. The vision of a better society must be linked to a strategy that is based on an understanding of class forces and class interests.
     The economic system of capitalism is now in deep crisis—a crisis that can only deepen. It is global in proportion and is systemic and cyclical: crises are an inherent part of the system itself. At its core this is a crisis of over-production.
     As it is driven by the profit motive, capitalism must constantly expand, to the point where it saturates existing markets and plunges into crisis and recession. It is a system based on the premise of permanent growth in order for it to survive. If profits decline or stagnate, then the whole system itself stagnates. It is driven to constantly expand its markets, to commodify all aspects of people’s lives and needs.
     But how can we have permanent growth on a planet that has finite resources?
     This present crisis was triggered by a combination of over-production and growing financialisation: speculation in financial products such as derivatives. The consumption of commodities has been increasingly achieved by the availability of easy credit—in other words, debt.
     What is also becoming more apparent is that there is now little or no discernible period between recession and small growth spurts. It is like a football bouncing down the stairs: the bounce is shorter but domed upwards in a downward trajectory.
     In Ireland the trigger was the over-extended banking system in the massive housing bubble, coupled with heavy speculation in the European and global property markets by Irish and other speculators using Irish financial institutions.
     Under orders from the EU to prevent the collapse of the German and French banking systems, the Irish state took complete responsibility for the massive corporate debt built up within Irish financial institutions—cheap money loaned by German, French and other international finance houses to Irish banks for speculative investments.
     This debt has now been placed on the backs of our people, a debt that now stands at about €47,000 for every single person in this state. It is not the people‘s debt: it is an odious debt, and we should not pay it. This is a transfer of wealth from the people to the monopolies. The EU has created structures of debt-dependence between the periphery countries and the centre.
     This year alone we will pay €7 billion to service the debt. In the last four months of 2012 alone this state will have handed over about €2 billion to unsecured bond-holders, while the government wants to cut €3½ billion from government spending.
     So where is the drive for savage cuts coming from?
     Within the European Union the crisis is worsening as the policy options open to the EU elite narrow and the crisis of the euro deepens. Germany is beginning to slide, and it was to be the bail-out master.
     The solutions presented by the external troika, eagerly supported and implemented by the internal troika of the three main establishment parties, is working. Austerity is working, as planned. It was designed to shift the burden of the crisis onto the backs of working people. It is for transferring wealth from working people to the big monopolies. It was never designed or intended to solve the people’s problems.
     The American speculator and multi-billionaire Warren Buffet remarked in 2006 that “there’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
     The crisis has presented an opportunity for a globalised offensive by monopoly capitalism. Throughout the capitalist world tens of millions of people are unemployed or under-employed; more are pushed into precarious employment.
     We can see the same approach here in Ireland, with savage cuts in health and education and other public services, and workers facing wage reductions coupled with increased charges and taxes. Poverty and homelessness are growing; workers are being forced to work harder and longer for less; retirement ages are going up; social benefits and public services are being cut; workers’ terms and conditions are under constant attack.
     What has taken decades of struggle and sacrifice by working people is being undermined and taken away on a scale not experienced before. And yet we know that the rich here in Ireland, like their counterparts abroad, are still getting richer while the poor are getting poorer.
     One has to ask, What exactly is the point of economic development if it’s not to improve the lot of the people?
     A number of scenarios are being put forward that I think we should look at.
     The government, the EU and the IMF have all identified debt repayment as the most important priority. To achieve this they tell us we need to do a number of things: —to hand over the bulk of the National Pension Reserve fund (or our sovereign wealth fund), pump it into failing banks, which in turn hand it over to German and other EU banks; —to cut government spending and reduce the role of the state in the economy; —to further deregulate the economy; —to privatise state-sponsored companies—that is, to hand them over to foreign capital, which in turn will only further weaken the economic and political sovereignty of this state; —to give priority to handing over the bulk of the capital raised through the sale of our public companies to repay corporate debt; —to open up further the commercialisation of public services, with services provided only if private companies can make a profit; and as international experience shows, these services will be dominated by foreign monopolies; —to adopt a stimulus strategy that is centred on promoting private companies over state companies—in other words, to bloat the profits of private corporations; —to continue to entice transnational corporation to set up her as the primary industrial strategy; —to drive down workers’ pay, terms, and conditions.
     On the left, some people have been calling for —a strategy for growth, so that we will generate more wealth and thereby pay the debt without cutting services; —talking to our creditors and getting a better deal on the promissory notes; —some sort of “left-wing” austerity programme: cutting this and not that; —taxing the rich; —some possible re-heated Keynesian approach (this of course ignores the reality that EU rules outlaw state intervention that interferes with the market); —a return to “social Europe” definitely ruled out by the latest treaty.
     Others, such as the leadership of the trade union movement, wish to keep their heads down and hope, with the Labour Party in government, that they might protect workers’ interests.
     Yet these two approaches bear similarities. They do not challenge the illegitimate nature of the debt imposed upon the people. Repudiation is on the agenda. They do not challenge the anti-democratic role of the EU, imposing the central thrust of economic and social policy and priorities. We can vote for whoever we like, but the policies must remain if not the same then within very narrow parameters.
     So, if we wish to move forward we have serious questions to confront, and we have to be honest with our people. I believe there is no lasting solution to the problems facing our people within the existing economic system and the present economic, political and social framework.

