THE BANKS - RESEARCH SECTION, SINN FÉIN THE WORKERS PARTY, 1978
Apr 28th, 2010 by Conor McCabe
[Click on image to read the booklet]
I’m putting up this booklet with a couple of caveats, but in spite of them, the booklet does show how the Irish left has pointed out the serious flaws within the Irish banking system for decades, and that the problems are structural, not personal.
Last year’s publication by Shane Ross, talked up the greed, collusion and incompetence of Irish bankers and politicians, arguing that the Irish story was ‘unique’ in its tawdriness. Finian O’Toole pretty much drew the same conclusion in his book, Ship of Fools.
For thousands of left activists across the island, though, the news that some bankers were, *gasp* corrupt and self-serving, came as no surprise as the banking system itself is *gasp* corrupt and self-serving. Even a good man in the wrong place will do bad things.
There is a strong desire on the part of the Right to personalise the failings of the banking system, that all we need are a few good men to ride into town and sort out the problems. The analogy which springs to mind is with The Magnificent Seven, with the Irish as the Mexican peasants gong to town to hire Yul Brynner to get the bandits off their back.
But, the bank crisis wasn’t due to a moral failure on the part of some individuals. The bank system is geared towards the interests of its private owners, not anyone else. Given the systemic importance of banks and banking to a modern economy, it’s one fraught with dangers, but to acknowledge that is to acknowledge the problems associated with the private ownership of critical services. Better to have a moral tale than a structural analysis.
With regard to the Workers’ Party’ booklet, its strengths lie in the data it gives on the structure of banking in Ireland, as well as providing a short history of the sector. It also gives a reasonably simple and succinct overview of the analysis of money as given in volume one of Capital.
The political analysis put forward by The Banks is in line with the conceptual framework of the party’s magnum opus, Irish Industrial Revolution - an incredibly flawed, but equally fascinating, piece of work, and one which I’ll try to make available online soon.
The overall thesis of The Banks falls broadly within state capitalism. The booklet argues that it is the necessary to nationalize the banks in order to further industrialize the economy, and that the banking system is too important to be left in private hands. The ultimate goal is a country where both the banking and industrial sectors are controlled by the state. In simple, broad-stroke terms , the Workers’ Party was arguing that capitalist exploitation is more in the field of output, rather than in how the machine works. Were it possible to socialize output, this would in some way counter-balance the inherent contradictions and endemic exploitation of the capitalist mode of production.
It could be argued, of course, that this is exactly the situation Ireland has today, that the banking and industrial sectors are run in the state’s interests, but that the state’s interests are those of the banking and industrial sectors.
There is a symbiosis between those who run the banks and those to fund the political parties. Irish citizens and their children are given little say in economic matters, and are instead viewed by the state as little more than betting chips for hedge fund managers.
It can also be argued that a form of right-wing state capitalism - or neo-corporatism as it is sometimes called - has been in operation in Ireland since the foundation of the state in 1922. (I make a deeper argument for that type of analysis here.)
Anyway, despite these concerns, the research presented in The Banks is still of use to us today, and certainly it provides a resource to the Irish Left in its attempts to tease out an analysis of Irish economic and social life which doesn’t trip itself up in simplistic morality tales of greed and exploitation.
A pdf of The Banks is available to download here. (2.8MB)
Enjoy.
Thanks for this Conor. Very hard not to read this in the current climate and conclude that we aren’t living through the logical outworking of the process described in the pamphlet. Also very hard not to conclude that we need more of this type of stuff now.
There’s one thing in your analysis though I’d like to ask you to elaborate on (we’ll leave aside the theoretical arguments about state capitalism and the like
). Which is this bit
“In simple, broad-stroke terms , the Workers’ Party was arguing that capitalist exploitation is more in the field of output, rather than in how the machine works. Were it possible to socialize output, this would in some way counter-balance the inherent contradictions and endemic exploitation of the capitalist mode of production.”
Probably my fault, but I’m not really sure what you mean when you say that the argument is that exploitation comes in output rather than how the machine works.
