Cowards of the county

A common theme of the crisis has been the idea that the eyes of the world are on Ireland, a coded – and sometimes not so coded – way of tellings dissenters to button it for fear their flappy jaws will land us in even more trouble with those we like to call our European ‘partners’, for want of a better word to describe them. Business, policy and media elites, eager to embrace what they see as the shiny cosmopolitanism of an imaginary Europe in the sky, are slow to point out that European institutions may not have the best interests of all classes of Irish society at heart. The word ‘Euroscepticism’ has been transmogrified, and is now just another sock to stuff in the mouth of anyone who would criticise power differentials. This, writes Hugh Green, has everything to do with looking after narrow national class interests, and nothing to do with the advancement of a European-led universalism.

European Central Bank chief Jean-Claude Trichet was reported recently in the Irish Times as saying that the terms of Ireland's EU-IMF 'bailout' plan had been approved by the ‘entire world’. The world according to Trichet, of course, doesn't include the broad mass of people living and working in Ireland because, quite simply, they're not part of his concern.

It doesn't matter to Trichet how much unemployment there is in Ireland, or what sort of burden the EU-IMF crackpot plan imposes on ordinary people: what matters to him is maintaining the stability of the financial system.

Warning there had been ‘behaviour in a very improper manner’, Trichet stood prepared to adminster a good dose of sado-monetarism as a necessary corrective. He reiterated that price stability was still a top priority, and he had an interest rate instrument and wasn't afraid to use it.

Why does the ECB exist anyway? Short answer: controlling inflation. It is presented to the population as a collection of objectively-minded, mildly obsessive technocrats who survey the broad sweep of economic activity and make adjustments here and there in order to keep the gears of that divine system of industry and trade, known as the common market, nicely oiled. But that is not the full story.

Marx is often misquoted as saying that the State was the executive committee of the bourgeoisie. What he actually said was that the executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie. Still, this does not detract too much from the old joke that ECB stands for Executive Committee of the Bourgeoisie.

In a recent Guardian article, Dean Baker of the Centre for Economic and Policy Research observes that fighting inflation –‘the holy grail of central banks’- is treated as outside the realm of normal political debate. ‘On slightly more careful inspection,' Baker continues, ‘inflation-fighting is actually a policy that is designed to ensure that the wages of ordinary workers do not grow too rapidly.’

To Baker, it is crucial to understand the way the debate is framed. The claims to inflation-fighting are part of the mechanisms that redistribute income upward. His insight on America can also be applied to Europe, and, by extension, to Ireland.

As long as progressives ignore the rules that are designed to redistribute income upward, they will be left fighting over crumbs. There is no way that government interventions will reverse a rigged market. For some reason, most of the people in the national political debate who consider themselves progressive do not seem to understand this fact.

What happens when the ECB raises interest rates, as it surely will sometime soon?

When central banks jack up interest rates to tame inflation, the CEOs at Goldman Sachs and JP Morgan won't be out on the street. The people who lose their jobs will be factory workers, store clerks and other less privileged workers. Raising unemployment among the group of less educated workers keeps their wages down. In other words, controlling inflation is about making sure that the wages of less educated workers don't rise relative to the wages of more educated workers. And the central banks have a licence to push as hard as they like in this direction.

Incredibly, the vast majority of progressives go along with this central bank squeeze. They accept the absurd notion that this upward redistribution by the central banks is simply apolitical monetary policy and agree not to criticise the central bank.

When a central bank ploughs forward with its inflation-busting remit, and when leftists turn a blind eye to why it is doing this, it remans unseen as a powerful instrument for class war.

In Ireland, the class dimension to the European Central Bank's operations is ignored. First, because the media denies class exists. Second, because there is a conscious identification, on the part of business, policy and media elites, with the cosmopolitan character of European institutions, including the European Central Bank. They contrast this with the insular outlook that comes from the essentially backward, parish pump nature of Irish institutions.

A form of negative projective identification afflicts these business, policy and media elites. They point at an insular xenophobic rabble, because they want to present themselves as occupying a position of command. At the same time, they are anxious about their status as very small fish in a very big pond. And so when they talk about the European Central Bank, it is as though they were talking about a benevolent uncle, giving the wayward Irish a dig-out.

There are all sorts of patent absurdities in play when politicians talk about the European Union. Consider Brian Lenihan's claim, when pressed on the idea that Ireland had lost sovereignty on account of the EU-IMF bailout, that in fact, Ireland had long ‘pooled its sovereignty’ with other countries in Europe. The obvious question to pose, faced with this answer, ought to have been when precisely the people of Ireland will get their go at managing the affairs of France and Germany.

Consider also when there is talk about ‘our European partners’. The ‘par’ bit of the word ‘partner’ implies equal, as in primo inter pares. Strangely, the newspapers seldom talk about Brian Cowen in the same breath as Sarkozy and Merkel when it comes to the most powerful actors on the European stage. But how could this be? Is Brian Cowen not the equal of M. Sarkozy? Short answer: no. Everyone knows this - that is why they wet themselves with laughter at the idea of Enda Kenny stcking it to Sarkozy and Merkel.

