Health inequality and the Irish Labour Party: Vincent Browne advises… July 4, 2008
Posted by WorldbyStorm in Irish Politics, Social Policy.trackback
Vincent Browne has advice for the left in the Irish Times on Wednesday. More particularly he has advice for the Labour Party. He spoke at the weekend at the Labour Party Youth conference in Galway. We’ll get to that advice in a moment.
Firstly he made an interesting point, that:
Labour has been in power 14 of the last 34 years. It has been in office for longer than any other party, aside from Fianna Fáil.
It’s something I hadn’t thought of before, but of course Labour has worked with both Fianna Fáil and Fine Gael in that time, so inevitably it would have a slightly greater slice of the governmental pie than our supposed ‘main’ opposition party. Great, we can blame them for slightly more of the ills of the society than we had already.
But briefly, he argues that:
Labour was … in government from 1982 to 1987 and once more from 1992 to 1997. In the 15 years from 1982 to 1997, Labour was in government for 10 years. And one of the legacies left by Labour in government is demonstrated in a report by the Institute of Public Health entitled Inequalities in Mortality (and I apologise for going on and on about this yet again).
This report reveals that in the period 1989 to 1998, during most of which time Labour was in office and appeared to have succeeded its period in office from 1982 to 1987, for all causes of death, the death rate of those in the lower occupational classes was three times higher than the death rate for those in the higher occupational classes.
The death rate for all cancers among the lowest occupational class was over twice as high as for the highest occupational class and nearly three times higher for strokes, four times higher for lung cancer and six times higher for accidents. Ruth Barrington, a former director of the Health Research Bureau, has extrapolated the data from the Institute of Public Health report and concluded that 5,400 people died prematurely every year because of inequality. This is part of Labour’s legacy from its time in office in the 1980s and the 1990s.
I wouldn’t take issue with those figures at all. They’re a crushing indictment of our society as a whole. But to point the finger solely at the Labour Party seems somewhat unreasonable. One might also argue that some context wouldn’t go amiss, for example it would also be important to see whether there was any reduction in the number of deaths over that time period.
And if one turns to P.175 of the original report available here one will read:
3.5 Limitations
Underlying limitations in the data used have certainly affected death counts and
mortality rates. Until the methodological issues described in Part Three are better
understood, some of the results presented here are best interpreted cautiously.
The decade 1989-1998 was a period of great social, political and economic
change throughout the island. The pooling of ten years data, while increasing the
number of deaths involved, means that any temporal trends in mortality are
ignored. The choice of health (and social services) board areas and urban centres
for regional analyses means that variation within these regions is not reflected in
the results. Small area analysis of mortality statistics is not considered and nothing
is reported about special groups such as Travellers and minority ethnic groups.
Finally, we should recognise that patterns in mortality reflect not only underlying
disease and disability in a population, but also the care seeking behaviours of its
members, the way it locates and operates its health care services, the practices of
its health care workers, its methods of death registration, and patterns of internal
migration. Consideration of these and other issues is required when interpreting,
for example, regional differences in mortality.
Here is the problem. 1989 to 1998 was indeed a time of great change. To take the aggregate figures and not consider changes means that we are ignoring a large element of the picture. To then construct a thesis that this is in some sense the responsibility of Labour is a step too far. Not least because it ignores the point that first Labour was in a minority position in all the governments of which it was a member, and that, as with the late 1980s FF government, even more iniquitous policies as regards the health service were carried out. Does Labour get credit for ameliorating the situation, if only slightly? It does not.
But there is some other data which points to the direction the graphs were moving in over the time period.
If we look at the World Health Organisation we can see here a slightly different picture over the years from around 1995 to 2001.
As the WHO notes:
Vulnerable populations
IncomeThe evidence on determinants of health shows that people who are socioeconomically disadvantaged bear the greatest burden of disease. Among determinants, income is related to an accumulation of factors that affect mortality (Martikainen et al., 2001). For example, it influences and is influenced by education and employment.
It continues:
Even in the richest Member States in the WHO European Region, wealth is not equitably distributed and pockets of relative poverty exist (WHO Regional Office for Europe, 2002a; WHO, 2002). The association between poverty and urban areas is particularly important in Europe. As populations migrate and become more urban, there are increases in the number of urban poor whose housing, employment conditions and diet expose them to greater risk of illness and disease (WHO Regional Office for Europe, 2001b). The nature and impact of poverty on people can vary according to factors such as gender and age group (Ziglio et al., 2003).
According to the GINI index, Ireland’s income inequality was rated at 35.9 in 1996, which is relatively high when compared to the Eur-A average of 30.8 (WHO Regional Office for Europe, 2002a). During the period 1987-1997, about 12% of Ireland’s population was living below 50% of the median income level, ranking fourth among Eur-A.
