Economics in Fantasyland

Clinton talks entrepreneurship East Belfast, 1995

During his first visit to Northern Ireland in 1995, US President Bill Clinton claimed to a gathering in the East Belfast Enterprise Park that he could discern the first signs of the economic benefits flowing from political progress. He went on to express his hope that the “entrepreneurs” of Northern Ireland would come to provide “a model for a lot of other countries as well who are struggling to build a system of free enterprise.”

Since the mid-nineties, the linking of the promise of peace with that of “free enterprise” and prosperity became a familiar refrain among many proponents of the “peace process”.

In the intervening years, a fragile political arrangement has failed to bring sustained and equitably distributed wealth to Northern Ireland.

Sociologist Colin Coulter notes: “When the main republican and loyalist paramilitaries decided to lay down their arms back in 1994, Northern Ireland was a society deeply scarred by poverty and inequality. The passage of two decades… has, alas, done rather little to alter that particular, miserable reality”.

Initially, the economy improved. Following the ceasefires, there was indeed an initial influx of multinational capital into Northern Ireland, especially from the United States. Between 1994 and 2000, almost $1.5 billion was invested in Northern Ireland by American multi-nationals alone.

It has been estimated that after the Good Friday Agreement in 1998, Foreign Direct Investment (FDI) from the US came to account for 10% of the jobs in Northern Ireland. This period saw a growth in jobs, particularly in service sectors such as retail. But this inward investment did not last and, as happened in the south, when FDI declined it was hoped that a debt-financed property boom might fuel continued economic growth. Stormont politicians on all sides presented no alternative plan.

In an effort to secure continued FDI into the North, on 1st April 2001 the Invest NI quango was set up with the stated aim of delivering “expertise and resources to accelerate the creation and growth of businesses committed to, and capable of, being entrepreneurial, innovative and international”. In the years since its inception InvestNI has not been able to live up to its promise.

Neil McCracken, an investigative journalist with theDetail.tv has found that there was spending of almost £1bn (£932m) by Invest NI from 2002-07 and that “when jobs lost were taken into account … Invest had only created 328 net jobs over a five-year period, equating to an average of only 65 jobs per year.”

Moreover, according to the Community Relations Council’s 2014 Peace Monitoring Report, around 60% of the jobs that Invest NI has brought to the region are in call centres and two-thirds of these offer wages less than the median for the private sector in general.

If a nationalised public utility spent the money that InvestNI has spent and produced so few jobs, no doubt the press would have a field day mocking the “dinosaur public sector” but criticism of InvestNI has been muted.

Coulter said: “The attraction of this particular form of multinational investment to Northern Ireland both reflects and compounds its status as a low -wage economy”.

If a nationalised public utility spent the money that InvestNI has spent and produced so few jobs, no doubt the press would have a field day mocking the “dinosaur public sector” but criticism of InvestNI has been muted. Indeed, business magazine agendaNI noted in September 2014 that while the Northern Ireland Department of Enterprise, Trade and Investment has recently audited other “arm’s length” bodies (quangos) such as the Consumer Council and Health and Safety Executive, “Invest NI has the largest resource budget (£129 million this year) but has not been reviewed as its work is strategically important for the economy.”

The inadequacy of the FDI policy was clear in September 2015, when Northern Ireland’s biggest remaining industrial company, Canadian multinational Bombardier, announced that it intended to cut almost 400 jobs from its aerospace operations.

The consultancy firm Pricewater-houseCoopers has been forced to admit that “some of the [economic] achievement of the 1990s and 2000s may have been built on insubstantial foundations”. There is every possibility that continuing to rely on foreign multi-nationals to invest in the local economy will produce no results or, at most, flash-in-the-pan growth in times of upturn in the global economy.

In the absence of a FDI-induced upturn, Stormont politicians and their obliging media place a lot of faith in benefits to the tourist economy of “big” events such as Presidential visits, golf tournaments and MTV shows. But not even they can seriously believe that this kind of thing is enough. So, (re-)enter the new plan B: Lower corporation tax, a neoliberal wheeze supported across the board by all parties in the Stormont Coalition. While Sinn Féin’s stated opposition to welfare reform is a welcome sign, there is no suggestion that the party has cast itself adrift from the broader neoliberal agenda. Coulter notes that “the increasingly marked neoliberal turn within Sinn Féin” is most readily apparent in the context of corporation tax:

“The republican movement has traditionally cast itself as socialist, with the manifestoes of its political wing typically emphasising the causes of equality and public provision. Since entering power, however, Sinn Féin has largely dispensed with radical rhetoric, on social and economic matters at least, and has come to embrace some key elements of the neoliberal agenda”.

July 2016. Sinn Féin’s Ó Muilleoir bends the knee to US business – “they are not big on borders”, while promoting his nationalist agenda

Prior to the current political impasse, the Executive coalition was committed to matching the Republic of Ireland’s 12.5% rate by 2018. But in 2016 Finance Minister, Sinn Féin’s Máirtín Ó Muilleoir, said they might need to consider reducing it to below even that in response to then Chancellor, George Osborne’s commitment to a UK rate “below 15%” aimed at attracting businesses to post-Brexit Britain. In language that managed to combine neo-liberal ideology with his nationalist agenda Ó Muilleoir told Radio Ulster “We know, especially in north America, that Ireland is viewed very favourably and actually they view Ireland as one island, they are not big on borders.” (Of course, Ó Muilleoir’s remarks represent something of a rhetorical gambit since Sinn Féin itself is very “big on borders” and Unionists could claim that the united Ireland that Ó Muilleoir seeks would cut the North off from automatic access to a much bigger UK economy than that of the 26 Counties).

The corporation tax wheeze is once again on hold but should it ever be enacted it is very unlikely to bring general prosperity to Northern Ireland, and will only benefit, as in the Republic, a tiny layer of tax lawyers and financial consultants.

