As the Irish economy winds down, perhaps people will see merit in an often discarded party.

After the last election, political scientists at Trinity College undertook a fascinating piece of research, which found that people who voted for the Labour Party in Ireland were richer than those who voted Fianna Fail, Fine Gael or any other party apart from the Greens.

So there it was: the party of the workers was actually the party of the bourgeoisie. So how come Pat Rabbitte, a man of the Left with a long pedigree of left-wing activism, led a party that represented the well-off?

It all seems a far cry from the rhetoric of Karl Marx – the spiritual leader of the Left – who knew exactly where he stood.

In Das Kapital, Marx stated that ‘‘capital is dead labour which, vampire like, lives only by sucking living labour’’. How did it happen that the men who read and subscribed to Marx in Ireland also managed, without feeling compromised, to live in big houses?

This inconsistency is possibly the biggest dilemma facing the Labour Party now. Who are they? What is their constituency?

If working men are not voting Left, what is the point? And because of this failure to connect with the workers, what is the least successful Socialist party in European post-war history going to do now?

One interesting way of looking at this conundrum is through the prism of generational politics. Back in the 1970s, when the big beasts of the Labour Party were forming their political views, the world was captivated by the language of Marx.

There was a real sense this Utopia could be achieved, albeit based more on blind faith than on concrete evidence. But spurned on by the ham radicalism of 1968, the extreme idea of a class war and class enemies was seen as part of rational political discourse.

Faith in the state’s ability to deliver – once power was wrested from the old order – was unwavering and (possibly most crucially),the economy was seen as a tool of ideology to be used and abused at will.

Just about the time Irish university campuses were packed with Che Guevara wannabes in PLO scarves, the entire system which underscored this fantasy began to break down. Many regard the fall of the Berlin Wall as the day socialism ended; however, arguably, it came much earlier.

In themid-1970s,thewestern economies suddenly stopped working. The 25-year post-war expansion stalled. Europe went from full employment to persistent unemployment. Budget deficits ballooned.

Stagflation replaced growth and the hydraulic management of the economy – where it seemed politicians only had to pull levers to effect change – came to a sudden end.

Like most things in economics, the problem can be traced to a change in relative prices. The oil price shock of 1973 was the turning point. For 25 years, the West had motored along, subsidised by cheap Arab oil. As long as petrol prices were low, the European cost base looked artificially competitive, which allowed Europeans to pay themselves more than they were worth.

The resulting rise in living standards allowed the young socialists to indulge in fantasies based on a mythical lumpen proletariat and a tiny boss class. It also emboldened their view of what could be achieved by the state and, maybe most damningly, it deluded them into thinking that economic success was easy to come by.

Since then, apart from a blip here and there, the left-wing cause has been an ailing one. This is a shame because their aspirations are obviously worthy. Who can argue against a comprehensive health care system, who can return from a visit to Denmark and not be impressed by the way they organise themselves, despite having the highest tax rates in Europe? Yet, the Irish electorate have comprehensively rejected Labour under two very able leaders for over a decade now.

The reason might be very simple. This generation of Labour leaders, who are now in their 50s, do not understand an electorate where the big bulge in the population is in the 20-35 age group. There is a political generation gap in Ireland, which is as much demographic as ideological.

Arguably, Ireland is governed by a new social contract, which has been drawn up by Bertie Ahern during the boom. We have witnessed the emergence of a younger generation, who could be termed New Provisionals. They lead a provisional lifestyle where everything is temporary.

Your house, your job, maybe even your relationships are seen as provisional stepping stones on the path to a better future. Many Irish people now, as Ronald Reagan once said about Americans, ‘‘believe that tomorrow is a brighter place’’.

So are we on a conveyor belt which is moving in the right direction? The motor of this machine is the belief that tomorrow will be more prosperous than today. The lubricant of this New Irish Dream has been rising house prices. As long as house prices were rising, the electorate tolerated the daily hassle of living here, safe in the knowledge that they were getting rich.

Many put up with the overcrowded schools, hospital waiting lists and lack of childcare because they believed in a better tomorrow. Private wealth predominates over the public realm. And for many, the rhetoric of Labour sounds outdated and possibly destabilising.

Bertie Ahern on the other hand, as the architect of the new social contract, is seen as the custodian of the Provisional dream.

As a result, thousands who are concerned about the same basic issues that the Labour Party espouses, opted to vote for Fianna Fail.

Ironically, now that house prices are unambiguously falling and the basis for the Provisional dream is being undermined, it might be that the message of the Left, or a reconstructed Left, might be more persuasive.

Pat Rabbitte is an intelligent man and one of the best speakers in the Dail, but might it have been wiser for him to have stayed the course a few more years and waited for the downturn to make more persuasive the Labour message?

It is clear that the social contract based on ever-rising house prices is about to be torn up; Labour and the other opposition parties should have their new political scripts ready for that eventuality.

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