Building a new citizenship
Issued : Friday 27 March, 2009
Making the real alternative in solidarity
Delegates, Comrades and Friends,
I wish to thank members of the Party for re-electing me as President of the Labour Party. May I also wish all of our candidates in the June Election every success - be it in the bye-elections the European Elections and the very important local elections to City, Town and County Councils.
This Conference takes place at a time of crisis in economic terms but also at a time when there is evidence of a great desire, and willingness, to change.
We in Labour must respond with a critique that is as fearless as it is honest. We must be resolute, and courageous too, in setting out the basic elements of the new economy that needs to be built, the new connections between economy and society that are needed, the transparent reforms in governance that are demanded, and the role of the State in a mixed economy in recession.
When I say that we need to be fearless, I mean that we have to in the first instance claim the space for a new and different discourse. That discourse must have a content that is practical as wells as inspirational. We cannot talk about the new and needed alternative in the same language, within the same boundaries of that which has failed and must be discarded.
The present economic morass in which we find ourselves must not be regarded as the consequences of an accident. Its international dimension was sourced in a version of economics that was carefully propagated or for example, the Chicago School. It was based on a radical individualism, on unregulated markets, and an extension of financial instruments so as to include virtual products based on speculative estimates of growth and indebtedness.
The Neo-Liberal model of this economy drove a version growth without substance in production and export terms. Among the high priests of this madness was current European Commissioner, Charlie McCreevy. As we know, having facilitated speculative alternatives to real growth at home, he later took to lecturing those in Europe who believed in the social economy such as the Scandinavian countries that they were backward in not adopting the heady mix of liberalisation, privatisation and speculation in virtual financial instruments, all facilitated by regulation with a light touch, that he and his party had adopted for Ireland.
Let us, then, not have any affected amnesia as to those politicians, and what Parties, have brought us to the point. There is no we that must take on responsibility for the neo-liberal economics we have endured. The parties responsible were Fianna Fail/PD Governments.
For us now to address the way forward in economic terms, in such a way so as to build social cohesion, we must be clear on what it is that constitutes the project of the Left as the only real alternative to that which has failed with such disastrous social consequences, as 354,000 people out of work and the prospect of that figure rising to 500,000 with all the consequences, social and economic, for families and communities.
Our project is not simply the demonstration of political incompetence. That speaks for itself. Neither can it be a resuscitation of that which has collapsed with such disastrous consequences for citizens. We have to state that the Neo-Liberal model of the economy and society has failed and that a new social model of the economy, must be, and can be put in its place.
This model is not simply more democratic, inclusive, sustainable, egalitarian, and positive. It is also based on better economics. Furthermore, more equal societies with a social economy are healthier, more cohesive, and more creative.
The advocates of that which has failed have not gone away of course. Indeed, having prescribed a toxic medicine they now seek a role as undertakers in the media. Refusing to recognise their failed model, they obscure the consequences of their wild irrational economic assumptions, their lethal policy prescriptions.
Their response now to the present crisis would be as callously indifferent in its social implications, by way of adjustment or response, as it was when they were advocating a radical individualism and supporting a trickle down economics that required the existence of poverty as an incentive.
There are exceptions within the intellectual community. There are those who write and speak of wealth and inequality. They must be our allies now and our inspiration at this time of change.
Dr Padraic Kenna, in his most recent book, quotes a report prepared for Investec Private Bank by DKM Consultants in 2008. It pointed out that €41 billion was added to the collective wealth of the richest 450 people in Ireland in the three years from 2005 to 2008. It spoke of 'quiet wealth' of around €11 billion accrued by those who sold land for property and such infrastructure as roads.
There was no limit of course to that upon which the Fianna Fail/PD governments invited investors to speculate- the need for a home, health, education- it did not matter.
Dr Kenna states that housing is now the central repository of personal wealth with a nominal value which rose from €39.1 billion in 1981 to €553.5 billion in 2005. He also quotes a Bank of Ireland report in 2007 Wealth of the Nation which showed that the asset base (defined as gross assets minus residential property) of the top 1% of the population increased from €86 billion in 2005 to €100 billion in 2006.
This is regarded by some as the achievement of good times. Good for whom, one might well ask.
Of course most of this artificial growth would not have been possible had the Kenny Report, with its proposals to control the cost of building and essential land, which Labour consistently supported, been introduced.
But how was this new wealth being distributed?
While speculative fortunes were being enhanced in one Fianna Fail/PD budget after another Ireland still remained among the worst countries, as adjudged by the OECD for wealth distribution. In 2006 it was in 27th place out of 30 countries. In the same year, while claiming to be the second richest country in the European Union, and occasionally the world, Ireland had the second lowest level of social protection. Social protection includes childcare, housing and amenity facilities, transport and the basics in general for a decent housing and work environment. Social protection is what defines citizenship.
