This article by Eoin Ó Murchú first appeared in Unity, the weekly publication of the Irish Communist Party.
AS US President Trump’s new tariff system kicks in, with a blanket 15% facing Southern exporters to the US and with a 10% in front of Northern exporters, the ruling circles, North and South, remain unable to comprehend or even image any alternative to the old Atlanticist model.
The humiliating capitulation of the European Union to Trump’s naked bullying has exposed the totally subservient character of European capitalism to the US master, whether it be Britain’s delusion that it can continue its imperialist life through the US or the European pretence that it is a separate power.
The stark fact is that the old model of economic development has been sabotaged beyond repair, and a new model must be found.
The old model, operative since the effective abandonment of independence in the 1950s, was to rely on foreign direct investment (FDI) primarily from the United States to create employment and economic links.
Trump is now pursuing a policy to force US capitalists to restore manufacturing capacity to the United States. This is particularly so in the area of pharmaceuticals.
Now, the US does not have the manufacturing capacity on site to do that at the moment, but Trump is planning to have it in place within a year and a half.
That is why he is willing to accept a 15% on pharma for now, but is talking of a 150% leading to a crippling 250% tariff by 2027.
This is not the idiocy that Irish commentators comfort themselves as portraying it as being, but a planned realignment of US dominated world capitalism to rescue the US from increasingly crippling international debt.
Those who think all we need to do is to hold our breath and wait for the Democrats to get back in power in the US should know that this realignment is irreversible no matter which power holds the White House.
The conclusion is stark. The old way is coming to an end, not overnight, but, as the years go by, FDI will reduce.
Irish capitalism doesn’t know where to turn or how. To imagine that the EU can come to our rescue, when the EU can’t even rescue itself, is obviously nonsense, and it has no other option since indigenous capital is too small to do the job.
The only way forward is to take a completely non-capitalist path, with the state taking control of finance and investment policy, putting the social interests of the people above the profit greed of native and foreign investors alike.
Along with this we need to take an even-handed approach to the rest of the world – being open to economic and development cooperation with China, with Russia, with India, with Africa, with Latin America, as well as with Europe or North America, but certainly not confining ourselves to the sinking Atlantic boat.
The South has the formal independence to allow it to make that choice, though we know that the existing power centres will fight tooth and nail to keep the exploitive system no matter how much it decays nor how much working people are subjected to severe austerity.
The North, however, especially with an Executive divided on sectarian lines only tangentially connected to economic choices, doesn’t have the power to determine a way forward.
It is totally dependent on Westminster not only to provide funding for investment but to define what economic models are acceptable/
With Britain shifting resources from social support to expenditure on arms and war the North is caught in a trap.
It is up to the Irish Labour movement, North and South, to reject capitalism’s failure, to recognise that the old way is done, and to push for a new state-led economic system.