Celtic Tiger on a long leash held by Uncle Sam - The Corporate Takeover of Ireland (PR7)

Kieran Allen

Irish Academic Press / 2007 / C=19.95

 

In a recent protest the Irish government colluded with the mega corporation Shell in jailing five local Rossport protesters fighting Shell’s proposed pipeline through North Mayo. The government supports Shell, despite the fact few benefits accrue to the state from the proposed exploration through royalties or even employment. Shell is given carte blanche to plunder a natural resource with the blessing of the Irish government offering grants and tax breaks. After their imprisonment, 5,000 rallied in Belmullet, reminding us that what Michael Davit had fought for one hundred years ago is being re-run – but this time it’s not against the landlords but global corporations.

In his book Kieran Allen gives a detailed account of how multinational corporations, especially those based in the US, have increased their penetration and domination of the Celtic Tiger. He examines the effects corporations have on Irish life and shows how democratic decision making is being subverted. Major corporations such as Microsoft view Ireland as an Atlantic tax haven that offers light state regulation. They want the country to become a bridgehead inside the EU, the de facto 51st state.

Neo-liberalism became the dominant philosophy earlier in the Irish Republic than in the rest of Europe – in the late 1970s. Reagan set the stage when he fired the PATCO airline traffic controllers in 1981, followed by Thatcher’s historic defeat of the miners in 1985. Privatisation of state assets, deregulation of labour markets and the erosion of welfare rights became the norm as imperialism entered a new phase of globalisation.

The Irish government too has cut business taxes and privatised industry – measures that have created unemployment, eroded public services, benefited the rich and widened the gap between rich and poor. In Ireland corporation tax has been cut to a mere 12.5% while the average PAYE worker pays 40%. Social partnership deals, along with “benchmarking” and “flexibility arrangements”, aid the process of privatising everything from water supply to computers in primary schools.

First in line for privatisation was Irish Sugar, followed by B&I (British & Irish) Shipping. Then it was the turn of Telecom Eireann. Disaster has attended in the wake of each of these privatisations, for both workers’ jobs and the erosion of services. When B&I became Irish Ferries, company bosses attempted to sack all the Irish workers and replace them with Eastern European workers at one-third the rate of pay, much worse conditions and no job security.

When Irish Sugar was sold off two decades ago it became Greencore, with equally disastrous results. Earlier this year the doors of the last of its plants, Thurles, established by the Irish Free State in the 1930s, were closed with workers thrown onto the scrapheap. Now we lack an independent sugar producer as a basic commodity and are totally dependent on Latin American suppliers. The recent privatisation of the national airline, Aer Lingus, was an illustration of the erosion of the remnants of economic national sovereignty.

A new medical apartheid is being created in health, as huge US health corporations stand ready to move into the private healthcare market. Between 1987 and 1990 the overall number of hospital beds decreased by nearly 15%. The consequence of tax cutting is that Ireland has a Third World health service in a First World economy (the rate of MRSA cases is the highest of the 25 European Union countries).

The state delivers a double whammy as it subsidises private health insurance while running down the public health service. As a result, one half of the Irish population has private health insurance today, creating a two-tier health service. Local health boards have been abolished and with them local representatives, now replaced by a central apparatus along business lines. Privatisation in health continues on a massive scale, not least through the co-location of private hospitals built on land previously owned by public hospitals. As Allen points out, the result is that “Private patients who pay costly insurance premiums will be able to avail themselves of high-tech equipment and hospital wards with flowers, flat-screen TVs and computer terminals. The rest will continue to queue and pray.” (p175) Funds that could be used for the public system are diverted into tax breaks for investors.

One of the factors that always belied Ireland’s phenomenal growth in the late twentieth century was the fact that investment in research and development has always been well below international standards. US corporations continue to spend the bulk of their money in their research facilities in the US. Their research facilities in Ireland, where they exist, have been sited there for tax reasons.

