Developing a Socialist Environmental Policy. Part Three: Mainstream Responses and Socialist Alternatives

This is the final part of  three-part article on environmental politics.

Mainstream Responses to the Climate Emergency

From what we have seen above, many climatologists believe that calamitous climactic change could happen with temperature increases at or under 2°C. Some go further. For example, radical expert James Hansen and his colleagues at NASA’s Goddard Institute argue that due to positive feedbacks and climatic tipping points global average temperature increases should be kept to less than 1°C below 2000 levels. This means that atmospheric CO2 need to be kept to 450 ppm or below.

However, many mainstream experts are prepared to consider considerably higher rates of growth as necessary because they are locked into the capitalist logic of endless accumulation and growth, of making profit rather than meeting needs. The widely-respected Stern Review, for example, settles for a global average temperature increase of no more than 3°C (a threshold beyond which the environmental effects would undoubtedly be absolutely disastrous), which it estimates can likely be achieved if CO2e in the atmosphere were stabilized at 550 ppm, double pre-industrial levels. Yet, the Stern Review also acknowledges that a 3°C increase would bring the earth’s average global temperature to a height last seen in the middle Pliocene around 3 million years ago.

boulter

Some ‘deep ecologists’ would prefer to see the human race extinguished if the rest of the biosphere could survive. For example Prof Michael Boulter of the Natural History Museum in London thinks that “human beings are a failed species – we’re on the way out … Our lives are so artificial they can’t possibly be sustained within the limits of our planet.” Looking ahead, he adds: “The planet would of course be delighted for humans to become extinct and the sooner it happens, the better.”[1]

Many right wing economists argue that the problem belongs to the future and by the time that the worst effects of global warming make themselves known, technology will have been created which will be able to deal with them. As Dimitris Karagiannis of the Greek Communist Party (KKE) notes:

On 18.12.2009 the UN Climate Change Conference in Copenhagen came to an end. Despite the declarations and fanfare, the sharpening of the interimperialist contradictions in the energy field cannot be concealed. An effort for over-accumulated capital to find a profitable way-out through the so-called “green economy”, that is the commercialization of environmental protection and of climate change, is underway.[2]

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Others argue that, rather than abandoning the market, the only way to properly deal with nature’s externalities is to put a price on them and let the market work its magic on them. Carbon trading, developed in the wake of the Kyoto summit in 1997, represents a well-known attempt to put a price on pollution. So, greenhouse gas emissions – that is, pollution – are made into an economically scarce resource, which is supposed to maximize the efficiency in which this pollution is reduced on a global basis. But turning polluting gases into a product may open pathways for profit-making which do not have the desired effect. You might, for example, create an incentive to horde and speculate with this commodity, and you hence might encourage more pollution, because with pollution one can now earn money.

Take, for example, HFC-23, one of the most potent GHG [greenhouse gases], which is equivalent to 11,700 tons of CO2. Precisely because of this extraordinarily high CO2 equivalent, and the associated high earning potential associated with it, it is now feared that new HFC-23 production facilities are being set up in places like China only to profit from the sale of CERs (Certified Emissions Reductions). That is, rather than ‘efficiently’ reducing the production of this highly potent GHG, the newly created carbon markets have introduced a perverse incentive to produce and emit even more GHG. [3]

carbon trading

It’s worth noting that in its report, “Developing the Green Economy in Ireland”, the modestly named High-Level Group on Green Enterprise argues that a new Green International Financial Services Centre (IFSC) could make money by “developing a ‘green IFSC’ brand and capability for Ireland.

Ireland is already an attractive location for international financial services. Potential exists to develop a green IFSC cluster and brand incorporating green investment vehicles (e.g. investment funds of energy companies, banks and VCs), the administration of funds managed under green principles, and carbon trading and associated professional services. The Group welcomes the recent establishment of a sub-group of the IFSC Banking and Treasury Group which is exploring the options for a green IFSC. We would strongly encourage the IFSC Clearing House Group to progress recommendations which emerge. [4]

This is what being Green means to the IFSC, an opportunity to turn a profit. For socialists, I would argue, our priority has to be reducing global warming directly through the lowering of greenhouse gas emissions. This will necessarily involve economic regime change because the current system is inimical to real sustainable development and because technological fixes are too costly, slow in coming on-stream, or too small-scale to deal with the problems.

