Issue no. 18 of resistance the Irish Socialist Network (http://www.irishsocialist.net) for the Winter of 2013-14 is now out. The articles include:-
Labour Goes From Boom to Bust – by Kevin Quinn (ISN)
Demanding a Future for Young People – S. Fitzgerald and M. Murphy
Roma case exposes state racism – Aindrias O’Cathasaigh
Greeks Bearing Lessons – Ed Walsh (ISN)
No relief in sight for Northern economy – from the Sraid Marx website (see below)
Preparing For The Next Round – Alan MacSimoin
The Emancipation & Liberation Editorial Board is posting the article, No relief in sight for Northern economy, because it raises some interesting and more general points about the role of the state and state-led economic development.
Northern Ireland got a new Finance Minister in August, Simon Hamilton from the DUP, and he made a bit of a splash in his first major speech.
He noted the well known facts that around one third of the workforce is in the public sector and two thirds of economic output is in the State’s hands. However, instead of simply deploring these figures and blaming an inefficient and bloated public sector he said that the public sector can help the economy grow and not simply hold it back. He said that what was needed was a reformed public sector that was more efficient. And who could disagree with that? Let’s skip for the moment what he means by reform and efficiency. Surely socialists are in favour of reforms and efficiency? Aren’t we?
Well, the answer has to be yes. Socialists are in favour of change. In fact we want so much change that this requires not only reforms, not only radical change, but revolutionary change. Of course we know the DUP aren’t advocating this but that doesn’t mean we don’t welcome change that involves genuine reform that, for example, improves efficiency. And yes, we are in favour of increased efficiency.
In fact we are socialists because we believe a socialist society is a higher form of society than capitalism and is higher because, among many other things, it is more efficient. Such efficiency could eliminate the need for unnecessary work, reduce the burden of work that does need to be done and create enough wealth so that poverty is eliminated and everyone has a standard of living that can satisfy our reasonable needs.
Simon Hamilton also said that he is in favour of alternative models of service delivery – like mutuals, cooperatives and social enterprises. In other words public sector organisations or companies run or owned by the people who work in them. What could be more socialist than firms or state bodies owned and controlled by workers?
Some might think this is a very naïve approach to what Simon Hamilton is saying. Surely he isn’t advocating the sort of reforms we would want? Since when did the DUP become socialist and advocate workers’ ownership as a solution to economic underdevelopment?
Well there is a reason for the above approach and we can appreciate this reason when we compare it to the reaction of the trade unions to his speech.
I got a copy of the speech through a circular by my trade union NIPSA. The letter from the General Secretary of NIPSA, Brian Campfield, noted the references to different models of public service delivery but said only that the view of NIPSA is that these would be detrimental to the interests of the union’s members and to the general community.
Of course Hamilton referred not only to cooperatives but also to ‘partnering with the private sector’, which is code for privatisation. (You see! I’m not so naïve!) But this is only part of the story and not the most important part either.
Sticking only to the question of privatisation, which of course we should vigorously oppose, presents only a negative answer. When our class enemies propose change our answer isn’t that things should stay as they are, but just be funded better. We don’t defend the current state – or public sector as many call it – we want it changed just as much as we want the private sector changed. We want the whole capitalist system changed, not just big private corporations but the bureaucratic state that supports and defends the corporations.
Socialists don’t look at the current state as a model for socialism. It’s bureaucratic and undemocratic. I’ve worked in various bits of it for nearly 30 years and I haven’t had any meaningful say about how I do my work in all that time. I have a boss, in fact I have loads of bosses, and I don’t have any say over who they are or what decisions they make. How could this be any sort of socialism?
Socialists are socialists not only because are we against the present set-up but because we actually have an alternative – something positive to say. So when the DUP says the present state is in need of change the first thing we should say is yes – and here is what it should look like.
It is much easier to be against things but much harder to say what you are for; even harder to explain what the alternative is and harder again to put it into practice. That’s why when we see an opportunity to say we have an alternative and explain what it is we should grab it.
Part of the current weakness of socialism is that we, like the majority of people, are against how things currently are – with unemployment, inequality, crap jobs and the stress of everyday life – but we haven’t fought for the socialist answer that demonstrates the alternative.
Instead socialists have often been seen as defenders of the status quo – opposing privatisation but not offering any alternative to how the state delivers services, except to demand that it gets more money to do it. Instead we are often seen as demanding solutions that don’t offer any radical change to the present system. A better funded and bigger state is often how our alternative is presented, not just by our enemies but by ourselves!
The economy in the North of Ireland is well know as a bit of a basket case and the big size of the state sector is not the cause of it but is an expression of it. This is also pretty well known by many. It should be a big clue that a big state is not the answer.
Simon Hamilton thinks the public sector can be a vehicle for changing this situation and ironically the trade unions agree with him. They just have slightly different ideas about how this can be done.
