Irish Times: Freeze Public Sector Pay for 70 years

This Irish Times article effectively advocates that public sector pay should be frozen in real terms for the next 70 years, with wage growth no higher than inflation –  here.

86 replies on “Irish Times: Freeze Public Sector Pay for 70 years”

It does seems strange to index pensions to the current wage levels of employees rather than the levels that prevailed when the individual was employed does it not? If wage rises follow increased productivity why should past workers receive increased pensions? The rationale for linking pensions to final salaries is also pretty unclear to me…

@Philip Lane

This Irish Times article effectively advocates that public sector pay should be frozen in real terms for the next 70 years, with wage growth no higher than inflation.

What serious person could disagree with the idea that the levels of public sector pay for the next seventy years should be set according to our priorities now?

You could laugh but it would be nervous laughter.

Business section journalism is interesting stuff sociologically isn’t it? It is not simply news and analysis about business and the economy but the kind of news and the kind of analysis that confirms the existing ideological positions and supports the financial interests of “business people” – it is as if every article on the domestic economy of any depth is also an opinion piece and many are additionally kite flying for class interests (like this one).


It does seems strange to index pensions to the current wage levels of employees rather than the levels that prevailed when the individual was employed does it not?

That depends on whether you see the increased wages now as a reward for productivity or a belated recognition of the importance of the job and/or increased power of the work vis a vis the employer.

So if wages have increased because of “fairness” you can see a case for increasing the pension to reflect this.

However I agree with you that the final salary pension calculation is a very bad idea and all of the current pension wangling, public and private, distracts from the miserably low state pension (the UK is worse remarkably).

I’ve not seen the report and it’s quite possible I’m being dumb here but isn’t the increase in pension liabilties above the rate of inflation, which the IT finds ‘puzzling’, just a fairly reasonable assumption of an increase in the number of current/former public sector employees?

Worrying about pay levels over a 70 year time horizon is foolish or stupid.

The link of a retiree’s pension with the salary of a person who now occupies the final position the retiree had, is also foolish.

If the current incumbent is on a fixed term contract with some premium built into the pay, how should the pensioner who had an open-ended contract be compensated?

The standard of reporting on this piece is really abysmal. The “savings” of €16 billion is over several decades. Is the €15bn a present value number? If not, then it is totally meaningless. If it is the result of a PV calculation, I’d like to see the discount rate used.

The IT comment seems to go beyond what was said by Robert Watt, i.e. it implied that salaries of serving public servants would not increase by more than inflation (or even in nominal terms?) in the very long run. Whatever about the debate on public v private sector pay rates in recent years, a very long run freeze is not only industrial relations fantasy, it also would mean that the public sector would find it increasingly difficult to recruit skilled personnel – just look at recent problems with recruiting medical consultants.

As for pensions, the link with current salaries has not been formally abandoned, but neither has a link with current consumer prices been substituted for it. If it had been then public sector pensions would have increased (albeit modestly) over the past 4 years. Also there appears to have been no reference in the discussion to the intention of the Government to move from final salary to average salary as the basis for pension calculation.

To me there is a huge element of arbitrariness in current and proposed pension arrangements. This is an area of public policy where the rules should be clear and where people are given the best possible chance of planning their personal finances for the long run. My fear is that when CPI inflation exceeds salary increases they will index to the latter, but as soon as salaries outstrip the CPI, the rules will be reversed.

The universities should be free to set their own salaries and set up (re-set up) their own independent pay and pension schemes.

I very much doubt the current linked-to-public-sector entrants allows TCD / UCD to be competitive in hiring new economist PhDs on the international market.

Minor point:

Considering the ‘fact’ that Ireland is lumped with >40% of the cost of the EZ financial crisis ….

… How about freezing payment of odious interest on same for 70 yrs?

“If people are still paying nearly €9,000 each while the remainder of the EU pays only a fraction of that, then it is no deal at all; just a rearranging of euro notes on the decks of a sunken ship,” Mr Taft said.

The average banking crisis debt across the EU is €192 per person, and the figure of €9,000 for each Irish person does not take into account the €18bn put in from the National Pension Reserve Fund.

After Ireland, the German people at €491 per person have shouldered the next biggest cost of bailing out their big regional banks, which invested heavily in hedge funds.


“I very much doubt the current linked-to-public-sector entrants allows TCD / UCD to be competitive in hiring new economist PhDs on the international market.”

Sure, what do we need new economics PhDs (who might be interested in being something other than neoliberal cheerleaders) for?

Meanwhile, today the Irish Times makes an absurd call for frozen PS salaries based on some dubious premises and it gets a thread on the Irish Economy blog. In recent days TASC published report defending taxation and, horrors, increased taxation and nobody on The Irish Economy has said a word about it.

This is typical of how things go both here and in the ever-so-slightly broader world of Irish economists. It is enough to bring one to tears. Yet, through my tears I still manage to smile knowing that all indications are that the tide has turned. The response to Piketty’s book (and the Occupy movement before that) are really watershed moments. The Thatcherite/Reaganite neoliberal moment has passed. I expect the EU and Irish economists to get the news a few decades down the road. In the meantime it’s full speed ahead on the project of shrinking the public sector until it can be drowned in a bathtub and letting the wealthy continue to party like it’s 2005.

@Ernie Ball: you caricature economists as “neoliberal cheerleaders”. This is nonsense.

No, I characterise Irish economists as neoliberal cheerleaders.

Here’s a challenge: point me to a Marxist economist working in an economics department of an Irish university. One.

@Ernie Ball

Name one succesful Marxist economy ? You can’t and Marxist economists are these days appropriately rare.

@Ernie Ball

Here’s a challenge: point me to a Marxist economist working in an economics department of an Irish university. One.

Wasn’t there one in UCC or UCG at one point in the last few years? Anyone?


You’re labouring under the misconception–typical of Homo Œconomicus–that the value of an academic discipline lies exclusively in the comfort it can give and the prescriptions it can issue.

One can very well have doubts about Marxism as a political project and still have enormous respect for the tools of analysis Marxism provides.

