January 22, 2016

James Connolly wanted a Worker's Socialist Republic, but Ireland is a bourgeois capitalist republic and tax haven

James Connolly, an unbending advocate of a socialist workers republic, unremittingly anti-capitalist and anti-imperialist
James Connolly wrote in an 19897 essay, 'Socialism and Nationalism':
"If you remove the English army tomorrow and hoist the green flag over Dublin Castle, unless you set about the organisation of the Socialist Republic your efforts would be in vain. England would still rule you. She would rule you through her capitalists, through her landlords, through her financiers, through the whole array of commercial and individualist institutions she has planted in this country and watered with the tears of our mothers and the blood of our martyrs."
James Connolly wrote another essay in 1914 ‘The Hope of Ireland’, and said:
"The Labour Movement in Ireland stands for the ownership of all Ireland by all the Irish; it therefore fights against all things calculated to weaken the hold of the Irish upon Ireland, as it fights for all things calculated to strengthen the grasp of the Irish people upon Ireland and all things Irish."
James Connolly wrote an essay in August 1914, 'The War Upon The German Nation':
"Governments in capitalist society are but committees of the rich to manage the affairs of the capitalist class."
Connolly also wrote in the Workers’ Republic, 8 April 1916, an essay ‘The Irish Flag’:
"Who are the Irish? Not the rack-renting, slum-owning landlord; not the sweating, profit-grinding capitalist; not the sleek and oily lawyer; not the prostitute pressman – the hired liars of the enemy. Not these are the Irish upon whom the future depends. Not these, but the Irish working class, the only secure foundation upon which a free nation can be reared. 
The cause of labour is the cause of Ireland, the cause of Ireland is the cause of labour. They cannot be dissevered. Ireland seeks freedom. Labour seeks that an Ireland free should be the sole mistress of her own destiny, supreme owner of all material things within and upon her soil."
Running counter to the vision of Connolly, I have written about modern Ireland's unashamed capitalist crown here. Dairmaid Ferriter wrote:
"As we in Ireland edge towards the centenary of the events that comprised the revolution of the early 20th century, we face a stark conclusion: this is a state bereft of meaningful sovereignty due to its bankruptcy and a state whose governing culture has been exposed as rotten. 
We may have little to cheer about in 2016."
The Green Book of the IRA, which formulated the principles and polices of the IRA and its recruits, mirrored the anti-imperialist, anti-capitalist stance of Connolly. It stated:
"Another aspect of economic imperialism at work is the export of raw, unprocessed materials: live cattle on the hoof, mineral wealth, fish caught by foreign trawlers etc. Further, from 1958 on, the Free State abandoned all attempts to secure an independent economy, and brought in foreign multi-national companies to create jobs instead of buying their skills and then sending them home gradually. 
'Africanisation' is the word for this process elsewhere. Control of our affairs in all of Ireland lies more than ever since 1921 outside the hands of the Irish people. 
The logical outcome of all this was the full immersion in the E.E.C. in the 1970's. The Republican Movement opposed this North and South in 1972 and 1975 and continues to do so. It is against such political economic power blocks East and West and military alliances such as NATO and the Warsaw Pact. It stands with our Celtic brothers and the other subject nations of Europe, and with the neutral and non-aligned peoples of the Third World; it seeks a third, socialist alternative which transcends both Western individualistic capitalism and Eastern state capitalism, which is in accordance with our best revolutionary traditions as a people."
It continued:
"Economic imperialism is evident on every main road and city street of Ireland: in Banking, Insurance, Merchant Marine, the Motor Industry, Mining, Fisheries, Industry in general, I.C.I., cultural imperialism epitomised in the Conor Cruise O'Briens of this Island, has been reinforced since the Treaty sell-out by successive Free State Governments via mass media, R.T.E., and the press and through education."
In 2012 Ireland was listed as a tax haven by US President Barack Obama's re-election campaign team (see here)
TODAY, the norm of the Irish government is to negotiate deals with multi-nationals, allowing the given corporation to base their headquarters in Ireland in exchange for minimal tax bills. The Irish exchequer saw a corporate tax bonanza in 2015 and 2016

Historian Niall Feguson wrote:
"It goes without saying that Ireland’s recent riches are the fruit as much of economic dependence as of political independence: dependence, above all, on American capital and European subsidies. Drawing up historical balance sheets is never easy."
