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Thread: The Self-Employed as 21st Century Kulaks - How our Government Destroyed an Economic Class

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    Politics.ie Member Malbekh's Avatar
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    Default The Self-Employed as 21st Century Kulaks - How our Government Destroyed an Economic Class

    Greetings. It's been a long time since I put in a decent thread on this site. I was going to preface this article with the usual egotistical preamble, but as this would detract form my party piece, best to just get straight to brass tacks.

    First, culture from Wikipedia:

    According to the political theory of Marxism-Leninism of the early 20th century, the kulaks were class enemies of the poorer peasants. Vladimir Lenin described them as "bloodsuckers, vampires, plunderers of the people and profiteers, who batten on famine. Marxism-Leninism had intended a revolution to liberate poor peasants and farm labourers alongside the proletariat (urban and industrial workers). In addition, the planned economy of Soviet Bolshevism required the collectivization of farms and land to allow industrialization or conversion to large-scale agricultural production. In practice, these Marxist-Leninist theories led to the ruination of the agricultural economy as government officials violently seized kulak farms and murdered resistors; others were deported to labour camps. Beginning in 1932-33, great famines ensued, with several million dying in the Ukraine famine alone. Documents uncovered in recent decades from this time period show that "the Stalin leadership" was aware of what was occurring in the countryside, and were actually using the "famine as a means of terror, and of revenge, against the peasantry."

    Of course, I'm not making a direct comparison between the events of the last century and this one, but then, we live in enlightened times these days, so what passes for mass extermination in one century becomes this century's passive bliss of ignorance.

    So who are these people I am referring to? Let's start with tradesmen:

    #

    Not to be confused with developers, speculators, property magnates etc. Yes, we will all admit to a certain schadenfraude thinking about all those years ago when you couldn't get a plumber, electrician or plasterer for love or money, and when you did, it cost you an arm and a leg when eventually they did turn up. All changed now.

    Most of these people were self-employed, working on a contractual basis with property developers. So when the work dried up, so did the money. Of course, in quite a lot of these situations they never got paid. But at least unlike a lot of us they had a trade, and trades as you know are an international commodity leaving those that have not adapted and survive to leave the country and go elsewhere.

    Shopkeepers:



    Not to be confused with retail chains, multiples, out of town shopping centres or design outlet malls. Oh, I'm not giving out about the unfairness of it all. But companies like HMV can just disappear, B&Q and Woodies/Atlantic can go into administration and then use that leverage to renegotiate their rents and shut down stores. The Harvey Normans and other retail giants of this world can absorb enormous losses in Ireland and keep going.

    Unfortunately the same cannot be said for the local self-employed shop-owner. This government came into power on the back of promises made, all too predictably they failed to deliver on. For example, we were told that Fine Gael and Labour when in power would "pass legislation to give all tenants the right to have their commercial rents reviewed in 2011 irrespective of any upward-only or other review clauses" once in power however, they pleaded the 21st century equivalent of "that would be an ecumenical matter" by sadly informing us their hands were tied by the constitution.

    Funny that, you'd think they'd play the same well-worn card about the current abortion debacle, well actually, they've done that over the last 30 years. The constitution of course, is no obstacle to sudden swathes of power shifts and debt mountains enforced on the public like The Bank Bailouts of 2008 and 2013. But for something simple and tangible like upward only rent reviews, they can't or won't do a thing.

    Well, is it can't or won't? Let me give you a clue. Who is the largest landlord in the country? Who controls vast portfolios of property the length and breadth of this country and is quite happy to crow about how much this portfolio is returning? Not to mention the fact that high rent landmark properties are usually run by well-connected trust funds, not the kind of people governments want to annoy when you want to have a favourable international reputation.

    The Pub Owner

    <please use your imagination to insert a picture of your favourite barman/pub as alas it appears this stupid site won't allow me to upload any more images>

    Not to be confused with SuperPubs, Pub Chains or any other criteria formerly owned by property magnates, developers and now owned by NAMA and other vested interests.

    In the past six years I have worked with a number of recreational bodies. Most of their activities are free of charge, because their base of operations is on 'public land' such as those owned by Coillte. The 'value' of these activities is enormous, not so much for the recreational bodies, but for all the members of the public who use such facilities, particularly in context with our health issues like obesity. This value is hard to quantify, but it makes a mockery of 'real things' like timber etc.

