Being LGBT+ in the Traveller community: a personal reflection

By Lois Brooks-Jones.

I remember being sat on the armchair, nails diggings at the leather out of stress as a comfort. I was 14 years old and was preparing to tell my family that I am bisexual. I had known for years, trying to suppress myself due to a phobia of losing everyone I loved. I just wanted to be straight, and not have to worry about seeing the care in my mother and father’s eyes leave, no matter how often they professed their support for LGBT+ rights in small but meaningful ways. 

This fear increases when you come from a community which is currently experiencing mass programmes of assimilation by governments and institutional powers, where ideas of tradition and historical cultural values are clung to even harder, to feel a sense of identity in a world which has been trying for 1000 years to smite it.

You fear being rejected from a community which protects you from the pain and harm caused by wider gadjo society for your sexuality or gender identity, and then being rejected from mainstream society for not only being LGBT+, but also for being Gypsy, Roma Traveller (GRT) identifying. This is a common narrative for LGBT+ GRT youth trying to navigate their own identity as well as deconstructing the extent of their family’s love and support. This impacts mental health, emotional wellbeing, as well as potential regarding suicide victims. 

I was lucky to have my grandmother. When I was 13 years old she point-blank asked if I was gay, taking long drags from her cigarette as she looked at me with her dark eyes. Seeing my hesitation, she followed up her question by saying “Because it’s okay if you are, you know”.

This is a woman born amid 1930s fascism, who learnt what it meant to be persecuted based on an identity outside of her control, and that this level of discrimination and hatred must not happen again. Included in the mass murder under Nazi Germany, LGBT+ people were included, with up to 15,000 LGBT+ being transported to Nazi concentration camps, with 60 per cent believed to have been murdered there.

Need for a support network

When we discriminate against LGBT+ people, we discriminate and threaten the safety of members of our own, already marginalised community. My family not only fully supported me in my sexuality, but also support those without the support of their own families. In no way am I saying that GRT are intrinsically anti-LGBT+, my own family are a testimony to love and acceptance. However, we can’t deny a lack of acceptance for LGBT+ GRT youth in need of a support network. 

Changes are happening, albeit slowly, and we must celebrate the fact that this year for the first time, LGBT+ Travellers made history, as in we had official representation at London Pride. This should by no means be seen as an ends in itself, but instead a vital part in a long-running battle for recognition and acceptance; a momentum on which we can build and send out a strong message to not only LGBT+ GRT people specifically, but to our community in general. We must tackle these attitudes head-on and with pride in ourselves. 

When we begin to accept hatred towards others based on identity, we comply with our oppressors. We divide ourselves, define what is or isn’t GRT, and do the establishment’s work for them. 

Lois Brooks-Jones is currently studying politics and international relations. A British Romany Gypsy, she is a Gypsy Roma Traveller and LGBT+ activist. Follow www.lgbttravellerpride.co on Twitter @TravellerLGBT

Neoliberalism is dead, long live neoliberalism!

By Lisbeth Latham.

Neoliberalism is a term which has entered the left lexicon over the past three decades, although in different countries it can have other analogous terms. While it is a term that the left has embraced, the right, and the advocates of what is commonly referred to as neoliberalism, deny it exists as a phenomenon, instead arguing that it reflects the conspiratorial nature of the left. 

Contrary to these positions I argue that there is a usefulness in conceptualising neoliberalism as a distinct response to the capitalist crisis, and that it is not only the hegemonic response to capitalist crisis but that its proponents use crises to deepen and strengthen its hegemony. Moreover, because significant sections of the governmental left have embraced neoliberalism, challenging neoliberalism is central to not only rebuilding left alternatives but to challenging the rise of the far-right internationally. 

Why does capitalism experience crises?

Capitalism is the only economic system in the history of humanity that is driven by a need to expand and take over pre-existing social relations. It is also the only economic system in which  economic crises are characterised by the production of too much use values (at least in the early period of the a crisis). Marx postulated that the primary underlying driver of an economic crisis is the tendency of the rate of profit to decline. Adding to this general tendency is the anarchic character of the capitalist system, where individual capitalists seek to maximise their own profits by shifting investment to areas of higher rates of profits, which leads to a series of additional crises, specifically crises of overproduction and crises of over-accumulation. 

The rate of profit is profit (or surplus value) over the sum of constant capital and variable capital. Political economists dating back to Adam Smith and David Ricardo argued that it was an undeniable fact that there was a tendency of the rate of profit to decline; however, they believed it remained unclear what the mechanism for this decline was. Marx, in Volume 3 of Capital, argued that this tendency was driven fundamentally by profit (i.e. surplus value) being derived from labour. 

Therefore, increases in constant capital (an increase in the organic composition of capital – for example, factory machinery or the value of the goods and materials required to produce a commodity) would reduce the amount of labour power involved in production and thus overtime would result in a reduction in the amount of surplus value being extracted in comparison to the total constant and variable capital involved in its production. 

Crises of overproduction 

Overproduction simply means that too many goods – of either a single category or multiple categories of goods – are being produced to be sold and generate sufficient profits. Since the earlier period of laissez faire capitalism when markets were generally expanding, this is the normal state of affairs. In the US auto-industry, for instance, the industry operated at 75.9 per cent of capacity in the first quarter of 2019. 

A crisis occurs, however, when the production and sale of goods is no longer able to produce a profit, or at the very least a sufficient profit which can lead to individual companies, or whole industries collapsing. Such collapses, while a disaster for individual capitalists or corporations and the thousands of workers who are employed by them, creates opportunities in the economy to remove excess capacity from circulation and reduce competition.

Crisis of over-accumulation

Over-accumulation crises occur when the level of capital accumulation in the system reaches such a point that there is too much capital in circulation for significant levels of capital to be profitably invested or reinvested in production, or at least increases the appeal of capital investment in financial speculation rather than in investment in new capital goods. 

Overcoming a crisis of over-accumulation requires either the destruction of significant amounts of capital, such as through war, a major recession with widespread bankruptcy, the opening of new markets to create expanded demand, or via the development of new technology – opening new avenues for capital investment. In all of these circumstances, the relief provided cannot and will not be permanent.

Throughout the history of capitalism there have been a range of responses to capitalist crises, particularly large-scale crisis such as recessions and depressions. In the wake of the 1929 stock market crash and resulting Great Depression, then US President Franklin Delano Roosevelt, along with a range of governments in advanced capitalist countries, embraced Keynesian responses, which focused on what Roosevelt referred to as “pump-priming” – i.e., public expenditure on infrastructure, much of which was subsidised by using the unemployed as a cheap labour source. 

The Great Depression

Such measures were essential in overcoming the impact of the Great Depression, and they undoubtedly ameliorated some of the worst levels of poverty unleashed by the depression. But there are two important points to remember: the first is that in many countries the Great Depression unleashed significant levels of class struggle, including both the unemployed and the employed – with this struggle resulting in the victory of fascism at the domestic level in Germany, Italy, Portugal, and Spain – and with the emergence of social democratic governments in a number of countries for the first time. 

In response to an increasingly combative US working class, exemplified by the West Coast maritime strike, the Teamster strikes in Minneapolis, and the Toledo Auto-Lite strike – all of which occurred in 1934 and are seen as key drivers of industrial unionism in the US –  Roosevelt’s second New Deal in 1935 had specific measures seeking to limit the level of violence in the class struggle with formal mechanism for union recognition (Preis, A. 1964. Labor’s giant step: Twenty years of the CIO. Monad Press, New York). 

The second point to note is that many economies did not truly recover from the Great Depression until the second world was, where the massive investment in armaments, mass conscription, and the destruction pf capital goods fed economic growth, and massive profits, this was particularly the case in the united states where the majority of unions, particularly in Stalinist lead unions, made no strike pledges to help support the war effort (ibid). 

Expansion of capitalist accumulation 

In the wake of World War II, the environment was set for the rapid expansion of capitalist accumulation. These were the massive destruction of capital goods wrought by the war, and the opening up of new markets as more and more imperial colonial powers broke up under the pressure of anti-colonial national liberation struggles. 

At the same time, the growth in confidence of the working class, along with the enhanced standing and expansion of the Soviet Bloc through its role in the defeat of fascism in World War II – placing whole swathes of Western Europe at risk of being ‘lost’ to capitalism – despite the efforts of the Soviet leadership to maintain the division of Europe as agreed between Britain, the US and the Soviet Union at the Yalta Conference. 

In this context the US government launched the Marshall Plan to massively boost the rebuilding of capital in Western Europe and Japan. In addition, there was pressure to expand social services and public welfare provisions. These steps lay the foundations for the long post-war boom in Western Europe and the US, which was also prolonged by imperialist spending on their militaries as part of Cold War and hot wars in Korea and Vietnam. 

The 1973 oil crisis

However, the long boom held within it the roots its own demise, which were exacerbated by other dimensions. These were the absolute limits of expanding markets via the collapse of European colonial empires; the rebuilding of capital in the wake of the destruction of World War II leading to greater capitalist competition and reduced opportunities productive capitalist investments; and growing US deficits due to the cost of the Vietnam war. 

In addition, more and more markets were either removed or became more restricted from access to imperialist capitalism as a consequence of national liberation struggles and attempts to build their own national economies. These developments led to a growing stagflation crisis, where both inflation and unemployment grew. This meant that the international capitalist system was vulnerable to further shocks to the economy as the long boom came to a close. Of particular importance were the 1973 OPEC strike and subsequent oil crisis and along with global decline in the demand for steel, exacerbating pressures of deindustrialisation, particularly in the US.

Insurgent neoliberalism

In response to these challenges, a wave of conservative economist and social theorists began to gain a greater hearing among governments for their alternative model for saving capitalism. These groupings, commonly referred to as neoliberals, have their origins in a serious of meetings that founded the Mont Pèlerin Society (MPS) in 1947. 

Although not having a clear economic doctrine, it represented a political project to reassert capitalist class power and defeat the growing strength of the working class and its organisations the trade unions and the social democratic and communist parties. During its early existence neoliberalism sought to construct a international thought collective represented by a range of national and international think tanks, and seeking to influence and take over university economics departments transforming their positions into increasingly common-sense and thus hegemonic responses to economic crisis.

The ‘Chicago Boys’ make their mark

The first experiments with the implementation of neoliberalism came in Indonesia and Chile following the respective coup d’etats  in those countries in 1966 and 1973. In Indonesia, following the establishment of Suharto’s New Order regime, which had been supported in its smashing and mass slaughter of the country’s communist and nationalist left, orchestrated by US intelligence services (particularly the CIA), moves were made to remove barriers to investment by capital from the US and other imperialist nations. 

In addition, the Indonesian economy was actively carved up between US corporations. Despite these changes that enabled the expanded imperialist exploitation of Indonesian natural resources and labour, investment processes were extremely corrupt, with investments requiring joint ventures – with domestic Indonesian capital generally with connections to Suharto’s family and the cronies around him. 

The extensive level of poverty within the country, exacerbated by the opening up of the economy, also meant that the state was forced to provide a significant level of subsidisation of basic goods to enable much of the population to survive – essentially state subsidies for social reproduction in order to allow the imperialist extraction of super-profits. 

In Chile, following the September 1973 coup against President Salvador Allende’s Popular Unity government – carried out by the Chilean armed forces with the backing of the US government (pictured) – there began a program of both mass repression and economic transformation.

During the coup and its aftermath tens of thousands of people were murdered and terrorised, and a further 200,000 people (six per cent of the population) were forced into exile. At the same time, the ‘Chicago Boys’ – academic and graduates from the University of Chicago’s School of Economics, including “Nobel Prize” winner Milton Friedman – were brought in to reshape the Chilean economy. The impact of this transformation saw significant reductions when comparing, wages and social spending when comparing 1970 to 1989:

  • Wages decreased by eight per cent.
  • Family allowances in 1989 were 28 per cent of what they had been in 1970. 
  • Budgets for education, health and housing had dropped by over 20 per cent on average.

At the same time, Chile was seen as an economic miracle in comparison to other parts Latin America, with consistent growth in the economy, and lower levels of unemployment than in other Latin American countries. This helped neoliberals to assert ‘common-sense’ truths that private companies are more efficient than governments in delivering services; that higher profits leads to more jobs; and thus lower wages lead to more jobs. 

Neoliberalism bites in the global south

With these ‘successes’ neoliberals were in a position to push for the application of neoliberal solutions to economic difficulties facing both economies of both the imperialist centre and the global south. These changes were pushed by both the victory of openly neoliberal politicians such as US President Ronald Reagan and British PM Margaret Thatcher, and in the case of Australia, France, and Germany social-democratic (or more accurately social-liberal) governments. 

In these countries the attacks were pitched as necessary to maintain competitiveness, the rejection of social goods, and general social responsibility for the collective good – and the assertion, in Thatcher’s words, that “there is no alternative”. In many global south countries, resistance to change came from governments, who were unwilling to go as far as demanded, then the levers of international financial institutions as such as the World Bank, International Monetary Fund (IMF), and World Trade Organisation (WTO), which sought to tie loans and bailouts to deregulation and privatisation of countries’ resources.

