Below are some written comments of mine on a piece published on the SWP.ie website. It is called, Reply to Vincent Browne attack on left. It was published on 8th May 2011. Its position is so crassly reactionary that I felt obliged to promptly draft a hasty response to it.10 May 2011
SWP: The Left has no difficulty with the latter point and indeed goes further. In common with Vincent Browne, we favour higher rates of taxes on incomes over €80,000 as a means of re-distribution. More broadly, we favour progressive taxes rather than regressive indirect taxes which hit the poor disproportionately.
Hackett: "...hit the poor disproportionately." The Socialist Workers Party call themselves marxist (at least they did in the past) and yet ironically they support progressive taxation. Even progressive taxation adversely hits the working class. The poor! The SWP dont even pretend to seriously represent the interests of the working class anymore. Like Father Mc Verygood they represent the interests of the poor. Perhaps the SWP dont understand that sections of the working class can be quite cultured and affluent. Workers dont just live in Ballyfermot. They can live in Foxrock and Templelogue too.
SWP: But why focus solely on income? Why not get to the root of the problem of inequality by also taxing wealth and capital? And why focus just on Irish incomes rather than on wealth generated in Ireland?
Take a simple paradox. In 2008, at the start of the crisis the shortfall in government spending was €11.5 billion. But after three years of ‘deficit reduction’ it has actually increased to more than €18 billion. Why should this be so?
Hackett: The state deficit is caused by falling profitability and not by falls in spending. Spending is, in a sense, a function of profitability. The greater the profit the greater the spending. Spending on capital and consumer goods. The reason for the recent dramatic deficits in the Irish Republic is because of falling profitability which is reflected in falling spending.
SWP: First, ironically, government cuts. The more the government cuts its spending, the less money there is to go around and so there is less work and less taxes raised. If, for example, you cut the wages of public sector workers, fewer people will use barbers or restaurants and so are fewer people employed in these outlets. The problem for ‘deficit hawks’, therefore, is that instead of solving the capitalist crisis, they often make it worse.
Hackett: The question of government spending cuts is not an independent variable. State spending is again a product of profitability. The greater is total profit the more the capitalist state can spend. As profit falls state spending is objectively constrained. The Irish government cut spending and increased taxation because of falling profits. Had the Irish state continued to spend and tax at the levels that existed before the economic collapse the deficit would have grown even greater bringing the Irish economy into an even worse situation. Reduced state spending and increased taxation, at most, leads to a redistribution of profit. It does not necessarily bring about a fall in the amount of money spent. It merely brings about a change in the way that money is spent. If the economy is shrinking as a function of falling profitability then it is necessary for the capitalist state to correspondingly cut back on unproductive spending in order to seek to slow down the falling rate of profit. Marx made this point very clear in his work on the law of the tendency of the rate of profit to fall. By slowing the rate at which profit falls then a corresponding fall in capital investment tends to take place. In that way the rate of falling unemployment tends to be slowed down somewhat.
Neither can a government (much less a governement representing a minuscule economy such as the economy of the Irish Republic) simply increase spending at will to supposedly prevent an economic depression. To do so just results in galloping inflation. But the Irish government could not even do that because it no longer even owns its own currency. We are forced to use a foreign currency called the Euro. The SWP and the Socialist Party rant on about the launching of public works as forming a key ingredient in the national solution to the economic crisis. However significant public works require large quantities capital. Given that the Irish economy has been suffering from steadily falling profitability there does not exist the profit necessary to provide the necessary capital for such works. Taxing Irish and foreign capitalists to pay for such public investment merely reduces their already falling profits --the fountainhead of the economic crisis. So calling for major public works, even a la Trotsky, makes no sense.
SWP: Third, and this is the crucial point, Ireland is currently experiencing an investment strike by the Irish capitalist class. Capital is the life blood of the current economy and its flow is driven by a desire for profit. When owners of capital decide not to invest, the whole economy seizes up.
Hackett: To claim that there is "an investment strike" inflicting the Irish economy is to misunderstand the very nature of capitalism. Capitalists can only exist by the expansion of capital through the productive investment of its profit as capital. This is the dynamic underlying capitalist investment. It is this dialectical dynamic that drives the capitalist economic system. Now capitalism cannot, even if it wants to, subjectively refuse to invest in industrial capital. To do that is to undermine its very existence.