Again, these are not good figures, particularly for a state entering into it’s longest sustained period of significant positive economic growth.
Ireland measures poverty in terms of consistent poverty and at risk of poverty. Consistent poverty is measured using a combination of relative income (in this case mean income) and deprivation, the indicators of which are based on surveys of what Irish people consider necessary to ensure an adequate standard of living. At risk of poverty is based on relative income and identifies those with an equivalised individual income that is below a certain threshold. For the European Union, the threshold is 60% of the median income level.
IMAGE OF CONSISTENT POVERTY
Between 1994 and 2001, the percentage of the population in Ireland in consistent poverty fell (ESRI, 2003). Among children, consistent poverty fell between 1997 and 2001 (from 15.3% to 6.5%). However, during the same period, the percentage of households deemed to be at risk of poverty increased.
I think the latter figure (and let’s not ignore the possibility that these figures are open to question) is interesting, and points to a political issue, relating to government formation, which I’ll return to in a moment.
But let’s look at the mortality data for the period 1995 to 2001. This doesn’t take into account occupational classes, although implicitly we can draw tentative conclusions from age cohorts. What is most striking is firstly that mortality rates are in decline (with percentile decreases tending towards the high teens and right through into the thirties) across a range of areas, bar digestive diseases. Even in the particularly vulnerable 65+ age cohort we see significant declines.
And this tallies with a graph that notes that life expectancy in the EU is increasing (particularly in contrast to other regions of the planet), and has done so since the 1970s.
Which points to another problem with his argument. We are not presented with evidence of mortality figures in the decades preceding the period in the IPH report. So it is impossible to judge whether – grim as they are – the IPH figures actually represent an improvement or not in inequalities.
And all of that taken into account I genuinely don’t understand Browne and a leap of logic in the next part of his article:
That might be regarded as “history” and one has to “look forward”. But wouldn’t you think that Labour would reflect on how it was that it allowed such gross and obscene inequalities to persist while it was in office? Would you think they would wonder how it was that removing or at least radically reducing such inequalities would have been a priority for them in office, and wouldn’t you think they would now analyse why this did not turn out to be the case?
Might it not now reflect that its purpose, as a Labour Party, is to remove or radically lessen such obscene inequalities and that it would appreciate that this cannot be done without changing the political culture that regards such inequalities as “unavoidable”? And that such a change in the political culture would take time and persistence and also, inevitably, would require Labour forsaking office for the foreseeable future?
Firstly, it could be argued that as they have been in opposition for over a decade they have had just such an opportunity to rethink and reprioritise, and there is some evidence to suggest that they have attempted a number of political tactics to reposition themselves. But it’s also based on the assumptions that firstly the Labour party is entirely serious about redistribution and in favour of radical measures to curtail inequality – two interesting theses I think most will agree, and secondly that eschewing office is going to ‘change the political culture’. He may be right as to the latter, but how precisely he does not spell out (Unless his argument is that Labour, in some indeterminate, or at least unstated, fashion increases inequality. And I’m not sure that that party, whatever it’s flaws, is responsible for that).
But consider the term “radically lessen”. There is no way to determine from the IPH report whether there has been a decrease, increase or stasis in mortality rates. By contrast the mortality figures from the WHO present us with significant decreases. What is now needed is clear data on mortality in occupational classes during that period so that we can see whether there has been a parallel in mortality decreases for those in disadvantaged socio-economic groups, although it’s hard to see why there wouldn’t have been (my prediction though would be that while decreases would exist they would be lesser).
But had Browne tied the WHO data to the IPH data then he’d have had to write a different article, one which was less condemnatory of Labour, while recognising their hand in overseeing income and health inequality. This is problematic, obviously, and it’s worth noting how Browne is a better correspondent than this. His column in the SBP throws up some usefully provocative thoughts, all the better for the generally moderate tone of them.
And indeed in the first part of his piece he makes a much better case for Labour rethinking its position when he notes, as Donagh has on Dublin Opinion, their complicity in Cabinet in the 1970s sitting on the Kenny Report on Building Land which “advocated that just slightly more than the agricultural value of land would be awarded in compensation to landholders whose land was deemed appropriate for the building of houses”. Now that was a disgrace. But even still, there’s something a little bit unconvincing about it… that also was in the early 1970s under an entirely different generation of Labour party leaders. And since then we’ve seen arguably two – perhaps three – other generations come and go. This may well amount to a sort of political original sin. Or it may not. The crucial thing is that the Kenny report has been shelved in the intervening years by governments of all stripes. A different way of putting it would be, well, what did he expect of that version of the Labour Party with people like O’Brien et al in Ministerial positions? And let’s reverse the argument. Does the introduction of the NHS in the 1940s exonerate Blair et al for their misdeeds? It does not. So why should the reverse process be in operation for the ILP?
