Capitalist crisis & default - Can Ireland Go it Alone?


As the scale of the debts loaded onto the Irish people became clear, the calls for defaulting became louder. The moral argument for default is certainly strong: why should Irish workers pay for the poor decisions of Irish and European capitalists? But justified though it may be, would defaulting cause more pain than gain?

The counter-argument, which has been a constant refrain from the government since the crisis began, is that if Ireland doesn’t assume the debts of the banks, then international credit will dry up and we’ll be unable to finance our state-run essential services.

Lenihan’s argument makes one thing obvious: Ireland is enmeshed in a global economic system that leaves precious little room for manoeuvre. Of course, with the arrival of the EU Commission and the IMF to directly oversee operations here, nobody even bothers to say that Ireland is a sovereign country anymore.

What does this mean for alternatives?

One option would be to place Irish industry under public control. However, the current owners of this capital would try to withdraw it and shift it overseas. This in itself could lead to economic collapse.

It should be clear to everyone that a small country like Ireland cannot operate in economic isolation. It was hard enough for a large one like the USSR to do so and it’s simply impossible for Ireland to survive unless it’s our ambition to become a latter day version of North Korea.

Irish nationalist projects are therefore a waste of time. There is no point in fighting to return to being a minor player in the capitalist system, especially as it’s only an illusion of sovereignty.

The economic crisis is an international one and as such it can only be solved internationally. The only question is whether that solution is going to be a capitalist one or a socialist one. At the moment, despite the severe dent to the credibility of neo-liberalism, and indeed capitalism itself, it remains the dominant ideology amongst the population at large.

Indeed its dominance reaches so deep that most people aren’t even aware that they support it. There are lots of complex reasons for this dominance, but one that can’t be avoided by the left is the lack of a viable alternative.

The Soviet Union versus Socialism

Mention socialism and most people think of the USSR and immediately associate the concept with failure. With the absence of a vibrant labour movement advancing the idea that socialism is possible, most people fall back on the ideology pervading society.

It is up to the left to respond to the crisis and advance plausible socialist solutions. A keystone of any viable alternative to capitalism is going to be its internationalism.

Just over a month ago there were major strikes in France and, as the crisis gets worse, they could easily break out again. It is almost impossible to know what could spark a renewal of the struggle there, but given the fragility of the European financial system an Irish default – if it was on the basis of rejecting domination by capital itself – could well serve as the inspiration.

It is in this context and with our eyes firmly oriented towards developing international solutions that a default would make sense. Otherwise Lenihan is right. The difference is that the government and the main opposition parties only think within a capitalist mental framework. It’s time to broaden our horizons.

The wealth that capitalists own isn’t so much the Euros they have in the bank, but their control of the production process that generates those very Euros. And that control depends on dominating workers and getting them to produce commodities for the capitalists to sell on a profit.

So capitalists withdrawing their wealth and moving it overseas is only a problem if they can take the production process itself away. Currently they have that ability, but it’s not a law of nature that they always will. If enough countries moved towards a socialist society and put businesses under public control then capitalists wouldn’t find it so easy to move overseas and at the very least we’d be able to produce enough ourselves to maintain our society.

Realistically, Ireland must unite with Europe if it is to avoid a pillaging. This means something different than the EU, given its current role as an agent of European capitalism rather than as a representative of the interests of the people of Europe. But the takeover by the EU of the Irish finances has the advantage of focussing our attention away from the charade at Leinster House and gets us thinking on a bigger scale. There is zero point in trying to go back to a pre-EU era of Irish independence, which after all was only ever a disguise for us being an adjunct of the UK.

Only large countries have a chance of maintaining genuine sovereignty in the face of the power of the financial markets. And if any country is to be democratic it’s going to have to be socialist. Unless we wish to remain supine before the wealthy elite, we’re going to have ditch primitive notions of national independence, embrace the idea that democracy is only meaningful if there is economic equality and be ambitious enough to try these radical ideas on an international scale.