Thursday, 27 October 2011

Towards a Second Republic

Peadar Kirby: Despite promises of the imminent announcement of a constitutional convention in the spring of next year and of plans for local government reform, the dynamic of reform has lost momentum since the last election. And, as the staunch defence of Ireland’s low corporation tax rate indicates, the reform agenda remains narrow and has entirely failed to address what needs to be done to move beyond the neoliberal development model that is centrally responsible for the present crisis. In other words, the reform debate needs to be broadened to examine the wider links between the political and administrative system, the nature of the Irish economy and its leading sectors, and the ways in which civil society acts either as an agent for change or for resisting change. We need a focus on Ireland’s political economy options as part of the move towards a second republic.

In our forthcoming book entitled ‘Towards a Second Republic: Irish Politics after the Celtic Tiger’ (Pluto Press), Mary Murphy and I offer an analysis of the ways in which the Irish collapse had its roots in the political and administrative system. Not only did these grossly mismanage the Celtic Tiger boom, but they have created a particular model of development, highly dependent on foreign investment and very resistant to taxing the huge profits made in Ireland so as to fund decent public infrastructure and services. For too long, civil society has acquiesced in this subservience to global capital, failing to put pressure on the state to respond more adequately to the needs of the many vulnerable in Irish society. As a result, we have created a society blighted by gross inequalities and based on a growth model that emitted high levels of greenhouse gases thus making it unsustainable. The book examines the challenges in an all-Ireland context, analysing whether the second republic will overcome partition and be an all-island state.

It identifies two alternative models being promoted by sectors of civil and political society. Foremost among these is a developmental social democratic model, espoused by organised sectors of civil society and by some among the political left while the ecological or Green movement seeks a model that can loosely be called an ethical or ecological socialism. While this latter seems less feasible now, the dramatic impacts of climate change and of peak oil over coming years may well create conditions that make such a model more realisable. Mary and I draw on developments in the European Union and elsewhere in the world to offer lessons for the challenges and possibilities now facing us in Ireland. The book’s final chapters examine what forces exist in today’s Irish politics and society to promote a new model and what the prospects are for its realisation.

A debate on the book takes place in the Oak Room of the Mansion House, Dawson Street, Dublin at 6:00 p.m. on Thursday, November 3rd. In addition to Mary and myself, contributors will include Professor Kathleen Lynch (UCD), Catherine Murphy TD, Fintan O’Toole (Irish Times), David Begg (ICTU). All are welcome. Copies of the book will be available at a special discounted price of €15.


Paul Hunt said...

A 'debate'?! Sounds more like a prayer-meeting to worship the vision of some utopia that neither can nor ever will be achieved.

Peter Connell said...

I find it disappointing that you should be so dismissive of an attempt to widen the debate about our society's future that challenges some of the orthodoxies that got us into our current crisis and that goes beyond the narrow parameters of GDP debt ratios and bond markets that seem to dominate our media and public discourse. I assume you expect that your own ideas on reform that you espouse so consistently are entitled to be treated with tolerance. It is a courtesy that you might extend to others.

Paul Hunt said...

@Peter Connell,

In the context of this report of the US Congressional Budget Office:
which shows how the 1% have been making out like bandits in the US (similar to the 1% in most developed economies) during the last 30 years, I'm afraid I am less than enamoured that so much effort is being put in to concocting utopian fantasies that don't have a snowball's chance in hell of resonating with a plurality of the remaining 99%.

In any event, my primary focus is on empowering and resourcing the Dail to make informed decisions on the policies governments should execute. Then let all options and visions be considered in the only forum that counts - the Oireachtas and its Cttees as the sole repository of the people's power and authority between elections. Tolerance means that all options have an opportunity to be advanced, but if they fail to secure traction in that forum - or in the court of public opinion - those advancing them must be prepared to accept this and to modify their positions.

Peter Connell said...

I suspect Peadar and Mary share your view of the gross inequalities evident in the US and some other developed societies. Your characterisation of their work as 'concocting utopian fantasises' is, I think, unfair. I don't think any rational commentator would suggest that the social democratic model referred to by Peadar that has shaped much of Europe since World War 2 is a utopian fantasy. It has its faults and the political parties that have worked within the model (both social democrats and christian democrats) have made their mistakes. But the model is one that has delivered economic growth alongside (and in tandem with) decent levels of social provision. It’s a model that seems to have the allegiance of significant swathes of the population of western and northern Europe so I wouldn’t be as pessimistic as you that some of the thinking that informs social democracy can’t gain traction with ‘a plurality of the 99%’. And if you think gross inequality is a bad idea Sweden's gini coefficient is 23 while the US stands at 45.

