Written more than a century ago, Jack London’s, The Iron Heel, endures as a very pertinent read. The dystopian novel, which later influenced George Orwell’s Nineteen Eighty Four depicts the tyranny of a class of nihilistic super-rich, named ‘the Oligarchy’, imposing their brutal rule on the rest of humanity. The book’s protagonist, Ernest Everhard, is a fiery socialist whose life-cause is to take on the huge capitalist monopolies and the powerful state which safeguards them. Riddled with outbursts of rage against the profit system, the book’s reader could not fail to miss the parallels between the scenario set out in this book and the world today.

Politicians from the two main parties in the US bore the brunt of one of Ernest’s wonderful tirades, an eruption of anger which could be aimed at almost any parliament in the world today:

“You pompously call yourselves Republicans and Democrats. There is no Republican Party. There is no Democratic Party. There are no Republicans, nor Democrats in this house. You are lick-spittlers and panderers, the creatures of the Plutocracy. You talk verbosely in antiquated terminology of your love of liberty, and all the while you wear the scarlet livery of the Iron Heel.”

Although it has been true for a long time, the present Eurozone crisis has brought to the fore the unspeakable fact that national parliaments are no longer the main power-holders in the world. The blackmail and intimidation of the Irish people into accepting Angela Merkel’s ‘Stability’ Treaty was but the latest instance of a rabid financial system making big decisions against the interests of the majority of humanity.

In January, under the threat of a “financial bomb” going off in Dublin, the Irish state pitifully paid €1.2 billion to unsecured, unguaranteed, faceless bondholders at the now defunct Anglo-Irish bank. Two months previously, €720 million was forked out for the same senseless purpose, at a time when billions are hacked away from public spending. The fact that the Fine Gael and Labour manifestos pledged to “burn the bondholders” did not halt this grotesque looting of scarce public funds. Terroristic warnings of financial catastrophe saw to it that the desires of the Irish electorate were overridden.

Although Ireland reluctantly bowed to the intimidation of financial terrorists, the Greek people took a stand and rejected the social vandalism of austerity, much to the annoyance of the “markets.” Christine Lagarde, the head of the IMF, let her veil slip when she declared that it was time for the Greek people to “payback” and warned them “not to expect sympathy”. The world’s media were shocked by her callous outburst. They needn’t have been surprised, however, as cold-hearted arrogance is well within the tradition of this monstrous institution whose policies have spread poverty and hardship throughout the globe.

True to her economic fanaticism, Lagarde is capable only of acknowledging hard figures, while remaining totally oblivious to the destitution millions of people now face in Greece. And destitution is no exaggeration.  It has been reported that many schools in the country are no longer able provide physical education because children are fainting in class as a result of hunger. In April, retired pharmacist Dimitris Christoulas shot himself in the main square of Athens during morning rush hour after his pension was butchered by the fanatical austerity measures imposed on Greece by the Troika.  His suicide note read: “And since my advanced age does not allow me a way of dynamically reacting… I see no other solution than this dignified end to my life, so I don’t find myself fishing through garbage cans for my sustenance.” Later the same month in Athens, a university lecturer in his 30s hanged himself from a lamp post, a young student shot himself in the head and a priest took his own life by jumping off a balcony. One can only imagine the hopelessness these people experienced to be driven to these extremes. This is the human side of economics, beyond the endless chatter about “the markets” and those frustratingly dull, lifeless figures.

Before the Troika’s diktats, Greece had one of the lowest suicide rates in the world. Since then, it has doubled and is likely to continue to rise. The country has seen a 25% increase in homelessness over the past three year and 1 in 11 people in Athens rely on soup kitchens for food. Thanasis Maniatisan, an economics professor at Athens University, told the Guardian that Greece faces “a great humanitarian crisis, similar to that suffered in advanced economies during the 1930s.” The society of an entire nation is collapsing as a direct result of the financial terrorism perpetrated by the Troika. Lagarde remains indifferent.