And what of other countries? Presumably Browne has some ideal, although he does not articulate it. So what of inequality of outcomes in health in, say, Sweden?
An interesting report is available as PDF here of a study published in the British Medical Journal from Gothenberg into coronary heart disease which concluded that:
After a mean of 11-8 years’ follow up the incidence of
coronary heart disease was found to be strongly and
inversely related to occupational class. For death
from coronary heart disease this association fell just
below significance when other risk factors were
taken into account, but the inverse association
between non-fatal myocardial infarction and
occupational class persisted even in multivariate
analysis. A weak but independent inverse relation
was found between occupational class and fatal
cancer. Mortality from all causes in the lowest
occupational class was 12% compared with 6% in the
highest class, and this difference could only partly be
explained by other factors. After 10 years a subsample
ofthe men were examined again. Risk factors
had decreased in ali occupational classes, but the
changes in risk were not associated with occupational
class.
Social class, defined by occupation, in Sweden is
clearly related to the incidence of coronary heart
disease.
The percentages? Curiously similar.
Table II shows the, strong inverse relation between
occupational class and all coronary end points. The
rate of coronary heart disease in occupational class 1
[unskilled and semi-skilled workers] during follow up
was more than twice that of occupational class 5
[employed and self-employed professionals,
higher civil servants, executives] (8.8% v 3.8%).
For non-fatal myocardial infarction and total
coronary heart disease the odds
ratios for the lowest in relation to the highest class were
only slightly reduced ~when other risk factors were
taken into account. Coronary death, however, was not
independently associated with occupational class, even
though the lower limit of the confidence interval was
close to one. The incidence of stroke (fatal and nonfatal
combined) during follow up was similar in all
classes. Deaths’ from cancer and all cause mortality
were significantly and inversely associated with
Iforemen in occupational class. The figure shows the cumulative
nals, higher mortality of the different classes and shows a continuously
widening gap between the highest and lowest
occupational classes over time.
The study was conducted between 1970 and 1983. Granted, some time ago, but surely in the context of a highly efficient longstanding health system such as the Swedish one indicative of the difficulties in ameliorating such inequalites, and also, arguably, the impact of lifestyle elements on health. This latter is an important factor.
A retrospective analysis of the
data showed that low occupational class was associated
with slight increases in smoking rates, systolic
blood pressure, serum cholesterol concentration,
body mass index, and heart rate. Alcohol abuse was
strongly associated with low occupational class.
That said there is no dismissing the conclusion that:
Our data suggest that the impact of socioeconomic
factors is far from negligible. If the low mortality in the
highest occupational class had prevailed for the entire
study population (participants and non-participants)
fewer than 600 men would have died during the follow
up period, instead of nearly 1300-a net loss of more
than 700 lives. The results from this study, however,
must be interpreted with caution. The classification
used was developed several years after the screening
examination, and the classification of the men into the
different categories was also done at a later date,
though the data on occupation were collected at the
first screening. This also means that there was no prior
hypothesis, and the results must be seen accordingly.
Also the data are not consistent with earlier Swedish
investigations even if more recent reports seem to
confirm the results of our study. More national
research on this subject is certainly warranted.
And it argues:
In conclusion, we found a clear inverse relation
between occupational class and the incidence of
coronary heart disease and total mortality entailing
many excess deaths in the lower socioeconomic strata.
Possible reasons include differences in patterns of risk
factors, and in lifestyle, effects of occupational
hazards, and low social support, but no clear answer to
why class differences persist has been forthcoming.
The magnitude of the problem certainly warrants
further study, not least from a preventive point of
view.
Or the UK with an equally well embedded health service, albeit one fractured by a decade and more of Toryism? The Independent Inquiry into Inequalities in Health of 1998 found that;
Mortality
Over the last twenty years, death rates have fallen among both men and women and across all social groups25,29. However, the difference in rates between those at the top and bottom of the social scale has widened.For example, in the early 1970s, the mortality rate among men of working age was almost twice as high for those in class V (unskilled) as for those in class I (professional). By the early 1990s, it was almost three times higher (table 2). This increasing differential is because, although rates fell overall, they fell more among the high social classes than the low social classes. Between the early 1970s and the early 1990s, rates fell by about 40 per cent for classes I and II, about 30 per cent for classes IIIN, IIIM and IV, but by only 10 per cent for class V. So not only did the differential between the top and the bottom increase, the increase happened across the whole spectrum of social classes29.
I have to stress that I’m not arguing that nothing can be done, or ignoring or dismissing health inequality. Quite the opposite. I fervently believe that much much more can be done, that the outcomes in a comprehensive national health service will be much better and that, to echo the piece above, preventative actions encouraged by an Irish NHS are not merely desirable but essential.
