Trotskyism in Britain: A brief overview and some thoughts (Rough Print)

By Darcy Luke
After spending a few days reading around the subject of British Trotskyism I arrive at a place I feel all too familiar in. This place is characterised by severe disappointment, annoyance and sheer confusion. When one is attempting to trace the history of British Trotskyism, one must be prepared for a most convoluted plot, marked by numerous schisms, instances of infighting and at points, sheer insanity. The history of the Trotskyist left in Britain is indeed a messy one, but it is one I will attempt to give a brief outline of. From this brief outline it is possible to infer causes and also solutions to this political culture of fractured multiplication, however when one examines the recent case of the Respect party split, one is simply left sighing, as it is clear that the last remaining, and meaningful, Trotskyist party- the SWP- has not learnt from the Trotskyist history of failure and marginalisation, sticking to a dogmatism that cripples the party more than it allows itself to believe. The real pity is that the SWP was once a radical reformation of the British Trotskyist orthodoxy, splitting from the despotic Healy group around issues of the Soviet Union and the Labour party, but has now descended back into Leninist anachronisms and a rigid class politics that leaves the party floundering in a society that has moved beyond it.

Trotskyism in Britain has been about since 1938, when the Fourth International was established in order to form some opposition to the Stalinist ‘red bureaucracy’ that had emerged in Russia by that period. Trotsky himself had decided that the Stalinist regime constituted a ‘deformed workers’ state’, meaning that Russia had seen a true workers’ revolution which had allowed the workers to appropriate the means of production. However, Trotsky saw that a parasitic outgrowth in the form of Stalin’s iron bureaucracy as subverting the cause of socialism, as it perverted the democratic politics that should have been established in Russia. Trotsky, therefore, stood against the Stalinists and the Communist parties of the day. It is from this oppositional stance that the Trotskyist movement was born as a marginal oppositionary force to the juggernaut of Stalinist totalitarianism.

It is near impossible for me to reproduce the history of the Trotskyist left in full, as it is an ideology which harbours a multiplicity of mini-parties that all differ from one another in some respect (usually down to some superfluous disagreement upon the tenets of their ideology), however the genesis of a real Trotskyist alternative can be traced back to the establishment of the Fourth International (FI) in 1938. This was meant to be a revolutionary continuation of Lenin’s Third International, and came to stand in opposition to the Comintern which was dominated by Moscow and used as an arm of Soviet foreign policy. The FI stood at the threshold of WWII, and had predicted that this war would present a revolutionary moment in history, whereby crisis would give way to socialism. This form of apocalyptic gesturing and reliance on tactics of Manoeuvre, I would argue, has been a permanent part of Trotskyist ideology since the inception of the movement. Trotskyists, it would seem, would do well to actually read Gramsci and learn from him, but this, of course, is an impossible request. The Trotskyist Left, despite its opposition to Soviet bureaucracy, reflects much of the dogmatic puritanism and rigid organisational principles which were characteristic of their main opponents, the Communists leashed to Moscow.

The prediction that WWII would present a moment of crisis that would be enough to destroy capitalism and open space for socialism was, of course, incorrect and just another underestimation of the tenacity of capitalism, and its entrenched, diffuse legitimacy. However, the Communist parties in Europe grew massively in the post-war era, and became the primary vessel for workers struggle in Western Europe. In Britain, the Communist party was comparatively weak, when one considers the French and Italian parties, and the Trotskyist Left was even weaker. In 1944, the Revolutionary Communist Party (RCP) was established, a group to which all notable current Trotskyist tendencies can be traced back to. This group consisted of no more than 400 people, and was officially a national section of the FI. The RCP was a group riven with internal dispute around issues of the Soviet Union and whether it was a ‘deformed workers’ state’ or a ‘state capitalist’, and also on how to treat the Labour party. These disagreements may be what us non-Trotskyists call healthy, however the Trotskyist organisation manages to translate healthy disagreement into intense infighting and fracturing. Most democratic organisations will face disagreements if its members are imbued with any measure of cognitive faculties, however the Trotskyists seem to have trouble absorbing the shock that people disagree. Disputes, within a Trotskyist party, are not part of a democratic process, but are examples of ‘factionalism’, and any of those who are caught trying to re-theorise the dogmatism of the Leninist-Trotskyist doctrine may face banishment. This has somewhat improved, and the SWP were a step away from this kind of authoritarianism within the British Trotskyist tradition, however it is still an issue for the SWP, who still manage to translate disagreement into factionalism, and then expel people, no doubt in order to maintain the ideological purity of their vanguard.