 Alternatives to Capitalist Barbarism

The radical eco-socialist approach demands that the planet and its people cannot afford the anarchic capitalist profit system and that a largely closed system such as the biosphere (the Earth heated by the Sun) cannot sustain the limitless growth that modern globalised capitalism promises and needs. However, Marxist scholar David W. Schwarzman is optimistic that new ways of harnessing the Sun’s energy might be found, while at the same time opposing the environmental barbarism that capitalism fosters. Among the material and technological components that Shwarzman believes will be essential to an ecosocialist transition are:

  • A global high efficiency solar energy infrastructure, replacing fossil fuels and nuclear energy;
  • Progressive dematerialization of technology, global availability of state-of-the-art information technology;
  • Increase of human population density centred in green cities, elimination of sprawl leaving extensive biospheric reserves, managed to preserve biodiversity.[5]

We have to wonder if technology could ever be “dematerialised” in the utopian way that Schwarzman supposes. Chinese Marxist scholar Li Minqi has little time for this utopian dematerialised eco-future:

4In the post-fossil fuel world, electricity from various renewable sources will have to play a dominant role in overall energy consumption. However, the construction of power plants and other electricity facilities requires not only financial resources, but also workers, technicians and engineers with special skills and expertise, as well as equipment and materials that have to be produced by specialized factories. One cannot simply print billions of dollar bills and expect renewable electricity to be generated. Instead, workers need to be trained in the necessary skills, and new equipment and materials need to be produced. All of these — as well as the construction process itself — will not only consume resources but also take time.[6]

Li Minqi outlines two of the main features that he believes are necessary for an ecologically sustainable (i.e. non-capitalist) society:

“…for an ecologically sustainable society, the use and allocation of society’s surplus product must come under some form of social control through either political procedures or established social norms. Such a society may or may not be economically less efficient than the current capitalist society (with ‘efficiency’ measured by current conventional criteria). However, efficiency would, at most, be of secondary importance in the post-capitalist era. For the sake of the survival of humanity and civilization, it is absolutely essential to ensure that the human economy operates within the ecological system’s natural capacity. With an ‘inefficient’ economic system (conventionally measured) that operates with limited and stable flows of material consumption, humanity can survive. With an economic system that is highly efficient in generating economic growth, humanity will very soon be committing collective suicide.

Second, the future post-capitalist society will not emerge out of a historical vacuum. Rather, it will have to reflect the political and social developments that have taken place in the capitalist era. Most importantly, it will have to accommodate the relatively high levels of political consciousness and organizational capacity of the working classes (in comparison with what prevailed in the pre-capitalist societies) as well as manage to meet the population’s ‘basic needs’ as they have been historically defined. These two historical constraints imply that when the future post-capitalist society does emerge, it is likely to be based on some form of social control over the surplus product (i.e. the appropriation and the use of the surplus product take place through political and social processes, preferably through democratic planning, rather than through the market) and some forms of social and community ownership of the means of production.”[7]

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More practically, we could examine the folowing from the The Belém Ecosocialist Declaration, which was distributed at the World Social Forum in Belém, Brazil, in January2009.

Ecosocialism proposes radical transformations in:

  1. the energy system, by replacing carbon-based fuels and biofuels with clean sources of power under community control: wind, geothermal, wave, and above all, solar power.
  2. the transportation system, by drastically reducing the use of private trucks and cars, replacing them with free and efficient public transportation;
  3. present patterns of production, consumption, and building, which are based on waste, inbuilt obsolescence, competition and pollution, by producing only sustainable and recyclable goods and developing green architecture;
  4. food production and distribution, by defending local food sovereignty as far as this is possible, eliminating polluting industrial agribusinesses, creating sustainable agro-ecosystems and working actively to renew soil fertility.

To theorise and to work toward realizing the goal of green socialism does not mean that we should not also fight for concrete and urgent reforms right now. Without any illusions about “clean capitalism,” we must work to impose on the powers that be — governments, corporations, international institutions — some elementary but essential immediate changes:

  • drastic and enforceable reduction in the emission of greenhouse gases,
  • development of clean energy sources,
  • provision of an extensive free public transportation system,
  • progressive replacement of trucks by trains,
  • creation of pollution clean-up programs,
  • elimination of nuclear energy war spending.[8]

In conclusion, eco-socialism should not merely involve add-ons to current policies. The kinds of eco-socialist approach to the present and future that are outlined here would demand that the communists and socialists develop all policies and practice with the global environmental emergency in mind.

[1] Quoted in “The decline and fall of the Human Empire” by John Gibbons, Village Magazine, June 2011

[2] Communist Party of Greece, 2010, Collection of Articles and Contributions on Current Issues of the Communist Movement, p.174

[3] “Upsetting the Offset: An Introduction” by Steffen Böhm and Siddhartha Dabhi in Upsetting the Offset The Political Economy of Carbon Markets, Steffen Böhm & Siddhartha Dabhi (eds), mayflybooks.org, 2009

[4] Forfás, 2009, “Developing the Green Economy in Ireland”, pp.9-10

[5] “Ecosocialism or Ecocatastrophe?”, Capitalism Nature Socialism Journal ~ Volume 20 Issue 1 2009 pp6-33

[6] Li Minqi, “Capitalism, Climate Change and the Transition to Sustainability: Alternative Scenarios for the US, China and the World” Development and Change 40(6): 1039–1061 (2009).

