slides for class one of an eight-part module, Introduction to Irish Political Economy

1. Irish P
olitical
Economy f or
Trade Unionists
and Activists
1. What is
P
olitical
Economy?
Dr. Conor McCabe
UCD School of
Social Justice

2. 1. Introduction to political economy
2. The development of the Irish State
3. The IFSC and the global financial system
4. Debt: sovereign, private and mortgage-related
5. Austerity, tax avoidance and privatization
6. Gender and austerity
7. Alternatives (with guest speaker)
8. Conclusion

8. Political Economy –
Looks to understand economic
activity by observing it as part
of a dynamic, contradictory
social system.
The course of human society
“never doth run smooth.”

9. Political Economy –
Looks to understand economic
activity by observing it as part
of a dynamic, contradictory
social system.
The course of human society
“never doth run smooth.”
In terms of Irish political
economy, that social system is
a capitalist social system.
Looking to understand
capitalism through the ‘rules’
of the market is akin to trying
to understand football by
staring at the linesman.

10. Political Economy –
Looks to understand economic
activity by observing it as part
of a dynamic, contradictory
social system.
The course of human society
“never doth run smooth.”
In terms of Irish political
economy, that social system is
a capitalist social system.
Looking to understand
capitalism through the ‘rules’
of the market is akin to trying
to understand football by
staring at the linesman.
If you want to know how something works, you have got to watch the forces at play

12. research

16. [Lehman collapse, 15 September 2008 - headlines 16 Sep 2008]

23. activism

25. Economics is a social subject.
It’s the interactions and relationships between
people that make the economy go around.
Debates over economic issues are not technical
debates where expertise alone settles the day. They
are deeply political debates.

26. Economics is a social subject.
It’s the interactions and relationships between
people that make the economy go around.
Debates over economic issues are not technical
debates where expertise alone settles the day. They
are deeply political debates.
A society in which ordinary people know more
about economics, and recognize the often conflicting
interests at stake in the economy, is a society in
which more people will feel confident deciding for
themselves what’s best – instead of trusting the
experts. It will be a more democratic society.

27. Economics is a social subject.
It’s the interactions and relationships between
people that make the economy go around.
Debates over economic issues are not technical
debates where expertise alone settles the day. They
are deeply political debates.
A society in which ordinary people know more
about economics, and recognize the often conflicting
interests at stake in the economy, is a society in
which more people will feel confident deciding for
themselves what’s best – instead of trusting the
experts. It will be a more democratic society.
Quite apart from whether you think capitalism is
good or bad, capitalism is something we must study.
It’s the economy we live in, the economy we know.

36. Capitalism is first and foremost a historical social
system.

37. Capitalism is first and foremost a historical social
system.
What distinguishes the historical social system we
are calling historical capitalism is that in this
historical system capital came to be used
(invested) in a very special way. It came to be used
with the primary objective or intent of selfexpansion.

38. Capitalism is first and foremost a historical social
system.
What distinguishes the historical social system we
are calling historical capitalism is that in this
historical system capital came to be used
(invested) in a very special way. It came to be used
with the primary objective or intent of selfexpansion.
It was this relentless and curiously self-regarding
goal of the holder of capital, the accumulation of
still more capital, and the relations this holder of
capital had therefore to establish with other
persons in order to achieve this goal, which we
denominate as capitalism.

39. The purpose of capitalism is self-expansion – capital
begets capital – and it does so by monetizing social
value and human labour.
This is a circuit of transformation.

40. The purpose of capitalism is self-expansion – capital
begets capital – and it does so by monetizing social
value and human labour.
This is a circuit of transformation.
Historical capitalism involved therefore the
widespread commodification of processes – not
merely exchange processes, but production
processes, distribution processes, and investment
processes – that had previously been conducted other
than via a ‘market’.

41. The purpose of capitalism is self-expansion – capital
begets capital – and it does so by monetizing social
value and human labour.
This is a circuit of transformation.
Historical capitalism involved therefore the
widespread commodification of processes – not
merely exchange processes, but production
processes, distribution processes, and investment
processes – that had previously been conducted other
than via a ‘market’.
And, in the course of seeking to accumulate more
and more capital, capitalists have sought to
commodify more and more of these social processes
in all spheres of economic life.
Immanuel Wallerstein, Historical Capitalism
(London: Verso, 2011), 15.