I am suggesting that Brownes charges may be – somewhat – misplaced and that since health is at the heart of a progressive agenda the way in which we frame the arguments must be thought through carefully in light of actual data about outcomes.
I’m certainly not suggesting that the IPH report is in some sense wrong. Again, quite the opposite. It is the essential first step towards diminishing health inequality. And further contextualisation is necessary because as we can see from the UK health inequality can increase as well decrease. Everything depends – to a large degree – upon the nature of the political context.
And this leads to some interesting thoughts about how our present situation might have been had we had an FG/Labour coalition over the past decade. I’d suspect that had we been spared the excesses of the FF/PD coalition of the past decade we might have seen a marginally lesser increase in inequality under an FG/Labour coalition. I can’t be sure, but I tend to think that co-location for one, might not have been placed front and centre of political activity in this state. And as with that so with other smaller issues, including the introduction of marginally greater labour law protection which potentially could have mitigated the ‘at risk of poverty’ figures due to a broader sense of a social contract due to the involvement of the Labour Party, minimalist as it is – and not least a voice for the unions actually at the Cabinet table.
I genuinely can’t see how public expenditure could have been directed to less socially progressive ends in the event of such a government, particularly during an economic boom – and as someone with no love of Fine Gael as a political vehicle that’s not an easy statement to make.
But I recognise that that argument is one that takes the line of the ‘lesser evil’, the bane of progressives everywhere. We know governments were going to be formed. We know these governments would have negative impacts on issues of equality. What is better, to go for the one that results in lesser negative impacts or to permit the one that will generate greater negative impacts in the hope that the electorate will eventually see sense? And what then of that greater number of people who suffer in the latter case? Add to that the reality that political choices don’t exist in a vacuum, that for example, arguably the Peace Process might have taken a different route as well. So, how to judge?
This brings me to my central problem with the article. It’s fine to say Labour should step back. I agree and a number of us have argued the same here and here on numerous occasions [and again, Donagh at Dublin Opinion has a take on the broader message for the Labour Party which I agree with]. But there is no point, none at all, in doing that without a political strategy, one that seeks to link with other progressive forces and to move the situation forward. Yet curiously Brown doesn’t articulate that strategy, not in the slightest. He lashes Labour by pointing to a disgraceful episode over a quarter of a century ago, then by selecting figures which while atrocious simply can’t be used to support an argument on this specific issue one way or another, and then as if there is some logical connection argues that by recusing itself something will happen. Not sure that it will. Not sure at all. Not least because having viewed the progress of the Green Party in the last year, I believe that given the choice Labour wouldn’t run towards power. This last time out due to a very specific set of circumstances that wasn’t an option. Next time? Let’s not bet the house on them staying out.
And the problem is that there are strong counter-arguments which the data would support for making a decision to go into government in order to ameliorate the issues he points to. If Labour must take the rap for the IPH report then surely it must equally be given some credit for mortality decreases found in the WHO data? After all, the years the WHO looks at overlap at the start the last period Labour was in government, a full five year term as it happens.
Or could it be that the reality is that mortality rates, while linked to political, societal and economic decisions, aren’t dependent on political dynamics in the sort of crude casual fashion Browne posits in order to make his political point. That, it is true that a strong and sustained campaign will decrease inequalities, but that the outcomes may not be quite as he expects. And how does this work politically? By rights, using health as one axis, using others shouldn’t Fianna Fáil, or indeed Sinn Féin, stand down from government or thought of government since they have been evidently unable to bring about a United Ireland during the same time. What of Fine Gael (of which Browne, curiously, was in discussions with, how serious is uncertain, at one point about standing as a candidate – during the John Bruton era no less!) which delivered neither Christian or Social Democracy.
Is it that Browne is using a rhetorical yardstick which at the end of the day is meaningless in the way in which he proposes it. That’s not to say that Labours self-evident deficiencies aren’t cause for analysis and reflection. Their time in government has hardly been marked by radical reform. Indeed I find it odd to be making a sort of apologia for that party. But this time, this yardstick, seems just too loaded – whatever the clear importance of the source material – both as a rod to beat the LP or to be useful as a basis for future political action. There is a better argument, one rooted in the data, which is that Labour should be doing all it can to reduce inequalities in health – that such reductions are possible as can be seen from other European countries with progressive left agendas – and that part of that process is to fashion a means of replacing our centre-right parties as the dominant government force which will almost inevitably require Labour to avoid entering coalitions as a subsidiary partner.