There is no evidence to support the absurd SWP claim that the Irish capitalist class is gone on strike. Irish capitalism has nothing to gain by such egregious behaviour. Many substantial Irish capitalists, are going to the wall because of the absence of capital investment in Ireland. And there will probably be more such collisions. It makes no sense to suggest that prominent capitalists, some of whom are celeb business people, would deliberately commit commercial suicide. If capitalists are not investing in the Irish economy to the degree that they were it is because of the unavoidable diminution in profit available in Ireland. To maintain and even increase their capital they are compelled to instead invest in China or wherever. They will send their capital anywhere that currently returns a profit under relatively secure conditions. These conditions dont exist, as they did, in Ireland. Fugitive capital will only tend to return to the Irish Republic as indigenous profitability conditions show improvement. In other words when the Irish economic system hits bottom and can then take off then investment will begin to recover. Whether that actually happens in the forseeable future in another matter.
SWP: Some capital has been wiped out in the crash – but not all of it. Figures from the Central Statistics Office indicate that private savings for 2009 amount to €37 billion. (This figure is based on gross saving minus the public sector deficit) ‘Savings’, however, is not simply composed of the extra money PAYE workers have in bank accounts – mainly it includes the additional income accruing to the rich. In addition, there has been a huge capital flight. In 2010, €100 billion was withdrawn from Irish banks and 73% of those withdrawals came from corporations.
So the rich have plenty of money – but they have chosen to stage an investment strike. Their aim is to re-configure Ireland as a low-wage tax haven and only AFTER that has occurred, might they re-start the engine of capitalist accumulation.
Hackett: The above SWP conspiracy theory is so obviously naive and threadbare. If the Irish capitalist class was staging an investment strike then why would it stage one now? Why would it stage one at a time when the economy was said to have been undergoing unprecedented expansion? The motive for an investment strike makes little sense since capitalism generally seeks to perenially keep the price of labour power down so that it can sustain maximum profit. Why would a low wage economy be something capitalism would seek for Ireland now than say at other times? Marx has shown in his work, Capital, that the accelerated accumulation of capital is not the result of subjective factors such as the decisions of the capitalist class. It is an objective process driven by the prevailing objective conditions --profit conditions. The accumulation process is independent of the intentions of the Irish capitalist class.
SWP: Irish society will not be going back to a Celtic Tiger-style normality because the economic model of development based on low corporation taxes and de-regulation has run its course. We shall either live in a society that is permanently ravaged by emigration and poverty – or we can re-organise the economy on socialist lines where control over accumulated resources is in the hands of the majority and subject to the needs of society as a whole.
Hackett: The above piece contradicts Kieran Allen's claim, a leading figure in the SWP, that there has been a "corporate takeover of Ireland". In his book The Corpoate Takeover of Ireland he claims that "the corporations also wants a state that reduces overall taxation." In his book he never, as I understand it, argued that the then "economic model of development based on low corporation taxes and de-regulation had run its course." In fact he seemed to be suggesting the very opposite. If "the Irish capitalist class" have mounted an investment strike in Ireland, as the SWP claim, while multinational corporate investment appear to be faring relatively well in Ireland then surely there is a conflict between indigenous capital and global corporations from abroad. This apparent dichotomy between the two forms of capital must mean that there has been no "corporate takeover of Ireland" with the help of Irish foreign policy and the indigenous bourgeoisie or certainly significant sections of it?
SWP: However, the Left advocates a more radical approach. It is to get to the root of the issue by increasingly taking control over capital and depriving the wealthy of their ability to sabotage the economy.
Hackett: To call for the need "to increasingly take control over capital" amounts to no better than an oxymoron. Capital by its very nature denotes the absence of popular control. It is a reified social relation of production. By virtue of that very fact, expounded by Marx, it is not possible to exert popular support over capital. However I take it that by increasingly taking control over capital the SWP are advocating, in a disguised way, some version of reformism. Nowhere in the world has capitalism been reformed out of existence. Nor can it be. The SWP apparently claims to be Marxist, indeed a Trotskyist organisation, yet it has been stridently and publicly espousing reformist politics. For it a nationalist capitalist solution, and not world social revolution, is the answer.
