Responding to the crisis
Issued : Monday 5 July, 2010
One of the most widely used terms to describe the present position of Irish society is that of "crisis." The word is being used not merely to describe the economic circumstances in which we find ourselves but also to refer to institutions in which the public has lost trust be they in the realm of the state or civil society.
The form which the crisis takes in economic terms is most dramatically illustrated in the rise in unemployment. The percentage of persons unemployed is 13.4%, up from the May figure of this year of 13.2%. In describing unemployment however, it is very important to accept that everyone of the 452,882 people that make up this percentage are people whose lives have taken a huge impact of a negative kind or whose hopes or expectations have been dashed.
Based on seasonally adjusted figures from the Department of Social Protection, the increase in numbers of those persons seeking employment in the last month of June is expected to be approximately 5,800. The overall figures include more than 63,000 people who work part time and more than 23,000 people who sign on to claim credits. Participation in the back to education allowance scheme has doubled this year and more than 5,600 of the inflow in the first three weeks of June are from this scheme.
The figure to be announced by the Central Statistics Office for June 2010 is, I repeat, 452,882. This is the highest number of people ever unemployed in the state. It is 300,000 more than were on the live register when the general election took place in May 2007.
It represents 100,000 jobs lost each year that the government in its present form has been in office, and 2,000 jobs lost each week.
These figures of course do not include the number of people who have left the country, as immigrants who have gone home, or young Irish people who have emigrated to Australia and elsewhere.
One in every three young men in the workforce is out of work. It is the cause of huge worry to parents who wonder whether their children will get work or whether they will have to emigrate- it is estimated that there may have been as many as 100,000 such emigrations since the beginning of the crisis.
It is so evident that from an economic and social point of view, the biggest crisis that the country is facing at present remain the cripplingly high level of unemployment. The CSO indicates further, and more worryingly, that 40% of those who are out of work have been out of work for more than a year.
The impact of unemployment is far greater than the loss of income. It radically alters the form of participation of the unemployed person and their family have in society. The level of poverty experienced by households impacts on not only the self-esteem and morale of the individuals out of work but also on their dependents and those who live with them.
A return to growth without addressing unemployment is to accept a depeopled version of the economy.
The government's failure to address the needs of the real economy is having the disastrous consequence of turning a recession into a depression. The failure to initiate a strategy for employment protection and creation is condemning individuals and families to poverty and exclusion.
The government seems to have accepted the loss of 100,000, mostly young people, to emigration. We have educated a young population regarded as among the most flexible workers in Europe, and the government is now exporting a huge proportion of this generation.
Already the government is indicating that it may be returning to what is left in the National Pension Reserve Fund for further recapitalisation of the banks, including two entities that have no future- Anglo Irish Bank and Irish Nationwide Building Society.
We are proposing a positive alternative for €2 billion of what is left in the National Pension Reserve Fund. We have suggested the establishment of a National Strategic Investment Bank which would be a key building block in our jobs strategy. Already the cuts announced by government in the public finances combined with the massive increase in savings has had the effect of such a deflation in the economy so as to send unemployment soaring.
It is absolutely crazy for the government to remove €1 billion from its capital programme at a time when male unemployment in the construction industry is at an all-time historic high. At precisely the time when it could be providing infrastructure, schools, clinics, amenities and recreational facilities at the most competitive cost, when professionals such as architects, engineers and lawyers are unemployed or facing emigration, above all, when so many construction workers are unemployed, the government cuts its capital spending. This year, capital spending will comprise 5% of GNP; the equivalent figure for 2016 will be 3.1%. Meanwhile, social protection reamains well below the European average.
The government seems intent on sequencing its strategy in terms of starting with banking recapitalisation, then, waiting for growth, and simply hoping that unemployment will begin to fall at that point. In the Finnish crisis, which was similar to that of Ireland, even after a return to modest growth, unemployment did not fall for five years.
Labour's Strategic Investment Bank could leverage a multiple of what it gets from the National Pension Reserve Fund so as to provide necessary infrastructure at the most competitive cost in decades. This is an employment-rich proposal. In addition, our Strategic Investment Bank is the most practical way of getting high-grade employment in research and development.
