What Ireland did right (and what it needs to do)…

It is difficult to believe now that one country recently sent 19 delegations to Ireland to study how well our economy was managed. The revelation that our model of economic management featured positively in political and economic discussion in countries including Estonia, Greece and Scotland may also come as a surprise.

As we survey the ruinous aftermath of the collapse of a property and banking bubble, it is salutary to read that ‘Ireland turned out to be the first country in which policy makers would turn to get ideas about successful public policy reforms, almost in every single sector of public policy’.

This is one the most interesting insights of What Did We Do Right?: Global Perspectives on Ireland’s Miracle edited by Michael J O’Sullivan and Rory Miller. Experts from abroad review the positive elements of our recent economic performance and analyse what other economies can learn from our experience.

This books stands out as welcome antidote to analytical gloom. It reminds the reader that in our recent history, economic and regulatory decisions have been made which were correct, and which worked.

It achieves this through breadth of analysis. Reviews from Scotland, France and America are amongst the more predictable inclusions. However the insights from Greek, Chinese, Vietnamese, Egyptian and Indian experts provide a fresh spectrum of thinking.

A shared framework engaged in by most of these writers involves dividing our performance into two independent, though overlapping, phases. The first ‘catch up’ era saw income, employment and standard of living surge. This economic miracle then gave way to the collapse of a bubble, that is seeing the loss of many of those gains.

The articles in this book focus on this first stage as a period that can be learned from. Khuong Minh Vu compares Vietnam to Ireland in its success of supporting free markets, proper governance and human capital development. A comparison of Irish and Portuguese productivity gains by Perdro Lains shows how exceptional productivity gains by Irish workers underpinned our competitive advantage.

While these essays do not uncover any new causes for our economic resurgence and decline, the interest is in the relative weight they allocate to commonly understood factors.

They argue that ‘intangible infrastructure’ was crucial in driving our economic performance. These are defined as ‘the set of factors that develop human capability and permit the easy and efficient growth of business activity’. These elements are mainly political or social and include respect for the rule of law, a strong intellectual property framework and respect for our institutions.

Many of these commentators review how these capacities led to the decisions on ‘harder’ infrastructure or investments. This includes our ability to win foreign direct investment and creating an environment to reward business endeavour.

This strongly infers that the failure of regulatory systems, the demise in the value of legitimate profit making activity, and the collapse of social partnership, will not just have a current cost. It will erode the ability to make the shared decisions to keep our country and economy secure.

The erosion of these elements means that no author greets the subsequent collapse with any surprise. As the editors acknowledge ‘there is no sign here of the mixture of denial and bewilderment that colours the accounts of Irish policy makers and commentators’.

A reminder of how our own decisions contributed to sustainable growth is needed. This is not just for our national mood, but also to help ensure similar policies are pursued in the future.

A crucial conclusion is that efforts to rebuild intangible infrastructure are, at least, of equal importance as decisions on our roads, broadband and Luas lines. Decisions on protecting international property, restoring the effectiveness of law, and rebuilding faith in the fairness of our institutions will make a crucial difference.

All books are a product of their time and liable to date as soon as they are published. However international comment on how we are dealing with the national depression is of real interest at home. In fairness, the editors are clear in acknowledging their focus on the ‘pre-collapse’ stage. But some comment from this rich array of writers on how current efforts are perceived would have added to the interest and appeal of this work.

The authors conclude by noting that ‘nations and economies have emerged strongly from crises once they have undertaken serious reform and adapted themselves to the new world order’.

This work forcefully reminds us that we have made these changes in the recent past and that we can do so again.

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  • http://www.labourbelfast.blogspot.com DC

    Ireland couldn’t handle its own capitalism, which turn out to be turbo-capitalism after the domestic reforms.

    Sure sign that it had no effective socialist thinkers in the government who usually critique capitalism and try and save it from itself. Bit like in Britain too.

    Ireland’s upturn and growth pre-crash is important for those aspiring to join the EU, as it is the manner in which Ireland subscribed to EU values and westernised itself that helped to change its outlook and legal framework.

    But, history tends to emphasise terminal events and there is nothing more revealing about a character or a nation than the manner of its own downfall.