Socialist don’t agree with this and so don’t agree with Simon Hamilton or the standard trade union view. In my next article I’ll explain this a bit more by looking at what else Hamilton said in his speech and what the standard left response has been.
STATE LED DEVELOPMENT?
When the new Finance Minister in the North said that the public sector could be a vehicle for developing the North’s economy, instead of being simply a drag, this was welcomed. But with suspicion that this might mean privatisation. There was also concern that he was continuing to boast of his party’s record of supporting low taxation. In response the NEVIN economic think tank, sponsored by the trade unions, called for adequate levels of taxation; that is it was calling for increases in taxes.
What attitude should socialists take to this argument?
First of all we should recognise that states all over the world have involved themselves in promoting economic development, some more successfully than others. Nationalists of all types are in favour of the nation state promoting its own economy in competition with other states. For much of the last century this type of political programme was held up as ‘national liberation’. More and more state ownership was and still is presented as socialism.
It is very hard to see how the Northern state could ever be one of the successes. State led economic development elsewhere has been successful to a point but the Northern State is dysfunctional. Behind the rhetoric what is being proposed is not state led development but state enablement and facilitation of growth, but it is doubtful if the Northern State could even make progress with this. Instead it will at best be reduced to attempting to lower taxes and entice a few footloose multinational companies to invest, based on a bucket of state hand-outs.
How desperate this has become was illustrated at the beginning of October when £3.3 million was given to a call centre company to promote nearly 1,000 jobs. Half already existed, no capital investment was being made by the company and it had previously closed in Derry two years ago with the loss of 1,000 jobs.
The Northern Ireland Assembly hardly meets, it discusses things it can do nothing about and hasn’t a clue about what to do about things it can influence. The Executive meets but has nothing to talk about since the DUP and Sinn Fein can agree nothing except to give hand-outs to multinationals. But state led economic development requires much more than this.
It is doubtful if this is understood. The DUP is a party of small businessmen who see the state and taxation purely as red tape and expense. The need for the state to provide high class infrastructure and a well-educated and healthy workforce is all far removed from their immediate concerns with ‘how much tax do I have to pay?’
However a recent report by the Organisation for Economic Cooperation and Development records that in Northern Ireland (and England), 16 to 24-year-olds scored 266 on average in a literacy test, which put them third from bottom in a 24-nation league table. In numeracy, 16 to 24-year-olds scored 257 – putting them fourth from the bottom.
Sinn Fein thinks the economy would be great if there were only one Irish economy rather than two but there is not even an inkling that a united economic state might result in benefits for the larger Southern bit to the detriment of the smaller Northern bit. It’s called uneven development.
A policy of relying on the state in the north for economic development looks hopelessly improbable not least because the state hasn’t been able to modernise itself never mind anything else. The new minister, Simon Hamilton, announced the creation of a new Public Sector Reform Division but there is no strategy.
It is recognised that innovation comes from people but in his speech all he can do is ask the question – “and how do we motivate our public servants and unlock their ability to innovate?”
Don’t expect an answer. Workers won’t get paid any more and they won’t be trusted with ownership or control over their own workplace or job. And if you’re not trusted to control your own job how could you be trusted to make truly transformative changes to society?
One ideological supporter of capitalism once wrote a book with the interesting title ‘Why most things Fail’. It noted that most companies fail sooner or later. While the capitalist state will accept that this or that capitalist enterprises can fail there is one capitalist undertaking that cannot be allowed to fail, ever, because it protects the rest. That is the state itself. Only the most trustworthy can be entrusted with state power which is why the DUP and Sinn Fein don’t really have it. What they have are the powers of a glorified council and they don’t even exercise the powers they have.
If workers were really to be given the power to develop a new economy there would still be many failures but the powers unleashed would ultimately lead to a new society.
This however isn’t the model of state economic development on offer or championed by any nationalist party.
The Northern state has failed but unfortunately for Sinn Fein so has the Southern State. The nature of the capitalist state everywhere is that it cannot give workers the autonomy or freedom to take risks, innovate and try to change society, for example by promoting workers’ cooperatives. Such economic power might sooner or later form the basis of a rival political power.
In other words state led economic development is nothing to do with socialism, which is the power of the working class. And ‘national liberation’ tells us that the key problem is liberating a state in the oppressed nation instead of liberating the working class of the oppressed nation from the state – foreign and domestic.
This means workers have no interest in supporting many of the measures usually associated with such a programme, including tax increases, which will inevitably hit them hardest, or supporting local industry against foreign as if it was somehow ‘ours’. Socialism is not the growth of the existing state or its accretion of more and more powers.
Simon Hamilton’s proposals on privatisation are widely recognised as bad news but the bureaucratic state is not the alternative. If the Northern economy shows one thing it shows this.
(This article was first posted at:- Reforming the Northern Ireland Economy – A job for the State)