Sunday, April 7, 2013

A Celtic Tiger for some, but a kitten for most?



Ireland is in recent years engulfed by the crisis in the euro-zone that affects many other European countries. The country went from being one of the shining examples in the EU, to receiving an EU/IMF bail-out loan to avoid bankruptcy.

Many new EU states from Eastern Europe aspired to become “new little Irelands,” but perhaps all was not what it seemed during the Celtic Tiger booming years. Not everyone benefited equally and the surge of wealth revealed the fragmentation of the Irish society. This era also revealed the reality and constant changes of the Irish political life, ideology and mentality.

With the Irish economy booming during the past decade, it seems incredible that just twenty years ago the country was in a state of economic collapse. (1) That did not happen overnight. Ireland had to go through a series of transformations and reforms, in order to reap the benefits of its economic “Tiger”. But some of them eventually lead to alteration of its social structure and even contributed to its economy’s eventual demise.

During the ‘40s Ireland introduced control by professional management through the County Management Act. So County managers had the incentive to build on the strengths of local communities and probably had better prospects in encouraging local development. (2)

Once professional management was introduced into local government, it was reasonable to assume that this structure would be used to make the administration more responsive to local needs. Instead, the central government progressively reduced the powers of local government over the succeeding years. (2)

The local role was diminished and the whole drift of policy was towards centralization. There it developed a political system, welfare oriented, centralized, bureaucratic and controlled by competition among highly organized elites. For the ordinary citizen, they were remote, distant and impersonal. (3)

So the politics of this democratic system are above all the politics of compromise, adjustment, negotiation and bargaining. Carried out by professional and quasi-professional leaders who constitute only a small part of the total citizen body. Politics that is un-ideological and even “anti-ideologic.” (3)

This system and its ethos, marginalizes small, rural and local communities. If we look at the uneven spread of wealth among Ireland’s counties and also its social groups, then we see clearly that the country is being governed by a form of elitism.

County Donegal for example never saw the development that Dublin had and now is one of the worse hit regions in Ireland by the crisis. Unemployment there is far higher than many other counties and emigration is very common.

So having first failed to use local administration as a means of bringing democracy down to grassroots level, the centralization of the Irish government led in fact to a style of decision making that became removed from democratic control. (3)

In turn, this has led to a decline in the parliament’s ability to be an effective critic of policy. The British style Cabinet government belittles the role of the elected representative. Policy is made and public affairs are decided by ministers and their civil service advisers. Always after consultation with the spokespersons of organized groups, appropriate to the matter under review.  (3)

All of this is a long way from the people’s elected representative or from the representative assembly. Clearly, Ireland’s politicians do not appear to believe in the participation of the people in the making or influencing of decisions that affect their lives. For them, community empowerment is a very delicate matter.  (3)

But Ireland is not a sovereign nation anymore. Since it joined the EU, it has willingly given up some of its sovereignty to be part of this club. And with the help of Europe and foreign investments from the USA, its multinational companies and policies that favored the global capitalist system, Ireland became one of the most globalized economies in the world.

How have this contributed to the country’s transformation? Globalization means that many economic and cultural activities are increasingly played out in the world as a single place, rather than within national borders. While the nation state is still a very viable entity, power is increasingly placed in the hands of unelected policy-makers. (4)

In other words, all decisions in Ireland are not taken always according to the Irish people’s wishes or needs. Some are taken with the cooperation or compromise of the Irish elites with the European or global ones. The purpose of course is to maintain the current economic, corporatism and economic system that has been ruling our planet progressively since WW2.

After the war, we have seen the development of an international order, initially under US hegemony. Firstly the creation of an international monetary system based upon the dollar, enabled the movement and profits and funds to a greater frequency than direct investment. (5)

Secondly the post-war settlement in Europe, a politically imposed one based on Marshall Aid and NATO, tied Western Europe to the USA. (5) Ireland, in order to get access to financial aid through the Marshall plan, had to reform and open its economy to foreign investment.

But inviting foreign investment is problematic, because it removes a crucial component of national ideology, namely that the people control their economy. (5) Ireland’s open economy and reforms, lead to the industrialization of the former conservative and farming country. Its supporters utilize the frameworks of such transformation from a “modernization “or “development” theory. (6)

However, from analyses produced by Marxists and radicals, there is a danger that the banalities of the bourgeois thought will be replaced with an equal problematic form of Marxist left-wing nationalism. That treats Ireland as an extension of the world capitalist system and the Irish state as the instrument of a “comparador” bourgeoisie, in direct alliance with foreign capital. (6)  

And that has happened with the dominion of the Fianna Fail party in the Irish politics for the past decades. They are a traditionally “leftist” populist party, which was the main actor in Ireland’s rise to prominence, but also its decline.

With policies that helped the perpetuation of their dominance in Irish politics, they have contributed to the creation of a “bubble” economy. They have overspent on social security policies to maintain the status quo of the various Irish classes. But their dependence on foreign investment to fund their spending left the country also vulnerable, to the global economy, the markets and their volatility.

To achieve foreign investment they had to end national protectionism. By cutting the state-workers link and with external dependent industrialization, they cold fragment the workers from one another. (7) Thus Ireland had never a strong Union organization and presence, especially on the private sector.

