Thursday, August 20, 2009

Should the Irish banks be nationalised?

Many economic commentators call for the nationalization of Irish banks.
They claim that it will reduce costs to the state. It is suggested by some
commentators such as SIPTU's Manus O Riordan and Brian Lucey that Fianna
Fail's policy concerning the refusal to nationalise is ideologically driven.
This cannot be true especially given its history of past nationalisations
and its generally populist character. They miss a sigificant political
point. It is the Fianna Fail party's intention to maximise protection to the
developers and their allies, the Irish banks. This Fianna Fail hopes to
achieve by buying toxic assets at a higher price than is necessary. In this
way revenue will have been transferred from one section of the capitalist to
another --to the bankers and developers. The acute nature of the Irish
Republic's economic crisis is exposing the degree to which the existence of
the Fianna Fail party depended on the financial support of Irish property
developers. Fianna Fail cannot turn on the developers. To do so would be to
turn on itself. This, in a sense, is the basis for the Irish property bubble
and the Fianna Fail government's procrastination wirth regard to its

It must be also remembered that not all Irish developers are going to
ultimately suffer from the property market collapse. Many of the weaker
property developers will be squeezed out to the advantage of the stronger
capitalist developers. In this way they can increase their profits. Indeed
the present depression is all about the need to squeeze weaker capitalists
out of the system to the advantage of bigger ones. If there is not a social
revolution then there will be a consolidation of finance capital at the
expense of weaker capitalists and the working class.

If there is not a global revolution the working class are in for a hard
time. This is why I have written that things, in the wake of the current
depression, are never going to be the same again. The working class, to
defend its class interests, must strengthen itself organisationally and
politically against the consolidation of capitalism. The worker is going to
be made pay for the billions that Washington, London, Paris etc., have
recently injected into the financial sector to help slow down and arrest the
downturn. But this massive unprecedented injection of funds into the system
is merely going to create a new "bubble" that leads to a new collapse.
Capitalism is afraid to let the depression go its full course to thereby
cleanse the system because of the potential threat from the working class.
Indeed capitalism has become so contradictory that even a very deep downturn
may not save it from deep stagnation. The cyclical downturn is now no longer
sufficient as it would have been in the 19th century. Now capitalism needs
cyclical inter-imperialist wars.

Paddy Hackett