January 2017        

Democracy: An impediment to capitalism

Eoghan M. Ó Néill

“The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.”
     Marx wrote these words in the Communist Manifesto in 1848 and in so doing accurately described the role of capitalist liberal government. Over a century and a half later, some argue that we have moved on and that Marx’s description is no longer relevant. After all, we now have an almost universal franchise. We have a multi-party system, from which we elect a “representative” government, which operates “in the interests of the nation.”
     But form is not the same as substance. As the dynamics of capitalism have driven changes in the form of production without altering the exploitative nature of capitalism, so too have these same dynamics changed the form of the state while continuing to reflect the interests of the capitalist class.
     The universal franchise was not a natural development within capitalism but was something that was hard fought for by the working class, and one that the bourgeoisie reluctantly conceded. We may choose parties, but we have no say over policies. Democracy ends at the ballot box.
     Just as the process of production remains in flux, so too has the form of the state, which must remain in keeping with the needs of the capitalist class. Despite the myth, the capitalist class is no longer made up of individual industrialists, struggling in competition. The capitalist class is now transnational corporations, with monopolistic control, led and controlled by large block votes and management teams rather than individual shareholders.
     Disguise it as best they may, the power of national governments has waned and is under continuing pressure to withdraw from the economic arena. The continuing crisis of capitalism has accelerated the dynamics of globalisation. In turn, the national management of economies is being restructured to reflect the material conditions of a globalised economy. The contradiction between democracy and capitalist accumulation can no longer hold.
      The impact of this global capitalist transformation has thrown light on the precariousness of liberal social democracy, particularly so here in Ireland. The Irish state has been hit by a triple whammy. Firstly there is the continuing colonial relationship with Britain. British partition of Ireland and its continued control of the north-eastern counties has distorted the economic development of both the Republic and the northern statelet.
     Historically, industrial development in what is now the Republic was constrained by British imperialism, even after national liberation. Partition and the separation of the more industrialised north-east continued to negatively affect the economy of the emerging Republic. In the north-east, economic development remained subject to British control and interests. It was the British state that decided on the destruction of the industrial base in the north-east of Ireland, not the people of the north-east, nor the people of Ireland as a whole.
     Secondly, the Irish state’s membership of the EU has brought a loss of economic and political sovereignty. EU membership brought with it the surrender of control over fisheries and agriculture, the loss of budgetary control, loss of control over competition, loss of control over the raising of state borrowing, and the surrender of control over negotiations on international trade agreements. Furthermore, the Republic is coming under extensive pressure to surrender control of some of its tax policies. Ireland was also bullied into accepting the lion’s share of private debt from European banks.
     Thirdly, there is the power of American transnational corporations, which are demanding the surrender of natural resources, such as gas and oil, and which wish to introduce fracking into Ireland. Meanwhile they continue to move production processes out of Ireland, leaving only shell companies, which act as a conduit for the repatriation of global profits for the purpose of tax avoidance.
     Transnational corporations also use Irish financial services to move the criminal proceeds from international tax evasion and corruption. They determine the tax status of their subsidiaries in Ireland, and also determine the actual rate of corporation tax they pay. These corporations have also sought to constrain the struggle for trade union recognition, have supported anti-union laws, and have increased the precariousness of employment.
     As capitalists seek to address the continuing crisis within capitalism by means of a globalised economy, impediments to that process, such as national sovereignty, must be reduced if not fully removed. States will be compelled to open up the public sector to privatisation as capitalism demands new markets. Governments must surrender control over economic, environmental and industrial relations legislation to transnational corporations, which will design and vet such legislation.
     Despite the franchise, we have no control over economic affairs, and never had. The state may allow us to decide on the voting age of the electorate but will not allow us any say on important international trade agreements.
     The Government and the Northern Ireland Assembly cannot be described as sovereign. The peripheral states of the EU, Ireland included, cannot even claim to be managers of their own economies. They have been reduced to nodes in globalised supply and value chains. They have been reduced to the status of comprador, answerable not to their own people but to their imperial masters.

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