Ireland after NAMA

The Regional Studies association – Irish Branch Newsletter Issue 15 can be accessed here.

Justin Doran, Hon. Secretary
Regional Studies Association – Irish Branch (RSAI)
Email: justin.doran@ucc.ie

Previously published in today’s Irish Examiner

The election of a ‘New Republic’ government is a possibility, but it depends on Sinn Féin turning down coalition with FF or FG and implementing leftist policies.

IT IS very possible that in the next general election, whether it is in 2015 or 2016, the Irish people will vote for the most dramatic transformation in politics since the foundation of the State.

The recent elections, opinion polls, and Irish Water protests suggest that a coalition combining Sinn Féin, a new leftist party, independents, and small parties could form the next government. This would be the first leftist government in our history.
There is widespread citizen disaffection with establishment politics, stemming from the Government’s failure to deliver their promised “democratic revolution” and protect the vulnerable and communities.

Growing numbers of people do not feel represented by FG, FF or Labour and have shown they are willing to vote for radically different parties and independents. Polls show that almost half of voters want a new party to be formed and two thirds do not trust the current party political system.

I have described this as a fracturing of the social contract between the population and the establishment parties that has been part of the republic since its foundation. It is this fracturing that presents the possibility for a fundamental transformation of Ireland towards equitable economic development and a society of social justice.

But this is not guaranteed. Many commentators still assert that there is an inherent conservatism within the Irish voter which will mean that, when faced with choosing a government, the majority will vote for Fianna Fáil and Fine Gael.

The status quo of austerity, neoliberalism, inequality, and privatisation could, in fact, be strengthened in the coming election if the independent sentiment is captured by a new party of the right, such as the Reform Alliance, as they are likely to support Fine Gael to remain in government. This would also be continued through a Fianna Fáil and Fine Gael coalition, which is a real possibility as indicated by their current pacts in councils across the country.

The formation of a broad leftist government depends, therefore, on the ability of leftist parties and independents to put forward a coherent policy that can gain sufficient support from the anti-establishment vote.

It will also require the formation of a new party or broad alliance that would represent and involve a break with all the old politics and include those who are protesting for a “New Republic” of democracy, solidarity, community, environmental sustainability and equality. Community groups and campaigns, anti-water-charges groups, NGOs, trade unions, and independents could play a key role in setting up this party. The reality is that politics is as emotional as it is logical. Those in favour of a leftist government need to create a vision based on values and policies that connect with a majority.

There is, despite the caricatures of division, much ground for agreement on the left and protest movements in regard to an alternative policy programme. A review of the left party proposals and campaigns since the crisis shows that almost all would agree with the following six key areas that could form the basis of a leftist programme for government:

1. Reversing water and household charges and the aspects of austerity that have affected the most vulnerable, such as cuts to disability, lone parents and community services;
2. Standing up to the EU to achieve a significant writedown on Ireland’s bank-related debt and a writedown of mortgage arrears for struggling families, similar to that done by Iceland;
3. Addressing inequality through increased wages for the lower paid;
4. An historic expansion of public investment to provide social and low-cost housing, state-provided affordable childcare, improved transport (eg light rail in Cork, Galway, and Limerick), and a public health system that would end the apartheid between public and private healthcare;
5. A series of referendums on returning power to local areas and communities and enshrining basic rights in the constitution such water, housing, health, and welfare;
6. A state and indigenous-led economic strategy centred on environmental technology and moving us away from the dependency on multinationals, thus enabling the creation of employment.

This programme could be funded through the saving of €2bn a year on debt interest payments, extension of our deficit targets, a wealth tax, a 3% increase in corporation tax, changes to private pension reliefs, the financial transaction tax, stimulus investment from Europe, and extracting a greater return (or nationalising) from our natural resources (gas, water, seas, wind).

The state-led economic development and public investment would also provide significant multiplier impacts such as increased tax revenue and reduced unemployment spend. These are not utopian policies. They are implemented by countries much more successful than Ireland and by those that have avoided the boom-bust neoliberal model, such as Sweden, France, Denmark and Austria.

But the formation of such an alternative New Republic government depends on Sinn Féin’s willingness to turn down coalition with FF or FG and become a leftist party that is prepared to implement these policies. It would also depend on getting agreement with the smaller socialist parties. Would they be willing to support such a progressive leftist government?