Back in March, ECB chief Mario Draghi revealed the sheer short sightedness and utter stupidity of the powerful when he boldly declared that “the worst of the Euro crisis is over”. The path of austerity they have chosen to travel tragically underline this folly. Their self-styled solutions merely attempt to resolve the symptoms of this crisis, rather than the causes. Such is their blind fanaticism.

The aim of Merkel’s Treaty is to minimise state debt and restrict public spending deficits. Although these issues were not the causes of the Great Recession, and tackling them will certainly not improve the situation as Greece has shown, the austerity gang insists on continuing on its failed path. Far from being a problem of the public sector, the current crisis was caused by the excesses of the private sector. Before the notorious bank guarantee, Ireland ran budget surpluses every year for the previous five years. Even the usually right-wing Economist magazine commented:

“This fiscal focus gets things exactly backwards. Spain’s poor public finances, unlike those of Greece, are a symptom rather than the cause of the country’s economic woes. Before the crisis Spain was well within the euro zone’s fiscal rules. Even now its government debt, at around 70% of GDP, is lower than Germany’s. As in Ireland, the origins of Spain’s debt problems are private, not public.”

This crisis, particularly in Ireland, Spain and the United States, was caused by an uncontrolled housing boom, unregulated private banks and the 30-year long suppression of wages. The austerity zealots have turned a crisis of a runaway private sector into a crisis of public spending. This situation urgently needs reversed.

Doubtless, there are millions who would agree with Jack London’s character Ernest Everhard when he raged:

“The capitalist class has mismanaged. In face of the facts that modern man lives more wretchedly than the cave-man, and that his producing power is a thousand times greater than that of the cave-man, no other conclusion is possible than that the capitalist class has mismanaged, that you have mismanaged, my masters, that you have criminally and selfishly mismanaged.”


– This article was published in The Morning Star.




A common theme running through much of the world’s history is the prevalence of often bizarre and outrageous ideas that would never be granted any credibility in the modern age. Some of these ideas and doctrines, during certain periods of history, were seen by most people alive at the time as undeniable truths. For much of the last millennium, the divine right of kings was used to justify the perverted reign of Europe’s many monarchs. Those who questioned it were seen as seditious radicals on the fringes of society. Likewise, the doctrine of Manifest Destiny declared that the United States had a God-given right to expand westward on the North American continent, even if it meant the extermination of the native population.

Today’s prevailing delusion is not a peculiar religious dogma or indeed any crazed racist political doctrine; it’s the belief in the necessity of unending economic growth. Championed by almost all politicians and economists, the notion that the world’s economy can grow indefinitely comes up against one huge stumbling block; Earth’s finite resources.

The scientific consensus is that humans are causing our planet’s climate to change. The only thing that is really contested here is the degree to which it is taking place. And our collective obsession with never-ending economic growth, coupled with our addiction to heat-trapping fossil fuels, is a recipe for environmental disaster. Future generations, if there are any, are likely to be bemused at our economic system’s reckless short-termism.

Growth is a central component of the current economic system and is necessary for its normal functioning. It’s generally accepted that capitalism requires the economy to grow by around 3% every year to avoid a crisis, as we now know today. When growth stops, millions of people are thrown onto the scrapheap. However, when growth continues, the environment suffers. It’s an unfortunate fact, but when GDP increases, so do greenhouse gas emissions. This is an enormous obstacle which humanity needs to overcome in the very near future.

Economics is perhaps the most over-mystified field in modern academia. Many people feel intimidated by the figures, strange-sounding financial terms and, ultimately, its sheer dullness. Consequently, most people feel that they should leave major economic decisions to those “who know best”, much to the detriment of the rest of society.

Boiled down to its most simple form, economics is about human beings labouring to produce and exchange things that they want or need. In a sense, “economics” has existed for as long as humans have populated this planet, even if the term wasn’t articulated by our earliest ancestors. However, economics today is a very different beast. The attacks on living standards across the world, carried out on behalf of the powerful, testifies to the fact that people are now seen as objects whose sole purpose is to serve the interests of “the economy”, rather than the other way around. Environmental lawyer Gus Speth highlighted the blindness at the centre of this fanatical money worship when he said: “Economic growth may be the world’s secular religion, but for much of the world it is a god that is failing – underperforming for most of the world’s people and, for those in affluent societies, now creating more problems than it is solving.”

