General
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35THe crisis in Ireland is just the latest, though the worst, of a series of boom and bust cycles since independence that have marked the history of the frst Irish republic, such as it is. The crisis is an outcome of global neoliberalism, but also of the dysfunctional nature of our jaded political system. economic decisions have always refected the power of vested interests and elites, created clear winners and losers, from gombeens to tigers. we have spe-cialised in unsustainable patterns of development, both socially and environmentally. The pattern of boom and bust is likely to recur unless we funda-mentally redesign the system. we need to build a distribution of power and a style of politics that can lead to a more sustainable and equitable eco-nomic model, working in the long-term interest of people and the environment. one that makes us happy, too.we have options and alternatives as we seek to build a second Irish republic. we can resur-rect the unsustainable ‘neoliberal model’ that has led us into the present deep recession. or, we can break with the past and create ‘a developmental social-democratic model’ with a more sustain-able economy. This would be less deferential to foreign multinationals. It would have more efec-tive mechanisms of redistribution that reverse the deeply entrenched inequalities that blight our society. By suspending pessimism, mediocrity and deluded compromise we can also imagine a very diferent future and establish an ‘ecologi-cal or ethical socialist model’, with less focus on (quantitative) growth and consumption, and more focus on (qualitative) living well.our choices will necessarily be made in the context of globalisation and our membership of the european union. Neoliberal discourse still thrives and prevails in Ireland and abroad. However, lessons from other countries show that, even in crisis, it is possible to shape more equitable and sustainable futures. It is essential, therefore, that those who believe in the necessity of such change work to make credible the viabil-ity of an alternative model.The frst step is to expose the fallacy of the growth model on which neoliberalism depends. But successful exposure would also challenge the developmental social-democratic model espoused by many progressives, social demo-crats and socialists. while a shift from a neoliberal to a developmental model would be a change for the better, it would still be a relatively thin change. It would essentially leave intact the con-tours of the present model: reliance on economic growth, failure to deal with the decline of labour as a share of national income; and consequent deepening of inequality in power and distribution. This model would only involve cosmetic changes environmentally, without signifcant reductions in carbon footprints or the obliteration of fos-sil-fuel dependence. It would fout the scientifc consensus that climate change will have lethal implications for global equity, development and survival.The ecological or ethical socialist model ofers thick change, which fundamentally shifts the focus of growth away from ‘economic’ growth. economic degrowth strategies are based on rec-ognising ecological limits and challenging the traditional spendthrift growth economy. They may promote social and ecological growth. addressing the limits of the ecosystem will require a radically new confguration of social, state and economic power. degrowth will relo-calise economies and embrace renewables. The move to a de-carbonised economy will require the strengthening of state power. social power will be bolstered and the power of the market, so beloved of neoliberals, relegated. It will evolve into new forms of state, and especially social, power.The ecological or ethical socialist model requires direct engagement with power. No longer would economic growth take priority over environmental protection when the two collide; economic power must be forced to live within the limits of sustainability. regulation, in this sense, will be regarded as a liberation, not a subversion.Fournier (2008) argues that this requires a reimagining of our collective economic sense through more robust forms of democracy and cit-izenship to challenge taken-for-granted economic rules. This in turn requires a thick democracy and an active society, an ongoing ‘high-energy democ-racy’ (ungar 2009).an obvious starting point is to make people more aware of the fundamental damage capital-ism is doing to society. Polanyi (2001) originally saw capitalism destroying society by placing a market value on land, labour, and capital – the original fctitious commodities, as he called them. Today, care, love, knowledge and nature itself are all commodifed. The very essence of humanity is monetised and marketised. The next step is to mary p murphy and peadar kirby“We need to affrm and promote values grounded in humanism and the republican ideals of democracy, equality, solidarity, participation, activism, transparency, mutual interdependence and care, ecology and sustainabilityand how is contemporary life for yoU?