But here’s a thought to consider. So far to Thursday evening/Friday morning – and I haven’t checked this mornings IT, no responses from any Labour Party members (at least none in the IT). Sure, perhaps the accusation that their Party is complicit in the worst excesses of capitalism in this ‘liberal’ democracy is neither here nor there to them, or perhaps they can’t be bothered to respond to an article in our ‘paper of record’. Or perhaps they think a response would be self-serving (and, sure, it probably would). But it also points to how disengaged they appear to be even from the terrain they stake out themselves to work upon. That’s odd, which leads me to a parting thought that however much I dislike VB’s argument in this particular instance, he may well be right on his broader thesis…




The head of the Labour Party’s ‘Commission on 21st Century Labour’, Greg Sparks, through his company Farrell Grant Sparks, is a business partner of Libertas supporter Ulick McEvaddy. This indicates that Labour will be part of the problem of inequality, rather than part of the solution.
Browne’s interview with Pat Rabbitte in the Village before the last election was quite brilliant. It thoroughly exposed the lack of any significant divide between the main Irish political parties.
Yes indeed, but what about health inequality?
What about it?
I think the figures show fairly conclusively that Labour in its most recent period of government did nothing to help end health inequality. I tend to agree with you that particularly singling them out, over FF, FG and the PDs is a little unfair, but then again nobody is going around claiming that those parties are “on the left”.
The other mistake Browne makes is that he seems to think that he can appeal to the progressive instincts of the Labour leadership to encourage them to change course. Unfortunately, as he himself showed all too clearly before the last election, such progressive instincts are entirely fictional.
Of course much depends on how wide, or narrow, our definitions of left are.
Reasonable point re Browne’s mistake…
Incidently the 5400 deaths were recently used as an argument by the IRSP bulletin:
Clear Class Divisions
For Republican Socialists, there is a fundamental division within society; that between the “working class” and the “capitalist class”. But what is the exact nature of this division? Many would answer that it is one between “rich” and “poor”, the “have” and the “have not”. Statistical evidence clearly points to a sharp division between the have and the have not.
In 2007 Bank of Ireland Private Banking Limited published a report entitled The Wealth of the Nation. It disclosed that net wealth per head in the 26 counties had increased from 148 000 to 196 000 Euro from 2004 to 2006. It stated the top 1 per cent of the population held 20 per cent of the wealth, and the top 2 per cent held 30 per cent of the wealth, with the top 5 per cent holding 40 per cent of the wealth, leaving the remaining 60 per cent of the wealth to be shared among 95 per cent of the population.
But if the value of housing were left out, then the top 1 per cent held over a third of all wealth (34 per cent). It said 3000 millionaires were created in 2006 and that there were 33 000 millionaires in the country in 2007. Of these 30 000 had wealth of up to 5 million Euro. Nearly 3000 had wealth of between 5 million and 30 million Euro and 330 had wealth in excess of 30 million Euro.
Meanwhile almost 7 per cent of the population of the 26 counties are living in consistent poverty, that is almost 300 000 people living on incomes of less than the equivalent of about 11 000 Euro for a single person and being unable to afford two pairs of strong shoes, or unable to afford a meal with meat or chicken or fish every second day, or unable to afford a waterproof coat. Aside from that, 17 per cent are at risk of poverty (over 700 000 people), that is, living on equivalent incomes of less than 60 per cent of the average. That is about 11 000 Euro for a single person or 27 000 Euro for a household of two adults and two children. (1)
However, class is not simply about dividing people into rich and poor. Being rich or poor is an effect of class divisions, not its cause. A class refers to a group of people who share a similar relation to the way they earn their living.
Those who rely on wages, pensions or social security benefits to live, who are compelled to sell their labour to survive constitute the working class.
Those who live on profit, rent and interest constitute the capitalist class.
To live the workers have to work for an employer otherwise they would have no source of income. The capitalists own companies and products on whose profits they live; the same for landlords and speculators who live on rents generated by the properties and land they own. They employ (or ‘exploit’) the labour of workers, from which they will derive their profits.
A recent report estimated that capitalists in Ireland made an average 45 800 Euro of profit per worker. (2) This is what Marx and Engels meant by ‘proletariat’ and ‘bourgeoisie’:
“By bourgeoisie is meant the class of modern capitalists, owners of the means of social production and employers of wage labour.
By proletariat, the class of modern wage labourers who, having no means of production of their own, are reduced to sell selling their labour power in order to live.” (3)
In terms of statistical measurement; the bourgeoisie can be defined as Socio-Economic Groups (SEGs) 1-4 and 13 in the Northern Ireland Registrar General’s classification and Social Classes I-III in the 26 counties’ Labour Force Survey.
The proletariat comprises all other SEGs in the Registrar General’s classification and Social Classes in the Labour Force Surveys together with the unemployed. (4) The 45 800 Euro of profit per worker made by capitalists are what scientific socialists call ‘surplus value’.