Economic growth, we are told, is the only way to improve our lives and to raise millions of people out of poverty. It’s believed that building and consuming more things makes our lives more fulfilling and enjoyable. But this view, although widely held, does not stand up against the evidence. Although the global economy has grown many times over the last few decades, very little of the wealth created has went towards lifting the world’s poorest people out of poverty. And in western countries, whose populations are the supposed beneficiaries of economic growth, depression and anxiety levels have increased massively as a result of stress and longer working hours.

Economic growth does not necessarily lead to increased life satisfaction. Indeed, most working people saw little benefit from economic growth over the past forty years. Since the 1970s, wages in the western world have stagnated as a result of the demise of effective trade unionism. So, while the economy was growing year-on-year, those who were creating the growth in production and wealth received nothing extra for their labour. To fill the gap in demand left by falling wages, working people were encouraged to obtain credit cards in order to buy things which otherwise could not have been sold. Thus, a growing consumer economy is necessarily built on huge amounts of debt, which clearly brings about its own set of personal and social problems.

The wisdom of promoting western consumer-based economies as models of development for the rest of the world is questionable at best. In their 2006 report, Growth Isn’t Working, the New Economics Foundation pointed out the stark unfeasibility of continuing to grow the global economy indefinitely: “For everyone on Earth to live at the current European average level of consumption, we would need more than double the biocapacity actually available – the equivalent of 2.1 planet Earths – to sustain us. If everyone consumed at the US rate, we would require nearly five.” Aside from the ecological impossibility of using growth to tackle poverty, the actual results have left a lot to be desired. The authors of the report also discovered the following:

“Between 1990 and 2001, for every $100 worth of growth in the world’s income per person, just $0.60 found its target and contributed to reducing poverty below the $1-a-day line. To achieve every single $1 of poverty reduction therefore requires $166 of additional global production and consumption, with all its associated environmental impacts.”

Rather than the wealth “trickling down” to the less well off in society, as Margaret Thatcher infamously believed, the tendency in capitalism is for the wealth to trickle in a most definitely upward fashion.

Beyond a certain point in any society’s development, economic growth ceases to contribute to general public well-being. Once people’s basic requirements are fulfilled, such as health care, a good social and family life, purposeful employment and adequate shelter, the urge for material goods diminishes. This is exceptionally demonstrated in Tim Jackson’s Prosperity Without Growth, which points out that people generally value having a productive role in society more than they value material commodities. Following the initial buzz of buying a new iPad or catching up with the new fashion fad, there’s little to suggest that we are any happier when we consume things. Indeed, the most visible facet of growth-based consumerism, advertising, encourages us to be deeply unsatisfied with our lives and with what we own. Life is never good enough unless you go out and purchase the latest crap the capitalist has to offer.

Fred Magdoff and John Bellamy Foster, in their 2010 book, What Every Environmentalist Needs to Know About Capitalism, made an important point when they wrote: “The emphasis on consumption has even brought about a change in everyday use. Instead of talking about the “people”, the “general population”, the “public,” or “humanity,” it is common to use the term consumer.” They continued: “Our humanity is being defined as our connection to commodities instead of to each other and our communities”.

Shopping is central to the workings of capitalism. The powerful need us to buy their junk to keep their system ticking over. That is why, in the days after the 9-11 attacks, US President George Bush urged terrified Americans, who were worried about the prospect of another Al-Qaeda attack, to get out their credit cards and start spending again in a bid to prevent an economic slow down.

Not only does economic growth fail to improve our happiness and wellbeing, it assists in the destruction and cooking of our fragile planet. The fetishisation of growth gets more cult-like by the week. There is no alternative, we are told. Any other system which has been tried out has failed. Capitalism gives people what they want. We must appease the markets. History ended when the Berlin Wall fell in 1989. So goes the mundane mainstream narrative.