The various attempts to develop Northern Ireland as a prospering neoliberal economy have thus far failed. But, even if they were to succeed, only a minority of the population in the North would reap the benefits. Under the guise of austerity, the lives of working people in Northern Ireland are, as usual, under attack. Sustained economic crises of the sort we have recently suffered usually result in changes to the make-up of the working population and this crisis has proved no different. The unemployed, the disabled, women, those in Belfast and in the west of Northern Ireland are more likely to be poor and thus can expect to be hit particularly hard by the current welfare cuts.

Household incomes, poverty rates and the labour market have all worsened in Northern Ireland since 2009, according to  recent research from the well-respected Joseph Rowntree Foundation. Almost 400,000 people now live in poverty in Northern Ireland, and the number of working people in poverty is also rising.

In each case, this deterioration has been greater than in Great Britain. Research by Paul McFlynn of the NERI Institute has found that employed workers in the North are now more likely to be female, older, more likely to work part-time, and more likely to work in service sectors than they were in 2008. Job creation, such as it is, is mostly low-paid and coming from the accommodation and food services and administration sectors. A local charity noted in September 2014 that unemployment and reduced working hours are the “primary drivers” of a household debt problem in Northern Ireland that is serious and growing.

While for many in Northern Ireland wages have stagnated or even declined, the earnings of those at the top of the occupational hierarchy have increased steadily. Coulter notes that “almost half of the income increases that have happened over the last decade have fallen to the most affluent fifth of Northern Irish society”.

Recent statistics show that the wealthiest fifth of households in Northern Ireland enjoy incomes 4.9 times greater than the poorest fifth and, as elsewhere in the capitalist world, Northern Ireland now boasts a small number of extraordinarily (obscenely) wealthy individuals. In 2012, The Guardian reported that Belfast has, in per capita terms, more people with net assets of more than US $30m than any UK city apart from Aberdeen and London. Coulter estimates that in 2011, Belfast was home to no fewer than 96 of these ‘Ultra High Net Worth Individuals’:

“In fact, there would appear to be literally dozens of individuals settled in… exclusive parts of the city whose distance from the lives of those who clean their homes, tend their gardens, mind their children is sufficiently great that it has to be measured in tens of millions in various hard currencies”.

Coulter believes that: “There are some grounds… for hoping that the terms of political debate might finally begin to shift in Northern Ireland. The prospect of ever more painful austerity measures implemented by unionists and republicans alike might finally open up the space for another form of politics with a different set of priorities.”

An earlier version of this article first appeared in Look Left magazine.

 

Advertisements

Fight the Squeeze

sueeze

In what follows I outline some political and economic aspects of austerity and make some suggestions about what form the fight against austerity could take in the North.

Before I look at Northern Ireland, I think we should remind ourselves in broad terms of how the current round of austerity politics originated. I say the current round, because I’ve been living through downturns of one sort or another for most of my life, punctuated by booms which have led otherwise sane social democrats to insist that the age of class struggle and business cycles is over.  For example, in 2007, in his last budget speech as chancellor, Gordon Brown said “we will never return to the old boom and bust”. How foolish that sounds now, as it did then to some on the political fringes.

Although economic downturn has been my main experience, I grew up at the tail-end of what has become known by social democrats as an economic ‘golden age’ for working people in the rich capitalist countries. This so-called Golden Age was put in place by the capitalist powers in the aftermath of the Second World War and was characterised by relatively high government spending on consumption and investment, the regulation and in some cases state ownership of transportation, communications, steel, coal and electricity, utilities, regulated banking and insurance sectors and high levels of unionisation and union militancy. For me as a child, it meant among other things, school milk, healthcare and education free at the point of demand.

By the late 60s and early 70s capitalists and their economists were complaining that workers’ share in income was too high relative to profit. As one economist put it, ‘the struggle over distributional shares intensified between the economic elite and ordinary working people’. For the capitalist class this was a crisis, a ‘profit squeeze’. As  economist LI Minqi puts it, “the rising bargaining power of the working classes in the core and the semi-periphery was the primary factor that led to the world economic crisis.”

money

In my view, this amounted to workers demanding a greater share in what they produced in the first place but the pursuit of endless accumulation that is central to capitalism requires no increase in claims on profits by the producers.

Under the pretext of fighting inflation, capitalists and their politicians looked around for a replacement to the limited class standoff of the post-war period. And they found an answer in Milton Friedman. Neo-liberal ideas that had once belonged to a crackpot minority operating out of a few US universities and think-tanks were quickly adopted by the Conservative Party in the UK and Reagan in the USA. Over a relatively short time, most of the services that I had received by right, free at the point of demand were privatised along with much else that had been owned by the people during this period.

Thatcherism and its bastard child Blairism, mounted a serious attack on the working class that has been on-going since the 1970s, of which the current austerity drive is the latest manifestation. Since the neo-liberals took over, the threat of unemployment has been used as a deliberate means of keeping down wages and reducing union membership and class solidarity.

Some would say that I’m going too far: surely, they would say, the government is always concerned to keep unemployment low for the good of all the people. Surely, when times get tough, we’re all in this together, different, of course, but ultimately working on the same project like one big Downton Abbey?

budd

Sir Alan Budd suggests otherwise. Who is Sir Alan Budd?  He is an economist, who was senior economic advisor to HM Treasury between 1970 and 1974. Other of his appointments have included group economic adviser to Barclays Bank and between 1991 and 1997, he was chief economic adviser to the Treasury, and headed the government economic service. More recently, under Cameron he briefly became Chairman of the Office for Budget Responsibility. So, he’s clearly no left-wing firebrand. In 1992 Sir Alan was asked by journalist Adam Curtis if monetarist theories had been used by the Tories to disguise a right-wing political assault on the working class. Budd replied as follows:

The nightmare I sometimes have, about this whole experience, runs as follows. I was involved in making a number of proposals which were partly at least adopted by the government and put in play by the government. Now, my worry is . . . that there may have been people making the actual policy decisions . . . who never believed for a moment that this was the correct way to bring down inflation. They did, however, see that it would be a very, very good way to raise unemployment, and raising unemployment was an extremely desirable way of reducing the strength of the working classes — if you like, that what was engineered there in Marxist terms was a crisis of capitalism which re-created a reserve army of labour and has allowed the capitalists to make high profits ever since.