On rely on a hero to ride into town to save us from greedy bankers, I give you Matthew Elderfield a.k.a. The Financial Regulator a.k.a. The Regulator a.k.a. The Sheriff of Dodge City….
http://www.irishleftreview.org/2010/04/29/kickass-financial-regulator/
I know that state capitalism is not a fixed-definition term, but I can’t see any other way to describe what the Workers’ Party was calling for in the 1970s except Soviet-style industrial expansion and state ownership. With regard to the idea that exploitation is output-based rather than structural, it’s the call for the nationalization of industry and banking, rather than a reorganisation of industry and banking. It’s really seen in Irish Industrial Revolution, but the main thesis of the Workers’ Party c.mid-1970s was to industrialize on capitalist lines, and then reorganise the ownership of the means of production. The mode of production, however, is to be left alone - in fact, the Workers’ Party is hoping that an expansion of the mode of production will create an industrial working class which will then lead to a class revolution. It’s banking (pardon the pun) on the capitalist mode of production to revolutionize the working class, with the Workers’ Party at the helm.
I don’t agree with that thesis. I think Smullen and Harris not only got Irish history wrong, they got the dynamics of the southern Irish economy wrong. The South was (and is) a capitalist economy - but it was driven by agrarian capitalism and a comprador class rather than industrial capitalism. The idea that you can socialize capitalism and the capitalist mode of production is one which sees the pros of output outweighing the cons of actual production. It’s also one with a long history in the European left, going from Scandinavian social democracy through to Soviet Marxism, so it doesn’t mean the Workers’ Party wasn’t left or even Marxist, but it does throw some light on the eventual split - that behind the strong Marxist rhetoric in the 1970s, there were currents of social democratic socialism at play.
Thanks for the elaboration Conor. A fair bit to think about. I would agree that the strategy outlined in the pamphlet (or indeed in the Irish Industrial Revolution) is not one aimed at the total reorganisation of economy and society, but rather how to lessen exploitation by the banks as it exists, and to turn them and their power towards more socially-useful purposes. Like you say, this is in line both with a great deal of social democratic thinking, and the Marxist tradition that demands the state take control of the commanding heights of the economy in a mixed economy. It’s a call for an interventionist - but not necessarily fully socialist - state, I’d agree. Having said that, a State-owned bank with a monopoly is precisely one of the measures Marx identifies as necessary for revolutionising the mode of production in advanced countries. So I guess we could say this work, like the IIR, is discussing a stage (so to speak) on the way to fully revolutionising the mode of production.
I think there is an issue of terminology here as well, where I would use different terms to you. You use the phrase socialize capitalism and the capitalist means of production. As I understand Marx and Engels, their argument is that capitalism has already socialised production, and so the question has become fundamentally one of ownership in a way it can never have been before. So I’m not 100% sure I understand your meaning, though I take it that by socialise you mean turn to the good of society and the workers within the enterprises rather than the interests of the bourgeoisie. It’s unclear to me though whether you mean doing that via nationalisation in a workers’ state or so other form.
I think myself that you have a valid point about the interpretation of Irish history and the importance of agrarian capitalism. Although I would point out that in the more directly political activity the farming interest was a regular target for criticism. However I wonder whether the emphasis on the creation of industries and an industrial proletariat (the gravediggers of capitalism) via the state is as much part of a general emphasis on creating modernity in a backward country that was such a prominent part of the C20th as an incipient social democractic strain of thinking. It’s also worth separating out the Harris/Smullen thing to some extent from the DL one, though clearly they share major reasons.
cheers Garibaldy. I haven’t come across where Marx says that a state-owned bank with a monopoly is necessary for revolutionising the mode of production in advanced countries. Also, it’s a statement which is out of step of my reading of Marx/engels to date. I think we have different readings / intepretations of Marx and Engels. When you say that
“their [Marx/Engels] argument is that capitalism has already socialised production, and so the question has become fundamentally one of ownership in a way it can never have been before”
I don’t agree with that at all. In fact, I’d argue that they make it very clear, especially in Capital, that it’s the process of capitalist production that is the problem, not the readjustment of the end result.
And Ireland wasn’t a backward economy. Far from it. It was hotwired into one of the most advanced economies in the world. Its role within that economy wasn’t beneficial to the vast majority of Irish citizens, but that’s different to saying that it was backward and needed to industrialize in order to modernize. I mean, is the West Midlands a backward economy because it’s agricultural? That seems to have been the logic of Smullen and Harris. Ireland’s relationship with the UK remained colonial in nature even after partition. Irish economic policies, its pegging of the punt to sterling despite the huge problems it caused for independent Irish economic development, and its banking system, all fed the trading links with Britain. It was exploitative and horrendously damaging to the social life of the Irish Free State, but not economically backward. In fact, it made complete economic sense if you were part of the Irish agrarian and banking comparator class. Paraxodically, it may have been the influence of British Marxism on Smullen and Irish Marxist thought in general which led to the assumption of industry as advanced, with very little appreciation of the industrial nature of agrarian capitalism - something which forms a more balanced part of European, Asian and South American marxism.