Paul Hunt said...


I am not denying, not would it be possible to deny, that this broadly social demaocratic model worked well for a considerable period from the end of WWII. But is was based on a degree of financial repression and this, inevitably, provoked a counter-reaction since the mid 70s that is based on considerable wage repression (perhaps less so in Ireland than in other economies) and on a bonfire of financial regulation.

An astute and informed commentator on another blog described the recent experience very well:
"Financial markets have messed up massively over the last decade, ...but we have lived in a society that has demanded ever cheaper credit from our banks and ever greater returns from our savings/investments (and ever decreasing fees on such as well), that combination of “demands” implying that we either didn’t understand risk/reward trade off’s, or that we had solved for the ‘risk’ component of that equation, X increasingly equalling zero somehow. Remember, “ordinary citizens” benefitted massively from overly-cheap and overly-available credit, and while there is a very complicated debate about where the blame lies between bad-lenders and bad-borrowers, at least some blame lies with both parties as both of them benefitted from the credit super bubble.

The only real answer as to how this ‘worked’ is now quite clear in the financial market subsidisation or backstopping we have seen come to the fore in the last 4 years, this the necessary answer to a crisis which threatened (and still threatens) to dismantle many of the standard political and societal principles/frameworks (ever increasing wages, safe cheap/free pensions, generous social welfare) we have grown to assume are there forever (principally the general stability we have seen in the last 20 years).

I’m not saying this is right or this is how capitalism or economics should work, but I am surprised that so few understand this or saw/see it coming."

And I would add that the glut of credit helped to conceal the wage repression and growing inequality. Rajhuram Ragan coined the phrase "let them eat credit". A Great Deleveraging is unavoidable.

We have gone through the workings of the EU social democratic model, and we are now experiencing the bitter fruits of the inevitable reaction to it. And we are entering the birth throes of a new ordering of economy and society.

Most electorates that have been asked during this crisis have not endorsed a return to the 'socila democratic model'. Francois Hollande in France may be able to secure sufficient popular support for some version next year, but he would be the exception that proves the rule. Perhaps voters are looking for some synthesis of the social democratic model and of the good things, because there were some good things, in the reaction over the last 30 years. But we can't go back, nor can we wish into being the particular set of politcial, social and economic conditions that secured the social democratic model after the war. Neo-cons, neo-liberals, the centre-right and the progressive-left will all have to shed a lot of ideological baggage if we are to secure a workable synthesis.

Martin O'Dea said...

I think Paul's last contribution is a really well presented arguement that within its own set of parameters and assumptions seems completely right. However, in the spirit of useful debate (which, of course, has nothing to do contributors being right or even aligning themselves personally to their arguements) I would like to present a different context.
Firstly, much of Paul's heartfelt dismissiveness seems to come from a starting point that many display when commenting on the left and might be characterised as the naive enthusiastic, but innocent of how the world actually 'works' student; model.
This set of contributors to the left may well be a weakness they dont understand themselves as the portrayal is right - and many come to the left perspective prior to appreciating the harshnesses of reality, or before growing up and after indulging in some reading and some cultural influences their parents had spared them from.
However, many, I feel thread the weary path of the realist and prior to selecting their graveyard plots (and with much fuller appreciation of the systems under which they toil) they still think 'feck it - someone better try - and I don;t really care about looking silly' etc.

