Can Europe Make It?

Still locked out

The states in greatest difficulty since 2008 have been those most closely wedded to neoliberalism and accommodating to the needs of transnational capital. One hundred years on from the Dublin Lockout, many in Ireland are still ‘locked out’ from public economic decision-making. 

Stephen McCloskey
7 August 2013
Union members protest over bank debt in Dublin

Union members protest over bank debt in Dublin Demotix/David Gray. All rights reserved.

On 11 January 2010, Rachel Peavoy, a 30 year old mother of two, was found dead in her flat which was part of a largely unoccupied block on the Shangan Road in Ballymun, a socially blighted estate on Dublin’s northside, plagued by high unemployment, drug and alcohol abuse and related health problems.  Rachel died from hypothermia in a particularly severe Irish winter.  Her family and friends alleged that she had written to Dublin City Council and her local TD (member of parliament) about the lack of heating in her flat.  Dublin City Council contested family claims that the heating in the flat had been disconnected as part of a ‘detenanting’ process although a doctor giving evidence at an inquest into Ms Peavoy’s death described the flat as ‘perilously cold’.  The inquest returned a verdict of death by misadventure even though the cause of death was indisputably hypothermia.

In January 2013, an elderly couple were discovered in similar circumstances, ‘huddled together’ fully clothed on the floor of their flat in a senior citizens complex in Stoneybatter, Dublin, with the cause of death again hypothermia and ‘continuing health problems’.  John Glennon and Debbie McEvoy were believed to have been dead for a number of days before they were found. They died in the middle of a cold snap when the overnight temperature dropped below freezing. Do these deaths represent tragic, isolated examples of vulnerable people falling between the cracks of social welfare, or do they point to a swelling of the ranks of the poor in a more callous, recessionary Ireland? 

One hundred years after the Dublin Lockout when the forces of capitalism and organised labour collided in one of the greatest industrial disputes of the twentieth century, many in Ireland still feel ‘locked out’ from public services, economic decision-making and, quite literally, from their homes that have been repossessed on the back of over-extended mortgages issued during Ireland’s property bubble.  Many lower and middle-class people in Ireland have today joined the ranks of the poor.  As Anthony Crowley, who attends the Capuchin Day Centre in Bow Street, Dublin that feeds 950 people a day ‘down on their luck’, suggests: ‘In Ireland, you are two steps from having nowhere to live, with just the clothes you stand in’.

Ireland’s economic collapse

Few countries experienced the boom and bust cycle of neoliberalism as spectacularly as Ireland which was a tyro economy from the early 1990s to 2007, enjoying spectacular levels of growth on the back of investment from transnational corporations producing for export markets mostly in the Eurozone.  Ireland’s economic collapse in 2008 turned what David Begg, General Secretary of the Irish Congress of Trade Unions, described as the ‘poster child for globalisation’ into the ‘poster child for austerity’

But as the current crisis has revealed, the states in greatest difficulty since 2008 have been those most closely wedded to neoliberalism and accommodating to the needs of transnational capital.  Ireland’s once buoyant Celtic Tiger economy was a model, often pitched by the now disgraced former Taoiseach Bertie Ahern and the architects of Ireland’s industrial policy, to developing countries as a template for rapid growth propelled by foreign capital lured by low corporation tax, access to the European market, state incentives and a well educated workforce.  This winning formula combined with political consensus on the efficacy of the neoliberal model ensured that a change of government did not mean a change in economic policy.   

But even at the peak of the boom, critics of the Celtic Tiger model questioned the sustainability and benefits of Ireland’s economic strategy.  Peadar Kirby and Mary Murphy suggested three specific failings of the Irish model.  Firstly, the rise in growth did not result from ‘capabilities developed within the economy’ but was rather based on adapting to the needs of corporate investors.  The economy consequently lacked resilience and mostly supported capital accumulation by foreign firms which repatriated most of their profits.  Secondly, the links generated between the productive economy and investment in social services were weak and the boom years were characterised by ‘increases in relative poverty and in inequality’.  And thirdly, the state was largely ineffective in the area of welfare and regulation, prioritising the maximisation of competitiveness and profitability over investment in the welfare of society.

These structural weaknesses in the Celtic Tiger economy contributed to the financial crisis in 2008. The rapid unravelling of the financial sector in the United States quickly spread to Ireland and exposed a property boom largely fuelled by a credit bubble and banks laden with toxic debt.  The collapse was just as spectacular as the boom when Ireland accepted an €85 billion loan from a troika comprising the European Commission, European Central Bank, and International Monetary Fund, losing its economic sovereignty in the process. 

Socialising the debt

In one of the most pivotal decisions in the history of the state, the Irish government opted to socialise the debt, bail out the culpable banks and accept loans with conditions that included cuts to social welfare, pensions, university grants, jobs in the public sector and healthcare.  Fintan O’Toole estimated Irish debt to be larger than Japan’s, which has 30 times Ireland’s population with each citizen owing on average €37,000.  The average Irish family lost half of its financial assets from €95,000 at the height of the boom to €51,000 in 2009.