Irish universities are increasingly run as businesses and their research work is being put at the service of major pharmaceutical firms. Corporations lure cash-strapped third level colleges to redirect science away from basic research on general topics to more applied research topics that suit their immediate needs. The humanities are downgraded and must demonstrate that “Chaucer pays the bill as effectively as engineering or business” (Business Week). There is a growing emphasis on textbook delivery and courses packaged in terms of definite “learning outcomes”. Multiple-choice questionnaires replace essay writing as a mode of assessment.

These closer links between universities and corporations result in a clear conflict of interest between the scientific search for truth and commercial pressures. Former editor of The Lancet, Marcia Agnelli writes:

“Drug companies would give a grant to an academic medical centre, then step back and wait for faculty researchers to produce the results. Now, however, companies are involved in every detail of the research – from design of the study through analysis of the data to the decision whether to publish the results. That involvement has made bias not only possible but also extremely likely. Researchers don’t control clinical trials any more; sponsors do.”

Ireland has the highest level of greenhouse gas emissions per head of the population in the EU. 70% of all waste is agricultural waste and the bulk of non-agricultural waste comes from construction. The state focuses on individual households as if they were the main producers of waste yet in 2004 household waste accounted for only 1.7 million tonnes of the 85 million tonne waste mountain.

Illegal dumping became rife as the Celtic Tiger grew. The biggest culprit was the construction industry, according to one report, but there was also significant dumping by wider commercial and industrial sectors between 1997 and 2002. The government used the waste crisis to legitimate the imposition of bin charges on individual households, creating in the process a new market for private operators. Waste collection is no longer organised as a public service but is being turned into a big business.

Ireland, already the most open economy in the world, experienced a phenomenal growth surge in the 1990s due to the fact that it was the first choice for inward investment of US multinationals seeking to locate inside the EU before the tightening up of barriers. Ireland was an ideal location for US firms because of the very favourable grants and subsidies, and in particular a flexible, educated, low wage workforce, kept especially docile since the late 1980s through partnership deals between government and trade union officials.

While Kieran Allen’s book is thoroughly researched, with a wealth of detail and footnotes to back up his thesis of the global takeover of corporate Ireland, what is lacking is a coherent analysis of why this takeover is happening. The reason for this is that neither Allen nor the Irish SWP (Socialist Workers Party), the party he belongs to, have a theory of imperialism. For Allen and the SWP, large multinational conglomerates are the new imperialists: “Of the top 100 economic entities in the world, 52 are now corporations and only 48 are countries.” (p3) To reduce the complex relationship between a handful of huge (usually US, EU or Japanese-owned) monopoly companies and the states in which they operate to a league table of global “economic entities” is to vulgarise Marxism.

In order to fully understand what is happening in Ireland today, it is important to have a proper understanding of imperialism in the 21st century. The Irish Republic gained its freedom from colonialism in a period of capitalist development in which the world markets for goods and services and access to raw materials were already divided up. At that time the process of concentration and centralisation of capital and the competition up to and including wars carried out for the possession of these supplies, ensured that a handful of countries monopolised capital resources.

The G7 countries today contain the main centres of finance, innovation, and business services. They maintain inherited advantages over the rest of the world in productivity rates, access to capital and technological renewal. Their powerful retail giants are able to determine the output and prices of industrial firms further down the supply chain located in other countries. These advantages are defended by powerful state machines and multilateral economic agencies. Sometimes they defend these advantages in international courts, sometimes on the battlefield.

The sobering truth is that Ireland remains a semi-colony, albeit one integrated into the EU imperialist block, a country at the service of the G7 that places its labour and land and state revenues at the service of the main foreign-owned, multinational corporations (MNCs). Its growth in recent decades has been a function of US multinational investment in the country to get inside the EU market. Few linkages exist between the operations of these MNCs and the wider domestic economy.

It is a country whose economy is fundamentally at the mercy of patterns of investment, finance and trade, the shape and direction of which are determined by the small group of countries of the G7. An adverse shift in the overseas investment strategies of these countries and companies would turn the Celtic Tiger into a starved, stray cat forced for its survival to turn to scraps from globalisation’s high table.

by Maureen Harrington

 

Mon 03, March 2008 @ 20:04