These institutions routinely operated on a gaslighting framework where the people whose economies had failed under the strain of neoliberal restructuring were told that the problem was not the changes that was enabling corporations to extract billions in profits from the countries for little return, but rather that that their economies had not been restructured enough and the recipe for their situation was more and more privatisation and deregulation.  

Can neoliberalism be defined?

So what is neoliberalism? There is no definitive prescription of what neoliberalism consists of, which is why its advocates can so readily dismiss its existence.

Neoliberalism began as a small intellectual society founded at Mont Pèlerin in 1947, initially heavily influenced by the ideas of Austrian economist Friedrich Hayek, but similar societies and think tanks were established globally. These organisations sought to take over and influence university, institutional, and governmental economics programs, forming what Philip Mirowski refers to as the “neoliberal thought collective”

These interlinking bodies do not so much articulate a coherent policy doctrine as seek to build and inculcate policy discussions with neoliberal ideas, which may well be at odds with each other, but have the effect of co-opting and subsuming the language of other movements, but also creating a situation where people are presented with not a choice between neoliberalism or an alternative solution, but simply varying forms of neoliberal solutions – which both, in George Lukács’ view is an articulation of the power of neoliberalism as a hegemonic discourse, but also reinforcing Thatcher’s dictum that “there is no alternative”.

Neoliberalism as a response to capitalist crisis

Neoliberalism constitutes a political project aimed at weakening the political power of the working class, asserting the political power of the capitalist class and seeking to establish profitable avenues for capital investment (Harvey, D. 2007. “A brief history of neoliberalism”. Oxford University Press, Oxford.)

Key features of neoliberal projects include:

  • Reducing barriers to the movement of capital by both removing barriers to capital investment and shattering trade barriers; 
  • Increasing barriers to the movement of workers – which results in increasingly constrained rights and marginalisation for migrant workers (this includes open calls to movement being linked to migrants’ wealth);
  • Prying open more aspects of social life for capital investment – privatisation and ownership of water, for example, exemplified by the 1999-2000 water wars in Cochabamba, Bolivia, between the community and the the Nestlé corporation;
  • Opening of government services to capitalist competition, whether through direct privatisation; corporatisation; “public-private partnerships”; access by government agencies or the introduction of “voucher systems” to enable government subsidisation of the entry of private capital into the provision of social services; and at the same time, deregulating costs. This is often articulated in terms of enhancing consumer “choice”;
  • Reduction in government spending, primarily premised on the justification of the need to reign in deficits, although this has rarely been achieved (throughout the neoliberal decades the US’s budget had regularly been in deficit). Instead reductions occur primarily as a consequence of declines in government income via the narrowing of the tax base to be more heavily reliant on working people, and a redirection of government spending away from social spending on the working class and the promotion of worker-funded retirement funds – which both reduce government responsibility and make massive levels of capital available for speculation on capital markets. For example, the Australian Superannuation Funds amounted to to $AU2.8 trillion in funds at the end of the March Quarter of 2019 .

Weakening the strength and power of organised labour 

The outsourcing of work occurs both within public services and in private companies, often posed as leading to cheaper costs, Outsourcing works to undermine the bargaining power both of the outsourced and non-sourced workers, but tends to have higher overall costs due to the labour hire companies’ own need to provide their own work materials. 

The tying of wage increases to productivity increases has resulted in a significant shift in the share of GDP to profits away from wages, as workers are forced to work increasingly hard to see their wages maintain pace with inflation 

The shifting the cost of the reproduction of labour onto the working class has occurred through a range of mechanism including:

Shifting the burden of paying for the state apparatus via increased taxes on workers and the reduction taxes on capital; 

Reducing spending on social services – via either total elimination of services or means-testing services.

The 2008 crisis and beyond 

The 2008 global financial crisis and subsequent Eurozone crises, with the accompanying response by governments have been seen by some as signalling the death of neoliberalism. However, as Mirowski and others would argue, the responses to these crises instead reflect a deepening of neoliberalism – in that they have resulted in the efforts of saving capitalism being carried on the back of workers, while international capital has largely been free to continue to reap massive profits and pay out dividends and bonuses even as they were receiving public subsidies to survive.  

In response to the global financial crisis (GFC), the US government bailed out banks and financial institutions to the tune of of $US4.6 trillion. This was bankrolled by US taxpayers. The US and other governments facilitated banking consolidation to “save the system” – handing billions in assets to surviving major banks. 

In response to the failure of the “big three” US auto manufacturers, the then Obama administration provided a bailout of $US80.7 billion. This bailout was premised on the tearing up of workers’ collective agreements with demands that workers make significant concessions on their working conditions in order to keep their jobs. 

In Europe, Ireland’s opening up of the purchase of non-performing loans to cheap purchase by vulture funds has driven up housing prices in Dublin at a time of acute economic decline. We also continue to see – in the face of the imminent destruction of our planet – continued refusal and obfuscation by governments and by capital to take serious action to slow and hopefully stop action to combat climate change. The US and Australian governments in particular continue to subsidise the fossil fuel industry .  

Factors behind the growth of the far right

The past three decades have seen a growth of the far right in a wide range of countries, which has coincided with a decline and weakening of the left. This shift has been partly premised on deindustrialisation of certain economies and the erosion of the welfare state, which left-wing parties have at times been responsible for, particularly when in government coalitions with right-wing forces.  

This has resulted in understandable anger and frustration among sections of the working class and the petite bourgeoisie – anger which the right has demagogically sought to direct into anger at marginalised communities, which it blames while at the same time cynically supporting many of the attacks on working people. 

In France for example, Marine Le Pen’s National Front – now National Rally – has sought to court a range of marginalised communities, including Jewish, Islamic, and Queer communities by painting itself as the only force capable of protecting them from “marriage equality” and Islamic fundamentalism respectively. 

Part of the growth of the far right can be explained by the reality that the interests of capitalist class are not homogeneous – the capitalist class is made up of fractions that reflect different interests within its own class. The far right reflect interests of capitalist class fractions that would benefit from a more nationalist framework. Moreover, the far-right in a range of countries have a long history of supporting policies that are not in the interests of working people or the petite bourgeoisie. 

This includes support for:

  • deregulation and privatisation;
  • cutting of legislation which limit pollution; 
  • cuts to social security;
  • attacks on working people.

Left demands opposing neoliberalism

Despite this record, the far-right has taken advantage of the complicity of social-democratic and other left parties in the implementation of neoliberalism to seek to present themselves as the only opponents of austerity and the dislocation of the working class. This includes seeking to cynically accuse social democracy and the left more broadly of abandoning workers for support for multiculturalism and the support of other marginalised communities – causes that the left are more likely to support, but which is totally unrelated to the implementation and support for neoliberalism. 

In response to this challenge, it is important that the left is seen as putting forward proposals that address the needs of working people without giving ground to attacks on marginalised communities. Such demands would include:

  • In the event of mass foreclosures government should protect owner-occupiers;
  • Ensuring our demands are around universal provision of services rather than accepting means-testing for access;
  • Ban redundancies in profitable companies;
  • Job creation through limiting overtime and reducing working hours with no loss in pay;
  • Support for a universal basic income – but it must be set at a level which is liveable, and there must be strict controls on rent/commodity prices to ensure that it is not simply consumed as increased profits;
  • Ending of speculation and separating retail banks from investment banks;
  • Caps on wage ratios between senior managements and the lowest-paid workers;
  • Lifting company tax and personal income tax threshold for higher-income earners to fund an expansion of social services;
  • Reabsorption of outsourced social services back into the government – to facilitate collective bargaining and improved wages for workers in these vital and essential services;
  • Legislate to require companies operating in a country to at minimum comply with that country’s standards when operating in other countries;
  • Legislate to enable workers the option of creating co-operatives in companies facing closure or sale;
  • Give workers veto rights on restructuring plans.

While such demands seem unrealistic in the context of more than 30 years of retreat and defeat globally for progressive movements, it is important for us to consistently challenge neoliberal hegemony and to always, to quote Che, “be realistic and demand the impossible”.

Lisbeth Latham is a contributing editor to Irish Broad Left. You can follow her on Twitter @grumpenprol.

Trotskyism today and Cold War hysterics

By Fergal Twomey.

“The tradition of all dead generations weighs like a nightmare on the brains of the living. And just as they seem to be occupied with revolutionizing themselves and things, creating something that did not exist before, precisely in such epochs of revolutionary crisis they anxiously conjure up the spirits of the past to their service, borrowing from them names, battle slogans, and costumes in order to present this new scene in world history in time-honoured disguise and borrowed language” – Karl Marx, Eighteenth Brumaire of Louis Bonaparte.

If I were a Trotskyist, alarm bells would be ringing in my head. Globally the Committee for a Workers International (CWI) is coming apart at the hinges in one of Trotskyism’s perennial cycles of splits, as the dialectic seems to be unfolding backwards towards further fragmentation rather than unity of opposites.

In Ireland, the foremost outpost of the international Trotskyist movement, the Socialist Workers Party (SWP) and Socialist Party (SP) cadres are finding themselves in uncertain waters. By financing core parties through state funding, they have rendered the majority of their small membership into full-time organisers and in turn managed to craft a delicate eco-system of fronts to carry the burden of the very same electoral machine that enables their existence.

Such a stable system has, in fact, initiated a unique convergence of factors in Ireland that have enabled the existence of unprecedented “Internationalism in One Country”, as Irish cadres distance themselves from their counterparts abroad, who are, of course, back to their usual habit of depraved theoretical disputations in the case of the CWI, and are, well, just embarrassing to be associated with in the case of the International Socialist Tendency (IST).

In such a context, we can only feel sympathy for our Militant comrades who are discovering for the first time the frustration of having pragmatic responsibilities to their class run into direct contradiction with Trotskyist gospel. To paint the dispute in broad strokes, their electoral focus on popular social struggles in Ireland has invoked the dreaded appellation of ‘identity politics’ from their more ‘class-oriented’ contemporaries abroad. 

However, to waffle on about this dirty laundry would be a waste of paper (or electricity). It would be far too tempting, for instance, to end up “using Kerensky as a gun-rest to shoot Kornilov” by implying that there is a global crisis in Trotskyism based on the poll doubts and international hostility facing the Irish Trotskyist movement. Moreover, it has already been covered accurately and in excruciatingly fine detail by Paul Demarty for the Weekly Worker in articles with catchy titles such as What will be left? and Drop the Dead Donkey, which I recommend be enjoyed ironically.

‘Stalinist’ as a political slur

For the purposes of this article, I want to draw attention to one of the most amusing idiosyncrasies of this clash of personalities (apart from the existence of the non-faction faction) which has been the use of ‘Stalinist’ as a political slur between competing Trotskyist factions. When I turn back through the pages of my memory, I can find countless occasions on which I’ve been called a Stalinist by errant supporters of the goateed prophet for doing such relatively innocuous things as walking my cat, holding a divergent opinion on the 1938 transitional programme, or being in the wrong Facebook group at the wrong time.

The term ‘Stalinist’ can’t be said to have lost any appreciable meaning, for it never held much meaning in the first place, but it has reached the point of sheer parody in the life-course of any decently debased word where it has come to mean everything and anything, approaching the final terminus of “nothing”. 

It is thus with some enthusiasm that I welcome a new article authored by John Molyneux for the SWP’s theoretical journal Irish Marxist Review, entitled The Return of Stalinism? The first thing that springs to mind is an old adage in journalism, Betteridge’s Law of Headlines, which states “Any headline that ends in a question mark can be answered by the word ‘No’ ”.

Revival of ‘Stalinism’ among Irish youth

This article, at a glance, is a brief overview of the history of ‘Stalinism’ written with the aim of responding to a “certain revival of various forms of Stalinism among a layer of young people on the left, including in Ireland”. I hope I can be absolved of flattering myself in the assumption that this bold claim refers to the recent consolidation of the Connolly Youth Movement (CYM) as a fixture of radical politics on an all-Ireland basis, given its explicit reference to the CYM’s comrades abroad in the UK and Greece.

Comrade Molyneux, hoping by this venture to dissuade a new generation of youth activists from veering too far from the truth of his brand of Cliffism, has divided Stalinism into a series of historical categories, each with an inevitably sordid history reflecting the folly of Marxism-Leninism. 

His characterisation of the Soviet Union inevitably drudges through the hoary old clichés about Lenin’s will, degenerated (or is it deformed?) workers’ states and intra-party feuds, and it is not my wish to contest the documentary evidence surrounding these century-old grievances. It condenses, as always, a complex story of human aspiration and mass socioeconomic development into a neat bundle of betrayal, even going to the extraordinary lengths of comparing Stalin to the blueshirts, a charge I am relatively confident he would have denied.

Material reality of life in the Soviet Union

This whole operation is carried out under the ostensible premise of lip service to material analysis, but even the fundamental trends it cites as the basis for its speculations do not hold up to scrutiny. The standard of living in the USSR, for example, did not fall under Soviet socialism. In fact, it increased year on year until in the 1960s life expectancy in the USSR briefly surpassed that of the USA.