  • A N Other

    What’s up in Ireland? http://url.ie/75qx

  • Alan Maskey

    After JFK tried to invade the socialist paraide of Cuba, he asked why he was so silly as to trust the experts. Economic experts are always wrong, India has plenty of them and a broken clock is right twice a day.
    Vietnam, huh? Ho Chi Minh, peace be upon him, said that the true patriot is the one who grows two blades of grass where one previously grew. (or something to that effect). Vietnam is now growing. The future is in the East, where governments intervene and they don’t listen too much to US apologists and self obsessives masked as experts. Look what these people did to Russia, Chile etc. Pass the bucket.

  • joeCanuck

    Surly. Sounds like you would like the country to be an economic basket case like Greece.

  • Kevin Barry

    Depends what experts you listen to, as quite a few predicted the crash but the popular media and governments chose to ignore their rather inconvenient predictions.

    It’s always very tempting and easy to predict the end of western civilization and believe that because nations in the East are autocratic that their economic decision making process is superior to ours owing to larger rates of economic growth at present. While the latter point is that they can make decisions very quickly, the difference is that you are relying on the oligarchy in charge,who haven’t decided to liaise with the relevant people effected to get their decisions right everytime, while we (to varying degrees) liaise with effected people. I know what we have is afar from perfect but in comparison to autocratic regimes we do actually debate an issue.

    Also, owing to the fact that they are inherently corrupt, should we take their figures on growth at face value? Are we to believe that they (Eastern Governments) are above allowing some party cadres to become exceedingly wealthy and massaging the growth figures? China is not above the effects of a property bubble in their own territory and to imagine that they will have this kind of unprecedented growth every year until kingdom come is perhaps naive.

    Here’s an idea of what I’m talking about

  • joeCanuck

    I can well remember how much “The West” fretted 10 or 12 years ago that the Japanese were virtually going to take over all world commerce. Instead they became an economic basket case and have yet to recover. With their predicted population decline they might never regain their previous industrial strength, robots notwithstanding.

  • Mack

    Sure sign that it had no effective socialist thinkers in the government who usually critique capitalism and try and save it from itself. Bit like in Britain too.

    Um… Have you ever heard of the Inchidoney accord? Or Bertie Aherns coincident announcement that he was a socialist? Do you know what the outcome of this accord was?

    You do realise the fiscal crisis, caused by rampant social spending to appease the Unions and social pressure groups, at least in terms of the figures currently available – even taking worst case estimates from the likes of Brian Lucey and Constatin Gurdgiev – dwarfs the banking crisis in Euro amounts?

  • Mack

    Or to put it another way – we had rampant out of control bankers capitalism coupled with rampant out of control socalism (ICTU, CORI etc)…

  • Kevin Barry

    Joe,

    I couldn’t agree more with you. I am not saying that China will go back to being a mainly agrarian society, far from. However, I am not entirely convinced that they have the right decision making structure in place for the long term.

    Right now, we have a case of confirmation bias whereby people are saying ‘Well, they’re autocratic and their economy is growing beyond compare’, hence, the fact that they don’t have to debate decisions means that they get things done correct and quickly. Also, while this is going on we’re facing a massive correction here in the West and quite rightly questioning how our institutions make decisions that benefit the populace in general.

    But, when things start to go wrong in China, and they will face a recession at some stage in the coming years, will the consensus they have in place between the Politburo and the populace still be as cosy?

    I was listening to CSIS on Russia, and here is a country that shows us a perfect example of a country that does not have a large amount of debate over decisions made regarding their economy. When the credit crunch started the leadership was under the impression that this would not effect them, that it was localised entirely in Western countries and that they could ride it out with their massive reserves. And because of this they acted incredibly slowly and squandered their huge reserves and faced an insanely massive correction.

    I am not saying that what we in Ireland or in the West have is perfect, but I think we have lost the belief that the reason we have democratic institutions is based on the principal that democratic decision making is to the benefit of all as it should highlight objections to an idea and bring to the attention of all concerned ideas that have survived rigorous debate.

  • http://www.labourbelfast.blogspot.com DC

    I don’t know the exact fiscal situations or accords you highlight, but the way I see it is that the financial market/markets and public service provision are both competing tensions always needing managed at a government leve. They are competing tensions if you operate a third way approach to managing the economy.

    It wasn’t managed properly.

  • http://www.labourbelfast.blogspot.com DC

    Bertie Ahern a socialist? Sociable I think he meant?

  • Mick Fealty

    That basket case became a basket case nearly 20 years ago Joe/Kevin…

  • joeCanuck

    How time flies, Mick. I just guessed. I’m getting old and time flies.

