When the Boom goes Bust - Thoughts on the demise of the Celtic Tiger

Its not just dyed in the wool Marxists who are eyeing up the Celtic Tiger to check for signs of fatal illness. Even the poster boy of popular capitalism, the economist/journalist David Mac Williams, has taken to making dire warnings of about the consequence of the bubble bursting.

Before we read the tea leaves of demise, its important to state that, critical, non-dogmatic Marxism has never been about prophesy, unlike the Marxism-as-religion practised by some left organisations. The back catalogue of many a socialist organisation is littered with gleeful predictions of the inevitable collapse of capitalism tomorrow but, despite an element of determinism in Marx’s writings, sophisticated Marxist thinking has usually eschewed such determinism for clear headed analysis of ‘what-is’ rather than ‘what-ought-to-be’. This, of course, does not preclude a bit of crystal ball gazing, as long as it is based on hard-nosed analysis of current trends and past developments of the capitalist system. The idea here is not to make predictions for the purpose of ‘Ha ha, we were the only group to predict that the American economy would enter recession in February 2007’-style one-up- manship but to try to prepare tactically and strategically, as best we can, for engaging in struggle in the coming period.

Before we join the prophets of doom, or harbingers of joy, depending on how you look at it, its worth noting that a boom in a capitalist economy can sometimes last a very long time, give or take a hiccup or two, the post-war boom in the Japanese economy being a case in point. The period of capitalist growth called the Celtic Tiger has now lasted for well over a decade and it is possible that it can be sustained for many years to come. Given the cyclical nature of capitalist economies, however, it can’t last forever, though the downswing might be gradual. In fact there are good reasons to believe that it might happen a lot sooner and a lot faster, hence the growing warnings from the likes of Mac Williams.

One does not need to be an economist to see that the Irish boom is a fragile construction. It is based, not as right-wing myth would have it, on the plucky Irish entrepreneur or the grand vision of great men (Haughey, McSharry, Whitaker etc.etc.) but on the good old drive for profit of U.S. multi-nationals, with a bit of coaxing from the Irish state in the guise of the IDA. Such is the dependence of the Irish economy on US multi-nationals that even the growth of indigenous industry has been heavily driven by servicing the American giants. There are, of course, a number of reasons why the US MNCs located here, not least of which the rate at which surplus value can be squeezed out of Irish workers, but it leaves the Irish economy uniquely vulnerable. A recession in the US leads to retrenchment and withdrawal….crash. Tax changes in the US or other European countries….crash. New Tigers emerge in Eastern Europe….crash. Competition from rapidly developing capitalist giants of India and China….crash. You get the picture. Not that this is inevitable, but its fairly high wire stuff.

Just to add to the feeling of vertigo, and here’s where Mac Williams, despite his made-up sociological groups and too-clever catchphrases, has hit the nail on the head, the huge dependence on building/property is a highly unstable recipe for continued growth. Ireland has now reached the stage where purposeless building is driving the economy. Another hotel….go on go on go on GO ON! More like another teensy weensy mint Mr. Creosote! Now we are faced with a profusion of empty apartment blocks and office buildings, post-apocalyptic landscape without the apocalypse, and with typical capitalist logic in a state where thousands of families can’t afford a home. If the property/building bubble bursts then Ireland’s primary indigenous growth industry is gone…good-bye Tiger. Again, it’s not inevitable but given the simple capitalist laws of supply and demand (or supply and demand if you can afford to demand) it’s looking shaky.

So for arguments sake, lets say the end arrives soon and its nose-dive style, what might we expect or more importantly what should socialists prepare for? Let us take it that a downturn has a two fold immediate effect on the standard of living of working people. First would be a return of high unemployment, affecting workers across the board but concentrated amongst those in the manual and lower end of the service sector. Remember as well as the profound effect on people’s standard of living, this would have a ‘cultural’ impact in the sense that people under the age of about thirty have never experienced unemployment or the risk of unemployment. Coupled with this would be a collapse of consumer buying power, again affecting all of the class. No more of those escapes from reality via the holidays in Spain or the second car etc. etc. As one would expect with a crisis of national capitalism, it would not just be the working class that would be affected. Large numbers of self-employed/small business people would be ‘proletarianised’ especially as many of these are currently dependent on the consumer spree i.e. the plumber and the electrician benefiting from the extension craze, the restaurant owner and the beautician from the extra few bob in the average workers pocket.

It does not take a genius to envisage two possible spin-off effects of such development: one is the renewal of class struggle and newfound militancy on the part of the class, creating an opening for the growth of the revolutionary left. But that’s not the only possibility; there is a real danger that a recession will lead to the rise of right wing populism, in the form of a new party, a split from an existing party or one of the existing conservative parties taking up that flag of convenience. The most obvious danger is that such a party or movement would target immigrant workers. While some eastern European workers might return home or move on to greener pastures if employment opportunities dried up in Ireland many others would stay put because this is where they and their kids belong now, so it would be easy pickings for unscrupulous politicians or a tactically clever rightist outfit to target this division in the working class. In fact, if you look at the tactics of the renewed BNP in Britain, they cleverly mimic the language and, to a certain extent action, of class politics to appeal to the indigenous working class, identifying their enemies as asylum seekers, Muslims and the wealthy liberal elite. This sort of rightist populism with a class tinge can extend to hostility to gay people, demands for a withdrawal of women from the work force etc. etc. and is especially effective in the absence of a strong class based socialist movement based in struggles in the community and the workplace.

The key question of course is how will the left cope with such a downturn. I use the word ‘cope’ deliberately because, after years in the wilderness, many of us wont have a clue how to deal with the changed situation. Of course every left group will say the main object is to be organisationally prepared, i.e. ideologically and numerically strong and despite the sectarian and party-building obsessiveness sound of it, there’s some truth to the view. If you’re not fit before the race you are hardly going to be in the running when it starts. So it goes without saying that it is hugely important that those of us who believe in democratic revolutionary politics (and that isn’t just the ISN obviously) need to do the groundwork now because there’s going to be a lot of competition. Of decisive importance is how we connect with the class. Are we going to concentrate on what we think is important or the daily priorities of working people? Are we going to talk the language of common sense or the gobbledegook of ‘left-speak’? Can we connect with the class by zoning in on issues that relate directly to people’s experience and by engaging in campaigning work in a practical manner? Can we integrate our revolutionary ideology with our practice and bring this to bear on the struggle while having the flexibility (and humility) to learn from working people as they struggle for a better life? We can take nothing for granted. Just because we find ourselves in the sea does not mean we can swim like fish.

-By Colm Breathnach, January 2007.