So, this vanguard of 400 people in the 1940s disagreed, and being Trotskyists, split into opposing factions. This is where things get ridiculous. The original split in 1947 saw the RCP split into two, the RCP and The Group were then formed. This split came from a disagreement of whether or not the emphasis for Trotskyists ought to be entrism sui generis, mass entrism into the Labour Party in order to awaken the post-war working class. Setting aside the fantastical claim that 400 or so Trotskyists could subvert the whole British political tradition, this was taken seriously and was the official tactic adopted by the FI. This order split the RCP. Gerry Healy formed a group loyal to the FI within the RCP, against the official leadership. The group around Healy were the ones who integrated into the Labour Party, while the remainder of the RCP were left even weaker than before. The FI had split the RCP, as they were more concerned with ideological dogma than the reality of British politics in the period.

I will cut out a large portion of history and instead give a brief overview of the Orthodox Trotskyist tradition before moving onto the SWP. The Healy group remained loyal to the FI, as an orthodox faction within the RCP, until 1953 when an esoteric disagreement emerged around the theories of Michel Pablo, who believed that a mass war would take place in Europe and that Trotskyists need to enter the European Communist parties as left-opposition groups and attempt to steer them in the correct direction in order to achieve international revolution. Many saw liquidation within this new path, however the FI ordered entrism into Communist parties which resulted in much disagreement. The Healy group refused to move into Communist parties and denounced ‘Pabloism’ as revisionist, sending salvos of Marxist jargon along with their denunciations. Healy grew increasingly uncomfortable with the RCP, and moved his group out of the Party in1958-9 in order to establish the Socialist Labour League, justifying his move with a conjuration of yet another example of Trotskyist ‘apocalypse now’ shite, an imminent danger of fascism within Britain’s middle-classes. The SLL grew throughout the 60s, moving away from groups such as CND, which they felt did not have a concept of class-war at its core, thus rendering unworthy of the brave vanguard of the working people, a working people that were surprisingly low in number within this party, which was made up of professionals and the ‘fascist’ middle-class. By the 1970s, the group was the largest Trotskyist organisation in Britain, publishing newspapers regularly and recruiting the youth at grotesque socialist-ran discos… With the threat of declining membership, this group transformed into the Workers’ Revolutionary Party (WRP) in 1973, where it became increasingly deranged, warning of imminent military coups within Britain and supporting the Ba’athist party in Iraq after the murder of 21 communists, and supporting Khomeini in Iran even after he had ordered the destruction of the FI in Iran, claiming that Khomeini had simply removed the CIA and KGB from the country. Not surprising then, that money trails were found linking the WRP to Iraq and Iran, as well as Libya. The organisation spiralled out of control. Membership was declining, there were rumours of violent coercion within the party ordered by Healy, and finally in 1985 Healy was removed due to allegations of sexual abuse of party members. The group still exists today, but is a tiny faction that is irrelevant even for Trotskyists.

The WRP were amongst the most dogmatically orthodox Trotskyists, as well as one of the largest groups in Britain’s Trotskyist history. However, the party suffered from a lack of any democracy; a stifling personality cult around the dominant leader, Healy; increasingly deranged beliefs and a sectarianism which proved an isolatory disability. It is no shame that this organisation has fallen apart, and it is of little relevance. I believe that this is a dark chapter in Trotskyist history, however I feel that mistakes are being remade. The lack of democracy and dogmatism that came to characterise Trotskyists is still evident in the SWP, one of the biggest Revolutionary Left groups in Britain, which is not to say that it is large at all, neither is it incredibly relevant to modern struggles.