Of course, socialised medicine is not socialism, and institutional ossification eventually slowed the growth of the economy, but central planning, rational development, and workers’ democracy existed in the USSR and were salvageable from its flaws. For those who are interested in a more balanced approach to Soviet history that does not revolve around mental gymnastics in service of failed factionalists, I emphatically recommend the works of the scholar Geoffrey Roberts, as well as other writers such as Eric Hobsbawm, Roger Keeran and Thomas Kenny, and Moshe Lewin.

Just to show you how totally baseless and steeped in Cold War paranoia the work of John Molyneux is, consider the fact that he cites as a source Roy Medvedev – whose massive death counts hung at the door of Stalin were a grotesque fabrication based on the surely unbiased material evidences of White émigré testimony and on gross distortion of population trends. To use such outdated Cold War historians with axes to grind rather than the most recent and comprehensive reviews of the history is a major lapse of diligence and endorses ideological partisanship over fidelity to good scholarship. 

A mature analysis of the USSR’s successes and failures

Comrades, I want to believe at this point that we can engage in a mature and honest discussion of the failings and successes of Soviet socialism within the Communist movement without frothing at the gob or adhering to the comforting simplifications that Trotskyism has to offer.

The function Trotskyism played for Western leftists was as a disinfectant to wash their hands of the legacy of the Soviet Union, allowing them to act with an autonomy of theory and action that ultimately amounted to adventurism and left them briefly mistaken in the aftermath of the Soviet Union’s demise that they really were finally the true inheritors of the mantle of revolution that they so coveted.

For us the revolution is not an old knick-knack or a gaudy coat-of-arms to be fought over; it is the lived experience of millions, and the greatest trove of that experience is in the lives of the liberational struggles of the Socialist world. To cast aside the memories of millions for the bitter recollection of a handful of exiles is an injustice against history.

The fundamental and only real material argument put forward by Molyneux is that the Soviet Union was state capitalist. Far from infested by capitalists, the Soviet Union was a state of workers, scholars and agitators, among whom laboured planners and economists who were more than mere bureaucratic boogeymen. They were dedicated workers shaping the economy in trust and consultation with the party, industrial workers and their trade unions.

Although between the 1960s and the 1980s, significant chasms of miscommunication opened between the different channels of Soviet administration and life, their relationship was fundamentally cooperative rather than competitive. Even a culture of corruption and black marketeering did not replace the Soviet system at once, but rather created an underbelly parallel to it.

The ‘state capitalism’ that wasn’t

A capitalist class, as we are aware of it as Marxists, consists of individual actors. Trotskyists would argue that the collective became one gigantic capitalist, devouring the fruits of its own labour. In reality, inflation was virtually non-existent in the Soviet Union as prices were fixed and the exchange rate was static with foreign currencies.

Money in this closed publicly owned economy did not operate according to the principles of money in a capitalist economy and came close to Marx’s conception of the lower phase of Communism described in the Critique of the Gotha Programme. To say that in such an economy, where the majority of re-investment was not through valourised profit, free to be spent on luxuries, but rather through the rational redistribution of materials to new projects, that the state acted as a capitalist and that moreover its planners were capitalists is nonsense.

The main suggestions of the proposed Kosygin reforms in the Soviet Union was the introduction of ‘autonomous enterprises’ and re-alignment (i.e. inflation) of prices to more accurately reflect the cost of production (i.e. to allow the new autonomous enterprises to be able to profit). We can see here that the opportunist ‘reformers’ in the Communist Party of the Soviet Union knew exactly what the socialist elements of the Soviet economy were and how to dismantle them. 

Democratic central planning

When we speak about capitalist economies, especially those of scale, we often forget that the capitalist is a planner. The chaos of production in capitalist society is that of thousands of disproportionate planners each deciding where the investments of owners will go and trying to absorb the profits of the others.

Central planning removes that chaos and replaces its incoherent competition with growth in the interest of all rather than the individual. Regardless of the good or ill health of Soviet democracy at different points in enabling the workers to communicate their desires to planners, fundamentally the goal of the economy was not the enrichment of individuals but the decency of all.

We can’t wear blinders about the inconsistencies in Soviet society that charted it on a course to dismantlement and the mass poverty and death wrought by neoliberalism. Neither should we have fantasies about ‘state capitalism’ to justify counter-revolution over self-criticism. 

Out of the frying pan and into the fire, we turn next to the second and third faces of Stalinism in Molyneux’s categorisation. These are the Stalinism of the Comintern/World War 2 and the Stalinism of the later USSR’s intervention in Hungary and Czechoslovakia, as well as the Stalinism of Ho Chi Minh and others.

As you can see by now, we’re beginning to rack up a lot of Stalinisms. Given that the term is applied to countries and outlooks that are completely removed from Stalin as an individual as well as from orthodox Marxism-Leninism, ranging from other Trotskyists, to Gorbachev, to Ceaușescu, to Kevin O’Higgins and Eamon Gilmore (perhaps Bertie Ahern is the final torchbearer for true Stalinism in Ireland), we ‘Stalinists’ should take care not to become Dizzy with Success or overcome with a sense of vanity at how far our tendrils reach.

Hungary 1956

The highlight of these sections is the description of the counter-revolution in Hungary in 1956 as being a ‘workers’ revolution’ crushed by Soviet tanks. This point of view is so far removed from reality as to need no real response, but in service of my insidious plot to lure the working class to Fully Automated Luxury Stalinism, I’ll point out the most glaring flaws.  

Molyneux asks the rhetorical question “How was it to be explained that after 10 years of ‘glorious’ socialism, fascism suddenly gained mass support in Hungary?” I will showcase my typical Stalinist arrogance here by answering a rhetorical question. One decade before the Great Hungarian Workers’ and Peasants’ Revolution of 1956, ended a World War where Hungary was in the grip of a fascist movement that had emerged in reaction to the legitimate Hungarian revolution. A reactionary past doesn’t disintegrate in 16 years but is a painful and lengthy process of disempowerment and re-education.

Imre Nagy was little more than a figurehead, a leader on paper, incapable of controlling a section of society that had years earlier supported Miklós Horthy. He wanted to adopt a position of neutrality between the USSR and Western powers – hardly a workers’ revolutionary position. We have seen with the course countries like Austria, Italy and France took in the 20th century, that in bourgeois democracies ‘neutrality’ quickly became repression of the Communist Party, vote-rigging, and armed opposition to the socialist states.

To call it a ‘workers’ revolution’ is a solecism and abuse of phrasemaking at the expense of meaning much the same way that calling Hitler’s Sturmabteilung (brownshirts) a ‘workers’ revolutionary organisation’ might be correct in that it was an organisation; it called for a reactionary insurrection; and it had workers in it.

I will advance this as one of my primary criticisms of Trotskyism – it embodies the very ‘enemy of my enemy is my friend’ mentality that Molyneux says he is writing against. As soon as any group acts against ‘Stalinism’, which, as we have seen, means whatever Trotskyists don’t like, then suddenly that group gets the words ‘revolutionary’ and ‘worker’ tacked onto the front of its name with no material basis for such absurd claims.

Trotskyists are fond of trotting out Stalinist disruptions and Stalinist diversions of communist parties and movements across the globe, but in reality Trotskyists have failed to ever achieve the mass mandate or democratic legitimacy of Marxist-Leninist parties in leading the working class into power. The book Quite Right, Mr. Trotsky by Denver Walker elucidates this pathetic history of backstabbing and collaboration, with a unique focus on the history of the SWP. It responds with much panache to many of the critiques of the international role of the Comintern which Molyneux makes. 

Irish Communist formations

On Irish Stalinism, the final Stalinism (I hope in the sense of being the Hegelian absolute), Molyneux weaves a colourful tapestry of the Communist Party of Ireland’s purported intrigues to corrupt the Irish republican left from within with ‘two-stagism’. He levies the charge at the CPI that it is guilty of a sort of ‘Labour Must Wait’ misinterpretation of James Connolly that originated with Menshevism (!) and passed to C. Desmond Greaves through the Comintern’s policy of promoting temporary power-sharing with the national bourgeoisie.

It claims that the two-stage corruption then passed from Desmond Greaves, who is now allegedly responsible for the Stickie-Provo split, to the Workers’ Party. Finally, this wild rollercoaster arrives at Eamon Gilmore. We can answer an intellectual question that no one has ever asked – how do you trace the ideological genealogy of Eamon Gilmore back to his Menshevik and CPI handlers? 

In the Leninist/Comintern sense, the idea of revolutionary power being approached in stages is not an “inheritance from the mensheviks” as Molyneux describes it and is how the Bolshevik revolution proceeded. The Mensheviks saw the industrialisation connected to capitalism and market forces as something that could only be performed by the bourgeoisie. Lenin states, as published in Letters on Tactics

What, then, is the first stage?

It is the passing of state power to the bourgeoisie.

Before the February-March revolution of 1917, state power in Russia was in the hands of one old class, namely, the feudal landed nobility, headed by Nicholas Romanov.

After the revolution, the power is in the hands of a different class, a new class, namely, the bourgeoisie.

The passing of state power from one class to another is the first, the principal, the basic sign of a revolution, both in the strictly scientific and in the practical political meaning of that term.

This is the sense in which Lenin speak of stages of revolutionary transition – as a brief step in removing a more entrenched obstacles before quickly (in the same year in the case of the Bolsheviks) finishing off the state power that the working class had to share. Not the Menshevik concept of the development of the economy according to the impetus of the bourgeoisie, but rather, the transfer of state power from a feudalistic regime to a broad alliance, followed by a workers’ and peasants’ state.

Colonialism and emancipation

However, this is neither what the Communist Party of Ireland or Connolly advocated for Ireland.  For a colonial state like Ireland, which shared many similarities to the level of class development of Tsarist Russia, British colonialism occupied the same position as the local aristocracy in Russia.

Patriotic internationalists, including Connolly, have understood the necessity of allying with the peasantry, which was highly present in the rank-and-file, although not the leadership, of the Irish Republican Brotherhood (IRB) and Irish Republican Army (IRA). A nationalist revolution for the overthrow of colonial domination was deeply intertwined with the alienation of the landless farmers and workers.

Many falsely believed that a bourgeois revolution would also involve social emancipation, and many others falsely believed that socialist emancipation was possible under colonialism. The workers’ soviets and industrial upheavals that coincided with the War of Independence were crushed by the neo-colonial Free State.

Connolly knew what he was doing. He was temporarily allying with the national bourgeoisie to gain Irish sovereignty, which was a natural predecessor for the working class to wrest power from the national bourgeoisie, which depended on colonial support to maintain its privileged position. His writings show that he was under no illusions as to the nature of who he was working with. The consciousness of the workers and peasants could have developed to the point of making the national bourgeois element redundant.

Moreover, this trend was already taking place more slowly, for example, Liam Cahill writes in Forgotten Revolution: Limerick Soviet, 1919 that IRB and Volunteers were restructuring in 1916, and that working class agitators were taking a more prominent role. This is what happened in the Soviet Union, as first the hold of the Tsar was broken, only to be overthrown by the Bolsheviks as the political situation changed. 

Moreover, the Revolutionary Workers’ Groups (RWG), the CPI’s forerunner, did not attempt to join Fianna Fáil because of some tactical madness in believing that Fianna Fáil could usher in socialism, but rather saw Fianna Fáil as a fertile potential recruiting ground. The Fianna Fáil of that day was releasing regular articles in support of the Soviet Union through The Nation and many radical IRA members had joined.

RWG members also had to join Fianna Fáil because their members were being attacked or killed, and their offices and presses were regularly moved, withdrawn or assaulted. They were presented with total illegality and disintegration or joining Fianna Fáil to try to influence the left-most members safely. That this was a mistake is a testament to the terrible conditions these early communists operated in and the trying decisions and stigmatisation they were faced with.

It is not some secret conservative kernel at the heart of the CPI, which has been at the forefront of workers’ and tenants’ struggles in Ireland; it is the reality of doing the best with the hand you’re dealt. The RWG struggled from attack and dissolution to attack and dissolution in the 1930s, whilst in the 1960s the CPI were out and open as communists in one of the most repressive environments in Western Europe, whilst the SWP was attempting abortive entryism into the Labour Party. It is a shame for Molyneux that he cannot recognise the bravery of these visionaries who struggled without credit in the dark. 

It’s clear from this article that the SWP knows which way the wind is blowing. It hasn’t recovered and is unlikely to ever recover from the serious crisis of identity it suffered in the early 2010s. Based on my previous observations of interactions between members of the CYM and the SWP, they are starting to build up a repertoire of talking points that seem to, now, have finally developed into something that purports itself to be a substantial critique.

Poverty of thought

It is telling, then, that all Molyneux can do is inveigh against the CPI for imagined past sins. This escape into the past is very telling of the priorities of the SWP, given that its present is not an enviable position to occupy. It is a reflection of the poverty of thought in the Trotskyist movement that it engages in the vulgar practice of calling for materialist analysis, of claiming to be adept in performing material analysis, but carefully avoiding lifting the hood to discuss the phenomena on which its justifications are based.

This search for moral high ground that it has lost today has led the SWP to bizarre accusations that the CPI is responsible for the defection of the leadership of the Workers’ Party to the Labour Party in 1989. 

