As we move into the summer, developments demonstrate continuing instability and geopolitical reorganisation of global capitalism. Throughout May and June, inflation remained stubbornly above target. As the business press reports, capitalists are no longer assuming an automatic return to the ultra-low-inflation world that characterised the 2010s; access to cheap capital has ended.
In this respect, the Great AI Mania is itself inflationary. Enormous investment in data centres, semiconductor production and electricity grids is increasing demand for electricity, critical minerals and construction inputs, while also running into physical constraints in energy systems and infrastructure. Is the AI boom the beginning of a new long-wave investment cycle comparable to earlier periods of railway construction or electrification? Or, as argued in Socialist Voice, another speculative phase of capitalist waste in which vast sums of capital are misallocated?
Related are the pivots of European state monopoly capitalists. Conscious of their relative weaknesses, their political agents have spent recent weeks intensifying efforts to build more strategic capacity and independence. Throughout June, business reporting focused on efforts to deepen European capital markets and channel Europe’s considerable savings into productive investment in Europe in the race to minimise dependence on China. European leaders are also seeking to reduce dependence on American AI infrastructure while simultaneously repurposing defence spending and NATO imperialism as industrial policy, as recent agreements between Italy’s state-owned Leonardo and Turkish drone manufacturer Baykar testify.
In this wider climate of economic uncertainty, Dublin and Stormont are seeking to manage organised labour. In Dublin, discussions have already begun about what the next round of public-sector pay negotiations might look like. The Irish government, as evidenced at the recent National Economic Dialogue Forum, is attempting to moderate expectations in the interests of “fiscal responsibility”, but the unions are gearing up to protect living standards against steady inflation. There is some talk within the labour movement of wage indexation.
For Irish private-sector workers, the wage trend is around 3-4% annually, but many workers do not feel substantially better off due to rising costs of housing, childcare, insurance, and energy. As public-sector unions seek forms of wage indexation to protect incomes from inflation, private-sector unions may also find such mechanisms attractive. However, wage indexation is not a complete solution. There is a danger that unions become trapped in a cycle in which rising costs are continually accommodated by higher wages, without addressing the underlying causes. Higher wages cannot, by themselves, solve housing shortages, expensive childcare or escalating car insurance costs. The labour movement might seek to defend the money wage through collective bargaining while simultaneously pushing for an expanded social wage through greater public provision and socialisation of essential services. Otherwise, workers may continue to earn more and feel no more secure.
In the North, inflationary forces have also begun to generate renewed discontent amongst organised labour, primarily within construction supply chains. The disputes at Haldane Fisher and, to a lesser extent, Balcas may signal a return of private-sector labour unrest in the autumn as workers’ wages continue to fall behind prices. Meanwhile, hopes that Stormont would deliver meaningful pro-labour reform have faded, with the Federation of Small Businesses, aided by the DUP, effectively stalling the Good Jobs Bill.
While the law is rarely decisive in class struggle, this nevertheless represents a setback if the anti-labour politics are not reversed through public pressure and mobilisation. However, a more encouraging development has been the response of the labour movement to recent racist violence. Racism is not simply a community relations issue. When workers are intimidated by nihilistic lumpen mobs travelling to and from work, or targeted because of their ethnicity while participating in economic life, this is fundamentally a workplace issue. The fact that the labour movement led the Belfast anti-racist demonstration of 3,000 people on June 13th serves as a reminder that the struggle for stronger workers’ rights cannot be disentangled from the fight for a better society.