Conor,
The bit I was thinking of is at the end of chapter II of the Manifesto. In my summary, I may have misrepresented it, but if so, accidentally. Here’s the original anyway for sake of ease.
“Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property, and on the conditions of bourgeois production; by means of measures, therefore, which appear economically insufficient and untenable, but which, in the course of the movement, outstrip themselves, necessitate further inroads upon the old social order, and are unavoidable as a means of entirely revolutionising the mode of production.
These measures will, of course, be different in different countries.
Nevertheless, in most advanced countries, the following will be pretty generally applicable.
1. Abolition of property in land and application of all rents of land to public purposes.
2. A heavy progressive or graduated income tax.
3. Abolition of all rights of inheritance.
4. Confiscation of the property of all emigrants and rebels.
5. Centralisation of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.
6. Centralisation of the means of communication and transport in the hands of the State.
7. Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan.
8. Equal liability of all to work. Establishment of industrial armies, especially for agriculture.
9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.
10. Free education for all children in public schools. Abolition of children’s factory labour in its present form. Combination of education with industrial production, &c, &c. ”
I guess my reading is that a general transfer of the means of production to the working class, effected by the coercive power of the state after the working class had taken power, would end capitalism by transforming the economic, social and power relations within society. That in itself would transform the nature of work for individuals (working conditions, working hours, your relationship to your work etc), but not the technical aspects of the way things were made.
I would agree that the Irish economy wasn’t backward, but I think a lot of people saw it that way, partly because as you say they failed to appreciate the nature of agrarian capitalism in Ireland. I think though the perception of backwardness also applied to the society as well as the economy, and that was a large part of the feeling that industrialisation was necessary. It was seen as essential to break the power of the forces of conservatism in politics and society, as well as to promote economic development I think. It was definitely POLITICAL economy. And I suspect that in that faith in economic change as a way to achieve secularising and liberating ends lie the seeds of the conversion you were talking about in the late 80s.
Sorry Garibaldy, I’ve been wrapped up with the economic works. the manifesto didn’t cross my mind. Capital does that to you!
Well that just proves you are doing the serious work Conor, unlike chancers like me
I wouldn’t say that Garibaldy. I’m not a political activist and it shows.
On a serious note, like too many others on the left, my grasp of economics is not what it ought to be. The fact that there’s no real equivalent of this type of thing coming out of the left (with the exception of Michael Taft) is a serious problem for us. So the type of research reflected in this post is of serious political as well as academic value.
Oh, and I meant to raise the issue of colonialism. How much merit do you think there is in the argument that the extent to which the Irish economy, especially the agricultural sector, was shaped by being Britain’s natural hinterland rathern than deliberate policy set in London?
Oh I’ve absolutely no time for the argument that it was natural for Ireland to provide England with meat, any more than it was natural for England to industrialize and develop large urban centres.
Nor was it natural for Ireland to provide Britain with the raw material for a beef industry - namely cattle on the hoof. Irish meat processing only really takes off in the 1970s. up to then it’s live cattle being sent to Britain where they are killed and processed for market. Again, nothing natural about that economic set-up.
I don’t have the references handy at the moment, but it’s interesting to check out the attempts by Irish cattle dealers to open themselves up to European markets in the 18th c. They were quickly shut down by England. Same goes for the still-born Irish fishing industry. Sabotaged in the 19th c. to suit British fishing interests. Even today Ireland is an island that does not fish, and there is nothing natural about that.
Perhaps I ought to have said rational rather than natural
By which I meant that the choices made by Irish agrarian capitalists, going back to the later C18th, were pretty much rational ones maximising their economic advantage. Certainly, there are cases of industries being cut back by British interference, but I think there’s a case to be made that the development of large sectors of the Irish economy would have looked pretty much the same. Never mind the advantages derived by Ulster from membership of the Union.
I have doubts about the colonial model as an accurate description of society within Ireland (especially where people draw lazy comparisons to countries where colour was a fundamental difference), although clearly there were colonial, and later neo-colonial, aspects to the relationship with Britain. I also worry it denies the large elements of agency involved, and makes the Irish experience more exceptional in European terms than it was.