[7] Ibid

[8] Ian Angus, Joel Kovel, Michael Löwy, “Belem Ecosocialist Declaration”, 2007. Online at http://links.org.au/node/803

 

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Talk on the Economy and PFIs

This was delivered at the annual Northern Ireland Conference of the Workers’ Party of Ireland in March 2018. The information isn’t footnoted and the sources are varied. A few links are provided.

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In this talk on the economy I’m going to look at two myths of mainstream economics. Then I’m going to provide a brief overview of the current state of the economy in Northern Ireland.  I’m going to look at how public finances have been disastrously mishandled through Private Finance deals known as PFIs. Finally, I’m going to briefly discuss alternatives to provision in the short-term and The Workers’ Party’s goal of the socialist alternative. In what follows I’ve drawn on a number of sources, notably the work of economic historian Conor McCabe, the Nevin Institute, the Community Relations Council monitoring report and the work of various journalists and academics.

The facts of the economy in Northern Ireland, as everywhere in the capitalist world, directly contradict the myths of mainstream economics. Chief among these myths is the idea that a freely competitive capitalist economy left to itself generates full employment. It follows from this idea that unemployment is the product of various external problems caused by groups such as trades unions or through government interference.

A second mainstream economic myth is that there is a tendency in developed capitalist economies towards a decrease in inequality, due to the effects of modernisation, including enhanced educational opportunities. So, the idea is that capitalism generates equality. Moreover, the inequality that does exist is the product of the greater drive, hard-work and entrepreneurial vision of the wealthy. According to the mainstream, a person’s income is simply a function of his or her productivity and willingness to work. People are poor because they are not very productive or because they have a weak involvement in the labour force as a result of their own choices. The inequality that does exist is a ‘natural’ result of different skills and effort. In 2004 Robert Lucas, Jr. of the University of Chicago, the most influential macroeconomist of his day, stated that, “Of the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of [income] distribution.” According to mainstream economic view inequality is benign precisely because it can be attributed to different levels education and skill sets.

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The real world, is somewhat different. Far from a full-employment equilibrium, what we see is high levels of unemployment and underemployment. Income and wealth levels, rather than converging, have diverged sharply—and this divergence cannot be put down to differences in education and skills. In short, both of the principal justifications for the system provided by neoclassical economics are bogus.

Let’s look at the current economic situation in Northern Ireland to see how far it diverges from the mainstream economic fantasy. In 2018 Northern Ireland has a low investment, low productivity, low employment and low income economy. Following the global crash of 2008, the Northern Ireland economy has lagged behind the modest growth seen elsewhere in the UK and still further behind the recovery, for some, in the republic.

UntitledProductivity in Northern Ireland (in terms of gross value added per employee) is low, standing at 85 per cent of the UK average. Northern Ireland is one of the UK regions where productivity levels fall below public spending.  The North East of England raises only 29% of its region’s Gross Domestic Product in revenues while public spending reaches 62% of GDP, a deficit of 33%. Similarly, Wales, a raises only 30% of its GDP in taxes but spends 66% and Northern Ireland, raises 27% and spends 67%. Northern Ireland is the poorest of the UK devolved jurisdictions in terms of living standards. Contrary to widespread expectations of a sustained ‘peace dividend’ following the Good Friday Agreement, data show that median household income after housing costs in 2014-15 was, at £380 per week, almost identical in real terms to a decade earlier.

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As we saw, mainstream economic theory says that skilled workers are rewarded for their efforts in acquiring employable skills. Again, the reality is different. Rather than being rewarded for their skills, workers who’d had skilled well-paid jobs in NI have lost these jobs in recent high-profile closures and cutbacks—with Michelin and JTI Gallaher announcing shutdowns in Ballymena, Co Antrim, and big job cuts in the east Belfast engineering plants, Bombardier and Harland & Wolff. In terms of the budget most departments will experience a real term cut in public spending this year, despite DUP promises of £1 billion from the Tories.

The Northern Ireland economy shrank by 1% in the second quarter of 2017.  The Production sector was responsible for the largest decline in overall output in the economy. The 20% fall in Food, Beverage and Tobacco manufacturing, which accounts for more than a quarter of total manufacturing output, explains much of the decline. Much of this is due to the cessation of production at the Japan Tobacco plant in Ballymena, with the loss of 800 jobs. The Services sector declined by 0.5% in 2017 due to a continuing slump in ‘Retail and Hospitality’. Public Sector productivity also decreased slightly, leaving the Construction sector as the only sector in the economy to record growth. The collapse of construction firm Carillion earlier this year is perhaps a sign of change for the worse in the construction sector. It’s certainly a sign that putting construction in the hands of private firms is no way to run an economy.

The failure to restore the Northern Ireland Executive resulted in the Secretary of State bringing a budget for Northern Ireland through parliament in Westminster in which core public spending on most public services will see cuts in real terms.