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14 — villageJune – July 2013Shatheadvillager likes shatter. well likes is a little strong. likes more than any other Fine Gael member of government, apart from Frances Fitzgerald, per-haps. or respects. anyone that annoys the Garda, the legal profession and judges, inspires a debate on their respective contributions to the common good and then wins it, deserves a little indulgence. It is entirely predictable that he will be replaced just as he implements the Troika-mandated Competition authority recommendations on the legal profession. That said, of course he should have resigned over leaking details of wallace’s trivial trafc incident – even Mcdowell at least complained he was saving the state when he tried it on with Frank Connolly. There was no possible justifcation or proportion to shatter’s action, which was committed in front of the Garda and which the Garda decided to overlook. we do not live in a police state and information received by Ministers, particularly the Minister for Justice, must be treated with scrupulous dis-cretion. Tellingly, shatter hasn’t helped his own case by revealing any corroboration: villager presumes someone knows if the Minister likes a drink (though he seems like a man who would, perhaps, drink on his own, if at all), and indeed if he sufers terribly from the asthma, for which no proof has been ofered. Meanwhile, villager is concerned at rumours that shatter has a class of superinjunction out against coverage of the prices charged by his former law frm. Certainly there’s been a precipitous decline in media men-tion of this once controversial issue.Bitter PILunfortunately for him, shatter was the latest member of the cabinet to come under the spot-light of non-party activist network ‘Independent resistance’, when ten members of the group held a silent vigil outside the minister’s home in the leafy suburb of Ballinteer, Co dublin on sunday 2 June. Independent resistance is a broad network of anti-austerity and community-rights-based groups, joined together by collective endorsement of a six-point economic strategy for prosperity and sovereignty put forward by Professor Terrence Mcdonagh of NuI Galway. Members see the network as an alternative to the anti-austerity campaigns covertly driven by ‘Marxism-based’ political parties in Ireland.organisers (including a number of academ-ics) claimed they were holding the vigil as a response to the Personal Insolvency legislation (PIl) and shatter’s plans to make home evictions more expedient through empowering County registrars as special judges to preside over debt cases in the courts. This is already practised infor-mally throughout the country with dundalk being an example where the County registrar, who is also the sherif, sits in her own court, handing out repossession notices, enforcing them and in doing so enriching the sherif’s ofce that receives a percentage of the value of the repos-sessed home or articles. one placard at the vigil read “You leave our homes alone and we’ll leave your home alone”.Independent resistance also held silent vigils outside the home of Minister for social Protection, Joan Burton, last month. a number of the network’s founding members held an eight-week rolling vigil outside of the house of then Minister for Justice, dermot ahern’s, in 2011. In ahern’s case he resigned and stated that the pro-testers were “the last straw” describing them in local media as “worse than the Provos”. Dishonest and corrupt people are dishonest and corruptThe editor was going to synopsise the fndings of the report Villagehas commissioned on pri-vate prosecutions against dishonest bankers and tribunal villains. But the legal advice was to keep it quiet for the moment. and all of us here in the sweat-pit that is Villagealways follow the legal advice: senior counsel chose the headline for this paragraph, for example. anyway, it’s all happening…Crash to crèche37 inspectors to monitor 4,700 crèches and pre-schools? sounds like the beef industry. or the industrial schools. or planning or building-regulation compliance? or the banks?Gonzagawhat secondary school do parents whose tod-dlers send them to a crèche called little Harvard go to?The big issues: corporation taxIrish journalism famously confuses on the big issues (does NaMa make a proft, can we renege on our debts to bondholders, is enda Villagervillager“Dead”; not “Live”. Bill O’Herlihy represents the tobacco industry 15Kenny an eejit, what colour is shatter’s hair etc). Corporation tax is no diferent. so, after a fort-night’s scintillating media debate, we know that we charge 12.5% Corporation tax, although there seems to be a problem and our grown-up friends abroad think we’ve a special deal with apple, though that’s sort-of not true. In fact, just like in France where the ofcial rate is 32% but the actual rate 8.2%, you need to look behind the headline. In 2011 Michael Noonan said our efective rate was 11%. But we do better for our IT companies. In fact there’s a special tax rate on income arising from intellectual property (IP) which can be as low as 2.5%. up to 80% of the cost of acquiring IP can be set of. You don’t need to create the IP in Ireland you just need to oper-ate in Ireland and buy the IP here, wherever it has been created (Palo alto, normally). so you just bump up the cost of acquiring the IP and bingo, you pass for a tax genius, and feece the ordinary man across invisible borders. who cares if it’s a ‘special deal’: it’s globalism, and Ireland majors in it.Hari Namasimilarly, news that NaMa claims to have made a proft of €224m boggled the brains of the nation for a few days recently. what it means is that some of the loans that NaMa bought at dis-counted prices (remember haircuts) were sold at a proft over the last year. of course NaMa has carefully chosen to sell the best of its port-folio – 80% of its asset sales since inception have been in Britain. Clever, but meaningless for the prospect of the agency getting this country back the €32bn it has invested. a shocking augury is that the likes of Harry Crosbie have indicated that NaMa, before it pulled the plug on him,
