August 2014        

The law of unintended consequences


In bourgeois economics, numerous rules and laws have developed to obscure the class nature of society and the existence of the class struggle. Adam Smith’s “invisible hand” is also the law of unintended consequences.
     Smith maintained that the farmer, butcher etc., by acting in their own self-interest, will produce a meal for the consumer. None of them sets out to produce the meal. Likewise, the economic actions of a government or of individuals can have consequences other than those intended. This is the case with the attempt by the Government to privatise water.
     Ireland’s system of local government came from England in the eighteenth and, especially, the nineteenth century. This was the high point of monopoly capitalism. Urban areas had developed rapidly, with slum dwellings, overcrowding, and many outbreaks of diseases linked to such conditions. Dublin at the beginning of the twentieth century was reckoned to have some of the worst slums in Europe.
     Workers were congested in cities. They were an important part of the production process in an era of labour-intensive manufacturing.
     Outbreaks of diseases associated with public health were disruptive to business. Public health issues, such as collecting refuse and providing clean water, were passed to local authorities in order to combat these problems, as private companies had failed, and capitalists were forced to absorb the social costs.
     Now we are in the era of finance capital. Heavy, labour-intensive manufacturing has been moved to the East, where labour is plentiful, cheap, and expendable. Public health and workers’ conditions are not a priority of many of the governments in those countries, and the Western social-democratic media are not bothered if famous brands are produced in sweatshops in Bangladesh, so long as they are cheap in the West.
     In Europe, and Ireland specifically, labour is no longer as valuable as in the last two centuries in the productive process for the type of industries the Government likes to attract here. Indigenous industry has been wiped out and replaced by screwdriver operations, using Ireland for access to grants and European markets or as part of a tax-planning strategy.
     Under pressure from its imperial masters in the EU, the Government was told to privatise and to charge for the provision of domestic water. Businesses were already paying, and domestic consumers were paying through general taxes.
     To carry out the policy it is first necessary to take it away from the local authorities. All the water staff are therefore being transferred to the Irish Water quango. A whole propaganda machine has been established, using the bourgeois press to regurgitate the lie that this is beneficial for the environment, and that there is no alternative.
     If the plan succeeds and our most valuable natural resource is privatised, those capitalists and politicians behind the scheme will be very wealthy, especially when Ireland begins exporting water.
     The fact is that the damage caused by capitalism to the natural environment around the globe has brought about global warming and an increase in desertification. In many parts of the world, especially sub-Saharan Africa, prolonged droughts are now a regular feature. But other parts of the world are being affected also.
     The unintended consequence of the attempt to privatise water in Ireland is the effect it will have on major employers. Companies in the computer industry, such as Intel, are attracted to Ireland by the moderate climate and not simply by the tax regime. (They can get these deals elsewhere.) Other countries do not have our regular rainfall and moderate all-year climate. The Romans never colonised Ireland, probably because after an initial scouting expedition they realised that they could not grow vines and simply called the island “Winter.”
     However, the damp climate means that the temperature is fairly constant all year round. Companies in the computer and IT industries require very costly cooling systems; by setting up in a cool climate, such as Ireland’s, rather than in California, they save vast amounts of money on their production costs.
     The EU’s plan, as implemented by the Government, to transfer the control of water from local authorities to Irish Water has not fooled companies like Intel that this is anything other than a precursor to privatisation, which will drive up their production costs. Already they have begun lobbying for a special deal to ensure that they are not subjected to the profiteering and interruption of supply that will inevitably result from privatisation.
[AH]

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