Unemployment in NI is at its lowest level in almost 10 years and below the UK average for the first time since 2013.  However, as the Nevin Institute notes, the proportion of the unemployed who are long-term unemployed continues to rise. This figure increased by 14% in 2017, indicating that more and more workers are detached from the labour market. In particular, increasing proportions of men have stopped actively seeking work. Nearly a quarter of men aged 16 to 64 are economically inactive. When adjusted for inflation the wages of male part-time workers fell by 5% in 2017. The Nevin Institute argues that the declining earning power of male employment in these jobs, might help explain why men are exiting the labour market. The market has failed these men.

Unemployment and underemployment are endemic under capitalism. Poverty is another outcome of capitalist organization. Owners of businesses generally aim to lower the number of workers or their wages or both.  They automate, they outsource jobs, and replace higher-paid workers by recruiting domestic and foreign substitutes willing to work for less.  These routine actions generate rising poverty at the same time as they create rising profits.  On top of this, from the owners’ perspective the threat of poverty provides a break on possible worker militancy as workers tend to accept what employers dish out to avoid losing jobs and falling into poverty. The latest data show us that 370,000 people in Northern Ireland live in poverty. This figure consists of 110,000 children, 220,000 working-age adults and 40,000 pensioners. Overall, poverty rates have been stable in Northern Ireland over the last 10 years or so at around one in five of the population. However, the poverty rate varies greatly between different groups within the population in Northern Ireland. Pensioners currently have the lowest poverty rate, followed by working-age people without children. Poverty is highest among families with children.

While these figures indicate enormous problems in the local economy, according to the 2017 Barclays UK Prosperity Map, Northern Ireland is the fourth most prosperous region in the UK. This is because some people Northern Ireland are doing very nicely indeed. The supposed growth in prosperity in Northern Ireland has been accompanied by a growth in the number of millionaires resident here. According to the Barclays findings there are now 12,500 millionaires living in Northern Ireland. One in every fifty UK millionaires lives in NI.  Moreover, according to figures from The Guardian in 2012, Belfast has, in per capita terms, more people with disposable cash of $30 million than any U.K. city other than London and Aberdeen. In 2011, 96 of these “Ultra High Net Worth Individuals” lived in Belfast.  As sociologist Colin Coulter notes, “It would be hard to think of a statistic that highlights more vividly the profound material inequities that have survived all the many, often progressive, changes that have occurred in Northern Ireland over the last generation.” Coulter notes that “While the residents of west Belfast, for instance, suffered more than most during the Troubles, they have gained very little in economic terms since the conflict effectively ended. Indeed, there were more state sponsored jobs located in the constituency prior to the cease-fires than there are today, which goes some way to explaining its status as the second most impoverished community in the entire United Kingdom. The “peace dividend” evidently has materialized elsewhere and the data on Northern Ireland’s multimillionaires gives us a broad hint as to where to look.” We can look at an economic system based on exploitation that generates inequality, locally and globally, an economic system which all the main parties on this island endorse.

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Economic historian Conor McCabe notes that government policy in relation to Northern Ireland is based on the idea was that “any aid to profit-seeking growth is automatically an aid to societal growth. And if reality show[s] otherwise, it must be the people … that are wrong, not profit and its margins.” The idea that profit-seeking is the means to prosperity underlies such policies as the privatisation of electricity, the attempt to build prosperity on the back of a property boom, the belief that InvestNI is good for NI, the austerity agenda that has resulted in so much misery and chaos in working class communities and the promise that lowering taxes will somehow raise all boats and produce a prospering economy.

A number of disastrous economic policy decisions have been put in place in the past 40 years, contributing to the development of a neo-liberal global capitalist order. Since the early 1970s the capitalist class has clawed back the limited gains that had been made by the western working class in the period between 1945 and the early 70s. The collapse of socialism in the peripheral countries of the former Soviet Block and in China, whose enormous working class has been placed in the service of western capitalist powers have greatly increased the power of capital.

Examples of disastrous neo-liberal policies in the UK include been the privatisation of steel and coal production, of energy production and of key services including communications. Another key neo-liberal policy has been the outsourcing of the provision of goods and services. Yet another has been the use of private finance agreements to fund schools, hospitals roads and so on. These Private Finance Intitiatives (PFIs) are basically glorified hire-purchase arrangements in which a consortium of financiers borrows to construct a new asset such as a school, hospital or road. The taxpayer then makes payments over the contract term (typically 25 to 30 years), which cover debt repayment, financing costs, maintenance and any other services provided. The PFI initiatives were favoured because they sat well with the free-market myth that the market is more efficient than the state. Perhaps more importantly, they were debts that don’t show up on government balance sheets. The IMF, of all people, note that, “In many countries, investment projects have been procured as PPPs not for efficiency reasons, but to circumvent budget constraints and postpone recording fiscal costs of providing infrastructure services”. And they allow governments to engage on projects in the short term while repayment is long-term.