Why do Republican Socialist campaign for the abolition of the class system? The effects of class society can be summed up by a single shocking statistic that is defiantly ignored by the political class and by most of the media: that 5 400 people die prematurely in the 26 counties every year because of the inequality they suffer from being on the wrong side of the class divide. Thousands more live miserable lives because of broken health, also arising from inequality. The proportion of people who die in the 26 counties because of inequality is significantly higher than in other European countries. (5)
It is the capitalist class which has benefited the most from the economic growth in recent years; both in absolute terms and in relative terms. Overall, the disposable weekly income of households in the 26 counties rose by 54 percent between 1995 and 2000, or in absolute terms from 281 pounds to 434 pounds. But whereas the top ten percent of households saw their incomes increasing by 62 percent, the bottom ten percent increased their incomes by 33 percent. (6) Apologists for the current economic system will point that the fact that the bottom ten percent increased their income shows that it works.
However, as professor Robert Erikson of the Swedish Institute of Social Research wrote last year:
“The general increase in income does not seem to have been matched by a general change in income inequality, except for a possible but uncertain increase of the relative share of the very highest incomes.” (7) More significantly, the evidence suggests that workers lost out relatively, with wages falling as a proportion of the various incomes generated within the 26 counties economy, whereas capitalists increased their share.
Until 1987, the share of wages, pensions and social security in the 26 counties stood at 69.2 percent, with profits, rents and self-employed earnings taking the other 30.7 percent. By 1997, the share of wages; pensions and social security fell to 56.3 percent and mostly the share going to profits had risen to 43.7 percent. In 2004 the first category had again fallen to 52.1 and the second risen to 48.1 (8) As Whelan argued already in 1995,
“The nature of Irish industrialisation has been such that the degree of disadvantage suffered by the working classes has been greater than conventional…analysis would suggest.” (9)
As Garrett FitzGerald notes:
“during the Celtic Tiger period the incomes of many better-off people rose quite disproportionately vis-a-vis those of the less well-off”. (10)
By the end of the 1990s, the share of total income enjoyed by the top 1% of 26 counties earners was more than twice the level prevailing throughout the 1970s and 1980s. The top 5% of the population holds 40% of the wealth. (11) This reflects US trends: In the United States in 1970, chief executives earned 25 times the average worker’s wage. In 2007 chief executives earned 360 times the average worker’s wage. (12)
In the Six Counties, things are no better. The material well-being of the working classes has been eroded between 1971 and 1995: a 42.7 per cent growth in non-earner families, a three fold increase in poverty, a 32.2 per cent decline in income, a rise in unemployment from 4.3 percent to 14.2 per cent all attest to social dislocation. Conversely, the evolution of the economy has significantly benefited the middle and upper classes. In the period 1971-1995 they have enjoyed a 28.1 per cent rise in their share of total income and by 1995 possessed the highest levels of personal savings as a percentage of disposable income within the United Kingdom. (13)
Has the ‘peace dividend’ changed things?
“It has become increasingly evident, however; that insofar as there can actually be said to have been a peace dividend its benefits have not been evenly distributed.” (14)
For the upper and middle classes, life has never been better. (15) But a 2006 report showed that the poorest members of society in the six counties were worse off than ten years before. (16) The UN Human Development Reports rank the 26 counties among the most unequal developed countries in the world. Yet the Poverty and Social Exclusion NI survey revealed that inequality in the North is greater -a Gini coefficient of 0.42 compared to 0.36 in the 26 counties -the Gini coefficient is a measure of inequality ranging from zero (complete equality) to one (complete inequality). (17)
When looking at who has benefited the most of the economic growth, things are also made more complex due to a number of unique characteristics that set off the Irish economy from others within the EU, including others on the EU periphery.
The 26 counties are unique in Europe in the degree that its Gross Domestic Product (GDP) exceeds its Gross National Product (GNP) because of the profits that are removed by transnational corporations (TNCs) operating there. In very broad terms, GDP measures the value of what is produced in the 26 county economy, by indigenous and foreign enterprises alike. It represents the net output or added value generated in the economy during any given period. GNP, on the other hand, identifies that portion of the income generated in Ireland that is retained in this country in any time period. In sum, where GDP measures the value of output produced, GNP represents what the 26 counties gets to keep from what is produced here. As the economics editor of the Irish Times explains:
“For most advanced countries, GDP and GNP are interchangeable but Ireland is a special case because of the scale and importance of foreign direct investment in the Irish economy. Foreign industrial investment provided the platform for the Irish boom and foreign-owned enterprises continue to dominate production and exports in Irish manufacturing industry. They contribute substantially to the amount of output produced and income generated in Ireland. That contribution is reflected fully in the GDP statistics. However, foreign companies did not invest in Ireland for the good of their health. They came to Ireland because it was a highly profitable location that allowed free profit repatriation. A major slice of the profits, dividends, interest and other income earned by foreign-owned enterprises operating in Ireland is exported abroad. Such repatriations comprise a substantial element of the outflow of net factor income from the country. This net outflow of factor income is a large number. In 2007, it exceeded €29 billion, equivalent to more than 15 per cent of GDP.”(18)
In other words up to one fifth of the value generated within the 26 counties economy each year is spirited out of the country, principally in the guise of the repatriated profits of transnational corporations.