The most glaring evidence of this poverty of thought can be found in Molyneux’s self-plagiarism of his past publications in this latest article. The subsection shown below is recycled straight out of his 1983 book What is the real Marxist tradition? without any self-citation:

The Bolshevik party found itself suspended in a vacuum. To administer the country it had to take over and use a vast army of Tsarist officials and against all its intentions it itself became bureaucratised. Bureaucracy is essentially a hierarchy of officials not subject to popular control from below. In Russia the social force that Marxists (above all Lenin) counted on to prevent the development of bureaucracy, an active revolutionary working class, had been cut from under the feet of the party. In this situation it was impossible to implement the Marxist programme in pure form. For a period it was possible to mount a holding operation, relying on the hardened socialist commitment of the Bolshevik old guard, to cling to the basic revolutionary aspirations while making the necessary practical compromises (for example the New Economic Policy or NEP) and waiting for help from the international revolution. This in essence was the course taken by Lenin. But failing the international revolution (and it did fail) a stark choice had eventually to be made. Either remain loyal to the theory and goal of international proletarian revolution, with the possibility of losing state power in Russia, or cling to power and abandon the theory and goal. The situation was extremely complex and the participants did not see it in these clear terms, but, essentially, Trotskyism was the product of the first choice and Stalinism of the second.

You might be wondering what exactly is wrong with this – self-plagiarism is considered a form of fraud in academia, because it repackages an old work as a new one, thus avoiding originality while tricking audiences into believing that they’re consuming novel work.

This brings me to my fundamental criticism of Molyneux’s outlook that I hint at in my opening quote. Trotskyism is a repackaging of various personalities, figures, and feuds of a different age and an attempt to build a cargo cult. By attempting to go through the rituals that Leon Trotsky, Ernest Mandel, Tony Cliff and their contemporaries went through in the great factional hullabaloos of their day, Trotskyists are constantly enjoying a form of live-action roleplay where they are invariably persecuted geniuses and academic revolutionaries chased by conspiracies of conformist Stalinoid bureaucrats.

This re-enactment of the Comintern struggles of the 1930s satisfies egos while providing a safe merry-go-round to dissipate revolutionary fervour of young people in alignment with Western soft power foreign policy and domestic interests. The Trotskyist electoral machine, meanwhile, continues to burn out young activists with potential and enthusiasm in futile and hollow electoralism. Red Youth are building a new revolutionary form of popular struggle from the ashes of the old, and sectarian partisans will have to recognise that their methods are spent and that a new chapter is beginning for socialism in the 21st century. They must decide whether to become obstacles to that progress or actively aid it. 

I would invite the youth activists of today to not go glassy-eyed gazing at the past, nursing old grudges, but to critically and coldly scrutinise it for fundamental principles of theory and action to apply to the present. By working in one mass communist party, along the lines of democratic centralism and a serious commitment to class work and dialectical materialism, we can win back the future.

Decaying capitalism will not inevitably deliver socialism

We shouldn’t wait around for any Trotskyite delusion that the ‘class balance’ or ‘decaying features’ of capitalism are going to bring us socialism on a silver platter. Nor should we, in the name of most revolutionary slogans, lend our voices to any revolution in any country regardless of its class character and its ideology. Let us not forget that it is Molyneux’s erstwhile comrades in the International Socialist Organisation (ISO) who referred to Aleppo as the “Paris Commune of the 21st century”.

Considering that the ISO, like the IST and CWI, are teetering on the brink, we will soon gladly consign useful-idiot gullibility and left-wing anti-Communism to the dustbin of history. No to re-constructed “socialism”, no to counter-revolution, no to euro-communism. Forward to victory and a new unity. 

To quote Che Guevara: “The revolution is not an apple that falls when it is ripe. You must make it fall”.  

To quote Lenin: “To wait until the toiling classes bring about a revolution on an international scale means that everybody should stand stock-still in expectation. That is nonsense”. 

To quote Regina George: “Why are you so obsessed with me?”

Fergal Twomey is the former National Chairperson of the Connolly Youth Movement. Follow CYM on Twitter @ConnollyYM .

This article is part of a general debate and, like all articles we publish, does not reflect the views of the Irish Broad Left editorial team. We welcome responses to this article from those with opposing views.

The Irish elections: Results and prospects for the left

By Sean Byers.

The results of the recent elections in Ireland correspond to the fragmented and radically uncertain times we now inhabit. They reveal continuities in terms of the resilience of the dominant parties as well as changes in the overall composition and balance of political forces in both jurisdictions.

In the North’s local elections, the Democratic Unionist Party (DUP) and Sinn Féin have comfortably re-emerged as the two largest parties. The DUP will be the happier of the two, increasing its share of the vote and losing just eight seats despite a succession of scandals and the party’s ignominious role at the centre of the Brexit saga.

This is partly thanks to the Ulster Unionist Party (UUP) offering nothing but a pale imitation of the DUP to a dwindling constituency of octogenarians, the result of which will almost certainly be the former’s continued decline in years to come.

It also reflects the absence of a compelling working-class political alternative within Unionism, the persistence of key faultlines across society and zero-sum nature of politics in the North, which enables the DUP to retain mass support on account of being viewed as a bulwark against nationalist gain and the prospect of Irish unity.

Sinn Féin’s vote was down slightly on the last election, though the party held on to the same number of seats (105) won in 2014. This is no disaster. However the party leadership will have been left pondering why they haven’t built on the remarkable gains recorded in 2014 and again in 2017, why they haven’t managed to dispense with the SDLP, and why they have instead lost support in different directions.

A ‘liberal’ surge in the North?

A number of commentators have remarked that the northern elections were significant for the success of what have been variously described as the ‘centre ground’, ‘moderates’ or the ‘Others’. These headlines, whilst capturing an ambiguous desire for change among sections of the population, serve to obscure important differences between the parties as well as the class, ethnonational, ideological and geographical dynamics at play.

Overall, the Alliance Party made the largest gain of the share of first-preference vote and the number of seats in the local elections, while Naomi Long took the third European Parliament seat from the UUP. Alliance’s strong opposition to Brexit coupled with its support for equal marriage and abortion reform has succeeded in winning over significant numbers of liberal Unionists in more affluent areas.

As Henry Patterson has argued, the party now represents a class which has “an objective interest in the continuation of the Union but … no desire to be bothered by rowdy debates about the national question”. The party’s appeal, which rests on the vacuous slogan of “Demand Better” and the rejection of ‘tribal politics’, is also what makes the Alliance ill-equipped to deal with the constitutional question, the intractable problems of devolution or the multiple challenges facing working-class communities.

The Green Party’s increase of four seats to a total of eight in the local elections in the North is perhaps more significant from a left perspective. It could be argued simply that the Greens captured a similar demographic to Alliance’s core vote. But the Green brand has also benefitted from a growing awareness of the urgency of climate breakdown, particularly among young people.

Belfast City Council moves left

Significantly, the Green Party of Northern Ireland is more unambiguously left on key economic questions than the ‘centrist’ label implies and more amenable to the anti-capitalist slogan of ‘system change not climate change’ than their counterparts in Britain or the South, despite operating within a more restrictive economic and political environment. The presence of four Green councillors in the chambers of Belfast City Council could, however, help to shift the city’s policy agenda in a more left-wing direction.

Adding to the leftward dynamic in Belfast City Council is an increase in the number of People Before Profit (PBP) councillors from one to three. As in Derry, where the party gained two seats, PBP strengthened its support in Belfast on the back of tireless campaigning around the impact of welfare reform. Here Sinn Féin’s strategy of targeting PBP’s position on Brexit appears to have worn thin among some of those most badly affected by the punitive, privatised Personal Independence Payment regime and rollout of Universal Credit.

Adding to the leftward dynamic in Belfast City Council is an increase in the number of People Before Profit (PBP) councillors from one to three. As in Derry, where the party gained two seats, PBP strengthened its support in Belfast on the back of tireless campaigning around the impact of welfare reform. Here Sinn Féin’s strategy of targeting PBP’s position on Brexit appears to have worn thin among some of those most badly affected by the punitive, privatised Personal Independence Payment regime and rollout of Universal Credit.

The PBP contingent, together with the Greens, could potentially form an influential bloc that challenges the neoliberal bureaucracy, not to mention the powerful corporate interests that have captured key policy areas, and helps to pull Council politics in a leftward direction. We may already be seeing glimpses of this with the rejection of plans to drill for fossil fuels in the Belfast Hills.

In other parts of the North it is possible to detect signs of left-wing growth that defy the singular narrative of ‘centrist’ or ‘moderate’ advance. For example, the election of the PBP’s Eamonn McCann and Shaun Harkin will strengthen the existing anti-austerity critiques offered by Independent left republican councillors in Derry and Strabane. Likewise, in the rural conservative districts of Fermanagh & Omagh and Mid-Ulster, we have seen the election of Independent socialists and left republicans who have their roots in trade unionism and community-based campaigns around issues such as health, education and the environment.

That is not to say we should place great stock in local elections or electoralism as a substitute for the building of mass organisations and systemic change. But rather it is to suggest that these results present limited openings for strategic interventions at a local government level, to help build something from the ground up. The ambition for the combined forces of the left in Belfast, for example, should be to move towards – and beyond – something like the Preston model, replacing the fundamentally neoliberal, carbon-heavy model of urban development that has been instituted in the past decade.

The state of left politics in the South

The two dominant parties, Fine Gael and in particular Fianna Fáil, will be satisfied with the gains they have made against the propitious backdrop of economic ‘recovery’. Winning just over half of the vote between them, they are some way short of restoring the two-and-a-half party system that was broken in the wake of austerity and the Right2Water campaign. However, Fianna Fáil will be confident of using their strengthened vote in Dublin and elsewhere as a platform for success in a general election, particularly if they take a left turn to put clear water between themselves and Fine Gael.

‘Green wave’

For many, the big story of the European and local elections was the surge in support for the Green Party, which increased its number of council seats from 12 to 49 and took two MEP seats. Again, the Greens have been the main beneficiaries of an emerging consciousness around the impending climate crisis, especially among a younger generation.

Many of these young people who voted Green will have no memory of the party’s experience of coalition government with Fianna Fáil between 2007-2011. But the Green Party’s social basis remains solidly middle class and there is no sign of it moving away from the individualised, anti-working-class solutions favoured by party leader Eamon Ryan.

Fine Gael and Fianna Fáil will already be thinking about how to hijack the green movement or woo the Greens, Social Democrats and Labour, whose combined vote of 14 per cent would almost certainly put one of the two main parties back in government in the event of a general election.

Fine Gael will be buoyed slightly by the exchange of transfers between their candidates and those of Labour and the Greens. Fianna Fáil, meanwhile, has already managed to craft deals with the centre-left in Dún Laoghaire-Rathdown and in Dublin City Council, where there appeared to be the possibility of an (albeit messy) broad left alliance.

Such horse-trading is a built-in feature of the local political system and does not necessarily reflect the national picture. But whatever about the ‘green’ concessions that have been granted as part of these deals, the decision to back Fianna Fáil will have confounded those supporters of the smaller parties who were hoping for a new departure.

Left opposition falters

For Sinn Féin and the Trotskyist left, the two main left-wing opposition forces, along with the Independents4Change group, the elections will have prompted a lot of soul-searching. The loss of half of their council seats – 78 for Sinn Féin and 17 for Solidarity-PBP – is nothing short of devastating for the two parties which had attracted mass working-class support for their anti-austerity message in the 2014-2016 period.

The scale of these losses appears to have been determined by a number of factors including the choice of candidates, vote mismanagement, the absence of a compelling narrative in the context of economic ‘recovery’, the sense that the left parties have not delivered change at a local level and, for Sinn Féin, internal difficulties that have prompted resignations across the state.

Above all, the political left will have cause to reflect on the low turnout in working-class urban areas. This reflects the dissipation of popular energy since the height of the Right2Water protests while also suggesting a disconnect between the left parties and large sections of the working class.

Sinn Féin’s problems

This disconnect is most pronounced in the case of Sinn Féin, which, having established itself as the biggest working-class party on the island in 2016, has strayed furthest from its base in the intervening years. Rather than investing in the building of an oppositional, class-based politics in cooperation with other social and political forces, one that would present a long-term challenge to the right, the leadership has opted for the misguided strategy of becoming the hegemonic, catch-all nationalist party – a 1930s Fianna Fáil in 21st century Ireland.

This strategy comprises a number of key elements. Firstly, the adoption of a more liberal, rights-based discourse in response to issues such as equal marriage and abortion. Secondly, in the context of Brexit, the move from a position of critical engagement with the EU to one that is more engaged than critical. Both of these moves had the added appeal of speaking to the concerns of liberal Unionists.

Thirdly, and relatedly, gestures towards reconciliation and the shedding of some trappings of the party’s past. Fourthly, the uneasy combination of pro-workers and pro-business rhetoric.

And finally, the pivot away from an ‘anti-establishment’ message to one that assures the middle classes of Sinn Féin’s readiness to govern, culminating in the Ard Fheis decision that the party would be willing to enter coalition government as a junior partner. The defence of this decision – that any coalition arrangement would be formed around an undefined ‘radical republican’ programme – neglects the fact that the leadership would determine what ‘radical republican’ means in that eventuality.

