February 2009-02-12

Ireland and Economic Depression
By Paddy Hackett


The world economy has plunged into a sustained economic depression. The signs are that this depression will be deep and prolonged. The main 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 from the capitalist class by the working class involving the establishment of a world communist federation. Because of the peculiarities of the Irish situation: booms powered by bubbles and a government that instead of storing up its surplus tax returns in anticipation of future contingencies squandered it. The surplus revenue was used to  bribe sections of the electorate into voting them back into power. It was also used to subsidise its capitalist friends such as property developers and bankers.

Since the outset of the depression this same Irish government has been engaged in a sustained attack on the working class. This is its way of taking the Irish economy out of recession. It  seeks to achieve this by dividing the working class --pitting worker against worker. At present the government is encouraging division of private sector workers from  public sector workers. In this way it hopes to launch a successful offensive against  public sector  workers. Victory here will increase the government’s self-confidence while tending weaken to weaken the working class as a whole. Consequently the chances of the government  successfully launching further attacks on public and private sections of the working class in the Irish Republic is enhanced. Public sector workers are  among the most unionised section and politically more advanced of the working class. This helps explain how this strata of the working class has managed to maintain  relatively better living standards and conditions of work and social life. This is why the government has been striving to defeat it. The government hopes to restructure the civil service as a means of disorganising public sector workers. It hopes that restructuring with the aid of new technology will put civil service workers out of work. In this way their resistance can be undermined in the way that  workers within the private sector were disorganised and disarmed. The introduction of new technology restructured the composition of the working class. The effect of this development weakened and demoralised the working class. It is imperative, therefore, that the working class stoutly resist this sustained offensive being mounted by the government against it. This defensive action must involve strike action eventually culminating in the general strike together with the setting up of workers councils for the organisation of economic, social and political life. To achieve this the current character of the trade union must be replaced by communist unions of the working class. These communist unions, in contrast to the present condition of the unions, must be inherently democratic. They must have minimum centralisation and maximum democracy. Preceding this workers must struggle to set up workplace committees as a means of organising against the bosses and the leadership of the trade unions.

The government actively encourages mass immigration into the Republic on an unprecedented scale. Again this forms part of the strategy of promoting division within the working class. This is designed to weaken the working class in the Irish Republic. The mass immigration of labour power into the Republic is intended to drive the price of labour power down. It also tends to hinder the prospects of the Irish working class organising itself into a unified politically conscious class force. The pressure imposed on high profile corporate, banking and media figures with super high salaries to take a voluntary cutback in their salaries is just a ploy to exert further pressure on workers to accept wage cutbacks.

The present depression is a result of capitalism’s failure to let the economic system follow its cyclical downswing whereby  capitalism cleanses itself of less profitable enterprises. This leads to a restoration of profitability and greater sustained economic activity. Instead the capitalist class through the medium of the state modified downswings through interventionist activity. This is because the ruling class feared a generalised depression because of the threat of a challenge capitalism and its state. But the more the cyclical behaviour of capitalism is modified and prevented from completing its cycle the greater, more intense and  universal the crisis. The signs are that we have now been plunged into such an economic depression. However no amount of subjective interventionism will arrest it this time. 

The growing reserve army of the unemployed means that the production of surplus value, total profits, has diminished. This means that there exists less resources from which to meet state expenditure. This forces the state to cut spending, increase taxes and borrowing. Borrowing is just 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 spiral downwards. This means that the Irish economy will have to further contract to reproduce the conditions for recovery. This means that spending cuts, taxation and borrowing must be further increased.

We have now entered a new historical epoch. Politics will never be the same again. Ireland is heading, as a minute and relatively insignificant component of the capitalist economy into a deep and prolonged economic downturn. Under these new conditions of sustained economic stagnation the class struggle will sharpen. As things progress capitalism’s obsolescent character becomes increasingly visible. This economic depression can only be resolved in two ways: Revolution or reaction.

At present the leadership of the working class (trade union and political leadership) has been offering solutions that are intended to rescue capitalism. The rescue of capitalism can only be achieved at the expense of the working class. There exist no significant political forces advocating a solution necessitating the transcendence of capitalism. The latter solution has not been seriously mooted within the public sphere. Communists must begin to build a communist political force if the class interests of the working class is to be served. This can begin by organising of circles of communist intellectuals. Such a communist intelligentsia conducts an intellectual struggle to propagate communist doctrine. As the intelligentsia develops and spreads its influence it can ideologically and politically link up with the more advanced sections of the working class to form a communist party.

The throwing out of work of masses of workers weakens the working class both objectively and subjectively. It as no surprise then that the working class may initially show less resistance  under conditions of growing unemployment.

Having said this there is an opportunistic element embedded in the depression. These are companies that are using the downturn as a pretext for laying off workers, making workers labour harder and imposing wage cuts. These are companies that are not necessarily too adversely affected by the downswing. They are companies hoping to use the depression to increase profits by cutting costs. The government are guilty of a similar strategy in relation to the public sector workers. They have been mounting a campaign against the public sector workforce from well before the depression. In these circumstances workers must demand that the books of companies be opened to the workers for inspection.

Paddy Hackett