Niall Feguson also wrote in an overview on the British Empire:
"The immense amounts of capital sunk into Latin America... gave Britain so much leverage - especially in Argentina and Brazil - that it seems quite legitimate to speak of "informal imperialism" in these countries."
Ed Moloney said, "Ireland is a tax haven for wealthy corporations in all but name."

John Spain wrote in Irish Central:
"Yes, we’re a tax haven. We may not like the connotations that this has with dirty money and criminality, and we may not be the first choice for dodgy people trying to hide money (although it did emerge last weekend that one of the biggest online porn groups in the world is opening an office here for tax reasons)."
Fintan O'Toole wrote in 2009, 'Dublin is a Liechtenstein on the Liffey':
"Ireland has deliberately constructed an environment in which the description of our capital as "Liechtenstein on the Liffey” by Lord Oakeshott, the Liberal Democrat Treasury spokesman, is not unjust. A globalised brand of cute hoorism has been created by state policy. 
If you asked most Irish people about the proliferation of UK firms moving their corporate head offices to Ireland, the response would probably be pleasure at the fact that we’re getting one over on the Brits. The perception is wrong. Most of these companies continue to pay taxes in the UK. What attracts them is the way Dublin acts as a gateway to offshore tax havens. A firm can move its headquarters to Dublin and then, because of the extreme laxity of regulation, reincorporate itself in, say, Jersey or Liechtenstein. They thus escape not just from UK company law and taxes, but from Irish law and taxes as well. 
Thus, for the sake of a handful of jobs, Ireland facilitates the avoidance of taxes by British corporations. And we do this as part of a mentality that has grown with the International Financial Services Centre - the notion that lax regulation is part of our competitive advantage. The IFSC has been a great cash cow for the Irish exchequer, and provided up to 20,000 jobs. But its very success has also encouraged a deep reluctance to ask too many questions about the flow of money in and through Dublin."
The Financial Times editorial wrote:
"Ireland should also beware of the growing international unease towards its status as a corporate tax haven. There has been outrage over the way Pfizer, the US drug company, is taking over Allergan, an Irish-registered group. While the move has limited industrial logic, it allows Pfizer to redomicile in Ireland and escape paying American corporate tax."
The UN expert, Special rapporteur on poverty Philip Alston, said Irish tax policies are ‘antisocial’ to developing countries. He said:
"The problem is not the 12.5% tax rate. Other countries have that too. The problem is that for many years now Ireland has supplemented that rate and its many natural attractions for investors with a range of schemes that look to all the world to be designed to facilitate tax avoidance by huge multinationals in return for a pittance of a reward to Ireland. But more importantly, the costs to other countries, including developing countries, have been immense."
David McWilliams said in 2013:
"There is a huge difference between a low tax country and a tax haven."
He wrote more recently on the Double Irish and said"the ‘tax haven’ stench is contaminating the national brand." Ireland does not benefit commensurately from corporate tax dollars, he said:
"The tax strategy was a form of protectionism that – rather than protecting infant Irish industry – protected big foreign industry that didn’t need protecting. It protected the strongest players, not the weakest."
John Cassidy wrote in the New Yorker that Ireland is a "distinctly dodgy" foreign tax locale. Following the Allergan-Pfizer merger, which makes Pfizer Irish, Cassidy wrote
"In merging with Allergan, which is based in Dublin, Pfizer intends to move its corporate residency to Ireland, where the corporate tax rate is just 12.5 per cent, compared to thirty-five per cent for a company of its size in the United States. Over the next few years, the merger could save Pfizer billions of dollars in taxes and deprive the U.S. Treasury of the same amount."
He continued:
"The Pfizer–Allergan deal will be the biggest inversion yet, and it is nothing short of a disgrace. Drug companies like Pfizer have long benefitted from taxpayer-funded research carried out under the auspices of organizations like the National Institutes of Health and the National Science Foundation. Now, Pfizer is seeking to avoid paying the taxes that are due on its profits, particularly profits generated by its overseas subsidiaries. Even though the Obama Administration doesn’t have the legal powers to block the Allergan transaction, it should seek to shame Pfizer and its board of directors into calling it off."
