Q: Why is Ireland the richest country in the world?
A: Because its capital is always Dublin.
Alas, like the rest of the developed nations, Ireland is no longer quite so wealthy. It is not immune to the depredations of the current financial crisis, and has recently experienced a depletion of its national assets.
Perhaps its capital city should be renamed “Halvin”.
In any case, the Irish government is facing an imminent inability to meet its pension obligations, and has responded by cutting public expenditures and raising pension levies. This move does not sit well with the general public, since many of the wealthy bankers who are deemed responsible for the crisis continue to enjoy their plush lifestyles while unemployment and privation are raging amongst ordinary workers.
A wave of populist outrage has resulted, and Dubliners have taken to the streets. According to today’s Irish Times:
Up to 120,000 People March in National Protest- - - - - - - - -
Up to 120,000 people have marched in Dublin in protest at how the Government is handling the economic crisis. The march, which was organised by the Irish Congress of Trade Unions (Ictu), took nearly one and a half hours to make its way from Parnell Square to Merrion Square.
Ictu maintained that the protest today was the first step in a campaign in support of a fairer way to achieve economic recovery.
Addressing the demonstration Ictu general secretary David Begg said that “a business elite” had destroyed the economy and had not yet been held to account for it in any respect.
Mr Begg called on the Government to talk to the trade union movement on its alternative ten-point plan for economic recovery.
He said that Ictu’s ten-point plan was not perfect but that it was the best offer that it would get “and if you are sensible you will engage with us and talk to us about it.”
He said that no balance had been put forward by the Government in its solutions for dealing with the current economic crisis. He said that there was no sense of a sharing of the burden right across the economy “not alone that it should be shared by the people who were best able to bear it and who had done best in the Celtic tiger years”.
The president of Ictu, Patricia McKeown, said that the Government wanted workers who built the economy to make the sacrifices while it protected those who wrecked it.
“We are not prepared to live in that society,” she said.
Ms McKeown said that the time had come for Irish workers to demonstrate to the Government the power they really held.
“That power is today on the streets of Dublin, it is in industrial action but most significantly it is at the ballot box.
“If our Government and the elected politicians are not prepared here and now to pledge that they will act now and act on our behalf and act on the proposals we have placed before them then you must be prepared to deny them even a single vote and to send that message out loud and clear,” she said.
Mr Begg described the activities of people who led the banks as “economic treason”.
He said that the world outside did not see a vibrant economy in Ireland any more but rather an economy which was propped up by “crony capitalism” and nothing else.
The Ictu leader said that people who had been leaders of the banking system had also held directorships in other sectors.
He said that it was incongruous that people who had presided over “huge failures” in one area were able to maintain their positions in others.
Mr Begg said that if the taxpayer was taking responsibility for the cost of the €300 million in loans for the ten members of the so-called “golden circle” who were involved in investing in Anglo Irish Bank that the people were entitled to know their identities at the very least.
Mr Begg also said that sooner or later — and he believed sooner — that the whole of the Irish banking system would have to be nationalised.
“There is no other route to ensuring that we have an effective banking system in place and we cannot put off that decision indefinitely,” he said.
Mr Begg also said that history had shown that massive adjustment to economic conditions could only be achieved if there was social adjustment at the same time to ameliorate the effects on the population.
“If you do not do that you will not be able to retain in this country any sense of social cohesion and the alternative is a social disintegration and retreat into protectionism, out of which we can only see great damage to our future and to our country,” he said.
In a statement issued this morning, the Government said there was a considerable amount in Ictu’s Plan for National Recovery that was “entirely consistent” with its own agenda.
“In particular, it reflects the Government’s view that an integrated national response to the current crisis is not only desirable but essential if there is to be a sufficient impetus and coherence of approach to meet the scale of the challenge,” the statement said.
“The Government recognise that the measures which it is taking are difficult and, in some cases, painful. The Government is also convinced, however, that they are both necessary and fair,” it continued.
The statement described the pension levy as “reasonable” and said it reflected “the reality that we are not in a position to continue to meet the public service pay bill in the circumstances of declining revenue”.
Despite the bracing nature of this wave of popular revulsion, I feel compelled to point out that nationalizing Ireland’s banking system is not an effective solution. It would buy the country an express ticket back to the Third World stagnation it was mired in not so many years ago.
The reason this news story caught my eye is that it fits into El Inglés’ general schema of a “discontinuity” in the political economies of the Western democracies. After discussing the concept for a while, he and I came to the conclusion that the proximate cause of the discontinuity will most likely not be political, but economic, and that the systemic failure of the welfare state — as evidenced by its inability to meet its unemployment and pension obligations — would rouse the lumpenbourgeoisie of Europe from their torpor and launch a period of sustained social unrest.
The malaise in Ireland may be the first faint breeze portending the coming hurricane. The same process is underway simultaneously in California: in order to close a yawning budget deficit, Governor Schwarzenegger is terminating public spending and increasing taxes — and in the teeth of a recession, I might add, which is certain to send the state spiraling downwards into deeper fiscal ruin.
The elite leaders of our Western countries — who can’t remember a time when their citizens weren’t inattentive, passive, compliant, and somnolent — are facing a nasty surprise. Sudden poverty and deprivation tend to concentrate the mind, and not in a direction which bodes well for the ruling class.
Just ask Marie Antoinette.