    The same is true of our pubs. It's not just a place to drink, it's a place to converse, to meet, to gossip and to act as a community hall. Not just in rural areas, but in urban areas too. The decline of pubs is not just rooted in this recession, it's also rooted in the increasingly tough drink driving rules, the banning of smoking in pubs and the availability of discounted booze in multiples.

    But fundamentally, a pub only exists through it's customers... you know...plumbers, electricians, shop owners, carpenters etc. What we don't quantify is the social value that these pubs bring to their communities and the same destruction and retrenchment of these communities when these pubs shut down. Like the recreational sphere, just because a value can't be quantified doesn't mean it doesn't have a value.

    The Hotel or B&B owner

    <please insert image etc>

    Not to be confused with country clubs, golf club resorts or health spas.

    Like the pub owner, another stalwart of the self-employed sector. Dependent on the tourist trade to a large degree, the travelling salesman to a lesser degree. We've all seen hotels shut down as well as bed and breakfasts. Tourist figures are relatively stable, travelling salesmen, thanks to our motorway network are a rare beast these days, but it's difficult to see what explains their demise.

    Well, not that difficult. Dotted around this country are hotels, country clubs, spas and golf resorts that are a legacy of the Celtic Tiger. Funded originally by developers using legal tax loopholes provided by governments, most of these businesses are still around and offering outrageous cut-price deals to all and sundry. None of which are profitable of course owing to the tab being picked up by the State. Yes indeed, our great friends in NAMA are currently subventing failed Celtic Tiger establishments and as a result, forcing countless businesses into liquidation.

    After all, we want NAMA to turn over a profit don't we? At the expense of everything else, don't we?

    TL;DR?

    All over this country, in all aspects of what we consider the entrepreneurial spirit, businesses are being allowed to fail on the alter of 'the greater good'. These businesses are failing on a number of fronts, a declining customer base, a failure of available credit from banks, and unfair competition from State sponsored institutions. Being self-employed and often without the protection of being a limited company, most of these enterprises absorb the debt into their personal liabilities as well. Meaning when their business fails, then their livelihood does also.

    What becomes of these people?

    Well we don't actually know. There is no safety net for the self-employed. Once their business fails then they do too. The best they can hope for is to leave the country as many have done, or start again, assuming they have the means to do so. They won't appear in the unemployed register because they don't count. Yet these businesses used to employ thousands of people - legally and illegally - all with something in common. That the money they earned was ploughed back into their communities.

    So let's turn our backs on this class of people. Let them leave or emigrate. Let their businesses and then their lives fail. You won't hear their voices, because they don't have a collective voice. You might see their boarded up businesses or To Let, To Rent or For Sale signs all over this country, but their is a collective apathy form the citizens of this country for their livelihoods.

    No, we should turn our attention to the Google, Facebook, Twitter and Paypals of this world. After all, these FDI companies employ what, hundreds of people of government sponsored and paid for jobs. These tech jobs may completely fail to generate any other jobs in their communities, bar the services required to satisfy these luxury jobs, and yes, those services may well involve the self-employed. But in essence, the privilege of having these stellar companies in Ireland and the taxes they don't pay, far outweigh the consequences of the tens of thousands of self-employed jobs that have disappeared in the last few years.

    On the bonfire of the vanities.
    Blessed be the threadmakers.

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    Politics.ie Member bluefirelog's Avatar
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    Have you been reincarnated as Tommy O'Brien, Malbekh?

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    Politics.ie Member Malbekh's Avatar
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    Quote Originally Posted by bluefirelog View Post
    Have you been reincarnated as Tommy O'Brien, Malbekh?
    No, I has pictures. Not as many as I would like ofc
    Blessed be the threadmakers.

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    Politics.ie Member Morgellons's Avatar
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    Great post, Malbekh-you're back on form.

    I look at shops in town and wonder how hard it must be for them to make a profit. Pubs too. All those local pubs that relied on local customers are dying a death. The upward rent thing is obscene: the whole property scene is obscene. Also these people don't get benefits if things go tits up. I mean would you even bother opening a business in this climate?

    p.s The "Tradesmen" look like some Mormon Village People outfit.

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    Politics.ie Member Twin Towers's Avatar
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    Quote Originally Posted by Malbekh View Post
    All changed now.
    Funny, I've been trying to get a builder and it's like a 30k job is too small beer for them.