But here is the key bit:
"Like many other big American corporations, Pfizer is facing challenges adapting to a changed world. But nothing in its financials or its strategic position suggests that it is facing the sort of threat that might justify the radical and potentially self-destructive move that giving up its U.S. domicile entails. A venerable member of the Fortune 500 now looks for all the world like a greedy tax exile, skipping off to a dodgy foreign locale. (Viewed in terms of its corporate tax policies and the assist it provides to big multinationals seeking to avoid paying taxes in their homelands, Ireland is distinctly dodgy.)”
He finished with a question:
"So here is a question for the independent directors: Do you really think that traducing Pfizer’s proud history by moving to Dublin and shafting American taxpayers would be the act of a “respectable corporate citizen”?" 
Read my previous post on Ireland as a "cynical tax haven" here. Also read the article, ‘Conned’ - A German view of Ireland, a story on how Ireland has sold its oil and fish. The German newspaper ‘Süddeutsche Zeitung’ published the article about the ‘conning’ of Ireland over several decades by its political masters. Christian Zaschke’s article in Süddeutsche Zeitung claimed Ireland’s political elite had failed its people, not least over oil rights. It centers on Ray Burke, and here's what the article said:
"People in Ireland don’t have positive thoughts about Ray Burke. After all, he sold their future. Ireland has been trapped in a never-ending crisis since its gigantic property bubble burst. The banks, above all Anglo Irish Bank, worked ceaselessly to pump fresh money into the already overheated property market – which finally collapsed with the outbreak of the financial crisis of 2008...
The oil off the Irish coast could be the way out of this misery. The oil could be the hope. If the former energy minister Ray Burke hadn’t rewritten the relevant laws as though the oil industry itself held the pen. And if Bertie Ahern hadn’t made an already bad deal for the Irish people even worse. 
Burke was energy minister in 1987, when it was decided to change the provisions for oil and grass drilling licence allocation. Until then the state owned 50 per cent of all oil and gas found in Irish waters. In addition, companies had to pay royalties of between 8 and 16 per cent as well as 50 per cent tax."
(1, see notes below) The new rule gave companies 100 per cent of their find and abolished licence fees. 
In 1992 Bertie Ahern, then finance minister and later prime minister from 1998 to 2008, cut the tax for oil companies to 25 per cent – a provision that remains to this day.
(2) Increasing numbers of Irish people no longer accept this. 
For instance, the fisherman Joey Murtagh. Standing on the edge of Dublin Bay, with a glorious view over the Irish Sea, he asks: “You know what Ray Burke did?” 
Or the psychologist Aisling Murphy. She sits in Dalkey in a pub called The Queen’s, where chicken and tacos are today’s special. Murphy asks: “You know what Ray Burke brought on us?” 
The financial adviser Eddie Hobbs has arranged to meet at the motorway restaurant Brown’s Barn, 15km south of Dublin. He asks: “You’re aware of Ray Burke?” Burke was always surrounded by corruption allegations and went to prison in 2005 because of tax fraud. The reason this political inheritance is causing such animated discussion now is because of huge oil and gas reserves believed to surround the island. The company Providence estimates the volume of oil it discovered in the Barryroe field, south of Cork, at over 1.7 billion barrels, of which at least 270 million can be pumped. Further test drillings in Irish waters have been similarly promising. At the moment a barrel of oil costs, depending on grade, between $90 and $100, meaning there could be oil worth many billions of euro in the Irish sea bed.  
(3) Even the oil companies concede that Ireland is surrounded by massive riches. But the Irish will probably gain none of this thanks to men like Ray Burke and Bertie Ahern. Screwed over again Murtagh says: “We are being screwed over again with every trick in the book.” Murphy: “We are a land that lies still while we are bled dry.” Hobbs: “The oil companies won’t succeed on this front. Not this time.” 
O’Toole: “Under the current conditions, it would be better if the resources stayed in the ground.” But they aren’t staying there. In April the American oil giant ExxonMobil began test drillings in the Dunquin Field southwest of Ireland. Off the west coast, Shell is extracting gas from the Corrib field, a source of often violent confrontations with residents for many years."
