Doesn't Anyone Read Marx Anymore?

As part of the fallout from the economic revelations of the last few days, attention has now firmly focused on the upcoming "hairshirt budgets", with even Labour's Pat Rabbitte on Vinnie B last night saying that some Public Sector workers need to be made redundant (i.e. voluntarily). Considering how desperately Ireland needs to wrangle in its public spending, I am totally in favour of this. So long as Mrs. Aitor (a health worker) can keep her job. And my parents (also health workers). And my parents-in-law (ditto). And my sisters-in-law (also ditto). The rest of the Public Sector workers need to be cut - just not the workers I know, please.

The brewing conflict's battlelines were drawn further with the President's comments (eh hello, President? This isn't America - you just look dignified and occasionally say uplifting things) on the need for the Government to rigorously crack-down on "lazy public servants". The Government is clearly setting out its plan of attack - the tried and trusted (and generally unsuccessful) approach of suggesting that the Public Sector is lazy. This strategy will fail, and the reason why is hinted at above - even I, an arch-capitalist, right-wing demagogue and free-market buccaneer (YAARRGH!) know that not all public sector workers are lazy, nor should we cut their numbers and wages because they deserve punishment. Rather cuts must happen because of the cold hard economic truth that budget slashing is the only way to keep this country afloat. This is the line that the Government needs to be pushing now - I will never accept that Mrs. Aitor will get the axe for being lazy, because she's not; but if she needs to lose her job to ensure the survival of the nation, that's painful, but necessary.

Of course, on the other side of the divide, the Unions are not exactly revealing themselves to be grand strategists either. When the Unions lay out their vision for the future of Ireland, they point north to Scandinavia, in particular Denmark and Sweden with their high-tax, total welfare approach to society. 

The Unions argue that because the Swedes and Danes have high taxes and happy societies, ergo high taxes lead to happy societies. Therefore, instead of cutting public spending, Ireland just needs to raise taxes, and we will all be happy, and shop at Ikea. There is a slight flaw in that plan, however, which can be summed up in this video clip:

The Unions are forgetting how the Nordic welfare states came into being. They did not spring into life fully formed, they developed broadly along the lines suggested by Marx - which makes it so ironic that the Unions don't understand how we cannot hope to raise taxes one evening, and in the morning wake up surrounded by blue-eyed blondes (that's their aim, right?). 

Marx claimed (from what I vaguely remember from that Political Theory class I dozed through in college) that Communism was the sixth stage in human economic development (yes, yes a Wiki link. So sue me if I don't have Das Kapital to hand), with our path to communal utopia running like this:

1. Primitive Communism

2. Slave society

3. Feudalism

4. Capitalism

5. Socialism

6. Communism

I guess the Nordics are at stage 5, or perhaps between 4 and 5. The Unions think we can jump from 4 to 5. Slight problem - Ireland isn't at 4, it's at 3. We are still a feudal society. Power is concentrated in the hands of those who hold land, and political power resides with a narrow band of the elite, and is regularly (indeed usually) passed on as inheritance. We aren't capitalist yet, as those with money and power in Ireland don't own the means of production. We have no "means of production", because we have no industry. And because we have no domestic industry to speak of, the proletariat can't sell their labour. When jobs are available, the proles can't move to where the jobs are, as they are committed (usually via massive mortgages) to remaining in place, they are tied to the land. They are serfs.

I have done some work in Scandinavia, and what struck me was what a long history these nations had of wealth creation and prosperity before they jumped to a Social Democratic model. They built up industry, developed businesses, and created the core level of financial wealth needed to support a switch to a robust welfare state before they began transforming their society. In Ireland, if we try to build a high-tax welfare economy from our current industrial base, we will only succeed in killing off business and driving wealth out of the country - we do not have sufficient indiginous wealth to support a welfare state. 

That's why all of us, even the lefties, need to be rooting for Ireland to choose capitalism. Once our economy has recovered, then let's have the Nordic debate.