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The Fair Economy

Issued : Monday 26 July, 2004

My purpose is to set out the framework of a social democratic alternative, based on the long-held values of the political left, but adapted to modern conditions, and attuned to the needs of one of the most open economies in the world.

July 2004
Pat Rabbitte

In May 2003, during my speech to The Labour Party conference in Killarney, I spoke of the need to construct, not just an alternative Government, but also an alternative vision of society. In contrast to the existing Government’s neoliberalism, the purpose of Labour’s social democratic project must be the creation of The Fair Society. It is a society based on social justice, sustainable development and personal freedom. Founded on a successful enterprisebased economy, the Fair Society is about the expansion of the real freedoms that people enjoy; freedoms flowing from access to a full education; that derive from access to a comprehensive quality health service; that obtain from the defeat of poverty and that are secured through the restoration to esteem of the public realm.

Underpinning that vision of the society we can build in Ireland, is a view of the economy that stands in sharp contrast to that which has dominated economic policy making since 1997. The dominance of the neo-liberal right in economic affairs has recently been the subject of a ‘phoney war’ within the coalition cabinet, provoked by the recent Local and European Elections. Senior ministers, we are to believe, are engaged in ideological debate about the future direction of the Government. The Minister for Communications, Mr Ahern, was moved to declare that “ In economic and social policy Fianna Fáil rejects the notion that the state should take a back seat and allow unbridled market forces shape our country“, while Ministers McCreevy and McDowell felt it necessary to respond with defences of their neo-liberal ideology.

The tension that we are asked to believe exists within Government on ideological grounds stretches credulity. After all, Fianna Fáil and the PDs have been in Government together for seven years, and it seems unlikely that senior Ministers of one alleged ideological persuasion would only now have woken up to the supposed ideological predispositions of some others of their cabinet colleagues. Minister Ahern has certainly never looked uncomfortable with neo-liberal thinking before, and indeed, would have been seen as one of its more enthusiastic practitioners. The departure of Mr McCreevy to Brussels may be intended to send a signal that Fianna Fáil is for turning, but the reality is far different. The Minister most strongly associated with the deception of the electorate in 2002 has been retired, and the dominance of the right within Government continues.

There is more to these exchanges, however, than post-election humbug, at least in so far as they prompted questions about the choices that confront us as to how our economy and society are to be managed and governed in the future. A speech by Minister McDowell to the Annual IBEC dinner on 22nd June, has provoked particular comment, since in his determination to justify his neo-liberal prescription for the future, the Minister grossly distorted the history of Ireland’s recent economic success. There are two related issues. First, what role has ‘liberal market economics’, as Minister McDowell describes his political creed, played in the success of the Irish economy since the late 1980s? And, second, is there any alternative to liberal market economics as a mode for successful economic management in the future?

This pamphlet addresses both questions, but its primary purpose is to outline just such an alternative approach to economic policy-making. This is not a manifesto as we have come to use that term. My concentration is on setting out a framework of general principles and objectives, as a necessary first step in developing an alternative, conscious of the necessity to put flesh on the bones of these principles between now and the next general election. My purpose is to set out the framework of a social democratic alternative, based on the long-held values of the political left, but adapted to modern conditions, and attuned to the needs of one of the most open economies in the world. It is an alternative that will bring continued economic success, but which will bring with it benefits other than simply expanded national income. It will bring a better quality of life, more opportunities for personal fulfilment, and a more equal country. It will allow us to tackle some of the many problems which our recent success have thrown up, as well as some of the grosser manifestations of inequality in our society. It will place a greater value on people, and what they can achieve in their own lives, rather than making them subservient to the demands of an impersonal and unrestrained capitalism. It is called the Fair Economy.