Economic ignorance? Unleash the Doherty [whenever possible]. But seeing as we’re also talking about Fine Gael… January 26, 2011
Posted by WorldbyStorm in Economy, Irish Politics, The Left.trackback
I haven’t heard the Morning Ireland that saw Varadkar and Adams square off against each other, though I’ve read some small extracts and in truth it’s hard to tell exactly whether Adams came out as badly as some say, or worse. But most likely this will be lost in the general noise that is increasing over the FF leadership, the Finance Bill and the Election itself. Mind you, free top tip to SF, unleash the Doherty whenever possible, firstly he’s in the Dáil, secondly he’s an excellent public speaker, thirdly he has what appears to be a good grasp of the fundamentals.
These aren’t inconsiderable virtues in the context of an election shaped almost entirely by economics.
Still, advice aside, what I found interesting was Varadkar’s charge of ‘economic ignorance’.
It went like this:
Mr Varadkar said the Finance Bill had nothing to do with bondholders. “I think nothing has changed in the last five years and since the last election when Mr Adams showed his ignorance of economics,” he said.
It’s a potent weapon, isn’t it, given all that has happened to this state in the past three years?
And yet, and yet, I was reminded of Pat Carey’s dismal performance on RTÉ when faced with a Pat Rabbitte who did the usual ‘shame, shame’ approach as regards Fianna Fáil economic policy then and now. The though struck me at the time as to why Carey didn’t turn around and inquire of Rabbitte why his party had entered the 2007 election campaign on a pledge to cut the lower rate of tax by 2 per cent, something even FF for all its pomps was reluctant to do at the time? And it’s not that I prefer Carey over Rabbitte, or vice versa come to think of it. And my God I was in two parties with the redoubtable Pat.
Which is why Varadkar’s charge made me smile just a little, because whatever about Adams abilities or otherwise to convey economic policy Adams would have been quite within his rights to turn the question around.
What about FG’s position in 2007, let alone afterwards?
Consider this useful overview from FinFacts of the joint Fine Gael/Labour ‘Agenda on Jobs and Taxes’ from that year, for yes, Labour was joined at the hip on these proposals.
Let me preface it by saying that some of the ideas weren’t bad, but there’s some eye-watering stuff nonetheless…and not all of it is hindsight…
Progressive Income Tax Reform
Labour and Fine Gael have agreed a number of income tax measures that bolster the incomes of “hard working families” that have suffered from the “rip off” experience and that support the life choices of all families, including parents and other carers, in achieving their own preferred balance between paid work and unpaid care.
▪ A 2-point cut in the standard rate of tax from 20% to 18%
▪ Indexation of personal credits and bands to earnings and a further €5,000 increase in the point where 1-income married couples hit the top rate of tax
▪ An increase in the home carers’ credit to the level of the PAYE credit
That’s right. An undertaxed economy, already horribly dependent upon a certain revenue stream, and they were talking about cutting taxes and widening bands?
And what of this, on stamp duty, a real old bugbear of the economic centre and right…
A Fairer Stamp Duty Regime
FG/Labour say they will introduce a fairer system of stamp duty that helps make housing for all families more affordable. Specifically, they will:
▪ Abolish stamp duty for first time buyers up to €450,000;
▪ Restructure stamp duty for others buyers as follows: o No stamp duty up to €100,000 o On the next €350,000 a 5% rate will apply o On the balance a 9% rate will apply
The parties say that it is the role of Government to help families buy homes, not to get in their way.
That’s right too, in the context of a housing market seriously overheating they sought to make it easier to purchase houses…
And for those from the right who now have seen the light [sic] as regards partnership and all its evils, what of this?
- Fulfilment of current Government policy commitments across a range of areas, such as those made in the latest Social Partnership Agreement, Towards 2016.
No budgeting for a rainy day [bar monies to the NPRF]. All the estimates were based on a sunny sunny reading of the future…
…an average growth rate (in both GDP and GNP terms) of 4.2% per annum (in real terms) projected over this period, compared with 5.0% per annum over the 2002-07 period.
And one L. Varadkar was a signed up member to this as he pounded the streets in 2007 as an FG candidate.
Indeed.
I couldn’t really give a (bleep) about Adams’ grasp of neo-liberal economics. I’d be more worried if he was able to waffle on like our so-called managerial politicians from the established parties. They’ve been doing a wonderful job so far!
(I also find it depressing that the same 2007 ‘issues’ – stability – so-called economic knowledge or lack thereof – political managerial talent – etc. are slowly coming back into focus as the main issues. The Left need to follow the KISS principle: Keep the message(s) simple. Attack the govt and FG/Labour on the performace of the neo-liberal economic ideology. There’s no limit of ammunition.)
The spousal unit made a pertinent observation last night: working people may not know how this economic disaster came about but they feel that the entire system is rotten – as are the people who talk about the system with apparent knowledge but never enlighten the uninitiated. Moreover the SU has the impression that the so-called educated in our society, far from being clued-up, are essentially brain washed: “. . . only an educated fool would accept, as natural, being taxed to pay for gambling banker’s mistakes…”.
(As someone with some educational achievement I suppose I should feel somewhat insulted, but it is making me think that she may have a point. )
SU spot on, IMO.
KISS messages: FG/Labour and current EU/IMF debt default postponement policies aren’t working and can’t work. This stability is as false as the one that prevailed in 2007.
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Adams also appeared on LMFM yesterday, I haven’t listened to it but it can’t be a good sign that FF released it as a press release afterwards. http://www.fiannafail.ie/news/entry/6244/
(this is not a direct response at/to Ciarán but just acknowledging his link)
Thx Ciarán, read the FF article and its the same line (almost word for word) that FG and now Labour are using. Only international financial capital, and how much they are willing to charge us in interest, are the means by which we test our abilities and options as a nation. International financial capital is the only means by which we can finance Ireland. We are helpless babes according to the 3 main parties. Comforting, no?
We simply couldn’t raise taxes on the rich; take back our natural resource such as oil into national control and develop such resources for our entire society; nor negotiate with sovereign fund states such as Norway, China or various Middle Eastern countries for short to medium term loans at favourable interest rates – and maybe set up new commerical ties.