He continued:
"In most oil- and gas-producing countries in the world the state taps on average 70 per cent of the profits. In Ireland there is just the 25 per cent tax, though this can rise to 40 per cent on particularly rich fields. But Irish rules allow companies to write off all costs for test drillings over 25 years, regardless of where they were carried out, meaning the Irish State ends up with considerably less than 25 per cent.  
Opposition is building through Hobbs’s “Own Our Oil” campaign. It is preparing a report looking into how Ireland could profit from its resources, prepared by experts from Ireland and other oil-producing countries. He points to Norway, where most of the profits from oil production go to the company Statoil – the majority of which is owned by the state. In this way Norway has become one of the richest countries on Earth. The study is to be presented at a major conference and then handed over to government. “We’re making good headway,” says Hobbs, “and may be finished this year.”   
Hobbs is well-known in Ireland thanks to his 2005 television programme Rip-Off Republic. He is viewed as a consumer champion and is known for his populist, biting attacks on the establishment. He became an enemy of the oil industry after the company Providence made a tactical error. Last September Providence managed to acquire a licence for test drillings in Dublin Bay. How this was possible is puzzling as the bay is a natural conservation area. The platform was to have stood 10km from the coast and would have been visible from land. 
Murtagh has gone to sea since 1972 and has first-hand experience of how Ireland sold its other big resource: fish.  
Irish fishing waters are regarded as the best in Europe. On EU entry in 1973 the Irish negotiated a deal that appeared good, but only at first glance: allowing other EU states into their waters to fish in exchange for money for Irish farmers. Murtagh says: “14.2 per cent of European seas are Irish. But we are allowed have only 2.6 per cent of the fish.” Murtagh’s thesis: Ireland has paid back twice in fish every euro of EU aid received. The Dutch, Spanish, French come with industrial ships and empty Irish waters while EU fisheries policy keeps him ashore. As he talks Murtagh, 57, has tears in his eyes. (4) Murphy says that the protest in Dublin Bay has triggered something among her friends. 
"You have to know that we Irish have no experience in confrontation. Here it’s usual not to make a fuss. On top of that is something that, in psychological terms, you call ‘acquired helplessness’. You find this, for example, among abused women. Ireland doesn’t defend itself. Ireland quietly puts up with it." 
But a new fighting spirit is palpable since the group in Dalkey formed, Murphy says. “This is completely new, even for me,” she says. “I was raised that institutions are always right and that you don’t raise any objection.” Great diplomats, terrible politicians Hobbs says the Irish always tried to find a third way. “You never have good and evil here, right or wrong. What you always have is people who are somewhat good or a little bit right. Above all, we are good at compromise out of fear of insulting the other. That’s why we have produced great diplomats and terrible politicians.” 
He continued:
"(5) O’Reilly jr prefers to speak in safe surroundings. A week ago he told the oil industry website Rigzone that Ireland’s tax regulations were “appropriate for the current state of the industry”. Ireland doesn’t have enough money to search for oil itself and thus, O’Reilly said, needs investors from abroad – and attracts them with low tax rates. In fact, Ireland has had good experience with low tax rates: a section of the Irish economy booms because of large international companies like Microsoft and Google, which have settled in Ireland because of the low corporate tax rate of 12.5 per cent. 
This sector is what the Irish Government points to when it says things are improving. But since 2008, Ireland’s domestic market has been in the cellar, with dramatic consequences. More than 300,000 Irish people have emigrated in the last four years, 40 per cent aged between 18 and 24. 
That would be the equivalent of 5.4 million people leaving Germany (population 82 million). The State has to make savings, meaning ever less money is available for education, which means there won’t be enough trained staff for international companies – the only economic sector that is working. 
“In countries like Greece or Spain the youth go on the street and protest,” says O’Toole. “In Ireland, they emigrate. Now our young people are also leaving because they don’t want to pay back the debts of our bankers.”  
The publication of the Anglo Irish Bank telephone calls has revived the outrage. In one extract a banker says: “The strategy is to pull [the government] in, so that they write a big cheque. If they realise the scale of this from the start, they might say it is too expensive for the taxpayer.” 