The SWP history is somewhat different, it was never an orthodox party, and still is not. Tony Cliff must be commended for his brave revision of the Trotskyist theory of the Soviet Union in his work “Russia: A Marxist Analysis”, and it is Cliff who moved away from the RCP leadership and Healy in order to establish his own group, which believed itself of the same broad tendency as the RCP, but differing on theoretical issues. In 1950 the Socialist Review Group was established by Cliff and his supporters. The group grew gradually, and in 1960 became the International Socialists, who were noted for their enthusiasm for Rosa Luxemburg as opposed to Lenin. The International Socialists achieved 1000 members by 1968, when Cliff began a turn towards Leninism and greater centralisation. This move was argued to be in response to growing membership, and perhaps happened at the worst conceivable time. 1968 was a period of mass struggle across much of the world, it represented a watershed moment in radical resistance, showing how anti-capitalism had now become as much about identity as it was about class. The mass deterritorialisation of capitalist social production meant that capitalism could no longer be targeted as a fixed phenomenon, but had become instead a diffuse form of social production that now forged the individual. Resistance to this deterritorialisation erupted in 1968, with a plurality of struggles around issues such as Gender and sexuality. The Trotskyist parties remained, as one would expect, attached to the notion of class-struggle, a theoretical position informed by the conditions of 19^th century Europe and Russia in the early 20^th century. Europe had become a very different place, but the Trotskyists were very much stood still in 1917, and still are. Cliff’s response to the 1968 burst in radicalism was one of disappointment. Not content with radical women and students, the party wanted access to Trade Unions, having abandoned Labour Party membership. Cliff instigated, along with Harman, a massive reorganisation of the party along Leninist lines.

The initial success of these moves were evidenced by increased membership and influence within the unions. Initially, members had left in response to the Bolshevisation of the party, splintering into smaller factions. However, by 1972 membership had shot up to around 2400 and the organisation had set up 40 factory branches. There was opposition to the move towards a mass party, for some obscure reason, but Cliff was determined. However, by 1974 it was discovered that the IS suffered from massive membership turn-over issues, something the modern SWP still has undeniable difficulty with. It was discovered that 48% of IS members had been members for less than a year. However, Cliff was not deterred and, in perfect Trotskyist fashion, flew in the face of reality and claimed that the IS would become a massive party of proletarianised workers. In 1975 Cliff sought to turn the IS into a Leninist workers party, which found mass opposition as the IS was understood to be a broad organisation. However, such dissidents were silenced by Cliff who reorganised the IS national committee of 40, into a central committee of 9. Cliff also reshuffled the branch system, turning branches into districts effectively reducing the oppositional basis to Cliff’s agenda. Trotskyists, the eternal friends of democracy they are not. The Socialist Workers’ Party came into existence in 1977, with no real discussion from the rank membership, as this would be far too democratic to be consistent with Leninist principles. However, the peak of the IS had passed before the forging of the SWP, and attempts by the SWP to build a rank-and-file union organisation failed miserably.

The SWP became increasingly known for a parochial and uncritical ‘workerism’, believing that increasing strike action was a reliable measure for proletariat consciousness. The SWP also came to be known for their disdain for collaboration with other socialists, arguing that they are the only party needed. Modesty and a firm grip on reality seems to escape the SWP leadership. Paradoxically, the SWP was saved from decline by the anti-racist campaigns set into motion by the Anti-Nazi League which the SWP had helped set up in 1977. An issue that lay outside factory politics, and resonated with those enthusiastic of identity politics, managed to mobilise 80,000 people at a carnival in 1978 which was a mere recruitment machine for the SWP, much like their Marxism event which is held every year and offers many stimulating meetings, alongside a truck-load of shallow theoretical engagement and mass rallies whereby everyone can stand around and applaud their mutual agreement, blocking out the fact that they stand as a marginalised group on the Left, now surpassed by non-aligned movements which the SWP continues to berate with the same hollow Marxist jargon. I, for one, have heard many a member call me an ‘autonomist’, which is a scathing condemnation from the mouths of the forever vigilant and mighty Leninist vanguard.

