It’s the system, stupid!

It’s nearly two decades since former US President Bill Clinton used the famous slogan, “it’s the economy, stupid”.  The motto was a rallying cry for his Democrat supporters during his presidential election bid in 1992. Almost 20 years on, some may still identify strongly with these words. The economic situation facing the word today is a bleak one. Austerity is the order of the day. Public
services, jobs and a generation of young people are being sacrificed at the altar of the market in order to fill the financial black hole left by the banking system.

The economic crash of 2008 was the worst crisis capitalism has experienced since the Great Depression of the 1930s.  A complicated system of derivatives, credit default swaps and collateralised debt obligations, terms which 99% of people have little or no understanding, helped bring the world’s economy to its knees. The Korean economist Ha-Joon Chang described these obscure tools as ‘weapons of financial mass destruction’. Regardless, business continues as usual.

Since the crash three years ago, the world’s governments and central banks, among others, have been scurrying to find a way out of the mess. Repeated bailouts of Greece, and the enforced
austerity which comes along with the said “bailouts”, have achieved only increased misery for working people and a yawning national deficit. A series of quantitative easing (printing money out of thin air) and various stimulus packages in a number of countries have also failed. The chance of a double dip recession, or even a depression, is increasingly likely.

Despite what politicians and others say, this crisis did not fall from the sky. Pick up any socialist
journal from the past decade and you will see repeated warnings about the imminent economic collapse. These warnings were ignored by the powers that be, brushed off as the rants of a handful of ‘loony lefties’. Indeed, former Taoiseach Bertie Ahern urged those making the predictions to commit suicide.

The problem, which is rarely acknowledged in mainstream discourse, lies in the system itself. History shows us that the capitalist class will pay workers as little as they can possibly get away with. Indeed, the past four decades have witnessed a repression of wages, in direct correlation with the decrease in trade union membership. The tendency to suppress wages leads to decreased demand, as workers collectively cannot buy back the goods they produce. This, in turn, leads to overproduction. Marxist economist David Harvey described this characteristic as the “internal contradiction of capital accumulation”. To overcome this contradiction, especially in more recent times, people were encouraged to obtain credit cards and other forms of debt in order to buy things they needed, but couldn’t really afford. On top of this, an enormous global market emerged, to the detriment of genuine wealth-creating industries, solely to trade on these debts. It doesn’t take an economist to realise that this system is inherently unstable and crisis prone.

The latest crisis has further highlighted the irrationality of capitalism. Despite the fact that a primary
factor in the Republic of Ireland’s economic crash was an overproduction of housing, it seems increasingly ridiculous that there are thousands of people sleeping on the streets of Dublin. On top of that, recent figures released by the International Labour Organisation show that wordwide unemployment is hovering at well over 200 million.

The fact is the capitalist economists genuinely don’t know what do to escape from this crisis. Worryingly, most people seem to be looking towards the same economic “experts” who failed
to see the crisis coming in the first place for a solution. “Getting back to growth” is the usual maxim thrown about on the airwaves. To sustain itself, it’s said capitalism needs to grow at least 3% year-on-year. The effect that eternal growth at any cost would have on the environment is seemingly not an issue. When the banks went under, we bailed them out. When the environment goes under, there will be no bailout.

The dangers the latest crises in capitalism pose should not be disregarded. In all likelihood, Greece will default on its debts. This will have a profound effect on the rest of Europe, not least here in Ireland. The collapse of the Euro is a very real possibility, as is the disintegration of the European Union. War is another danger. History teaches us that, in times of severe crises, capitalism reverts to war and imperialism in search of new markets. War is a profitable venture, and big business will have no qualms profiting from the death and destruction that comes with it.

The need for a new system, which does not base itself on promoting war, greed and extreme inequality, is glaringly obvious. The system is beyond repair. Is it really beyond human comprehension to have an economic system run for the benefit of all humankind rather than a tiny elite?

This leads us to Lenin’s age-old question: “What is to be done?”