Its leadership has been publicly espousing a national solution to the Irish economic crisis. A minuscule capitalist economy, such as is the Irish one, certainly cannot realise a reformist programme. An Irish workers' republic in which the wealth is owned and controlled by the state or even by "the people" would be crushed in no time by ambient imperialism. The solution to the economic crisis afflicting Ireland is only possible on the basis of a European revolution spreading out from core countries such as France, Germany or Britain. Given the international character of capitalism the solution has to be international --world revolution.
The SWP and the Socialist Party publicly maintain that there is an Irish solution to Irish economic crises. These false pronouncements are nothing but attempts to fool and mislead the working class. The probable outcome of parties such as the SP and the SWP gaining significant influence over the working class is significant sustained deep-seated economic and political instability involving enormous popular pain and suffering. However there is also, on the other hand, the distinct liklihood that parties, such as the SP and SWP, will instead opportunistically capitulate to capitalism a la Rabbitte and de Rossa should their electoral strength grow. This is on the assumption that a revolutionary communist movement fails to emerge and grow into a competing force culminating in social revolution. Communism means European and world social revolution together with the elimination of the state in all its diverse oppresssive forms.
And yes, then, in a perverse way, I do think Vincent Browne has a point. In the short term there is no way out other than, more or less, what is being officially advocated by the establishment i.e. outside of revolution. At present neither Ireland nor Western Europe have the popular culture nor organised forms to develop social revolution into communism. In the absence of these conditions Europe can secure no other than the model of a chaotic present day Iraq on a European scale --nihilism. This is why the building of a communist movement is such a necessity.
Ah sure I think I'll read McCarthy's novel 'The Road' again!
Showing posts with label The Irish Economy. Show all posts
Showing posts with label The Irish Economy. Show all posts
Wednesday, May 11, 2011
Thursday, August 20, 2009
David McWilliams and Money
Sunday, 9 December 2007
David McWilliams and Money
by Paddy Hackett
David McWilliams: Far from committing too much money to public projects, (as
much of the typically predictable commentary suggested this morning), he
didn't commit enough. He told us he was going to be ambitious, but he
bottled it (against his political instincts).
Yesterday was the day to tell the cautious mandarins of the Department of
Finance where to go. It was time to borrow heavily. This is particularly
logical given his view that the housing recession will not spill over into
the real economy in any worrying way. If that is the case, than now is the
best time to borrow to fund desperately needed new infrastructure...
Paddy Hackett: David has repeatedly made claims that the national economy of
the Irish Republic will suffer a hard landing yet he appears to be ironically
claiming in this current piece of his that the choices made by the Minister for
Finance can make a difference to the future state of the economy --hard or
soft landing.
It is questionable as to whether the Government should have taken up the
slack, as David would have it, by borrowing money on a significantly larger
scale to pour into the economy for capital projects. At the moment it is not
clear as to what the condition of the world economy is. Furthermore even if
this were clear the world economy (including here the Irish economy) may not
have progressed along its cycle sufficiently to render appropriate a very
large injection of funds into the national economy. Timing is of the utmost
importance here. If the economic downturn is far from bottoming out then a
mega injection of capital may not create the conditions for recovery. Then
too there are the constraints that the European Commission may impose
on the small Irish economy.
Generally it is just not clear as to what is the current condition of the
world economy particularly its more powerful components (the US). How then
can it be said what kind of interventionism is appropriate by the Irish
state? Given the uncertainities prevailing the present budget was probably
the best action the Irish bourgeois state could take as a means of coping
with the current economic contraction.
If it was a matter of throwing copious volumes of money at the problem of
economic downturns, recessions and depressions then it would follow
that they need never, in effect, exist anywhere in the capitalist world. But
this cannot be since the nature of economic downturn has a deeper and
more complex cause located in the contradictory nature of the valorisation
process of capital itself.
Overall the coalition government has probably done, budgetwise, as best
a job as they could concerning the immediate present in expressing the
interests of the capitalist class and capitalism itself.
Paddy Hackett
David McWilliams and Money
by Paddy Hackett
David McWilliams: Far from committing too much money to public projects, (as
much of the typically predictable commentary suggested this morning), he
didn't commit enough. He told us he was going to be ambitious, but he
bottled it (against his political instincts).