Research by the TUC shows that since the mid-1970s real wages in the UK have been rising more slowly than productivity, with the gap widening since 1990. Since 1980, real wages have risen by 1.6 per cent per annum while productivity has been rising at 1.9 per cent per annum. In the post-millennium years, the gap has opened with real wages rising by a mere 0.9 per cent while productivity has averaged 1.6 per cent. As the new Political Economy Network has noted, “[a]t the heart of the inequality trend is a thirty-year-long squeeze on people’s wages. The share of the nation’s output going to wage earners peaked at 65 per cent in 1975, but has been in freefall ever since. In 2007 it reached as little as 53 per cent … In contrast, the share of output taken in profits in that year had reached a near post-war peak. Wages for most of the population have been falling behind the growth in productivity, and at an accelerating rate.”

These headline figures hide differences between rich wage earners and working class wage earners, who constitute the majority of the workforce. Rises in real earnings have concentrated at the top and wages have risen much faster for high-earners than for median- and low-earners.

As a result, the brunt of the falling wage share has been borne almost entirely by lower paid employees, with the bottom two-thirds of earners facing a shrinking share of a diminishing pool. It is working people, who represent the majority and who have faced an unprecedented wage squeeze since the mid-70s.

It is also necessary to note the contradictory role that economic imperialism plays in this. While the growth of low-wage jobs in the global south has also meant that many jobs in the rich countries have been outsourced, the influx  of cheap goods clothing and other goods has benefited poor workers in the rich countries. As economists Christian Broda and John Romalis note with respect to the USA, “while the expansion of trade with low wage countries triggers a fall in relative wages for the unskilled in the US, it also leads to a fall in the price of goods that are heavily consumed by the poor.”

The decline in the purchasing power of workers limited their potential to consume. Demand deficiency and financial deregulation reduced investments despite increasing profitability. By the end of the so-called Golden Era worker militancy had produced a threat to capitalist profits. But reducing the workers’ spending capacity through wage reduction also resulted in a crisis for the capitalist class. Because if the workers aren’t able to buy the products in the shops, who will? This inability to make the most out of profit is known by some economists as ‘a realisation crisis’. Thus neoliberalism only replaced the profit squeeze crisis of the 1970s with the realisation problem. This was followed by a lengthy period of debt-led consumption, in which workers tried to compensate for lower wages by living off credit cards and second mortgages.

This growth in personal debt offered a solution to the realisation problem but it was not one that could last. After the Great Recession hit in 2008, this solution was  briefly off the table, but no alternative was put in place for squeezed workers in the core countries. The 2008 crisis was followed by major banking rescue packages and fiscal stimuli but not, of course, by debt forgiveness or state-directed job creation programmes. By 2010 the bankers and their journalists had relabelled the crisis as a “sovereign debt crisis” and began pressurizing the governments in many countries to cut spending to avoid taxes on their profits and wealth. Meanwhile, workers’ wages in the public and private sectors have taken another plunge since the onset of the recession.

So, it is hardly surprising to learn that according to the Guardian by October 2017 Standard and Poors was warning  that “the rapid rise in UK consumer debt to £200bn from car finance, personal loans and credit cards is unsustainable at current growth rates and should raise ‘red flags’ for the major lenders.” From my perspective, it should raise red flags from the major borrowers! In Northern Ireland the average amount of debt has now reached £14,367 and it is growing. The debt restructuring company that reports that credit card debt in Northern Ireland is “spiralling out of control” also explains the reasons for this growth in debt:

With wages stagnant since the financial crisis a decade ago and the cost of living continuing to rise, it’s no surprise that many people have been forced to turn to credit just to make ends meet. With inflation rising and no sign of wage growth, the situation could still get worse.

Northern Ireland has been promised an additional sum of £1.5 billion in return for a DUP promise to prop up Teresa May’s tottering government. Northern Ireland urgently needs a job plan, and not some welcome, but limited, initiatives to boost the economy. In 2011 Angela McGowan, the Danske Bank’s chief economist, is said to have called job creation in Northern Ireland “virtually impossible” in the current global economic conditions. This exposes the bankruptcy of mainstream economics. By contrast, some outside the mainstream argue that realistic alternatives to this jobs disaster exist. For example, the Nevin Institute has developed a plan for Northern Ireland that would create jobs and develop infrastructure. According to the Nevin Institute:

The biggest single obstacle to creating employment is the depressed state of the domestic economy. The way to tackle this problem is through economic growth, investment and job creation. The market, alone, cannot be expected to fill the gap in investment and consumption left as a result of the sharp contraction from 2008 onwards. There is, therefore, an urgent need to address the deficit in demand for work through a balanced investment stimulus that is state-led or facilitated but that also mobilises investment from private sources.

Even more radical alternatives exist. For example, the Campaign Against Climate Change is promoting a thoroughly costed campaign to create one million green climate jobs. As the alliance says: “To find solutions to the climate crisis and the recession, we need more public spending, the opposite of current government policy. We have people who need jobs and work that needs to be done. A million climate jobs in the UK will not solve all the economy’s problems. But it will take a million human beings off the dole and put them to work saving the future.” They stress that they want to create government jobs.

This is a new idea. Up to now government policy under both Labour and Conservatives has been to use subsidies and tax breaks to encourage private industry to invest in renewable energy. The traditional approach is to encourage the market. That’s much too slow and inefficient. We want something more like the way the government used to run the National Health Service. In effect, the government sets up a National Climate Service (NCS) and employs staff to do the work that needs to be done.

If this scheme were rolled out equally across the UK, then it would create nearly 30,000 jobs in one year in Northern Ireland.

