Leo Varadkar’s second term as Taoiseach began on Saturday 17 December. Under the coalition deal struck in 2020 Micheál Martin steps down as Taoiseach and the position ‘rotates’ to Varadkar. This manoeuvre extends the shelf-life of a decrepit Civil War politics by another two years. It is very much a case of ‘Keeping Up Appearances’ at a time when profound social crises, above all in housing, worsen. The Southern political establishment prize above almost everything else, except perhaps their property portfolios, a dubious reputation for ‘political stability’. A ‘stability’ built over 100 years on the backs of a working class who paid for it through low pay, mass emigration, mass incarceration, illiteracy, austerity and poor public services.
Sinn Fein’s rise in the polls shows few signs of receding. While it is not impossible that the current coalition could succeed in forming the next government with support from Independents, thus locking Sinn Fein out for five more years, the more likely outcome is, however, a government led by Sinn Fein. If that does transpire, there is a very distinct possibility that Varadkar and Martin may well be the last Taoisigh from either Fine Gael or Fianna Fáil for a very considerable time to come.
The South’s Dual Economy: Spectacular Profits amid Falling Wages
Varadkar’s key priority over the next two years is to keep the South’s ‘dual economy’ ticking over. One part of this economy, dominated by the activities of the multinationals who use the South as a tax haven, generates truly mind-boggling levels of profit. For instance, in early December RTE News reported that corporation tax receipts for November were €5 billion. With the official corporation tax rate of 12.5% this means that profits in November 2022 alone were in the region of €40 billion. As we all know, however, the effective corporation tax rate is almost half the official rate at 6.6%. Meaning that the true profit rate for November 2022 was at least a staggering €75 billion!
Enough money generated in November 2022 alone to cover 2023’s health (€22 billion) and social protection (€23 billion) expenditure, with enough left over to build 40,000 local authority houses (€ 10 billion). And that still leaves € 20 billion for the capitalists to keep the wolf from the door. Micheál Martin, Leo Varadkar and the media like to boast about the huge economic growth rates in the South but refuse to dwell too much on the spectacular levels of profit generated every year.
And that is probably wise for them considering the reality of the other part of the South’s dual economy: the domestic economy. This is where the vast majority of us working people earn our living and try to build our lives. In this economy real wages are steadily falling in nearly every sector under the high levels of inflation driving a cost of living crisis. An economy where a poverty level minimum wage is paid to hundreds of thousands of workers. Where levels of deprivation are beginning to rise again, including for many who work. Where rents are out of control. Where aggressive vulture funds buy up whole swathes of private housing with the intention of forcing workers into permanent renting in a country with some of the worst levels of tenant protection in the developed world. Where almost one in five people are on a waiting list for treatment in the public health system, while private for-profit hospitals cater exclusively to those who can afford to pay.
Crisis of Capitalist Democracy
Varadkar’s task is to ensure these arrangements continue uninterrupted and as a truly vicious Right-wing politician he will do just that. In truth it matters little to the vast majority of working people who occupies the high offices of state. In 1914 James Connolly wrote: ‘Yes, friends, governments in capitalist society are but committees of the rich to manage the affairs of the capitalist class.’ Over 100 years later these words still hold true as the best description of governments under capitalism.
The problems facing the working class in Ireland are little different to those facing the working class across the globe. Parliamentary politics has proven itself time and again neither interested in nor capable of addressing these problems. For the fact is that ‘democracy’ under capitalism always means the capitalist class holds a veto. Every capitalist politician understands where real power under capitalism lies, and it is not in parliament. Only under a socialist system can true democracy be attained, when the working class owns and controls the key elements of the economy. Because of its refusal to address the huge economic problems of the working class masses, democracy under capitalism is in a potentially terminal crisis. At present this is benefiting far Right forces, from Italy to India, who pose no threat to capitalist power.
A Socialist Future
Leo Varadkar has now twice held the office of Taoiseach without a popular mandate. This is in part a reflection of that wider crisis of democracy under capitalism. He will do nothing to address the huge crises facing working people in the South. Indeed, in his second term as Taoiseach he will continue with the policies that have created them. There is a sense that people are probably prepared to put up with another two years of Varadkar in the knowledge that he will almost certainly be replaced by Mary Lou McDonald, which will signal a decisive shift in Southern politics. However, Sinn Fein will face entrenched powerful economic forces who will not tolerate any significant changes that threaten their profits.
Any Sinn Féin led government that attempts to push beyond the political boundaries imposed by capitalism will find itself very soon plunged into crisis. Capital flight, higher bond rates, factory closures, mass unemployment, all of the tactics the capitalist class use to discipline democratic governments can be brought to bear, if necessary. After nearly 15 years of economic crisis, austerity and an economic growth that yields little tangible improvement in the quality of life, the working class in the South are poised to back Sinn Fein as the only source of hope. It is this very hope, under conditions of capitalism, which will prove to be Sinn Fein’s sternest challenge in government. If a Sinn Fein led government fails to make good the hopes placed in it by the working class then the consequences are likely to be seismic.
Militant Left argues for a socialist future based on the democratic workers ownership and control of the economy and a socialist plan for an environmentally sustainable society. Only this socialist future offers any real hope to workers in Ireland, North and South.