Well not really. comment boxes aren’t the best places to explain the development of the Irish economy over 200 years, but given the enormous political and social forces which had to come into play to coerce the Irish economy into producing a cash crop of live cattle for export to British meat processors, I hardly see how non-judgemental economic efficiency stands up as a credible conceptual framework for the explanation of same - especially as there is absolutely no such thing as a natural, efficient, capitalist economy.
The colonial model as frequently used sets Britain up against Ireland, and is saturated with nationalist rhetoric, and such a clumsy tool neglects the development of the Catholic middle class in the 19th c, particularly around agriculture - for obvious reasons - who acted as middlemen for the production of raw material in Ireland and the exportation of same to Britain. It’s this class, whose economic power is directly related to the colonial relationship, which gets to set economic policy in the Free State, and it is through them that the colonial relationship gets to remain in place after partition.
I suppose the easiest way to counter the efficiency argument is to ask why the Shorthorn was used for milk production in Ireland. Why did a breed of cattle that is good for meat, but not great for milk, end up as the staple of the milk industry? what’s efficient about that? The answer in part has to do with the system of production which grew up around cattle, where small farmers bred cattle primarily for the ranchers, with the shorthorn marketed as a dual-use animal when in fact a much more efficient system would have had beef breeds for beef production, and milk breeds for milk production. It’s a bit like using broilers for eggs.
It seems we’re closer than it might seem, both of us rejecting any simplistic colonial model. I think there’s probably to some extent a difference of emphasis regarding domestic and British factors in Irish economic development, but like you say comment boxes aren’t the place for elongated discussions of the theme. I think the Irish agrarian bourgeoisie did what was best for it (which is what I meant by rational rather than most efficient), which was to tailor its production to the British market. Clearly the way it did that was heavily influenced by the political relationship with Britain.
Well the evidence is there to show how British policy shut down export markets for Irish produce, as well as shutting down the economic development of fisheries which would have put Irish fishermen in competition with English and Scottish fishermen. Ireland de-industrializes during the 19th century. The businesses which build up are those based on providing raw materials for British manufacturers. To use an extreme example, the Irish farmer took the rational choice of producing live cattle for export to British slaughterhouses and butchers in much the same way as India took the rational choice of producing cotton for the British textile industry.
A lot of Irish colonial discourse completely ignores class, and for good reason on its part - namely the existence of the Irish comprador class - so I’d share your criticisms. I don’t feel any urge to defend current Irish colonial and post-colonial studies because I don’t see what I am doing as part of what they are doing - as far as I can see they’re about making the Irish middle classes feel good about themselves by making out they’re the victims. At the same time, it is analytical lunacy to ignore the overwhelming evidence for the colonial relationship between Ireland and Britain both pre and post partition, simply because the Irish middle classes think a close reading of a poem by Yeats gets them off the hook for mass emigration and the industrial schools.
Garibaldy, Michael Burke has replied to your comment on his Tory/UUP manifesto post on Irish Left Review. I think its very relevant to the discussion here:
http://www.irishleftreview.org/2010/04/29/100-years-date-toryuup-joint-election-manifesto/#comment-49378
Cheers for that Donagh. I have responded over there, basically wondering about the importance of other factors in NI’s decline (such as Britain’s overall relative economic decline) and also raising the issue of Ireland’s role as part of an imperialist power and economy. That’s another part of the reason I am suspicious of the post-colonial discourse so aptly summed up by Conor in his comment above yours.
Conor,
It’s clear that your stuff has nothing to do with what we might call lit-crit post-colonialism. As I’ve said above, I think there were definitely colonial aspects to the relationship with Britain, and the economics were a huge part of it, but that the nature of Irish society and of Ireland’s place within the Empire - economically, politically and organisationally - still makes me nervous about characterising the whole situation as one of a colony.
“like you say comment boxes aren’t the place for elongated discussions of the theme.”
I don’t know about that, it’s a very interesting discussion to be eavesdropping on.
Garibaldy, hopefully I’ll be able to flesh this out over the next few months, maybe give a clearer and deeper analysis of why I find the conceptual framework of colonialism useful in explaining the course and development of Ireland in the 20th century - and it has nothing to do with Joyce and nationalism
I’ll look forward to that Conor. At least Joyce’s letters are a laugh. BTW let me add my congratulations on the book, and say how much I’m looking forward to it.
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