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    With the greatest of respect Malbeth - thats an awful load of revisonist septia-tinted nostalgic twaddle..........

    the biggest problem for all the above is that the easy credit of the tiger years is gone - and wont return in any meaningful capacity for another 10 years at least - sweet F all this government - or any government for that matter - can do about that.

    lets look at "tradesmen".............firstly way way too many of them for a country of this size - every tom dick and harry got into the game over the last 12 years - now the building boom is over - time for the sector to return to normality - we dont need over 70% of them - simple as - supply and demand - nada to do with anything else - many were of questionable talent and quality - the best and most determined and most adaptable will survive and thrive - the rest of them better start looking at alternatives - also everything changes - Im sure Gaslight repairmen thought they had a trade too until electricity came in and finished that gig..........

    Shop owners - here again - supply and demand - while I take the upward only rent stuff into consideration - there are plenty of ways around that for the determined - and its a renters market now........dont get caught up the legals here. Also in retail - the whole scene is changing and businesses have to change too - there are lots of new niche businesses starting up all over the country and many of them are actually doing a new fangled thing called customer service and they use this internet thingy to market themselves aswell - any retail business that doesn't deserves to go to the wall - its a tough environment out there - no question - but its a serious opportunity for those prepared to go for it......

    Pub owners - no sympathy whatsover - ny other business facing a falling market tries new things and cuts prices and extends service to bring back custom - the publicans? - yeah right - next

    Hotels - yes there is massive overcapacity due to the property tiger years - and yes - NAMA could be a bit more proactive about getting some of these properties moved on - but its up to individual hotels themselves to start properly marketing themselves and living up to their billing - I've stayed in some fantastic family run hotels over last 2 years and am holding my wedding reception in another one next year - but these businesses are not constantly moaning and holding the begging bowl out - they are actively engaging with their customer base, pushing the boat out as regards service and really trying............they'll survive no bother - the slackers deserve to go down

    You do not have a divine right to stay in business - I know that many think they do - this current shake out is nothing more than getting rid of the overhang caused by overexpansion during the tiger years.............I think the 80's were far worse in that regard- at least now there is a bit of fighting spirit

    the less the state interferes the better - no matter what it does - it will be criticized - people only like the state in this country when they are getting something from it

    We're about 40-50% the way thru this economic downturn - still a fair bit to go yet - as long there is supply and demand - there will be a private sector - it may change shape - certain areas contract and expand - other areas die off completely while totally new areas come into being - but thats life

    the state is not killing off the domestic private sector - if anything its been a weakling for the majority of its existence over protected by the state and then overdosed on cheap credit which gave the illusion of expansion - but it was all flab not muscle - and now we're on a serious diet.

    I have a small business that is doing alright now - finally after 2 previous and costly failed attempts - ironically when I had no money left - I finally hit upon an idea and managed to get it off the ground with the minimum of cost - still working me hole off and thank god for the multi-national sector as they and their employees are becoming my principal clients - they are also pulling me up in the direction of their standards - world class standards and hopefully I'll be looking at exports in a couple of years - touch wood and all that. O


    Other friends of mine are in the same boat - starting their own gigs - some in traditional areas and others in newer areas...............good luck to them all - some will make it - some wont - but we all know that nothing ever stands still and the moment you think you've made it is the moment that the ground shifts from under you

    why does everybody in this country think the world owes them a living or more particularly - why the government owes them a living? - I pay my taxes - have paid and will pay my property tax and water charges and will keep updating mySWOT and PEST analysis plans as situations change - all I want from the government is to signal changes well in advance to give me time to adjust - I dont expect the state to stop the world revolving now that Im on top...........

    some justified complaints and rants there Malbekh - but the majority of it is sentimental nonsense -there is never a perfect time or a perfect situation in which to start and run a business - its all about coping with the turbulence - some trees must fall to let others grow - the day that stops we're in trouble.

    I'd recommend Nassim Taleb's ( of black swan fame) latest - "Anti-fragile" - for you to put on your bedtime reading list..........very good and addresses much of theme you laid out above.
    Last edited by Ed O'Leary; 23rd February 2013 at 02:43 AM.
    A politician thinks of the next election; a statesman thinks of the next generation. - James Freeman Clarke

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    Quote Originally Posted by Malbekh View Post
    Greetings. It's been a long time since I put in a decent thread on this site. I was going to preface this article with the usual egotistical preamble, but as this would detract form my party piece, best to just get straight to brass tacks.

