It is often said that economics is too serious a thing to be left to the economists. A more accurate and honest statement would be that economics is too serious a thing to be left to the bourgeois economists.
Everything about economics is political and all of those who make pronouncements on economic matters are making political pronouncements also. Let us not forget that the original name for economics was political economy and, as has been noted recently, it is high time that we began to refer to it as such once again.
So, when a right-wing government commissions a right-wing economist to compile a report to investigate ‘rationalisation’ of Public Service Numbers and Expenditure Programmes, to use the report’s full title, you can really only expect one outcome.
The author of the report of ‘An Bord Snip Nua’, UCD economist Colm McCarthy, has a long career in academia and economic consultancy behind him, including work promoting the merits of the neo-liberal agenda to government and Leinster House politicians. Even a cursory look at the findings contained in his report show that he has approached the task of identifying cuts to public services in an ideologically biased way; in writing his report, McCarthy had a very definite set of preconceived notions about the types of measures that would need to be taken.
Was it ever going to be otherwise?
In accordance with the economic worldview he espouses, McCarthy has produced a report that is based upon a number of fundamental economic premises. These revolve around the notion that the system in the Twenty-Six Counties needs only to be adjusted so as to restore it to its former glory; i.e. while we have experienced a major crisis, there is no alternative to the present economic mode of organisation and production, and, things will recover in time. The market is going through a period of correction and the job of government in this instance is to manage its finances in a way that best corresponds with this reality and, of course, facilitates the development of another round of profiteering and capitalist economic growth.
The economic model that McCarthy and all other servants of the interests of capital espouse is one that views periods of boom, bubble and bust as normal parts of the ‘business cycle’. From their ivory towers, they see the economy in terms only of statistics and financial values. In short, they see economics in a way that is completely removed from the real lives of working class people.
At best, when they do acknowledge the human and social aspects of the economy they do so entirely on the understanding that it is people that serve the economy and not the economy that should serve people.
The anti-social and anti-working class agenda contained in the McCarthy report is indicative of the bankruptcy and dishonesty of bourgeois economic and political thought. To achieve cuts to the amount of O5.6 billion [#4.8 billion], the report proposes that those who contributed most to wealth creation during the last 15 years, at a time when they now find themselves unemployed in greater and greater numbers and in need of decent and accessible social services, should now suffer further at the hands of a state that is prepared to slash away whole swathes of areas of social provision in health, education and social welfare.
McCarthy has proposed a whole range of not so much snips but swingeing amputations of vital aspects of public and social services. This is keeping in line with the report’s neo-liberal acceptance of the idea of the ‘smaller state’ and of the desirability of ‘outsourcing’ (read privatisation), closing and merging vital social services and public bodies. As one commentator has noted, “this is a report which sets out to apply the disciplines of the market throughout every part of the public service.” McCarthy sets out to apply the very same economic principles to the public sector and the whole area of social service provision as have been ruinously applied to the wider financial and economic system.
Only a few examples will suffice to demonstrate what ‘recovery’ under capitalism means in practice to the services that working class people depend upon:
* At a time when unemployment is set to reach 16.5 per cent, or 500,000 [one in six workers], McCarthy proposes cutting 17,000 jobs from the public sector.
* The education sector is singled out for particularly harsh treatment, with language support teachers and special needs assistants accounting for 3,000 of a proposed 7,000 job losses.
* ‘Rationalisation’ in this area is also to be achieved through the further increase of class sizes.
* Cuts in the health sector will see several thousand jobs being lost, with O1.8 billion [#1.6 billion] in total spending cuts proposed.
* The income threshold limits for medical card holders will be lowered to that of a social welfare recipient and there will now be a charge for prescriptions received on the medical card.
Proposed cuts to the social welfare budget include:
* Reducing social welfare payments across the board by 5 per cent.
* Ending of the Christmas bonus scheme.
* Reducing child benefit by 20 per cent.
In short, the McCarthy proposals represent the outcome of an approach to economics that considers the interests of capitalism to always be of paramount importance in cases where there is conflict between the rights of people and the ‘right’ of business to make a profit.
It is undeniable that capitalism has entered a period of atrophy and decay and that the economic crisis presently enveloping the world is as deep and severe as any since the 1930s. The Twenty-Six County state in particular is suffering, relatively speaking, on an even more dangerous and larger scale than most other states.
The real reasons behind this crisis will never be communicated to the public by economists who are part, and representative, of an establishment who have a vested interest in the status quo.
Lets’ get this straight - the public finances in the Twenty-Six Counties have collapsed to the extent that there is now a deficit in public finances of in the region of O20 billion [#17 billion]. They have collapsed because of the establishment’s wholehearted pursuit, during the years of the so-called Celtic Tiger, of a nakedly neo-liberal agenda where all areas of economic activity are subject to the disciplines of the market.
The guiding principle of this agenda is that it is the ‘invisible hand of the market’ and not government that regulates economic life; it is an agenda that sees the development of a society where workers are evermore exploited and the rich increasingly profit; it is an agenda that sees the system rigged so that the rich pay relatively little in tax and the state minimizes its role in service provision; it is an agenda where the quality and extent of health, education and social service provision eventually come to stand as an embarrassing indictment of the callousness of a society that worships mammon over humanity.
What has been proposed by way of ‘recovery’ from economic meltdown and a massive public finance deficit is based upon a wilful failure to recognise that it is the system itself that is broken. The latest range of proposed measures will be ineffective in achieving anything other than increased misery for working class people and, ultimately, the restoration of an economic environment where unnecessarily massive amounts of profit might again be made.
There is nothing that the establishment can offer by way of a solution which is capable of addressing the manifold economic and social problems we face as a people and society. They have nothing to offer because their interests and the interests of the people are completely hostile to one and other.
The notion that the McCarthy report is “the harsh medicine that will save us” is to suggest that the cure for the disease of capitalism should be based upon the strictures of a right-wing neo-liberal agenda that is, itself, the very cause of the current economic and financial crisis causing such widespread misery. It is, in effect, to suggest that the cure for the disease be more disease.
The solutions to the economic problems we face will never be found in any report commissioned by a Brian Lenihan and written by a Colm McCarthy. They, and their ilk, represent the interests of those who will never know what it is to be unemployed and in need of decent, accessible and sustainable social service provision. They represent the interests of the establishment and the establishment alone.
The time is fast approaching when working class people will need to stand up and fight for a better society. We will need to fight for the establishment of a socialist republic or we will need to resign and accustom ourselves to a life where it is the diktats of the ‘free market’ and the booms, bubbles and busts of capitalism and not us who are sovereign.