As it happens, Marxist economics has proven to have been more prescient before the fact and to have better analyses of today’s crisis than, say, the European Commission or the ECB. Even Piketty (no Marxist he) suggests as much. Given that Irish economists are generally lagging behind even these latter European institutions, the hiring of a Marxist could only be an upgrade.

@ otto

You are, of course, correct. What is particularly striking in the debate on the cost of the public sector is the short memory of those involved.

There is no “market” for public sector employment because of the set system of salary-scales and grades. This can only be unpicked when there is acceptance that basic working conditions for all employees – including pension rights – should be similar irrespective of whether they work in the public sector or the private sector. I cannot see this leap of imagination happening.

When the private sector was booming, public servants did not wish to be left behind; hence bench-marking. The bust in the private sector is now, inevitably, matched by a bust in the public sector as the latter is ultimately dependent on the former.

What lies ahead is a slow process of attrition until the level of pay in the public sector ends up where it belongs i.e. some ten to twenty points behind that in the private sector in order to factor in the value of two major benefits available to the latter viz. secure employment and defined benefit pensions (assuming that the leap of imagination to which I referred above does not occur).

The one avenue of escape is for those sectors that need not be within the public sector at all – notably third level education – to assess the possibilities of going private!

As for the putative rarity of Marxist and Marxian political economists, that betokens the very sort of confusion between what one sees and what there is that I’m talking about. Here’s a partial list in no particular order and off the top of my head limited to writers in English: Alex Callinicos, David Harvey, Gerard Duménil, John Bellamy Foster, Chris Harman, Mick Brooks, Sam Gindin, Andrew Kliman, Richard Wolff, Leo Panitch, et j’en passe et des meilleurs…

What folks in Ireland and many other places still have to learn, is that the only possible “indexing” is to what the republic can afford, and neither inflation or pay scales of whatever.


“Occupy” was in most places just the usual riot of rich spoilt brats, who could afford working nothing or many months, based on the generous stipends of their parents, reliving their youth through them. Definitely not “working class”.

The intellectual garbage of Piketty was covered in this blog more than enough.

The very cheap trick of ignoring depreciation to further his socialist agenda,

“Not even wrong” I want to say.

A “Marxist Economist”? In what kind of yesterdays world do you live in.

Even the leader of the “communist platform” Sahra Wagenknecht, just to mention with a German economics PhD, takes Ludwig Ehrhardt’s “social market economy” as the reference point.

We also don’t have physics professors anymore who teach phlogiston theory or astrology.

Marx was describing England in the 1800’s. a historically very special situation, unique in the UK and before WWI. Maybe you read up a little on Wilhelm Krelle, and his Lorentz curves for the US, UK, Germany, from 1800 to 1960 ?

@Ernie Ball: There are some Neo-liberals (horrible term!) in the economics profession; there are no doubt a few Marxists (very few!). But there are loads of people in between. By and large they are not dogmatists and so they don’t appeal to media types and others who just love dogmatists and ideologues

All of them, John, operate under the panglossian assumption that though capitalism may have problems, capitalism itself cannot be the problem, for it is the optimum way of organising not only an economy but also a society and the entire world. Capitalism is the water they swim in and they are, therefore, not sufficiently detached to really analyse it. That makes them dogmatists à leur insu.

Maybe DOCM can explain why he thinks an Independent article written by someone who, apparently, doesn’t know what a civil servant is, is worthy of our attention.

Also, note the arbitrary timespan: why start in 2007, rather than 2008, given that budgets are decided a year in advance? Three guesses at what that would do to the “scandalous” figure trumpeted in the headline by our version of Izvestia.

@ Ernie

Opinion is free but facts are sacred! Why not submit a few facts from time to time?

By the way, it occurs to me that it would be an interesting academic exercise to plot the development of the various salaries in the public sector grade by grade, say over the past ten years. Does there exist a 1% – and a 10% – at the top while the rest have languished?


“Why not submit a few facts from time to time?”

Happy to. From

Gross Public-Sector pay in 2007: €18,156,738,000
Gross Public-Sector pay in 2008: €19,338,696,000
Gross Public-Sector pay in 2014: €14,519,368,000

Public-Sector pay overall has decreased by %20 since 2007 and by 25% since 2008. Any increases that anyone might have got through increments are irrelevant to these facts.

Do you think the average Independent reader, upon reading the article that you think is worthy of our attention, will be given to believe that public-sector pay has gone up overall or down since 2007? And, if the former, how do you reconcile your insistence on “facts” with your apparently favourable citation of rank propaganda? And what was that you were saying about opinion vs. facts?

And, since you know what it is I do for a living, maybe you could do us the favour of enlightening all of us as to who your employer is and what kind of job you do? In the name of, you know, transparency and having a sense of the partis pris of the ideologues we’re dealing with.

Oh and, by the way, it defies logic that the continued payment of increments could favour the highly-paid given that everyone in the public sector eventually reaches the top of their scale. Combined with a hiring freeze in effect since 2009 the numbers actually getting increments now must be much reduced.


Public-Sector pay overall has decreased by %20 since 2007 and by 25% since 2008. Any increases that anyone might have got through increments are irrelevant to these facts.

Nice. I somehow doubt that if C P Scott were alive today he would have much time for the current EU establishment or their schills.

@DOCM the fact that 6 years into this “crisis” that a question can be asked as to to what is the evolution of PS pay is indicative of the fact free nature of public debate in this country. A responsible media would demand that the government identify in reasonable detail the changes since 2000 (say) in numbers, pay, and outputs of publicly funded bodies. This would allow some mature debate on the issue. But we do not have a responsible media and instead we get the Indo rants and the likes of the Irish Times article and data would simply interfere with these.

The public pay and pensions bill has fallen by 7% since 2007 based on data from an annual report. See latest:

The Dept of Public Expenditure and Reform website and databank are very poor as information tools.

The data below are net values for each year after deducting staff pension contributions. Figures for 2014 and 2014 come from the annual Stability Programme Updates.

Staff at local authorities c.30,000 are not included.

2001 €10.2bn
2006 €16.2bn
2007 €17.6bn
2008 €18.7bn
2012 €16.9bn
2014 €16.8bn
2015 €16.4bn

The pay and pensions bill rose by 59% in the period 2001-2006

Increases in public sector over the period 2001-2006 due to general pay rounds total €2.479bn (or 24.3%); “special” pay increases (primarily Benchmarking) total €1.328bn (or 13%), and other factors (such as extra numbers of 38,000 and a rise in the total pensions bill) total €2.193m (or 21.6%).