To some extent, this catch-all strategy is designed to align the party’s southern trajectory with that in the North, where the Provisional republican movement has made the transition from insurrection to parliamentary politics and from a more explicitly socialist orientation to accommodation with the demands of neoliberal, power-sharing governance.

It should be enough to point out that this is poor from a principled left-wing perspective as it weakens the basis for a class-based alternative and implies greater hardship for workers and communities. But it is also founded on a misreading of conditions in the South, where the ‘respectable classes’ retain a deep-seated hatred of Sinn Fein; where the cause of a united Ireland has been taken up by bourgeois and ‘civic’ nationalism, depriving Sinn Féin of the leading role in that particular struggle; and where the political space is wide open to the left, not in the congested centre-ground.

All of this is well understood by the Sinn Féin left, which has been fighting a rearguard action within the party for the past two years or more. As Sinn Féin’s collective leadership meets to discuss its ‘identity crisis’, there will be pressure to identify a quick fix that enables the party to get through the next election.

Faced with calls that the party should double-down on centrism and moderate its tone, the leading voices of the left will be arguing, publicly and privately, for Sinn Féin to tack leftwards, revise its position on coalition government, rebuild in working-class communities and seek closer cooperation with other radical social and political forces. This appeal to restore the dynamic of 2014-16 and recalibrate it for the present will carry significant support within and outside of the party.

But whereas Sinn Féin’s centralised organisational culture has so far guarded against the formation of an official left caucus, the situation may require that the left’s struggle over the future direction of the party north and south becomes more organised and assertive.

Solutions?

There are no easy answers to these challenges. But there are a number of observations that are worth making about the current political moment and its implications for the left:

  1. The fragmented state of the Irish left is a persistent problem. For instance, one might question the logic of Clare Daly’s decision to swap Dublin for Brussels and stand against Lynn Boylan, one of the strongest advocates for a principled red-green politics in Europe, or the failure of Solidarity-PBP to agree on a single candidate for the same constituency. However, these debates overlook the more pressing issue of low turnout and the political disenfranchisement of the working class. A turnout of just 50 percent in working-class districts would have seen both Daly and Boylan elected and yielded a much better performance for left formations across the island, particularly as transfers between parties to the left of Labour show that their voters understand the principle of unity.
  2. The steady decline in political participation among the working class is largely down the failure of parties to speak to their interests. There is of course a need for the left to develop and cohere around a common narrative that goes beyond the anger of the austerity period. But it is the embrace of a ‘progressivist’, post-class politics which has led to the collapse of traditional socialist parties across Europe and now threatens to stunt the development of a radical alternative in Ireland. It is a mistake to think that there is any future for the left in avoiding the main faultline across Irish society, one of the most unequal in Europe, when the moneyed interests are clearly thinking and organising along class lines. As the experience of British Labour shows, a new politics must be organised around the interests of those “who have the greatest incentive to upturn the economic order”. New thinking need not mean moderation; it can be radical, insurgent and positive.
  3. There is no harm in developing better lines of communication or exploring the possibility of electoral pacts. But any ‘left unity’ worth talking about has to be grounded in practical cooperation on an issue-by-issue basis: the forging of effective alliances without necessarily pushing for a merger. Right2Water provides the model for a single-issue campaign which briefly united grassroots community actors, trade unions and the political left – and may have to be revived as the government looks to introduce ‘excessive usage’ charges. The Raise the Roof housing campaign has not managed to emulate the success of Right2Water, but may yet realise its promise with the adoption of more militant tactics. Trade union and political pressure has also delivered significant legislative gains in the area of workers’ rights. The next big political project for the left is ensuring that any green transition tackles the questions of ownership and power, and delivers a just outcome for workers and communities. This will require an escalation of grassroots activity, trade union interventions and the formation of red-green alliances on a national and international basis.
  4. There is no shortage of locally focused single-issue campaigns which have (re)politicised spheres that had been marked as non-political and registered small victories against capital. But they are limited by the absence of a radical context and a ‘political instrument’ which is capable of raising ‘a national project that can unify and act as a compass for all those sectors that oppose neoliberalism’. In lieu of this political instrument, the trade unions can play an important role in facilitating and integrating as much of this activity as possible, in order to help build the required forces to bring about a transformative situation.
  5. The refusal to do business with the two conservative parties is not an empty slogan. Rather it forms a basis upon which trust can be built up between political forces on the broad left. There should be no rewards for talking left and walking right. In addition, this principle recognises that each time a party of the left props up Fine Gael or Fianna Fáil, they provide them with the material for their rehabilitation whilst killing off the prospect of a class-based oppositional politics.
  6. Events have rapidly produced an all-island dynamic witnessed, for example, in the mobilisation and solidarity around issues such as equal marriage and abortion rights as well as the growing support for a united Ireland. But increasingly it looks like this united Ireland will be delivered by bourgeois and civic nationalism in cooperation with liberal Unionism. This, and the poor state of conditions in the North, drives home the necessity of the parliamentary and extra-parliamentary left organising and fighting on an all-island basis.
  7. The electoral sphere is one site of struggle for socialists. However, all parties of the Irish left have been guilty of working primarily within the confines of parliamentary politics and adapting to the rules of electoralism. This has operated to the detriment of building working-class organisations which are capable of challenging the material power of capital outside of the political institutions. It is vital that we invest time and energy in rebuilding the trade union movement, tenants’ unions and community organisations, and realise the potential of struggles at the point of production and social reproduction. It is this ‘construction of forces’ outside of the state which, coupled with an effective political strategy, will hit capital where it hurts and provide the social basis for a genuinely transformative movement.

Dr Sean Byers works as a researcher with Trademark and helps run the blog Brexit, Europe and the Left. Author of Seán Murray: Marxist-Leninist and Irish Socialist Republican (2015), he has published widely on the themes of socialist history and politics, post-conflict Northern Ireland and left political economy. He is an active member of Unite trade union and Belfast Trades Council. Follow him on Twitter @Sean _Byers84 and follow Trademarkon Twitter @TrademarkBF.

Thousands plan to protest Donald Trump’s visit to Ireland

By Memet Uludag.

Protest: Thursday June 6, 6pm at the Garden of Rembrance, Dublin. See the Facebook event here.

Donald Trump is a threat to us all.

His presidential campaign was based on racism against Mexicans – “build that wall!” He has tried to ban visitors and migrants from Muslim countries from entering the US. He is separating children from their parents at the border. 

President Trump gives carte blanche support to apartheid Israel to murder Palestinians and steal their land at will. He has worked with, encouraged and emboldened far right racists and fascists across the world.

As the world’s leading climate change denier who has pulled the US out of the Paris climate agreement, removed environment protection in America he is destroying the planet and endangering the whole future of humanity. 

In the age of #MeToo, when women globally are standing up for their rights, he has boasted of his ability to sexually assault women with impunity. 

He is undermining Irish neutrality via Shannon. He is an imperialist warmonger. 

Trump has posed as the friend of ‘the working man’ but in reality he is a billionaire property developer who represents the interests of the super-rich.  He filled his cabinet with CEOs and generals. 

Our protest against Trump is in solidarity with the millions of American people who are also victimised by Trump’s policies. We extend our solidarity to all people in the US involved in the #MeToo and #BlackLivesMatter campaigns, and those who stand up to Trump’s barbaric border policies.

United Against Racism calls on the Irish government, which claims to be progressive, to make this clear to Donald Trump and to ensure that no public money – so urgently needed for the housing and health crisis – is spent on this visit.  

We call on European governments to open the borders to refugees fleeing wars and persecution.  

We also call on the Irish government to #EndDirectProvision and normalise all undocumented migrants in Ireland.

We are for a progressive Ireland of equality, justice and hope, not of racism, hate and fear!

Memet Uludag is the convener of United Against Racism, and one of the organisers of the ‘Stand up to Trump!’ protest in Dublin, which is supported by a broad range of progressive campaign organisations, unions and parties. Protests are also taking place in Shannon, Cork, Belfast and Derry. Follow Memet on Twitter @Memzers, and follow United Against Racism on Twitter @UnitedARacism.

‘Change the System’ is core demand of climate strikers

By Damien Thomson.

Around 3,000 students gathered outside government buildings in Dublin and towns across the country on Friday (May 24) to demand rapid and radical action on climate change. This is the second international strike co-ordinated by Fridays for Future – a global movement of climate protest. 

Speaking to some of the teen strikers, it’s clear that young people are ahead of the politicians on climate change. I say that not because they possess some extra knowledge (which may also be the case!), but because they acknowledge climate change as a political problem, not a technical one. 

The student demands call for radical state involvement in the economy to deliver a predictable, accountable and fair transition to a ecologically safe society by 2030. Core to their movement is the idea of standing up for their futures and how securing a safe future for young people is the government’s responsibility.

The immediacy of the effects of climate change, in that the picture is so grim for the lifespan of today’s young people, is clearly the greatest motivation with mobilising young people to take direct action. 

Fourteen-year-old Grainne O’Sullivan from Bray (pictured above) told me: “Politicians aren’t doing anything about this. It’s our future that they are taking away from us and that’s not fair. We are going to have to live with this and they are stealing our future.” While telling me about the demands of the Fridays for Future Movement, Grainne lamented that “one hundred corporations in the world are responsible for 71 per cent of our emissions, and it shouldn’t be that way, we should be using renewable energy”.

Beth Doherty (15) from Balbriggan told me how climate breakdown comes down to “the way our society is structured. It makes it impossible to live sustainably, and we are calling for the government to put legislation in place that changes those structures.”

We are not reaching our climate targets, Beth says, because “our government does not see this as a priority.” Noting trends to individualise climate action, Beth added: “If you are passionate about changing your individual lifestyle choices, then you should definitely consider getting involved in political action and getting involved in demanding systemic change too.” 

Eighteen-year-old Dan Drum (pictured above) spoke of how “we have already achieved a small goal of getting the government to declare a climate emergency”, but we want “our economy and ecology to work in sync”. We need to have “climate change-responsible production” and “a climate change-responsible economy”. Dan says that “once economy and ecology come in sync, huge change can be made”.

Meadhbh Bolger from Friends of the Earth Europe, who was also at the strike, notes how young people are mobilised because “leaders are not doing near enough”. 

“We can’t have an economy or any sort of working society without a healthy planet, without using resources in a sustainable way… everything is interlinked and connected, we need to change all sectors of our society and economy. It’s not just about climate change, its about changing the system of how we produce, consume, and operate as a society collectively.” 

The demands of the young people are reasonable, not radical, if we maintain the basic aim of securing a safe future. The Irish government, and government leaders across the globe, have been abdicating on climate change, pushing it into the market for the so-called invisible hand to solve. Young people, however, do not buy this approach. They want predictability. They want assurance. They want their state to do everything within its powers to stop global warming now. 

Is that too much to ask? 

Student climate strikers’ demands

Below are the demands of the Friday’s for Future movement, and the next global climate strike is planned for September 20 this year. 

  1. The Government ensures all fossil fuels are left in the ground and should not allow any new fossil fuel infrastructure to be built and that Ireland uses 100% renewable electricity by 2030.
  2. The Government declares a climate emergency, communicates the severity of the ecological crisis to the general public and reforms the primary and post-primary educations systems to address the need for ecological literacy. The government must prioritise the protection of life on Earth, taking active steps to achieve climate justice.
  3. The Government makes transitioning to a CO2-neutral Ireland socially fair. We demand of the government that it takes its responsibility seriously and avoids having regular citizens carry all the burden towards transitioning to a sustainable society.
  4. The Government implements all the recommendations of the Citizens’ Assembly on Climate Change. As this is a climate emergency, we demand that the recommendations be implemented immediately.
  5. The Government creates and enforces stronger regulations on corporations that are causing the climate crisis and ensure a transformation to reduce emissions from agriculture in Ireland.
  6. The Government implements a Green New Deal and ensures that after leaving school, all young people in Ireland can have livelihoods that don’t damage the Earth.

All photos by Damien Thomson. Damien Thomson is a contributing editor of Irish Broad Left. Follow him on Twitter @dmacthomais.

Economic democracy, trade unions and labour-managed enterprises

By Michael Taft.

“It is the supreme paradox of democracy that every man is a servant of the matters of which he possess the most intimate knowledge, and for which he shows the most expert proficiency; namely, the professional craft to which he devotes his working hours; and he is a master over that on which he knows no more than anybody else, namely, the general interests of the community as a whole.”

Beatrice and Sydney Webb pointed out that where people had intimate knowledge and expert proficiency – the workplace – they were denied the right of participation they were allowed in political society. Democracy is not a 24/7 process. It stops at the beginning of each working day.

There are many arguments for economic democracy: rights-based arguments that claim people should have the same entitlements as they do in political democracy; performance-based arguments showing how greater democracy improves economic and social outcomes; and psycho-social arguments emphasising how it enhances the individual.

All of these arguments are valid but unfortunately they are made ineffectual as they are painted as naïve or impractical, anti-business or anti-entrepreneurial.

But the real complaint is the privileging of labour. This is economic democracy at its most audacious – the idea that people, the producers, have the capacity to run workplaces and economies in a better, more efficient and sustainable way than capital.

