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Socialist Democracy Bulletin 

September 2011

Bleeding the Irish people dry
Tear these 'peace walls’ down
The test of Libya
Karl Marx and the theory of capitalist crisis
We need a working class party!

Bleeding the Irish people dry 

A couple of years ago the Financial Times ran an editorial in which it called on the then Fianna Fail led government to abandon its costly bailout of Irish financial system.  The FT leader writers declared it was “time to staunch the bleeding”.  In the time that has passed since then and now the costs of the financial crisis have escalated; the Irish state has been shut out of the financial markets had to accept a bailout from the EU-IMF; and there has been further public spending cuts and austerity measures.  There has also been a general election in which the government parties were comprehensively defeated.  Despite the obvious failure of their strategy for dealing with the financial crisis the Irish ruling class continues to persist with it.  There is almost unanimity across the political class as Fine Gael and Labour continue on from where their Fianna Fail predecessors left off.

So what is their strategy? To call it a strategy probably gives too much credit, but two main elements can be identified.  The first is that international capital, whether in the form of financial institutions that lent to Irish banks or multi-national companies based within the state, should have an absolute guarantee of profitability.  The second is that the Irish people should be made to bear the burden of such a guarantee.  This reflects the relative weakness of the Irish capitalist class in the global economy and also its hostility towards its own working class.  Indeed, subservience to international capital and class oppression within Ireland are completely bound up with one another. 


The recent public discussion over the growing problem of mortgage indebtedness provides an insight into this how this class strategy operates.  With the number of mortgage holders in arrears for more than three months reaching 50,000 and continuing to rise, and amid reports of people being driven to suicide and going without meals in order to keep up payments, there have been calls for the introduction of a debt relief scheme to offer some respite to hard pressed families.  But this modest proposal, which is estimated would cost around €6bn, has been dismissed out of hand by Government as it would result for Irish banks and their European creditors.  Such arguments are usually accompanied by sermonising on the need for “moral hazard” and the deterrence of reckless behaviour.  This is of course rank hypocrisy from a political and business class that encouraged the growth of a huge property based ponzi scheme which was fraudulent at its heart and which collapsed with disastrous consequences.  It is an injustice that the victims of that fraud, such as families struggling with hugely inflated mortgages, face the most draconian sanctions while its perpetrators, whether those be Irish bank officials or their European financial backers, continue to be protected.   However, it does serve as stark illustration of the mentality of the Irish ruling class.


The assumption underlying all of this is that if Ireland faithfully follows the demands of international capital then it will be rewarded.   The recent revision of the terms of the EU/IMF bailout has been held up as evidence that this will work.   However, when we actually examine the EU agreement and its consequences for Ireland and also the prospects for the Irish economy we find that the grounds for such optimism are very tenuous.   For a start, the revisions to the bailout, a reduction in the interest rate by two per cent and an extension of the loan period from seven to fifteen years, does nothing to reduce the overall burden of the debt. Indeed, under the new terms Ireland could actually pay more, with more being extracted over a longer period of time.  

Despite revisions the terms of the bailout are still impossible to satisfy.  That they were revised was a recognition that the original terms would have resulted in a default occurring much sooner.  While the new terms are just as draconian they delay default and allow creditors to extract as much as they can from Ireland in the intervening period.  The debt agreement also leaves open the possibility of a second bailout for Ireland.  While the Irish government has dismissed the prospect of second bailout it has also highlighted the commitment of the EU to continue to fund the bailed out states if it is too expense for them to return to the markets.  Of course such support is dependent on states continuing with deficit reduction programmes.  So we have the prospect of more debt being loaded onto states such as Ireland accompanied by more savage austerity measures and an ever greater percentage of government income being taken up by debt repayments.  

The Irish Government has already indicated that it will press ahead with planned cuts despite the supposed easing of the bailout conditions.   Minister for Finance Michael Noonan has boasted that that government has met or “overachieved” in implementing the terms of the bailout.  A modest proposal from the trade unions that any savings should be used to offset some of the planned cuts has been contemptuously dismissed.  The government has said that it plans to press ahead with cuts of €3.6 billion in December’s budget and will be making cuts of at least €2.5 billion in next year’s budget.  It is also due to outline plans for further cuts and tax rises spread over the next your years.  

Trade unions

Having accepted the basic principal of austerity the trade union leadership has no answer to this.  Indeed, as the EU agreement met the only “demands” that they had been making (that the interest rate on the loan be lowered and the period of payment extended) they really have nothing to say, and are reduced to making pleas for a slight softening of austerity measures.   In many ways the trade union leadership reflect and encourage the ideas promoted by the ruling class - that if people are prepared to make sacrifices and go along with what is demanded of them the financial crisis will be resolved and prosperity will return.   Of course this isn’t true, either in a political of economic sense, but the fact that they are propagating it shows the degree to which they completely identify with the interests of Irish capitalism.   

Tear these 'peace walls’ down

The image of 'peace walls' scattered throughout Belfast is a physical manifestation that the scourge of sectarianism is still alive and breathing in the North. The recent calls to tackle this 'problem' suggest no real action to confront them. 

Both the DUP and Sinn Fein on numerous occasions have stated that they must remain. 

Sinn Féin councillor for the Lower Falls, Jim McVeigh, recently said: “I would say with some certainty that most people would not want to see the walls coming down - certainly not in the near future. In my lifetime, hopefully the wall at Clonard will come down, but it's going to be a long process." 