CSO data show that consumer prices rose 18% in the period 2001-2006 while the average industrial wage rose 22%.

Consumer prices slightly fell in the period 2008-2013

Full-time equivalent numbers fell from 279,000 in 2009 (no earlier data available on FTEs) to 264,000 in 2012.

Staff pension contributions increased from €561m in 2007 to €1.556bn in 2010 and €1.509bn in 2012.

The Department of Public Expenditure Databank is “a very poor information tool” dixit the Sage of Kuala Lumpur based on nothing… We await your refutation of the entire website. Make sure to accompany it by a lot of pithy anecdotes about the Raj or whatever, the relevance of which will be clear to no one but yourself.

The article I was responding to cited gross pay figures not net of pension contributions (why?), so I responded in kind. But, a propos, here’s another very poor information tool:

Tell me, Michael: do you think the article from the Independent cited by DOCM is a good information tool?

Nevertheless, my point stands: the Independent article seems to suggest increases on the order of billions to PS pay in the years 2007-2014. The opposite is the case, even by the figures you provided.

The PER’s databank shows gross pay falling from €15.3bn in 2012 (total including pensions was €18.4bn) to €15.1bn in 2003 and €14.5bn in 2014.

The full-year savings of the ‘Haddington Road’ public pay agreement in 2013 has a target saving of €1bn – €210m relates to pay of earners on €65,000+ €130m relates to increments and the rest is productivity and related measures but in the health area, budget limits are already being breached.

So €500m in savings would likely be a best outcome.

So if not 7% by 2015, it’s likely to be less than 10%.

@ Ernie

Now we are beginning to get somewhere!

At no stage have I ever denied that there have been major reductions in public service pay and pensions and the public sector in general has shown a high level of what can only be described as patriotism by taking it on the chin. This is because there was a general recognition IMHO that pay scales had gone well beyond what was sustainable, especially at the higher levels. The main reason this happened was the dubious bench-marking exercise.

@ Dearg Doom

The media has many responsibilities but you are asking too much of it. It is the responsibility of the elected representatives of the people to guard the public purse, something that they have singularly failed to do. As I have pointed out many times, a major element of the failure is the confusion of mind that has arisen where politicians are seen as public servants; as epitomised by the formal link established between their salaries and that of public servants by the Buckley Report (2002). (This leads to the interesting thought as to whether their salaries are to be frozen for the next 70 years!).

I have also commented many times on the fatal political error implicit in dividing responsibility for control of expenditure between two departments as part of a coalition deal. These chickens have now come home to roost.

The general point that can be made is that when the then elected representatives steered the ship of state on to the financial rocks on two identifiable previous occasions, emigration and a general up-turn in the international economy floated it off. The level of debt burdening the economy after the boom makes this very unlikely on this occasion. What is required is the type of radical reform which I have also consistently advocated notably the creation of a level playing field between public and private employment in the manner achieved in other developed – mainly Scandinavian – economies where the open conflict between public and private sectors as happens in Ireland is simply not conceivable.

One lives in hope!


We’ll be getting somewhere when you divulge your employer and job and, thereby, your interest in posting here.

@ Ernie Ball

This issue can be discussed without a piggish reaction. 😯

The data I used is official data and the question on the reliability of a forecast is relevant.

The minister prefers to highlight gross pay but the net is what is relevant for budget purposes.

Oh, and, while you “didn’t deny” that there have been reductions, you cited an article expressly designed to suggest to the ill-informed that there have been increases, not decreases. Like a true propagandist, you preserved what Oliver North used to call “plausible deniability.” Well played. But not really.

@ Dearg Doom

I should add that one of the unavoidable consequences of the approach of the present government – and previous governments but to a lesser extent – is that it inevitably leads to an attempt to micro-manage the administration of government, the case of medical cards being the most egregious current example. Indeed, everybody seems to want to lend a hand on Joe Duffy’s Island, media included. The result is a cacophony.

Public servants need to be given the capacity to manage i.e. hire and fire within the clearly established parameters of the enabling legislation. This can only be achieved by draconian legislative central financial control e.g. if an organisation responsible for supplying a public service goes over budget, it ceases to provide that service!

This paper shows how it it was done in the case of Sweden, the most representative recent example.

The Irish body politic is still waiting for the incoming tide.

@ ernie

It was DOCM who cited it, probably just throwing a stone in the pond. As for the Sage of Kuala Lumpur, he puts a lot of good stuff on the table, as indeed do you.

@ francis

Many of the worst things are done by the Robespierre types, who see themselves, and are seen, to be acting in the name of some transcendent goals. Some pretty dreadful stuff has been carried out in the name of Christianity (and indeed other religions). But Christianity, with all its flaws, is nevertheless a big part of the European and global heritage. It is a fact of history.

If we do not learn, we are bound to repeat errors. Any literate reading of politics, sociology or economics, will recognise that Marx had a huge influence. If Marx was a fool, why did so many highly capable from all social backgrounds people find his ideas interesting ? If his critiques of German society had no foundation, there could have been no Rosa Luxembourgs.

The Red Tide may have receded, but as Germans above all must know, there are all sorts of tides in this world. One of those tides is neoliberalism and deregulation, with international labour arbitrage, financialisation of the real economy, and the upwards transfer of wealth to the 1%. The ‘system’ as currently designed leaves savers with no return on deposits.

Piketty may be ‘in vogue’ at the White House, but his basic thesis looks reasonable to most folk. It is not his fault that he is French. 🙂

Ernie is entitled to lament the fact that so few of our domestic economics question the neoliberal consensus. Even in circumstances where that consensus leaves us with huge unemployment and emigration.

Here is the sort of perspective which I find helpful.

Since we’re throwing stones in the pond, here’s an interview that Thomas Frank (a great commentator) conducted with David Graeber of the LSE (a brilliant analyst) about the disappearance of the dream of leisure, the rise of bullshit jobs, and why those whose jobs are least valuable to society get rewarded most handsomely.