There are a number of problems associated with the private financing of public goods and I’ll outline some of the main ones. The first problem is that because PFIs put profit first, they tend to cut corners. Secondly, deals are often renegotiated at the last minute in terms favourable to the private financiers.  Thirdly, the financial groups that are tasked with maintaining a school or hospital can go bust. Fourthly, a swathe of corporate lawyers makes a hill of money in the process of setting up the deals. According to the Financial Times, in the UK “lawyers, financial and other consultants have earned a minimum of £2.8 billion and more likely well over £4 billion in fees over the past decade or so getting the projects up and running”.  Fifthly, the cost of repayment can saddle the government with enormous repayment bills, which are many times larger than the original outlay.  In Northern Ireland, by 2017 33 PFI arrangements were in place to build hospitals, schools and roads and they will have cost the taxpayer £5 billion above their original cost by the time the last contract is through in 2043. Most infrastructure projects in the UK are directly funded by government. The remaining PFI financed projects amount to a risk-free money trough for financiers.  PFI is quite simply a matter of the government giving money away to financial groups whose only interest is profit making. In 2014 the Stormont’s Public accounts committee noted that, “there is no strategic programme to review PFI contracts”. This lack of oversight is scandalous.

This Party has, of course, been vocally against PFI as a means of developing infrastructure as have the trades unions. NIPSA has produced some great material on PFIs. And this year Unison has called for a windfall tax on PFI profits, which some in the Labour Party support. This is a good idea, but it only goes so far. A number of these profiteering entities have gone bust and you can’t levy tax on a bankrupt enterprise. The PFI’s should be renegotiated and all projects brought back into the public sector.  As a matter of interest, although Sinn Féin was in theory against PFIs, in reality, SF Education Ministers signed off on 20 privately financed school buildings. Martin McGuinness stated that PFI offered “real potential for value for money solutions”. The financiers must have thought their day had come!

The tide of history seems to be against PFIs. The Department of Education in Northern Ireland has now admitted that PFI does not offer value for money. Throughout the world a fightback against private finance, and against privatisation is ongoing. For example, in Norway following the election of left wing parties to city councils, 21 services have been de-privatised and brought back into public hands in municipalities. In February 2017, 170 employees who were engaged by a private waste collection company became municipal employees when the Oslo municipality took over waste services in the capital. Those who think that the local politicians’ hands are tied, that no alternatives are realistically possible should look at what is being done at local level around the world to push back against the profiteers. While we applaud and endorse these struggles, we are a Workers’ Party. Our goal is the complete management and control of society by and for the working class. That is our goal and that goal informs all our struggles including the struggle against public service profit-mongering. In Northern Ireland a distracted and divided working class has allowed determined and well-financed class of financiers, builders and multi-national capitalists along with their lieutenants in the media and government to have their way. Only a united, class-conscious working class with goals that go beyond trade union demands can begin to challenge the power of capital.

Developing a socialist environmental policy. Part Two: The Global Warming Emergency

Before, the people fought and are fighting still, with honour, for a better and more just world, but now they are also having to fight, without any alternative whatsoever, for the very survival of our species. If we ignore this, we know absolutely nothing.” —Fidel Castro, 2010[i]

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The greenhouse effect is a naturally occurring phenomenon, and is essential to the climate on Earth as we know it. With the natural greenhouse effect the average temperature on Earth is 15 degrees Celsius (59 degrees Fahrenheit). Without it, the average temperature would be about minus 18 degrees Celsius (or 0 degrees Fahrenheit).

The greenhouse effect happens in nature by the presence of “greenhouse gases”, principally water vapour and carbon dioxide (CO2), which trap heat from the sun in the atmosphere and provide a relatively mild and stable climate. Carbon dioxide from animal respiration is cycled into the atmosphere, then taken up by plants in the process of photosynthesis. Animals take in the oxygen emitted from the plants, and the cycle continues. So, the so-called greenhouse gases and the greenhouse effect are necessary for our well-being. But at certain levels greenhouse gases can lead to dangerous rises in temperature.