The SWP struggled with identity politics, shutting down its Women’s’ Voice groups in 1981, I assume because they were not ‘class-orientated’ or something. Or perhaps they could not grasp the notion of Marx’s historical materialism and the dialectic of antagonistic contradictions. But, in all seriousness, they decided that these Women’s Voice groups did not correspond to Leninist organisational principles. Yes, remember ladies your struggle may be of ultimate importance, but Comrade Lenin’s words must be heard above all others! Amen!

There is a substantial amount of history that I am going to omit for the purposes of this article, however, lest I be charged with bourgeois white-washing and an attempt to subvert the truth of the SWP, I will attach a ‘Further Reading’ section which will contain some excellent historical sources and studies which will fill in all the gaps I have omitted. What I want to discuss now is the SWP today. It is one of the largest remaining organisations of the Trotskyist variant in Britain and I was once a member of this revolving-door party. Therefore, I cannot resist the urge to comment on my experiences with the SWP.

I believe that the party is still caught up in a form of politics that has largely been surpassed in recent times by the growth of more horizontally organised movements. The recent student movements around the Con-Dem cuts and attacks on higher education have left much of the old-guard Left behind. The SWP, on my campus cannot mobilise more than 3 or 4 diehards, and their presence has been overshadowed by the Anti-fees groups on campus and a strong coalition between Friends of Palestine, People and Planet and Student Broad Left. The non-aligned Left dominates this campus’ left-wing, and the SWP are largely marginalised due to their rigidity and entrenched ‘workerism’. The plurality of radical struggle today largely undermines a centralised party which mobilises around a parochial issue. Many would argue that class-orientated politics has been surpassed, or at least stands equal, with other struggles that exist within an organic polity. Class, in my eyes, is still an essential site for resistance, however I believe that any reductionism that seeks to belittle many struggles at the expense of one will do nothing but harm a movement or party, as has been seen with the consistent decline of the Leninists. The SWP’s trouble with integrating and fighting other struggles is indicated by the recent split from Respect. During 2007-8 the SWP split from Respect, condemning many of its members of ‘communalism’. The predominance of the SWP ‘s parochial ‘workerism’ renders them unable to work together with other organisations without trying to usurp its leadership, or draw it ever closer to class-struggle. The SWP remains rigid in the face of plural and reflexive political issues, rendering it slow to react despite its centralised organisation. In many ways, the centralised nature of the party, adopted in order to allow quick manoeuvre and response, slows the party down and makes it less receptive to outside influence. As a result, the SWP becomes more and more esoteric, and members either become integrated into the parochial focus, or are ejected through either optional disengagement or expulsion.

As I mentioned before, the deterritorialisation of capitalism and social production into all facets of life have shifted capitalist exploitation into greater areas. The capitalist mode of production transcends itself and becomes diffused amongst those within the polity, it becomes an identity, an ideology, much in the same way that patriarchy does so, as well as racial issues. However, with this growing diffusion there becomes greater space for resistance. The plurality of oppressions, diffused across society, creates a multiplicity of resistance; something which cannot be easily integrated into a centralised party structure which is orientated around a singular struggle. The failure of the SWP to become open and self-critical means that it can no longer flow with the multiplicities that exist with the political, and this is why horizontal movements are proving more and more successful.