And DUP councillor William Humphrey added: “People believe the wall is required to live in confidence in their own home in comfort and safety.” 

The two main parties believe that the 'peace walls' must stay in place for the foreseeable future. These positions are a mockery of the Good Friday agreement which made empty boasts about a shared future and the ending of barriers between two communities. 

The failure to confront these 'peace walls' is also evidence that the State is prepared to support the continuation of nationalist and orange ghettoes along with Sinn Fein and the DUP. British imperialism is also quite content to shower 'grants' on so-called community groups who exist for one purpose only to keep this sectarian divide alive.

Socialist Democracy believes that these 'peace walls' are in reality an ongoing attempt to keep sectarianism alive. They are also one more sign that the Good Friday Agreement was aimed at keeping sectarianism as a viable force in Irish politics. The 'walls' demonstrate that the sectarian beast is alive and breathing. The challenge is to confront it.

The test of Libya

Much could be said of the conflict in Libya. The dictator Gaddafi has been overthrown, but at the price of the imperialist powers placing a grip on the throat of the Arab revolution. The sheer hypocrisy of their role is illustrated by secret documents showing that only months ago the British were collaborating in the torture of the Libyan opposition. 

A significant footnote in the struggle has been the reaction of socialists in the West. A small layer, drawn from the Stalinist tradition of the European Communist parties, supported Gaddafi. A much larger layer, led by influential academics such as Gilbert Achcar an Juan Cole, supported the imperialist "no-fly" zone - a code for total war in Libya

The classic Marxist position is quite straightforward. We support the Libyan people in their struggle against dictatorship. However we oppose imperialist intervention on the grounds that the imperialists represent a greater long-term threat to Libya and the Arab revolution than Gaddafi ever could. 

The decisive imperialist blitzkrieg that led to the fall of Tripoli has exposed these cruise missile socialists. That's very important, because what they had to say would have had no effect on the fighting in Libya. Where they did have effect is in urging European socialists to support Cameron and Sarkozy. 

That's why socialists unremittingly oppose imperialist adventures abroad - so that they can more effectively oppose their leaders at home.

Karl Marx and the theory of capitalist crisis 

Most working people know of Karl Marx as a ferocious critic of capitalism who predicted the sort of economic catastrophe that we are living through. 

However in today's society, with capitalist control reaching into every corner, it is not surprising that Marx's ideas are misinterpreted. Many people believe that crisis grows out of the struggle between capitalists and workers. From this point of view it can make sense to call on the workers to capitulate in order to resolve the crisis - just the sort of position taken by Labour and Trade union bosses. 

Another misconception is that the crisis has been caused by the enormous gap in earnings between rich and poor. That would mean that the way out of the crisis would be the programme proposed by the British economist Keynes - tax the rich and increase public investment so that full employment will put the economy back on the rails. Again this is favoured by our leaders while what happens is that the poor are taxed in order to fund the bankers and bondholders. 

In fact what Marx spelt out about capitalist crisis is quite different. He explained that crisis arises from competition between capitalists and that means that capitalism is always unstable, sliding between boom and bust. The basic criticism of capitalism is that it ends by fettering human productivity, with mass unemployment in the midst of plenty. 

We are at a stage now where capitalist strategy is not working. Calls for state investment would increase debt, but the continued squeeze on workers will collapse the economy. We are facing the default solution - a global recession where resources become worthless and where workers wages and living standards are driven down and down until they reach a level of penury that allows the capitalist cycle to begin again. 

And this brings us to what Marx had to say about the working class. They are not part of the crisis of capitalism, but the solution to that crisis. We are surrounded by the things that can provide a decent life for all. They are being cut away because capitalism exists to turn a profit. 

If the workers organize independently. If they take control of the resources of society. If we organize to meet human needs rather than profit, then we will have a sustainable society free from boom and bust - a socialist society.

We need a working class party! 

As the economic crisis sweeps through Europe it takes different forms in each country, as does the level of resistance. Greece is universally known for the ferocity of its resistance, Ireland for the astounding level of acceptance of years of austerity. The reason for the difference is clear enough. In Greece the working class is stronger, with a large socialist movement. 

Irish workers have demonstrated angrily in large numbers, but they lack a voice or any means to take action. The only voice that is heard is the voice of Irish capitalism. Labour and the trade union leadership echo that voice and hamper and paralyze any attempt to build a coherent opposition. 

The ULA represents an opportunity to give the workers a voice, the opportunity to build a new mechanism for action, the opportunity to advance a working class programme, the opportunity to build a party. 
At the moment it is a hodge-podge. It is a movement. It has TDs, members and branches and components of a common programme, but it is not a party. It is only now suggesting a common activity alongside a jumble of other campaigns and activities carried out by the individual organizations that make it up. 

The ULA has the beginnings of a programme in its call to repudiate the debt. In the view of Socialist Democracy it is mistaken in the common view that the policy of the existing Irish state can be modified to tax or restrict capital or in the belief that a widespread level of protest can force a change of policy by the government and IMF. 

Many of the steps we should take are unclear. That's why we need a common organization, why we need to act together, why we need a broad democratic discussion. 

One thing is clear. Any gains that the workers make they will have to seize through their own actions. 

That's why we need to begin building a working class party today.


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