Studies on the long-term trend show that the CO2 level remained stable at around 280 parts per million (ppm) during the last 10,000 years until they began to rise around the time of the Industrial Revolution. Since the onset of the Industrial Revolution, around 1750, human beings have begun to make a significant impact on CO2 levels in the environment by burning substantial amounts of fossil fuels, i.e. coal, oil, and natural gas. (Other greenhouse gases are produced from human activity. Agriculture produces methane and nitrous oxide, and aerosol propellants produce Chlorofluorocarbons. However, CO2 is the principal greenhouse gas due to the sheer volume released into the atmosphere from burning fossil fuels. CO2 plus these other gases is known as CO2e). The carbon dioxide produced today remains in the atmosphere for almost a century, but 20% of this will still exist for almost another 800 years. It seems clear that whatever we are doing to the atmosphere today will continue to be a problem for our children, grandchildren and many more generations to come.Untitled2Around 1750, the concentration of CO2 in the atmosphere was about 275 parts per million (ppm). Today, the concentration is 387 ppm, or a 30% increase, and rising. Since the last half of the twentieth century, the rate of this increase has risen sharply and is currently about 3% per year. Below we can see changes in greenhouse gas emissions in Ireland in recent years. The 2007 United Nations Intergovernmental Panel on Climate Change (IPCC) assessment report written by a panel of leading scientists argues that it is virtually certain that human activities have been responsible for the global warming that has taken place since the industrial revolution. This is not, as then Stormont Environment Minister, Sammy Wilson, put it in an interview with the Belfast Telegraph in 2008, a “con”.[ii]Untitled3

Data show a long-term upward trend: from 315 ppm in 1958 to 387 ppm in 2008. Levels of CO2 and related gases in the atmosphere are now 38% higher than they were in pre-industrial times

The world is warming at a rate of 0.2˚C per decade and given the greenhouse gases already in the atmosphere, there will be a further long-term warming of 0.6˚C.which cannot be prevented.

According to James Hansen, director of NASA’s Goddard Institute for Space Studies and the leading U.S. climatologist:

Our home planet is dangerously near a tipping point at which human-made greenhouse gases reach a level where major climate changes can proceed mostly under their own momentum. Warming will shift climatic zones by intensifying the hydrologic cycle, affecting freshwater availability and human health. We will see repeated coastal tragedies associated with storms and continuously rising sea levels. The implications are profound, and the only resolution is for humans to move to a fundamentally different energy pathway within a decade. Otherwise, it will be too late for one-third of the world’s animal and plant species and millions of the most vulnerable members of our own species.[iii]

With the likely loss of Arctic summer sea ice, the Arctic Ocean will absorb rather than reflect back solar radiation, which may lead to an additional warming of 0.3˚C. The projected speed of change, with temperature increases greater than 0.3°C per decade and the consequent rapid shifting of climatic zones will result in most ecosystems failing to adapt, causing the extinction of many animal and plant species. The oceans will become more acidic, endangering much marine life.

The world may be already almost committed to a 2˚C warming relative to pre-industrial times, widely considered to be a critical threshold in climate change. A significant global warming, i.e. a 2°C or greater increase above pre-industrial temperatures, could trigger high-impact, low probability events which would cause major climate disruption. In the Irish context Laura McElwain and John Sweeny note that “even below the 2°C temperature target, significant climate change impacts are expected to occur in Ireland during the coming decades. Planning, and especially action, is required to avoid the worst effects of these climate change impacts.”[iv]

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[i] Reflections of Fidel, January 3, 2010 http://monthlyreview.org/castro/2010/01/03/the-world-half-a-century-later/

[ii] Belfast Telegraph, 31st December 2008

[iii] Hansen, J., 2008: Tipping point: Perspective of a climatologist. In State of the Wild 2008-2009: A Global Portrait of Wildlife, Wildlands, and Oceans. W. Woods, Ed. Wildlife Conservation Society/Island Press, pp. 6-15.

[iv] Environmental Research Centre, 2006.Implications of the EU Climate Protection Target for Ireland”.

Developing a 21st Century Socialist Environmental Policy

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This is the first part of a three-part examination of Marxism and the political economy of the environment

Part One: Introduction

“Even an entire society, a nation, or all simultaneously existing societies taken together, are not the owners of the earth. They are simply its possessors, its beneficiaries, and have to bequeath it in an improved state to succeeding generations.” —Karl Marx[i]

Until recently, there may have been a suspicion among Communists that Green politics were mostly the domain of various hippies, anarchists and other upholders of petty bourgeois thinking. If this is entirely the case, then all green ideology might reasonably dismissed as faddish distraction from the serious business of confronting capitalism.

In this regard, we could point to the Irish Green Party and its role in government as well as to its business-friendly rhetoric;

The Green Party believes that ….tax reliefs for businesses should be structured so that the establishment of strong indigenous enterprises is rewarded. [ii]

From a left social democratic perspective green academic  John Barry argues for an  approach to green political and economic transition, “which does not completely reject the positive role/s of a regulated market within sustainable development … [but which]does demand a clear shift towards making the promotion of economic security (and quality of life) central to economic policy”.[iii] He argues that, “an alternative economy and society must be based in the reality that most people (in the West) will not democratically vote for a completely different type of society and economy. That reality must also accept that a ‘green economy’ is one that is recognisable to most people and that indeed safeguards and guarantees not just their basic needs but also aspirations (within limits). The realistic character of the thinking behind this article accepts that consumption and materialistic lifestyles are here to stay (so long as they do not transgress any of the critical thresholds of the triple bottom line) and indeed there is little to be gained by proposing alternative economic systems, which start from a complete rejection of consumption and materialism.”[iv] This suggests that the current economic system is based on the  “consumption and materialistic lifestyles” of most people and not the endless compulsions towards accumulation and expansion which lie at the heart of the capitalist economy (when it’s not in recession). As Karl Marx put it “Accumulate, accumulate! That is Moses and the prophets!”