The task of this generation is to move the world beyond an economic system which views both people and planet as mere “externalities”. We need to build a system which views these things as more than trivial side issues which warrant only an afterthought. There is nothing to suggest that a non-growth economy, organised in a non-capitalist way, of course, would not prosper. The key is to reorganise the priorities of the economy and to plan production in a way that meets the basic needs of everyone while at the same time not destroying our species’ chances of survival on this planet. Of course, it will require a change in the way we currently live our lives and will present an immense challenge, but it can be done. To continue the way we are going risks disaster.

Kenneth Boulding wonderfully summed up the madness of the current economic paradigm when he quipped: “Anyone who thinks exponential growth can go on forever in a finite world is either a madman or an economist.”

The news that RBS chief Steven Hester has turned down his obscene £1 million bonus has been welcomed by all shades of political opinion. “Banker bashing” has transcended the narrow boundaries of the left and is now part of mainstream discourse, with even millionaire David Cameron spouting populist rhetoric attacking certain behaviour in the City. Mr Hester, however, will have little difficulty getting by on his modest salary of £1.2 million. Perhaps this is the “restraint” that David Cameron is referring to when he harps on about “moral” capitalism.

It might well feel good to attack the activities of “reckless bankers”. However, the problems inherent in the economic system we currently live under run far deeper than that. Certainly, lending huge amounts of money to people who could never afford to pay it back and subsequently selling that debt on to other financial institutions is irresponsible, but this does not address what it is that is wrong at the very core of capitalism.

One glaring absence in most public debates about the economy is the key issue of what actually caused the current crisis. It’s almost taboo to highlight the fact that wages in general have been stagnating since 1980. With the advent of Thatcherism/Reaganism, the assault on organised labour became ever more intense. The defeat of the British miners and American air traffic controllers in the 1980s marked the beginning of the decline of the trade union movement in the two countries. This was mirrored across the world, not least here in Ireland. These anti-union assaults heralded the birth of the most modern form of capitalism; neo-liberalism.

Trade union membership in the UK peaked in 1979, with just over 12 million members. This number has fallen year on year since the beginning of Margaret Thatcher’s deliberate destruction of the British manufacturing industry. Today, just over 6 million UK workers are unionised. The picture in Ireland shows a similar trend. Irish trade union membership peaked in 1980, claiming 62% of the country’s workforce. In 2010, just before the Troika’s “bailout”, less than 25% of Irish workers were in a union. Young people, especially, are less likely to even know what a union is, let alone join one.

The effect decreasing union membership has had on society was entirely predictable; wages fell in real terms and working conditions deteriorated. Last week, a TUC report revealed a number of startling findings. The main one was this; had wages grown at the same rate that the economy was growing over the past three decades, workers in the UK would be collectively earning £60 billion more than they are earning today. The TUC’s Touchstone Blog has a very useful tool on its site called the ‘Incomes Tracker’, which all workers might want to have a look at. It helps put this great robbery into perspective. Say you are earning £21,000 per year. Had your wage risen at the same rate the economy was growing (and remember, workers create all wealth in any economy) you would be taking home a handsome annual salary of more than £32,000. Or, if you are taking home a modest wage of £14,000; you would actually be on a wage of £24,000 had your wages grown in line with the wider economy.

When the economy was growing, the rich were increasing their income accordingly. However, those who were actually working and producing things to make the economy grow received nothing extra for their labour. Despite becoming more productive, workers’ income stayed the same. In many cases, wages actually decreased in real terms. In the US, this reached extraordinary levels. Between 1979 and 2007, the richest 1% of Americans increased their income by 275%. In contrast, the bottom 20% increased their income over the same period by a mere 20%. While some union activists were preaching class war, the ruling class were busy practicing it.

And don’t think for a minute that the pain is now being shared out proportionally just because there is a recession; far from it. Last year the income of the directors of the top 100 companies in the UK increased by 43%. The thousand richest people in the UK fared even better. According to the Times Rich List the total wealth owned by this group of people has increased by 53% since 2009. They now own a combined wealth of more than £400 billion.