There is also the idea of Ireland punching above its weight in Europe, in the manner of a featherweight pugilist with a fierce left hook: Barry McGuigan in the form of a state. And then there is the idea of Ireland as canny poker player, last put to good use in the EU-IMF bailout negotiations by Batt O'Keeffe - I suggested shortly after on #budgetjam that:

The Irish government had taken on the mantle of The Gambler in the Kenny Rogers song: it was a matter of knowing when to hold 'em and when to fold 'em. When the government folded a week later, shovelling the contents of the National Pension Reserve Fund into the state's banking furnaces, it was The Coward of The County's 'twenty years of crawlin' that seemed more appropriate.

The Gambler/Coward of the County dyad, if you will, dominates how Ireland's relations with European institutions are portrayed. On the one hand, you have the idea that the country is locked into a game of wits with the ECB or whoever, and there is one last ace held up the country's sleeve, some means of turning the tables and leaving the Eurocrats ashen-faced. On the other, European institutions are presented as standing poised to crush even the most minor act of lèse majesté.

A panel discussion on the Marian Finucane show this week included economist Tom O'Connor and - to paraphrase what they used to say about PUP members, a man understood to have an insight into IMF activities, Donal Donovan. O'Connor was constantly interrupted for attempting to suggest that Ireland ought to borrow money for investment activities and that there was a need for a negotiated political solution, involving other EU countries, to the burden created by the EU-IMF bailout. Donovan at one stage informed him that his loose talk was dangerous, and levelled the accusation of ‘populism’, as opposed to his own ‘pragmatism’, which entailed shouldering the full burden of repayment wth one's mouth shut, lest the powers that be decided to inflict great vengeance and furious anger.

‘Loose lips sink ships’ thinking is gaining ground. When Labour Party leader Eamon Gilmore recently claimed that it was ‘Frankfurt's way or Labour's way’, an Irish Times letter-writer demanded that Gilmore immediately apologise for 'going overboard in the manner of his rhetoric', lest it offend Germany. Backing away slowly from the Letters Page towards safer ground, the Irish Times's resident economics boffin Dan O'Brien was equally perturbed, accusing Gilmore of ‘especially heightened Eurosceptic fever’, and, fearing that ‘utterances made in this campaign will echo far beyond this country’s shores’, expressed the hope that Gilmore would put a sock in it.

The Coward of the County talk on display here, this don't-let's-be-beastly-to-the-authorities sentiment, is quite remarkable, and points up just how supine Irish public opinion can be.

Even though Gilmore's rhetoric will not be backed up by substantial action, and even though ‘Frankfurt’ is more a metonym for the European Central Bank than one for Germany, any politician that sought to represent the interests of the population in Ireland - and workers across Europe - would be completely justified in pointing the finger at successive German governments, and German banks.

It is not just that German banks loaned outrageous sums to Irish banks, an act for which the Irish population bears no responsibility whatever: it is that the policies pursued by successive German governments are immensely destructive to Ireland’s economy. German workers have been getting paid much less than what corresponds to them on account of their high productivity, and this has kept German domestic demand low. The German government shows no sign of any inclination to reflate the German economy, a move that would raise German salaries and thus raise German demand for imports, thereby stimulating the European economy. It would prefer to see further wage cuts in the PIIGS countries, a move that will plunge these countries into even deeper recession.

Not only that, but Germany is seeking the application of a ‘debt brake’, whereby countries would introduce constitutional changes to limit the size of their budget deficits, in imitation of their own ‘balanced budget’, constitutional amendement. According to an Irish Times editorial, both Fine Gael and Labour have, remarkably, expressed approval for this idea. At the time of Germany’s ‘balanced budget’ constitutional amendment, which is basically what the Germans want for the rest of Europe, Wolfgang Munchau, writing in the Financial Times, described the move as ‘an extreme measure – like locking the door, and throwing the keys away’. The measure, he continued, was ‘a moral crusade, and it is the last thing, Germany, the eurozone and the world need right now’.

Yet there is seldom any direct criticism of the German government in Ireland. You would think such criticism might be a good idea, seeing as the German government is complicit in the destruction of the fabric of Irish society (pointing the finger at Germany should not, of course, let anyone else off the hook). The fear among Irish opinion makers is that remarks such as that of Gilmore's will show the side up.

Against The Coward of the County talk of ‘toning down the rhetoric’, as expressed by the likes of Dan O'Brien and Donal Donovan, the rhetoric must be amplified tenfold, hundredfold. This is essential to raise public awareness of how European institutions - as instruments of class power - are shafting the Irish population.

Elite opinion-formers will seek to present basic statements of worker solidarity as instances of xenophobia, ‘Euroscepticism’ and loose lips sinking ships. The function of the term ‘Euroscepticism’, in this context, is similar to that of the accusation of ‘anti-Americanism’ when the policies of the United States government are criticised: a way of stifling dissent and of glorifyng the power of the corporate state. We ought to know by now that this has everything to do with looking after narrow national class interests and zero to do with the advancement of a European-led universalism.

(Image top via blech on Flickr)