Is social partnership a myth? Is the Irish formula for economic success "solidarity without equality"? Has the bulk of Irish society acquiesced to an increasing gap between itself and the rising professional and business classes? These two studies examine these critical and highly topical contentions in great and compelling detail.
The eloquent polemic by Kieran Allen, lecturer in sociology at University College Dublin, is subtitled "The myth of social partnership in Ireland", and presented unabashedly as "part of a project to promote the left alternative". Bust to Boom? is the work of 18 authors, and is one of those valuable compendiums in whose production the Economic and Social Research Institute excels. Published to coincide with the institute's 40th anniversary, it draws on the insights of its many in-house experts and far-flung academic alumni and collaborators to examine the emergence of our boom economy and its social implications.
Neither study pulls its punches. Dr Allen characterises the ESRI establishment as "conventional economists" who exhibit "facile optimism" about our economic prospects. He believes the boom will not last and, when it ends, Irish workers will not be able to look back and point to many substantial gains. "What is really at stake is whether workers can reverse a pattern where the share of the national economy going to profits, dividends and rent has risen dramatically, while the corresponding share granted in income to working people has declined."
It may surprise some readers, including Dr Allen, to discover that in this latter portion of his analysis, at least, the "conventional, facile" ESRI concurs - albeit in more circumspect language. Its study concludes that some reversal in the "marked decline in the share of wages (versus profits)" appears inevitable. "The question is how fast it can happen and how far it can go without derailing the engine of economic growth. Irish society and the institutions of social partnership are now confronted with very fundamental issues about the distribution of the fruits of growth," according to the ESRI authors.
Dr Allen points out that post-war reconstruction left British workers with the legacy of the National Health Service. The ESRI favours the re-negotiation of social partnership to place a much higher priority on social spending.
There is no dispute between these authors about the reality that during the years of recovery and social partnership, wage moderation ensured booming profits and the fruits of growth were spread unevenly. In 1985 wages accounted for almost 75 per cent of Ireland's GDP. In 1998 this had fallen to under 60 per cent, compared to just under 70 per cent on average in Europe.
The reader may be further surprised to learn that the description of the Irish formula as "solidarity without equality" is not Dr Allen's but the ESRI's. "The bulk of Irish society has acquiesced to the increasing gap between themselves and the rising professional and business classes. The intense battles being waged over public sector pay are evidence that those workers in a position to do so are increasingly willing to take action to redress this inequality," write Professor Sean O'Riain of the University of California and Dr Philip O'Connell of the ESRI.
Where the ESRI sees acquiescence, Dr Allen sees discontent. "One of the great ironies of the Irish success story is that it has already produced a discontented majority," Dr Allen writes. Dr Allen's contention that the majority of workers have lost out from the Celtic Tiger rests on somewhat shaky statistical ground. He quotes a 1993 Conference of Major Religious Superiors document to support the statement that four out of five people are worse off today than they were in 1980.
In contrast, Dr Niamh Hardiman, his academic colleague at UCD's politics department, in her review of social partnership for the ESRI, cites the National Economic and Social Council's estimate that the average manufacturing employee received a cumulative increase in real take-home pay of over 35 per cent in the 1987-1999 period compared to a real drop of seven per cent in the 1981 to 1987 period.
Dr Allen has a surer touch in his pen portraits of the winners and losers of the boom years, juxtaposing imprisoned bricklayers and millionaire tax evaders at liberty, contrasting the treatment of Ryanair's baggage handlers and the £17 million worth of the company's chief executive, Mr Michael O'Leary, after its flotation. "Who got the main share of the Celtic Tiger?" he asks in chapter three and proceeds to answer in detail. I particularly liked the minutiae : Mercedes sold 1,869 cars in Ireland in 1997 and fewer than 500 in 1987. He ranges widely both philosophically and geographically. In a detailed review of the murky connections between Irish businessmen and politicians, he quotes a California industrialist: "With a little money, they hear you better".
While not supporting Dr Allen's view that a majority of the population is worse off now than in 1980, the ESRI agrees that relative deprivation and inequality has increased, which poses tough questions for trade unionists and others participating in social partnership. The ESRI describes how tax cutting since 1987, seen as central to social partnership, has been regressive, achieved largely through the reduction of tax rates which has favoured those on high incomes. Earnings inequality, already high compared to other OECD countries, has grown. Household income distribution is among the more unequal in the EU and the rate of relative income poverty is one of the highest in the EU. Social spending has fallen as a proportion of national income. The boom has brought increased opportunities and improved living standards but "meritocracy remains an aspiration", the ESRI comments.
The truly critical juncture at which the ESRI and Dr Allen diverge is on the question of whether, with this backdrop, social partnership is worth preserving. It is a "myth" to Dr Allen, over-rated in its role in Ireland's economic success in the 1990s, which he attributes to the vagaries of international capitalism. Divergent interests between trade union leaders and their members will provoke major conflict, he forecasts. His is not an image of a negotiated future for Irish society, rather the cake should now be divided by trade union militancy, liberating workers from "what Marx called the muck of ages". He identifies good prospects for a socialist movement to the left of Labour.
This call for a return to free-for-all trade unionism may find some willing listeners among members of trade unions with industrial muscle. What, though, of those who have no bargaining strength and those represented by the voluntary and community pillar in social partnership who recently threatened to withdraw from the PPF because its renegotiation and the Budget left social welfare recipients lagging further behind working taxpayers? Where will a free-for-all leave them? And what of the consequences for Ireland's future prosperity if industrial peace is to be jettisoned as a goal?
Dr Allen is ultimately more persuasive in his analysis than in his prescriptions. The ESRI sets Irish society an altogether tougher challenge than the abandonment of social partnership. It is to develop a more mature model of partnership which better divides the fruits of growth and sets greater priority on social spending, issues which are "crucial to the continued sustainability of the distinctive Irish model".
These two volumes are required reading for the social partners. For the rest of us? Dr Allen's is a racy and angry read, the ESRI's is more technical but still accessible. While Dr Allen places reliance on secondary sources to support his thesis, many of the ESRI's authors have themselves produced the research on which social policy is based. It is all here in one volume, up to date, with international comparisons and theoretical underpinnings. The authors explore widely: class, education, gender, political culture.
For the serious reader who wants an informed conscience on the direction of this society and the choices we face, the two make a provocative combination. If you have only space for one on your shelves, the ESRI has produced an enduring work of reference.
Maev-Ann Wren is an Irish Times journalist. Her column, From the Doorstep, appears on Tuesdays