The entire language of economics is dominated by neo-liberal jargon – much of which is left unexplained and, I susupect, much of which is unexplainable or, if explainable, wouldn’t appeal to the average working man or woman during an election. That SF or indeed Left leaning people are deemed not au fait with so-called ‘real’ economics is in my book a definite plus.
Those politicians who ‘understand’ economics think that taxing average workers more, cutting social provision for the most vulnerable, increasing unemployment and immigration, and cutting wages for workers at every opportunity is beneficial to Irish society.
Such knowledgeable politicians I can do without.
“That SF or indeed Left leaning people are deemed not au fait with so-called ‘real’ economics is in my book a definite plus.”
The problem is that voters are deeming left wing parties as nice but useless because of this issue. I would disagree with you. I think the left’s loss of reputation on economic matters has been a serious failure on our part and has been one of the reasons that neo-liberalism is still going stron 30 years after Thatcher and Regan launched the first ne-lib heavens both of which didnt create economic miracles as often claimed.
We are shutting ourselves out if we dont excel at economics and economic argument.
There was a session on economics at the Greaves summer school, chaired by Conor McCabe, where Conor made exactly that point. I think he phrased it something like Marx didn’t dismiss the central importance of economic arguments so how can the Left? (Apologies if I’ve misquoted.)
In fairness though TASC and other contributors at the progressive economy blog do produce a lot of detailed economic analysis. The difficulty, one which DublinDilletante (I think it was) raised some months ago elsewhere, is that Left parties in particular don’t have spokespeople who are economically numerate/literate. SF’s Doherty and his recent performances in the Dail may be the start of a change in that respect.
*blush*
Yeo, that’s what I said. Were you there Left? You should have introduced yourself, it would have been nice to meet up. I was talking briefly with sonofstan after that session so it would have been nice as well.
As far as Sinn Fein and economic goes – the main backroom person with regard to the economic analysis provided by Sinn Fein is Joanne Spain. She is highly impressive, has a deep understanding of the economic arguments, is well-versed in economic modelling – the aspect of modern economic which makes the Irish left shit itself – and is one of the reasons why the Department of Finance said with regard to Sinn Fein’s pre-budget submission that they could not criticise it. They did not agree with it, but they could not criticise it. That was in part due to the type of economic model they used, which was that provided by Philip Lane of UCD – widely seen as the government’s economist.
So, not only was the Sinn Fein economics backroom able to understand Philip Lane’s model, they were able to adapt it for growth.
Pearse Doherty has been thrwon in at the deep end with regard to that. The loss of Arthur Morgan here is a bit of a setback as he was in at the ground floor with regard that document and had a deep understanding of the economics behind it.
Now, how deep or how fare this understanding of left-wing heterodox economics goes in Sinn Fein I don’t know. How much in danger is it in being jettionised, ditto. But, one’s thinig is for certain, they learnt from 2007 – not only that they decided to tap into the rich vein of heterodox economics.
que & LATC, you are, of course, correct. As per usual, I was vague and/or obtuse. When I used the word ‘real’ I was alluding to the fact that the MSM and most Irish politicians only accept neo-liberal capitalist economics and its jargon as a basis for discussing all matters financial. Economic argument or analysis in this state, whether fiscal or monetary, is discussed within this narrow framework of NLC doctrine. Those who don’t frame their analysis or solutions within the accepted wisdom, using the buzzwords of the day, are deemed economically illiterate.
Hence the reason why I’d be happy to be deemed economically illiterate. I don’t accept NLC ideology, and I think much of its jargon borders on the mythical allowing the practioners of NLC to say one thing but later claim to mean another – almost always to the detriment of working people.
So, by all means it’s useful to understand finance and monetary policy, and have spokespeople who can convey this knowledge and understanding to the workers of Ireland. But shouldn’t it be framed with the language of the left and economic/ethical concepts of the left? I image if you frame a leftist program using NLC concepts and jargon you’re automatically creating narrative contradictions, since the goals of NLC and left economic policies are not convergent, which would make the left proposals seem absurd and opens the left up to charges of being economically illiterate
Conor, yes I was there and saw yourself and SoS chatting. I’ll introduce myself next time!
Anon-Anon, I’m not an economist so I could be talking through my hat here, but the academic discipline of economics is apolitical in the sense that it frames itself as a science of sorts. You’re correct of course that it is used by the right for a political end. Maybe the challenge for the Left is to get inside economics, as Conor has noted SF’s Joanne Spain has done, and to use the scientific language and techniques to expose and break the assumed connection between the “science” and the political flavouring with which we have become accustomed. A different flavour, a Left flavour, could equally well be applied. Without the underlying science, the facts and figures and models and projections, we’re always open to the accusation of being half-arsed.
LATC, lol, we’d probably need a large bottle of whisky and several hours to discuss how science is applied or related to economics.
For sake of brevity, I think we can agree that there are objective criteria with regard to economic issues and economic model methodologies.
best
A large pot of tea would do me Anon, I can’t handle the strong stuff at all. On the science & economics stuff, my stetements were influenced by Eric Hobsbawm’s book “On History” which has some essays devoted to economics. I’m otherwise unfamiliar with the detail of it as a discipline. Doesn’t stop me from pontificating on it of course…
‘not only was the Sinn Fein economics backroom able to understand Philip Lane’s model, they were able to adapt it for growth.’
To suggest that the left should attempt to gain knowledge of ‘economic facts’ through the prism of a neoclassical economic model, such as Philip Lane’s, is to assume that epistemology can be separated from ideology.
“To suggest that the left should attempt to gain knowledge of ‘economic facts’ through the prism of a neoclassical economic model, such as Philip Lane’s, is to assume that epistemology can be separated from ideology.”
Great phrase. I must remember to use that if I’m ever canvassing.
Ehh, even SF acknowledge that international finance capital is a cornerstone of running the country – and a return to the bond market will be required in short order. Danger of ascribing one’s own views on quite different policy there.
My advice to Adams? Try not placing yourself out the back of SF offices in Andytown when reacting to emerging Dail stories – it just hammers home the ‘removed from events’ meme that, frankly, isn’t all guff. Nice hunger striker themed gate though.
