Class and wealth in Ireland

by burtenshaw

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I had been meaning to write an article on this topic but haven’t been able to find the time so far and the road for the next few months is rocky. So, this blogpost will have to do.

I’ve been looking at Credit Suisse’s 2011 Global Wealth Databank numbers on Ireland with questions of wealth and class in mind.

First, a quick primer on class:

There are problems associated with defining class by wealth. The predominant liberal discourse on class tends to define it in two erroneous ways. Firstly, as an identity: “this person is working-class because they wear tracksuits, come from a certain area and speak in a certain way.” Secondly, by simply dividing societies into categories by virtue of income alone (A, B, C, D, E) in an approach sometimes called socioeconomic class analysis. Often this involves the use of the term working class as a synonym for poor (DE category).

These are wrong-headed approaches.

Class is important because it is the relation on which capitalism is built, and capitalism is the system by which the world we live in is reproduced. Liberals tend not to pay much attention to the existence of capitalism, which may explain why their definitions of class are weak.

So – what is class under capitalism? The class society in which we live is predominantly (there are sub-divisions, we’ll come back to this!) divided into those who own the means of production and those who labour for them: the capitalist class and the working class.

The working class is the class socialists focus on because it is the majority that, through its labour, produces the wealth in society. A worker is best understood as someone who relies on their wages to survive.

The capitalist class is a minority that owns the means of production and so controls the process of social reproduction. They use this ownership to extract a profit – a certain percentage of the value produced from the labour of workers – this is the basis of capital. If you are a worker capital is wealth you have created expropriated by your exploiters and then turned to oppress you.

So, as David Harvey says, class is best thought of as your “positionality in relation to processes of capital circulation and accumulation”.

The question of how we define the means of production is also important. When socialists talk about capitalists as a “property-owning” class it is a very specific kind of property we’re referencing: value-producing assets. Almost everyone owns private possessions – and they can keep them in a socialist society!

But property that interacts with the circuit of production should be socialised. Otherwise private tyrannies will control the world in which we live – political, economic, cultural, educational – and the majority will be required to rent themselves to these people for a wage to survive.

On to class and wealth in Ireland:

One of the problems with Credit Suisse’s methodology from a socialist point of view is that it measures net wealth as a category exclusive from the definitions I proposed above of value-producing assets. Its formula is: (financial wealth + non-financial wealth) – debts = net wealth.

Despite this we can make rough judgements on the basis of its findings about class divisions in Ireland if we acknowledge net wealth’s relationship to the means of production.

Another of the problems is that it measures individual adults (aged 20 and above). Certainly, not all of these will interact with the process of capital circulation and accumulation as workers or capitalists.

Nevertheless its breakdown of wealth in Ireland in 2011 suggests very clear divisions.

Here are its numbers (wealth is expressed as a percentage of the total):

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In other words:

  • The top 10% in Ireland owns almost 60% of the wealth
  • The bottom 50% own less than 5% of the wealth

If we think about this in terms of a social division between those who own productive assets and the proletariat we can be clear that the top 10% is in the former category and the bottom 50% is in the latter.

The other categories would be disputed and need examination that specifically analysed net wealth for its productive asset component. What we have in this ‘middle section’ is a 40% chunk of the population which owns roughly 36% of the wealth. If I was to venture a suggestion I would say that deciles 9, 8 and most of 7 would be at least petit-bourgeois – roughly, small business owners or management who co-ordinate the implementation of capitalism.

On the basis of these numbers one could propose that our constituency as socialists is 60/5% of the people – those who do not own means of production and would benefit enormously from a redistribution of wealth.

This is a majority of people who are not served by the political or economic system in Ireland.

That is a system run of, for and by the 10% who own 60% of the wealth of the country.

This is clearly not an exhaustive study of class in Ireland in the early 21st century, but I think it provides a useful basis for a conversation.

EDIT: An economist friend of mine contacted me to make me aware that Credit Suisse’s numbers have been challenged, including by UCD economist Seamus Coffey here. It is his opinion that there is no authoritative data available on wealth distribution in Ireland. 

He further adds that age is an important factor to consider in the distribution of wealth, noting that it may explain some of the accumulation in the 6-9 decile region better than petit-bourgeois status, referencing this document.

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