I appreciate this, but think that one assumption that can be particularly unhelpful here - is that there is nothing new under heaven type thinking - - I think there is a fundamental difficulty in realising the accelerated nature of change that is relatively undeniable from the industrial revolution and then the informational revolution etc; and how these affect wealth generation (as opposed to just wealth redistribution - and also the empowerement of the widest possible publics (particularly through communication technology)
In these broad contexts there is a paradigm where one can argue that we are witnessing is a massive resistance to new realitites by powerful elite elements in the social construct we inherit and alter.
Paul argues that a synthesis is required between neo-liberal model and social- democrat model - - personally I think that the likely historical plus accelarating change analysis would make left of social democracy as the likely outcome in the next decades - and in this broadest sweep of history one can see the move from feudal to individually empowered - but that importantly if we believe that the chanegs will continue at a constant pace we are supporting a difficult enough perspective to justify. The truth is changes of all types are accelerating. This is hard to accept but difficult to deny. The stakes are massive and much more important than being seen to be silly - the occupy protests provide great cardboard post reminders coninuously showing the inequlaities and their real-life ramifications, which are, lest it be forgotten, tragic. How quickly we alter and precisely where we go is not written in any 'destiny' and what is called for in the book outlined is as restrained as it is necessary.
In my opinion

Paul Hunt said...

@Martin O'Dea,

Many thanks for your thoughtful and insightful comments. It is rare to find such a willingness to engage in such an open manner on this board. And I am not making any dogmatic assertions about the need for this 'synthesis'. I am merely speculating and trying to establish a basis for exploring the potential. Nobody has a monopoly on wisdom, but there are two things I think on which we can agree. These are, one, that we can't go back to replicate the post-war social democratic model and, two, that we have to find a way of moving forward from the mess the reaction to this model over the last 30 years has created.

For many voters the experience of the last 30 years is what they know and, despite the current crisis, for many of them the reasons they rejected elements of the previous social democratic model and consented to the reaction remain valid. I do not see it as a 'false consciousness' or a failure to grasp what is in their best interests or a willingness to succumb to propaganda - though aspects of all three (and more) may be identified. I see it more as a sense that the reaction offered something 'better'. And we have to admit that it wasn't all bad - even if it did end in a mess.

The challenge is to identify the rhetoric in the reaction that convinced many people, but which departed so violently from reality (and bebefitted the elites), and to see how it may be made to work in practice in the context of a renewed social democratic model.

It's a heck of a challenge, but it's where we have to start.

And over and above all this, particularly in an Irish context, but also at the EU level we must compel TDs, of all factions or none, to exercise restraint over government and for EU member-state parliaments, collectively, to exercise restraint over the Council and the Commission.

Let the work begin.

Martin O'Dea said...

Cheers Paul,
I appreciate the thoughtfulness also in the engagement and I think I would agree with all of your points but for one relatively recently acquired further point of context. Or, I would agree with you in a relatively stagnant or stable setting, however.
Here is the point I think that may be overlooked in economics and politics. The best way I can find to explain is by marrying to thoughts.
First compare a man of average or below average means (there's lots of us) with a rich man in 1911.
Assess all aspects - health, comfort, shelter, transport, entertainment, life expectancy, ability to communicate etc.
The reason that the modern average joe wins is technology and scientific advance, from the industrial revolution to the immense changes of the ongoing informational revolution.
Like I said in the previous post there is a tendency to assume that all these things have happened before and history will always hold the answers; of course, it is essential to appreciate the story of the couple of hundred people's decision making in the past, but the vast vast majority or people through history in all parts of the world, only, struggled to survive - that this has changed is recent and has massive ramifications.

The second thought - and it has taken a half decade of continuous exposure to appreciate and then accept the astounding implications is the fact that technology, in fact, increases its potential exponentially. That last word is one of many that is constantly wrongly used - but, incredibly, in this case is not. A look at the simple but vital Moore's Law and a consideration of it and other evidences shows that even already there is a massive amount of potential tasks for all of the worlds population that would assist the task of making a life better - but a bankrupt economic system and a struggling political system (which to be fair can be explained as relics of the past) stop us from embracing the most exciting time there has been and which will be nearly twice as exciting in a matter of months.

I think perhaps, socialism came before there was enough to go around. I don't think what replaces it will be the same, nor would I want it to be - but it must allow all access to the abundance that is attainable in so many areas and should be goals that we organise or re-organise for.
The current trends around music - online platforms - published materials etc being open sourced or trying desperately to readjust to a business model where the producers/suppliers/retailers can afford their profit
Of course, normally we would finish such radical arguements with a 'it goes without saying' that these changes should not be violently sought; but I think on any forum it is nearing the stage where this point needs making. Maybe we should be applauding the Gardai and the occupy Dame st participants

Paul Hunt said...