Yeah, Alastair, a country, especially a country without its own currency, may need to borrow money from time to time. I believe sovereign funds from such countries as Norway, China and the Middle East are all considered international, no?
Anyhow, my suggestions, as you suggest, are my own although I’d admit they’ve alreay been mooted by various leftist parties – so are not particularly unique. What’s important is that they represent economic thinking that is no dominated by neo-liberal capitalist jargon and deflecting nonsense.
““I think nothing has changed in the last five years..”
That’s a great quote WBS, thanks for that.
SF members themselves will tell you they have no idea why Grizzly is running for Louth. He does not add gravitias- he adds baggage. Your right, let Doherty lead the charge.
http://www.rte.ie/podcasts/2011/pc/pod-v-2501112ndhour39m28smorningireland.mp3
think i got it on the first link but if not go to the second scroll down to 25th on jan second hour and its about 14min in
think there over stating how bad adams did. hit most of the points from his side of the argument. think critisism is more TINA
That’s a fascinating and vital discussion on ‘economic literacy’ above. In my opionon, we must be suspicious of econonomic models, per se.
It is good that SF have someone who has the technical knowledge to use the accepted models. However, just as we question the rules of the political game, accepting the implicit rules in these models is a serious mistake. Neoclassical economic models are part the embodiment of rules of thumb, part ideological tools and part mathematical fantasy.
The problem lies, I believe, in the kind of science that the economics profession thinks it is doing. Many (especially heterodox, going all the way back to Keynes) economists regard economics as a discursive social science, where underlying processes are analyzed and then, as far as possible, compared with empirical evidence. The contemporary neoclassical economist, however, implicitly claims for their subject the status and real-world applicability of the physical sciences.
The models (and this has something to do with the ideological role of the neoclassical economist as a priest of capitalism) aspire the predictive value and mathematical sophistication of models in the physical sciences. However there is a world of difference between, say a climate model, and a macroeconomic model. The former is founded on well know universal physical laws and a panoply of tested mathematical techniques for modeling and elaborating their effects. The latter lack both of these.
Whatever their aspirations, economic models can’t claim to be like physical models. Firstly, despite what reductionists and purveyors of evolutionary just-so stories would like us to believe, we do not have fundamental laws for the interaction of human beings, economically or socially. Secondly, the mathematical techniques are crude and conventionally make various unjustifiable assumptions about the equilibrium of the system being studied.
The ideological content is in the premises of the model and in the notion that the economy is a natural system, rather than an social game, the rules of which we should be free to alter.
In a word we should beware of the implicit ideology and pseudoscience embedded in ‘economic literacy’, and instead claim the right to invent economic systems compatible with the real physical limitations of our world.
Good contribution Pope. On your point of the in-built ideology within the models, there’s presumably a wealth of ecomonics theory from the Acamedmy of Sciences in the previously “actually existing socialist” states? Not to suggest that such theory and models can be adopted, but more to illustrate the connections between models and ideology, using the “discredited science” of the socialist example as evidence. If that was dodgy then so is this, that type of argument.
There’s a book I’d like to get sometime called “Red Plenty” which I believe centres around the modelling of the economy in the USSR, or how it might have been http://kenmacleod.blogspot.com/2010/05/red-plenty.html
Pope, just to clarify, I’m not saying that Sinn Fein have accepted Philip Lane’s model – I’m saying that they used Phiip Lane’s model in their arguments against the slash and burn rhetoric of the main parties and, indeed, of the department of finance itself.
In other words, they used one of the strengths of their opponent against their opponent.
I would have thought that was good political move, no?
As far as dismissing modelling as neo-classical – I don’t know of any left-wing economist who would take such a stance. When you think of people such as David Harvey, Michael Perelman, Jan Toporowski, Andrew Kilman,and in Ireland people such as Terrence McDonagh and Tom O’Connor – all criticise the type of models put forward in today’s world, but it is because they have endeavoured to understand the machinery of the argument they are criticising.
On a general point, the concept of economic modeling makes sense – if only because when dealing with such large abstract mechanisms such as complex national and international financial and economic frameworks, we need a theoretical conceptual framework in order to give a structure to help us understand just how these mechanisms work. Models form part of this, they are a technique, even though they are used by some economists as Q.E.D. itself.
Now these are dynamic processes, but for myself anyone who tells me that someone is wrong, or that an argument is wrong, and cannot explain why it is wrong – apart from it just is or well it’s all right-wing tosh – that doesn’t wash with me, especially as I know from my own research just how much of what the Irish left wing holds about Irish history and the actual dynamics of the Irish economy is absolute tosh. It is embarrassingly bad, mostly based on conclusions copied from the dynamics of the UK economy and then transplanted onto our shoulders – as if it is possible to take the economic and social class dynamics of the UK need only to be twigged in order to work for Ireland.
These are fast times. The Irish left needs to raise its game. It cant sit around working off cogged economic broadsheets from Britain.
for example, can you tell me the structural defects with Philip Lane’s multiplier with regard to government investment? That’s the model that Sinn Fein used to argue that every one billion spend in investment by the government will lead to a 2.19 billion euro improvement in the economy after 6 years.
Now, Sinn Fein used that model preceisely because it is the one used by the Department of Finance – in other words, if they criticised Sinn Fein’s multiplier effect, they’d be criticising the very theoretical framework they use themselves.
In order to have that level of a sophisticated argument, Sinn Fein – at least the economics think-tank within Sinn Fein – raised their game.
The side-effect is that when Pearse Doherty is asked on TV how Sinn Fein would finance their budget proposals he is able to give an answer.
Yeah, that’s the crucial thing. That if the left is to move beyond the orthodoxy it has to demonstrate that it understands the orthodoxy and can explain not merely how and where it’s going wrong but how to move beyond it is feasible.
It’s true, I mean, if a mechanic told me that my car wasn’t working and when I asked him why he said “it just isn’t” or “well the conceptual frameworks used in modern mechanics are wrong” I probably think he wasn’t much of a mechanic.
A couple of months back the New York Times blog, economix, pointed out how up to 25 per cent of Ireland’s GDP is fiction. A tax fraud. A scam.
what gets me is, why is this coming from New York? How come the Irish left hadn’t been pointing this out?