Yesterday was the day to tell the cautious mandarins of the Department of
Finance where to go. It was time to borrow heavily. This is particularly
logical given his view that the housing recession will not spill over into
the real economy in any worrying way. If that is the case, than now is the
best time to borrow to fund desperately needed new infrastructure...
Paddy Hackett: David has repeatedly made claims that the national economy of
the Irish Republic will suffer a hard landing yet he appears to be ironically
claiming in this current piece of his that the choices made by the Minister for
Finance can make a difference to the future state of the economy --hard or
soft landing.
It is questionable as to whether the Government should have taken up the
slack, as David would have it, by borrowing money on a significantly larger
scale to pour into the economy for capital projects. At the moment it is not
clear as to what the condition of the world economy is. Furthermore even if
this were clear the world economy (including here the Irish economy) may not
have progressed along its cycle sufficiently to render appropriate a very
large injection of funds into the national economy. Timing is of the utmost
importance here. If the economic downturn is far from bottoming out then a
mega injection of capital may not create the conditions for recovery. Then
too there are the constraints that the European Commission may impose
on the small Irish economy.
Generally it is just not clear as to what is the current condition of the
world economy particularly its more powerful components (the US). How then
can it be said what kind of interventionism is appropriate by the Irish
state? Given the uncertainities prevailing the present budget was probably
the best action the Irish bourgeois state could take as a means of coping
with the current economic contraction.
If it was a matter of throwing copious volumes of money at the problem of
economic downturns, recessions and depressions then it would follow
that they need never, in effect, exist anywhere in the capitalist world. But
this cannot be since the nature of economic downturn has a deeper and
more complex cause located in the contradictory nature of the valorisation
process of capital itself.
Overall the coalition government has probably done, budgetwise, as best
a job as they could concerning the immediate present in expressing the
interests of the capitalist class and capitalism itself.
Paddy Hackett
Wednesday, March 25, 2009
Ireland and Economic Depression
Ireland and Economic Depression
Paddy Hackett
The world capitalist economy has plunged into a sustained economic depression. The signs are that this depression shall be deep and prolonged. The principal way by which capitalism can come out of the depression is by reducing both the living standards and employment conditions of the working class. The only other solution is social revolution involving the seizure of power by the working class from the capitalist class necessitating the establishment of a world communist federation. Because of the peculiarities of the Irish situation: booms powered by bubbles and a Fianna Fail dominated government that instead of storing up its surplus revenue, in anticipation of future contingencies, largely squandered it. These funds were largely used to bribe the electorate into voting the Fianna Fail party back into power. It was also used to support its capitalist friends such as Irish property developers and bankers.
Since the outset of the depression the same Irish government has been engaged in a sustained attack on the working class. It endeavours to achieve this by splitting the working class --pitting worker against worker. By maximising the fragmentation of the working class it is rendered more vulnerable to a crushing defeat. Immigrant workers are split from indigenous workers; public workers from private workers; female workers from male workers; unskilled workers from skilled workers etc. In its current attack the government has singled out the public sector workers. To achieve a cutback in the income of these workers it has actively led a sustained campaign against them entailing the polarisation of pubic and private worker. This is the basis from which it has imposed a substantial pension levy on the public worker. Success here will render it easier for the state to reinforce this cutback with follow up cutbacks in the incomes of the entire working class. Its declared intention of widening and further increasing income tax within the next month is irrefutable evidence of this. The government also hopes to continue the reorganisation of the public sector work force. "An Bord Snip" with its mandate to focus on slashing employee numbers and spending within the public service forms part of this plan. The consequent reorganisation and diminution of the public service will lead to a weaker and harder pressed workforce. It is hoped to ultimately reduce the public service worker more or less to the same condition as that of the average factory or shop worker. Then capitalism will have a cheaper and more docile workforce. The European bourgeoisie is watching this conflict with keen interest. Cowan will be Europe’s new hero should he succeed in defeating the public sector workers and indeed the working class in Ireland as a whole. His success may provide them with encouragement to attempt to impose similar conditions on their own public sector. The present struggle in Ireland is not just a local matter. It also has a European dimension that may influence events in the European Union.