A recent, excellent, report from Tasc highlighted that attached to third-level colleges and universities at the present time are about 350 incubated companies in the high-knowledge area, on which the government spends about €1 billion per year. Dr Tom O'Connor pointed out that thirteen companies were spun out of this as fully-fledged trading companies; yet, all of these were at the mercy of foreign multinationals that could purchase what they had achieved at minimal cost.
The work of Tasc is replete with suggestions as to how a job-rich version of the social economy might be initiated. There are, of course, jobs to be created in the green economy and the proposal he has made for capitalising innovative discoveries from third level sites is but one example. Job creation can also come from expanding the caring community and recognising their skills.
Again, in the cultural sector there are many opportunities for high value sustainable and personally rewarding job creation. A study by DKM economic consultants last year reported that employment dependent on the creative and cultural sectors combined in 2008 was 170,000, or 8.7% of total employment. This sector is the fastest growing sector in the global economy, representing 7% of global GDP and growing at 10% per annum. Expenditure on this sector by the state represents a multiplier far greater than in many other areas.
DKM give figures for total exchequer expenditure in 2008 of 330 million euro. The direct exchequer revenue was approximately one billion euro, and the yield, taking the multiplier into effect, was 4.1 billion euro.
It is clear that a fundamental difference between Labour and the other parties is that we put employment creation, adequately capitalised, in a real economy, as its priority. If we are, however, to have what is little less than a paradigm shift in economic and political thinking, the community demand for it must come into existence and a new form of economic literacy must emerge, one that challenges the present orthodoxy that has failed.
Yet, if the Strategic Investment Bank had been in place, instead of a few dozen jobs, hundreds, even thousands of first-rate employment could have been created.
Using measures like the Strategic Investment Bank is the only approach to providing liquidity. It is dishonest to suggest that the recapitalised banks will do so. They have neither the record nor the intention of becoming primary agents in the real economy.
Labour demands that the real economy now take priority. Labour calls for public support for the unemployment crisis to be regarded as our present major challenge. Neither the unemployed, nor the real economy can wait for the government to complete its mercy mission to a speculative banking system.
In this paper, I want to address what I believe is a crisis that is not getting the attention is deserves - a crisis of language, of intellectual assumptions, of morality itself, and of the connection between economics and society. If literacy was to be in the past, one of the necessary preceding conditions of such democratic participation as would sweep away some of the worst aspects of authoritarianism, and the abuse of power, often sustained by fear, ignorance, and superstition; we are now at a stage where the domain assumptions of an unaccountable economics represents an even greater threat to our future.
Language itself becomes meaningless, becomes a threat rather than an instrument of liberation when it is used to justify and sustain assertions that are not open to critical examination.
Literally every response to contemporary economic circumstances refers to 'the markets' and their response to the financial strategies of governments and the proposals of opposing spokespersons. The consequence of this is to lift a determining aspect of our lives out of the frame of accountability, transparency, or public understanding. The parallel with the medieval frame of reference is striking. Contemporary discourse rarely, if ever, seeks to provoke a justification for the acceptance of what is a contestable domain assumption in the social sciences. There is nothing empirically inevitable about 'the markets'; rather, it is an ideological assertion.
At our meeting last year I suggested that there was an intellectual and academic background to our present crisis. The present economic crisis with its misery of nearly thirty million unemployed people in Europe, the prospect of half-a-million unemployed people in Ireland, and half of the people on the planet living in abject poverty, is the fruit of a particular model of the connection between economy and society - radical individualism.
It is worth recalling the injunction of Friedrich von Hayek, the high-priest of radical market theory. His view was that the market order was beyond human comprehension, but necessary:
The aim of the market order is to cope with the inevitable ignorance of everybody, of most of the particular facts which determine this order. By a process which men did not understand, their activities have produced an order much more extensive and comprehensive than anything that could comprehend it, but on the functions of which we have become utterly dependent.
