|Fianna Fáil waves goodbye|
If there is one OECD economy that can be considered a place where the logic of neoliberal shock therapy — what Naomi Klein has dubbed the “shock doctrine” — was used most brazenly to solve a crisis of neoliberalism itself, it would have to be Ireland. The result has been nothing short of a social disaster, and it is this that lies behind the dramatic political rupture seen in the election last weekend.
Most significantly, Fianna Fáil, the centre-right nationalist party that has dominated Irish politics since 1932, only twice dipping below 40 percent of the vote and holding the allegiance of a significant proportion of the working class, has been cut down to a humiliating 17 percent (as low as 8 percent in Dublin). The main beneficiaries have been the other centre-right party, Fine Gael, and its likely coalition partner, the centre-left Labour Party. But there has also emerged a clear Left vote, with Sinn Fein rising from four to 14 seats and the openly socialist United Left Alliance winning five seats.
Perhaps most interesting in view of current political arrangements in Australia, the Irish Green Party — which had been in coalition with Fianna Fáil — was routed, losing all six of its MPs. Rather than being able to use its place in government as a springboard for greater things, it has left office almost universally despised and riven by a series of internal splits. I’ll return to the Greens in a while, but first it is worth looking at the roots of this seismic political reconfiguration and the near-certainty that the instability will increase in the months and years ahead.
Of tigers and leprechauns
Not so long ago dubbed the “Celtic Tiger” Ireland was a shining star of the free market mania that swept the world after the fall of the Berlin Wall. Here was a country where rapid growth could proceed on liberal principles, allowing it to overtake many others thanks to its economic “openness” and “flexibility”. New York Times columnist Thomas Friedman, writing in 2005, could barely restrain himself in praising the model embodied by this “leapin’ leprechaun”:
Given that Ireland received more foreign direct investment from the U.S. in 2003 than China received from the U.S., the Germans and French may want to take a few tips from the Celtic Tiger. One of the first reforms Ireland instituted was to make it easier to fire people, without having to pay years of severance. Sounds brutal, I know. But the easier it is to fire people, the more willing companies are to hire people.
In the latest New Left Review Daniel Finn has pointed out that as the global financial crisis hit in late 2008, Ireland had an economy with a stagnating manufacturing base, an over-reliance on foreign direct investment (attracted by its low-tax status), a housing bubble of gargantuan proportions and a bloated, unsustainable financial services sector. Not only that, but the country’s prosperity was tied up with a political system that had fostered systematic corruption, much of it centred on Fianna Fáil’s networks of patronage.
Alongside these contradictions were the social problems created by a growth strategy based on holding down wages and limiting public spending on social goods. In contrast to the picture later painted by deficit hawks, Irish government spending seriously lagged GDP growth and public sector jobs shrank as a proportion of total employment. At the height of the boom Ireland came second-to-last on OECD ratings of poverty and inequality. I vividly remember, when I visited in 1999, meeting young workers employed in skilled jobs in the booming technology sector having to share bedrooms (let alone flats) in order to pay rent on their meagre wages.
When the crisis hit (well before the GFC), the response of the government was to bail out the banks, guaranteeing toxic debt with public money. There was no stimulus package to save jobs here, only a complex arrangement to ensure that ordinary taxpayers would fund the revival and reconstruction of a rapacious financial sector. Finance Minister Brian Lenihan boasted that he’d delivered “the cheapest bailout in history”, but as the true scale of the debts came into view, the bill just kept going up and up.
The result was a massive collapse in production, a staggering 9.4 percent decrease in GDP in the year to the first quarter of 2009, and a total of 12.9 percent before a single quarter of “recovery” fizzled into two more of stagnation. Whereas a historically high unemployment rate had been reduced to under 5 percent between 2001-2007, it had rocketed to 13.8 percent by late last year.