In view of this it is imperative that the working class meet this capitalist onslaught, led by its state, with stiff resistance and the correct politics. Working class action must involve strikes culminating in the general strike together with the setting up of workers' councils for the organisation and administration of economic, social and political life. In the struggle the conservative unions must be replaced by communist unions. In connection with this communists must struggle to set up workplace committees as a means of organising against the bosses and the leadership of the conservative trade unions. In solidarity with the working class in Ireland the European working class must strenuously resist their own ruling class too in the struggle for power.
The government has been actively encouraging the mass immigration of workers into the Irish Republic on an unprecedented scale. This is but a further way of promoting more division within the working class. Immigration is a social engineering device intended to drive down the price of labour power through competition. It is also intended to hinder the prospects of the working class in Ireland evolving into a unified revolutionary class force. The working class based in Ireland must overcome this division by endeavouring to create unity among migrant and indigenous sections of the working class in Ireland on a principled revolutionary basis.
None of the political elements represented in the Oireachtas can offer a solution other than essentially the same solution as that of the Fianna Fail Party. They are each bourgeois in character including the Labour Party, the Green Party and Sinn Fein. They simply attempt to dress the same solution up in different clothes. They all actively support a solution to the capitalist crisis at the expense of the working class. The leader of the Labour Party, Eamon Gilmore, has expressed his opposition to strike action and does not reject a pension levy in principle. Neither is he, in principle, against increased taxation being imposed on the working class. He merely calls for “fairness” in taxation. The Labour Party and Fine Gael claim that cutbacks in the living standards of the working class are necessary and correct. Their difficulty with Fianna Fail is their alleged lack of fairness together with the unscrupulous way in which they are imposed. The opposition of Fine Gael and Labour hinges on matters of ethics. Fine Gael and Labour like to present themselves as corruption free in contrast to Fianna Fail. They oppose the form as opposed to the substance of Fianna Fail's politics. They thereby present a false opposition since ethically there can be no essential difference between the parties. If Fine Gael and Labour were in power as much as Fianna Fail they would exude just as strong a smell as the latter. Again this is a rather derivative difference of no real significance. In effect the main party in power and the opposition are similar. Consequently the Dail opposition concentrates its opposition largely around matters of corruption, ethics and competence. These constitute matters of secondary importance that obstruct the healthy development of class politics.
The voluntary reduction of salaries of high profile figures from the business and media world is merely a ploy designed to exert further pressure on the working class to accept living standards.
The growing army of the unemployed means that the production of surplus value, total profits, has diminished. This means that fewer resources exist from which to pay for state expenditure. This forces the state to cut spending, increase taxes and borrowing. Borrowing is a form of future taxation with a difference. Interest must be paid which amounts to an addition to future taxation. This constitutes a further deduction from total profits which further adversely affects investment conditions. This tends to bring about a downwards spiral. Consequently the Irish economy is forced to further contract in order to reproduce the conditions for recovery. Spending cuts, taxation and borrowing must be further increased.
The present depression is a result of the bourgeoisie's refusal to let the economic system follow its "natural" cyclical downswing whereby capitalism cleanses itself of less profitable forms of capital. This leads to a restoration of profitability and greater sustained economic activity. Instead the capitalist class through the medium of its state modified the downswings through counter-cyclical interventionist activity. The ruling class fear a generalised depression because its destabilising consequences may lead to revolution. In general the more the cyclical behaviour of capitalism is modified and prevented from completing its "natural" cycle the greater, more intense the crisis. The evidence suggests that the capitalist social system has plunged into depression. No amount of state intervention can prevent it from assuming an acute form this time round. We have now entered a new historical epoch. Politics can never be the same again. Under these new conditions of sustained and deep stagnation the class struggle sharpens. Consequently capitalism's obsolescent character becomes increasingly visible and thereby the need to abolish it.
At present the leadership of the working class (trade union and political leadership) has been offering solutions intended to rescue capitalism from its demise. Capitalism can only be rescued at the expense of the working class. There exist no significant political forces advocating a solution necessitating the transcendence of capitalism. Communists must endeavour to create a communist current within the working class. This can begin by organising circles of communist intellectuals. Such a communist intelligentsia conducts an intellectual struggle to propagate communist doctrine. As this intelligentsia develops and spreads its influence it has the basis for linking into the more advanced sections of the working class to form a communist strand within the working class. This is the basis on which a revolutionary communist movement can be built.