It’s increasingly likely that this deep inequality will lead to social catastrophe. There has been only one other period in modern history when inequality was as great as it is now; the decade immediately before the Great Depression.

The race to attack the incomes of workers highlights the sheer irrationality of capitalism. When wages are repressed, demand collapses, as the working class as a whole are unable to buy back to goods it collectively produces. This leads to millions of useful products rotting unsold in warehouses and factories. This is known as a crisis of overproduction. The solution of the capitalist class to overcome this problem is an inherently unstable one; pumping out credit. Instead of raising the income of those who create the products they want to sell, the capitalist class encourage workers to obtain credit cards and stack up mountains of personal debt. Rather than actually overcoming it, the best capitalism can offer is the postponement of a crisis. With personal, commercial and public debt all spiralling upwards over the past three decades, it was only a matter of time before this system collapsed.

However, things are likely to get worse. A lot worse. The internationally coordinated attacks on wages and working conditions, coupled with the destruction of the old social democratic welfare states, will cause consumer demand to collapse. This will lead to a vicious cycle of ever more job losses and company closures, which will collapse demand still further. Even Mervyn King, the Governor of the Bank Of England, has warned of the coming depression being worse than the 1930s. The coming years will see thousands defaulting on personal debts. House repossessions will become more common as people struggle to meet ruinous mortgage payments. The Euro is also on the verge of collapse, with some countries veering towards default. The fact is, the crisis of 2008 was merely a forerunner of a larger crisis about to come.

Tumultuous historical periods such as the current one often witness great calamity. In times like these, the stupidity of those in power should not be underestimated. Just look at the political response to the crisis. Almost all commentators are calling on governments to “get the economy growing again”, regardless of the impact perpetual growth will have on this planet’s fragile environment. We also hear politicians urging the banks to “start lending again” without questioning why we need to run an economy built upon colossal amounts of debt. And the best our geniuses in Stormont can come up with is a proposal to reduce corporation tax.

Despite the frantic efforts of the world’s leaders, no solution will be found to this crisis within the current economic structures. A radical reorganisation of society is the very least that is required to guarantee a decent standard of living for every human being on this planet. Anything less will bring us back to the conditions of the 1930s.

The announcement by Greek Prime Minister George Panpandreou to hold a referendum on whether or not to accept the Troika’s latest “bailout” has been met with the predictable fury of Europe’s leaders. Such are their democratic credentials, the very thought of the Greek people having a say on the austerity being inflicted upon them sparked outrage. Under intense pressure, Papandreou balked and called off the proposed referendum.

Everyone needs to keep a close eye on the events unfolding in Greece. What happens there will affect us all. The very existence of the European Union is on the line; if the Euro collapses, the EU is likely to go down with it. What happens after that is anybody’s guess. The ethnic cauldron that makes up much of Europe could very well boil over, the results of which most do not care to think about. The prospect of war in the continent is a very real one. Don’t just take my word for it; German Chancellor Angela Merkel issued a stark warning in the Bundestag last month when she said: “No one should think that a further half century of peace and prosperity is assured. If the euro fails, Europe will fail.”

Distracted by X-Factor and other hollow gimmicks, much of the population seem oblivious, and contently so, to the enormous events unfolding around them. Capitalism is now in its biggest crisis since the 1930s, with even the “top” bourgeois economists at a loss as to what to do to next. In all likelihood, capitalism is heading towards a period of prolonged and deep recession. Many are even plausibly predicting another depression. If this materialises, the ramifications on working people will obviously be enormous.

The sense of urgency among Europe’s leaders to save the EU project stems from the continent’s collective memory of fascism. They know the EU is the cement that has maintained peace in most of Europe since 1945. Its collapse will create a political vacuum in many countries, which the far-right will doubtless take advantage of. Across Europe, a tide of extreme nationalism is gaining ground. Muslims have replaced Jews as the targets of “acceptable” racism in today’s society. Fascist-friendly comics, such as the Daily Mail and Daily Express, spout their racist, reactionary vitriol without any real controversy. Their headlines attack Muslims on a daily basis, accusing them of being “terrorists”, “benefit scroungers” and “imposing their values”. Such disinformation in mainstream discourse provides fertile ground for the spread of fascism. This can already be seen across much of Europe. In 2009, the BNP polled 1 million votes in the European Parliament elections. The increasing popularity of the odious English Defence League since then is another case in point. Geert Wilders’ Freedom Party has made considerable gains in Holland. Latest opinion polls show that 16.9% of Finns support the True Finns Party. 15.2% of the electorate in Denmark have expressed sympathy with the Danish People’s Party.