In these circumstances it is difficult to overstate the level of anger caused by the crisis, exacerbated by the shameless pandering of the political class to big business and the demands of the European Central Bank for debts to be repaid. There is bitter irony in the fact the boom of the Celtic Tiger was sold as creating a strong and independent Irish economy yet has left it in hock to the bankers of much richer European nations to a staggering degree. It has moved even the normally pliant, “social partnership” oriented leaders of the Irish trade unions to organise something of a fightback — although their preference for seeking a place at the negotiating table (even offering pre-emptive concessions) has seen well-attended national protests limited to one-day affairs despite the government’s refusal to play ball.
It is in such a scenario — a deep and prolonged structural crisis, the delegitimizing of a hegemonic neoliberal ideology, and subaltern resistance being kept partial (or “reformist”) in character — that a social crisis tends to break through into politics mainly at the level of the parliamentary system. But broken through it has, and spectacularly so. Electoral politics has a tendency to seriously lag developments on the ground, with long-held loyalties derived (if indirectly) from basic class and/or national identifications surviving long past their real existence when transposed to the ballot box. The decomposition of traditional political constituencies bubbled beneath the surface throughout the boom years, but the ferocity of the crisis exposed it for all to see. Nevertheless, even now the political realignments taking place in Ireland only appear in the electoral field through a series of complex mediations.
In this maelstrom came the Greens, a party that really achieved major electoral success for the first time at the 2002 general election, when it won six seats. Despite increasing its vote it won the same number in 2007, and while it had seemed to rule out a coalition with Fianna Fáil beforehand, it ended up making a deal to enter government, supported in this by 86 percent of members. Demonstrating predictive powers greater than political nous, one Green Party MP even wrote on his blog before the deal, “Let’s be clear. A deal with Fianna Fáil would be a deal with the devil. We would be spat out after 5 years, and decimated as a Party.”
Despite projecting a left-wing image, in power the Greens did little to push their environmental priorities, and once the economic crisis hit they became central to the government’s effort to sell the bailouts and austerity. By the 2009 council elections it was clear that their electoral base was fragmenting. The party’s MPs supported cuts to spending on public transport, school buildings, water infrastructure and research on sustainable energy in the 2009 Budget, all of which ran against their stated environmental agenda. The collapse of the party’s base led it to be ever more reliant on its place in the government, with leader John Gormley apparently arguing to his dwindling membership that the party should stay in government to achieve “nothing less than the transformation of society and the economy”. Yeah, right.
While some may argue the Irish Greens are a radically different beast to other Green parties around the world, reading an interview with high-profile councillors who left the party in 2009 in protest suggests they are much like Greens we’re familiar with here. While organisationally weaker, the Irish Greens seem to have had significant roots in activist campaigns. The tension between pragmatism and principles they describe is one the Australian Greens have been wrestling with. It strikes me that the difference is that the Australian party is able to drive a harder bargain around some issues because of its greater electoral weight, but it also seems that it is similarly weak on economic questions. The focus on playing a constructive role in alliance with the main government party is leading the Greens here to play along with Gillard’s neoliberal agenda. While the scale of economic crisis has to date been much smaller here, the same logic seems to apply. Furthermore, it is now obvious that the global crisis was anything but a singularity, instead spreading and mutating across the world with no end yet in sight.
On Insiders last Sunday Laura Tingle spoke of how Gillard and Swan’s desire for “economic credibility” would likely lead to “very big spending cuts” in the Budget, so as to deliver a big surplus. The constant calls for “economic reform” of the type delivered by Hawke and Keating in the 1980s — which of course were all about shifting wealth upwards — can only lead in one direction. How the Greens deal with this remains to be seen, but it is not certain that they will be able to (or even think they should) oppose all the attacks on public services being planned any more than their Irish counterparts did. If parties with deep social roots like Fianna Fáil once had can implode so ignominiously, what will happen to a smaller, less socially and ideologically coherent party like the Greens when faced with the contradictions of being in office in an economic crisis? Especially when you have the entire capitalist class demanding you resolve it in its favour?