Unfortunately, socialists and many in the wider trade union movement know what they are against. However, many, myself included, struggle to define what they are actually for. This crisis should act
as a catalyst to open up a debate among socialists and other progressives to clarify what should be put in the place of capitalism. And just as importantly, how are we going to do it? Clearly, the old “Soviet” system is not one that is going to garner much support. We need a new type of socialism, and the time is ripe for the working class to start debating ideas on how to bring humanity forward.

In the words of the great British economist John Maynard Keynes;

Capitalism is not a success. It is not intelligent, it is not beautiful, it is not just, it is not virtuous and it doesn’t deliver the goods. In short, we dislike it, and we are beginning to despise it. But when we wonder what to put in its place, we are extremely perplexed.”

There are a number of questions which I would like to put out there, and hopefully some of my comrades will be kind enough to share their thoughts.

  • In the context of the North of Ireland, would building a new working class party be worthwhile? Consider the fact that the Stormont Assembly has no economic powers and its executive consists of a mandatory coalition.  Hypothetically, if a new party was to gain a considerable number of seats, would we just remain in opposition? What could be achieved by entering Stormont? Also counter in the fact that the North’s politics is deeply sectarian, rather than class-based.
  • How would a socialist society work? Will it be based on a central economic plan? Or would workers’ co-operatives be encouraged to take the lead? What other ideas are there?
  • Is the partition of Ireland a barrier to achieving socialism? Or can we do it in the framework of the UK?
  • How do we actually take the levers of power from the capitalist class? Is a mass movement necessary? Is a revolution necessary? Indeed, what do we actually mean by the term ‘revolution’?
  • What role can the trade union movement play in achieving socialism? Are they a vital part of the struggle?
  • What are the biggest barriers we face in changing society? How do we overcome them?
  • How do we overcome sectarianism? What are the main obstacles?
  • What form would a socialist democracy take? Would it be parliamentary or participatory? Are Workers’ Councils, such as those which existed in the early Soviet Union, a credible form of democracy?
  • Will people be receptive to these ideas? What is the best way for us to influence people?

All comments are welcome.

  1. Brian Pelan said:

    An interesting piece. I think one of the main areas for trade unionist activists is to break the link with the union bureaucracy and an end to social partnership.

  2. For me, there’s little point in trying to create a new left wing political party in this part of Ireland. Even if we managed to secure enough support to win a few seats, we’d still have no power. There may be an argument for a campaign to get 1 MLA elected in order to have a left wing voice in Stormont but other than that, I feel we’d be wasting our time and resources.

    I think a mix between centrally planned, state controlled industry and smaller, worker controlled co-ops has a lot of potential. I don’t believe it’s feasible to run something like the Corrib gas fields as a workers co-op, nor do I see any benefit to the state owning restaurants or shops. The issue for me is not what sort of worker control exists but that the private ownership of the means of production is abolished. I believe the state has a responsibility to provide housing, energy, heat and water. Therefore I feel those should definitely be nationalised. We need to have a discussion about where that nationalisation line ends though.

    I can’t see how we can make any substantial changes to Irish society while partition exists. As raised above, Stormont has no power worth talking about. On top of that, consociationalism is never going to lead to socialism. The same problem, however, exists in Dublin. The EU is as much a barrier to our success as partition. Until we are free to control our own affairs, we cannot hope to succeed.

    This part of Ireland is a strange place. I assume we’re all agreed that armed revolution isn’t an answer. I further assume, given what we’ve been discussing, that we’re agreed ‘politics’ (in the Stormont/Dáil sense of the word) is a waste of time. What is left is economics. The reason the world is in such a fucking mess is because those with money have wrecked it trying to get more money. We give them our money every single day. We work for their companies, we lodge money in their banks and then we buy their shit that we made in the first place. Over the last few months, I’ve come to the realisation that the only way to break that cycle is by changing who we work for, who we bank with and who we buy from.

