The Mission of Trade Unions - NIPSA Conference

29 May 2002

Address by David Begg, General Secretary, Irish Congress of Trade Unions to NIPSA Conference, Newcastle, Co Down, 29th May 2002

 

A few weeks ago I attended a meeting with the Secretary of State, together with Jim and other members of the Northern Ireland Committee. Our purpose was to explore how to build upon the momentum of the Rally at City Hall in March and to carry the anti-sectarian agenda forward. These discussions will hopefully continue but I was struck by a remark that Dr Reid made about the economy. He said that the problem in Northern Ireland is that the public sector is too big. Mark you he did not say that the private sector was too small. It was a revealing comment because it epitomises what I think is a deep malaise at the heart of social democratic values today - an acceptance of the basic tenet of liberal economics; public sector bad, private sector good. Once this contention is accepted the consequence is that the thread that binds us together in some degree of mutual concern for one another in society begins to unravel. The essence of Government involvement in the economy and society is to create conditions for the common good which markets left to themselves cannot do.

This goes to the nub of the current debate about the future of Europe, whether it is possible to have both economic efficiency and social solidarity. It manifests itself in the "Boston v Berlin" argument in the Republic but it is also a European wide debate. It takes place against a broader tapestry of globalisation and the increasing dominance of a model of capitalism which is much harder, more mobile and more certain about what it needs to make it tick. Its overriding objective is to serve the interests of large property owners and shareholders, and it has a firm belief, effectively an ideological one, that all obstacles to its capacity to do that - regulation, controls, trade unions, taxation, public ownership, etc - are unjustified and should be removed. Its ideology is that shareholder value must be maximised, that labour markets should be "flexible" and that capital should be free to invest and disinvest in industries and countries at will. It is a tool of both job generation and job elimination. It is capable of creating both great wealth and great inequality.

In developed countries this manifests itself in a greater proportion of national wealth going to the top decile of income earners and a growing gap between the top ten per cent and the bottom ten per cent. In Britain the people at the top spend £857/week while those at the bottom have just £127/week on average disposable income. The position in the Republic of Ireland is slightly worse than this. The figure being €1125/week and €83.63 respectively. In Britain three million children live below the poverty line. In fact, according to the United Nations Food & Agricultural Organisation there are 11 million undernourished people living in industrialised countries.

The position of the developing world, however, is extreme:

  • 1.5 billion people live on less than €1 a day and more than 2 billion live on less than $2 dollars a day;
  • 777 million people are undernourished.

The result is that statistically someone dies every 3.6 seconds of hunger. Yet there is plenty of food in the world for everyone to have over twice the daily calorific intake necessary to sustain them. This is the position in a global economy worth 30 trillion dollars. It is a political and ethical abomination about which nobody can afford to be indifferent.

I met a man at a funeral in New York this time last Year. He was involved in business but I knew he was a fairly active supporter of Concern - the international development agency with which I worked at the time. We fell into talking about the state of the developing world and the failure, as I saw it, of globalisation to help the poor. His view of the model of capitalism I have described was that "there is no other way".

I do not accept this. The system of liberal market capitalism not even efficient in all circumstances. Consider the list of failures in recent years:

  • Russia adopted the free market model and its economy virtually collapsed. The volume of goods and services dried up and poverty increased by 50 per cent;
  • Argentina accepted the entire liberal prescription of the IMF and its economy has collapsed. All the international community cares about is that there should be no contagion effect from this collapse;
  • The Enron corporation that was the epitomy of liberal economic philosophy collapsed. It was a vicious corporate model using political donations to pressurise politicians to deregulate markets to allow it to enter. It was at the heart of the electricity debacle in California where there have been extensive power cuts and prices have risen by up to 1000 per cent;
  • Closer to home the AIB (First Trust) subsidiary, AllFirst, was involved in the biggest banking failure since Barings. It is clear from the Ludwig report that there were no effective controls on futures trading. Indeed such controls are the very antithesis of the "free booting" nature of capital markets.

Still, these failures have done little to dampen the enthusiasm of the free marketers. The great achievement of the Barcelona EU Summit was hailed as the decision of the French Government to open its electricity market to competition. Actually the British Government is one of the strongest proponents of private sector involvement in the economy.

But Britain too has had its failures. Amongst them the case of Railtrack was spectacular. Not alone has the Government been effectively forced to renationalise Railtrack but it has had to pay over £300m sterling to its investors in compensation.

The big idea, short of outright privatisation, for getting private involvement in traditional areas of public sector provision is PFIs and PPPs. The advantage is not financial for Governments can borrow money cheaper than the private sector but rather that it is supposed to transfer the risk from the public to the private sector. What Railtrack has demonstrated, however, is that Governments will not be allowed by the public to abdicate their responsibility for public services. As such, no transfer of risk is possible. It seems to me, therefore, that apart from straightforward infrastructural construction projects these PFIs have no possible advantage for Government. And even here much depends on how the financial agreement is structured. Certainly transferring public service provision to the private sector is very wrong and we must continue to oppose it as much as we can.

