Partnership consensus masks surge in inequality

The consensus among institutions in Irish society is now so strong that people could be forgiven for asking whether there is …

The consensus among institutions in Irish society is now so strong that people could be forgiven for asking whether there is any other way of seeing the world than the economic model which now confronts us at every turn. To suggest even that there may be limits to a society's capacity to engineer its own well-being by purely economic measures is a heresy punishable by ridicule.

In prosperity we appear even less willing to debate the extent to which our political culture is equipped to embrace the welfare of the maximum number of its citizens than in times of relative poverty. One of the great unchallengeables of current political discourse is the concept of social partnership, which, we keep being told, is the main reason for our alleged prosperity. It is odd that, even in the year of DIRT and Ansbacher, there is stomach for pretending that we're all on the same side.

Partnership, we are required to believe, is an unambiguously virtuous concept. A lot of well-intentioned people continue to believe that social partnership can succeed in reversing the widening gap of circumstance between rich and poor.

And while it is right that this should be given every possible opportunity, there is meanwhile the possibility that the alleged panaceas of our condition are actually feeding the disease.

READ MORE

Partnership has not worked for the nurses. Neither has it worked for up to perhaps two-thirds of the population, who have said in various surveys that the whereabouts of the Celtic Tiger is a mystery to them.

There is an argument to be made that the partnership culture of the past decade has enabled resources to be directed back towards the better-off sections of society while appearing to act in the interests of those at the lower end of the prosperity scale. But such an argument is almost impossible to make in the present climate which equates partnership with fresh air. One commentator, Kieran Allen, a sociologist with University College Dublin, recently offered a most intriguing analysis of the dangers of social partnership, arguing that the inevitability of greater inequality is built into the partnership model. Adopting a Marxist framework which placed Ireland in the context of late capitalist development, he argued that social partnership had actually masked a process whereby resources were being transferred back to the wealthier sections of society.

He examined several factors in the economy, including taxation, public spending and productivity. In the first decade of the social partnership era, he noted, productivity increased by several multipliers of the increases in wages. Profits grew in that period at a rate between three and four times that of wages. The overall wage share in the non-agricultural sector of the economy has fallen by 10 per cent since 1987, whereas the profits quotient has grown by the same amount. "Instead of a trickle-down effect," he wryly observed, "there is a trickle up".

Mr Allen plausibly attributed this pattern to the social partnership process which, he said, was not intended to achieve better distribution of the spoils of economic success, but rather the opposite. Social partnership arrangements, he maintained, "have become a means by which the corporate elite have won considerable freedom to raise productivity, restrain wages and pursue an agenda which transfers resources to them".

This will be dismissed as an "ideological" view by those who have succeeded in giving the impression of having transcended ideology, which they assure us is an outmoded concept. Contrary to what we are led to believe, however, ideology is not dead: it's just that the nature of governing ideologies has become more confusing, not least because of the persistent disingenuous insinuation that the beliefs foisted upon us are no less than reality itself. There are two working definitions of the word "ideology": one, a neutral definition, a body of ideas that reflect the beliefs of a nation, system etc; and two, ideas which are false or held for wrong reasons but believed with such conviction as to have become irrefutable. The present consensus is really just a lot of bogus notions which have become irrefutably "true". But what we need to beware of is not the ideas themselves but the manner of the conscription of the very people who are being adversely affected by the application of these ideas.

Social partnership became in Ireland an ideological placebo for disillusioned socialists wishing to save face. At a time when left-wing ideas were under pressure in the international arena, the Irish left was suckered by the monied establishment into selling out any significant chance its constituency might have of significantly participating in prosperity. Thus, left-leaning politicians have been centrally involved in turning this State into one of the most inequitable in the Western world, and have had the full support of the disadvantaged voter in so doing.

For all that the concept is dressed up in rhetoric about sharing the fruits of economic success, the central ethic of partnership is that the economy cannot function unless the interests of the better-off are given priority in policy-making. One of the fundamental obstacles confronting efforts to deal with social exclusion is the notion that, for an economy to continue growing, its productive elements must at all times be given precedence.

This thinking, unsurprisingly, is also at the back of the litany of scandals of recent times: had our political system not been in thrall to the supposed entrepreneurial community, none of the abuses would have been possible.

THE other side of this coin has been the quasi-liturgical belief among economists and politicians that more equality means less efficiency. But, as leading thinkers in such radical and subversive organisations as the OECD and the World Bank have ventured in recent years, this is not necessarily the case.

Three years ago, the chief economist of the World Bank, Mr Michael Bruno, said that reducing inequality was not simply desirable from the viewpoint of helping the poor, but also of boosting the wider economy through higher growth.

Around the same time, an OECD report recommended the reduction of inequalities as a means of creating future prosperity. These statements were not born out of altruism but out of a rigorous view of economic development. It's obvious, really: a pound in the hand of a poor man works many times as hard for the economy as a pound in the offshore account of a captain of enterprise. Moreover, any resources provided to the positive relief of the need and suffering of the less well-off will sooner or later reduce the necessary expenditure on ameliorating the negative long-term consequences of deprivation. Put simply, more schools today means less prisons tomorrow.

John Waters can be contacted at jwaters@irish-times.ie