In the fight against austerity in Northern Ireland, we have to make three things clear.

fat

The first is that austerity is a class project. And the people who suffer through austerity, the working poor and the dependent – the villains of the piece identified in the mainstream press – are not responsible for the mess. As socialist economist Michael Burke notes ‘the source of the current crisis is the investment ‘strike’ by firms. The refusal of firms to invest accounts for the entirety of the fall in output since the recession. Firms have been hoarding capital, not investing. But hoarding capital means the corporate sector has reduced its borrowing and increased its net savings.’ Burke notes elsewhere that government policy amounts to ‘a reordering of society and is neither intended to nor is likely to achieve deficit-reduction’. We are back to Alan Budd’s ideological assault on the working class majority.

The second point is that even if Stormont is given new life in 2018, none of the parties in the Stormont Executive offers any alternative to Thatcherism. This is not some rhetorical device or a matter of point scoring. I really wish that Sinn Féin was more than just hot air on austerity. But it really isn’t. In a recent article sociologist Colin Coulter observes, “the increasingly marked neoliberal turn within Sinn Féin”, which is most readily apparent in the context of corporation tax, an issue currently on hold but unfortunately due to make a come-back. Coulter notes that “[t]he republican movement has traditionally cast itself as socialist, with the manifestoes of its political wing typically emphasising the causes of equality and public provision. Since entering power, however, Sinn Féin has largely dispensed with radical rhetoric, on social and economic matters at least, and has come to embrace some key elements of the neoliberal agenda”.

The third point is that the evidence of history indicates that if some variety of stimulus economics is enacted, at some point the capitalist class will see a squeeze on their profits and put their considerable power behind a wage squeeze and another erosion of workers’ rights. The only way to get round this problem from a workers’ perspective is to entirely change the system and remove the capitalists.

nyse

 

“Nationalist, Unionist or Other” – The Poverty of Consociational Politics

consocWhen the Anglo-Irish Agreement [AIA] was signed by Margaret Thatcher and Garret Fitzgerald more than three decades ago, the IRA and Sinn Féin rejected its terms with Gerry Adams denouncing it as “the formal recognition of the partition of Ireland [which] far outweighs the powerless consultative role given to Dublin.” In the AIA the two governments made a commitment to taking “measures to recognise and accommodate the rights and identities of the two traditions”. Thus, in the words of academic Chris Gilligan, “instead of a universalist language of equality regardless of race, religion or ethnicity”, the AIA proposed to give recognition to people identified not as citizens but as members of two pre-ordained sectarian ‘communities. The Sinn Féin position has changed considerably since the mid-1980s but the Good Friday Agreement (GFA) of 1998 and the Assembly which developed out of it share the basic idea expressed in the AIA that, “a condition of genuine reconciliation between unionists and nationalists is mutual recognition and acceptance of each other’s rights”. Subsequent to the GFA, the structures and protocols which emerged out of this thinking included the mandatory identification of Stormont MLAs as ‘nationalist’, ‘unionist’ or ‘other’, and an enforced executive coalition in an assembly with sectarian veto rights. The structures of the new Stormont Assembly institutionalised sectarianism and were a recipe for recurring instability.

“those in poverty, often located in the most highly segregated areas, have suffered most during the recent conflict, yet have benefited least from the peace”.

The kind of system of government that was developed, known in academic circles by the unwieldy term ‘consociationalism’, was based on the belief that difference could be managed by a governmental elite made up of sectarian parties and that those in favour of a more radical integrationist approach to government naively deny the stubborn reality of sectarian difference. As John McGarry, one of the chief academic supporters of consociationalism put it in 1995, “the problem with integrationist solutions is that they require a willingness to be integrated, and no such willingness exists in deeply divided societies… Many blacks in the United States are now coming to realize, ironically, that the separate but equal doctrine [in education]… is more attractive than the separate means unequal doctrine [which currently exists]”. This kind of ‘realism’ denies the common experiences of workers in capitalist societies as well as the opinion poll evidence in Northern Ireland showing consistent support for integrating or mixing in schools employment, housing and socially. Moreover, it fails to explain why politicians on all sides in the Executive endorse the same free market economics which materially disadvantage the working class majority. Academic Paul Dixon notes that “those in poverty, often located in the most highly segregated areas, have suffered most during the recent conflict, yet have benefitted least from the peace”.

“It is unfortunate that we have to put up these fences but there is a saying that ‘good fences make good neighbours.’”

Consociational government aims to produce a kind of voluntary apartheid in which each ‘side’ chooses among representatives from its own political ‘community’. The parties which have ultimately benefited from consociational voluntary apartheid are, of course, the hardliners in the two sectarian camps. For Paul Dixon it is the DUP and Sinn Féin, “the most segregation-oriented parties, [who] continue to benefit electorally from continuing communal antagonisms and segregation.” In Derry in 2011 Sinn Féin’s Gerry MacLochlainn perfectly expressed ‘consociationalist’ thinking when arguing in favour of the erection of a new 170-metre long ‘peace line’ in Lisnagelvin. MacLochlainn told a Community Safety Forum meeting that ‘it is unfortunate that we have to put up these fences but there is a saying that ‘good fences make good neighbours.’” It is hardly surprising that in the 1980s National Party Ministers in the South African Apartheid regime began to promote consociationalism as a more workable way of enforcing white rule.

Commentator Alex Kane writes that when the GFA was signed, “there was a general optimism that time would result in the building of trust followed by broader co-operation”. An integrationist arrangement built around ideas of common citizenship could have led to greater co-operation but consociationalism has led instead to widening sectarian difference and political instability while doing nothing to redress inequality, poverty and economic uncertainty. The various existential crises that have beset the Stormont government since 1998 have highlighted the instability of the current system of government. As I write in November 2017, there is a strong possibility that the British Government will be forced to implement direct rule (as it did between 2002 and 2007) in the absence of any agreement over the implementation of an Irish Language Act.