What has recent experience shown us?

Decisions are determined by the dominant economic forces within any given society. The Irish establishment are committed to maintaining and deepening their relationship and links with the European Union and the United States—with imperialism. It is in their class interests to do so, as it was in 1922. The policies pursued by Fianna Fáil over the last sixty year have been the gravedigger of its own demise. That element of Irish capitalism is historically exhausted.
     The policies of the EU are made in the interests of the big monopolies—in the interests of imperialism. I use this term because it best reflects the class character, the nature of the European Union itself. It is an imperialist bloc. I do not believe that it can be reformed, or transformed into anything other than what it is.
     Any alternative economic and political strategy must take this fact into account. We do not have “European partners,” which would imply equality among member-states, for we clearly have no such thing.
     What we need is an alternative political, economic and social strategy, one that is centred on the people’s needs and interests—a strategy that will create balanced economic and social development; a strategy that will undo the uneven development that is inevitable under capitalism; a strategy that is environmentally sustainable; a strategy that is based on the interests of all our people, north and south—in other words, a strategy for socialism.
     To overcome the anarchy of capitalism we need to plan the use of capital investment in a way that can develop the economic and social base of the country in a targeted way, first and foremost on what benefits the people.
     So the control and use of capital is a central question.
     Our natural resources are abundant and, if carefully developed, could provide significant economic and social development. These are resources that can be developed on an all-Ireland basis. So the question of who owns them and how they are developed is important.
     Making use of the intellectual potential of our students, academics and institutions is another area to advance, taking a more scientific approach and investing in high-tech industries. Much intellectual energy and talent is wasted in useless competitive research, skewed to meet the needs of transnational capital.
     Building an economy for the people requires the active participation of the people. It will require the deliberate and conscious mobilisation of the people. It will require a radicalisation and rejuvenation of the trade union movement, a movement now tied up in the ideological straitjacket of “social partnership.” We are reaching the point where it either becomes radicalised or staggers on towards being redundant for many workers.
     Democracy would have to move beyond the very narrow framework that is now allowed today. Parliamentary and electoral struggles are only one aspect. To reduce the people’s aspirations to the electoral arena is to draw their dreams and aspiration into a swamp.
     Democracy must be about empowering people in every aspect of their lives—political, economic, social, and cultural. The deepening of democracy is the only way in which we can end the exploitation of man by man, to create genuine equality between men and women and between nations.
     A people-centred economy requires shifting the balance of forces from capital in favour of labour. Socialism and social change require the conscious understanding and conscious action of working people. That means challenging people’s understanding of events around them to inform and educate them, to assist in drawing lessons from their own experiences. Struggle changes people; it enriches their understanding of who they are and what they can achieve.
     The European Union is a major obstacle to progressive change. The main controls on economic and social development lie with the EU, which uses them to maximise the interests of monopoly capitalism and to close down any possible challenge or alternative to its power and interests.
     The adoption of the euro has left monetary policy to be determined by the major economic players. This prevents us placing democratic controls or determining democratic investment priorities and the use of capital.

The Irish ruling class

The Irish ruling class in the main have made their bed with international capital. It is integrated in and depends upon that relationship to maintain its control. They are the gatekeepers for the imperialist interests of the EU and the United States.
     If we are to move to an “economy for the common good” we have to present it at its core as a struggle for national democracy, a struggle to re-establish sovereignty—but not democracy and sovereignty in the old way. It is about a much more radical democracy and sovereignty, from government to factory, office, shop, community, and home.
     The immediate struggle is against austerity, to oppose the odious debt and resist privatisation—the robbery of the people’s wealth.

Strategy for a way forward

We need an alliance of progressive forces to bring about a progressive radical government, centred on the working class, with working people mobilised around the following demands: —to challenge the hegemony of the European Union; a more radical expression and assertion of national democracy and sovereignty; —to assert democratic control over capital; this requires a break with the euro —to establishment a state development bank; —to take control over natural resources; —to harness human and intellectual resources, placing them at the service of the people —to repudiate the odious debt.

What forces still have historical momentum?

The forces of Irish capitalism have run their historical course, and I would argue they no longer have the strength to push forward. The only force that can bring about radical change is a mobilised working class and all working people. It is a struggle against imperialism and for national liberation, with democracy as its central goal, to give dignity and respect to all our people.
     It has to be national in character to maximise the contribution of the working class and remove all imperialist influence and controls. It also requires reaching out to and building allies throughout Europe.
     Democracy and a democratic state are also the only way we can end the scourge of sectarianism and its use as a political weapon in the North of Ireland.
     An all-Ireland economic strategy is the only way to end the triple marginalisation experienced by the people of the North. They have little if any influence in London, little if any within the EU, and little in Dublin. An alternative radical economic and social strategy has the potential to draw significant sections of the Protestant working class to see that this strategy and approach is in their class interests.
     Central to all this approach is building the class-consciousness of working people and their mobilisation as a political force—essential if we are to avoid further “bitter betrayal and heroic defeats”!
     As Connolly put it, “only the Irish working class remain as the incorruptible inheritors of the fight for Irish freedom.” The liberation of the working class will finally see the liberation of Ireland.

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