    Changing your employer is perhaps the hardest of those three. It may not be feasible for a lot of us. However it is very easy for each of us to change our bank and to choose a boycott.

    As we all know, when you lodge your money in a bank, they either ‘invest’ it or loan it out. The fractional reserve system and the explosion of debt are a huge part of the problems we’re facing at the minute. So let’s stop funding it. Move your money to a credit union or a building society. Deny the capitalists the opportunity to use YOUR money to make more money for themselves.

    Also choose a boycott. The only reason companies exist is because people buy their products. Economics 101 – no customers, no company. Stop flying Ryanair. Don’t drink Coke. Don’t eat Nestlé. These are really simple things that will ultimately wreck capitalism if done by enough of us.

    On top of this though, I think we need to start actively supporting alternatives to capitalist enterprises. There are numerous co-ops and social economies scattered across Ireland. We need to buy from them, not McDonalds. Perhaps we could set up our own co-ops? If we can contribute the capital needed to realise the alternative, why don’t we?

    The trade union movement is vital in that it represents our best chance to find other people who believe the same as us. It also encompasses the only real power we, as workers, have at the minute. The difficulty is that, by its very definition, a union can include anyone, no matter what their politics are. We see this political sectarianism day and daily – even among the left itself. Therefore I don’t think it’s sensible to rely on a trade union to start the ‘revolution’. No union here is going to overtly support such a radical change to capitalist society. I think our best bet is to find the people we need within the movement and operate independently of it.

    We face many challenges. In a global sense, the fact that the people we mean to defeat are extremely wealthy, armed to the teeth and have control of the media seems almost insurmountable. What we need to recognise, however, is that their system is ultimately built on apathy. Capitalism needs us to produce and buy shit to survive. It needs us to believe that we are powerless. It needs us to care more about who wins X Factor than who controls society. Up to now, it’s winning. But I think what we’re seeing with Occupy Wall Street, Los Indignados and the like is an awakening among ordinary people – I honestly believe we’re witnessing the fall of capitalism around us. The difficulty, which we’ve discussed before, is that when there is a vacuum, people like Nick Griffin fill it very easily. To my mind, that’s our immediate challenge. We need to ensure that this vacuum isn’t filled by fascists. We can only do that by providing an alternative. That alternative needs to be agreed very quickly or we run the risk of missing this opportunity.

    I’ve always thought that a major failing of a lot of political systems is that they are too rigidly dogmatic. You either vote every 5 years or you devolve power to the lowest level possible. Every political system that has ever existed has had good points. I think we limit ourselves by sticking to one option. I don’t see why we can’t have a participatory democracy (like Cuba through it’s CDRs) while still electing people to a national parliament. I think some decisions, like infrastructure and the education curriculum for example, need to be taken centrally – parliaments have shown themselves to be effective at these things. That doesn’t mean people can’t contribute to the daily running of their society at a local level. I’m not arrogant enough to suggest I have all the answers (just most of them :D) but I think if we begin by limiting our options, we won’t be able to design a workable system.

    I believe in people. I reckon most people want a fair society. I think that, given the choice, most people would buy Fair Trade, give to charity and boycott companies who behave immorally. Therefore I think most people would be receptive to our ideas given the chance to listen to them properly. Our problem isn’t whether people will listen – it is whether we will have the opportunity to talk to them. Coming back to a previous point, the first part of that battle will be won once we define what we stand for. Then we either need to force the media to give us a voice or find another way to reach people.

    We can start by talking to the people around us – our work mates, our families, our friends who tell us ‘they aren’t political’. Maybe we could set up a newspaper? Found co-operatives? The point for me is that everything has value – every small action, every conversation, every blog, every changed bank account is part of the process. We aren’t going to win with one massive leap, nor are we going to win in the next 5 or 10 years. We need to be realistic.

    I think you’re right, a good start would be to hold a meeting where we can define what sort of society we actually want to create. We need to come up with concrete ideas as to how our economy and community will be run. Then we can start to tell people about it.

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