The political commentators cannot resist looking into their various crystal balls. For Alex Kane, “it is difficult to avoid the conclusion that this peace or political process is drawing to a close” and “the present institutions cannot survive”. Writing in the Belfast Telegraph, Anthony MacIntyre argues that if Sinn Féin is to succeed, “in its pretence that a united Ireland of sorts [with Sinn Féin in government North and South] … can be put in place, it requires the apparatus in the north to be firing on all cylinders.” Irish News columnist Patrick Murphy argues that a replacement assembly is needed. He argues that rather than calling for an end to ‘institutionalised sectarianism”, Sinn Féin has used the current crisis to call for a fairer deal for Sinn Féin: “Thus it [SF] missed the opportunity to recognise -as republicans might be expected to that Stormont has also failed to deliver for unionists, particularly the working class. But there was no [Sinn Féin] demand for equality for the poor, the marginalised, the under-educated and those on hospital waiting lists.”

If and when the Stormont Assembly is resurrected, unless it moves away from the separate but equal ideology of consociationalism it will continue to be riven by crises and will continue to do a profound disservice to the working class majority in Northern Ireland.

In 2014 the Workers Party produced a comprehensive Working Paper on Sectarianism, which is available here: workerspartyelection.files.wordpress.com/2014/10/sectarianism.pdf

A version of this article appears on Counterpunch website

 

An Alien’s-eye view of Earth

nightearthImagine an alien who has been told to examine our world for a number of years and then report back to the aliens in her home planet. Imagine that on the alien’s planet equality is more than just a word,  that the goods and services on that planet are produced according to an agreed plan and  made primarily for use by the aliens and not to turn a profit. (Indeed, we can imagine that it took our alien observer some time to get her head around the idea of producing things simply to make money.) Imagine that these aliens are careful not to destroy the ecosystems of their planet and have organised the use of raw materials and the disposal of waste with this in mind. What would this alien observer make of our world in 2017?

patch

Using the cameras on her spacecraft she might notice a moving flux of waste deposited in the ocean from the western USA into the Eastern Pacific. Her computers will tell her that this loose, free-floating “dump” twice the size of Texas, is known in English as the Great Garbage Patch and is at times 1,000 miles long. She will listen to people on radio and TV talk shows discussing their carbon footprints and their duty to recycle but our alien will know from her research that household waste in U.S. society is estimated to be only 2.5 percent of the total waste generated by the society, which also includes industrial waste, construction and demolition waste, and special waste from mining, fuel production, and metals processing. As a result, if an individual were somehow to cut out 100 percent of his/her household waste, that person’s per capita share of total waste would be largely untouched.   Moreover, the higher the class/income level the bigger the ecological footprint. In 2008, Americans in the highest income quintile (the top 20 per cent) spent three to four times as much on both housing and clothing, and five times as much on transportation, as those in the poorest quintile.

trash

Our alien will notice that on Earth at night some countries and cities are brightly lit by electric lights while others remain shrouded in darkness.  Further research will tell her that over 15 per cent of the global population – 1.06 billion people – lack access to electricity -and about 3.04 billion still rely on solid fuels and kerosene for cooking and heating. The 19.5 million people who live in New York state consume as much residential electricity as the 791 million inhabitants of sub-Saharan Africa, excluding South Africa.  Some 40 per cent of the global population – 3 billion people – rely on the traditional use of wood etc. for lighting their stoves.

Zooming in with her cameras, she will notice that over recent years the Arctic icecap has been rapidly melting. She will read online that the likely loss of Arctic summer sea ice will increase global warming and result in ecosystems failing to adapt, causing the extinction of many animal and plant species. In 2017, she learns, the Arctic ice cap melted to hundreds of thousands of square miles below average in the summer as climate change pushed temperatures up most rapidly in the polar regions.

Another check online will tell her that some people are already planning to make a profit out of this disaster and another war might be on the cards. According to Scott Borgerson, International Affairs Fellow at the Council on Foreign Relations and a former Lieutenant Commander in the U.S. Coast Guard: “Thanks to global warming, the Arctic icecap is rapidly melting, opening up access to massive natural resources and creating shipping shortcuts that could save billions of dollars a year. But there are currently no clear rules governing this economically and strategically vital region. Unless Washington leads the way toward a multilateral diplomatic solution, the Arctic could descend into armed conflict.”

War, she notices is much more persistent on this planet than on her own, and she might conclude that Washington, which the article paints as a peacemaker, is in reality warmonger-in-chief and that when the USA steps in to make the rules, the locals had better beware.

slumBy the time she decides to pay a visit to our planet and meet the humans up close, she will already have been preparing for the worst. And, if she visits the poorest parts of our world, that is what she will get. She will visit Togo, West Africa, where only 32 per cent of families have access to toilet facilities. In Togo there is on average just one lavatory for every 53 people, with only 120,000 toilets in a country of 5.8 million. (In contrast, Wembley stadium alone has 2,618 toilets.) In the Kibera slum in Nairobi, Kenya, where more than a million people live lives of terrible poverty, she will learn that women become prisoners in their own homes at night and sometimes well before it is dark.  They need more privacy than men when going to the toilet or taking a bath and the inaccessibility of facilities make women vulnerable to rape, leaving them trapped. On top of this, the fact that they are unable to access even the limited communal toilet facilities also puts them at risk of illness. The situation is compounded by the lack of police presence in the slums and when women fall victim to violence they are unlikely to see justice done. Although Kibera is one of the most densely populated places on earth, it has no police station. 19-year-old Amina who comes from the Mathare slum (population around 500,000) will tell her, “I always underestimated the threat of violence. I would go to the toilet any time provided it was not too late. This was until about two months ago when I almost became a victim of rape.”  Amina was attacked by a group of four men while she walked to the toliet at 7pm. They hit her, undressed her and were about to rape her when her cries were heard and a group of residents came to save her. Although she knew one of the men involved in the assault, Amina did not go to the police as she feared reprisal attacks. Unable to leave their one-roomed houses after dark, many women in informal settlements resort to ‘flying toilets’ – using plastic bags thrown from the home to dispose of waste. In 2017 35.8% of the world’s population  lacks access to any proper sanitation facilities.

concern
Global undernourishment by region

Our alien observer will see a lot of hungry people on her visit to the poor world, for nearly one in six people on Earth is undernourished. In 2017 there are 815 million people who do not have enough to eat. This is more than the 795 million in 2014. These people are chronically hungry because they regularly eat food that provides less than 1,800 kilocalories (kcal) a day. In comparison, people in the rich world on average consume food that provides more than 3,400 kcal per day. (A happy meal contains about 640.) As well as lacking fats and protein, the undernourished lack essential minerals and vitamins such as iodine and iron.

