From Socialist Voice, March 2010

Gombeen capitalism exposed

The malign domination of Ireland’s economic and political levers by financial and property interests has come home to roost. Figures issued last month by Davy Stockbrokers demonstrate the inept short-termism of Irish finance capitalism over the past decade.
     The report not only indirectly exposes the lack of vision of the Irish political class but lays bare its subservience to the agenda of a dominant coalition of builders and speculators. It demonstrates furthermore the inherent weakness of the Irish private sector in developing a sustainable industrial base without adequate state-led support and development.
     The report makes stark reading. Taking the years 2000–08, it illustrates how national capital stock increased by 157 per cent in real terms, from €222 billion to €477 billion. While this was one of the highest in the EU area, it was housing that actually accounted for the bulk of the increase: €184 billion, or 72 per cent of the total.
     Housing is, of course, socially necessary; but from the point of view of a country’s national wealth it is an unproductive asset, in that once built a house does nothing in the way of contributing anything further to the national stock.
     Once housing is excluded from the figures, the actual productive capital stock (which in contrast has the potential to, and in fact does, contribute to the national wealth) rose by only €70 billion, to €174 billion. A significant portion of that—€20 billion—went into retail, transport, and storage. As the Davy report identifies, these are principally foreign-owned. Furthermore, they are of little long-term consequence for the development of the economy to justify such a significant channelling of the national income.
     Of the remaining €50 billion, the state and public enterprise investment made up €33½ billion, principally in such areas as roads—which have, admittedly, improved over the last decade and made a real discernible impact. Most notable, however, was the fact that the productive stock of the private sector rose by a mere 26 per cent in the same eight years, at €17 billion.
     A number of lessons can be drawn from the figures. The obvious one is that our national infrastructure, the basic organs that keep the economy alive, are an under-invested shambles. As the Communist Party has repeatedly pointed out, our telecommunications and broadband capacity have been progressively sucked dry by foreign profiteers, eagerly assisted by our client-friendly political class. Furthermore, our schools are positively Third World, as the state continues to herd schoolchildren into overcrowded prefabricated shacks. Notably, these are two areas that the report has identified as requiring urgent and significant investment.
     Yet it is clear that Irish capitalism is not only too structurally weak but utterly incapable of leading such required investment. It is interested only in protecting private shareholder wealth, not socially necessary development. Indeed evidence is now suggesting that private-sector investment is in any case regressing to levels that pertained in the 1990s.
     Unfortunately, the Irish state as at present constituted is unlikely to lead in this regard either. The governing class in Dáil Éireann are more interested in dancing to the tune dictated by the EU Commission, which effectually wants to micro-manage the Irish economy, in the interests of Franco-German monopoly capitalism. This is part of the reason why the Government is keen to engage in a project of further rolling back state investment in the foreseeable future.
     At a time when the national labour movement is engaging in a struggle against pay-packet cuts it needs to be mindful of broadening out these campaigns beyond merely defensive actions over the price of labour to one that begins to challenge the political and economic structures on which the rotten edifice of Government action is premised.

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