A paradise for capital, hell for the working class

Forbes magazine recently lauded Ireland as top of its list of the best countries in which to do business. The low tax regime and personal freedom, by which Forbes means corporate freedom, being high on the state’s list of ‘positive’ attributes. This praise adds to Ireland’s status as the poster child for austerity, little  Ireland bravely biting the bullet and bailing out the global banking system. Nowhere in the Forbes article does it appear what effect this ‘cure’ has on the working population, the youth, the elderly or the less able bodied in Irish society. All that is mentioned is the favourable figures produced largely through global capitalism’s relationship with the Irish tax haven and the parasitic elite who  run it. 

Cost

But where does the cost lie? It was one of Karl Marx’s outstanding achievements that he took the abstract relations between figures and turned them in to relations between people and it is there that the cost becomes apparent. 

Topping the good news off for Forbes is the fact that the “savage austerity measures of the past few years have repeatedly been      endorsed at the ballot box”, an aspect of Irish austerity which the Troika also finds favourable.   Ireland has a relatively small   domestic economy in relation to international money flows. In other words international finance capital flows through the country, producing favourable growth   figures but leaving little trace of this fabulous wealth on the local working populations who are    quietly picking up the bills for the banks losses. The success of the austerity has little to do with any conscious ‘willingness’ on the part of working people to repay the bankers debts and more to do with poverty and emigration and a lack of a political fight back.

Bolstered by the recent figures and the endorsement of Forbes and the credit agencies and brimming with confidence, IBEC has raised its economic forecasts for the coming year. Of course these figures are based on the assumption that there will continue to be a lack of any real resistance to austerity and that growth will come on the back of tax cuts and government investment, which is to be financed by public service pension reform.

Yet again, providing no meaningful fightback occurs, wealth is to be transferred from the working class to the capitalists and profit figures are to be boosted by an attack on the modest savings of the working population. It is the lack of a concerted resistance and the state’s determination to follow through on attacks on pay, conditions and pensions that gives IBEC and the markets their confidence. 

As a result Ireland is shedding its population. Total emigration from Ireland in the year to 2013 is estimated at 89,000, up 2.2% on the previous year. 50,900 of those were Irish nationals.  In 2013 for every 5 that arrived home from Australia 15 left to go there,  probably including the 5 that had a holiday at home. The majority of emigrants were between the ages of 25 and 44, but when the 15 to 24 age group is included it is plain that the overwhelming     majority of emigrants are from school leaving age upwards, and are in the prime of their working lives. Our youth are disappearing into the Australian outback, or the Canadian north, to mine for the minerals that are the only thing left that is profitable, or to  construct infrastructure for their extraction. According to the    Financial Times, 397,500 people have emigrated since the financial crisis began in 2008. The rate shows no sign of slacking, in the year to last April ten people left the southern state every hour, 1 every 6 minutes but even with this exodus the youth unemployment rate is still at almost 25% while the overall rate is at 12.8%.

Foreign Direct Investment Boom.

This working class immiseration is happening during an unprecedented flow of capital into Ireland. Forbes tells us that between 2008 and 2012 US firms invested $129.5bn in Ireland. This is more than the previous 58 years put together, making it the fourth  largest recipient of US Foreign Direct Investment last year, with Ireland receiving almost as much investment as all of ‘developing Asia’. The 12.5% corporation tax is of incredible benefit to transnational capital in avoiding taxation, especially as many companies engage in further swindles with the co-operation of the Irish state that reduce the tax take close to zero. Federal taxation in the US is 35%, so setting up in Ireland makes corporate sense. 

The transfer of profits then from the parent company to Ireland means that the transferred profits are taxed at the Irish rate,    meaning massive savings without leaving barely a footprint on the host country. Google declared 41% of its global revenue in Ireland in 2012, Facebook 48% and Microsoft 24%. Linkedin and Twitter have registered in Ireland as “unlimited companies” which means that they do not have to reveal their turnover, profit or how much tax they are paying, but taking the other three we get a picture of where the rosy figures emanate from, a global corporate swindle. Little wonder these billions flow in to Ireland, and then slip quietly out again in the direction of huge offshore accounts. 

These figures have been the cause of Kenny and the political elite’s enthusiastic assertion that recovery is under way, but for the working class the austerity is continuing, indeed the austerity is the reason for the ‘recovery’. The promise that the Irish workers will agree to their standard of living being slashed, their elderly, and less able bodied people being robbed of medical cards and home helps, that household charges and water charges proceed apace and be implemented smoothly, and that the young generation should flee the country at such an incredible rate. These are the promises that create optimism in the markets and at Forbes. The successful imposition of poverty on the working masses is the guarantee on which the latest stock market bet on Irish debt is based. The Forbes article enthusiastically argues that what makes Ireland more     attractive is the fact that “Nominal wages fell 17% between 2008 and 2011, which helped keep labour costs in check.” and that   unemployment remains high, “providing companies a large labour pool to pick from”. In terms of labour costs the race to the bottom has one objective, to reach it and stay there in an attempt to restore profitability.

Ireland’s present usefulness is to show the world that the Irish working class can suffer in silence in the face of endless austerity while the Irish state plays it traditional neo colonial role by providing a gateway for global capitalism to filter their massive profits away into offshore accounts.  These accounts dwarf global indebtedness, lying bloated with the uninvested dollars of cash rich   corporations seeking the nonexistent investment opportunities that capitalism cannot provide without massive destruction, the       destruction of working class lives.

Fightback!

There is no alternative but to fight back, but not with any naïve illusions that a plea to our current leadership will make them change course and act. The Irish Trade Union Congress submits to the political perspectives of the Trioka and global capitalism, and seek only a Keynesian twist to their plans for saving the banks and restoring profitability. 

James Connolly is most popularly known to have been correct about “the carnival of reaction” that would ensue with the partition of Ireland but his prediction was also correct that without revolutionary socialism the “green flag flying o’er us” will not save us from domination by  imperialism through their banks and institutions. The entire project that was assembled on the basis of the 1922 treaty has failed. We must take Connolly’s revolutionary advice. Success at the ballot box means    nothing without an active self motivated workers’ movement outside parliament. That means revolutionaries must pour all their resources in to building and supporting workers’ actions against austerity. A further transfer of wealth from working people to the capitalist class is planned against the backdrop of a stagnant economy, which is leeching its life’s energy from the poorest and most vulnerable in society as it tries to stave off the next crash. 

For the working class to begin a fight back we must recognise the enemy and simultaneously repudiate the bankers debt and repudiate the leaders of the working class movement who have mouthed platitudes while capitulating and implementing the austerity. In no matter how small a way we must confront the pretenders and begin to rebuild our labour movement, a movement based on struggle and not subscriptions, that can be of practical use to the working class.