While such a statement can be seen as having supplied, in the past, a manifesto for Thatcherism or Reaganism, it still remains as a source of policy in many areas of the world. Indeed the views of von Hayek and Robert Nozick have been rightly described by Professor Michael Volkerling as constituting little less than a framework for a utopia of the right, based on the separateness of persons. Von Hayek invoked a utopia of market extremism, and while he had to wait decades, saw it emerge.
If Von Hayek ushered in a new narrative in economics, it has in recent times come to be accepted as something that cannot be questioned, as a form of inevitability. Professor Volkerling, in his paper, quotes a 1947 statement of Schumpeter which defined a new type of hero in this unaccountable economics. The characteristics of such a hero he described as one who was willing:
To act with that confidence beyond the range of familiar beacons and to overcome that resistance requires aptitudes that are present in only a small fraction of the population and [they] define the entrepreneurial type as well as the entrepreneurial function.
It is one of the distinctive aspects of the Labour Party's agenda that, rather than seeking to mend that which should not be mended, that to which we should not return, it both envisions and offers as policy a real alternative- an inclusive society based on a social economy in a world of responsible, fair, sustainable development.
In pursuing this, the Labour Party is drawing on the rich legacy of socialist and emancipatory writing. The human impulse is to long for a better world. What Labour proposes must, then, address not just the basic needs of humans but must seek to develop the flowering of human potential achieved collectively. This rich tradition and scholarship, the emancipatory politics, this celebration of the power of the collective has in recent times across Europe, particularly since 1989, been surrendered to an alternative that it was assumed could be achieved within prevailing notions of the market.
We are reaping the fruits of that false choice at the moment.
Last year I made the case for a return to the liberating and empowering utopian literature. It is worth repeating just two quotations from Vincent Geoghegan's Utopianism and Marxism. In the first, Geoghegan makes the point, following Ernst Bloch, that hope must be grounded and must lead to a strategy for action and change:
"For Bloch, the enemies of hope are confusion, anxiety, fear, renunciation, passivity, failure and nothingness. Fascism was their apotheosis. But since all individuals daydream, they also hope. It is necessary to strip this dreaming of self-delusion and escapism, to enrich and expand it and to base it in the actual movement of society. Hope, in other words, must be both educated and objectively grounded; an insight drawn from Marx's great discovery: 'the subjective and objective hope-contents of the world.'1
Geoghegan also finds in Bloch's The Principle of Hope an affirmation that preparing for future alternatives does not require an amnesia as to the past:
The Principle of Hope is an encyclopaedic account of dreams of a better existence; from the most simple to the most complex; from idle daydreams to sophisticated images of perfection. It develops a positive sense of the category 'utopian', denuded of unworldliness and abstraction, as forward dreaming and anticipation. All the time, however, the link between past, present and future is stressed - concern with what one might be is the royal road to what one has been, and what one is: 'we need the most powerful telescope, that of polished utopian consciousness, in order to penetrate precisely the nearest nearness'2.3
Standing against any affirmation that real gains can be made, in terms of social structures or forms of economy, is the radical writing of such as Slavoj Zizek:
Today's 'mad dance' ...awaits its resolution in a new form of Terror. The only 'realistic' prospect is to ground a new political universality by opting for the impossible, fully assuming the place of the exception, with no taboos, no a priory norms ('human rights', 'democracy'), respect for which would prevent us from 're-signifying' terror, the ruthless exercise of power, the spirit of sacrifice...if this radical choice is decried by some bleeding-heart liberals as Linksfaschismus, so be it!4
There are some on the left who accept this view and suggest that the only authentic act of liberation from institutional terror must be, by definition, a violent response. Many ethically-minded people have been attracted to such a view and have paid a high price for their belief. It is, however, I believe, a profoundly pessimistic view. While the changes that are urgent cannot be met by the fruits of Labour in the parliamentary process alone, the parliamentary process still represents the best prospects for such a discourse as will enable the shape of a different society and a social economy to emerge.
That having been said, it is important that I enter a caveat to what I perceive to be the excessive optimism of such scholars as Jurgen Habermas in the possibilities of achieving such a rational discourse as would enable the economy to become an instrument for the achievement of such public welfare as might generate a supporting consensus.