Some excerpts:

Do economists have an explanation for this combination of greater productivity with increased work hours? What is it and what do you think of it?

Curiously, economists don’t tend to find much interest in such questions—really fundamental things about values, for instance, or broader political or social questions about what people’s lives are actually like. They rarely have much to say about them if left to their own devices. It’s only when some non-economist begins proposing social or political explanations for the rise of apparently meaningless administrative and managerial positions, that they jump in and say “No, no, we could have explained that perfectly well in economic terms,” and make something up.

After my piece came out, for instance, The Economist rushed out a response just a day or two later. It was an incredibly weakly argued piece, full of obvious logical fallacies. But the main thrust of it was: well, there might be far less people involved in producing, transporting, and maintaining products than there used to be, but it makes sense that we have three times as many administrators because globalization has meant that the process of doing so is now much more complicated. You have computers where the circuitry is designed in California, produced in China, assembled in Saipan, put in boxes in some prison in Nevada, shipped through Amazon overnight to God-knows-where… It sounds convincing enough until you really think about it. But then you realize: If that’s so, why has the same thing happened in universities? Because you have exactly the same endless accretion of layer on layer of administrative jobs there, too. Has the process of teaching become three times more complicated than it was in the 1930s? And if not, why did the same thing happen? So most of the economic explanations make no sense.


Let’s talk about “bullshit jobs.” What do you mean by this phrase?

When I talk about bullshit jobs, I mean, the kind of jobs that even those who work them feel do not really need to exist. A lot of them are made-up middle management, you know, I’m the “East Coast strategic vision coordinator” for some big firm, which basically means you spend all your time at meetings or forming teams that then send reports to one another. Or someone who works in an industry that they feel doesn’t need to exist, like most of the corporate lawyers I know, or telemarketers, or lobbyists…. Just think of when you walk into a hospital, how half the employees never seem to do anything for sick people, but are just filling out insurance forms and sending information to each other. Some of that work obviously does need to be done, but for the most part, everyone working there knows what really needs to get done and that the remaining 90 percent of what they do is bullshit. And then think about the ancillary workers that support people doing the bullshit jobs: here’s an office where people basically translate German formatted paperwork into British formatted paperwork or some such, and there has to be a whole infrastructure of receptionists, janitors, security guards, computer maintenance people, which are kind of second-order bullshit jobs, they’re actually doing something, but they’re doing it to support people who are doing nothing.

When I published the piece, there was a huge outpouring of confessionals from people in meaningless positions in private corporations or public service of one sort or another. The interesting thing was there was almost no difference between what they reported in the public, and in the private sector. Here’s one guy whose only duty is to maintain a spreadsheet showing when certain technical publications were out of date and send emails to the authors to remind them it needed updating. Somehow he had to turn this into an eight-hour-a-day job. Another one who had to survey policies and procedures inside the corporation and write vision statements describing alternative ways they might do them, reports that just got passed around to give other people in similar jobs a chance to go to meetings and coordinate data to write further reports, none of which were ever implemented. Another person whose job was to create ads and conduct interviews for positions in a firm that were invariably filled by internal promotion anyway. Lots of people who said their basic function was to create tasks for other people.

Is the problem of bullshit jobs more apparent to us now because of the financial crisis, the Wall Street bailouts, and the now-well-known fact that people who do almost nothing that’s productive reap so much of our society’s rewards? I mean, we always knew there were pointless jobs out there, but the absurdity of it all never seemed so stark before, say, 2008.

I think the spotlight on the financial sector did make apparent just how bizarrely skewed our economy is in terms of who gets rewarded and for what. There was this pall of mystification cast over everything pertaining to that sector—we were told, this is all so very complicated, you couldn’t possibly understand, it’s really very advanced science, you know, they are coming up with trading programs so complicated only astro-physicists can understand them, that sort of thing. We just had to take their word that, somehow, this was creating value in ways our simple little heads couldn’t possibly get around. Then after the crash we realized a lot of this stuff was not just scams, but pretty simple-minded scams, like taking bets you couldn’t possibly pay if you lost and just figuring the government would bail you out if you did. These guys weren’t creating value of any kind. They were making the world worse and getting paid insane amounts of money for it.

Suddenly it became possible to see that if there’s a rule, it’s that the more obviously your work benefits others, the less you’re paid for it. CEOs and financial consultants that are actually making other people’s lives worse were paid millions, useless paper-pushers got handsomely compensated, people fulfilling obviously useful functions like taking care of the sick or teaching children or repairing broken heating systems or picking vegetables were the least rewarded.

But another curious thing that happened after the crash is that people came to see these arrangements as basically justified. You started hearing people say, “well, of course I deserve to be paid more, because I do miserable and alienating work” – by which they meant not that they were forced to go into the sewers or package fish, but exactly the opposite—that they didn’t get to do work that had some obvious social benefit. I’m not sure exactly how it happened. But it’s becoming something of a trend. I saw a very interesting blog by someone named Geoff Shullenberger recently that pointed out that in many companies, there’s now an assumption that if there’s work that anyone might want to do for any reason other than the money, any work that is seen as having intrinsic merit in itself, they assume they shouldn’t have to pay for it. He gave the example of translation work. But it extends to the logic of internships and the like so thoroughly exposed by authors like Sarah Kendzior and Astra Taylor. At the same time, these companies are willing to shell out huge amounts of money to paper-pushers coming up with strategic vision statements who they know perfectly well are doing absolutely nothing.

You know, you’re describing what’s happened to journalism. Because people want to do it, it now pays very little. Same with college teaching.

What happened? Well, I think part of it is a hypertrophy of this drive to validate work as a thing in itself. It used to be that Americans mostly subscribed to a rough-and-ready version of the labor theory of value. Everything we see around us that we consider beautiful, useful, or important was made that way by people who sank their physical and mental efforts into creating and maintaining it. Work is valuable insofar as it creates these things that people like and need. Since the beginning of the 20th century, there has been an enormous effort on the part of the people running this country to turn that around: to convince everyone that value really comes from the minds and visions of entrepreneurs, and that ordinary working people are just mindless robots who bring those visions to reality.