The features which hamstrung parties such as the WRP are working away within the SWP. A disregard for radical democracy, ideological puritanism, rigid systems of operation, and a parochial scope have aided in the development of a party consisting of increasingly delusion radicals that have become cut off from that which they are attempting to liberate. The SWP will become an irrelevancy, it is aware of its dwindling popularity, despite membership bursts, and now turns to the populist tactics of personalised politics. The same apocalyptic visions remain as the SWP paint an image of a world torn between socialism or Nazis. It will be a long time before a party so petrified realises how it has ceased to live and move. Much like the Soviet Union, these parties become resistant to reform and therefore fizzle out before they become an entity capable of radical change. I fear that the party will whither and die before a radical and critical implosion takes place that will transform the party. However, this will mean a radical move beyond the dogmas of old, and a new critical edge capable of remaining sharp and dangerous in the face of hegemonic forces which dictate the lives and deaths of so many.

Disclaimer – Due to the fragments of polemic within this lengthy article, I must stress that these views are my own, and do no represent the overall views of the Student Broad Left group. I worked alone! I am the culprit! I am the one to be beaten by the boot-boys of Lenin!

Further Reading:

Callaghan, John. (1987), The Far Left in British Politics, Oxford: Basil Blackwell.

Coates, David. (1985), ‘Parties in Pursuit of Socialism’, in Coates, D; Johnston, G; and Bush, R. (1985), A Socialist Anatomy of Britain, Cambridge: Polity Press, pp. 190-216.

Callaghan, John. (1984), British Trotskyism: Theory and Practice, Oxford: Basil Blackwell.

Respect: Documents of the Crisis (Circulated by the Socialist Resistance who are a minute group of ageing Trotskyists bitter at the SWP, but the book is quite good!)

Guattari and Negri. (1985) Communists Like Us, New York: Semiotext(e) Foreign Agents Series

Reflections On The Left

By Darcy Luke

There is a shocking lack of critical engagement amongst the left. I seem to continually berate and lambaste the left, and I do, however I do so out of commitment and out of genuine fervour for the values that designate me a lefty. I have continually expressed my stance on apologists whom I think are the extreme representation of a symptom upon the left that is debilitating and embarrassing. The issue is rather a simple one, we have lost sight of the values that we are supposedly fighting for. Too often do I witness the left attempting to salvage figures and ideas that should, by my account, be left on the rubbish heap of history, or at least firmly thrown into it once again.

It is not unknown that the left lacks its heroes, it lacks its historical success stories and it lacks credible figures. Perhaps this is down, as many claim, to the bourgeois historiographies and biographies that attempt to inoculate and discredit figures on the left, or perhaps this is down to a reluctance upon the left to let go of those figures that have been close to the mark, a near-hit. This is down to a neglect of values and a lack of internal criticism amongst left-wing organisations. Apologists exist throughout the left, apologists for figures such as Stalin; for despotic “anti-imperialists” such as Gaddafi and Saddam; for corrupt and brutal regimes such as North Korea and the PRC, it is endemic of the left to cling to our failed experiments, to the grotesque abortions born of despotism, extremism and brutality. The left clings to these mangled corpses, crying praises with blinded eyes and deafened ears. This is the situation in many of the communist parties which are now inhabited solely by deluded old men who cant see past their crinkled and faded copy of the Manifesto, trying desperately to justify the failures of a doctrine they cannot bear to let go, refusing to stray from the path set by theorists of a different world, preserving their words with religious dedication and wishing they were there in 1917 to witness the birth of their glorious projection, the Soviet Union.

Set aside the fact that many of these people have never experienced hardships like those endured by the victims of the failed communistic experiments of the past, and we are left with the question as to why so many people, whether they be the cariacture of the fading Leninist, or the youthful radical, cling to examples of communistic experiments that have largely failed; ideas that have brutalism and despotism built within them; and to figures which embody the very evils any socialist should vehemently despise?