Points well made. But, unfortunately, this 'feast of technology' has generated a population of isolated, atomised, individualised, disenfranchised citizens pursuing their own interests and struggling to maintain any semblance of the common bonds that hold society together. And they seem to have lost the ability, and have been officially deprived of the ability, to mount effective collective action against the depradations of those exercising economic power and influence.

The old assocations are no longer fit for purpose. But is there a willingness to re-think, openly and honestly, what is needed in this era? Yeah, you've got it. Apart from your welcome response, all one gets here is criticism for daring to poke fun at some of the 'household gods' and for seeking to provoke a debate.

paul sweeney said...

Peader is correct that it was the liberal economic model which was the downfall of the Irish Celtic Tiger’s success. More importantly it looks as if it is still the model which is being used to attempt to “clear up” the mess. That of course is why there are no green shoots. It simply is not working. Except that it is the poor who are paying most and we are all stuck in the mire.

Peader is very correct in stating that “the reform debate needs to be broadened to examine the wider links between the political and administrative system, the nature of the Irish economy and its leading sectors, and the ways in which civil society acts either as an agent for change or for resisting change. We need a focus on Ireland’s political economy option.” Yes we need some clear thinking.

This is crucial and it is not good enough to say that we cannot afford to address the big issues; that we have to be “pragmatic;” to deal with immediate fiscal crisis. Unless policymakers realize that they have made some whopping great policy mistakes in the past decade or so, and some of the biggest in the past three years, we are going to endure a decade of austerity. With little growth and growing social unrest.

I do see many policy makers now being more cautious and critical of the many mistakes made in False Boom era, but most policy makers are in so narrow a space that they seem incapable of taking a differing perspective. There is regrettably little innovative thinking at top.

Unless we adopt a longer term – broad industrial policy strategy model- we are going to be stuck in a low growth high unemployment model for many years.

Our biggest four private indigenous firms, AIB, BOI, Anglo Irish and Quinn Group all have collapsed. The new model of Irish capitalism has socialised the risk, so you and I pay an enormous price.

Ironically, part the way in which we will pay is that we will privatise some of the biggest and best remaining indigenous companies to pay for the staggering debts run up by the best in the private sector.

Am I a bit slow? If the private sector dug the hole, and collapsed its biggest and best companies, why must we, the taxpayer, continue digging by selling of the best of what is left?

Those best state companies like the monopoly ESB which we own. After one of the biggest and fastest nationalisation programmes in the world – of Ireland’s six indigenous private banks, why are we redressing this huge mistake compounding it? Why are we privatising the best of the rest?

Can we have some thinking in policy-making when we making/ taking such big decisions?

Martin O'Dea said...

Paul Sweeney on your analyses of current government policy, yes you are completely right, we are trying to dowse flames with petrol. However, the political naivety of electing FG in place of FF should mean that this is a surprise to no one.
Politically we have chosen between two non-ideological parties that found themselves in existence after emerging from conflict. We could argue without stretching a whole lot that, FF were more successful precisely because they were less ideological than FG (the ultimate in populism I don't think anyone doubted Bertie Ahern when he claimed that he was (could be) a socialist) - absolutely after a decade of P.D. neo-liberalism FF would have started soviets if it won the next election.

FG were - to be fair to them - somewhat more clearly defined ideologically and how that has refined and reformed itself through the decades to a party of small government, big business, a party who - well, its hard to imagine how we could elect them at this moment in history.

However, the electing again was local and without much in the way of ideological debate. Labour is taking a tough course and being an establishment party - either to gain the power an aging party desired for a long time or in a largely ineffective way to attempt to temper their neo-liberal partners.

The danger for the only ideology based party then is that they are replaced by the current left-wing version of Sinn Fein - another party that has emerged from a conflict and that I fear would prove again the fickle or Machiavellian nature of such parties.

I think Paul, there is no doubt that there is a space crying out to be filled by a new party in Ireland. There are a couple of independent TDs in Dail Eireann that represent applied intelligence with a concentration on humane treatment of all members of society but it is a very big ask to expand that to an ideology and to a party - its one worth trying though surely (things cant get much worse)

Paul H. I strongly disagree with the analysis of communication technology as isolating.
I am relatively young and I can still remember a world where France was (dragons go there) territory and Asia and Africa were still holding a slight chance of unearthing Hong Kong or something - language divided other nations in a way that could never be bridged and a sense of unity among peoples in circumstances where the east and the west were good and evil depending on your latitude.