Under the present critical conditions a communist movement would draw up an action plan as the basis for struggle against this sustained attack on the working class.
Paddy Hackett
The world capitalist economy has plunged into a sustained economic depression. The signs are that this depression shall be deep and prolonged. The principal way by which capitalism can come out of the depression is by reducing both the living standards and employment conditions of the working class. The only other solution is social revolution involving the seizure of power by the working class from the capitalist class necessitating the establishment of a world communist federation. Because of the peculiarities of the Irish situation: booms powered by bubbles and a Fianna Fail dominated government that instead of storing up its surplus revenue, in anticipation of future contingencies, largely squandered it. These funds were largely used to bribe the electorate into voting the Fianna Fail party back into power. It was also used to support its capitalist friends such as Irish property developers and bankers.
Since the outset of the depression the same Irish government has been engaged in a sustained attack on the working class. It endeavours to achieve this by splitting the working class --pitting worker against worker. By maximising the fragmentation of the working class it is rendered more vulnerable to a crushing defeat. Immigrant workers are split from indigenous workers; public workers from private workers; female workers from male workers; unskilled workers from skilled workers etc. In its current attack the government has singled out the public sector workers. To achieve a cutback in the income of these workers it has actively led a sustained campaign against them entailing the polarisation of pubic and private worker. This is the basis from which it has imposed a substantial pension levy on the public worker. Success here will render it easier for the state to reinforce this cutback with follow up cutbacks in the incomes of the entire working class. Its declared intention of widening and further increasing income tax within the next month is irrefutable evidence of this. The government also hopes to continue the reorganisation of the public sector work force. "An Bord Snip" with its mandate to focus on slashing employee numbers and spending within the public service forms part of this plan. The consequent reorganisation and diminution of the public service will lead to a weaker and harder pressed workforce. It is hoped to ultimately reduce the public service worker more or less to the same condition as that of the average factory or shop worker. Then capitalism will have a cheaper and more docile workforce. The European bourgeoisie is watching this conflict with keen interest. Cowan will be Europe’s new hero should he succeed in defeating the public sector workers and indeed the working class in Ireland as a whole. His success may provide them with encouragement to attempt to impose similar conditions on their own public sector. The present struggle in Ireland is not just a local matter. It also has a European dimension that may influence events in the European Union.
In view of this it is imperative that the working class meet this capitalist onslaught, led by its state, with stiff resistance and the correct politics. Working class action must involve strikes culminating in the general strike together with the setting up of workers' councils for the organisation and administration of economic, social and political life. In the struggle the conservative unions must be replaced by communist unions. In connection with this communists must struggle to set up workplace committees as a means of organising against the bosses and the leadership of the conservative trade unions. In solidarity with the working class in Ireland the European working class must strenuously resist their own ruling class too in the struggle for power.
The government has been actively encouraging the mass immigration of workers into the Irish Republic on an unprecedented scale. This is but a further way of promoting more division within the working class. Immigration is a social engineering device intended to drive down the price of labour power through competition. It is also intended to hinder the prospects of the working class in Ireland evolving into a unified revolutionary class force. The working class based in Ireland must overcome this division by endeavouring to create unity among migrant and indigenous sections of the working class in Ireland on a principled revolutionary basis.
None of the political elements represented in the Oireachtas can offer a solution other than essentially the same solution as that of the Fianna Fail Party. They are each bourgeois in character including the Labour Party, the Green Party and Sinn Fein. They simply attempt to dress the same solution up in different clothes. They all actively support a solution to the capitalist crisis at the expense of the working class. The leader of the Labour Party, Eamon Gilmore, has expressed his opposition to strike action and does not reject a pension levy in principle. Neither is he, in principle, against increased taxation being imposed on the working class. He merely calls for “fairness” in taxation. The Labour Party and Fine Gael claim that cutbacks in the living standards of the working class are necessary and correct. Their difficulty with Fianna Fail is their alleged lack of fairness together with the unscrupulous way in which they are imposed. The opposition of Fine Gael and Labour hinges on matters of ethics. Fine Gael and Labour like to present themselves as corruption free in contrast to Fianna Fail. They oppose the form as opposed to the substance of Fianna Fail's politics. They thereby present a false opposition since ethically there can be no essential difference between the parties. If Fine Gael and Labour were in power as much as Fianna Fail they would exude just as strong a smell as the latter. Again this is a rather derivative difference of no real significance. In effect the main party in power and the opposition are similar. Consequently the Dail opposition concentrates its opposition largely around matters of corruption, ethics and competence. These constitute matters of secondary importance that obstruct the healthy development of class politics.