The privileging of labour: both the trade union movement (producers coming together to exert more power than they can do individually) and the cooperative movement (where labour hires capital rather than the other way around) are agents of this. But, unfortunately, with so much in common, they do not always act in concert.

Ladder of participation and productivity

The jury is not out. It came in a long time ago. We have what can be called the ladder of participation and productivity. It is the same ladder. Let’s take one example: employee participation, a rather bland term which, however, conceals a more insidious, essential message. Academic studies and government papers, institutes and special commissions: all report that the greater the participation of producers in the decision-making processes of the enterprise, the better the performance.

Participation operates in a continuum, or on different rungs of the ladder, ranging from the minimal right to information, to the right to suggest, to prior consultation, to bargaining, to veto, to co-decision, and finally to unilateral workers’ decisions, or labour-managed enterprises. Each step up these rungs has been shown to improve the performance of the enterprise.

So if the evidence is so overwhelming, why isn’t democracy at enterprise level more widespread? Simply because it undermines so many vested interests – the status of senior executives and management, and the financial interests of shareholders. And more.

Ever since societies started producing surpluses, there has been a hierarchy that dictates what is produced, how it is produced, who produces it, on what terms, and – most importantly – who derives the greatest benefit. This is the source of social and political power.

The trade union and cooperative movement enter the frame at the enterprise level. However, they enter at different rungs on the ladder. Trade unions enter at the most basic level, organising workers, their voice and their potential collective strength.

The cooperative movement enters at the top of the ladder – as contractual owners of the firm. These different stations inevitably create different perspectives and strategies.

Rethinking enterprise and ownership

One perspective might be that workers in a cooperative are both the producers and owners whereas workers in a traditional, capital-privileged enterprise produce but do not own. However, the distance between the two is not so great in practice.

Workers in both types of enterprises want the business they work in to succeed. Obviously, workers in the cooperative want the business to succeed. But so do workers in the traditional firm. Living standards, job security, social benefits and social networks are all vindicated by and through the enterprise. Nobody wants the business they work in to fail.

Indeed, the biggest group within any enterprise that wants the business to succeed is the workers. They outnumber management and shareholders. Shareholders are mostly passive, rentiers by definition, extremely short-term, with no interest in the company beyond dividends and share appreciation. Workers look to the enterprise to provide for their future; for shareholders, the future is short-term and contingent.

Given its centrality to economic democracy and people’s lives, we need to redefine and reconceptualise the enterprise. We need to reframe the very idea of ownership. In this task we will have a lot of help. Academics, lawyers and researchers – even court rulings – have concluded that no one owns a corporation. Instead, it is described as a legal person, a nexus of contracts, a franchise government which is neither public nor private, and an economic commons.

In other words, the enterprise is a social space where a number of interests – workers, management, shareholders, creditors, suppliers and the community – have contractual rights and obligations but no one group owns the business. If shareholders or management have power, it does not derive from the essential activity of the enterprise, but from law. Its power is politically defined.

This may appear as highly theoretical and detached from day-to-day struggles. But it helps us to go to the heart of the problem. We are all too aware of how the odds are stacked against us when are adversaries frame the debate and define the terms.

Labour is a cost and we need to keep our costs down, we need to be flexible, we need to adapt quickly, we need to be competitive, we no longer can afford permanent full-time jobs, etc. etc. Employers, management, entrepreneurs are the wealth creators and who would oppose wealth creation. We lose the debate before we enter it.

Economic democracy as a cultural struggle

Democracy’s enemies license what is acceptable and what is unthinkable in society and the economy; in other words, they determine what is ‘common sense’.

And how do they enforce that license? They rely on us. We adopt what is acceptable and what is unthinkable as if we came up with these ideas on our own. Such is the power of this ‘common sense’ that we end up policing ourselves. Ironically, the debate that we lose before entering is actually framed by us.

Therefore, economic democracy first presents itself as a cultural struggle – a struggle over ideas, over what is desirable and practical. We must refashion common sense, reframe the debate and redefine the key terms. The current construction of the enterprise masquerades as a natural order.

In an alternative construction, the enterprise is a social space. Capital may have rights based on contract but this does not equate to ownership. And employees, in this construction, cease to be a mere vendor of their labour, a downsized party in the hierarchy of the enterprise.

Our pragmatic and ideological arguments for economic democracy may receive a wider audience if, at the same time, we reframe the debate into a new common sense.

State support for cooperatives

At first glance, the cooperative movement appears to have solved this problem since they are both producer and shareholders. However, the cooperative can be extremely circumscribed and vulnerable within markets dominated by capital.

They may be forced to compete with traditional companies that pursue ‘race-to-the-bottom’ labour strategies, engage in below-market selling, externalise their costs (especially in the environmental sphere) and other predatory practices while at the same time face discrimination by the financial system.

This is even more so given the weakness of the cooperative movement in Ireland. We do not have the long-established and deep-rooted ecosystems that sustain cooperatives in the Bologna or Basque regions, in the American plywood industry or in the French construction sector.

The cooperative movement would have a better chance in markets where economic democracy is making advances – where collective bargaining is widespread, where transparency is not the exception but the rule, where precarious practices are suppressed, where there is supportive public banking. The wider democratic agenda is the cooperative movement’s best chance of taking root.

Economic democracy is not just about reframing the enterprise as a social space. It constitutes a long march through the market economy itself. This can be done by changing the relationship between the state and enterprises, or creating new enterprise models.

For instance, Mariana Mazzucato has shown that the state is not only an entrepreneur but actively creates markets through its role as risk-taker and first mover in investment and R&D. However, the state does not act like a market investor who takes a direct stake. This means that the costs and risks of investment in companies are socialised but the profits are privatised.

This should be addressed by taking of equity in companies and markets the state supports. The equity can be leveraged to extend democracy – ensuring collective bargaining, introducing participation programmes and even requiring workers’ representatives on the board – within those companies which benefit from direct and indirect grants. This is similar to a ‘social value’ clause in public procurement contracts, requiring enhanced democracy in firms that seek to win public contracts.

Role of public enterprises

A second form of market intervention is the promotion of public enterprise, especially at the local level. Throughout Europe and North America local public enterprises play an expanded role; it is far more limited here in Ireland.

Public enterprises can be used for a number of purposes. For instance, a rural town in Kentucky found itself a victim of a cartel of petrol stations. It countered by establishing a public petrol station that sold petrol at cost. This broke up the cartel and forced other petrol stations to cut their prices.

Local public enterprises can be used to provide goods and services where private capital is absent or engages in monopolistic practices. It can set benchmarks for prices – as in the Kentucky example – for wages and working conditions, and for democratic practices in the workplace.

Local public enterprises can become laboratories where labour-managed practices can be tested, workers trained in self-management, creating spillover effects that can drive the formations of worker cooperatives and other civil-society led businesses.

Social infiltration of the market space

And it is in the promotion of civil society-led enterprises where labour-managed activities can find traction. We must get out of the mindset that the public is only served by state intervention. The creation of community enterprises, labour-managed enterprises, and innovative hybrid models of small capital, public capital and labour-managed – all these represent opportunities for the social to enter the private and market space.

Economic democracy – whether reframing the enterprise or creating new enterprise relationships – can also help the trade union movement square a perennial circle. The Fabian Society, following up on an earlier survey by the TUC, found that employees want a number of things from the workplace: fair pay, certainty of hours, opportunities for advancement and promotion, chances to learn new skills, better work-life balance, reductions in the gender pay-gap and a say in how their work is organised. All of these point to the enterprise as a social space as referred to earlier.

The Fabian survey also indicated that employees want the trade union to protect them from problems that arise – that is, protect them from employers’ actions – while at the same time they want unions to work with employers. This may seem contradictory but it is not; it merely reflects the actual conditions of capital-privileged enterprises.

The enterprise may be the source of workers’ living standards but it is also a place of insecurity, stress and discrimination. Capital allows the former on its own terms and engages in the latter when it suits it, unless there is a counter-veiling collective force.

This dichotomy – working with and being protected from – can be reconfigured in the social space to labour’s advantage. But this requires us to champion that space for interests other than our own. For instance, it has been shown conclusively that collective bargaining leads to productivity gains. When management refuses workers’ collective rights, they are actually undermining enterprise performance and harming other interests or stakeholders in the firm.

Therefore, rewriting common sense requires unpicking alliances that currently oppose labour, finding the fault-lines that can pry apart those alliances, and to develop new – if ad hoc – links that can advance economic democracy.

Challenging the infantilisation of workers

So where do we start? It is very simple and extremely subversive: to challenge the infantalisation of people whether in the workplace and in civil society. We’ve seen this throughout history (‘you are not capable of reading and properly interpreting religious text’. We experience this today (‘you are not capable of understanding complex economic issues or sophisticated business strategies’).

A number of cultural tools are employed to maintain hierarchies in society and in our heads: the idealisation of the lone ‘entrepreneur’ and the assertion that hierarchy is the natural order of the enterprise. These need to be challenged.

This is exactly what both the trade union and cooperative movement do: challenge the sociology of infantilism. All of us promote the idea that people are the producers, capable of writing their own contracts, possessing – as the Webbs put it – intimate knowledge and expert proficiency of their craft, their workplace.

To promote people’s confidence that they can participate fully in the workplace is the very first condition of economic democracy. This is the common station where we both enter, the common ground, the alliance, the partnership. It’s a good starting point. So let’s start. It can only take us to better places.

Michael Taft is a SIPTU researcher and author of the political economy blog Notes on the Front. Follow him on Twitter @notesonthefront and on Facebook here.

This article is based on a speech Michael presented at the ‘Economic Democracy and Workers Cooperatives: the Case for Ireland’ seminar held on April 9 in Liberty Hall, Dublin.  

The paradox of plenty: Why we all need to worry about precarious work

By Marie Sherlock.

Looking from the outside in, the Irish economy is performing really well at the moment – on course to have the second-highest GDP growth across the European Union (EU) this year. Malta and Ireland have alternated positions at the top of the EU28 scoreboard for GDP growth for the past five years.

Yet ask any young worker on average earnings about their prospect of ever purchasing a home, particularly in Dublin, or a hard-pressed young couple trying to pay childcare and a mortgage or rent out of their combined average earnings and they will probably tell you they don’t feel they are doing particularly well at the moment.

Income distribution

This issue goes to the heart of how income is distributed in Ireland. It is measured in two ways: the first relates to how much workers can claim from the proceeds of output in terms of wages and taxes paid, relative to the owners of capital who elicit a return in the form of rents, dividends and interest paid on loans owing. This is the labour-capital share of output. The second relates to how evenly that labour and capital income is dispersed between various households.

Over the past 30 years, there has been a five-fold increase in GDP here in Ireland. Based on adjusted labour share data in the EU commission’s ameco database, we know that back in 1987 some 65.9% of national income was distributed to households. Thirty years on in 2017 that wage share has dropped to 37.1%; the lowest across the EU28.

Labour’s share of the pie is shrinking

So the overall pie has got bigger but the slice for households from employee’s income has got proportionately smaller. Importantly, within that slice, we know from ESRI work on long-run income growth and income distribution that all households are better off now compared to households across the income distribution three decades ago.

What stands out is that with the exception of the lowest 10 per cent of earners, all households saw their income more than double between 1987 and 2014. Trying to understand exactly how much higher-income households are better off becomes complicated when we factor in non-earned income. This is generated from rents, dividends and share options. For the top 10 per cent of earners, self-employment earnings and income from other sources account for some 15 per cent of overall income.

What has all of this got to do with precarious work? In short, developments within the world of work, within workplace technologies and an emerging global trend towards even larger corporates threatens to skew the balance between labour and capital further and to widen the divide within labour income.

Precarious work and automation exacerbate imbalance

Plain old-fashioned greed in the world of work remains, with many trade unions reporting the emergence of a more aggressive breed of employer. New technologies are transforming how firms produce through increased automation and the digitalisation of production and the emergence of digital platform companies are transforming how firms are organised. These technological advances plus government tax and enterprise policy are combining to ensure the growth of increasingly large firms.

We know that precarious work in Ireland is not new. My union SIPTU started off originally as the ITGWU and was formed over 100 years ago to organised casual labour on the docks in Dublin.

What is potentially new, though, is that the developments set out above will exacerbate the existing imbalance between workers and business and that this will have far-reaching implications for incomes, for future consumer demand and the sustainability of the public finances.

In its 2017 discussion paper on managing automation in a digital age, the Institute of Public Policy Reform (IPPR) in the UK note that the changes brought about by technology challenge some of our fundamental assumptions about how the world of work operates. In particular, they highlight concerns about how technology may alter “the role of employment as a primary means of distributing reward, labour’s position as a central factor of production, notions of scarcity and returns to scale and how we organise working time.” Many of these factors point to an increasing precariousness and insecurity of work.

Taking these concerns to their logical conclusion, the IPPR notes that automation and the control of many by a small number of robots may give rise to the “paradox of plenty.” In short, technological innovation may give rise to higher output but lower gain for workers and a widening inequality in the distribution of income between the owners of capital and workers. Not only would this have very serious implications for workers and their household income, their reduced purchasing power would also have a serious longer term impact on the wider macroeconomy.