More importantly why is it that within the Irish left it is STILL believed that corporation tax is a boon to the economy, instead of a drain, which is what it is?
When a couple of journalists in New York know more about the actual dynamics of the Irish economy than what feels like 95 per cent of the Irish Left, that’s a worry, no?
Couldn’t agree with you more.
I know you and I have discussed this face to face and both expressed this online, but it’s worth reiterating again.
Until the Irish left really gets its act together in this regard there’s always going to be a degree of a credibility deficit between intentions [great] and ability to implement [not so great] and this is something the centre and right, and indeed the LP, will use to hammer the left.
SF are as you said streets ahead of where they used to be, with the occasional presentational wobble, but more widely that should be taken up by the left.
All good points Conor – and you’ve got me on the multiplier – no I don’t have the expertise to critise Philip Lane’s model in that detail.
However this does not disqualify me from criticizing the predictive capabilities of this or any other model as a black box. To keep in the realm of mechanics (which I would still maintain is a false analogy because a car is a mechanical as opposed to a human, cultural system) consider the following:
If someone came to me with a model of how
a car’s engine worked, how much power it would output and how much fuel it consumed under varying conditions, and, most importantly,when it was going to overheat and blow a gasket, I would then expect
that model to be tested against a series of physical test runs of those conditions. If the results predicted by the model were dramatically different to what what actually occurred, I would be entitled to ask the modeler to check it and consider the possibility that something was wrong or missing.
Empirically, the models being used by government economists at least, have been very poor predictors of any number of outcomes – from employment, through GDP, to the consequences of levels of debt and the de-leveraging of that debt. They seem to have no predictive power whatsoever over crises such as the one we have been experiencing. Consequently we are entitled to suspect those models and their adequacy as predictors.
As for neoclassical economics, it’s underpinnings and it’s failure to treat economies as dynamic systems, I’d recommend a quick read of Steve Keen’s paper on how even after the crisis economists are falling back on failed theories.
I take all your points on board about the left needing to become much better at answering simple questions like ‘How would you fund the deficit and stimulate the economy if in office?’. I can quite believe most of what the left has imagined about the Irish economy was and is bull, which is why I’m looking forward to your book – when is it coming out BTW?
Of course it’s right to highlight the problems with modern economics – and a great book which takes that approach is Michael Perelman’s Railroading Economic, which is just great, and pretty much says backs up you’re saying here Pop.
But to take Perelman’s book as an example.
He takes the conceptual frameworks and analytical approaches of mainstream right-wing (is that a tautology?) economics and undermines those frameworks and approaches with the original research he has undertaken. And because of his detailed knowledge of the academic displine of economics – he lectures in the subject – he’s able to show the sleigh of hand and outright lies in a way that’s a lot more convincing than just ‘it’s all wrong’ of “it’s not a real science”.
That’s what we need to do – the Left in Ireland that is – we need to show up the fallacy of mainstream economic consensus through a detailed analysis of the actual real economy.
Now this is happening – with TASC, with Progressive Economy, with Michael Taft, Michael Burke, and Tom O’Connor – but we need more of it, and more from a distinctly Marxist background.
As far as knowing the more simple stuff – I mean, if I were to ask any ULA candidate, and possibly every Sinn Fein candidate with the exception of Pearse Doherty – how much does it cost to run the Irish State, how much to run education, health, civil service, how much tax is raised through PAYE, corporation tax, dividends, etc – I’d get the startled rabbit look. But, if you asked a labour councillor in Ireland in 1920 similar types of questions, they knew the bloody answers! I think that level of critical engagement with economic matters needs to come back. The same goes with class studies and class dynamics in Ireland, which really is the area that grabs me and the one I find so frustrating here in Ireland as the idea of class utilized by the Left in Ireland in the main – I remember talking to Garibaldy about this recently – is predicated on conclusions drawn from the class dynamics of the UK. These type of things, basic conscious-formation dynamics, the Irish Left is severely lacking. It just drives me up the wall, that’s all.
As far as the book goes, the editor got back on to me and asked if I’d add a chapter to cover the period up to the EU/IMF deal. I’m supposed to be working on that now, which is why I’m back on cedarlounge – basically I’m skiving off.
‘Economic facts’ should not be confused with economic knowledge.
Well to say you’re welcome back would be an understatement, though looking forward to book. But I think you’re right, we have to have a grasp of basic facts before we approach the electorate.
I see it this way, my shorthand is this and always has been, does a party or formation have a policy on education. Yes? Great. No. Not at the races.
And as with education all else, most particularly economics. Reason is, and I was like this long before WBS jnr. arrived, because that’s the sort of stuff the most activist in any class worry about. If we can’t address that for the working class, and my definition is broad there, then we are failing people as well as not connecting with them. Precisely the same with economics.
I think following the different dynamics of the economy – education ,health, imports, exports, taxation, etc – the numbers involved and WHY those numbers are what they are – why they are not smaller or bigger and so forth – I think each piece of information helps up to form a picture in our heads as to how the economy operates.
It goes back to that Marxist idea of the process as the dynamic – you know that famous line from E.P. Thompson about how class relations are ‘the heat, the thundering noise’ of the machine at work – that once we begin to explore the size and dimensions of the Irish economy, slowly the bigger picture, how these all interact, begins to form in our head.
There’s this scene in season two of the Wire where Lester Freeman is looking at a computer screen of containers coming on and off ships in Baltimore dock, and he’s doing it, he says, so that he gets a sense of the patterns, of how the machine works. and for me, that’s the same with knowing about spending, imports, exports, taxation, etc. It all builds up a sense of how the machine works – and that’s the key, that is what is missing from the Irish Left (in general) – that overall SENSE of how the machine works.
I second what has been said above. We can hardly fend off the right-wing consensus if we cannot speak their language. Truth is, most of the interlocutors in FF, FG, and Labour are economically illiterate as well, they just have a few people who can feed them credible lines and brief them on the basics. The economic plans put forth by the main parties are riddled with problems, but we cannot exploit these because we do not speak the language.