The fact that there are 15 million undernourished people amid the spectacular wealth of the developed world will also give our alien pause for thought. In 2017 moderate or severe food insecurity — defined as a lack of secure access to sufficient, safe and nutritious food — effects nearly 20% of children under 15 in the UK, and the USA . According to a 2009 report on hunger in the USA, 6.7 million people were defined as having “very low food security” because they regularly lacked sufficient to eat. Among these people, 96 per cent reported that the food they bought did not last until they had money to buy more. Nearly all said they could not afford to eat balanced meals The report said that most parents who did not get enough to eat ensured their children received sufficient food but despite that, more than 1 million children still suffered outright hunger. According to the report 50 million people in the US – one in six of the population – were unable to afford to buy sufficient food to stay healthy at some point in 2009.

Source: CNN World

In contrast, in the United States, the number of high net worth individuals reached around 4.78 million in 2015, (an increase from 3.12 million in 2009) and is even greater in 2017. High Net Worth Individuals (HNWIs), defined as all individuals with at least $1 million of “investible assets” in addition to the values of their primary residence, art works, collectibles, etc. At the top of this group are the Ultra-High Net Worth individuals, those with $30 million of investible assets. After losing 24.0per cent in 2008, Ultra-HNWIs saw wealth rebound 21.5 per cent  in 2009. At the end of 2009, Ultra- HNWIs-representing less than 1per cent of this rich club- accounted for 35.5 per cent of global HNWI wealth. In 2017 the number of UHNWIs grew by of 3.5% on the previous year to 226,450 individuals and a 1.5% increase of their total combined wealth to $27 trillion. The wealthiest 400 individuals in the United States (the so-called Forbes 400) have a combined level of wealth roughly equal to that of the bottom half of the population, or 150 million people. The top 1 percent of U.S. households in 2000 had roughly the same share (20 percent) of U.S. national income as the bottom 60 percent of the population.In rich countries the majority of those in society essentially rent themselves out to the owners, while globally eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity

rich

The alien reads about the United Nations poverty summit in New York, and learns that 800 million people today are forced to live on less than $1.25 a day. She reads that 2.7 billion people scrape by on $2.25 per day and almost half the world’s people live on $3.25 per day or less. In 2016 almost 6 million children died before the age of five, largely because of malnutrition and preventable disease.

Our alien reads of the 2010 declaration of President Barack Obama proclaims that his administration is “changing the way we do business” in relation to international aid. “For too long we’ve measured our efforts by the amount of money we’ve spent,” says the bringer of hope. Such assistance, he stresses, breeds “dependence,” insisting that this is “a cycle we need to break.” Our alien shakes her head. She knows that more wealth leaves Africa every year than enters it and that in Sub-Saharan Africa, for example, receives some $10 billion dollars in aid per year while paying more than $14 billion in debt payments to the banks on Wall Street and the City of London. So much for dependence. She knows that worse is yet to come, with the current incumbent in the White House planning an overall cut of 32% to all civilian foreign affairs spending.

Of course, the alien observer is a fiction: but the quotes and the statistics are not and for anyone who believes in the need for substantive equality of human beings, many questions arise. Why is the world so divided between rich and poor countries and between rich and poor people in the rich countries? Why is the sea full of junk? Why is the USA permanently at war? These phenomena are often viewed as being based on a series of happenstances, errors, or on cultural or moral failings. Contingency plays a part in shaping our world,  but for those who want to dig deeper the powerful tools of scientific socialism enable us to understand how the structural elements in the evolving capitalist system continue to reproduce violence, exploitation, inequality and class struggle.

 

The perfidy, ambition, avarice, and cruelty of these rulers

Speech for The Russell Society Commemoration, delivered in Downpatrick, October 2017

The Ireland into which Thomas Russell was born in 1767 was in very many ways a different country from the country we live in today. Ireland (like the rest of the world) was a pre-industrial country in 1796. It was governed by aristocrats and the majority of people made their living on the land or in related trades. The formal political structures of eighteenth-century Ireland were based on religious background, and full membership of the political nation depended upon conformity to the Church of Ireland. Russell was raised an Anglican and was deeply religious throughout his life, but his radicalism would not allow him to accept the relative political privileges which his background allowed.

Russell’s religious thinking tended towards a belief in the coming Armageddon of The Book of Revelations. Upon learning that he was to be hanged, he asked for a stay of execution so that he could finish his study of the coming end times. Pre-figuring that of some ‘liberation theologians’, Russell’s Jesus was a radical, bringing comfort to the oppressed. “When will this social war cease?” Russell asked. “How my heart beats. Jesus wept… Were He to revisit this earth, where would He be found? Would it be at the Episcopal tables or with stall-fed theologians? He would be found in the cottier’s cabin. His hand would pour balm on the mangled body of the expiring husband; and His eyes would spread the consolation of heaven upon the wretchedness of the Irish peasantry.”