But at the same time, they’ve had to validate work on some level, so they’ve simultaneously been telling us: work is a value in itself. It creates discipline, maturity, or some such, and anyone who doesn’t work most of the time at something they don’t enjoy is a bad person, lazy, dangerous, parasitical. So work is valuable whether or not it produces anything of value. So we have this peculiar switch. As anyone who’s ever had a 9-to-5 job knows, the thing everyone hates the most is having to look busy, even once you’ve finished a job, just to make the boss happy, because it’s “his time” and you have no business lounging around even if there’s nothing you really need to be doing. Now it’s almost as if that kind of business is the most valued form of work, because it’s pure work, work unpolluted by any possible sort of gratification, even that gratification that comes out of knowing you’re actually doing something. And every time there’s some kind of crisis, it intensifies. We’re told, oh no! We’re all going to have to work harder. And since the amount of things that actually need doing remain about the same, there’s an additional hypertrophy of bullshit.

Go read the whole thing. I implore you.

OK, one more choice quote:

So the right wing manipulates the resentment of the bulk of the working class from being able to dedicate their lives to anything purely noble or altruistic. But at the same time—and here’s the real evil genius of right-wing populism—they also manipulate the resentment of that portion of the middle classes trapped in bullshit jobs against the bulk of the working classes, who at least get to do productive work of obvious social benefit. Think about all the popular uproar about school teachers. There’s this endless campaign of vilification against teachers, who they say are overpaid, coddled, and are blamed for everything wrong with our education system. In fact, grade school teachers undergo really grueling conditions for much less money than they’d be paid if they’d gone into almost any other profession requiring the same level of education, and almost all the problems the right-wingers are referring to aren’t created by the teachers or teachers’ unions at all but by school administrators—the ones who are paid much more, and mostly have classic bullshit jobs that seem to multiply endlessly even as the teachers themselves are squeezed and downsized. So why does no one complain about those guys? Actually I saw something telling written by a right-wing activist on some blog—he said, well the funny thing is, when we first started our school reform campaigns, we tried to focus on the administrators. But it didn’t take. Then we shifted to the teachers and suddenly the whole thing exploded. It’s hard to explain that in any other way than to say: a lot of people resent the teachers for having genuine, meaningful jobs. You get to shape young lives. You get to make a real difference for other people. And the logic seems to be: shouldn’t that be enough for them? They want that, and middle-class salaries, and job security, and vacations, and benefits, too? You even see that with auto workers. “But you get to make cars! That’s a real job! And you also want $30 an hour?”

Surely over the very long term (70 years) total pay in the public service should be expected to track GDP, not inflation? The IT point of view simply means that they expect zero real GDP growth over the next 70 years. The thought of public service pay and GDP smoothly rising together for 70 years at a few % p.a. doesn’t ring true, though. Ireland is a volatile place that experiences fiscal/economic crises approximately once every 25 years, Assuming that governance does not improve, we can assume that over next 70 there will be 2 or maybe 3 occasions for public servants to “benchmark” up their pay, and then “austeritify” it back down again.

@Ernie Ball

One of the most interesting/worrying things for me is how nihilistic the European neoliberal right has become, with the intellectual battle lost, the economy stalled and public disenchantment with them increasing all the time (except in Germany) they have nothing to fall back on but class interest (or perhaps something more primitive and feudal).

The problems of the reactionary right (take DOCM as an example):

* They can not say they represent a safe set of hands as conditions fail to improve.
* They can not say that they are guided by a deeper understanding of the economy as their predictions and models keep failing.
* They can not admit how strong the element of class (and in the case of Germany, national) interest is[**] as it would reveal the essentially political explanation for the length and depth of the economic crisis.

What this has led to is a triple rejection.

* A rejection of the idea of agency – there is nothing anyone can do about the economy.
* A rejection of economics – all forecasting is nonsense, not just ours.
* A rejection of democracy – There is no element of politics in this, all our actions are guided by the majesty of the laws we forced to be enacted. Politics (and class interest) is neither here nor there. Voters can select a governments but policy is now decided at an elite level internationally.

Of course when your cynicism reduces you to this level of nihilism you can justify (or do not need to justify) any position, any misdirection, any cruelty. It is just a battle to preserve your own interests, to demonstrate your will, you are beyond good and evil.

It is the anniversary of the first world war but it is the politics of the thirties we have here..

** “We must stay the course, for the future of all our investments and positions of power.”

Thanks, Gavin. As we say in the academic trade: I haven’t re-read that recently.

skeptic01: Thanks for trying to get this thread back to the public pay issue and the ludicrous Irish Times take on this. A small quibble: you would expect public sector pay per worker (not total) to track real GDP per worker in the very long run. And 79 years is very long run!

Linking pensions simply to a % of final salary indexed for inflation might mean that someone lucky enough to retire in a year such as 2008 would be far better off for maybe 20+ years than some poor devil who retired in 2014. Some weighted career average would be fairer and more stable.

This has nothing to do with neoliberalism or marxism or any such ideological label.

@ seafood

That perspective rings fairly true to me. I would see it more the case, though, that the worthy European political and economic project has been unfortunately captured by cynical plutocratic interests which are transnational and global. The era of TNC power, as wonderfully described by Arrighi in his Long 20Century, has morphed into the era of Wizard Finance, nicely satirised by Gavin on a neighbouring thread.

The result is that the economic and institutional strengths of northern Europe, which were painfully evolved over many centuries, cannot be deployed in the parts where the beer of good government doesn’t reach. There is not a snowball’s chance that the recent Council Recommendations for healthcare or legal reform can be delivered here, for example. Na ga happen. Our national government will continue to be in thrall to the well organised special interest groups and lobbies much studied by Olson.

DOCM has a pretty broad knowledge of Irish and EZ political institutions, and broadly liberal perspective. I would link that to institutionalist economics, where the focus is on developing the structures which foster the right sort of market exchanges. The better side of ordo-liberalism seems to me, as an amateur, quite compatible with the views set out by Polanyi in his Great Transformation. Maybe we should be careful not to throw our European liberal baby, which was not easily born, and relatively recently arrived in Ireland, out with the neoliberal bathwater.