US superstar giants concentrate resources further

Technology is not the only future driver of a global and national trend towards declining labour income. The rise of so called “super star” firms also plays a part in concentrating greater amounts of resources in fewer hands.

In its 2018 Economic Outlook, the OECD highlighted an increasing trend among companies in advanced countries who are oriented towards allocating an increasing share of profit towards their cash pile as opposed to sufficiently reinvesting in their business. At a time when returns from bank deposits are at historic lows and the returns on investment are very high, we would expect firm investment to be booming. Instead companies have opted to sit on large profit piles and not distribute the gains between the owners and workers.

When we look at the Irish situation, the experience of US multinational corporations (MNCs) stands out. The presence of US superstar firms has long been a feature in Ireland with global leaders in pharmaceuticals and technology located here. In his comparison of multinationals located here, John Fitzgerald highlights the extent to which US MNCs do not repatriate their cash.

US tax rules have meant for many years that US companies located abroad could “defer” repatriation of their profits and thereby put off paying US corporation tax. Ireland’s low corporate tax regime meant it was more attractive to “park” profits in Ireland. While changes were introduced to the US corporate tax code in 2017 to limit the amount of tax deferred, the new rate is hardly penal. The result for Ireland is that approximately 40 per cent of corporate tax revenues in this country comes from just 10 companies, the bulk of whom are US multinationals.

How are profits distributed via taxes and wages?

So where does that leave us? While Ireland’s public finances may enjoy the benefit of US multinationals paying significant corporate tax bills here, there is a wider and longer-term issue as to how profits are distributed via wages, how they are taxed and how they are reinvested back into companies. The macroeconomic impact of concentrating greater market power and greater resources in fewer hands means there is less to be redistributed to incomes, taxes and by extension, social spending.

Special tax deals for REITS worsen housing crisis

Or another way to think about it is to understand how real estate investment trusts (REITs) operate in Ireland and their impact on Irish tax revenues, housing supply and the precarious life of so many renters. In order to encourage investment into rental and commercial property in Ireland, the Irish state waives the corporate tax liability on the rental income generated by these trusts and it waives the capital gains tax on any property disposals provided such sales do not take place within the first three years of purchase.

The outcome? Much of the new or recently built housing supply, typically in the form apartment dwellings, has been purchased by REITs with the result that control over this type of housing supply is becoming concentrated in the hands of a few and with that, the ability to set rental prices. This is not good in terms of rental market competition and rental price, it elevates the insecurity of individual renters to a whole new level in that large swathes of renters could face a change in ownership and all that that brings, and it is not good for the public finances in that it deprives the exchequer of revenue that could be used to build additional much-needed housing.

Direct regulation of companies

So how should we respond? No one measure will ensure greater distribution of income to workers. But a series of actions can. There is a growing volume of research that has found that increased financialization of companies is a strong predictor for the decline in wage share within countries. So a strong case must be made for enhanced financial and prudential regulation of companies. As a start there needs to be greater transparency in the reporting obligations of unlimited companies.

In order to protect workers from precarious working conditions, we need to see stronger enforcement of existing labour rules so that they are worth the paper they are written on. And we need to have stronger welfare systems to mitigate the uncertain effect of flexible working conditions. We know from looking at the experience within the Nordic countries, that there is a high correlation between well designed, flexible welfare systems, lower than average wage dispersion and a higher than average wage share.

Collective bargaining rights

And finally, we need a strong legislative framework to support collective bargaining in this country. That involves the right to bargain and to be recognised for trade union negotiations. In Ireland at the moment, there is the right to benchmark wages against other workers doing similar work, provided certain criteria is met. That is not the same as the direct right to be recognised for trade union negotiations.

Again there is a growing volume of research that shows that higher union density and greater union coverage are associated with a higher wage share and lower income inequality respectively. In their review of studies on the income share, Guschanski and Onaran (2017) highlight that union density is the most robust or consistent variable exerting a positive impact on the labour share within a sector when compared with all other variables.

Union density is the proportion of workers in union membership within a workplace. And in terms of the distribution of income within that wage share, 2015 research by OECD economist Oliver Denk finds that top earners obtain a smaller share of the total wage income of an economy when a majority of all workers are covered by collective wage bargaining. He used data from Eurostat and the international trade union database ICTWSS to compare wages shares with collective bargaining coverage.

Technological advances and the increasing concentration of market power by companies in certain sectors means that the power balance between workers and employers remains greatly skewed. In that context, precarious and insecure work will remain part of the workplace landscape. Overcoming it requires stronger unions and more collective bargaining- something SIPTU is striving towards every day.

Marie Sherlock is Head of Policy & Equality in SIPTU. Follow her on Twitter @marie_sherlock.

Trade unionists can bring class politics to debate about united Ireland

By Ruairí Creaney.

Irish unity is on the agenda. Across Ireland, it is being discussed in the media, at dinner tables and workplaces on a daily basis. While the endless calamity of a Brexit led by hard-right Tories, and the possibility of a hard border being imposed on our country against our will, has ensured that the debate on Irish unity has largely centred on our membership of the European Union, there is much more at stake.

The debate has begun, but it has struggled to move beyond questions of national identity and what Irish unity would mean for businesses and trade. Little attention has been paid to what it would mean for the working people who make up the majority of this island.

To broaden this debate, a group of us in the Irish labour movement recently launched Trade Unionists for a New and United Ireland (TUNUI), an initiative aimed at shifting this debate to the left and at putting economic and social justice at the heart of the discussion, rather than just focusing on what it would mean for the business classes. We want to articulate a specifically trade union-led vision for Irish unity and why this issue is one that should be a concern of workers.

So far, we have secured the public support of 150 trade union officials and senior activists, including two veterans of the famous 1984 Dunnes Stores anti-Apartheid strike. To properly initiate the debate on constitutional change within the labour movement, we will be hosting a conference, entitled ‘Uniting Ireland – Uniting Workers’ in Dublin this summer. We are inviting trade unionists and progressive activists from across Ireland to attend this conference and take part in this historic and exciting debate.

Bringing class politics to this debate

The trade union movement is uniquely positioned to offer three important contributions to the discussion on reunification.

Firstly, TUNUI want to bring class politics into the debate. The partition of Ireland not only divided our country geographically; it divided the labour movement and it divided working people along sectarian lines in the North. This product of the counter-revolution benefited only the wealthy establishment on both sides of Britain’s border in Ireland.

The trade union movement represents the interests of the mass of working people who create society’s wealth as opposed to the wealthy minority who control it. We recognise that the interests of working people are in direct conflict with the bosses. When workers seek better pay, the bosses seek ‘efficiency savings’ in order to boost profits.

No such thing as a ‘national interest’

Consequently, we recognise that while class conflict exists, there can be no such thing as an Irish ‘national interest’, as if we all seek the same thing. Nations are made up of classes with competing economic interests. The economic interests of Michael O’Leary, for instance, are very different from those of the Ryanair baggage handler. The interests of the tax-dodging corporations and the lawyers and accountants who facilitate them are not the same as an overworked nurse or a primary school teacher.

An opportunity for a new beginning

Irish reunification will be a chance for our country to have a new beginning, and will present an opportunity for progressives to ensure that the mistakes of the last century are not repeated. Constitutional change will mean that we could steer our economy from serving the interests of multinational corporations and towards serving the needs of working people. That means ending the scandalous tax haven system in the south, establishing universal free health care and introducing proper trade union rights for every worker.

Throughout the debate on Irish unity, much of the focus of civic nationalism has understandably been placed on protecting the rights of Irish citizens in the North that are under threat as a result of Brexit.

Little focus, however, has been put on advancing the economic and material conditions of working people. The whole discussion up to now has been contained strictly within the realms of what Mark Fisher described as ‘capitalist realism’.

The ownership of industry and our natural resources is not up for debate. The imbalance of power between capital and labour will not change. The harsh rule of the market is seen as an inevitability. As with so much else in our neoliberal age, ‘there is no alternative’.
We seek to challenge this narrative. We want to ensure that constitutional change will lead to a massive social transformation that will improve the lives of working people.

More that unites than divides us

Secondly, the trade union movement is Ireland’s largest civic society organisation, encompassing people from every ethnic background. There is a colonial myth that working people in the North are bloodthirsty tribes that despise each other and are incapable of having a civilised debate about our collective future.

Furthermore, there is an insidious and snobbish narrative that unionist workers are afraid of having a debate about Irish unity. This is offensive, patronising and dismissive to an entire section of society and ultimately displays an underlying prejudice against working-class people.

Trade unionists have the ability to break down racial, ethnic and sectarian barriers and organise working people based on their class interests. We want to ensure that this debate moves beyond the issues of identity of ‘unionist’ and ‘nationalist’ and towards broader issues of who gets to own our natural resources and how the wealth of this country is distributed. We know that there is more that unites us than divides us, and class politics is how we achieve that unity.

Independent advocacy of working-class interests

Thirdly, and most importantly, we want to empower working people to advance their own rights. Some in civic nationalism have called on the Irish Tories of Fine Gael to protect the rights of nationalists in the North. Again, these rights have not included economic rights.

No mention has been made of the fact that Fine Gael has always opposed the basic right of workers to collectively bargain; that they are opposed to the right to housing; and actively undermine the public health system in order to promote the private for-profit health sector. Why would anyone seriously believe that these people are suited to protect the rights of people in the North when they are undermining basic rights in the south?

Organise for real change in trade unions

Rather than appealing to Tories like Leo Varadkar or the institutionally neoliberal European Union, the most effective way for working people to protect and advance their rights is by organising into strong trade unions and fighting for those rights. This is how we won the 8-hour working day, the weekend, paid annual leave and every other right many of us take for granted.

For those of us involved with Trade Unionists for a New and United Ireland, reunification is not about nationalism. It is about democracy and participation.

We are not nationalists; we are trade unionists, democrats, socialists and internationalists. The debate on Irish unity has already begun, and it is vital that trade unionists step up and articulate our vision for society.

If we fail to do so, we will abandon that ground to corporate interests and they will mould a new society in their interests. This would be a continuation of the tax haven status of Ireland, the crumbling public health system and mass homelessness. Trade unionists avoid this debate at our peril.

Ruairí Creaney is a spokesperson for Trade Unionists for a New and United Ireland. Follow him on Twitter @RuairiCreaney.

Image above : Trade Unionists for a New and United Ireland at their Linen Hall Library launch in February. Pictured from left are former Siptu division organiser Christy McQuillan, Debbie Coyle of Unison, Mick Halpenny of Siptu and spokesman Ruairí Creaney. Picture: Mal McCann.

The eurozone’s ‘soulless market’ and its thuggish enforcers

By Emma Clancy.

In his open letter to Europeans last month, French President Emmanuel Macron revealed that he feared Europe “has become a soulless market” in the eyes of its citizens. Twenty years after the introduction of the common currency, and more than a decade after the global financial crisis, the soulless market is in trouble – again.

The eurozone has experienced a period of anaemic GDP growth over the past five years, during which a peak of 2.4 per cent growth in 2017 – the highest in a decade, but a rate that pre-crisis would have been considered to be very low – was celebrated as heralding the final end of the crisis, and christened with the hashtag #euroboom.

After a dramatic fall in growth in 2018 in which growth slumped to 0.2 per cent in the third quarter, the European Central Bank (ECB) and the European Commission have both sharply revised downwards their growth projections for the eurozone in 2019. In its February Winter Forecast, the European Commission said it expects eurozone growth to slow from 1.9 per cent in 2018 to 1.3 per cent this year and 1.6 per cent next year.

The ECB followed in March with a gloomier quarterly forecast, projecting growth to slow to 1.1 per cent in 2019 and 1.6 per cent in 2020. This announcement was followed by several ECB policymakers anonymously briefing Bloomberg that they thought the projections were still too optimistic. Apparently abandoning all pretence of hope of achieving its target of “close to 2 per cent” inflation at any point in the near future, the ECB also cut its inflation projections to 1.4 per cent for this year, 1.5 per cent in 2020 and 1.6 per cent in 2021.

In Italy, growth was negative for two consecutive quarters in the second half of 2018, meaning the country has officially fallen into its third recession in a decade. The grim surprise came from the export-led manufacturing powerhouse of the eurozone: Germany avoided the recession label by the skin of its teeth, recording negative growth of -0.2 per cent in the third quarter and zero growth in the fourth. Data released last week showed that German industrial production and manufacturing orders and fell in February, with a survey this week reporting “both total new orders and export sales are now falling at rates not seen since the global financial crisis”.

Constitutional austerity

Addressing a bankers’ convention in Frankfurt in November, ECB President Mario Draghi outlined the weak and fragile nature of the eurozone’s recovery: “Since 1975 there have been five periods of rising GDP in the euro area. The average duration from trough to peak is 31 quarters, with GDP increasing by 21per cent over that period. The current expansion in the euro area, however, has lasted just 22 quarters and GDP is only around 10 per cent above the trough. In contrast, the expansion in the United States has lasted 37 quarters, and GDP has risen by 21 per cent.”