The answer to this may be out of my depth. Perhaps it is the rejection of bourgeois morality within the left, which allows them to set aside worries of genocide and repression for the sake of the glorious revolution, or maybe I am just a victim of bourgeois propaganda. I, however, would like to posit another explanation, one that may be premature, ill-thought out and rough around the edges, but who cares, I am a socialist after all. I believe that the acceptance of such figures is the outward projection of the narcissism within the left, the very same narcissism that has blocked critical self-reflection. I would argue that to re-assess the fundamentals of their ideology proves too much for some left-wing organisations, as this runs the risk of implosion. However, this implosion may not be as negative as it sounds. To implode the dogmatic pretensions of the existing left would be to reinvent the left itself, to reassess our ideology and to, most importantly, reacquaint ourselves with the fundamental values we are striving for. Socialists should not have to waste time apologising for Stalin and defending corrupt states such as North Korea, instead we should be tackling oppression and exploitation, servitude and repression. We should be fighting for freedom from the capitalist machine and the hierarchical brutalism of the state. These are the fights that make us socialists, and because of these values, we should never move to defend the malformed, despotic failures of socialism’s past.

This is not to suggest that we should forget the lessons of history, quite the contrary, I believe that it is these lessons that need to be internalised, reflected upon and used in order for us to move forward. However, this will be no simple task. I mention time and time again the closed, narcissistic tendencies of a number left-wing parties, but I have yet to explain why this has developed. Centralised democracy does not help foster true democracy and self-criticism, but focusing too heavily on the internal nature of the parties and organisations in question is perhaps missing a large part of the problem. Capitalism and the hegemony it erects in order to protect itself is something that can inoculate and castrate left-wing organisations. Many believe that to maintain the radicalism needed to overthrow the state and achieve socialism is safeguarded by strong internal structure, anti-democratic organisation and dogmatism. These are all tools that can close any organisation off from the deradicalising nature of capitalist hegemony, however it also has served to separate organisations from eachother, from the people and from their values. The shield that some left-wing organisations seem to have erected is there for safety- their narcissism is a symptom of this defensive manoeuvre- however I believe that in order to provide a real alternative to capitalism the left needs to open itself up to criticism from within, from outside and criticism that is perpetual in motion. The critical left will not simply vanish into capitalist hegemony, but will pierce through the flabby layer of hegemony that is serving to bolster capitalism’s hold on the world. The left can pierce through this and take it apart, however, to do so we must shed all our prejudices. We must abandon the failures of the past, abandon the leftist anachronisms, reject those who are in breach of our values and carry ourselves forward in a united manner.

Capitalism is a real bastard. It is a rather tough enemy to fight. The state, too, is a real bastard. These things embody that which we despise, and it is for this reason that we fight. However, Stalin was a real bastard; Lenin and Trotsky, despite voluminous additions to theory, were of questionable character; North Korea is a repressive, sexist, despotic regime; the PRC was a quagmire of awful tragedy and ridiculous policy; and the Soviet Union was the slow death of a model of Marxism that did nothing other than redraw the lines of inequality. As a socialist, I look at these examples and I see nothing of substantial value that can hold me to them. A hammer and sickle and reference to Marx may impress on a superficial level, but those are empty gestures. Socialism should be the ideology of equality, peace and freedom, not the ideology of eulogising despots because they flew the red flag or shouted angrily at an Imperialist power. Along the path to socialism, we will be faced with the inevitability of self-criticism and re-evaluation. Meeting these obstacles and surpassing them will move us forward, succumbing to them will leave us with nothing but ghosts to chase and skeletons in our closet.

Reflections on the Irish crisis

by Jack Copley

Ireland’s economic woes are front-page news at the moment, as the black hole of debt created by the banks refuses to fill up no matter how much money the Irish government seems to throw down it. In this article I want to briefly outline the recent history that precipitated this crisis and then discuss how – and to what degree of success – Ireland has gone about addressing it. Breaking through the thick mist of rhetoric, jargon and economic confusion reveals a situation that is all too familiar today; one in which taxpayers are left to pick up the pieces of a crisis that they played no part in.