I think the Left needs to start viewing economics and economic models as a rhetorical device which it can harness for our own ends. Perhaps it is time to start up a reading group where Left activists critically read works by mainstream economics by people like Samuelson or Coase or get crash courses in econometrics.
There’s no point in any SF spokesperson trying to give detailed answers or reposts to agressive questioning during this short election campaign. The listener/viewer will only hear the question, not the answer. The education process required to turn this around will only begin with this election.
The best answer available is to turn the tables. This mess is caused by deregulation and slashing taxes thus starving essential public services. FG are committed to the same economic model as FF. Labour will assist in the maintainence of this ‘Irish Thatcherism’ by working with FG. Mentioning Thatcher never does any harm.
By all means have the science in the back pocket, but keep the message broad and don’t forget that there is tons of ammunition out there – look around!
All economic modelling is based on economic theory. As neoclassical economics is the highly developed ideology of capitalism any modelling based on it should be should be treated with extreme scepticism.
@Conor,
The same goes with class studies and class dynamics in Ireland, which really is the area that grabs me and the one I find so frustrating here in Ireland as the idea of class utilized by the Left in Ireland in the main – I remember talking to Garibaldy about this recently – is predicated on conclusions drawn from the class dynamics of the UK
That’s it. I came on to pretty much add something like that to your earlier post, only to find you’d said it already. The left here functions far too much on indignation uninformed by either analysis or theory: as if pointing out that ‘it’s not fair!’ has ever changed anything. You need to know what it is before you can transform it, and, even if the established descriptive language is saturated with ideology, in order to be able to point this out, you need to know how to use said language – and only by knowing it can you guard against being bewitched by it.
yeah I mean what are the wage levels in Ireland, what is the actual dynamic generated by corporation tax, why is cattle STILL the most important indigenous export, how come we have no fisheries industry despite being an island, and how do these fit into a Left analysis of the State?
It’s not about building up a catechism of left-wing answers – we need to have an understanding of all these different elements in order to get that sense of how they interact with each other. The CPI in the 1930s and 1960s did this, and Revolutionary Struggle in the 1970s and 1980s, Kieran Allen as well, so I mean it’s not like the Left is starting from scratch. There is a canon of sorts out there, but it’s the overall sense of an understanding of the dynamics of a State involving millions of people and hundreds of billions of euro a year – that is what is missing. what are the dynamics of that State? what can Marxist studies of agrarian capitalism tell us about the dynamics of the Irish State, its cattle industry, and how that industry influenced, and continues to influence, the State itself?
I’m all in favour of what you are saying here. Crotty’s Irish Agricultural Production is a good place to start on Irish economic history.
I’m merely disputing the notion that a mere knowledge of ‘economic fact’ is knowledge.
And trying to obtain economic knowledge using neo-classical theory is foolish. And so is the notion that mathematical technique is ‘scientific’.
“Too large a proportion of recent “mathematical” economics are mere concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols.”-John Maynard Keynes
I think that there are a number of different things being conflate here:
1) A lack of in depth analysis of Irish capitalist development and Irish society from a Marxist perspective. This is undoubtedly an issue – we do not have an equivalent to a Mariategui or a Gramsci, nor more importantly a collective body of analysis of the depth and rigor needed. This is not to say that no analytical work has been done – instead that much more is needed.
2) The utility of understanding neoclassical economics or more generally the economic views of our opponents.
3) The wisdom of framing our own proposals in the language of neoclassical economics or using models derived from it.
These are three distinct things. You can agree with points 1 and 2 without that dictating a particular answer to issue 3.
Well Mark P, in relation to Sinn Fein and Philip Lane, I thought I made it clear that the thinking behind it – as I understood it anyway – was akin to a chess move. That by using Philip Lane in a pre-budget submission to the Department of finance, Sinn Fein was heading off what would have a direct rebuttal. In fact, the Department of Finance had to admit that they couldn’t fault the submission. does that mean that Sinn Fein’s pre-budget submission is a neo-liberal document?
There are a lot of different things going on here – there are political and electoral dynamics at work,as well as economic analysis. But, having read at this stage more than my fair share of Irish left-wing economic analysis, it is my feeling that the criticisms raised by the Irish Left of modern economics could be made by any left-wing group anywhere in the world.
What I mean is the criticisms are generic. not only that, they come across as generic. and that’s an embarrassment.
Leading on from that, take neo-liberal.
Now the use of neo-liberal in an Irish context drives me mad, as there is nothing “neo” about the economic and class dynamics of the Irish state.
It’s important to recognise that, as it puts Ireland in a different position – we’re not defending a welfare state from attack, we’re still trying to build one.
Yet, neoliberal attack, etc, etc, etc.
It’s generic. Shows a lack of understandiing of the dominance of right-wing thinking in this State, and the reasons why the real civil war split in Irish politics was not between Fine Gael and Fine Fail, but between Fine Fail and Labour.
While it’s true that Ireland doesn’t have a welfare state in the same sense as England, Germany etc., the Irish right-wing have and are continuing to undermine those elements as well as the state and semi-state sector. Most importantly, they are deeply influenced by neo-liberal ideas, which have seeped from the bile duct of the PDs deep into the arteries of FF, FG and Labour. Why shouldn’t we describe attacks by neo-liberal politicians as neo-liberal attacks? Why does neo-liberalism pre-suppose a strong welfare state? I mean the idea was born in the U.S where the welfare state, if you can even call it that, is skeletal in comparison to the U.K. Surely the fact that Ireland only has some elements of a welfare state means that the threat posed by neo-liberalism is even more repellant, almost like starving an already malnourished person?
Conor, I don’t really have time to reply properly at the moment, but I’d suggest that you (at least in this part of the discussion) are partly right but are loading more weight on your argument than it can bear.
Which is to say that it is one thing to argue that not enough attention is paid to the specificity of Irish capitalist development in agitational discourse and a rather different thing to treat Ireland as entirely sui generis and isolate it from international patterns and movements. “Neoliberalism” is not a meaningless term in an Irish context, particularly given that our political elite and local economicists treat certain international trends in economic thought like a cargo cult. Which is not to say that it tells us everything we need to know about Ireland.
If we go back to the original point that sparked this, take Adams performance on radio. The imputation by the right is not simply that his/SF policies are wrong, but that he doesn’t understand economics.