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18 — villageJune – July 2013THe oeCd recently released an update of its income inequality sta-tistics. This provides a high-level analysis of income inequality across 33 oeCd countries for the frst three years of the crisis, up to the end of 2010. while important, the data used are 3-4 years old and a lot has happened in the intervening period of tax increases and public-expenditure cuts.Income inequality increased by more in the frst three years of the crisis to the end of 2010 than it had in the previous twelve years, before factor-ing in the efect of taxes and transfers, according to the report. our welfare systems have cushioned the blow for many but the report warns that fur-ther social-spending cuts in oeCd countries risk causing greater inequality The most unequal, before taxation (2010)oeCd says Ireland’s tax and beneft system raises us from worst out of 31 to 17th worst out of 31, for direct income newssinéad pentonypHoTo: eogHaN Barry 19Chart 1: Income Distribution and InequalitySource: ETuI, Benchmarking Working Europe, 2013.and poverty in the years ahead.The report includes country-specifc data on the Gini coefcient for direct income (household income prior to taxes and transfers). direct income includes employee earnings, employer PrsI, self-employed earnings and other direct income. The Gini coefcient measures income inequality, with a score of zero signifying all households having identical income and a score of 100 meaning all income going to one household. For the 31 countries included in this analysis, Ireland had the highest level of inequality for direct income by some distance. The (2009) Irish fgure of 59.1 is well above the oeCd average of 47.0.Ireland’s tax and transfer system, on the other hand, had the biggest impact on reducing the level of income inequality, giving us a net Gini coefcient score of 30.7 compared to an oeCd average of 31.3. This puts us 17th out of 31 countries, making us more equal than the oeCd average albeit by a narrow margin. However, this must be seen in a context of a general rise in income inequality across the board, internationally.This outcome reinforces the importance of the tax and beneft system in protecting low-income households and in re-distributing income from the top to the bottom. our taxation system is clearly progressive and efective in terms of re-distribution. However, the fgures also highlight that huge income diferentials persist in Ireland even in times of crisis.High levels of income inequality have social and economic consequences. They increase the risk of poverty and stife economic activity, particularly in the domestic economy. In 2011 the eu Member states with high levels of income inequality also featured high levels of risk of poverty. Ireland was 10th out 27 eu Member states, putting us with the group of coun-tries with higher than average levels of inequality and risk of poverty. The other countries in this group include Poland, Italy, Portugal and the uK. Chart 1 illustrates this relationship between income inequality and at-risk-of-poverty rates in the eu Member states. It uses the ‘at-risk-of-poverty’ indicator and the quintile share-ratio measure, which measure the income gap between the top 20% and the bottom 20% of earners. Policy options to reduce income inequality include raising incomes at the bottom, capping incomes at the top, using the tax and beneft system to re-distribute income, and ensuring that big corporations pay their fair share in taxes. The latter requires a global response to ensure multinational corporations pay their fair share. Income caps and reductions have been introduced in the public sector and the social-welfare system provides a minimum income in Ireland. But, with over 730,000 people at risk of pov-erty, the current levels of social welfare are clearly inadequate. The government plans to close the remainder of the defcit primarily through spending cuts, with minimal tax increases. The oeCd recently published fgures for the tax wedge (essentially the diference between before- and after- tax wages) in ‘Taxing wages 2013’. The tax wedge is generally reported as a percentage of total labour costs, including PrsI. This report shows that for a single worker without children, Ireland has the lowest tax wedge in the eu and the seventh lowest among the 34 oeCd member states included in this report. Ireland’s income-tax take is around the oeCd average, but the social-insurance contributions for both employees and employers are below average (see Chart2). a gradual move towards oeCd-average levels of social security Contributions (PrsI) would strengthen our social safety net and enable a basic level of income for everyone. Chart 2: Social Insurance ContributionsHigh levels of income inequality increase the risk of poverty and stife economic activity“