Crucial to understanding the crisis that Ireland now finds itself in, is an explanation of the economic transition that Ireland underwent upon its entry to the European Monetary Union in 1999. These changes saw the transfer of Ireland’s economy from one based upon highly competitive export-based growth to one in which, as University College Dublin economist Morgan Kelly wrote, “the road to riches lay in selling houses to each other” on borrowed money.

Upon entering the Eurozone, periphery countries like Ireland saw their interest rates (the price of borrowing money) converge with EU giants like Germany. This created the illusion that lending to Ireland was no more risky than lending to any other EU country, leading to a frenzy of borrowing by Irish banks from international financial markets. These international lenders extended cheap credit to Irish banks – which they then lent to domestic property developers, residential borrowers and property management companies on a historically unprecedented scale. Irish banks relaxed their lending conditions in order to maintain market share in this new, highly profitably, but inevitable short-term gambling racket. This saw a tripling of credit relative to GNP, while house prices in Dublin increased by 519% between 1994 and 2006!

However, when the European Central Bank increased interest rates in 2006, the flow of cheap money stopped and the property bubble burst – demand for houses plummeted and so did the ridiculously bloated construction and housing industry, that at this point made up 21% of national income in comparison with 5% in the 1990s. The banks that had taken out massive loans from international lenders suddenly faced insolvency as the value of the assets that they had invested in evaporated. However, instead of equally sharing out the costs of these losses among the parties involved, the Irish government decided to “absorb all of the gambling losses of its banking system” by guaranteeing the liabilities of Irish banks – liabilities equal to twice the annual GDP. After adding this incredible amount of debt onto its books – the true scale of which was largely unknown – as well as injecting more than €46 billion into the banking system, market confidence in Irish government bonds (debts issued by the government to investors, to fund public spending) unsurprisingly began to drain away.

Former Taoiseach Brian Cowen and former Finance Minister Brian Lenihan

To restore confidence in its public finances, the Irish government announced a 4-year austerity plan in November 2010 that was made even more severe upon the government’s acceptance of an €85 billion loan from the IMF and EU in December. These €15 billion public spending cuts are the harshest in the history of the Republic. They include; a 12% cut to the minimum wage, a €10 cut in child benefits (per child), an increase in the Irish equivalent of National Insurance tax and public sector pension cuts. On top of this pain, Nobel Prize winning economist Paul Krugman writes that the Irish public are “bearing a burden much larger than the debt – because those spending cuts have caused a severe recession so that in addition to taking on the banks’ debts, the Irish are suffering from plunging incomes and high unemployment”. Similarly, the Financial Times wrote that such an extreme degree of austerity risked further depressing confidence in the Irish economy by unleashing “a torrent of ice cold water” on the “flames of economic growth”. This concern turned out to be true – by March 2011, with unemployment at the highest level in 17 years as well as rapidly growing rates of emigration, the cost of insuring Irish debt was at the same level as it had been before the announcement of austerity. Signaling no improvement in the market’s confidence in Irish government bonds.

Stress tests carried out by the Central Bank of Ireland in late March, which aimed to restore confidence in the Irish banking system once and for all, found that the banks needed a further recapitalisation of €24 billion – bringing the government’s total expenditure on bailout funds to €70 billion. In reaction to this, credit-rating agencies (which assess the quality of government bonds) further downgraded Ireland’s rating – making it harder for the government to borrow money – claiming that while this further bailout was good for the credibility of Irish banks, it made the likelihood of default or some reduction of debt-repayment obligations by the government more likely.