It demonstrated to the Irish public like never before how they were conned ruthlessly by a shameless elite. 
Even Chancellor Merkel commented on the case. On Thursday evening she said: “I have nothing but contempt for that.” O’Toole says: “The interesting question now is whether the fury will focus. Whether the people perhaps choose the issue of oil to say: that’s enough. If even Third World dictators can agree better deals with oil companies, why can’t we?” 
(6) He answers his own question: “The Government always views itself in a weak position. All important financial decisions are being taken by the troika of the European Central Bank, European Commission and International Monetary Fund. The Government merely implements. That leads to a situation where they are psychologically incapable of acting independently.” 
The fisherman Joey Murtagh, the psychologist Aisling Murphy, the financial adviser Eddie Hobbs and the author Fintan O’Toole want to make sure that, on this matter, the last word has not been spoken. That the Irish people no longer have to pay for institutional stupidity and greed. 
“It is completely un-Irish what we’re doing here,” said Murphy, “but perhaps we are the start of something new.” She laughs very cautiously when she says: “Seen that way, perhaps we’re a kind of avant garde.” 
Conor Cruise O'Brien wrote heavily about James Connolly in his 1966 polemic for the New Left Review, ‘The Embers of Easter 1916-1966’. He wrote:
"Connolly was a revolutionary socialist, who won Lenin’s approval, and who would have approved Lenin’s revolution. The Republic Connolly wanted was a Workers’ Republic, in which the workers of Belfast would have played an important part. 
As things have turned out, both parts of Ireland are firmly in bourgeois control, and no significant labour movement has emerged... 
Connolly is venerated as a martyr, and labour leaders sometimes pay homage to his ideals, without specifying what these ideals were, and always compensating for the reference by some allusion establishing the speaker’s religious orthodoxy, and if possible Connolly’s also."
He continued:
"There were for a while signs that the government which claims descent from Pearse and Connolly had not entirely forgotten that Connolly regarded the Easter Rising not just as an Irish rising against England but as a blow against capitalist imperialism—the idea of the ‘pin in the hands of a child’. Nothing very dramatic along these lines could be expected from today’s bourgeois republic but, for a time, there appeared to be a realization that it would not be seemly for the heirs of Connolly simply to follow blindly, at the United Nations, the directives of that power which has inherited Britain’s role as the centre of capitalist imperialism, with its systems of indirect rule in Latin America, South-East Asia and parts of Africa, and its counter-revolutionary policies directed against the People’s Republic of China.. for persons in the habit of following [UN] proceedings attentively the undramatic but perceptible change in Ireland’s voting pattern from 1961 on had a chilling significance, finally confirmed when last year the one-time ‘independent’ voted, along with the other satellites, for the continued exclusion of the government of the people of China from China’s seat and the continuance in that seat of a delegation representative of American policy in Asia. The significance of this re-alignment was that, as far as official policy was concerned, the last embers of the 1916 spirit had expired."
He also wrote:
"We have no need of hypothetical Connollies, tailored to the requirements of someone’s propaganda. We have Connolly’s writings, and the record of his acts. The sense of these is the sense of the revolutionary movements in the underdeveloped world today. His writings reflect not only immense strength of character but also high intelligence; these are not the qualities that are required to swallow the American, and American-satellite, line on these revolutionary movements—that they are ‘master-minded’ from Moscow or Peking, that those who oppose them are the real anti-imperialists etc. From Connolly’s writings it is not easy to imagine him accepting the thesis that the armed Vietnamese peasants are the imperialists and that the American marines who are killing them and poisoning the rice-fields around them, are saving Vietnam from imperialism. Nor need we suppose that he would be as easily swayed as are his supposed heirs by the thought that the Vietnamese guerrillas, being either communists or Buddhists or both, quite possibly do not go to Mass.”
No party on Ireland is more against the corporate, against the inexorable power of the unaccountable corporation, than Sinn Fein. Yet it's military apparatus is effectively a corporation, endowed with huge finances and sprawling international ties, entirely unaccountable. Not only does Sinn Fein have an army with an arsenal but an army with a shadow bank, entirely adrift of regular checks and balances. 
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