New Economic Model – ICTU's "Revolutionary" Proposal for Managing Capitalism

At the recent biennial delegate conference (BDC) of the Irish Congress of Trade Unions (ICTU) in July, a policy document named ‘The New Economic Model’ (NEM) was launched. This document puts forward a number of suggestions under the umbrella of ‘four pillars’, namely: 1. The Productive Economy, 2. More and better jobs, 3. Economic and social security and 4. Economic Resilience. The proposals laid out create a harmful illusion that capitalism is not to blame but rather its mismanagement, and that an economic model can be created which works for the benefit of both workers and capitalists.

The first pillar, ‘the productive economy’, lays out proposals for increasing domestic productivity. The NEM declares that to mobilise human capital and increase productivity, ‘we need to radically extend democracy to the workplace’. The suggestions for doing so include vindicating the right to collective bargaining and worker representation on boards of directors. However, the very notion of ‘workplace democracy’ under capitalism is flawed. It suggests that a workplace can be democratically run while the ownership of the workplace itself, its means of production and its profits, remain in private hands. As long as a workplace functions within a capitalist economy, it is ultimately subordinated to the drive for endless capital accumulation (entailing increased exploitation of its employees) if it does not wish to go out of business. Thus no amount of worker representatives on boards of directors can make it democratic. Similarly, while the suggestion of protection of the right to collective bargaining is a positive one, it does not make a workplace ‘democratic’ but rather allows the workers to reduce their exploitation, with ultimate control remaining in the employer’s hands.

The document also calls for a strategy to reward ‘Good Companies’. The characteristics of these ‘Good Companies’ include having workplace democracy, having ‘efficiency wages’ and pursuing decarbonisation. These companies would be rewarded with preferential access to public procurement contracts, grants and equity funding from the state. This strategy of seeking to gain rewards for companies in return for concessions to their workers has been adopted by many trade unions around the world, failing everywhere it has been tried.

Jane McAlevey gives an example of this strategy in her 2016 book No Shortcuts. SEIU Local 775, a branch of the Service Employees International Union in America, set out to organise nursing home workers by promising nursing homes that they would lobby for an increase in state funding for nursing homes in return for them being neutral during the unionisation campaign. Meanwhile another branch of the same union, SEIU 1199NE, organised nursing home workers to improve their working conditions through frequent strike action. A comparison of SEIU 775 and SEIU 1199NE workers showed that workers in SEIU 1199NE had 6 more paid sick days a year than 775 workers, earned over $3/hr more than 775 workers and had employer contributions to their pensions that 775 workers entirely lacked. More importantly from the communist perspective, through their struggle for concessions, workers in 1199NE had become organised and had become experienced in the struggle against employers through strike action, where as the workers in 775 had no involvement or experience in their own ‘unionisation’, and many of the agreements concluded by union leaders with nursing homes directly prohibited workers from taking strike action, introducing gruelling arbitration processes to settle conflicts between the workers and their employers, and in some cases even designated certain homes as being off limits for unionisation.

The ‘good companies’ strategy ultimately sees organising workers as unnecessary. At a time when workers are under relentless assault from employers and without the means to defend themselves, no approach could be more dangerous than this one. This is yet another clear indication of the role that ICTU unions see for themselves, not as weapons of the working class against employers and their interests, but as ‘advocates’ for their members.

The rest of the policies put forward in the document are fairly generic and reformist: increase investment in infrastructure, housing and climate transition. What they all have in common is that they do not aim to destroy the system that makes things like housing scarcity and fossil fuels profitable. Rather they explicitly aim to preserve this system. The introduction explicitly states that the NEM ‘outlines those necessary reforms which are feasible in the current politic-economic order’. A late paragraph in the document laments the low trust in government institutions, and puts forward ways to increase public institutions, as if building trust in capitalist institutions will be in any way beneficial to workers.

Ultimately this document will remain a list of proposals that will never be acted upon. No strategy is outlined for forcing these changes to be implemented beyond ‘relentlessly promoting’ them. This document is reflective of the larger process of social partnership that ICTU has promoted for over two decades. Rather than promoting the interests of workers, the document aims to create a model that “manages” the contradictions of capitalist production. By hiding the real cause of the issues Irish workers face, the capitalist system, ICTU provides a great service to the employers. While the document claims to set out a ‘new economic model’ it in fact upholds and strengthens the existing.

The ICTU vision of trade unionism, in which trade unions are merely advocates trying to win concessions from employers without the involvement of their members, is actively harmful to the working class. This type of trade unionism fosters the illusion that the working class can resist the onslaught of capital without actively struggling for their own interests.

What is needed by the Irish working class is not class collaboration and reformism, but a militant trade union movement that truly trains workers in the struggle against capitalists, a trade union movement that creates real working class power through organisation. Such a movement must above all have a class-based orientation, and fight the idea that there can be an identity of interests between workers and employers.