Habermas is admirable in his defence of the capacity of change in the public world, yet one must question the silence in academic philosophical writing on the disaster that has been delivered by assuming a rationality in uncontrolled markets. What began as reason in classical economic theory has become an irrational, speculative force, one that has created, and is creating, misery in different forms at a global level. It is this unaccountable irrationality that represents the most serious obstacle to such global challenges as climate change, the food crisis, global poverty and sustainable development.
There is at present the other suggestion from an extreme of communitarianism that one can retreat from the state and its parliamentary representative organs- as it were, start all over again with a tabula rasa. I believe that this, as I have said in previous years, could have disastrous consequences. However well meant, it constitutes a form of surrender of spaces within the state, won at great cost, to the powerful forces of reaction.
If we have such large-scale unemployment as I have mentioned, with such deeply excluding forms of inequality as its consequences, how is it, one may ask, that it is repeated so successfully, transmitted from one generation to another? How does this succeeding inequality reproduce itself? One of the factors that facilitates such a reproduction is an uncritical scholarship, one which describes the existing status quo rather than uncovering the assumptions upon which it is built.
The task of demystification, of building a new literacy, so as to expose bogus expertise, is one that members of the Labour Party and beyond must embrace. We simply cannot afford to live as uncritical participants in an unequal society on a planet that moves ever further away from sustainability.
We need a new, engaged, form of citizenship. This will not be easily attained, insofar as what has crept into the heart of some seemingly progressive policies of the left in Europe in the last three decades is an acceptance of such individualism as made it possible for the promise of the values associated with solidarity to be lost.
We need a new politics of solidarity. We need an engaged, critical scholarship. We need a discourse which will envisage the alternative, inclusive society and the new social economics. This is what Ernst Bloch called 'anticipatory illumination'.
In the short term it is necessary to stress again that standing as an alternative to the abstract entity of the markets is a form of society built on the principle of solidarity. This in the short term, and as an immediate baseline for Labour in government, means establishing a floor of citizenship below which no citizen would be allowed to fall.
Such a floor becomes the guarantee which is the precondition for any negotiation. Above the line matters may indeed be articulated, evaluated, and become a matter for negotiation as to priority.
In a republic, however, the right to shelter, food security, education, a good environment, and freedom from fear and insecurity at different points of the life cycle, from childhood to old age, must be the benchmarks.
In the absence of such a consideration as faces up to the task of examining the assumptions upon which our present economy and social structures are built, there are many false directions that the current debate is taking. As a substitute to the debate on deepening democracy, we have a debate on shrinking institutions, indeed, their abolition. It is hard not to conclude that such approaches are simply a response to populist pressure. The anger of disappointed expectations built on individualism is an anger which can be misdirected.
It is a real task, for many it may be impossible, to get back to the assumption that security, development and prosperity have to be achieved collectively. The Irish people have had no adequate debate on what citizenship means; rather, what they have had is a discussion on volunteering from portions of private time and philanthropy from portions of private income all of which accept the basic premise of individualism and none of which accepted in full the demands of community and solidarity.
Should the adjustment prove not to be capable of being made, we probably would face an unmediated confrontation between the excluded and those who chose to be unconcerned. Such a point is the one at which the dark prescriptions of Slavoj Zizek become relevant. Around the world there is evidence that such an outcome is achieving some support.
If parliamentarism is to work, it will require deep and radical institutional change. That change, however, must be one that achieves the opportunity of making parliament relevant to the great issues of the day. It is not about numbers or the detail of practice; it is rather about creating new opportunities for relevance and participation.
Irish politics is in need of reform. On that there is general agreement. In response to the loss of trust visited on the public by individuals and institutions political and financial, an adequate response is both urgent and unavoidable. There is, however, a real danger that by concentrating on the wrong part of the task of reform that the entire effort may end up as the feeding of a dangerous populism rather than achieving the changes that are necessary.
I believe we should not shrink from a fundamental reform of the legislative process itself. To achieve this it is important not to begin in the wrong place. A concentration on reform of the electoral process without, for example, examining the role and function of those who are elected to Parliament by whatever elected system, those appointed to cabinet or those holding senior positions in the public service, in terms of their legislative effectiveness and capacity, would be a futile exercise.