That’s where the danger lies for the left. That not merely are we wrong, but we’re so disengaged/utopian [insert word as applicable] that we don’t understand what is “actually” {I use the quotes to indicate that I disagree with that} what is happening.
That doubly undermines our counter-argument.
And of course Philip Lane isn’t on the lips of everyone when we all go canvassing, but you can bet people will hear a discussion like Adams on the radio and even if they don’t get the substance, and Jesus I’ve spent two years now getting to grips with this myself to greater or lesser degrees of effectiveness, they get the sense of it, whether Adams is winging it or is able to mount a coherent defence.
If the latter, well and good, if the former… well, it can spell trouble.
I also broadly agree re Conors point on neo-liberal.
Well you see this is the problem, isn’t it?
I mean, if it is known that Ireland doesn’t have a welfare state, that it is still in the processing developing one, the question has to be why?
What is it about Irish history and Irish society that saw attempts to develop a proper welfare state successfully resisted?
What are the economic class dynamics and concurrent class-consciousness formations in Ireland which saw Ireland’s social system develop differently to that of the UK post-1922?
In terms of neo-liberalism, its development in Ireland is usually bookmarked with the rise of the PDs.
Yet there is nothing in what the PDs did with taxation, free market orthodoxy, trade and business, that Ireland wasn’t doing in the 1920s and, indeed, in the 1960s.
similarly, the Irish Left uncritically accepts the argument that Ireland was a closed, protectionist, economy until Whittaker and Lemass.
Well, Ireland was NEVER closed, and never particularly protectionist.
Ireland’s structural problem with regard to trade was that it was an open economy but that the openness was towards one country: Britain.
Within these historical developments of economic arguments about trade and welfare, the idea that the tenets of neoliberalism arrived sometime on the back of Des O’Malley in the 1980s are simply wrong.
In terms of Ireland having some kind of neoliberal revolution c.180s-1990s akin to other parts of the western world, it is not only wrong it distorts the dynamics of economic, social and cultural forces which have been at play within the Irish State since its formation in 1922.
The Irish Left has an extremely weak understanding of those dynamics, mainly because its conclusion on the Irish State are taken from two main sources:
the first is the writings of Irish conservative and right-wing historian who have written class dynamics (and indeed the entire Irish working class)almost completely out of Irish history.
The second is popular left-wing texts on the dynamics of late capitalism, which are gorged up and pasted upon those right-wing and conservative views of Irish history.
My problem still remains – the Irish Left will say that Neoliberalism applies to Ireland, but interestingly will not offer any analysis of the economic and social class dynamics with the Irish State – the interactions of these forces over time – as evidence that Neoliberalim arrived when it arrived and changed the course that Irish society was on in the process.
Now, Sinn Fein are a million miles from this as well, but in terms of economic literacy – and left-wing heterodox economic literacy – they currently stand streets ahead of the rest of the Irish Left.
The exception to that literacy is the Communist Party of Ireland, but nobody here wants to admit that!
Nobody “wants to admit it” Conor, because nobody here apart from you and perhaps WbS accepts your premise that framing left wing economic arguments in neoclassical economic language or using neoclassical models is either desirable or evidence of “economic literacy”.
This gets back to my first response to you. In so far as you are arguing that insufficient theoretical work into the specificity of Irish capitalist development has been done, I agree with you. In so far as you are arguing that understanding “mainstream” right wing economic thought is useful I agree with you. But when you argue that the left should be pitching its own economic arguments in those terms, I do not.
Glad to see Mark P, that you have been appoointed spokesperson for everyone on Cedarlounge.
I must have missed that meeting while I was away.
Did they get you a bouquet or anything?
As far as this goes:
“that framing left wing economic arguments in neoclassical economic language or using neoclassical models is either desirable or evidence of “economic literacy”.
now you’re putting words into my mouth. I said that Sinn Fein used Philip Lane’s multiplier effect as a tactic in their dealings with the Department of Finance, to good effect as well.
Donagh has also outlined the reasons why Sinn Fein used Philip Lane’s multiplier effect.
Conor, there is no need to take such an aggressive tone. I used the phrase “nobody here wants…” because your preceding comment ended with the claim that “nobody here wants” to acknowledge the truth of your argument.
And my point remains. Your argument jumps from two fair points about a need for theoretical investigation to unbacked assumptions about how the left should frame its arguments. You may or may not be correct that framing our arguments in those terms is advisable, but it is not a conclusion which flows from the other parts of your argument.
@Mark P:
“Conor, there is no need to take such an aggressive tone. I used the phrase “nobody here wants…” because your preceding comment ended with the claim that “nobody here wants” to acknowledge the truth of your argument.”
You need to read what I said Mark P. I was talking about the Communist Party of Ireland there, and how the CPI has a great grasp of modern economics.
When I said ‘nobody wants to admit it!” I was talking about the CPI and its economic literacy – usually when the CPI is mentioned a chorus of “STALIN! STALIN! STALIN!” breaks out.
So that’s what I was talking about, but you seems to have missed it.
I thought I made it clear that the thinking behind it – as I understood it anyway – was akin to a chess move
What?
Economic literacy isn’t the first thing that springs to mind when I think of the CP, Conor. Then again, neither is Stalin.
A handful of slightly cranky elderly reformists with a streak of nationalism about covers it. Can you point me towards some economic writings of theirs which you find particularly useful?
The Economy for the Common Good – whereas I wouldn’t quite agree with the adoption of the Cuban model, the analysis of the Irish economy in the 20th century is great.
“To suggest that the left should attempt to gain knowledge of ‘economic facts’ through the prism of a neoclassical economic model, such as Philip Lane’s, is to assume that epistemology can be separated from ideology.”
Great phrase. I must remember to use that if I’m ever canvassing.-Conor McCabe
Or. alternatively, if you’re canvassing in a working class neighbourhood you might advocate Philip Lane’s advice to workers that they should ‘internalize’ his neo-classical model and voluntarily accept wage cuts so that economic ‘equilibrium’ can be achieved. Don’t forget to wear a helmet.