  • Greenflag

    Today /yesterday on the Beeb Alastair Darling former British Chancellor told us that the Royal Bank of Scotland called him on the phone two hours before they were going to run out of money . Had Darling not acted banks across the UK and EU would have closed down -ATMs would not have disgorged cash -entire economies would have seized perhaps never to start again .Societies would have collapsed overnight as recriminations went around the world with everybody blaming everybody else .

    The truth is none of them -the experts -had an iota of what was going to happen before it did -not in Ireland -not in the UK and certainly not in the USA . Yes there were a few voices crying in the wilderness but they went unheeded for theirs were the voices which our powerful /powerless elite would not or could not listen to .

    Again for all the non experts out there – our so called elected and unelected ‘experts ‘ know as much about what is going to happen as you or I do :(

    They all predicted the 1987 Wall St crash , the 2008 meltdown , the property bubble burst , the fall of the Soviet Union , etc etc AFTER the events!

  • Greenflag

    Kevin Barry

    ‘ but I think we have lost the belief that the reason we have democratic institutions is based on the principal that democratic decision making is to the benefit of all’

    Very true . The neo con ‘destructive ‘revolution is all about decision making to benefit the few who have at the expense of the many who haven’t :( The pressure of globalisation and the competition for inward investment worldwide means that the ‘priviliged’ minority of the very wealthy in the western countries will do everything they can to hold on to what they have at the expense of their countries middle and working and non working classes .

    China’s from of capitalism is better called ‘authoritarian ‘ capitalism similar in many respects to the ‘capitalism’ of Britain in the Industrial Revolution i.e no opposition or if any existed it was powerless .

    Mr Nixon’s main objective in opening up China for world trade and ‘democracy’ in the 1970’s was the hope that it would provide a huge market for American industrial exports and consumer goods -a bit like India for the British Empire in the 19th century . Nixon’s hopes have backfired as the Chinese have now such a huge trade surplus with the USA and have made the USA’s dollar value totally dependent on the Chinese continuing to hold 1 trillion dollars in Treasury Bills (loans to the USA Government and economy) .

  • joeCanuck

    AFTER the events!

    Well, as that astute New York Yankees manager and unintentional supreme wit Yogi Berra, observed, “It’s very difficult to make predictions, especially about the future”.

  • http://www.labourbelfast.blogspot.com DC

    The financial fabric of contemporary life was about unravel hey Greenflag? I think the government picked the wrong war on terror because if the cash machines had stopped altogether never mind terror from Afghanistan afar, local life here would have become short, brutish and hard.

    But the businessmen/women knew the banks were fuelling it – that property speculation. My brother in law is a businessman and I asked him how it could be that social housing properties in areas of little work could fetch 160k? The “banks are fuelling it”, he said around 2006 time. Too many people intensely relaxed about what was rampant high risk speculation in the end.

    These great leaders and politicians of the time losing their critical faculties in a bid to stave off negative sentiment as spin operates by accentuating the positives only as does marketing products. Sometimes cold neutrality is really what is required in government at times, required for good judgement and even better governance in the end.

  • http://www.labourbelfast.blogspot.com DC

    “It’s very difficult to make predictions, especially about the future”.

    Upon reflection, the financial crash was a result of two mysterious types of people – the somebody and the nobody.

    Somebody did it, but nobody knows who!

    Yet, for physical terror, terrorists are supposedly known, they can get locked up under terror laws that go against the grain of human rights and civil liberties, they also have their properties, bank accounts and other assets frozen; but in the **financial sector** which took society close to the brink of financial ruin and would have created its very own form of terror throughout western society – nothing of the sort happens to them. How can that be right?

    The law’s an ass!!

  • http://www.wsws.org Mervyn Crawford

    The world’s ruling classes, led by the Americans, manufactured an artificial boom through the release of credit. This was in response to the demise of the post-war boom. This speculative boom has now collapsed; but the ruling classes wish now to put value into the speculation by attacking the gains made by the peoples of the world.

    For example: a house is puffed up to an absurd ‘value’. Credit had been advanced which facilitated this price explosion (from 30,000 to 600,00 in Dublin in 15 years).

    The boom collapses but that inflated house value must be repaid to the lender. A massive transfer of wealth from the citizen to the the super-rich.

    The speculators knew they were completely safe in the game of pass-the-parcel lending. Whoever was left holding the baby of loans when the crash came would be taken care of by the state. How did they know this? Because the state is the national administration of the ruling class. It is their state.

