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David McWilliams: Irish people are both capitalists and workers at the same time

The Irish economy – like its people – is multifaceted, shape-shifting and inconsistent

We are moving into the opening stages of the next election campaign. The battle lines are blurred but they will become clearer. Some might look at this as a straightforward left/right shoot-out, dividing the Irish population neatly along ideological grounds.

On one side we have workers, people whose income comes from wages and depend exclusively on their labour. On the other side, we have the capitalists, people whose income derives from profits, rents and other dividends.

In an ideological world, the interests of both these groups are inimical and a win for one is a loss for the other, a stylised world with property owners facing off against workers. Would that society were so simple – but it is not.

Irish people are both capitalists and workers at the same time. Most Irish people own their own home and profit from the most capitalist dynamic of all, rising asset prices, yet the same people go to work every morning. Most Irish people will get a pension.


In a normal, functioning democracy, lines are vague, distinctions are muddled and people's interests are imprecise

Some will have provided for that themselves, while the lucky ones will have a well-financed company or a public-sector pension. Everyone will get a State pension.

All these pensions will stem from some income derived from some fund which buys company stocks, meaning we are all in receipt of income from profits. Latest labour-force survey data suggests that about six in every 10 workers (59.8 per cent) had active pension coverage, meaning the majority have a vested interest in how financial markets perform.

One in 10 Irish people set up their own business. As this is a snapshot, it doesn’t consider the amount of people who will open or have opened a business at some stage in their life. Some 350,000 people are self-employed, meaning they are both capitalists and workers interchangeably.


Most Irish businesses are not the fat cats of caricature. Small and micro businesses account for the vast majority (98.7 per cent) of all active enterprises operating in Ireland.

According to CSO data from 2019, there are about 249,126 micro businesses, 19,053 small businesses and 3,620 medium-sized businesses operating in Ireland. (Micro businesses refer to those with fewer than 10 employees; small businesses are fewer than 50 employees; and medium-sized businesses are fewer than 250 employees.)

These people are the backbone of the domestic economy: when combined, these SMEs account for 66.4 per cent of employment, 43.6 per cent of all turnover and 36.9 per cent of Gross Value Added in the country.

Furthermore, when it comes to big business, if we look at where much of our tax revenue – which pays for schools, hospitals and Covid payments – comes from, we begin to appreciate that the picture of a clean, morally easy depiction of left and right fails to capture society’s reality. Last year Ireland raised €15.3 billion in corporation tax; close to 70 per cent of this came from big multinationals.

While 25 per cent of Fine Gael voters have third-level degrees, the next highest is Sinn Féin at 21 per cent

This is twice the total amount raised as recently as 2017. In terms of how much this is per head of population, we are talking above €3,000 for every person living here; to be clear, not for every taxpayer but for every man, woman and child. It is also twice as much per head as our nearest rival in Europe, Luxembourg.

For the purist ideologues, this is a capitalist tax, levied on those awful tax-cheating, multinationals, which finances for all sorts of social programmes.

As you can see, the economy – like life – is messy. It is not unlike us: multifaceted and frustratingly mercurial, shape-shifting and inconsistent. There’s rarely such a thing as well-defined separation between workers and capitalists/asset owners, as Marx would have us believe.

Nor is there, as the Fox News Right would contend, a clear distinction between the interests of business and the size of the State. In a normal functioning democracy, lines are vague, distinctions are muddled and people’s interests are imprecise; one day on the side of rising wages, the next on the side of rising profits.


Nowhere is this fogginess more evident than in the housing market. According to the 2016 Census, the share of owner-occupied households stood at 67.6 per cent (rising to 82.4 per cent in rural areas and dropping to 59.2 per cent in urban areas).

Note that this rate rises to 74 per cent when we restrict this to households headed by an Irish national. The data shows that home-ownership rates begin to rise sharply from age 32 onwards, with homeowners becoming the majority tenure type beyond age 35.

It's notable that the age at which home ownership overtakes renting as the majority category has been rising steadily since at least 1991, when it occurred for those aged 26. More recent figures from the CSO Labour Force Survey indicate that the pandemic may have pushed more people into home ownership, particularly in Dublin, where the numbers owning a property rose 8 per cent from 848,700 in 2019 to 916,400 in 2020.

This represents a five-percentage point rise in home-ownership rates from 60 per cent to 65 per cent in the capital. There was also an uptick in home-ownership rates nationally, rising from 70 per cent in 2019 to 72.5 per cent in 2020.

According to Eurostat, Ireland's home-ownership rate of 70.3 per cent in 2020 ranks higher than that of Germany (50.4 per cent) and Austria (55.3 per cent) but isn't far off the EU average of 69.7 per cent. If we examine wealth in Ireland of the middle of the middle class (statisticians would describe this as between, say, the fourth through to the seventh decile of the net wealth distribution), their primary residence accounts for about 77 per cent of their wealth and all property accounts for about 82 per cent of their wealth.


All these varying interests pose a dilemma for any party purporting to represent one distinct call or sectoral faction. We are simply too mixed up. Even within business, political affiliations are divided. Recent data from the ever interesting Ireland Thinks polling company show that 33 per cent of Fine Gael voters are business owners, but the party with the next highest proportion of business owners is Sinn Féin.

Taking educational achievement, a traditional pointer of ideological difference, the Irish picture is yet again cloudy. While 25 per cent of Fine Gael voters have third-level degrees, the next highest is Sinn Féin at 21 per cent. The party supported by the least well educated isn't the hard left but Fianna Fáil, until recently the party of Charlie Haughey, associated with bankers, speculators and property interests.

Ireland, like most countries, is ambiguous from an ideological perspective. So next time someone tells you that Irish politics are becoming more ideological, have a look at the data. It’s never black or white. As they say, in the dark all cats are grey.