“if you’re canvassing in a working class neighbourhood you might advocate Philip Lane’s advice to workers that they should ‘internalize’ his neo-classical model and voluntarily accept wage cuts so that economic ‘equilibrium’ can be achieved.”
Huh? Why would I want to do that?
Perhaps because because you seem to think that Sinn Fein’s use of Philip Lane’s model gives it some legitimacy.
‘neoliberal’ is a common phrase used as short-hand for a complex of ideological positions. The ‘Washington Consensus’ and ‘neoclassical economics’ are also used in much the same vein.
As for the ‘neo’ in neoliberal it is used because liberal economic ideology was discredited by the capitalist crisis of the 1930s. This ideology was revived in the Thatcher and Reagan years, hence the ‘neo’. To use a phrase of Joan Robinson it connotes a ‘rebunking’ of what was previously debunked.
Its very useful in the present Irish context: the neo-liberal policies embodied in the IMF/EU programme for Ireland-austerity, privatization, a more ‘flexible’ labour market-are what the election should be fought over. Sinn Fein’s populist/nationalist alternative is an alternative; whether its an effective one remains to be seen.
Ok, when you get back from that parallel universe you are in where I think these things, give me a call.
The views I have expressed here are commonplace in left wing public discourse, for example David Harvey’s History of Neoliberalism, and Richard Wolff’s ‘Capitalism hits the Fan’.
Critical works on the IMF and its attempt to impose neoliberal solutions are numerous and are readily available, and offer useful insights into the IMF program for Ireland.
Here’s a piece by Andy Storey, a useful contribution to this conversation on the left on the perniciousness of neoliberal doctines and the political necessity to oppose them. Anyone of course is quite free to ignore this public discourse.
Here’s the link to the Andy Storey article
http://www.brettonwoodsproject.org/art-567327
I have just been listening to BBC news interviewing Soros.
IIRC his views were:
Ireland may default next month as settlement was unjust; EU aim to protect bondholders was misguided. Need for new look at Euro!
With the health warning that my summary of his words may have been inaccurate(I was doing some urgent typewriting at the time)IMHO,his words completely undermine the TINA assertions of FF,FG and Labour.
[...] This post was mentioned on Twitter by Miriam Cotton and Fianna Failed, Pope Epopt. Pope Epopt said: http://bit.ly/fWzyak Good discussion of 'economic literacy' on the left on CLR. [...]
Soros has attempted to develop an alternative to the market fundamentalism of neoliberalism. His approach is more dialectical. He calls it reflexive. On this he bases his opposition to the neoliberal project, its doctrines, policies and institutions.
Soros the currency trader?
Tsk, CL, I see you chose to ignore that Andy’s excellent article on the IMF was published in a place where Irish left public discourse, or whatever occurs too, on Irish Left Review.
http://www.irishleftreview.org/2010/12/14/imf-eu-ireland-denying-democracy-defending-rich/
http://news.bbc.co.uk/today/hi/today/newsid_9377000/9377763.stm
I’ve now located a record of the Soros interview [4.24 mins]. It confirms that that my summary was accurate and also includes speculation by Soros about the future”political disintegration of Europe”.
“Neoliberalism” is not a meaningless term in an Irish context, particularly given that our political elite and local economicists treat certain international trends in economic thought like a cargo cult. Which is not to say that it tells us everything we need to know about Ireland.-Mark P. Quite right.
‘Neoliberalism’, orthodox economic doctrine,the dominant capitalist ideology, is the economic philosophy underlying Irish economic policy. One cannot intelligently discuss Irish economic policy without understanding neoliberalism, its origins, its nature and political attempts to implement it.
Fiscal austerity, privatization, cuts in the minimum wage, the ‘liberalization’ of the Irish labour market are not based on some pragmatic calculation of Irish national interest, but are attempts to impose neoliberal economic doctrine on Ireland.
This is the dominant theme in the election, with Labour, F.G. and F.F on one side and Sinn Fein and the U.L.A. on the other; those who support the IMF/EU neoliberal policy and those who oppose it.
The IMF’s 1200 economists preach and practice this doctrine as do Irish ‘neoclassical’ economists such as Philip Lane, which is not surprising because it is the economics taught in most economics departments throughout the world and certainly dominates in the English-speaking countries.
One could call it ‘generic’, (universal might be better) I suppose, but then the capitalism it seeks to legitimate is global, or at least has global ambitions, although obviously individual countries have different economic histories.
Pearse Doherty supported by David McWilliams
The Dept of Finance use Philip Lane’s models and its multiplier effect to calculate the impact of their budget cuts on the economy. He is known as the government’s economist, unofficially, and also one of the most conservative economists whose services are called upon. So it made sense that if you are trying to make an argument that would convince people who don’t want to give you an inch that, of all the models available you would choose those. I think it’s significant that SF presented a pre-budget submission which used those Dept of Finance figures that were available to them and used the same economic models that the Dept used. What SF were able to do however, and what the Dept of Finance never attempted, was to use those models to calculate the positive multiplier effect that would come from government investment.
The Dept of Finance, apparently, were staggered by the result. In fact they were surprised that the return on the investment wasn’t greater, such were the conservative assumptions that SF made in order to ensure that everyone who saw them would be convinced. The most senior civil servant in the Dept of Finance said that they couldn’t refute them and said that they’d have to send Brian Lenihan out to bat for this one. And what did he say? The SF didn’t understand economics. I’m not supporting SF here by the way, just saying that when you’re trying to make a case within a capitalist system that you show alternatives that work within a capitalist system when all of those who oppose you claim that only they know how the capitalist system works and what they say is the only solution.
The reaction so far to SF’s proposals from FF, FG and Labour has been to try and distract attention away from the details because they can’t argue against them on that level. What the left needs to do is to get to grips with the details and make the case again and again.
Regarding default etc (the point Nollaig0 was making), Willem Buiter of Citigroup Global Markets published an interesting report at the beginning of January which looked the Eurozone sovereign debt crisis. The part of the report on Ireland said that the Irish economy couldn’t withstand the level of austerity and the interest rates imposed by the EU on the loans and said that Ireland was heading for default, and the possible way for this to be avoided was if the interest rates on the EU/IMF loans were reduced.
http://www.nber.org/~wbuiter/DoN.pdf
Just after this talk in the EU about maybe reducing the rate on the loan started. Default is Armageddon for these guys. They know they’re ripping us off, so better to reduce the rate than face a serious write down.