I think to be fair to the spring rising and the occupy movements - and no guarantee that they do not misfire and morph into difficulties themselves - there is a definite feeling (again at least from a personal perspective) where people were kept under the illusion that they were protected from each other by politicians that knew better.

It seems now to me that a more educated (generally speaking) population with access to as much information as nearly all others have found from life in blogs/forums/facebook/twitter etc that in fact 98% of people are decent and police the other 2% quite well as they go along looking for commonly held familial and personal freedoms and social contributions

Paul Hunt said...

@Paul Swweeney,

Many thanks for taking the time to participate in this thread. But I fear you have missed the thrust of the case I am making. The two dominant, ostensibly 'progressive', politicians of the last 20 years, Bill Clinton and Tony Blair, (who clearly influenced similarly minded politicians elsewhere) entered into a Faustian pact with the Neo-con/neo-liberal forces. Banking supervision and financial regulation were consigned to a bonfire in exchange for the provision of a mountain of apparently risk-free credit to support the achievement of their policy objectives and to satisfy the desires of their citizens. And a majority of voters in many countries expressed their approval of this bargain, without fully understanding its nature, but enjoying its apparent benfits, on numerous occasions.

And, although inequality increased, almost all citizens benefitted. Any semblance of the previous relationship between risk and reward was suspended, but it could not be suspended indefinitely and a huge bill is now due. This Great Deleveraging cannot be avoided and the key policy challenges (in Ireland and elsewhere) are to moderate the impact on the various social and economic strata and to secure and expand some semblance of the underlying real economy.

And I agree that this proposed partial privatisation of the ESB is wrong-headed. Why should the private sector be allowed to share in this rip-off of final consumers? There is huge potential to restructure the ESB (and BGE), impose sensible regulation and ensure efficient financing that would benefit consumers and the economy.

@Martin O'Dea,

I have no problems with the information and communications technology which people genuinely benefit. Where I have a problem is when it is used by large vertically integrated businesses providing services to millions of final consumers to rip-off, isolate and atomise consumers in the absence of any effective collective action to restrain thier abuse of market power.

Brian Woods said...

Few obs:

1: "There is a tendency to assume that all these things have happened before and history will always hold the answers."

I would guess not. Anyhow, its your Frame of Reference that dictates your understanding - hence your questions. Like, you get the answer that you 'expected', 'needed', 'desired', whatever.

2. "Neo-cons, neo-liberals, the centre-right and the progressive-left will all have to shed a lot of ideological baggage if we are to secure a workable synthesis."

True. But we (humans and most particularly pols) DO NOT do 'shedding'. And if we are forced at Bazooka point - we do it real bad! Like now. Any 'gains' are downplayed. Any putative or potential 'losses' are amply adorned with klaxtons, blue flashing lights and accompanied by PR spin of the most mischievous sort.

3. "(the) astounding implications is the fact that technology, in fact, increases its potential exponentially."

Yep! Until it inflects over into that Seneca Cliff! Hope you enjoy freefall - without the Bungee!


Martin O'Dea said...

When I say technology I mean any method of affecting our external environment, be that a piece of flint for hunting, a wheel for transport, a plough for farming, and so on. Needless to say much of what we do now utilised our increasing control of the infinitesimal and the speed of electro-magnetic waves.
What we do with the technology - where we apply it and to what use of course remains up to us.
But imagine yourself if you will explaining to a guy in the filth of a couple of centuries ago, cooking and sourcing food the way his ancestors had for eons, having surgeries performed with no anaesthetic, having a life, expectancy of 40.
We are prone to romanticise the past and to downplay the achievements when these topics are under consideration.
But somehow political economy has got to come to grips with a fundamental shift in some of their core considerations.

As a fun exercise perhaps consider the possibilities over the coming years/decades of a field such as 3D printing, or perhaps seek out some of the under discussion possibilities around energy with synthetic carbon catchers or a range of nano-technology based pursuits.

In fact the energy alternatives (such as nano-tech based manipulation of solar panels increasing their efficiency by perhaps a hundred fold (bearing in mind that enough solar energy hits earth to meet our power usage 100,000 times over)) is an interesting case in point.
When the plans are laid out to spend (is it something like a staggered 10billion on wind farms in Ireland) who is making sure that these will not be obsolete by the time they are constructed or shortly thereafter