    First, culture from Wikipedia:

    According to the political theory of Marxism-Leninism of the early 20th century, the kulaks were class enemies of the poorer peasants. Vladimir Lenin described them as "bloodsuckers, vampires, plunderers of the people and profiteers, who batten on famine. Marxism-Leninism had intended a revolution to liberate poor peasants and farm labourers alongside the proletariat (urban and industrial workers). In addition, the planned economy of Soviet Bolshevism required the collectivization of farms and land to allow industrialization or conversion to large-scale agricultural production. In practice, these Marxist-Leninist theories led to the ruination of the agricultural economy as government officials violently seized kulak farms and murdered resistors; others were deported to labour camps. Beginning in 1932-33, great famines ensued, with several million dying in the Ukraine famine alone. Documents uncovered in recent decades from this time period show that "the Stalin leadership" was aware of what was occurring in the countryside, and were actually using the "famine as a means of terror, and of revenge, against the peasantry."

    Of course, I'm not making a direct comparison between the events of the last century and this one, but then, we live in enlightened times these days, so what passes for mass extermination in one century becomes this century's passive bliss of ignorance.

    So who are these people I am referring to? Let's start with tradesmen:

    #

    Not to be confused with developers, speculators, property magnates etc. Yes, we will all admit to a certain schadenfraude thinking about all those years ago when you couldn't get a plumber, electrician or plasterer for love or money, and when you did, it cost you an arm and a leg when eventually they did turn up. All changed now.

    Most of these people were self-employed, working on a contractual basis with property developers. So when the work dried up, so did the money. Of course, in quite a lot of these situations they never got paid. But at least unlike a lot of us they had a trade, and trades as you know are an international commodity leaving those that have not adapted and survive to leave the country and go elsewhere.

    Shopkeepers:



    Not to be confused with retail chains, multiples, out of town shopping centres or design outlet malls. Oh, I'm not giving out about the unfairness of it all. But companies like HMV can just disappear, B&Q and Woodies/Atlantic can go into administration and then use that leverage to renegotiate their rents and shut down stores. The Harvey Normans and other retail giants of this world can absorb enormous losses in Ireland and keep going.

    Unfortunately the same cannot be said for the local self-employed shop-owner. This government came into power on the back of promises made, all too predictably they failed to deliver on. For example, we were told that Fine Gael and Labour when in power would "pass legislation to give all tenants the right to have their commercial rents reviewed in 2011 irrespective of any upward-only or other review clauses" once in power however, they pleaded the 21st century equivalent of "that would be an ecumenical matter" by sadly informing us their hands were tied by the constitution.

    Funny that, you'd think they'd play the same well-worn card about the current abortion debacle, well actually, they've done that over the last 30 years. The constitution of course, is no obstacle to sudden swathes of power shifts and debt mountains enforced on the public like The Bank Bailouts of 2008 and 2013. But for something simple and tangible like upward only rent reviews, they can't or won't do a thing.

    Well, is it can't or won't? Let me give you a clue. Who is the largest landlord in the country? Who controls vast portfolios of property the length and breadth of this country and is quite happy to crow about how much this portfolio is returning? Not to mention the fact that high rent landmark properties are usually run by well-connected trust funds, not the kind of people governments want to annoy when you want to have a favourable international reputation.

    The Pub Owner

    <please use your imagination to insert a picture of your favourite barman/pub as alas it appears this stupid site won't allow me to upload any more images>

    Not to be confused with SuperPubs, Pub Chains or any other criteria formerly owned by property magnates, developers and now owned by NAMA and other vested interests.

    In the past six years I have worked with a number of recreational bodies. Most of their activities are free of charge, because their base of operations is on 'public land' such as those owned by Coillte. The 'value' of these activities is enormous, not so much for the recreational bodies, but for all the members of the public who use such facilities, particularly in context with our health issues like obesity. This value is hard to quantify, but it makes a mockery of 'real things' like timber etc.

    The same is true of our pubs. It's not just a place to drink, it's a place to converse, to meet, to gossip and to act as a community hall. Not just in rural areas, but in urban areas too. The decline of pubs is not just rooted in this recession, it's also rooted in the increasingly tough drink driving rules, the banning of smoking in pubs and the availability of discounted booze in multiples.