Such alarming statistics should come as little surprise. In deep crises, people will naturally look to areas outside the mainstream for solutions. Fascists provide extremely impressionable people with “easy” answers. Many people, unfortunately, find it easier to blame their problems on immigrants and minorities, rather than study the economic, social and political issues which dominate their lives.

One important point to bear in mind is that fascism is good for big business. Do not fall under the illusion that capitalism is compatible with democracy and human rights. Capitalism is there to make profit. What happens to the environment, societies, families and individuals is simply immaterial in the dark race for profit. If fascist states provide profitable outlets for big business, you can rest assured that they will take these opportunities.

Without a viable left alternative, the rise of fascism in many parts of Europe is a distinct possibility. Earlier this week, the Irish Independent reported that a significant number of people in Athens have been brandishing the portraits of some of the country’s top generals. In a nation which got rid of a military junta just 30 years ago, this is an extremely worrying development. Despite the inspirational resistance to austerity shown by the Greek working class over the past number of years, fascism can still creep in through the back door.

Since 2008, the capitalist class have been using the crisis as an opportunity. They have taken advantage of people’s shock and have begun the process of slashing wages, conditions and, of course, jobs. They are attacking all the gains made by the labour movement over the past 60 years. That being the case, this should be seen by socialists also as an opportunity. The time is ripe for the airing of new ideas and alternatives to a system organised for the pursuit of profit, as opposed to social need. To stop fascism before it grows, progressives and socialists need to provide a clear programme detailing what we stand for. We should discuss and debate this thoroughly, as it is the only way to clarify our ideas and strive towards what we hope to achieve.

The opening of opportunities for the building of a better and more humane society come once in a generation. Let’s not miss this one.

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.

“The evidence says that we will develop significant jobs. Guarantee? No. There is no guarantee and it would be totally misleading of me to sit here and say that I could guarantee you. I couldn’t guarantee you anything.”

These are the words of CBI NI chair Terence Brannigan when he spoke to the Northern Ireland Affairs Committee earlier this year on the long-running issue of the lowering of corporation tax.

Although neo-liberalism has proven to be an abject failure, those in power are convinced that more deregulation, lower taxes and attacks on wages is the only method of escaping from this latest crisis. Not least our esteemed politicians in Stormont. Despite the fact that the Stormont executive stands to lose at least £300 million in its block grant, the four main parties seem determined to turn the North into a tax haven.

This is all done on the grounds that it would “harmonise” the tax regime across the island of Ireland and attract “investment”. Vince Cable once described the Republic of Ireland as “Lichtenstein on the Liffey”.  It now appears the majority of Stormont’s politicians are content to emulate that system and see the North turned into “Lichtenstein on the Lagan”.

The absence of any real debate in the media on such an important issue like this one is striking. The main regional papers regularly provide business leaders with space in their publications to outline their case, while minimising the platform of those who oppose the move to lower corporation tax. For example, ‘Pot of Gold or Fool’s Gold?’, a brilliant report carried out by economist Richard Murphy demolishing the myth that corporation tax would boost the Northern economy, received very little media attention. The same goes for a recent report carried out by Cambridge University’s Wilberforce Society.  This was one of the reasons I made the effort to cobble together this article. I don’t claim to be in any way proficient in the field of economics, but, as a journalist, I feel I have a certain amount of responsibility to counter this conventional wisdom.