Recent decades have also seen the Dáil lose accountability to a plethora of extra-parliamentary bodies. As a consequence there has been a serious erosion of transparency and accountability. For example, a Parliamentary Question to the Minister for Transport on a matter on roads or traffic impact in one's constituency may well not be answered in the Dáil on the basis that authority in this matter has been ceded to the National Roads Authority. Similarly, a question to the Minister for Health and Children on a health matter which is deemed to have been delegated to the Health Services Executive, will be disallowed.
These are but some of the more serious and recent examples of leaks from Parliamentary accountability. While the agencies specified may indeed have a parliamentary section to answer parliamentary enquiries, the erosion of accountability is obvious. A constitutional issue, indeed, arises as to what precisely the Minister involved in such a delegation must specify, what the boundaries of what is policy and what is an administrative matter are. In this area, there is no clarity, and a serious question arises as a consequence as to whether the responsibility of the Minister to parliament, as understood in the constitution, has been eroded.
Any serious examination of the process of making, changing, and implementing legislation in Ireland would thus have to acknowledge a serious case for reform of a general and fundamental kind. Unfortunately, proposals for reform in recent times, drawn from a recently recovered interest, have been aimed, almost exclusively, at simply where the populist dividend is highest-changing the voting system- thus making the prospects for real reform far less promising.
Perhaps it is that so many aspects of Irish society consumed in their consumption in an artificial version of the economy no longer possess the capacity to articulate any alternative, any way out of our contemporary crisis. At first glance, much does not appear to have changed. The suggestion that banks get back to the way that they were, that an old version of authority must be restored within the church, that austerity must be imposed, that services must be cut, has still quite a wide acceptability among the public. Is it the case that either of the largest parties in the state favour a new departure in any aspect of our society- I am afraid the signs are negative.
That is why a great responsibility falls upon the Labour Party- to be the real alternative.
This will require a great effort from the membership. It will be necessary to be able to take charge of a discourse on the economy, on social inclusion, on climate change. We cannot afford to assume that others will do the work that will bring us to where we want to be. After all, as I have demonstrated, there are other, powerful, interests, who not only do not share our values, but are completely opposed to them.
In the coming decade the role of the state will be defined anew. We need a state system that is genuinely inclusive, and that is participatory. There is much to be changed, including all the forms of negative bureaucracy that have extended and atrophied the system.
In our contemporary lives in Ireland we have entered into an era of unfreedom, of over-bureaucratisation, the very antithesis of a republican life. Max Weber, whose work in the fields of politics, religion, sociology and economics has been so enduring, described such a situation as a 'polar night of icy darkness', in which such an increasing rationalisation of human life emerges as traps individuals in an iron cage of rule-based, rational control- a rationalisation gone wrong where what is predictable is a misery based on the loss of discretion or control over one's life, one's work, one's time, one's institutions. Indeed, when Weber himself was asked what his learning meant to him he replied:" I want to see how much I can endure".
In a Republic such as ours such a version of life ought to give particular pause for thought. We fought hard in the past to bring our State into existence as an independent entity. That such a struggle might merely bring into existence a country where alienation-at times of economic growth- is widespread, and where the citizen is so wholly separated from the mechanism of the state, is shameful. It poses very basic questions as to what it actually means to be a citizen; what rights the individual can expect to have as part of society, as well as how one is to construct, maintain, or participate in a properly functioning society on the basis of solidarity.
It bears repeating that there needs to be a critical engagement; a critical relationship to, and a critical evaluation of, the society. There is a real need to engage critically with the world around us; particularly with regard to the way it is presented to us.
In two years' time, we will be celebrating the 100th anniversary of the founding of our Party by brave people who had courage, conviction and the principle to stand against the tide in favour of a real republic. Now that Labour is surging ahead in the polls, we have not only an opportunity to emulate their efforts, redefine our values in new conditions, and most important of all invite all members of the public to be with us in building a real alternative with Labour.
