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New development model is biggest challenge for next government

Posted on February 12, 2020February 12, 2020 by peadarkirby


In all the commentary on the Sinn Féin breakthrough and the end of the FF-FG duopoly, there has been very little focus on what has brought this about, namely a scream of righteous communal anger against the neo-liberal model. Yet, like in so many other countries where this anger is being manifested both on the streets and in the ballot boxes, it is far from clear what new model can emerge.

Ireland has been an extreme outlier in its enthusiastic embrace of neo-liberalism and the almost complete absence of any debate about its impact on our society. Yes, we briefly had Mary Harney’s Boston versus Berlin contrast but this failed to generate any critical examination of the two political economy models and their implications. Indeed, the very context of its enunciation was to emphasise the superiority of the neo-liberal model over its social democratic alternative. And few in Irish society seemed to care.

Election 2020 shows how much things have changed. It’s true that there has been almost no mention of neo-liberalism during or since the election. But its consequences of neo-liberalism for wealth and income distribution, for the quality of public services, for the privatisation of the public space, for the transformation of social goods into private commodities (especially in the provision of housing), and for the capture of public authority by the interests of capital have dominated the election and its outcome.

Of course, none of this is new. For decades it has been obvious that the low-tax model so vaunted by Ireland as a way of attracting foreign investment (low-tax on wealth and profits, of course, but high tax on income and goods) must inevitably result in less investment in public services. Over a decade ago, former Taoiseach Garret FitzGerald lamented the ‘pathetic inadequacy’ of our public services amid a booming economy. And statistics have consistently shown for over two decades that Ireland remains one of the EU states with the lowest total tax take as a percentage of GDP and one of the lowest ratios of social spending. 

Yet, it is the heartbreaking stories behind these statistics that have become an almost daily feature of Irish life – stories about threadbare services for people, including many children, suffering from severe physical and mental disabilities and the lack of supports for their carers; stories about families having to fight protracted legal battles with state agencies to get a modicum of justice; stories about grossly unequal access to basic health services; stories about failures to protect vulnerable children and teenagers from sex abuse and drug addictions; stories about deficiencies in diagnosis and treatment for people with life-threatening conditions. 

We again and again get angry when we hear these stories yet we have lived with them as if they were somehow a normal part of our social life, rarely questioning why Irish life is characterised by such appalling treatment of our most vulnerable citizens. In election after election, this Irish model generated very little debate, as parties vied with each other to cut taxes even more without questions being asked as to the consequences for public services. That has finally changed in Election 2020.

The transformation now being expected will require a major change in our model of development. As the Irish Central Bank’s quarterly bulletin made clear just days after the election, we have a two-speed economy with exports and tax revenue far too reliant on a small number of multinational companies and with a relatively weak domestic manufacturing sector. This has been known for decades yet none of our major parties has tried seriously to address these major vulnerabilities.

What we need is nothing less than a complete change in the way the economy serves society, with the added challenge that we have to do it in a way that reduces greenhouse gas emissions rapidly. We must be bold, questioning economic growth itself and giving priority to creating a circular, regenerative economy. Sinn Féin’s emphasis on creating a co-operative sector is long overdue and it is to be hoped that the party make it a priority.

At the heart of the changes needed is a recognition of the severe damage done by relying on private market forces to develop our society, based as it has been on extreme individualism and hyper-consumerism. Instead, policy must focus on building an effective state, at all levels from the local to the transnational, in partnership with vibrant and empowered communities, to put equality, sustainability and quality pubic services at the heart of our public life.

Societies throughout the world are grappling with this challenge of building a new model beyond neo-liberalism. In my forthcoming book, Karl Polanyi and Today’s Global Crisis: Transforming Market Society in the Era of Climate Change (Bloomsbury, 2020), I try to map out some of the contours of this new model, different both from the Keynesianism of the post-War period and of the neo-liberalism of recent decades. There are no easy answers and we badly need a government with the honesty, leadership and vision to begin grappling with this challenge for Ireland.

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New book from Peadar Kirby

Karl Polanyi and the Contemporary Political Crisis: Transforming Market Society in the Era of Climate Change

Has politics reached breaking point? Rather than defending liberalism or abandoning it, how can a socially just and ecological alternative be built? My new book investigates the causes of our current multifaceted global crisis by drawing on the work of Karl Polanyi. This book explores Polanyi’s theory that social disruptions result from the attempt to run society according to the rules of the market. Drawing on these ideas, it outlines pathways towards an alternative future that overcome weaknesses in Marxism. Linking the ecological, political and socio-economic crises, The book identifies that an alternative socio-ecological model is emerging, consistent with the insights of Polanyi. Karl Polanyi and the Contemporary Political Crisis is being published in early December 2020 and is a contribution to key debates on the future of politics, on the low-carbon transition, on automation and on the emerging world order

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