In any case, I doubt that the German export model can flourish while the rest of Europe withers, so the clock is ticking for the Bundeskanzellrin. I don’t think it is as much a case of nihilism as people pushing buttons and nothing happening and not wanting, or not being able to afford, to examine the facts behind that. There is a good deal of fear and insecurity, and not just at the bottom.

The impasse is causing people to question core beliefs, and will intensify as the crisis deepens. The national and EZ institutions, and the existing social order, are going to be tested very severely, so democratic left and democratic right will need to pull together. That will not suit the plutocrats, but it is not the first time in history that the moneybags had to be reined in.

@ PQ

I just can’t see the rentiers making this fly long term. There are too many losers and too few winners and the people at the top always tear the arse out of it. Have you ever read Brideshead Revisited ? Or Wealth and Democracy ?

I have serious doubts about the valuations of the various equity markets given the “new normal” of low growth and low inflation.

There would appear to be a lot of risk building up -both economic and political- my guess is that it’s going to be very hard to steer a course through the mess while retaining enough lucre for the best connected.

@ PQ

Another thing is the Piketty view that we are slowly returning to Victorian income distributions. I don’t know how the noblesse oblige stuff can be replicated in an era of mass education.

Very few of the great and good appear particularly gifted on twitter, like

I thought this comment was on the ball
Greycoat | May 25 9:27pm | Permalink
“Most of current capitalism is “cut” based – earn on difference in price, no additional value making.
No new value making = slow growth of GDP. In such situation CUT based industries like banking, building and speculative investment will help concentrate SHRINKING wealth.”

I’m not sure what’s more extraordinary.

i) That the Irish Times should argue that nominal wages in the public sector should only rise in line with inflation

ii) That the intellectuals contributing to the comments section of this blog have missed Phillips key point. i.e. the Irish Times proposals would imply in real terms that public sector workers would see no rise their wages for 70 years – an exceptionally harsh view even for right leaning economists.

TBA: Real wages are generally expected to rise in line with productivity growth over the long-term, so there share in GDP remains constant.

@ paul quigley

Thanks for your comment!

I am generally chary of “isms” but I think an exception can be made for ordo-liberalism. However, it has its limitations as this paper from 2012 at the time of the agreement on the fiscal pact illustrates.

I agree with your conclusion regarding the approaching limits to Merkel’s approach. Indeed, it seems to me that the quiescence of the Bundesbank is the most notable feature of the present situation.

As to the future of the Irish public sector, either there is a radical change in direction or the debilitating effects of the present ad hoc approach – staff embargo, wage cuts, reduction in numbers, expensive early retirement costs, discriminatory treatment between current and newly recruited staff, variation in conditions of employment etc. etc. – will do lasting damage, if it has not already done so.

The Irish Times article would win no prizes for journalistic accuracy but it does draw attention to the cul de sac into which the public sector is being taken when the obvious conclusion is that drawn by JMK above i.e. that wages generally should rise in line with productivity and growth whether the beneficiaries happen to be in the public or the private sector. There can be debate about where the dividing line should be but hardly any with regard to the general principle that like work should be equally remunerated.

@ Ernie Ball

Thanks for posting extracts from the Graeber interview. I accessed the full interview and it made for very stimulating reading.

I’ve had bullshit jobs in both the private sector (two US multinationals) and now one in the public sector (HSE). There are a huge number of bullshit jobs in the HSE and nurses, for example, want these jobs as they have better terms and conditions than having to work shifts on a busy ward. So there are hundreds and hundreds of bullshit nursing jobs with titles such as Director of Nursing, Assistant Director of Nursing, Divisional Nurse Manager, Clinical Nurse Manager III, etc. Of course there are thousands of HSE administrative/managerial bullshit jobs as well with fabulous titles but nurses have their snouts in the trough as well. I can only imagine it is the same in academia.

Public sector works will get raises beyond inflation over the next 70 years. As they should.

Happily newspaper journalists and editors will not – as they will no longer exist.

@ Shay B

Ah yes, C P Scott..

“…Irish rebels were authors of their own destruction he thought, writing on the execution of Padraig Pearse and James Connolly after the Easter Uprising in Dublin: ‘it is a fate which they invoked and of which they probably would not complain’…”

4 May 1916, in David Ayerst (1971) The Guardian: Biography of a Newspaper; p. 392

@Ernie Ball
The Irish Reich does not sound as impressive as the German. We do have a word for it, Rioghachd na h’Eireann, purists might go for Riogha.
It lasted from 500 BC to arguably 1100 AD, the the one and a half thousand year Riogha. If we treat the British intrusion as a major irritant like a long and bad itch then we are in the 2 1/2 thousand year Riogha.

All our mental energy should be directed to surviving the next five years. In Kerry our horizon is, will the spuds be ready for digging late July to early August. Will they be floury or soapy.

Could we let attrition take care of any public service cost overruns. Patience people, patience. They have had enough animosity directed at them. Time to stop unproductive musings.

“Of course there are thousands of HSE administrative/managerial bullshit jobs as well with fabulous titles but nurses have their snouts in the trough as well. I can only imagine it is the same in academia.”

There are indeed titles in academicia, dept head, programme director, PhD director, assistant Dean, it goes on and on. All of them involve much more work and aggravation and not one of them pays a cent.



‘Interest rates paid to depositors will fall further. That should encourage more spending and lending.’

I should have thought it was more likely to make people worry that they might not have set aside enough for their funeral expenses 🙂

@Peadar Colman

Without C P Scott Britain would have been without a popular left leaning paper for the twentieth century.

He also had it in for suffragettes and I am sure he had many of the other blind spots of the English liberal – they have never learned to love the rebel, or the revolutionary.

@dearg doom

The bullshit jobs in academia are numerous but are not those you list. They are central administrative/managerial jobs going right up to the highest echelons and generally consist in going to meetings and devising new additional bureaucratic tasks to be carried out by those whose job descriptions involve the actual core work of teaching and research. These tasks change frequently and last year’s absolutely essential and indispensable bit of paperwork (Full Economic Costing, anyone?) is forgotten and replaced by some new and unrelated piece of make-work.