45. -

46. “Marx, for example, emphasizes that all of these forms of capital
– merchants’ capital, money capital and rent on land – had an
historical existence which stretches back well before the advent
of industrial capital in the modern sense.

47. “Marx, for example, emphasizes that all of these forms of capital
– merchants’ capital, money capital and rent on land – had an
historical existence which stretches back well before the advent
of industrial capital in the modern sense.
We therefore have to consider an historical process of
transformation in which these separate and independently powerful
forms of capital became integrated into a purely capitalist mode of
production.

48. “Marx, for example, emphasizes that all of these forms of capital
– merchants’ capital, money capital and rent on land – had an
historical existence which stretches back well before the advent
of industrial capital in the modern sense.
We therefore have to consider an historical process of
transformation in which these separate and independently powerful
forms of capital became integrated into a purely capitalist mode of
production.
These different forms of capital had to be rendered subservient
to a circulation process dominated by the production of surplus value
by wage labour.

49. “Marx, for example, emphasizes that all of these forms of capital
– merchants’ capital, money capital and rent on land – had an
historical existence which stretches back well before the advent
of industrial capital in the modern sense.
We therefore have to consider an historical process of
transformation in which these separate and independently powerful
forms of capital became integrated into a purely capitalist mode of
production.
These different forms of capital had to be rendered subservient
to a circulation process dominated by the production of surplus value
by wage labour.
The form and manner of this historical process must therefore be
a focus of attention.”
David Harvey, Limits to Capital (London: Verso, 2006), 73.

55. The purpose of capitalism is self-expansion – capital begets capital – and it does so by monetizing
social value and human labour. This is a circuit of transformation.
“Historical capitalism involved therefore the widespread commodification of processes – not
merely exchange processes, but production processes, distribution processes, and investment
processes – that had previously been conducted other than via a ‘market’. And, in the course of
seeking to accumulate more and more capital, capitalists have sought to commodify more and
more of these social processes in all spheres of economic life.”
Immanuel Wallerstein, Historical Capitalism (London: Verso, 2011), 15.

56. “Capitalism only triumphs when it becomes
identified with the state, when it is the state.
In its first great phase, that of the Italian city-states
of Venice, Genoa and Florence, power lay in the
hands of the moneyed elite. In seventeenth-century
Holland the aristocracy of the Regents governed for
the benefit and even according to the directives of
the businessmen, merchants, and money-lenders.
Likewise, in England the Glorious Revolution of
1688 marked the accession of business similar to
that in Holland.” (Braudel 1977)
The fusion of state and capital was the vital
ingredient in the emergence of a distinctly capitalist
layer on top of, and in antithesis to, the layer of
market economy.

57. Over the last quarter of a century something
fundamental seems to have changed in the way in
which capitalism works.
The tendency since 1970 has been towards greater
geographical mobility of capital.

60. Financialization refers to the increasing importance
of financial markets, financial motives, financial
institutions and financial elites in the operation of
the economy and its governing institutions, both at
the national and international levels.
Gerald Epstein, ‘Financialization, Rentier Interests, and Central Bank Policy’,2002
1970s – The Monetarist revolution
1980s – war on labour
1990s – Credit as a substitute for wage increases
2000s – Credit solution for wage stagnation fails
Present day – open conflict over monetary policy once again

62. “In the case of the United States, financialization during
the 1990s led to a closer alignment of large industrial
and financial firms in the U.S., leading to a greater
emphasis by Alan Greenspan and the U.S. Federal
Reserve in financial asset appreciation as a goal of
monetary policy.”
Gerald Epstein (2001)

63. “In the case of the United States, financialization during
the 1990s led to a closer alignment of large industrial
and financial firms in the U.S., leading to a greater
emphasis by Alan Greenspan and the U.S. Federal
Reserve in financial asset appreciation as a goal of
monetary policy.”
Gerald Epstein (2001)
“The goal of monetary expansion has been to do just
enough to stabilize financial asset prices without going
far enough to produce catch-up growth in the labor
market”
Matthew Yglesias, Rentiers and Financialization (2011)

64. “What [the wealthy], businesses and
banks share is a common interest in
supporting asset prices, a lack of
interest in seeking full employment
unless it is a prerequisite for
supporting asset prices, and an
aversion to any policies that can
trigger wage inflation.”
Ashwin Parameswares (2011)

74. Irish P
olitical
Economy f or
Trade Unionists
and Activists
1. What is
P
olitical
Economy?
Dr. Conor McCabe
UCD School of
Social Justice