That’s a great overview Donagh.
Of course investment has a positive multiplier and depending on the assumptions one makes one can determine the outcome. The use of such mechanical exercises does nothing to increase understanding of economic relationships.The relationships embodied in the technique are derived from the underlying economic doctrine; in the case of Philip Lane and other orthodox economists, neoclassical economics. Using such models gives a legitimacy to the underlying regressive doctrine. This is quite apart from the criticisms levelled by Keynes, a mathematician, at such concoctions.
“Yet there is nothing in what the PDs did with taxation, free market orthodoxy, trade and business, that Ireland wasn’t doing in the 1920s and, indeed, in the 1960s.” C.MC above.
The reason its called NEO-liberalism is because it is a revival of doctrine, in Joan Robinson’s phase, previously debunked.
Ireland has been integrated into capitalism since its inception.
There is no such thing as a ‘neoliberal economy’: such an animal would be an unlivable nightmare.
Neoliberalism is the shorthand phrase used to describe the economic doctrine that seeks through economic policy to ‘liberalise’ all aspects of economic acitvity, through privatization, a more ‘flexible’ labour market etc. These are all commomplaces in leftwing economic discourse.
Irish economic policy is now being supervises by two neoliberal technocrats, Olli Rehn and Ajai Chopra. This Thatcherite policy is being supported by Fianna Fail, Fine Gael and the Labour Party; it is being opposed by Sinn Fein and the U.L.A. This is what the election is all about.
Neoliberalism – ‘a revival of doctrine, in Joan Robinson’s phase, previously debunked.”
Well I would say that there is no revival when it comes to Ireland. And if the Irish Left had a knowledge of the dynamics of Irish economic and social class relations – as well as a knowledge of the actual economic history of the State – they would know that to talk about neoliberlaism in Ireland as a revival of doctrine previously debunked is, well, wrong.
I mean, just to expand on that. The argument usually put forward as to the conservatism of the State is the influence of the Church – yet the Church is not a class. The poor as not a class. I don’t expect middle class historians so say that in reality the Middle Class fucked us over – but at the same time I don’t expect the Left to accept it as well.
Another point with regard to Left/Marxist readings of Irish society – the complete and utter lack of any understanding of the dynamics of agrarian capitalism, except in the British Marxist view of agrarian capitalism as a stage towards full capitalism.
Current Irish economic policy, supervised by the neo-liberal technocrats, Olli Rehn and Ajai Chopra, is currently being enacted in the Finance Bill, which gives effect to the IMF neoliberal prescriptions signed up to by Fianna Fail in the Memorandum of Understanding with the IMF, and supported by Fine Gael and Labour.
You may not consider this a ‘revival’ of neoliberalism. Fine. But neoliberalism it is as any acquaintance with the vast literature on the IMF and its doctrines makes clear.
This regressive economic doctrine is also more colloquially referred to as Thatcherism or Reaganism or ‘the Washington Consensus’.
You have a valid point about class and class relations.
“economic doctrines and ideas can be seen to have been amongst the most important and influential forms of ideology. As with other forms of ideology, the evolution of economic ideas depends directly upon the evolution of economic forms and the class struggle.”-
Isaac Ilyich Rubin, ‘A History of Economic Thought’, Moscow, 1929
This is true of neoliberal economics, as is evident in the attacks on the Irish working class now being enacted in Dail Eireann. Claiming that Irish neoliberal economic policy does not exist won’t make it go way; better to understand it, recognize it for what it is, organize and oppose it in the coming election.
But what, CL, does using the neo-liberal ‘model’ bring to an analysis of Irish politics? I would say it brings very little since the analogy between Ireland and the UK or the US is very limited. For example, how does it help explain Fianna Fail habit of raising spending to match their political cycles? Nor does it help explain the social conservatism that plagues Ireland. Stopping the ‘neo-liberal agenda’ is not enough per se, we have to know what exactly the government is doing and what the actual effect of those policies are/will be.
I would that, while the political class is guilty of partaking in intellectual cargo cults, this is no excuse for the Left doing the same.
I also fail to see how ‘neo-liberalism’ works are a rhetorical device. How many people on the street will know what Joe Higgin’s means when he talks about ‘stopping the neo-liberal agenda’? It is hardly a phrase that is going attract more voters or heighten awareness. Were someone to ban the statement, I doubt that the Left would lose anything.
Huh?
I’m a neo-liberal denier now, am I?
I’m saying that there is a continuity in economic policy, not a revival. The historical evidence shows that, the dynamics of class relations in this state since 1922 also show that – indeed, the very areas that the Irish Left should be fluent in, but know very little about, show that.
I think it’s interesting, though, how you quote Rubin from 1929 but not O’Neill from 1933.
‘utter lack of any understanding of the dynamics of agrarian capitalism, except in the British Marxist view of agrarian capitalism as a stage towards full capitalism.’ Also true. The vulgar, teleological distortion of British marxist stages theory is refuted by Marx himself in his writings on Ireland.
I mentioned Crotty before because of his acceptance of the notion of economic surplus. He saw clearly that the graceful Georgian squares of Dublin were made possible economically by the surplus produced by Irish peasants. Such a view of economic history is impossible in a neoclassical perspective where the surplus does not exist; looking at the economy through the prism of neoclassical economics one is denied this important insight.
(And now I must battle a foot of snow as I make my way to the subway and work to produce some surplus value) Solidarity,-for now.
The ‘Adams doesn’t have a clue about economics’ line made Gift Grub this morning, as did Burton’s outbursts against Joe Higgins. Just so you know.
People shouldn’t elect candidates who have ‘economic ignorance.’ It looks like Adams is that kind of candidate. Leaders of this country should also think of and prepare for a future that is not so sunny for times and seasons change and we can’t predict only good things will happen in the future.
[...] of inertia is that of “economic illiteracy.” This notion was discussed in some depth at CLR recently. The term itself is interesting; one would tend to favour numeracy, rather than literacy, [...]