Or we could give the example of the Green Party in Germany which, under its leader then Foreign Secretary, Joschka Fischer, wholly supported the 1999 NATO bombing of Serbia. Moreover, as Greek Communist, Dimitris Karagiannis notes, “environmental protection” might be used in future as a cynical justification in future  imperialist resource wars:

NATO expands to all parts of the world through various relations, with the support of the bourgeoisie and their political representatives in tens of states including states in the Middle East. It is now preparing itself to adopt a new strategy against the peoples. This new doctrine that will be discussed at its summit in December 2010, provides amongst others the intensification of interventions against the peoples under many pretexts, including, apart from combatting terrorism, internal security, energy security, political and economic crises, even climate changes.[v]

We could also point out that opportunists at all points of the political spectrum have been rushing to don themselves with the greener-than-thou mantle. To take one example, the BNP has taken to linking its ugly racism to environmental concerns:

The British National Party argues that “our countryside is vanishing beneath a tidal wave of concrete” as more and more houses are built. Apparently “the biggest reason all these new houses are needed is immigration. One-third of all new homes are for immigrants and asylum-seekers.” The BNP claims that “immigration is creating an environmental disaster”, and worries that if we let in more migrants Britain will become “a tarmac desert”.  [vi]

To take another example, the Republican Party in the USA relates environmental issues to its free-market ideology:

Private property ownership key to environmental agenda

Republicans know that economic prosperity is essential to environmental progress. We link the security of private property to our environmental agenda because environmental stewardship has been best advanced where property is privately held. People who own the land also protect it. Republicans will safeguard private property rights by enforcing the Takings Clause of the Fifth Amendment and by providing just compensation whenever private property is needed to achieve a compelling public purpose.[vii]

Beyond the area of party politics many commentators on the left and on the right argue that capitalism can be reasonably expected to come up with the “environmental fixes” (e.g. bio-fuels, electric cars, nuclear fusion, carbon capture) and policies such as carbon trading which will solve such environmental problems as global warming. Moreover, many argue that a Malthusian drive towards global population reduction is the only answer to global overproduction.

And from yet another perspective, which again has its adherents on the right and left, anthropogenic (man-made) global warming is not happening and environmental concerns are being stoked up among the general public to suit various interest groups and moral agendas.

Are the global warming cynics right?  It is clearly true that environmental rhetoric is being used in many quarters as the latest trendy guise in which to present ideology and push products. Of course, Marxists should have nothing to do with the politics of “greenwash”, i.e., the cynical use of green language for populist purposes. However, there is an eco-socialist strand to green thinking which makes a strong scientific case for the inability of capitalism to sustain the accumulation of profit without the mass extinction of species and the cataclysmic destruction of various crucial natural cycles. From this perspective, socialism is not inevitable but it is necessary if the world is not to plunge, fairly soon, into an abyss of scarcity and environmental chaos. In short, according to the eco-socialist perspective, socialism is the alternative to growing global barbarism.

What follows is a general overview of some of the main issues. It is the opinion of this writer that communists need to develop scientific and radical approaches to environmental issues, not because the issue is currently “trendy” but because the issues are ones of life and death.

The radical eco-socialist approach demands that the planet and its people cannot afford the anarchic capitalist profit system and that a largely closed system such as the biosphere (the Earth heated by the Sun) cannot sustain the limitless growth that modern globalised capitalism promises and needs. What results is environmental degradation, some examples of which follow:

  • According to the United Nations Environment Programme (2008) the effects of human activities on biodiversity have increased so greatly that the rate of species extinctions is rising to hundreds or thousands of times the background level. Every year, 160,000sq km of tropical rainforest are destroyed, an area almost twice the size of Ireland. These forest areas are home to tens of thousands of species of animals and plants.
  • The damage wrought on the world’s seas and oceans is already so acute that, in the words of Achim Steiner, executive director of the United Nations Environment Programme (UNEP): “The recovery from the changes we’re making will probably take a million years.”[viii] Climate change, overfishing and pollution are causing severe strains on fish stocks worldwide and the total collapse of commercial fish stocks is now predicted to be just four decades away.