Rather than become an Anglican cleric as his father desired, Thomas Russell joined his brother Ambrose as a soldier, and later became a revolutionary activist, a prisoner and ultimately a martyr, dead at the age of 36.  Rather than entering ‘good society’, Russell seemed to prefer the company of the poor. “I am much interested for this seemingly unfortunate young man Russell, wrote Martha McTier to her brother William Drennan in 1793. “He seems very poor, is very agreeable, very handsome and well informed, … His dress betrays poverty, and he associates with men every way below himself, on some of whom, I fear, he mostly lives…”

Russell was born at the cusp of the transition to new manufacturing processes in textiles, extraction and steam power that became known as the industrial revolution and his journals show his keen interest in scientific discoveries of his time. He was born into a world in which people were routinely bought and sold as slaves, and against which he protested by boycotting sugar. Mary Ann McCracken remembered that as a young officer in Belfast Russell had “abstained from the use of slave labour produce until slavery in the West Indies was abolished, and at the dinner parties to which he was so often invited and when confectionery was so much used he would not take anything with sugar in it.”

Thomas Russell was also born into a world of political revolutions. The French Revolution of 1789 encouraged radical movements in Scotland and England, and as far as Haiti where the slave revolt of 1791 led to that country’s independence from France. In Ireland revolutionary activism culminated in the 1798 rebellion which one historian describes as “little short of civil war”.

painting
Source: BBC

Having been a British soldier in India in the 1780s, Russell returned to Ireland and resumed his military career in 1790 as a junior officer in Belfast. The French Revolution in 1789 had been warmly greeted in Belfast as were its ideals of liberty, equality, and fraternity. In 1791 Bastille Day was enthusiastically commemorated in Belfast with parades involving local Volunteer companies, other celebratory activities and souvenir merchandise offered for sale and in October 1791, the Society of United Irishmen was formed in Belfast in Peggy Barclay’s tavern – a pub in an entry off High Street. Russell was an enthusiastic early member. “I confess”, Russell wrote, “[that] I am quite proud of this club [the United Irishmen] … It is the first ever instituted in the history of this kingdom for the removal of religious and political prejudices. I think it as an event in the history of this country and, if properly managed, as the dawning of liberty.”Pressure from Dublin Castle would later force the United Irish movement to become a clandestine organisation as the would-be revolutionaries sought to continue their slow progress towards challenging the status quo. In 1796 Russell was arrested and imprisoned without trial as a “state prisoner” in Dublin and later Scotland. missing out on participation in the 1798 rising as a result.

 

rus

What was the nature of Russell’s radicalism? His radical religiosity was a constant throughout his life, although it was tempered with the guilty pursuit of worldly pleasures. His political radicalism can be seen most clearly in his Letter to the People of Ireland, which was published in 1796, the year of his imprisonment. It is a historical document that can usefully be re-read in 2017. “Great pains”, Russell wrote, “have been taken to prevent the mass of mankind from interfering in political pursuits; force, and argument, and wits, and ridicule, and invective, have been tried by the governing party, and with such success, that any of the lower, or even middle rank of society who engage in politics, have been, and are, considered not only as ridiculous, but in some degree culpable; ….  it became an indisputed maxim that the poor were not to concern themselves in what related to the government of the country in which they lived… Those insolent enslavers of the human race, who wish to fetter the mind as well as the body, exclaim to the poor, ‘mind your looms, and your spades and ploughs; have you not the means of subsistence; can you not earn your bread, and have wives and get children; and are you not protected so long as you keep quiet?’”

It is here, in this radical egalitarianism, in this radical refusal of injustice that Thomas Russell speaks to us from the very different Ireland of 1796. Because the rulers of the world, still want to “to prevent the mass of mankind from interfering in political pursuits.”  Referring to the rulers of Irish society, Russell asks us to, “look at their fruits in history, and see what terrible calamities the perfidy, ambition, avarice, and cruelty of these rulers have brought on mankind; look at the people who are said to make laws for this country; look at some of that race who inherit great fortunes without the skills or capacity of being useful; those fungus productions, who grow out of a diseased state of society, and destroy as well the vigour as the beauty of that which nourishes them. These are some of the wiser heads; these are the hands in which the people are to repose their lives and properties; for whose splendid debaucheries they must be taxed; and for whose convenience they must fetter even their thoughts.”

Unfortunately, this scathing judgement could be used to describe the political and economic rulers of Ireland in 2017 as much as those of 1796. The farcical politics of Northern Ireland played out by the sectarian parties do not blind us to tragic outcomes that the current economic system visits upon the majority. Meanwhile in the South, the Irish Times reports that in 2016 according to the annual Forbes ranking of global billionaires six Irish citizens are members of the billionaires’ club with a combined net worth of more than $30 billion (€27.6 billion),  The richest Irish-born billionaire is include Digicel founder Denis O’Brien, whose fortune is estimated at $5.7 billion, while financier Dermot Desmond is estimated as being worth $1.9 billion. Other statistics show that the top 10% of households receives 24% of Ireland’s total disposable income while the bottom 10% of households only receives 3% The number of people officially living in poverty in Ireland has increased by more than 100,000 since the onset of the recession – meaning that 750,000 people in Ireland currently live in poverty including one in five children.

Despite the development of industry and invention in the past two hundred years, the glaring injustices that inspired Russell to a revolutionary life persist in 2017. These injustices and the lives of revolutionaries such as Russell are our inspiration.

At this graveside last year Lily Kerr spoke fondly of the similarities between Thomas Russell and our late friend and comrade, Des O’Hagan. Des O’Hagan was a source of inspiration to many if not all of us here today and a founder and driving force behind these annual events. He was, like Russell, a great voice against injustice and sectarianism on this island and around the world. We are honoured to remember him along with Thomas Russell here today

Capitalism = Peace?

hill

In the immediate aftermath of the US occupation of Iraq in 2003, one of the first acts initiated by Paul Bremer, then de facto ruler of Iraq, was to reduce the rate of corporation tax from 40 to 15 percent. The flat tax had long been a goal of economic conservatives and was planned for Iraq in pre-war planning sessions with Iraqi exiles, despite its unpopularity among other members of the Coalition Provisional Authority. While leaving a few Hussein-era taxes in place, Bremer exempted his Coalition Authority, the armed forces, their contractors, and so-called ‘humanitarian organizations’ from paying any of these levies. Exempting occupation and some government personnel left only ordinary Iraqis to pay.

