From Socialist Voice, November 2008

There is an alternative

Ireland has one of the most open economies in the world, depending largely on foreign capital, particularly from American companies. We have a thousand large transnational companies that can decide the fate of thousands of workers, with no stake in Ireland’s development.
     The governments of the day, from the 1970s and 80s, pursued Thatcherite and Reaganite policies of allowing the so-called “free market” to decide policy for the national economy. This meant abandoning any policy of measuring the real wealth of a country in all its functions of looking after the welfare of the whole people, by developing our national resources, concentrating on a standard of living based on the real value of goods and services, rather than encouraging a consumer spending society (one of the highest-spending in Europe) and allowing bank credit to expand beyond the real productivity of the country’s work force.
     In joining the EEC (now the European Union) the government handed over control of finance, social policy, national resources, and foreign policy. Assurances of national control were, and are, for public consumption, while politicians wholeheartedly embrace the ideology of dismantling services and pursuing aggressive market policies.
     The economies of capitalist countries could survive only by massive credit creation, with ever-increasing divergence from real industry and agriculture. Because of the presence of socialist countries, workers in capitalist societies had the power to extract better working hours, pay, and conditions, because of the fear of their turning to socialism.
     With the demise of socialism in Europe and Asia and the availability of the newly impoverished workers and the markets of those countries, capitalism got a temporary boost. To encourage individual consumption and to remove people from a sense of responsibility towards their fellow-humans, the ideology promoted was one of “personal development” and “getting on.” Advertising promoted individual success, life-style scenarios, and aspirations of wealth. A false idea of freedom was promoted, with the free movement of workers peddled as a desirable way of living rather than the ruthless exploitation of migrant workers that it is.
     The rich traded in shares, buying and selling companies for profit, with no interest in what was being produced; and banks allowed loans of massive amounts without corresponding deposits. Governments issued paper money not linked to the real national production of the economy, and so a vast weight of fictitious money expanded the supposed wealth of countries. Finally, as debt grew, what was real and what was fictitious cannot now be unravelled.
     What really happened was that in all the so-called developed countries the gap between rich and poor widened. A section of workers were bought off with the expansion of credit and the availability of low-cost consumer goods, at the expense of the workers in developing capitalist countries. Tax relief and credit allowed the production of inappropriate housing, and unneeded services.
     Now, as wages are lowered, the need of capitalism for constant useless consumption cannot be satisfied, because workers are in debt, the cost of essential services has rocketed, and newer, low-cost capitalist countries are at the earlier stage of workers’ exploitation, with the power of European countries and the United States rapidly declining. The consequence for workers in those countries is that, by stealth, the social structure of society has been weakened, and privatisation has all but eliminated public services. Threats of unemployment and cuts in wages are now the sword hanging over our heads.
     In these conditions, what can workers do? Give in to threats, or fight?
     The first thing is to expose the structure on which wages and public services are based. Our economy is measured by rules set by economists who subscribe to an economic system that says that “private enterprise” creates wealth, that governments are there to back it up and to provide welfare to its casualties in order to prevent citizen uprisings.
     The available government spending is based on its ability to raise taxes on wealth and income. The amount it allocates depends on the cost of supplying those services. Rules such as those governing public spending as a proportion of the gross domestic product* are constructs, and are limited by the power of the owners of property and wealth. The present EU rule of allowing only 3 per cent of GDP for public spending is a manifestation of the policy of limiting services to the people by the power of the state, or groups of states, on behalf of the owning class.
     The distribution of national wealth will be better if organised workers are willing to challenge these dogmas. We need to get back to what is real: real production, real services, evaluation of what is really needed. We need a movement to reclaim public services from the clutches of private companies that charge a fortune for them. Then we can reduce our public spending in a real way.
     In Ireland, because of our size and the openness of the market, constrained by EU rules, we have a hard task; but people are aware that things can’t go on as they have been, and alternative movements are growing all over the world.
[DUB]

*Gross domestic product (GDP) is the market value of all the final goods and services produced in a country in a year, plus the value of the goods and services exported, minus the value of goods and services imported. This includes government spending.

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