According to Nicos Poulantzas, a Greek Marxist political sociologist, the growth of direct foreign investment in the dependent areas of Europe, such as Greece and Spain, has been to stimulate the development of what he terms “an internal bourgeoisie.” (8)

In his work Poulantzas presumes that the state is constantly involved in the negotiation of compromise with secondary class elements, and in the forging of hegemonic strategies, through which the rule of capital may be retained. The state realizes this mission through its capacity to organize and unify the dominant power bloc, by permanently dividing the dominated classes. (9)

That is evident in the Irish political reality. The State is constantly negotiating certain agreements with the unions, like in the case of the Croke Park Agreement. It is an agreement between the Irish Government and various public sector unions. Against a background of layoffs and pay cuts in the private sector, the government agreed not to impose public sector layoffs or further public sector pay cuts. (10)

In return the public sector unions agreed to call no industrial action, and to cooperate on wide scale reforms of the public sector aimed at increasing efficiency. The Irish government is now looking to amend what has been agreed, as it is looking to cut the salaries of the public servants. (10)

For the elitists, real decision making power will always be concentrated in the hands of a small number of political decision makers. And they will be directing the actions of a large scale bureaucracy to achieve that. (11)

Elitism, which was revived around the turn of the 20th century by mainly European critics, has challenged the optimistic expectations about a participatory democracy, which has been expressed by socialists and liberal thinkers in during the previous century.  (12)

The German theorist Robert Michels wrote of an “iron law of oligarchy.” Under which effective decision-making power in any large scale organization would always come to rest with a small elite group, to the expense of all rank-and-file members. (12)

In Ireland that is evident. A small group of rich people made a fortune out of the Celtic Tiger years. Bankers, property developers and various social partners were the ones who benefited the most, when immigrants, the poorer classes of the Irish society, the workers, the disabled and pensioners were the losers.

It is clear that the discourse in Irish politics rarely acknowledges its neo-liberal ideological content. It is also obvious that social partnerships were not about democracy. The institutional arrangements to deepen democracy, did not work for it. (13)

When the Fianna Fail government introduced social partnership in 1987, it was not long to realize that it was giving business virtually anything it asked for. Like low corporation and capital taxes, low social insurance contributions and a virtually unregulated labor market. (13)

Community and the voluntary sector became a tool of welfare provision, rather than developmental active citizenship. The ability and voice of the civil society to criticize policy and lobby for social change were muted. (13)

So while the Marxists believe that the state is displaced expression of a society divided by class and exploitation, the neo-liberal thinkers see the modern state as an increasingly domineering and malign influence, imposing itself upon society. (14)

They echo the fear that has been voiced by Hobbes, that the modern state would come to be so powerful and so authoritative that it would crush all freedom and autonomy in civil society. The rise of the neo-liberalism was the consequence of the pursuit by parties of all persuasions of a broadly social democratic agenda. (14)

In this agenda the state intervened ever more extensively in society, to seek to increase levels of economic activity, to redistribute economic growth and to underwrite the welfare status of its citizens. States extended their policies into more areas of social life, including the “intimate” sphere of the family. The more they intervened, the greater the resources it had to extract from the society. (14)

And so after the accumulation of failed government interventions and the raising of the resources to fund them triggered a process of government overload. States were extracting more and more resources from society, as to impose their unsuccessful agenda of reforms upon it. (15)

Ireland has a passive citizenry with relatively a low voter turnout and low levels of political party membership. There is a dominance of multinational capital over the weakened trade union movement, whose base of support was more and more restricted to public sector workers. On the contrary, there is an increasing rising of the international capitalist class. (13)

The Irish political elite allowed the country’s economy to inflate and behaved selfishly. The government, following the global trend of absolute freedom and independence of the banks, did not intervened in the country’s financial system. The Central Bank of Ireland acted irresponsibly and did not make any effort in regulating the banks, thus not doing the job they were appointed to do.

The Irish government was then forced to make the tax payers to pay for their mistakes and those of the bankers. But this model is not confined in Ireland only. It benefits transnational economic and financial elites and in fact, empowered by them. What will the future of the country be and can any real reform take place, when the inequality is promoted and institutionalized by the Irish government itself?





References:
1)      Why Ireland’s economic boom is no miracle. By Brian Beary. The Globalist. (http://www.theglobalist.com/storyid.aspx?StoryId=6172)
2)      Ask not for whom the Tiger roars. Fintan Tallon. Oak Tree Press, Dublin.2000. Page No 18.
3)      Ask not for whom the Tiger roars. Fintan Tallon. Oak Tree Press, Dublin.2000. Page No 19.
4)      What did we do right? Michael J. O’Sullivan and Rory Miller. Blackhall Publications. 2010. Page 8-9.
5)      Ireland: divided nation, divided class. Austen Morgan and Bob Purdie. Ink Links. 1979. Page 55.
6)      Ireland: divided nation, divided class. Austen Morgan and Bob Purdie. Ink Links. 1979. Page 59.
7)      Ireland: divided nation, divided class. Austen Morgan and Bob Purdie. Ink Links. 1979. Page 66.
8)      Ireland: divided nation, divided class. Austen Morgan and Bob Purdie. Ink Links. 1979. Page 67.
9)      The Modern State. Christopher Pierson. 2nd edition. Routledge, Taylor and Francis Group. 2000. Page 62.
10)  Croke Park Agreement. The Wikipedia. (http://en.wikipedia.org/wiki/Croke_Park_Agreement)
11)  The Modern State. Christopher Pierson. 2nd edition. Routledge, Taylor and Francis Group. 2000. Page 68.
12)  The Modern State. Christopher Pierson. 2nd edition. Routledge, Taylor and Francis Group. 2000. Page 67.
13)  Dr. Heikki A. O. Laiho, 2013 notes, on Exploring Political issues. DBS. Based on Kirby and Murphy.
14)  The Modern State. Christopher Pierson. 2nd edition. Routledge, Taylor and Francis Group. 2000. Page 63.
15)  The Modern State. Christopher Pierson. 2nd edition. Routledge, Taylor and Francis Group. 2000. Page 64.

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