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Unions are the vehicle for social solidarity

No sooner had the boom come crashing down, than right-wing commentators came out of the woodwork insisting on a 'quick fix'


The events of the last few months have proven beyond all doubt that, whatever about anything else, the “Dictatorship of the Market” does not work.  Neo-liberalism – which was foisted on unsuspecting humanity by Margaret Thatcher and Ronald Regan as the brand new ‘recipe’ for all the ills affecting humanity, has materialised as a cruel deception.  It was nothing more than old fashioned 19th Century economic laissez faire which, following a period of unprecedented growth collapsed resulting in the greatest conflagrations in human history.  In the cold light of reflection, how could a philosophy employing the basest human vice – greed, as its central imperative, result in anything better?

The devastating consequences of the slavish adherence to that philosophy by the PDs and the right-wing of Fianna Fáil in our economy since 1997 are now clear for all to see.  The illusionary bubble has evaporated and ordinary citizens are left to pick up the pieces.  Our once proud telecommunications company Eircom – the key to the development of broadband and technology – stands neutralised at best after successive raids by corporate vultures, following the privatisation of the majority shareholding.  Several financial institutions such as the ACC and ICC, were unceremoniously privatised.

The tax base was effectively dismantled by cutting capital taxes and the higher rates of income tax dramatically in the interests of the well off.  This was offset by shifting the emphasis from direct to indirect taxes, such as VAT and stamp duty, thereby transferring the burden disproportionately onto the middle and lower income groups.  The credit-led property boom was further fuelled by the refusal (despite agreement with the trade unions), to build even 10,000 affordable houses.  No, this might have marginally blunted the edge of the process of profit accumulation at the high point of the boom.  Instead, tens of thousands of ordinary families were sent out to bid against each other to put a roof over their heads, and with 100 per cent mortgages they couldn’t afford – all to make developers and bankers richer.  In this classic orgy of consumerism, the biggest snouts swallowed the lion’s share of the contents of the trough.  They were well on their way to an even greater prize – the complete marketisation of the right to healthcare, à la the American model.  Co-location hospitals represented the proverbial crossing of the Rubicon on this agenda.  Tragically, the Green Party campaigned against it, only to renege on their manifesto within days of entering Government by voting for it. Then the boom evaporated spectacularly, leaving a gaping hole in the public finances, a crippled banking system and a frail economy, heavily burdened by lack of strategic planning and reliance on the neo-liberal mirage. Viewed in the cold light of mature reflection, the great tragedy was the 1997 Election.  Labour made a tragic mistake by walking out of the coalition with Fianna Fáil in 1994 and this was compounded by the failure of the subsequent FG/Labour/DL Government to retain power in 1997.

Enter stage right – an array of right-wing commentators, many of them former cheer leaders for the credit-led property boom now metamorphosised into purveyors of fiscal prudence – peddling a new remedy.  These former champions of the “quick buck” now had a “quick fix”.

For all their faults, the much-maligned social democrats, like Dick Spring and Ruairí Quinn handed over an economy in pristine condition, and would never have permitted the unbridled free-market madness which followed.  The wreckage of the neo-liberal rampage is now clear for all to see – and for working people and their families to suffer the consequences.  Then enter stage right – an array of right-wing commentators, many of them former cheer leaders for the credit-led property boom now metamorphosised into purveyors of fiscal prudence – peddling a new remedy.  These former champions of the “quick buck” now had a “quick fix”.  Seemingly the whole problem was caused by greedy workers and a bloated overpaid public service.  Sacking hordes of them and reducing the pay of the remainder along with privatisation of remaining state assets so that they could be acquired by corporate vultures at bargain basement prices, would restore the good times.  For months the campaign continued, focussed on the public service, until the veil slipped about mid-January.

It transpired it wasn’t just about public servants, all workers were paid too much, even the minimum wage had to be cut, and this agenda would be driven by the attack on people who worked in the public service.

Jack O’Connor, General President of SIPTU

As always, the truth became the first casualty of war.  Facts, such as, that we spend a lower proportion of GDP on our public services than any developed European country, and that we have a lower percentage of our population than any in providing them, were carefully obscured.  The consequences of cutting pay in an economy which depends on the consumer spend for 48 per cent of its GDP, were blithely ignored.  Indeed, the only no-go area was increasing the tax contribution of the better off – that would result in deflation and the disincentivisation of investment. At the end of the day, the much-maligned trade union movement ends up picking up the pieces.  Our strategy for a Social Solidarity Pact envisaged a sustained approach over a number of years as an alternative to the “Quick Fix”.  It also emphasised the necessity for a contribution by all sectors in accordance with their ability to pay.  That means the better off contributing most. Finally, it asserted the primacy of an approach focussed on ensuring the cohesion of society, support for ordinary families, and an enlightened vision of growth. Ultimately the success of our initiative is contingent upon the strength of the balance of forces in society and, whether we like it or not, public-policy-making in this country is overwhelmingly dominated by the centre-Right parties. As long as that remains the case, we in the trade union movement must make the best we can with the cards we are dealt but our call for national unity is no empty slogan. It is absolutely vital if we are to come through this crisis with the minimum damage. Those seeking to divide public and private sector workers in pursuit of their own narrow agendas are on a slippery slope. Once that tactic prevails it will be open season for others to identify “the problem” as the unemployed, farmers, migrant workers or even specific groups within the business community. In that situation, erstwhile allies become antagonists defending their own patch and, in defending it, all hope of a viable survival strategy will fly out the window.

Jack O’Connor is general President of SIPTU, Ireland’s largest Trade Union