The spoils of empire are nowhere as obvious as in the middle-east, where after 2011 men in uniforms and sharp suits (and a few women such as Hillary Clinton) went about destroying welfare provision, state industry and price controls in Libya. In the words of the US State Department, “Libya faces a long road ahead in liberalizing the socialist-oriented economy and recovering from the losses of the ongoing conflict, but initial steps, including applying for World Trade Organization (WTO) membership, reducing some subsidies, and announcing plans for privatization, have laid the groundwork for a transition to a more market-based economy.” (July 2011) Whatever one thinks of the Gadhafi regime, it is plain that, as has happened from Serbia to Iraq, multinational corporations and sections of Libyan society see a chance for enrichment beyond their previous dreams while the majority have found their lives much harder as their standards of living are ruined and their country occupied and divided along sectarian lines.

Writing in 2017 one academic outlines the events following the NATO-aided war of 2011 as “State collapse, never-ending conflicts between ever-changing alliances of armed groups, the expansion of the Islamic State.”  Nevertheless, the same academic argues that we should not be too hasty to attribute blame for the ensuing chaos to those who intervened: “the story of Libya’s collapse recalls the insights of Thucydides and Clausewitz about the intrinsic unpredictability of war. Collective violence unleashes dynamic processes, draws new social boundaries and creates new communities. The debate over whether the intervention was justified would do well to take the imponderables facing decision-makers in March 2011 as its starting point, rather than the current chaos in Libya.” An interesting study could be made of the number of times this excuse has been made by academics in the chaotic wake of the imperialist wars of the past century.

To this academic betrayal of  reality we can add the idea in mainstream political science that imperialism is good for the natives and brings capitalist stability in its wake. In line with past imperial adventures, twenty first century imperialism justifies itself according to a number of ideological propositions, which make plunder seem routine, benign in intent and, indeed, good for the natives. Where once it was the poets and clergymen who sang the praises of empire, that role now belongs to the pundits and social scientists. A routine example of this  can be seen in the assertion of American political scientist Erik Garzke that ‘capitalism, and not democracy, leads to peace’. In an article written with Dominic Rohner, he argues that developed capitalist states no longer gain material benefit from direct imperial expansion, and that the next wave of empire could come from poorer countries: “political instability or dramatic price increases in critical resources could spark efforts [on the part of developing countries] to control mineral-rich regions. Global political competition could also ignite efforts to capture and control scarce minerals. We must hope that rising powers see themselves as beneficiaries of the global economy and endorse open markets in due course.”

Revealing the ideological nature of the mainstream academic writing on these subjects, Swiss academic Gerald Schneider, conceives of   “capitalist peace theory” as bulwark against radicalism, which “could serve as an antidote to the theory of imperialism and other “critical” approaches that see in capitalism a source of conflict rather than of peace”.

While for Garzke, Schneider and the many other defenders of “American exceptionalism” America’s role as a bringer and defender of free-markets is by definition benign, maverick economist Michael Hudson provides a more realistic description: “Finance is the new mode of warfare internationally. Finance aim for the same things that a military invasion aims for. It wants the land, it wants the mineral resources and it wants the nation to pay tribute.”

According to the mainstream fantasy, American military adventures involve what Garzke and Rohner call the “enforcement of a norm of territorial integrity” against those poor countries who would seek to undermine the sovereignty of other nations. America bombs countries and sets up military bases around the world for noble, nation-building reasons. It is developing countries (such as China?) that we must be wary of.

This idea that the market system makes it unprofitable for the USA to seek to control mineral-rich regions or undermine the sovereignty of nations and the idea that capitalism leads to peace are disproven by the reality from the streets of Athens to the bombed-out remains of Sirte.

The “capitalism brings peace” conceit has been also applied to the Northern Ireland situation. In March 2008 the Basra Development Commission toured Belfast ‘to learn how to rebuild a thriving economy in the midst of violent sectarian conflict’. Trevor Killen of the neo-liberal quango Invest Northern Ireland was seconded to the Basra Investment Promotion Agency. He informed the Basra agency that ‘[a]n improved economic climate, where people have a better stake in society, can play a great part in assisting with the improvement of stability and political development’. Killen is currently ‘Long Term Consultant – Private Investment Facilitation in Fragile Situations’ with the African Development Bank

In April 2011 the late Martin McGuinness told the New York Stock Exchange that “We need to replace competition on the island with cooperation to market and promote business.” McGuinness said that it was important to identify “our competitive advantage”…. We need the innovative thinking, the hard decision making, the dialogue that marked the process of political change. This is not just an issue for policy makers but all levels of our community and business sector,” he said.

Peace, prosperity and an end to sectarianism are all worthy goals but these things won’t be achieved, either in Ireland or anywhere else, if they are based on flimsy fantasies about the essentially benign and inclusive nature of capitalism.

An earlier version of this article appeared in LookLeft magazine

 

Have them running up and down the aisle

holz

‘The Employee’ is a sonnet written by Irish/German/French poet, Rudi Holzapfel (1938-2005). I first came across this poem in the Penguin Book of Irish Verse. In the late seventies my brother recited the poem in the school assembly, which might have caused some surprise to the nuns in the hall.

In 1959 Holzapfel was sent by his father from the USA to Trinity to ‘get an education’. He wrote the poem based on the experience of a friend who worked in a Dublin bookshop.

The Employee

Is all that fire put out, that passion spent
On bugger all, that I now worry what the boss
May think, and how to pay the bloody rent?
So I’m the rebel digit on his loss
Account . . . well, damn him and his cookie shop!
Can’t I dream, and love, or try and treat all
Passers-by as human beings and drop
A bob from off some battered article?
I tell you, mate, to please one poor old face,
To make it laugh again, or even smile,
I’d T.N.T. their bastard commonplace
And have them running up and down the aisle.
It is not time, but give my ghost re-birth —
I’ll burn away such sickness from the Earth!
The poem has been set to music by ‘experimental folk’ band, The Wicker Bones –