Economic Crisis

According to the politicians and the news media Ireland is in the midst of the greatest economic crisis it has experienced for twenty five years. Workers need only look at spiralling prices and unemployment to understand this. But it is much more difficult to understand what is at the root of this crisis.

According to the economists, not to the basic cause of the crisis is that wages have been rising too fast. Because wages are too high the price of Irish products are too high and cannot compete on foreign markets. This puts Irish industry out of business and results in unemployment. In addition, because wages are increasing faster than production the value of money decreases in relation to products and we get inflation. i In such a simplistic sketch the government, the employers and the economists sum up the crisis that is ruining the lives of thousands of workers. In line with their analysis, the only solution they can offer is to restrict wages i.e. more misery for workers. But really, in'trying to unload all the blame on workers the government and its propagandists are attempting to cover up for the bankruptcy of the capitalist system itself.

A falling rate of profit Just take for example their argument on inflation. Wages are increasing faster than output, they say, One would think from this that workers could THE PLOUGH — PAGE 2 determine the level out output where asin fact output depends mainly on the plant and machinery supplied by the employers. Workers have no say about the type of equipment they use; the employers jealously claim total control over this.

Why are Irish employers slow to use more and better equipment to increase output? Because the type of industry they have become involved in during the sixties, dernands very expensive machinery which more and more wears out mention the employers and government, Profits and problems quicker in relation to the amount of value they can be expected to help create. Originally employers could get back in output maybe double what they invested in machinery. But that is no longer possible today. The last census of industrial production shows for instance that to increase output by 14%, the employers had to increase spending on machinery by 12%. A supplement to the ‘Business and Finance® journal (May ‘74) put its finger on this problem when it acknowledge that “increasingly it is being accepted that any benefit there maybe in owing plant — and it is difficult to see what those might be (!) — are offset by the problem of purchasing it’. The problem is that at one time a machine that might cost say £1,000 would fall in value over perhaps five years but in the same period it would create £1,500 worth of value leaving a surplus of £500; now hoever, it falls in value much faster, in three years instead of five, creating only £300 surplus instead of £500.

Of course no machine can produce value by itself. 1t takes the labour-power of workers to set the machine in action, It is precisely this jabour-power which creates value and profits. So when the employers say that machines are getting too expensive, what they are saying in in relation to tabour. They have to spend labour. They have less money to invest in exploiting labour and consequently they experience a fall in their rate of profit.

as indeed it is throughout the world, is that it is even incapable of mak ing profits!

for all the key problems of today, namely inflation and unemployment employers are afraid to inv increase and expand produ to their trade union strength are all the time goods are scarce the employers are able to force their prices up. So, if commodities they want, th goods produced in Ireland with artidicially due to international factors, already have Ireland one of the highest i Europe.

they withdraw their capital reality, is that they are getting too expensive co Ballyfermot.

relatively more on machines than on employing In short the hub of the problem in treland, somethina?

capitalism is not only incapable of ensuring a decent standard of living for workers, but that it is the falling rate of profit which is responsible the Irish economy Because the rate of profit is falling, the est their money and ction. Workers, due increasing their wages and are able to demand more goods for consumption. The result of all this is that a relative scarcity of goods and because workers buy the ey are forced to buy high prices and import goods from abroad which, inflated prices. }t is this process that has given Inflation rates in In addition to inflation, unemployment arises out of this process. When the employers can’t get satisfactory returns on the capital they invest, from production or at least slow down the rate of investment.

Jobs are lost and any increase in production does ntd.page eight By contrast, the percentage of adults in upper-class areas with complete secondary education was 32% in Killiney, 27% in Dun Laoghaire and 25% in Ranelagh, Militown, Terenure. However, the corresponding figure for working class districts such as Bluebell, Crumlin and Walkinstown was 8%, while it was as low as 1.5% for Interestingly enough, figures for the 1972-73 financial year show that while the working class contributes.most in taxation, Government expenditure on national. education is only £76 per pupil, while it is £155 per pupil for secondary education and £321 per student for University education. Is it not time that workers learned

confrontation unprecedented performance. Naturally the Loyalist take-over is not seen merely percentage would certainly have been bigger.

Some qualifications are needed with regard to this