Small is beautiful
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The strength of the idea of private enterprise lies in its terrifying simplicity. It suggests that the totality of life can be reduced to one aspect - profits
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Today, Thursday is the 20th anniversary of the death one of the
world's best selling and possibly least regarded economists. E F
Schumacher.
In 1973 Schumacher published a book titled Small is Beautiful - A
study of Economics as if People Mattered. The book is easy to
read and highly informative and has sold 4 million copies across
the world. While Schumacher's philosophy is not socialist
republican his indictment of free market economics and
transnational economic unions will strike a chord with Irish
republicans.
For example he writes: ``The strength of the idea of private
enterprise lies in its terrifying simplicity. It suggests that
the totality of life can be reduced to one aspect - profits''. He
calls the idea of the market ``the institutionalisation of
individualism and non-responsibility''.
On the ideology of the market Scumacher writes that ``let no-one
befog the issue by asking whether a particular action is
conducive to the wealth and well being of society, whether it
leads to moral, aesthetic, or cultural enrichment. Simply find
out whether it pays; simply investigate whether there is an
alternative that pays better. If there is, choose the
alternative''.
Schumacher's work offers a range of telling indictments on
economics as a science, on the belief that greater size in
companies, in cities and economies is the only route forward.
He also tackles the role technology and mass communications will
have on society. Much of his analysis has been proven in recent
years and the central core of his work - the need for autonomous
independent states who control their own economic destinies has
never been more relevant.
Schumacher's book is available in most stores but if you hunt
around the second-hand shops you can possibly get it for a £1.
It's well worth the search.
Time to invest in people
In December 1997 Patrick Mayhew increased `security' spending by
£120 million. Mowlam's announcement last weekend means that at
the very least this spending should be diverted to other areas.
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It's not often that the Dublin and London governments act in
tandem when dealing with the Irish economy, but both governments
find themselves this autumn in a similar position. Both are
preparing budgets and spending plans for the coming year.
Both governments are also in a unique position as they come to
the next spending period with excess money to spend. Both
governments also face the common problems of how to deal with
long-term unemployment, how to tackle endemic disadvantage,
inadequate housing and living standards, as well as rural
underdevelopment, not to mention the pressing need for a border
regions development initiative.
In the Six Counties last Friday, Mo Mowlam told the media she was
accepting the bona fides of the IRA cessation. So now we are
facing a scenario where the budgetary spending of the British
government on its so-called `security' spending should be
substantially reduced. It follows then that this spending should
be used for social priorities and should not disappear back into
the British exchequer.
Under the Conservative administration, it was planned that
spending for 1997/98 would fall by 2%. Now the Labour Government
has a chance to reverse this plan. In December 1997 Patrick
Mayhew increased `security' spending by £120 million. Mowlam's
announcement last weekend means that at the very least this
spending should be diverted to other areas.
In the 26 Counties, official figures for tax revenue released
this week showed a 14.7% growth in the tax take so far this year.
The Fianna Fáil/ Progressive Democrat coalition face a scenario
where they have a £736 million surplus of income over expenditure
half way into the year.
Both governments have exceptional circumstances to divert
spending into the social and economic priorities that have been
ignored in previous years. For now though, the likelihood of this
happening seems remote.
In the Six Counties there has been no comment on the prospects of
diverting funds away from unnecessary military spending and in
the 26 Counties the focus is only on tax cuts. It is time for
both governments to move beyond the short term and think how can
they best help the people of Ireland. The first step is to think
of putting people first when formulating plans for economic
development. They need to invest in housing, in health and
education, they need to invest in people.
Low wage ghetto
What do 26-County workers have in common with their counterparts
in the USA? Well the 26 Counties vies with the USA for the
highest growth in wage inequality between the years 1987 and
1994. A new survey published by the Economic and Social Research
Institute (ESRI) shows that the 26 Counties has the highest
proportion of low paid workers in the industrialised world.
In the survey a low paid worker is someone who earns less than
two thirds of the median wage. The median wage is the earnings of
the people working half way between the lowest and highest paid
in the state.
In 1987 21% of 26-County workers were earnings wages below this
mark. In 1994 24% of workers were below the median level. Only
the USA at 25% has a higher proportion of workers in this
category.
ESB wage hike
ESB had to delay appointing a new chief executive this week
because of a dispute between the government and the ESB over his
salary.
Under agreed guidelines the new chief executive Ken O'Hara's
salary package could not have topped £105,000. However the ESB
board have negotiated a salary of £150,000 with him. This was on
the basis of the Buckley Report on Public Sector Pay published
last March, which allowed for substantially increased wages for
the bosses of public sector companies. Already the bosses of
Telecom and Aer Lingus earn in excess of the agreed guidelines.
The cabinet have suspended implementation of the Buckley Report
because the wage increases envisaged are substantially higher
than what Joe Soap workers will get under Partnership 2000. Maybe
it is time to look at the wage packets of Telecom and Aer Lingus
and impose some wage cuts there.
Germany rules
Who controls the 26-County economy? Last week German Bundesbank
President Hans Tietmeyer showed the power he wields.
Tietmeyer proclaimed that one EU currency would need to be
revalued. The punt currently at the top of the EU currency grid
is the obvious candidate. His comments led to ``steady foreign
buying'' of Dublin Government bonds, pushing up bond prices. This
shows the Bundesbank's power and is tangible proof of how eroded
our economic sovereignty is.
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