The battle between University Administrators and Academics rages on unabated, I hear it from the horses mouth five or six times a year. There is no need for outsiders to get in the middle of such viciousness. Government funding + student fees + trusts + alumni contributions make up practically all the available funding within which a University operates. The battle over how it is allocated is hotly contested by the people directly involved who know all the weaknesses and strengths and how to exploit them.
All outsiders can do is criticise the amount government allocates to 3rd level education, we are in no position to get into the minutiae and arrive at a positive outcome.

@ Mickey Hickey: Now what did Henry Kissinger have to say about university politics? At least he got that one correct.

‘Interest rates paid to depositors will fall further. That should encourage more spending and lending.’

Low interest rates, and poor investment returns generally, mean that I have to save much more to assure a comfortable retirement. I doubt this response is unusual.

@ paul quigley

The fanatics have in Germany now moved mostly to the green movement.

The kind of messianic certainty, which doesnt need data, shuns cost calculation and the endless zeal with which they go after people who do not agree with them.

I think a certain fraction of people (“Wutbürger”) just need constant conflict, hatred, and if their is no reason in a social society, they pick fights over a bridge, railway stations, a pass by street, whatever.

I think we use the word “marxist (economist)” in different ways.
In Germany that was a specific type of charlatans, who were not reemployed after reunification.

For my country I have enough left leaning economics professors, the income distributions is not scewing up, there is no transfer of wealth upwards.

And the problem with Piketty is not that he is French, but that is argument is screwed. I explaned that in a little more detail with some references in

Lessee, who to believe? Piketty’s 800-page synthetic book and copious research supported by the work of dozens of other colleagues throughout the world? Or anonymous German troll trying to get the drop on a complex work in about 5 lines in the comments section of a blog on the internet?

Tough call.

Ernie Ball,

as far as I know, this is also not your real name. Or? : – )

You are again insulting (“troll”), trying to exploit my german nationality .
What a fine marxist character.

When I look at my often pretty long statements here, it seems that Marxists like you can not count to more than 5, representing “many” to you : – )

If you read the stuff I provided for Ronan, and the statements of other folks saying the same as me, linked via

you will find that Piketty is just getting completely trashed in the moment, just not by some marxist intellectual and character garbage like DeLong.

@ Francis

I had a look at your referential Piketty post. You argue that he is looking for attention. What was the other point that led you to conclude that you had destroyed his credibility?


Lawrence Summers destroys the last shred of credibility he had left with his first sentence:

Atif Mian and Amir Sufi’s House of Debt, despite some tough competition, looks likely to be the most important economics book of 2014; it could be the most important book to come out of the 2008 financial crisis and subsequent Great Recession.


1. I am wondering where, in what context, you found “looking for attention” in relation to Piketty. Probably you have something specific in mind. You wouldn’t mind to provide a link, or ?

2. did you read and understand what not me, but the 4 SciencesPo guys said, and Tabarrok, Krussel & Smith, on more pages than being postable on such a blog ?

Because if you are not able or willing to understand their English, it is unlikely, I fare better.


people like Warren Brusse PREDICTED early 2005 “The second great depression, 2007 – 2020” by looking on US household debt, and comparing it to Japan, in brutally simple Excel sheets and graphs.

Larry and the book he reviews are about 10 years late to the party.

Very little new since Wilhelm Röpkes Crises and Cycles


Plenty of exculpatory stuff from Summers. He avoids the most central fact. Globalisation and financialisation have led to a lowered share of national income for the ‘middle class’, and that credit was liberally issued to obfuscate and conceal that reality. People were borrowing from their own and their neighbour’s future, but didn’t know it.

Doubtless Summers is correct in saying that there were few options once the sh1t had hit the proverbial. It;s the same as our banking guarantee, where the late MoF had no wriggle room at all. Trouble is, the wriggle room has not yet appeared.

There were plenty of occasions in the preceding decades when Joe and Jane Public could have been told what they were getting into, but that didn’t suit the oligarchs, the media moguls or all the other facilitators of the home equity Golden Goose.

Once the bust happens, it’s all about allocating the losses. The USG may have ‘got back the money it invested’ in some narrow sense, but Yellen has the nasty task of shrinking the Fed’s massively expanded balance sheet without sinking asset markets. the banks, and/or the real economy. I don’t envy her.

@ Francis
“And now look at Piketty from an MBA perspective, with the emphasis on Marketing AND strategic business development.
He shows the anglo establishment the middle finger, e.g. publishing French first.
He becomes totally independent of any anglo dominated journals by writing a bestseller, with sufficient academic credentials already in place. With that he can place any future article he wants to write.”

so you are saying it’s basically PR

What was your other killer point ?

@Ernie Ball

That David Graeber piece in Salon really is excellent and I would not have gone back to finish it without your recommendation. Somethings the converted can benefit from another sermon.

In fact I would recommend that anyone who has fifteen minutes to spare reads it. Michael Hennigan, it is not exactly up your street but it is an interesting detour.

@Gavin Kostick

Confession time: I have never read “Down and Out in Paris and London”, I took a bit of a turn against Orwell after the revelation (to me) about his list of unsound politicians and intellectuals but I think I should have been a little more charitable – early thirties rage it was. I’ll give chapter 22 a read.

Sort of off topic.

@Paul Quigley

The result is that the economic and institutional strengths of northern Europe, which were painfully evolved over many centuries, cannot be deployed in the parts where the beer of good government doesn’t reach.

Here I disagree with you. I think that the current strength of the Deutsche Bloc is more due to good fortune and greater. influence than good practices and greater adaptability. It is taken for granted that Germany and those in its slipstream have made themselves fit for the modern EU, I say the modern EU was made to fit Germany and it is no great achievement if you are the strongest competitor in a a competition tailored to your strengths (which applies to the EU policy response to the European component of the global financial crisis too).

As for the benefits of liberal institutionalism it looks like its inertia is going to pull the EU over the edge of a cliff.

Maybe we should be careful not to throw our European liberal baby, which was not easily born, and relatively recently arrived in Ireland, out with the neoliberal bathwater.

I would ask firstly whether the baby should be indoctrinated into the liberal faith and secondly whether the child will get the chance to grow up if the bathwater is so deep it drowns it.

@ Shay Begorrah

Thanks for the link.

A lot of the so-called bullshit jobs will be weeded out over time.