The 26 counties are not unique in that TNCs have a leading role in their economy. However:
“By the turn of the century, Ireland had by far the highest level of direct US investment per manufacturing worker of any country in Europe, with the capital deployed per worker being a full seven times higher than the EU average. … In the process, the Republic of Ireland became more dependent on US investment than many countries in Latin America, which has often been described as ‘America’s backyard’.” (19)
At the end of 2005, there were 473 US TNCs operating in the 26 counties, accounting for 47 per cent of companies supported by the IDA and employed 70 percent of the employment provided by IDA sponsored companies in Ireland. (20)
In the 26 counties, imperialist transnational corporations are more important to the accumulation of capital than the internally generated process of accumulation. Imperialist capital is the motor of industrial development, and Irish capital has a generally weak and subordinated role to it. Inward stocks of foreign direct investment as a percentage of GDP grew from 71.5% in 1990 to 129.7% in 2003 while the average for the EU15 was 10.9% in 1990 and 32.8% in 2003. (21)
TNCs were directly responsible for 45 percent of economic growth in the 26 counties during the first half of the 1990s and between 1995 and 1999 directly accounted for 85 percent of economic growth in terms of their value added. Their rising profits alone accounted for 53 percent of economic growth! Between 1990 and 1999, output in the three main TNC sectors grew by 375 percent and employment by 73 percent. Thus output per employee grew by 215 percent during that period.
In comparison, in Irish companies output rose by 55 percent and employment by 40 percent. Output per employee grew by about one percent annually, which is quite low by international standards. By 1999, the average worker in the foreign sector produced nearly eight times more output by value than did the average worker in the rest of the economy. (22)
The consequence of this is that the 26 counties bourgeoisie is in a position of relative weakness and that its representatives are not in a position of equality with imperialist capital. They are not a strong and independent fraction of the global capitalist class and are not in position to challenge of compete with imperialism. It is thus significant that in a recent article on the Irish bourgeoisie, the Ireland correspondent of the Financial Times could write:
“The ranks of the super-rich include few manufacturers, partly because foreign-owned companies have dominated that sector -about 70 percent of Irish manufacturing exports came from US-owned companies.”
He also adds regarding the people who became millionaires thanks to the Celtic Tiger:
“Some commentators complain that… the new moneyed class are just property speculators. One measure of this is the dearth of new listings on the Irish stock exchange. And the Irish boom has certainly been heavily concentrated in the property sector. About a third of the 80 000 individuals setting up businesses between January 2003 and June 2006 were in construction.” (23)
It is thus wrong to think that capitalism in the 26 counties is no different from that in any other EU country. The strategic sector of the 26 counties are dominated by imperialist capital.
For Republican Socialists, the current model of economic development being pursued in Ireland is a failed and unjust system. The fact that 700, 000 people still live in poverty despite more than a decade of prosperity and growth shows that economic growth is at best not linked to social development. (24) And at worse, the current model of development has increased social and economic inequality, whose effects results in at least 5400 people dying needlessly in the 26 counties. Also, another major contradiction is that despite a decade of growth putting them in the league of the richest states, the 26 counties still have infrastructures and collective equipment reminiscent of poor countries. (25)
Republican Socialists also argue that the current model of economic development leaves Ireland in a highly vulnerable position. First due to the dominance of imperialist capital, shocks to US economic growth would have ‘a much stronger effect’ on the pace of Irish economic activity than economic shocks of a similar magnitude in the Euro area or Britain, the IMF has found. A one percent drop in US economic growth translates into a 1.75 percent drop in the 26 counties. This is because the US is the 26 counties’ main source of foreign direct investment and largest single export market. (26) Second, the 26 counties ratio of housing investment to GDP at 13.3 percent is more than twice as high as the average 6.5 per cent for OECD countries, leaving the 26 counties highly vulnerable to depression in that sector. On top of that residential investment had increased its share of GDP in the 26 counties from 7.8 per cent in 2000 to 13.3 per cent in 2006. (27) Added to the slow down in the US economy, it means that the 26 counties will be left in an even worse position.
