By Kevin McLoughlin
SOCIALIST POLICIES are needed to solve the economic crisis and its devastating effects on the living standards and lives of ordinary people.
Socialist policies are relevant to the key problems facing people today, the draconian pay cuts, the housing crisis and looming mortgage crisis, the vicious cutbacks in health and education, and crucially the emergence of mass unemployment.
The tax hikes in the budget represent a universal pay cut and are part of an overall desire of the government and bosses to slash general wage levels by up to 20%. They are intent on imposing a race to the bottom. The Quick Service Food Alliance, which is made up of the main fast (bad) food outlets, are attacking some of the lowest paid workers, demanding that they give up payments for Sunday working etc. The minimum wage is also being attacked and undercut by bosses.
The Socialist Party says that not one cent should be taken off our pay. The bosses’ pleas of inability to pay should not be accepted. Companies in general made record profits in this country for years. Up until 2007, the average profit made by companies in Ireland was just under €45,000 per worker per year, twice the average in Britain
When asked to accept wage cuts, workers should demand to know what happened to all the profits! Instead of accepting any pay cuts, workers should fight to defend pay and instead demand the squeeze is put on profits. The idea that squeezing profits will damage investment and be disastrous for the economy misses the point. There is already an unprecedented crisis in private investment. But this has nothing to do with wage levels.
There is no economic argument to justify pay cuts. The market is made up primarily of ordinary people who have to spend the vast bulk of their income. The government and the bosses’ plans for draconian wage cuts will achieve nothing except make the economic crisis and unemployment much worse.
As well as being necessary from the point of view of defending their own living standards, a struggle to turn more profits into better wages would actually be good for the economy as people would be able to afford to purchase more of the commodities they need.
The term nationalisation is now commonplace. But the nationalisation that socialists favour is fundamentally different to what was implemented at Anglo Irish Bank. The banks and financial institutions should be nationalised, but under workers’ control and management, with compensation for small shareholders only.
Such nationalisation would give the state the means to implement a real example of restorative justice in the housing market, the source of so many problems.
A nationalised banking sector could bail out people who really deserve it – the ordinary people who were ripped off during the property bubble and who are straddled with massive inflated costs and repayments. Through genuine democratic and social control of the banks mortgage prices and repayments could be reduced to affordable levels and repossessions could be outlawed.
The National Assets Management Agency (NAMA) is a mechanism for the working class to pay the banks debts and for the bankers to continue on their merry profiteering way. The NAMA scheme should be scrapped and as well as nationalising the banks, the major builders (most of whom are insolvent) and the 200,000 – plus recently built vacant homes should also be nationalised.
Combined with the necessary investment in services and infrastructure, the basis already exists to implement a dramatic plan for social and affordable homes that could be an historic step forward in overcoming the housing crisis that has plagued this country since its foundation. Nationalisation is the means to achieve this.
Probably the biggest issue flowing from the crisis is unemployment and it is a huge worry for people. The old propaganda of the establishment – to blame the unemployed for unemployment – will not wash as it is becoming ever clearer that the system is at fault.
Socialists demand emergency and radical action to tackle the jobs crisis. That the sum total of the government’s policy is to hope that the same private sector that created the crisis will miraculously create hundreds of thousands of jobs would be funny if it wasn’t so serious. However such will be the scale of the collapse in the private sector that the need for state action on jobs will be enormous.
The bank bailout should be cancelled and instead of cancelling infrastructural projects, the tens of billions the government is clearly prepared to spend on the banks should be used to directly create jobs through an emergency national development plan geared to social needs.
State investment in a democratically constituted plan of useful public works would create tens and potentially hundreds of thousands of jobs quickly, providing for the transport, health and educational facilities and services that people desperately need.
The state must also intervene and be the prime investor and owner of manufacturing, as private manufacturing jobs are facing an unprecedented crisis. Manufacturing is essential to the development of any economy. State owned industry should likewise be under the democratic control and management of working people to ensure the economy is geared towards people’s needs and not the profits of the super-rich.
Such will be the scale of the jobs catastrophe that more emergency measures will be necessary. Cutting the working week for all workers and sharing out the work to the unemployed will be essential if unemployment is to be seriously tackled.
The average working week in Ireland is 38.5 hours. Given the size of the workforce, the implementation of a 35-hour week could immediately free up 7 million hours of work that could be translated into jobs for the unemployed.
However any reduction of the working week to tackle unemployment must not be used as an excuse to cut wages. The idea that a shorter working week is not possible because of the additional cost to the bosses and that the economy would be damaged is false. If such notions were true, there would not have been a reduction of the working week since the Industrial Revolution!
Over many decades the working class has fought successfully to reduce the working week and at the same time economic capacity has increased globally. The fact that in most countries the working week has increased over the last twenty-five years is an indication of the reactionary nature of capitalism. Bosses have been able to force people to work longer, often without any payments as a means of increasing their profits.
Time is money and fighting for a 35-hour week is equivalent to and as valid as fighting for better pay and conditions, only in a slightly different form. Even a rightwing French government under pressure from the working class was forced to implement a 35-hour week nine years ago. This was opposed by big business but it is estimated that it created hundreds of thousands of jobs.
In Ireland a 35-hour week could translate into over 200,000 new jobs for the unemployed. Any necessary retraining or upskilling are minor problems that could be overcome.
Socialist policies are about planning and investing for people’s needs not profits. Socialism would extend real democracy to all aspects of the economy and society, in forms and ways that are decided by people themselves collectively. Not only can socialist policies deal with the key problems that confront people at the moment, by creating employment for all, the overall wealth and resources at the disposal of society could be increased hugely.
The crisis conditions that capitalism is creating will result in huge struggles and powerful movements of workers and young people in the years ahead that will have the power to overthrow capitalism. But it’s not enough just to have the power, it is necessary to have an alternative to capitalism. The only real alternative is socialism. ent for all, the overall wealth and resources at the disposal of society could be increased hugely.