An audit of the Irish debt commissioned by Debt and Development Coalition Ireland found that Ireland’s debt, including contingent liabilities, had reached a staggering €371.1 billion - the equivalent to almost 300 percent of Irish national income.  Repayments to one bank alone, Anglo Irish Bank, could total as much as €47.9 billion by 2031, which is equivalent to 30 percent of Ireland’s GDP.  Anglo was totemic of the casino capitalism that underpinned the collapse and, according to O’Toole, had lent a secret consortium of investors ‘€300 million to buy the bank’s own shares’ with a further ‘€250 million given in loans to its own directors’.  The country has been enraged by the disclosure of taped telephone conversations between bank executives arrogantly predicting a state and European bailout, fully aware of the consequences of their fraudulent activity for the bank employees, the Irish economy and its people.  As O’Toole suggests: ‘The bankers’ verbal strutting is rooted in a simple truth: the Irish banking system had already got away with a monumental fraud on the State’

Since the crisis and the bailout, inequality has widened in Ireland with a 2011 European Anti-Poverty Network report finding that the top 1 percent of the Irish population held 20 percent of the wealth, the top 2 percent controlled 30 percent and the top 5 percent disposed of 40 percent of private assets.  This statistic is borne out by a report from Merrill Lynch, the wealth management division of Bank of America, which found that the number of millionaires in Ireland peaked at 20,400 in 2007, a figure which fell by more than 4,000 in 2008, but increased again to 18,100 in 2009.  The current Fine Gael-Labour Coalition government elected in 2011 has not only adhered to the terms of the troika deal but converted promissory notes issued against the debts accrued by Anglo Irish Bank and Irish Nationwide Building Society into sovereign bonds (state debt) with a longer repayment period but with no element of cancellation.  The short-term savings arising from this strategy (approximately €1 billion) are likely to be used to accelerate debt and deficit reduction rather than mitigate the effects of the government’s austerity measures on the Irish people grappling with private debt or living with reduced welfare protection.

According to Social Justice Ireland15.8 percent of the Irish people live in poverty which is greater than the figure for 1994 (15.6 percent) before the Celtic Tiger started to roar.  The unemployment rate in 2012 was 14.8 percent, creeping up to the 16.3 percent level of 1988, and even more worrying is the fact that in 2010, 29.1 percent of households  at risk of poverty were headed by someone in employment.  To add to the gloom, house repossessions are set to rise following a decision by the Central Bank in June 2013 to forego a one year protection for indebted house owners from repossession.  These statistics are a damning indictment of the government’s strategy of austerity and cuts to public services as a route toward renewed economic prosperity.   Ashoka Mody, the former IMF head of mission to Ireland, has suggested that austerity was a ‘potentially self-defeating policy’ because of the lack of growth and failure to reduce debt.  Mody said: ‘We have to ask ourselves why Ireland is not growing . . . It’s hard for me to believe that austerity is not contributing to this’.  He added that there was ‘not one single historical instance’ where austerity policies have led to an exit from heavy debt burden.

Still locked out

At a conference titled ‘Development Education: Responding to the Global Crisis?’ held in Dublin on 17 May 2013, Cathleen O’Neill from the Kilbarrack Community Development Project in north Dublin powerfully described the effects of ‘savage funding cuts’ which have threatened community services in a highly marginalised area.  Her address spoke of poverty, ill-health and unemployment in Kilbarrack with 1,600 people using a food bank in her community just a few days before the conference; ‘Soup kitchens’, she said, ‘are a growth industry in Ireland’.  She observed that one hundred years after the Dublin lockout, we ‘still feel locked out’. 

Pádraig Yeates described the 1913 lockout as the “nearest thing Ireland has ever had to a socialist revolution, and it therefore provides a glimpse of an alternative Ireland that people strove for before competing nationalisms imposed their own social straightjackets, ones that proved immensely durable as well as restrictive”.

The lockout was an industrial dispute between 20,000 workers marshalled by James Larkin and the Irish Transport and General Workers Union and 300 employers led by William Martin Murphy, chairman of the Dublin United Tramway Company and owner of three newspapers.  Central to the dispute was the right to unionise and Murphy’s attempt to thwart the spread of unionised labour in Dublin’s largest employers.  Urged on by Murphy, the employers locked out the striking workers and started employing labourers from Britain and other parts of Ireland.  The striking workers and their families endured terrible privations during the seven month dispute, with over a third of Dublin’s population living in slums at the time.  The lockout ended in January 1914 with defeat for the labour movement when calls for sympathetic strike actions in Britain were rejected.  Nonetheless the ITGWU was rebuilt after the lockout and by 1919 its membership had surpassed that before the action started.

Pádraig Yeates sees the lockout as ‘the furnace in which the Dublin working class and Irish industrial relations were forged but it shows what happens when the rich and privileged in any society deny to those less well off their birthright’. The centenary of the lockout has assumed a special resonance for the Irish people, coinciding as it does with the deepest recession in living memory.  It is a reminder that most social, economic and political rights have been secured on the back of individual and collective agency, often hard fought and achieved after learning the lessons of bitter defeat. 

We should apply the lessons of history to current efforts to steer the Irish government away from the disastrous ‘slash and burn’ austerity policies that have punished the poor and rewarded the culprits responsible for Ireland’s financial turmoil.  We should also support Amnesty International in calling on European governments to ratify a new international treaty that ‘would protect human rights that are under threat from austerity policies’.  This treaty allows people to take a case to the United Nations if their human rights (which include adequate housing, food, water, sanitation, health, work, social security and education) are violated.  At a national level, we need civil society organisations to work together, rather than in silos, toward a new economic model that is premised upon social need, resilient links within the local economy and enhanced regulation of financial institutions.  The current path is one bound for greater poverty and social polarisation and more tragedies like the loss of Rachel Peavoy.

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