    But fundamentally, a pub only exists through it's customers... you know...plumbers, electricians, shop owners, carpenters etc. What we don't quantify is the social value that these pubs bring to their communities and the same destruction and retrenchment of these communities when these pubs shut down. Like the recreational sphere, just because a value can't be quantified doesn't mean it doesn't have a value.

    The Hotel or B&B owner

    <please insert image etc>

    Not to be confused with country clubs, golf club resorts or health spas.

    Like the pub owner, another stalwart of the self-employed sector. Dependent on the tourist trade to a large degree, the travelling salesman to a lesser degree. We've all seen hotels shut down as well as bed and breakfasts. Tourist figures are relatively stable, travelling salesmen, thanks to our motorway network are a rare beast these days, but it's difficult to see what explains their demise.

    Well, not that difficult. Dotted around this country are hotels, country clubs, spas and golf resorts that are a legacy of the Celtic Tiger. Funded originally by developers using legal tax loopholes provided by governments, most of these businesses are still around and offering outrageous cut-price deals to all and sundry. None of which are profitable of course owing to the tab being picked up by the State. Yes indeed, our great friends in NAMA are currently subventing failed Celtic Tiger establishments and as a result, forcing countless businesses into liquidation.

    After all, we want NAMA to turn over a profit don't we? At the expense of everything else, don't we?

    TL;DR?

    All over this country, in all aspects of what we consider the entrepreneurial spirit, businesses are being allowed to fail on the alter of 'the greater good'. These businesses are failing on a number of fronts, a declining customer base, a failure of available credit from banks, and unfair competition from State sponsored institutions. Being self-employed and often without the protection of being a limited company, most of these enterprises absorb the debt into their personal liabilities as well. Meaning when their business fails, then their livelihood does also.

    What becomes of these people?

    Well we don't actually know. There is no safety net for the self-employed. Once their business fails then they do too. The best they can hope for is to leave the country as many have done, or start again, assuming they have the means to do so. They won't appear in the unemployed register because they don't count. Yet these businesses used to employ thousands of people - legally and illegally - all with something in common. That the money they earned was ploughed back into their communities.

    So let's turn our backs on this class of people. Let them leave or emigrate. Let their businesses and then their lives fail. You won't hear their voices, because they don't have a collective voice. You might see their boarded up businesses or To Let, To Rent or For Sale signs all over this country, but their is a collective apathy form the citizens of this country for their livelihoods.

    No, we should turn our attention to the Google, Facebook, Twitter and Paypals of this world. After all, these FDI companies employ what, hundreds of people of government sponsored and paid for jobs. These tech jobs may completely fail to generate any other jobs in their communities, bar the services required to satisfy these luxury jobs, and yes, those services may well involve the self-employed. But in essence, the privilege of having these stellar companies in Ireland and the taxes they don't pay, far outweigh the consequences of the tens of thousands of self-employed jobs that have disappeared in the last few years.

    On the bonfire of the vanities.
    A wonderful post. Thank you.

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    The self employed should be allowed to claim the dole too.

    The presence of a social safety net brings peace of mind even if you never need use it. To be struggling and facing a catastrophic loss of income without any means to buy food if everything else fails is nightmarish. We should treat people equally...self employment is employment (without a pension, maternity leave, sick pay etc as it is). It is precarious enough without denying hard working people a hand up when their business fails.

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    Quote Originally Posted by Twin Towers View Post
    Funny, I've been trying to get a builder and it's like a 30k job is too small beer for them.
    Quite. But are you asking for 30,000 worth of work? From the size of the budget this sounds like a domestic project. Many domestic clients have an unrealistic expectation of what they can get for their money - whilst labour costs have gone down, material costs have not depreciated by as much.

    Also, domestic work is a lot of hassle - for most people an extension, or such like, is one of the most expensive items, other than the purchase of the house, that they will ever spend their hard earned money on. Given that, even minor decisions can often be agonised over endlessly, changed multiple times, become emotionally charged etc. etc. thus making the builders job very difficult, very time consuming and, most importantly, ultimately unprofitable.

    None of this means that you won't find builders to do domestic work - just not the really good ones, as they would nearly all prefer to be doing anything else.

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