The claim that thousands of jobs will be created as a result of lowering corporation tax is, at best, a hopeful gamble, and, at worse, an outright lie. What you will actually get is transnational corporations basing their headquarters in Belfast to escape higher taxes in other jurisdictions. A handful of lawyers and accountants will be hired to fiddle the companies’ tax bills, with no other real jobs being created. And given that the bulk of businesses in the North are small and medium sized, which don’t pay corporation tax, its reduction would have no effect on most indigenous companies.

Of course, those who will take on the losses of this gamble will be the working class. In a previous case, concerning Portugal’s Azores Islands, the European Union ruled that any losses as a result of lowering tax in a certain region within a country must be incurred by that same region. In other words, if the predictions of the four main parties don’t materialize, the losses will have to be made up by further slashing public services. Even if the tax reduction did prove to be successful, the benefits would only be felt by the very rich. Former Unionist MP John Taylor (now Lord Kilclooney), hardy a leftie, told the House of Lords that “95% of the population of Northern Ireland who are not company directors would be worse off”.  On the back of the largest cuts in the public sector in decades, doesn’t this venture seem overly risky? Indeed, the ability of the main parties to fight for a reduction in corporation tax stands in stark contrast to their meek acceptance of Tory cuts.

Comparisons with the Republic of Ireland

The ‘success’ of the Celtic Tiger is usually cited by the proponents of this latest round of corporate welfare to justify their proposals.  However, any serious study on the Republic’s economic growth during the Tiger years recognises that the low level of corporation tax was, at best, a secondary factor in causing the boom.  The South had an overall lower tax base with many loopholes, which could be exploited by big business – something the North could never duplicate while it remains under the jurisdiction of the UK.  On top of that, judging by today’s climate, the Republic’s is hardly a model to base a viable economy on.

More important to foreign investors than a low corporation tax during the boom years was Ireland’s highly educated, English-speaking workforce, its proximity to mainland Europe and its lack of government regulation (along with widespread corruption carried out in the interests of capital). The fact that the Republic had a low corporation tax since the 1950s without any correlating growth in the economy is rarely acknowledged by the supporters of corporate handouts.

However, perhaps the most alarming aspect of all this is the fact that the main parties’ keenness to partake in this race to the bottom encourages the very worst traits of capitalism. The refusal of the rich to pay their fair share towards the societies in which they live is something which should be resolutely opposed, not facilitated. Indeed, we should be pushing them to put more money into the public coffers, considering we already have the sixth-lowest corporation tax rate in the European Union.

International effects

There are many reasons to oppose the lowering of corporation tax, not least the effect tax havens have on developing economies. Even from a strictly internationalist position, any moves to decrease taxes on the rich should be resisted for the simple reason that many of the poorest people on Earth will be worse off as a result. When large corporations declare their profits in tax havens, which the north of Ireland could soon be, the result is crippling for developing economies. Companies operating in parts of Africa and Latin America often declare their profits in Switzerland, Bermuda, or some other tax haven. The result is that some of the poorest countries in the world lose out on much-needed tax revenue.

Dr Sheila Killian, of the University of Limerick, put it well when she said:

 “…since business is now international, it is important that the taxes are designed not only with a domestic agenda in mind, but with a view to their consequences internationally, particularly for vulnerable economies in the global South.”

The point is also driven home by the Tax Justice Network (TJN), which says on its website:

“Supporters of tax havens point to the wealth enjoyed by such tax havens as Switzerland or the Cayman Islands to bolster their arguments. This is like pointing to the wealth of a corrupt politician and arguing that corruption is therefore a good thing: tax havens effectively appropriate other countries’ taxes for themselves.”

Furthermore, TJN also highlights the alarming fact that least $11 trillion is stashed away in tax havens around the globe. Why do our politicians feel the need to be part of this international crime ring which assists in the destruction of developing economies?

The reduction of corporation tax will almost certainly prove to be a costly mistake. The Wilberforce Society’s report concluded that it “could damage economic activity (by reducing local spending and increasing unemployment) and could have inequitable results, depending on where spending cuts or tax rises fell”.  At a time when hundreds of thousands of public sector workers are losing their jobs based on the spurious claim that they are “unaffordable”, all workers should stand in firm opposition to this latest spate of corporate welfare.