This radical ecological approach is also critical of earlier attempts to build socialism in the Socialist countries because these countries also based their economic and environmental practices on two principles that they shared with capitalists: these were

  • that Nature provides “free gifts” which human beings can use as they choose without too many consequences. Rivers can be dammed, species hunted, coal and petrol burned as and when required. Human beings dominate and exploit natural resources. Pollution, species extinction, etc. were treated as ‘externals’ (i.e. not included in the accounts) of the socialist economies, just as they are in most capitalist accounting.
  • that endless economic growth is an essential requirement of a planned socialist

Socialists in the USSR, China and other countries said that the planned socialist economy could provide growth and use environmental resources for the benefit of the working class and peasants and this proved the superiority of the Socialism. In Soviet and Chinese analyses capitalism was seen to be what it is– a ruthless, warmongering imperialist, inhumane system, but  ideas of endless growth and the domination of the world’s resources were not themselves in question. For example,

The Aral Sea: As recently as 1960, this was the world’s fourth largest inland sea, with a prospering fishing industry, and a sustainable agriculture in the surrounding region. In just thirty years, the Aral Sea … lost two-thirds of its volume, its fisheries are totally destroyed. The land that was set aside by Soviet agricultural planners for extensive cotton cultivation has been seriously polluted by fertilizers, pesticides and herbicides, residues, and by salt and chemical residues airborne from the dry lake bed.[ix]

cuba

Given the history and the situation of the Socialist countries, the need to build and grow as speedily as possible was perhaps not surprising but Socialists today are free to learn from the mistakes of Comrades past just as we can also learn from their great achievements[x]. Today also, we can learn lessons from the remaining Socialist countries. For example, in terms of its ecological approach to agriculture socialist Cuba is a shining light. After the collapse of the Soviet Union in 1990 oil imports in Cuba were cut in half, and food by 80%. The island underwent a transition from an industrial system to one of urban gardens using organic methods. In 1997 Havana’s urban gardens produced 20,000 metric tonnes of vegetables and by 2005 this number had grown to 270,000 metric tonnes.

More than two hundred facilities provide needed inputs for urban agriculture—producing, providing, and/or selling seeds, organic fertilizers, biological pest control preparations, technical services, and advice. More than 7,000 Organic Material Centers produce organic fertilizers (compost and vermicompost, worm humus). Water for irrigation comes from piped municipal urban supplies, as well as from wells, rivers, and reservoirs. Water availability is maximized by improvements in the capture of rainwater, as well as by efficient irrigation techniques, especially in organoponicos and intensive gardens. To the extent some imports, e.g., pipes for irrigation systems, are still needed, the Ministry of Agriculture undertakes their purchase and allocation.[xi]

The World Wildlife Fund recently identified Cuba as the only country in the world that meets the requirements of sustain­able development.

We have to ask ourselves whether we are prepared to put aside these fundamental ideas of domination of nature and endless growth, sometimes termed GOD (growth or death). This might be particularly difficult in relation to economic growth, but if the global economy returns to its ‘traditional’ growth levels of 3%, world economic output will double in the next thirty years. Can the world afford the economics of endless growth? Or can social/economic growth be decoupled from CO2 emissions growth?

[i] Karl Marx, Capital, vol. 3, (London: Penguin, 1981), 911, 959

[ii]  http://www.greenparty.ie/index.php/en/policies/economy/business_and_taxation last accessed 26th October 2011

[iii] John Barry “Towards a model of green political economy: from ecological modernisation to economic security”, Int. J. Green Economics, Vol. X, No. Y, xxxx 1, p.2

[iv] Ibid

[v] Communist Party of Greece, 2010, Collection of Articles and Contributions on Current Issues of the Communist Movement, p.163

[vi] Brendan O’Neill,  “BNP’s green disguise”, New Statesman and Society 23 August 2007[vi]

[vii] 2004 Republican Party Sep 1, 2004 . 69-70 Platform http://www.ontheissues.org/Celeb/Republican_Party_Environment.htm,

[viii] Quoted in “U.N. says world fisheries face collapse”, Reuters, February 22, 2008

[ix] . “Russian Environmentalism: Conditions and Prospects” by Ernest Partridge in Human Ecology: Progress Through Integrative Perspectives The Society for Human Ecology, 1995.[ix]

[x] The mainstream view on left and right is that Stalin adopted a crude “productivism” in which Soviet man would conquer and tame nature like a hostile beast. Against this view American historian Stephen Brain shows that,” “[e]vironmentalism survived—and even thrived—in Stalin’s Soviet Union, establishing levels of protection unparalleled anywhere in the world, although for only one component of the Soviet environment: the immense forests of the Russian heartland. (p.2) Brain argues that, “[w]hen Stalin passed from the scene, supporters of forest protection apparently lost the one political actor in Soviet history who was both willing to confront the industrial bureaus and powerful enough to tip the balance in conservation’s favor. (p.27) “Stalin’s Environmentalism”, Russian Review, Jan 2010, Vol. 69 Issue 1, pp 93-118.

[xi]Sinan Koont, “The Urban Agriculture of Havana” in Monthly Review, New York 2009, Volume 60, Issue 08 (January)

 

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.

 

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