We must remember that this version of the economy which has brought us into crisis was possible because the parties who promoted it secured political support. In trying to make sense of that maybe we also remember RH Tawney's old observation on why there was public support for inequality. He gave the example of tadpoles who put up with their miserable condition in the prospect that one of their number might one day sprout a jaw and leap to land and become a frog. Some no doubt felt that their day might come, that they might drive at speed in dark glasses, in an SUV, out of a gated community P.D. style.
Perhaps this was so. We should remember too, however, that there was uncritical institutional support for this version of the economy from banks, the higher echelons of the State, University Presidents, County Managers.
They all bought into the single model of the speculative economy.
There was particular enthusiasm from movers and shakers, or what can be called the toxic elite who hopped from one Board to another with different levels of financial agility and illegality. This toxic elite, we should remember, remains largely in place. It is these same people who now turn to the state and the taxpayer for succour and support, for guaranteed solvency for all of their operations, including the toxic assets that were the source of their remuneration and bonuses. Keeping that show solvent has been, as many small businesses will be aware, at the cost of liquidity, a liquidity that is vital not just to create but to retain jobs.
Already, of course, taxpayers in general are paying for the actions of that small toxic network. We are all doing so, insofar as the Government borrows for day to day running of the country at a rate several points higher on foot of the damage done to the country's reputation. That reputational capital which had been built up over decades was squandered by the irresponsible actions of some of those who headed Anglo Irish Bank, aided by those who chose not to inform themselves; those who colluded by their silence.
Let me make some suggestions that follow from what I have said:
We cannot, nor should we, solve our immediate fiscal problems by addressing our revenue demands solely to income. We have to target, and claw back, a real contribution from such wealth which has accrued.
Much of the wealth, admittedly reduced by a collapsing market was made possible by political actions. Fianna Fail led governments facilitated all of this in one McCreevy budget after another.
In its socio economic review of 2008, CORI quotes a Goodbody's Economic Consultants Report that shows that between 1999 and 2006 the urban renewal scheme in terms of tax revenue forgone was €1,423 million for the seven years.
As far back as 2004 the Revenue Commissioners figures indicated that property tax reliefs had an annual cost of €8.4 billion each year. As CORI point out, this would amount to a figure equivalent to 22% of total taxation.
Not everybody benefited from what is called the boom of the Celtic Tiger years. So let us put an end to this myth that we all shared in this wealth accumulation.
Of those who benefited from tax relief from multi-storey car parks over 80% of them had incomes of over €200,000 in 2006. The more disposal income you had to spare, the more you could use your accountant to benefit from the property tax relief.
Revenue Commissioners figures show that in the four years between 1999 and 2003 the number of top earners benefiting from very low tax levels of less than 15% had increased from 18.25% to 20%.
Indeed, of the top 400 earners, three reduced their liability to zero and 48 high earners kept their liability below 5%.
Given such encouragement, you can see why such people would need a bank of their own with a light regulation touch.
Why is it, you might well ask, that it is so difficult for wealth to be discussed in contemporary Ireland. Many of the commentators who write endlessly of public expenditure that must be cut, and income tax that must be extended to the lower paid, find it very difficult to allow wealth to be mentioned. This is not accidental. There is more than an absence of time or scholarship involved. There is an exercise of caution, of fear, in conditions where there is a strong tendency to monopoly in the media. It is a constant finding, of course, from wealth tax studies that opposition to wealth tax is based much more on what would be revealed by any wealth tax than on the issue of what the yield of such taxes might be.
The politics of the Right that gave property related tax breaks to those who thought paying tax was for little people, the politicians of the Right who sneered at the social provision of the Scandinavian social economies as backward and encouraging disincentives to individual wealth, gave us, as their alternative to the social economy, unrestricted market economics and regulation with a light touch. Thus they facilitated the degradation of governance and sacrificed trust at home and Ireland's reputation abroad.
Again, we should remember that the proponents of market extremism have not gone away. Nor have they reformed. They were opposed by Labour at every step of the way and will be opposed until the consequences of their failed model is recognised and we have made a beginning on building its real alternative - a responsible social model of the economy.
The politics of the Right cannot be the alternative that addresses our current situation or our prospects for the future. That politics is toxic in social economic terms and is recognised as such in one disaster area after another of the global economy. Economists such as Nobel Laureates Joseph Stiglitz and Amartya Sen have written of it in such terms.
Yet here in Ireland, where nobody on the Right admits a mistake, the old politics, the bad economics is presented as the sole source of the alternative in a media often devoted more by celebrities comment than to any substantial critique. There is also what I am afraid I must call a certain moral cowardice involved among those who refuse to recognise the difference between the politics and the economics of the Right and the politics and economics of the Left.
It is simply lazy to refer to all politicians, irrespective of their ideological or policy differences, in the phrase 'the politicians' and thus tacitly subscribe to the fiction that there is no difference. Indeed, it is worse than lazy, it is a serious contribution to public cynicism at best and at worst a celebration of political ignorance.
Let it be said, Labour's policies did not deliver our present chaos.