The voluntary reduction of salaries of high profile figures from the business and media world is merely a ploy designed to exert further pressure on the working class to accept living standards.
The growing army of the unemployed means that the production of surplus value, total profits, has diminished. This means that fewer resources exist from which to pay for state expenditure. This forces the state to cut spending, increase taxes and borrowing. Borrowing is a form of future taxation with a difference. Interest must be paid which amounts to an addition to future taxation. This constitutes a further deduction from total profits which further adversely affects investment conditions. This tends to bring about a downwards spiral. Consequently the Irish economy is forced to further contract in order to reproduce the conditions for recovery. Spending cuts, taxation and borrowing must be further increased.
The present depression is a result of the bourgeoisie's refusal to let the economic system follow its "natural" cyclical downswing whereby capitalism cleanses itself of less profitable forms of capital. This leads to a restoration of profitability and greater sustained economic activity. Instead the capitalist class through the medium of its state modified the downswings through counter-cyclical interventionist activity. The ruling class fear a generalised depression because its destabilising consequences may lead to revolution. In general the more the cyclical behaviour of capitalism is modified and prevented from completing its "natural" cycle the greater, more intense the crisis. The evidence suggests that the capitalist social system has plunged into depression. No amount of state intervention can prevent it from assuming an acute form this time round. We have now entered a new historical epoch. Politics can never be the same again. Under these new conditions of sustained and deep stagnation the class struggle sharpens. Consequently capitalism's obsolescent character becomes increasingly visible and thereby the need to abolish it.
At present the leadership of the working class (trade union and political leadership) has been offering solutions intended to rescue capitalism from its demise. Capitalism can only be rescued at the expense of the working class. There exist no significant political forces advocating a solution necessitating the transcendence of capitalism. Communists must endeavour to create a communist current within the working class. This can begin by organising circles of communist intellectuals. Such a communist intelligentsia conducts an intellectual struggle to propagate communist doctrine. As this intelligentsia develops and spreads its influence it has the basis for linking into the more advanced sections of the working class to form a communist strand within the working class. This is the basis on which a revolutionary communist movement can be built.
Under the present critical conditions a communist movement would draw up an action plan as the basis for struggle against this sustained attack on the working class.
Economic Depression and Fianna Fail
Economic Depression and Fianna Fail
Paddy Hackett
The following is my opinion:The Fianna Fail party has a strategy. It is my opinion that Brian Cowan, as Taoiseach, is being increasingly viewed by the Fianna Fail Party as a transitory leader of the Party. The Party will sacrifice him to save its skin. He will be saddled, so it hopes, with all the blame concerning the harsh decisions that are currently being made by the Fianna Fail led government. Consequently, in true Stalinist fashion, he will be eventually sacrificed to "the masses" to save the Party.
When he has done the “dirty work” he will be shouldered with the blame for Fianna Fail’s lack of popularity. He will then be replaced by a new and “shining” leader. Since many of the nasty decisions will have already been taken by Cowan, the new leader will appear as free from such blame --a smiling and kinder figure –a people’s person.
It is hoped in this way that any popular support lost by the party will be recovered as a result of the election of its new leader. The mass media will give her/him the customary honeymoon period. In this way it is hoped that the party will win the next general election. Fianna Fail hopes to be able to claim too that it saved the nation from collapse under very adverse global economic conditions. In this way Cowan, as a figure from Greek tragedy, will have fallen on his own sword. The Party, by distancing itself from Brian Cowan, will have saved the day by exclusively holding Cowan responsible for having imposed harsh policies on the working class.