Liam O RUAIRC
NOTES
(1) Vincent Browne, A nation divided by weatlh, The Irish Times, 13 February 2008
(2) Martin Wall, Irish firms make profit of €45,800 per worker, report says, The Irish Times, 2 July 2008
(3) Karl Marx and Friedrich Engels, Manifesto of the Communist Party, 1848
(4) Peter Shirlow, Class, Materialism and the Fracturing of Traditional Alignments, in Brian Graham (ed) In Search of Ireland: A Cultural Geography, London and New York: Routledge, 1997, 90
(5) Vincent Browne, Political class defiantly ignores massive inequality, The Irish Times, 14 May 2008
(6) Ronaldo Munck, Social class and inequality, in Sara O’Sullivan (ed), Contemporary Ireland: A Sociological Map, Dublin: University College Dublin Press, 2007, 307
(7) Tony Fahey, Helen Russell, Christopher T Whelan (eds), Best of Times?, Dublin: Institute of Public Administration, 2007, 271
(8) Kieran Allen, Globalisation, the state and Ireland’s miracle economy, Sara O’Sullivan (ed), Contemporary Ireland: A Sociological Map, Dublin: University College Dublin Press, 2007, 244-245
(9) Christopher Whelan, Class transformation and social mobility in the Republic of Ireland, in P Clancy, S Drudy, K Lynch and L O Dowd (eds) Irish Society: Sociological Perspectives, Dublin: Institute of Public Administration, 1995, 351
(10) Garret FitzGerald, Growth should be used to build an equitable society, The Irish Times, 2 December 2006
(11) Fintan O Toole, Inequality now official policy, The Irish Times, 15 January 2008
(12) Kathy Sheridan, Mind the Gap: wage disparity spreads from private to public, The Irish Times, 12 January 2008
(13) Peter Shirlow, op.cit, 100-101
(14) Colin Coulter and Peter Shirlow, The Peace Process in Northern Ireland, in Sara O’Sullivan (ed), Contemporary Ireland: A Sociological Map, Dublin: University College Dublin Press, 2007, 191
(15) Jim Smyth and Andreas Cebulla, The Glacier Moves? Economic change and class structures in Northern Ireland, in Colin Couler and Michael Murray (eds), Northern Ireland After The Troubles? A Society in Transition, Macmillan, 2008
(16) BBC webpage, Poor ‘worse off now than in 1996′, 14 September 2006
(17) Goretti Horgan, Class in Northern Ireland, in Sara O’Sullivan (ed), Contemporary Ireland: A Sociological Map, Dublin: University College Dublin Press, 2007, 322
(18) Paul Tansey, Riddle of the economy shrinking and growing at the same time, The Irish Times, 1 July 2008
(19) Kieran Allen, Neither Boston or Berlin: Class Polarisation and Neo-Liberalism in the Irish Republic, in Colin Coulter and Steve Coleman (eds), The End of Irish History? Critical Approached to the Celtic Tiger, Manchester: Manchester University Press, 2003, 57
(20) Paul Tansey, Recession in US would seriously affect Irish economy, IMF warns, The Irish Times, 31 January 2008
(21) European Commission, European Economy No. 6 2005, p. 399. (Figures supplied by Joe Craig)
(22) Denis O’Hearn, Macroeconomic policy in the Celtic Tiger: A critical reassessment, in Colin Coulter and Steve Coleman (eds), The End of Irish History? Critical Approached to the Celtic Tiger, Manchester: Manchester University Press, 2003, 38 and 45
(23) John Murray Brown, Lucre of the Irish, Prospect, January 2008
(24) Carl O Brien, Country following flawed economic model, says CORI, The Irish Times, 19 June 2008
(25) Marion Van Renterghem, L’Irlande, enrichie, a conserve les infrastructures d’un Etat pauvre, Le Monde, 21 Septembre 2007
(26) Paul Tansey, Recession in US would seriously affect Irish economy, IMF warns, The Irish Times, 31 January 2008
(27) Paul Tansey, ‘Growth Recession’ only game in town, The Irish Times, 11 April 2008
Thanks the Plough. Again, I’m not in any way arguing that they’re good figures, quite the opposite.
CL’s point is strange. If I’m a taxi driver with a contract with the HSE, does it mean that I support everything Harney says re Health Service
I take your point Joe. I presume CL means that with such a ‘business’ approach embedded at the heart of the Labour review it doesn’t auger well for those who might want a more ‘left’ approach. Of course the two don’t always follow. I presume few would be upset if Wallace of builders fame was on it…
I see that the State’s national pension reserve fund has been investing heavily in Zimbabwe. This indicates that Irish pensioners will be part of the problem of Zimbabwe, rather than part of the solution.
Interesting on two levels. Firstly wouldn’t seem much of an investment except the ZANU-PF government has always been stronger on anti-business rhetoric than its actual track record would demonstrate…
Joe Holt:
For the party of Connolly to give a capitalist,-and one who is in business with a figure from the extreme right-power to shape Labour’s direction for the 21st century is part of the problem of inequality in Irish society.
Taxi drivers have no such clout.