Labour's policies would have made a difference if implemented.
Labour's policies are now the real alternative based on equitable, ethical, transparent and achievable policies.
What is needed now is a campaign to build a new citizenship. That is the only true basis of a real solidarity. It is the best prospect for a return to trust - a trust that has been squandered at so many levels.
We need a viable political system with clear options and real choices. We need a discourse that is capable of handling all of the possible ethical and moral connections between economy, society and the state. This cannot be simply a discourse for experts. It must be a publicly informed discourse with real participation. Neither can we afford to jettison real and important areas of scholarship and policy such as economics, sociology, law and administration.
We cannot afford to substitute a celebratory populism for real policy discussion, choice and decision. It is not a time for anti-intellectualism. Neither can the new citizenship we are required to create, be reduced to an appeal for voluntary activity. Much more is at stake. It is about delivering and achieving a consensus on the values by which we can live together beyond individualism with Justice, Equality and with respect for the environment.
In achieving this and preparing in the short term, we should define a floor of rights and raise it progressively, use our taxes to sustain it. A social economy can deliver a system of guarantees in relation to citizenship in terms of both security and participation. With the guarantees we give we can break the cycle of inter-generational poverty, to create true access and participation.
We must not abandon our global pledge, already previously broken, to the poorest of the poor. We must keep our revised commitment to the UN target for ODA and reach 0.7% of GNP in 2012.
We will need to redefine work, recognising its human character, going beyond its narrow utilitarian designation as solely pay for time spent in the traded economy.
We must recognise the work of carers for example, and call it employment in the social economy, which is what it is. New combinations of health expenditure, social welfare and education support can be made so as to sustain activity in a rewarding sense with both short and long term benefits to the person and the community, giving a more sustainable and creative life to parents, children and our communities.
In the short term, rather than having a slash and burn approach to the economy, we should prepare to come out of the recession with social protection enhanced, with real achievements in upskilling, and with creativity respected as the real basis of innovation, as we build the social economy.
Above all we must sustain jobs, protect jobs, create jobs in the social economy, in the green economy, in new technologies. We should purchase patents and technologies from abroad if necessary in the short term to make the best connection between a highly educated population and the international economy.
We must also recognise the employment potential that flows from the creativity that is there in the culture area. It will be the case in the future that economic models will be generated in a cultural space that is creative rather than of culture activity being seen as residual to the economy.
In every area of policy, as this Conference will show, Labour has policies that are real, practical, creative and different. That is because our values are different, that is why Labour policies are the alternative and Labour Candidates can make it happen.
There is growing support among the public for our proposals that are both progressive and practical. There is nothing more practical than a sound economy where wealth is defined in terms of the welfare of all the people and in a more general sense Labour's policies appeal to the best instincts of the public. What they envision as a decent society and a productive economy is achievable with a Labour led Government.
What we have had and that which has failed the many for the benefit of the few was not inevitable. It was made possible by the politics of the Right.
For us politicians, there are questions that cannot be avoided- is it your policy to repair that which is failed and failing, or to build something new on decent values, good engaged scholarship, and transparent government. Policy cannot be about keeping or repairing the rackets. It can be about being something truly different, achieving what we have the capacity to be - a real republic with citizenship values that are public and inclusive.
There is no point either in a bogus consensus. Let those who hold such ideological positions as are similar as accord a minimal role to the state in the economy, and who would limit the state as guarantor of social security, let them combine if they wish with those who share such values.
For the real alternative, Labour will cooperate, and will give a lead, with those who recognise, who commit, and are willing to participate, in the achievement of its genuine programme of building the social economy here, in Europe and beyond.
May I invite those among the public who share so many of our values to join with us in a real political partnership. That is what is required. At a time when citizens are suffering from the policies of the Right. The left alternative can be, must be a shared vision. There are many outside Labour who hold values that are similar to ours. All I ask is that they recognise that, and that in their appeals for reform and in their campaigns they draw the distinction between those who support them, those who oppose them, and those who are available for conversion. It is easy to fudge the issue with an appeal to the 'politicians' in some kind if assumed neutrality.
As I have already said, such evasion can produce at best only a cynicism that is corrosive. I invite activists in civil society, in the NGO's to be with us and for us to work together, to at the very least to recognise that we have chosen and are travelling a similar road.
We are in new times Comrades. In a few years it will be a real achievement if we can accomplish what was envisaged as long as 90 years ago in the Democratic Programme of the first Dáil, written by Tom Johnson, Leader of the Labour Party. What better memory to have in future times than to be able to say that we have worked together to create the foundations of a real Republic, based on the needs, aspirations, imagination and genius of all our people in their different ways.
Support our candidates, Elect our candidates. Invite others to be part of building the real alternative, - Labour's alternative, the Left alternative. In the future let us be proud to remember how together we built something out of the worst of times new, both visionary and practical as we declared that we were Proud to be Left, Proud to be Labour.