I want to turn now to where I think this is leading and what I think we, as trade unionists, should be doing.

One consequence of the collapse of communism was the emergence of this very hard form of capitalism I have described. It is basically the American approach and the view is that it will ultimately find universal acceptance. Many Social Democratic politicians could not handle this. People like Anthony Giddens became an advocated for "A Third Way" and secured many disciples, including the Prime Minister and most of the Labour Party.

The Third Way was a marvelous discovery for politicians who lost their faith in social democracy. Third Wayers are never jealous of success. Third Wayers believe in equality of opportunity but not really in equality. They believe in redistribution but only in so far as it helps to pull the very poorest over the poverty threshold. Their vision of a successful economy relies on large numbers in minimum wage jobs. It allows them to make common cause with right wing politicians like Berlusconi and Aznar to free up the labour market - the type of thing that our Italian colleagues were on strike about a few weeks ago.

I believe that this is profoundly mistaken because it will serve only to institutionalise inequality.

But there is a deeper political challenge for the left as well.

For the last nearly ten years Europe has been governed by Social Democratic parties. They presided over the introduction of large chunks of the liberal economic agenda to Europe with deregulation and privatisation. It was not that Europe ever stated a pro-privatisation policy - it was just that the conditions where created through competition policy to make Government involvement in the economy less and less sustainable.

At the same time European citizens have become more and more dissatisfied and fearful of changes in society and the reaction has been to swing to the right. Austria, Spain, Portugal, Italy and now France have been lost. It is not just the swing to the centre right which is worrying. It is the extent to which these Governments are supported by far right parties and the assent to prominence of the people like Le Pen in France, Jorg Haider in Austria.

In the past when any centre left party drifted rightward, it always comforted itself that its core supporters would stay loyal because they had nowhere else to go. Now we know from the experience of France and the Netherlands that this is not so. The once faithful can stay at home or they can turn right, hard right. Once progressives accept that the people they used to count as their bedrock vote - urban families on low incomes - can no longer be taken for granted, they should ask themselves a tougher question. Why did people who might once have voted for a Socialist or Communist line up so readily behind a Fascist? Why did 25 per cent of manual workers vote for La Pen - and two fifths of the unemployed?

It is inconceivable that these people are Fascists. More likely they are men and women who are disorientated and exasperated at the failure to address their problems. When such an unmistakable mood of disenchantment with conventional politics is sweeping Europe we might ask why this is so instead of blaming the disenchanted. It is like echoing Algernon in "The Importance of Being Earnest": "If the lower orders don't set us a good example, what on earth is the use of them?".

No, this should be a wake up call for all Social Democratic parties to recognise that their dalliance with the interests of big business is fatally flawed and they must win back their natural constituency - the ordinary working people of Europe.

My personal opinion is that all of us who occupy the broad centre left of political thought have to give up on defeatism. There is no iron law that says we have to buckle under to transnational corporations and global capital. Europe particularly is strong enough to make choices about how we should live. Whether we take our wealth in quality of life or money; whether each person has to have three jobs to survive like the Americans or each family has one and a half jobs like the Dutch. We can decide whether every citizen has a reasonable chance of getting decent housing, education and health care or whether these are reserved for those who can pay.

Our particular priority must be to organise, to get more and more people, particularly in the private sector to join us.

The mission of trade unionism is to achieve social cohesion and justice. The primary instrument for achieving this is the organisation of workers in unions to balance the power of capital. It is the collective strength that derives from organisation of people that allows us to act in the market to effect the distribution of wealth.

Our mission derives from our value and beliefs. We believe that all human beings are morally equal; that we have an equal entitlement to self-determination; that all life chances should be as equal as possible; and that social justice is a condition of liberty.

Trade unionism offers the possibility that ordinary working people will be given the economic strength that gives meaning to the choice of a free society. The movement is the repository of a hope that society can be organised in a way that ensures the greatest sum of freedom, the highest amount of real choice and, in consequence, the most human happiness.

I want to conclude with a quotation which I think encapsulates both the enduring nature and the morality of the struggle in which we are all engaged. The author is Eugene Debs. He was the founder of the American Railway Union and one of the most attractive figures thrown up by the American Labour Movement. Based on a speech he made denouncing the First World War he was tried and convicted of sedition at the federal court in Cleveland. Before he was sentenced he spoke these words which I believe have a resonance still today:

"I am opposing a social order in which it is possible for one man who does absolutely nothing that is useful to amass a fortune of hundreds of millions of dollars, while millions of men and women who work all the days of their lives secure barely enough for a wretched existence.

This order of things cannot always endure. I have registered my protest against it. I recognise the feebleness of my efforts, but fortunately I am not alone".