It will also require additional support, possibly in the range of 20 seats. This is where a new party is necessary and left independents, unions, and protest movements have a key role to play. If these groups and left-wing, or anti-establishment, independents (eg Thomas Pringle, Catherine Murphy, John Halligan, Richard Boyd Barrett etc) do not attempt to form a coherent political alternative they are in danger of leaving the independent political vote to be usurped by a potential new ‘PD-like’ party of the right led by Shane Ross or Lucinda Creighton.

The current period suggests political earthquakes are on the agenda. Spain’s new Podemos party has, in the space of a year, gained such support that it is equal to the country’s two largest parties. Its politics is one of a critique of austerity, the failure of Europe to protect crisis countries, the return to democracy for the majority and not the elite and international markets, a greater role for public services and improved workers rights and conditions.

Combining this with demands for community, and social justice in a new party in Ireland could offer a politics that would win significant support from the anti-establishment vote and return 20 to 30 seats in the next Dáil.

It all depends on who steps forward.

Rory Hearne

A depressing confession: I find it increasingly difficult to imagine a radical left alternative (RLA) taking shape anywhere, as perhaps my recent posts here and here indicate. It’s not that I am a TINA-tout, as Matthew Sparke, whose text on globalization I’m using with Cian O’Callaghan, puts it. There is an alternative. There are alternatives. But geography. Geography.

Ok, so let’s say Irish voters elect a government with a RLA mandate. Let’s hope so. What then? I don’t doubt for a second – and if I’m off, please correct me – that Ireland’s credit rating would sink immediately once the financial world believes an RLA government will emerge here. These guys would have a quick scan of what’s on the cards.

They might, for example, have a look at the taxation agenda (or other proposed policies, all of them with a radical progressive slant). The backdrop here, of course, is that rich people are quite astute when it comes to moving their money around. Not all can, or will. Lots of capital is fixed in place, not quite as mobile as we might think. Still, will the necessary sorts of progressive taxation policies, such as increases in higher rates of income or wealth taxes (but I’d hope also some reductions in sales taxes), scare off some, lots; or, maybe just enough? And what will the credit ratings agencies make of that? Surely they’d hit us. An RLA government here would be such an outlier amidst a wider geography of neoliberal and conservative – fascist? – governments across Europe. Maybe it’d all pass. Maybe we could get by for a while – or at least for the duration of the government’s term i.e. long enough for the sorts of progressive changes people might vote for to be made – without needing to borrow. Maybe.

But then there’s our debts. The orthodoxy – economists will scream: not the orthodoxy, the fact you idiot! – is that even an RLA government would need to keep making payments on all the socialised bank. But I’ve no doubt that, if an RLA government did indeed come into office, one of its promises would need to be that it’d cancel the debt. And there’s a bloody good argument for doing so, on ethical grounds if nothing else. Moreover, it’s costing us so much in real hard cash terms. Hard to fathom.

So what if we defaulted? Let’s run quickly through this scenario. Think about that wider geography. A neoliberal world where bank debts get socialised. Where ‘good governance’ says “ don’t default”. So again, it’s us here in Ireland as a massive outlier. A pariah. A Zimbabwe or a Venezuela in the Atlantic. Can an RLA government survive that? Probably yes. But if the taxation agenda is one thing that’d frighten the ratings agencies, defaulting would be something else entirely. If nothing else, it’d be an interesting time. It’d be risky. Europe would throw a fit. Our RLA Finance Minister would be in for an earful. Again, that wider geography: not just credit ratings agencies and their pals, but our supposed allies in Europe.

Consider finally our much-needed inward investors. They wouldn’t leave, would they? Surely they’d bargain. If conditions weren’t right, they’d push for changes. So maybe an RLA government wouldn’t have too much to worry about. Hmmm.

But there’s an underlying issue here: one of the arguments for an RLA government is precisely that too many workers work for low pay, often in unpleasant circumstances, lacking a sense of security. And while, yes (or no?), maybe the inward investors are less likely to employ people in these sorts of ways, the fact is that the cost of labour as a whole is kept low in Ireland by suppliers, services firms, contractors, who do rely on a ‘flexible’ workforce. We need a new RLA government to design legislation to fix this. It isn’t just about what firms do. They’re allowed to make workers flexible. Our governments don’t regulate them enough. Our unions are too weak to do anything about it. This is precisely the imbalance that rankles. It’s precisely one of the root causes of generally widening inequality here and elsewhere. So let’s say an RLA government comes into office. It pushes for legislation. But won’t it then come into conflict with EU directives on labour or services? What then? Is leaving Europe on the cards? Should it be? I’m deadly serious here: Can we have socialism a radical left alternative in one country?

Alistair Fraser