As for Keynes’ prediction of a jump in leisure time, it has happened but not as much as he expected while there is a growing percentage of workforces under the tag of ‘self employment’ with irregular work and a precarious income situation where a health emergency can result in a real crisis for a family.

Mobile investment, a big global market with a wide range of labour rights and governments with less real power than they would like to believe, makes the goal an aspiration.

Mind-numbing work as in private sector security – possibly one of the biggest employment growth areas across the world – and the biggest US occupational growth job – personal care aides for elderly people – are examples of poorly paid employment as ageing becomes a challenge.

There is evidence from the US and UK that middle skill occupations involving routine work have borne the brunt of the crisis.

Data on Friday showed that US employment is back to 2007 levels but according to The Wall Street Journal the number of jobs in manufacturing, construction and government—typically well-paying fields—has shrunk, while lower-wage work grew. The US has 1.6 million fewer manufacturing jobs than when the recession began, but 941,000 more jobs in the accommodation and food-service sector.

More than 40% of the jobs added in just the past year have come in generally lower-paying fields such as food service, retail and temporary help.

Here’s a chart from the WSJ:

It’s not realistic to expect consumer demand in the US and Europe to return to pre-recession levels anytime soon.

After a 30-year fall in goods prices, a credit binge fuelled by the financial sector and asset appreciation, followed by poor pay growth, households in several countries remain highly indebted.

Germany will be the exception in the Eurozone this year after collective bargaining increases of at least 3%.

On the issue of Germany’s performance, wonder at the demise of the Japanese companies that powered the economy to become the second biggest in the world and then coincident with the huge property bust, they foundered or floundered. Meanwhile Samsung from a former colony is the world leader in smartphones and it along with other Korean companies also overtook Japanese rivals in TV set manufacturing.

Culture can be good and bad and success is built on a lot more than currency changes and such issues – the difference between France’s trade deficit and Germany’s surplus is a quarter of a trillion euros.

Why is the performance of Ireland’s indigenous exporting sector so poor that a taoiseach has to go on an ‘apology’ tour to California to reassure billionaires that he will fight to keep their tax breaks? – this week, Gov Jerry Brown’s barbed comment on Apple and its creative accounting in Ireland and the Irish ambassador writing to Sen Chuck Schumer of New York relaying a complaint about he lobbying for Bausch+Lomb’s Waterford jobs to be moved to Rochester, is an example of changing times.

According to European Commission research, over 50% of all US firms in the Top 1,000 global R&D spenders in 2009, were founded after 1975, in Europe the figure was 18% and in Japan just 2%.


I doubt that other readers of my full post at that time would reduce it like you to just “basically PR”

And it also shows that I was initially more sympathetic to Piketty, but noticed his usual use of words, which caused the need to carefully think in his terms first, before publicly critizising.

To the arguments, I brought I have given you the 4 SciencesPo guys said, the names Tabarrok, Krussel & Smith, in the respective links for Ronan.

If you dont understand them, there is no use me trying that again.
I am not wrting up a 10 page paper just for you, just saying the same as the above.

@ shay

I can’t see how the EU was made to fit Germany, which was divided at the time, and was just one voice among a number of big players. I think it is more a case that the European Project has been captured by financial and global interests and that Germany is coping best with the resulting strains. The problems besetting the ‘periphery’ will eventually take their toll on Germany.

Where the Germans, it seems to me, have erred, is in failing to grasp the degree to which they have been captured. Fiscal discipline matters, but a single-minded focus on government finances tends to miss the speculative finance elephant in the global room.

A time will come when even the Germans are obliged to recognise that neo-liberalism and globalisation are toxic, and that their big banks have sucked them into a very insecure place. Ordoliberalism does not provide the tools for addressing the ballooning of CB balance sheets, so they will be forced to re-examine their certainties. The Austrian school has not got many of the answers for today’s world of credit and debt.

Liberalism is a necessary and critical stage in political and economic development. Absent the liberal tradition, this board would be shut down, as it would be in China or Russia. It was not a coincidence that Marx spent so many years in the British Museum.

@paul quigley

One of the great strengths of the current form of European liberal institutionalism is that, though you can legally have all the dissent you want, real political change is not just difficult but illegal. People can let off steam they as long as they accept they can be boiled all the same. As I am sure you know liberal institutionalism is also entirely compatible with many varieties of managed democracy, oligarchy and even monarchy or dictatorship while popular democracy is not something that it fits with comfortably (as Hayek acknowledged).

To me it now seems obvious that the European Union can not exist as a progressive project under German domination because ordoliberalism itself is essentially reactionary and Germany is a country utterly in thrall to that philosophy. You can hope that they come to their senses but you also have to judge them by their actions – what in the last five years could give you any confidence that when the next crisis comes the solution Germany allows will be any less self interested or any more far sighted?

The Pay freeze headline is misleading. Pay freeze normally indicates nominal pay freeze.
In a developed democratic country wouldn’t one expect that public sector pay should increase at around the same pace as inflation?
That people would expect it to outpace wage inflation in the general economy goes against the ideals of a social democracy but not against the experience of those who have been earning over 50k since the early 2000’s

Michael Hennigan is right to point out the massive pay increases in the public sector that bore absolutely no resemblance to the increases in the general economy. Benchmarking me eye!
Sure the government have managed to scrape some of those unfordable excesses back. But its not anywhere near as much as it should and its coming from the wrong places. Massive cuts to new incumbents and huge reductions in numbers. Pay and entitlements of that hugely powerful vocal voting 45-65 year olds earning over 50k has been protected the cuts since 2009 have brought them back to 2007 levels. That was when the crisis began for the real economy.

Political parties and Unions all conspired to make this happen.
Tens of thousands less would have had to emigrate and staff shortages in health and education would have been avoided.
Ernie ball then comes on to this site to defend them to the hilt while espousing a marxist ideology?
Its not even social democratic, its just corrupt greed.

The gulf in the Public pay rises of 59% between 2001-6 and the increase in average industrial wage of 22% was unaffordable and only based on a temporary illusion of property tax revenues.
But FG and labour were never going to turn on these people. They are their most powerful allies.
So what if unions have to abandon solidarity for a few years. Their most powerful members were largely protected as the national debt ballooned.

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