Jun 12 2013


This article, by James Fearon, is from the Socialist Democracy (Ireland) website. It highlights how the Irish Congress of Trade Union’s (ICTU) support for Keynesian reforms is tied to a strategy to make workers pay for the ruling class’s debts – only more slowly than the incumbent Fine Gael/Labour coalition government.  

In the UK, Ed Balls has flagged up Labour’s acceptance of current Tory attacks on our class, and his willingness, if Labour is elected in 2015, to go down the same road with further attacks on universal benefits. The TUC’s thinking goes no further than that of the ICTU. Only when pushed does it mount any actions – such as on November 30th, 2011 over pensions. However, these actions are merely token, as the TUC’s ignominious collapse in the subsequent days highlighted. The TUC is trapped in the same Keynesian thinking as the ICTU.  It has no wider vision than a return of a Labour government, hopefully committed to  some Keynesian economy boosting measures, so that, as in Ireland, workers are given longer to pay off the ruling class debts. With such miserable aspirations, it is unlikely that the TUC will be able to shift Ed Miliband and Ed Balls. Their appeal is directly to the  banksters and other corporate capitalists –  ‘You can trust Labour to continue the austerity offensive and the welfare counter-reforms.’

David Begg, General Secretary of ICTU whipping up worker enthusiasm

David Begg, General Secretary of ICTU whipping up worker enthusiasm

The Irish Congress of Trade Unions (ICTU), and reformists in general, have been particularly animated recently over flaws that have been found, in the research by Reinhart and Roghoff, on the effect of austerity on the fiscal multiplier. They have taken this as evidence that ‘austerity isn’t working’ and that the possibility exists that they may still receive a lifeline from a slower, less virulent capitalist attack on the working class. If this ‘Better, Fairer Way’ to pay off the banksters’ debts should be adopted by the political elite in any meaningful way ICTU could claim that the slightly reduced pain of a slower austerity was their doing, and this in turn would provide them with some semblance of a fig leaf to cover their shame.

A former senior advisor to Citibank was quoted favourably in union literature recently when he expressed doubts about the efficacy of austerity based on figures which show a larger than predicted fiscal multiplier of €1.6 in economic shrinkage for every €1 removed through austerity measures. Figures from the IMF, based on data from 28 countries between 2009 and 2013, actually put the multiplier as high as 1:1.7 and Keynesian economists, the TUC and ICTU have all seized hungrily upon these figures. While trade unions exhibit a touching, perhaps over zealous, faith in these figures, the findings are not so readily accepted by the financial establishment.


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