However, two quite troubling factors have made the market’s recent reevaluation of Ireland’s finances far more favourable than expected. Firstly, Morgan Stanley – the US investment giant – claimed that what separated Ireland from other troubled periphery EU countries was the fact that throughout the crisis Ireland has remained a “fully deregulated, fully liberalised market economy” – which reflected positively on its investment credibility. This effectively prescribes Ireland’s continuation of the same policies that landed it in this monumental catastrophe, as key to reassuring the market of its credibility. Secondly, the decline in the cost of insuring Irish bonds in response to this most recent bailout is the result of the new government’s decision not to make those creditors (bondholders) who had lent money to Irish banks take any losses from their gamble. Bloomberg, the financial news network, reported that prior to this assurance, investors “were concerned Ireland would set a precedent for burden sharing as it grapples with banks’ mounting loan losses". This implies that Ireland’s refusal to set a precedent for burden sharing – by saddling its innocent population with the entirety of the costs incurred by the reckless gambling of others – is crucial in creating confidence in its economy. Surely both of these factors suggest an increasingly morbid paradox between what is required for recovery and what is required to save the Irish population from misery; in the short and long-term.

It is easy when reading and researching this latest financial crisis to become caught up in the furiously confusing language of investor confidence, financial recapitalisation, credit-default markets and debt obligations, and to totally overlook the glaringly obvious reality of a) who caused the crisis, and b) who is now paying for it. Paul Krugman advises us to “Step back for a minute and think about [it]”. Ireland’s enormous debt, which supposedly necessitates these austerity measures, was not the result of excessive child welfare payments or runaway spending on public housing or healthcare. Instead, these “debts were incurred… by private wheeler-dealers seeking nothing but their own profit. Yet ordinary Irish citizens are now bearing the burden of those debts”. The European Central Bank’s refusal to allow the Irish government to make international bondholders share the burden of loss not only flies in the face of what is morally decent, but even in the face of capitalist market logic. It is farcical to entertain the idea that these lenders could not see the massively risky and unsustainable nature of their investments. By 2007 Ireland – with a population 1/14^th the size of Britain’s – was building half as many houses as Britain. If investors somehow failed to see these risks then they have no-one to blame but themselves, and they should pay the price for their idiocy. However, Kevin O’Rourke – economics professor at Trinity College Dublin – candidly explains that “the only people they [European Central Bank] really care about are bank creditors… social welfare recipients have to see their payments cut and ordinary people who have nothing to do with the banking system have to pay more in taxes and get fewer benefits and so on, just to keep bank creditors whole”.

Dolphin House flat-complex in Dublin's South inner city.

During the Celtic Tiger years, Ireland became one of the most unequal of the industrialised nations. Now those that benefited the least from this boom period are the ones who will pay for the bust – and pay dearly. At the end of March, among the many news reports speculating about the financial market’s response to the Central Bank’s stress tests, there was a less pressing report about an inner city Dublin housing estate called Dolphin House. Dolphin House, in Dublin’s Rialto neighbourhood, is one of the largest public housing complexes in the Republic – with a population of nearly 1,000, housed in 4-storey and 3-storey flats. The report detailed that 45% of adults and 42% of children in the flats had respiratory problems linked to appalling living conditions, after biologists discovered the widespread presence of a bacteria known to cause pulmonary disease in humans. As well as breathing difficulties, diarrhea and skin rashes were found to be prevalent amongst residents as a result of chronic damp and fungus. Furthermore, tests carried out by engineers in the estate discovered that water which routinely came up through the plug holes of sinks and baths contained levels of faecal coliform bacteria more than 570 million times the levels of safe drinking water. The engineers concluded that these levels were consistent with “partially treated and untreated sewage waste”. These Dickensian conditions led the president of the Irish Human Rights Commission to declare the situation a breach of resident’s human rights. It turns out, a regeneration plan for Dolphin House was one of the first ‘unfeasible public expenditures’ to be scrapped in the name of austerity. Dublin City Council assistant manager Martin Kavanagh said in October 2010 that due to the economic circumstance the regeneration project was now “years away”. Five other inner city estates, in similar conditions, have also had their regeneration plans cancelled.

These are the people who are now carrying the burden of a crisis that they played no part in. Unlike the bondholders who have been assured that they will not lose a penny as the house of cards that they helped create collapses around them, Ireland’s poor are left desperately struggling for their jobs, their services, their housing and their human rights.