There is no better party than Fianna Fail to successfully appeal to patriotism as a device for rallying the Irish people behind it.Paddy Hackett
Paddy Hackett
The following is my opinion:The Fianna Fail party has a strategy. It is my opinion that Brian Cowan, as Taoiseach, is being increasingly viewed by the Fianna Fail Party as a transitory leader of the Party. The Party will sacrifice him to save its skin. He will be saddled, so it hopes, with all the blame concerning the harsh decisions that are currently being made by the Fianna Fail led government. Consequently, in true Stalinist fashion, he will be eventually sacrificed to "the masses" to save the Party.
When he has done the “dirty work” he will be shouldered with the blame for Fianna Fail’s lack of popularity. He will then be replaced by a new and “shining” leader. Since many of the nasty decisions will have already been taken by Cowan, the new leader will appear as free from such blame --a smiling and kinder figure –a people’s person.
It is hoped in this way that any popular support lost by the party will be recovered as a result of the election of its new leader. The mass media will give her/him the customary honeymoon period. In this way it is hoped that the party will win the next general election. Fianna Fail hopes to be able to claim too that it saved the nation from collapse under very adverse global economic conditions. In this way Cowan, as a figure from Greek tragedy, will have fallen on his own sword. The Party, by distancing itself from Brian Cowan, will have saved the day by exclusively holding Cowan responsible for having imposed harsh policies on the working class.
There is no better party than Fianna Fail to successfully appeal to patriotism as a device for rallying the Irish people behind it.Paddy Hackett
Money Printing
Money Pumping
Paddy Hackett
“It is crucial now that the world - and Ireland- creates inflation, not deflation. If we haven’t the stomach to print money(which would be by far the easiest exit route), we need to turn on the taps through government borrowing” (This Is Not The Time ToPanic by David McWilliams: Sunday Business Post 15th March, 2009)
In his comments on current economic conditions David McWilliams suggests that under the present economic downswing the Irish state can liberally borrow funds to compensate for the steep fall-off in revenue from taxation. It also suggests that this wholesale borrowing will largely relieve the Irish economy of the problems it has been experiencing as a result of the economic downturn. He also claims that this mass borrowing will prepare the Irish economy for taking advantage of the pickup in the global economywhen it comes.
David is a victim of the illusory way in which capitalismpresents itself. He seems to think that the Irish economy can essentiallyavoid the effects of the global economic downturn by borrowing. If this is the case then there need never be recessions since economies can merely borrow their way out of them. Borrowing thenis the the agency that prevents economic recession. But it is just this borrowing that has largely helped turn boom into bubble withits current deflation. The very borrowing of the banks and privatecompanies in Ireland and elsewhere was a factor in intensifyingthe economic conditions that created speculative practices. It is only at a particular stage in the downswing that the injection of cash into the economy can precipitate recovery. At this stage the economic slump has effectively bottomed outrendering it ready for take off. If it was as easy as David suggests there would never be recessions and there would be no need toabolish capitalism and replace it with communism.
Paddy Hackett
“It is crucial now that the world - and Ireland- creates inflation, not deflation. If we haven’t the stomach to print money(which would be by far the easiest exit route), we need to turn on the taps through government borrowing” (This Is Not The Time ToPanic by David McWilliams: Sunday Business Post 15th March, 2009)
In his comments on current economic conditions David McWilliams suggests that under the present economic downswing the Irish state can liberally borrow funds to compensate for the steep fall-off in revenue from taxation. It also suggests that this wholesale borrowing will largely relieve the Irish economy of the problems it has been experiencing as a result of the economic downturn. He also claims that this mass borrowing will prepare the Irish economy for taking advantage of the pickup in the global economywhen it comes.
David is a victim of the illusory way in which capitalismpresents itself. He seems to think that the Irish economy can essentiallyavoid the effects of the global economic downturn by borrowing. If this is the case then there need never be recessions since economies can merely borrow their way out of them. Borrowing thenis the the agency that prevents economic recession. But it is just this borrowing that has largely helped turn boom into bubble withits current deflation. The very borrowing of the banks and privatecompanies in Ireland and elsewhere was a factor in intensifyingthe economic conditions that created speculative practices. It is only at a particular stage in the downswing that the injection of cash into the economy can precipitate recovery. At this stage the economic slump has effectively bottomed outrendering it ready for take off. If it was as easy as David suggests there would never be recessions and there would be no need toabolish capitalism and replace it with communism.
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