What can explain the brief period that saw eurozone growth reach the dizzying height of 2.4 per cent in 2017? In a word – a massive fiscal expansion. But the expansion did not take place in the eurozone; it was a result of the fiscal policies implemented in the US, Japan and China, in the latter two cases funded by their respective central banks. Such an expansion could not possibly take place in EU member states, which must stick to the absurd, arbitrary and stifling debt and deficit limits laid down as gospel in the Stability and Growth Pact (SGP) and Fiscal Compact.

The slow growth and grinding recovery in the eurozone can be partially explained by the post-crisis austerity shock treatment applied to the periphery by the Troika, but the architecture of the common currency has acted as a brake on sustainable growth and convergence since day one. The euro has been built on an enduring effort to constitutionalise austerity, an effort that continues today despite all of the evidence demonstrating that it causes economic contraction.

‘Purely ideological and economically unsound’

The Maastricht Treaty of 1992 enshrined the so-called ‘convergence criteria’ – a set of rules members and potential members of the common currency were obliged to follow. To join the euro, states had to pledge to control inflation, and government debt and deficits, and commit to exchange rate stability and the convergence of interest rates. As the ECB was preparing to begin operating to control inflation and interest rates, Germany pushed for the adoption of an EU-wide SGP in 1997, including non-eurozone members, to enshrine the fiscal control aspects of Maastricht, and more generally to increase EU surveillance and control over member states’ national budgets.

The convergence criteria are purely ideological and economically unsound. When a eurozone member state experienced a downturn, its deficit would inevitably rise as a result of lower tax revenue and higher expenditure on social security. But when the convergence criteria kicked in, causing governments to cut spending or raise taxes, it would invariably worsen the downturn by dampening demand. Even French neoliberal Pascal Lamy, formerly the Director-General of the World Trade Organisation, called the SGP “crude and medieval” when he was EU trade commissioner.

The blanket, one-size-fits-all fiscal rules in the criteria – that member states must keep public debt limited to 60 per cent of GDP and annual deficits to below 3 per cent of GDP – were proposed by Germany, based on its own national SGP structure. In 2010, Germany proposed the reform of the Pact to make it stricter and more enforceable through the adoption of the so-called ‘six-pack’ and ‘two-pack’. Despite the vast evidence by this stage that the SGP was counterproductive and unenforceable, Germany pushed for the fiscal rules to be tightened yet again in 2012 through the Fiscal Compact Treaty, which created the obligation for the convergence criteria targets to be inserted into the national law of the ratifying states.

Fiscal straitjacket

The Fiscal Compact Treaty, signed by all EU Member States with the exception of Britain, the Czech Republic and Croatia, enshrines the rule that members in excess of the limit are obliged to reduce their debt level above 60 per cent at an average of at least 5 per cent per year. The structural deficit rule – called the “balanced budget rule” – must be incorporated into the national law of signatory states under the Fiscal Compact.

Not satisfied with the Fiscal Compact being an intergovernmental treaty, the Commission proposed last year that it be permanently enshrined into EU law. The Commission wanted the Fiscal Compact’s automatic correction mechanism to be integrated into national budgetary processes so that deviations would immediately lead to a reduction in public expenditure.

On 27 November 2018, this proposal was rejected in a tied vote of the European Parliament’s Economic and Monetary Affairs Committee. Fortunately for the Commission, it had anticipated such a possibility and had made its proposal on a dubious legal basis that provides for a decision to be taken solely by the Council of member states, and under which the Parliament only has an ‘opinion’ – despite the fact that several EU laws on the same issues have been adopted using the normal process whereby the Parliament and Council are co-legislators.

Despite the opposition of the Parliament, the Fiscal Compact is likely to be enshrined into EU law permanently – with its automatic correction mechanism, designed to remove the power to make a political decision on spending from national governments and put it in the hands of technocrats, beyond the reach of politics.

Surveillance and enforcement

Since Maastricht, the Commission has taken every possible opportunity to impose structural reforms that will exert downward pressure on wages in the belief that this ‘flexibility’ will act to increase convergence of the eurozone’s diverse economies and absorb shocks. The eurozone elites believe (or claim to believe) that if only ‘wage rigidities’ in the member states were overcome, both unemployment and trade imbalances would disappear. If only a country’s population could be forced to work for poverty wages, there would be a job for everyone; and the resulting stagnation in domestic demand would mean prices would fall and this country’s real exchange rate, which had become misaligned and risen too high, could regain its balance.

This view underpins the repeated attacks on the rights and wages of French workers, which has intensified under President Macron, as well as underpinning the EU’s overall agenda and forcing structural reforms in the member states in order to increase productivity, competitiveness and profit. The austerity imposed by the Troika was not only designed to regain market ‘confidence’ in peripheral governments, but also to facilitate internal devaluations in member states by a form of shock therapy. Of course, this adjustment facilitates not only the reduction of trade imbalances but also a sharp increase in the amount of wealth transferred from labour to capital.

The European Semester process – a yearly cycle of policy coordination between member states and the Commission – monitors the ‘progress’ of member states in implementing structural reforms that will facilitate downward movement on wages. In spring each year, EU member states submit their plans for managing public finances, including keeping debt and deficits within the SGP limits, and their National Reform Programmes, to the Commission. These plans are then assessed by the Commission, which proposes country-specific recommendations to member states, that are discussed and adopted by the Council. Then each autumn member state governments are graciously permitted to present their draft national budgets to their respective parliaments.

The next step in the drive to constitutionalise austerity is to establish a European Monetary Fund (EMF) that would replace the existing bailout fund, the intergovernmental European Stability Mechanism (ESM). An EMF could provide emergency funding for member states in a crisis, in return for strict budgetary discipline and invasive surveillance and control.

Accompanying the drive to enshrine austerity in EU law is a relentless push by the Commission to impose ‘conditionality’ over every aspect of its relationships with member states. Just one example of this is that in the EU’s next long-term budget (the multi-annual framework) for 2021-2027, the Commission has proposed to divert €25 billion away from existing ‘cohesion’ funds towards implementing austerity measures in member states. This funding stream will be targeted towards ensuring member states implement structural reforms – such as the privatisation of public services, reduction of spending on pensions, and labour reform aimed at reducing workers’ collective bargaining power – instead of being used unconditionally for direct cohesion policy: to provide support to rural and coastal communities, and support for employment, research, education and the environment.

Winners and losers

It will come as little surprise that a system designed to promote the German model of wage suppression, low inflation and export-led growth, propped up by a currency modelled on the Deutschmark, has benefited one country more than all other members of the eurozone.

In February, a German ordoliberal think tank affiliated with the ruling Christian Democrats, the Centre for European Policy, published an empirical study of the “winners and losers” from the euro 20 years after its introduction. It found that Germany was the big winner, having benefited by €1.9 trillion from the euro between 1999 and 2017, or around €23,000 per person. The Netherlands was the only other state that gained substantial benefits from the common currency. France had lost €3.6 trillion or €56,000 per person; while Italy had lost more than any other state, at €4.3 trillion or €74,000 per person.

Germany’s massive and consistent trade surplus has meant that its biggest export to the rest of the eurozone has been stagnation. But as a result of European fiscal discipline in the wake of the recession, there is not enough internal demand in the eurozone to sustain German industry. Now that a global slowdown has taken hold, and growth is slowing in China due to US trade tariffs and a debt crisis, the dangers of this economic model are exposed. If China’s latest stimulus package fails to boost demand, the German economy will certainly enter recession.

Italy, the euro’s big loser, is there already. The Italian economy is one of just two in the OECD in which GDP has failed to return to pre-crisis levels; the other is Greece. The Italian governing coalition between the anti-establishment Five Star Movement and the far-right Lega Nord faced its first test of eurozone fiscal discipline last year through the European Semester process. When it presented its draft budget for 2019, including a 2.4 per cent deficit, the Commission rejected it and threatened to enact the ‘excessive deficit procedure’ under the SGP, which consists of deadlines to comply, followed by substantial fines.

Open bias

The proposed deficit did not even cross the SGP’s 3 per cent limit. But using dubious mathematics to measure the structural deficit – what the deficit would be if the economy was at full employment – described here by Thomas Fazi, the Commission argued that the Italian economy – in recession – would be at risk of overheating if a fiscal deficit of 2.4 per cent was reached.

Instead of being technocratic, the budgetary surveillance and enforcement process is overtly political. When Macron’s government announced €10 billion in additional spending in December to defuse the gilets jaunes protests, taking France’s projected deficit for 2019 up to 3.4 per cent, EU economic commissioner Pierre Moscovici gave the thumbs-up.

“The comparison with Italy is tempting but wrong,” he said. “The situations are totally different. The European Commission has been monitoring the Italian debt for several years; we have never done that for France.” This is despite the fact that it was only in 2017 that France emerged from a long period with a deficit breaching the SGP rules.

A French treasury official agreed with Moscovici: “The situations are not comparable. Contrary to Italy, we do not question European rules. We agree that having public finances in order and reducing public debt are the right thing to do.”

Thuggishness dressed up as technocracy

The Commission is not the only enforcer policing the public spending of EU member states. The ECB has played an even more important role, throughout the crisis and in the latest clash with Italy. Its role during the crisis as part of the Troika enforcing austerity shock therapy under the bailout programmes is well known; its role in manufacturing the sovereign debt crisis between 2009-2012 as a means to force governments to capitulate on their budgetary plans, less so.

Adam Tooze refers to the ‘bond market vigilantes’ behind the massive capital flight from the periphery to the core during this period, and adds: “The role of bond markets in relation to the ECB and the dominant German government was less that of a freewheeling vigilante, than of state-sanctioned paramilitaries delivering a punishment beating whilst the police looked on.”

In May last year, during the political and market crisis in Italy arising from the temporary collapse of the coalition after the effort to appoint a eurosceptic finance minister by Five Star, EU budget commissioner Günther Oettinger openly hoped that the market turmoil “could be so drastic that this could be a possible signal to voters not to choose populists from left and right”.

The ECB’s new role, self-proclaimed in 2012, in the context of a mass sell-off of government bonds of a member of the eurozone – the situation that caused the sovereign debt crisis in 2010-2011 – is to support the state’s economy though purchasing the bonds though its quantitative easing (QE) programme. But instead of buying more Italian government bonds during this crisis in May last year, the ECB was buying less, and diverting its investment to German bonds instead.

In October the ECB announced it planned to change the ‘capital key’ it used in its €2.5 trillion QE programme from January this year. Though the ECB announced it would stop buying government bonds from the end of 2018, it is not the end of QE. The ECB is continuing to reinvest the maturing debt it holds – an estimated €117 billion in the first nine months of 2019 – back into eurozone government bonds. How much it spends, and where, is determined by the capital key.

The adjustment to the capital key will reduce the shares of 12 member states including Italy, Spain and Greece, while increasing the shares of 16, including Germany, France and Austria. One economist estimates that the change will result in about €28 billion less in reinvestment in Italian bonds, and €19 billion less in Spanish bonds than would have been the case if the change had not been made. Like the Commission’s bizarre calculation of the structural deficit as potentially causing runaway inflation in Italy’s clearly stagnating economy, the ECB’s capital key adjustment is another example of politicised thuggishness dressed up as ‘technocracy’.

Italy approaches the cliff-edge

This long stagnation caused by the SGP rules, Italy’s inability to recover economic activity to pre-crisis levels, double-digit unemployment and still massive youth unemployment have created the conditions for the election of the racist Lega Nord and the anti-establishment Five Star Movement. Following the Commission’s budgetary clash with Rome, support for Five Star has been strongly overtaken by support for the Lega. The actions of Commission and the ECB have directly contributed to the ongoing rise of the far right in Italy. It is no mystery if Italians, and Europeans, see Europe as a “soulless market”.

The threat of an economic collapse in Italy, precipitated by an inter-related banking and sovereign debt crisis, remains very real. It is exacerbated daily by the Commission and ECB. The Italian government needs to issue around €400 billion a year in public debt in order to stay afloat, which domestic banks are pushed into buying. This means Italy’s shaky bond market is highly exposed to its vulnerable banking sector, and vice versa. Banks in other EU states hold more than €425 billion euros of sovereign and private Italian debt. French banks are most exposed, holding €285 billion of this.

None of the much-touted reforms put in place in the EU after the crisis will rein in the bond market vigilantes; free movement of capital is sacrosanct. The proposal to end the ‘too-big-to-fail’ problem in Europe’s banks by structurally separating the commercial and investment activists of the banks – the so-called Bank Structural Reform – was officially withdrawn in 2017 after conservatives blocked its progress in the European Parliament and Council.

It is little wonder that there are winners and losers in the eurozone when the game is rigged and the referee is openly biased. Fears of economic collapse in Italy that peaked in May last year receded later in the year. But the country’s recession, combined with the broader global slowdown and a high likelihood of a eurozone-wide recession in the near future will push Italy closer to the cliff-edge. The deficit fetishism of the ECB and the Commission may push them off.

Emma Clancy is an economics advisor for the European United Left/Nordic Green Left group in the European Parliament, and editor of Irish Broad Left.

A shorter version of this article first appeared on the ICTU Trademark/Rosa Luxemburg Foundation blog, Brexit, Europe and the Left, on 12 April 2019.