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20 — villageJune – July 2013THe North’s High Court has quashed an order by regional development Minister, danny Kennedy, to proceed with construction of two parts of the a5 dual-carriageway. This is the largest planning-re-lated decision ever overturned by a court in the North. The grounds were that the department of regional development had failed to carry out an appropriate assessment under the eu Habitats directive of the impact on the Foyle and Finn rivers, as required under european law. The directive requires that any plan or project likely to have signifcant efects on the management of special areas of conservation be the subject of an appropriate assessment unless the risk of signif-cant likely efects on the sites can be excluded on the basis of objective information.The a5 was to be the North’s largest-ever road project. originally it was to run 54 miles from aughnacloy, on the Monaghan-Tyrone border, to Newbuildings, three miles south of derry. at aughnacloy, it was to link with the N2 from dublin. The government had initially com-mitted to pay half the cost, some £400m. Two years ago it withdrew that commitment, then last year agreed to pay £50m in two parts. last year, Kennedy had announced the decision to go ahead with stretches from Ballygawley, Co Tyrone, to omagh, and strabane to Newbuildings.The judgment was a victory for campaigners in the alternative a5 alliance (aa5a). This is a coalition of farmers and environmental cam-paigners, and raised £100,000 (€118,500) to fght the case.In his judgment, Judge stephens drew on evi-dence given by the loughs agency, a Cross-Border body, at the public inquiry into the project. The agency expressed concerns about potential dam-age from construction work “increased levels of silt in the rivers, increased levels of salt, loss of habitats, the lack of emergency pollution bunkers, increased fows of water into the river through inadequate drainage, a lack of maintenance of devices aimed at reducing water fows, the risk of polluted ground water entering the rivers from an old municipal land fll site and old industrial sites near strabane, impact on salmon and their habi-tat, and pollution”. He noted that this evidence was not challenged at the Public Inquiry. Justice stephens concluded: “In order to determine whether the scheme had been prop-erly engineered detail was required in relation to the remedial measures. That detail was absent and signif-cant efects could not be excluded”.There was a cross-border touch to the judgment: Mr Justice stephens quoted from an opinion of uK advocate-General eleanor sharpston, delivered at the european Court in the case of Peter sweetman v an Bord Pleanála, in respect of the Galway City by-pass.The judge dismissed 11 other grounds of appeal which the aa5a raised.Kennedy has announced he is not appealing the judgment. However, in Kennedy’s state-ment to the assembly he said: “The non-appeal route ofers the best opportunity to progress the scheme in a reasonable timescale. However, the decision of the court means that there will be a delay while further assessment work is completed”.deputy First Minister Martin McGuinness said the executive intends to press ahead with the project within 12 to 18 months. “However, there is still total commitment from the executive and the Irish government to the scheme”, he said. “during the discussions with éamon Gilmore, we (McGuinness and Peter robinson) also took the opportunity to remind him that the First Minister and I, in previous conversations with enda Kenny, had pressed the Irish government to ensure that the decision that they took to withdraw from their part of the scheme — with the exception of £50m — needed to be reviewed on an ongoing basis. The Taoiseach gave us a com-mitment that it would be reviewed in 2013”.There has been remarkably little discussion in the oireachtas about the project. as a general aspiration, it was included in the National development Plan 2007-2013: “The completion by 2013 of a high quality road network on the inter-urban routes linking the major population centres of dublin, Belfast and the North west (especially the letterkenny-derry Gateway)” .The politicians who are most vocal in support of the dual-car-riageway are nationalist. The project was agreed as a side deal between northern nationalist representatives and the two gov-ernments in the talks leading up to the st andrews agreement. However, sources in the duP are resentful at its being labelled a ‘nationalist road’ as they believe they are equally supportive.Meanwhile, there are questions over the viability of the project. The plan to make the N2 a dual-carriageway from Clontibret (Co Monaghan) to connect with the a5 at aughnacloy has been suspended. Trafc levels on the N2 between Monaghan and aughnacloy fell by 15% in the fve years to July last year. There is nothing that predicts an increase in the foreseeable future. anton McCabe has been a freelance contributor to the Sunday World, Sunday Life, Newsletterand Spotlight.anton mccabe newsA5 gets an Fas trafc falls, North’s High Court overturns unnecessary habitat-destroying road for inadequate assessment of its efects, for the momentThe road would have gone within 20m of this habitat on the FoyleThe government had initially committed to pay half the cost, some £400m. Two years ago it withdrew that commitment“