    This principle applies to all the price rises that occurred. Credit hid the profiteering temporarily.

    Artificial value in the form of credit is now to be turned into real value by exponential levels of super-exploitation – smash up public services, slash wages, drive up taxes; bring about dictatorship to enforce this.

    Read Nick Beams http://www.wsws.org

  • Alan Maskey

    Good points Mervyn. Japan is not a basket case, Check out its rate of exhcnage. They are always putting on the poor mouth, like Irish farmers used to do. Eastern economies are geared to save and work. Sure there are losers but the winners outnumber them.

    The West is an unbounded consumer society. People, when they are not watching Big Brother or osme other BS, vote for the parties that will allow them spend, spend, spend. On goods made in China.

  • http://www.wsws.org Mervyn Crawford

    The world economy is one. The ‘gains’ of the Chinese bourgeoisie are held in western debt.

    And what of the slave-like conditions of the Eastern peoples?

    One has to step back and re-assess world society and economics from the perspective of history.

    Capitalism has only existed for several hundred years. It reperesnts the highest point of class based organisation – production based on a ruling class exploiting the masses. The tremendous gains made by capitalism in productive technique must now be harnessed rationally.

    This means the taking of political power by the exploted and the ending of the profit system.

    We are still living in mankind’s prehistory. The return of hunan organisation to non-class sosciety (after only 10,000 years of such) will unleash a flowering of human civilisation and technique. The true beginning of human history.

    http://www.wsws.org
    I do repeat. Read the World Socialist Web Site.

  • Damian O’Loan

    Interesting article Mack, the book seems very worthwhile. It does point to those elements of ‘intangible infrastructure’ severely lacking in the North as well. Whether they can be created by providing economic success quickly, an argument I suppose for reducing corporation tax, is open to debate.

    The release of credit and the attraction of FDI are also interesting points. None of this would have been possible had Ireland not contributed to providing destinations for privately-held capital. Be that in social spending, some eventually considered debt, or the property bubble referred to. A problem seems to be that small nations have no choice but to become a sponge for this private investment, with all the instability that engenders. Ireland’s influence, not altogether positive, on other countries shouldn’t be underestimated then.

    On China, Martin Wolf wrote interestingly recently about the dearth of sponges for capital, even if houses cost 27 times salaries, three suggested as the acceptable limit for NI recently. The West is no longer trusted; the East is largely refusing it. That is what suggests to me that war for regime change is something worth worrying about. Cameron is doing his best to provide some options, but we can see that this is far from in the national interest in many cases.

    It is refreshing to see praise for Irish policy-makers again. It’s not curmudgeonly to ask whether the attraction of FDI, though, is necessarily counter-productive in terms of ‘intangible assets’. Anatole Kaletsky has already suggested democracy isn’t good for nations. It’s important Ireland plays its part in contributing to the debate on whether the social price for short-term growth is avoidable or justifiable. This book, and your blog, seem like good starting points.

  • Damian O’Loan

    Oops, sorry My Donohoe, all credit to you this time. I’m glad Mack’s in the comments or I might’ve had to ask whether I had an obsession/pathology.

  • Greenflag

    Very true JC . Had the great Yogi consulted with the Commissar’s in the East they’d have told him he was a pessimist ;) Any dog on the street could have told him with unimpeachable accuracy the result of the upcoming Soviet General Election to within .01 % ;)

  • Alan Maskey

    I will be spending most of this afternoon with Chiese people, with rich Chinese people. They will tell you that the Chinese Commies have lifted hundreds of billions out of poverty. And they are right. So save us the Marxist racist crap about Asian slaves. Such ignorant comments (from a point of view of ignorance and no experience) serves nobody.

  • Greenflag

    DC ,
    ‘I think the government picked the wrong war on terror ‘

    I believe Warren Buffet did make a comment just before the Lehman collapse about the ‘real weapons of mass destruction’ being located somewhere closer to the land of the free and the home of the brave i.e Wall St & the Banking /Financial services sector .

    A lot of people knew with the left side of their brain but denied the truth of their doubts with the right or vice versa .
    And there are no prizes for being a party pooper . The nature of the ‘beast’ i.e humanity deplores the bearer of bad news as any decapitated bad news messenger would have told you if he could in days of yore or at least before Magna Carta .

    ‘These great leaders and politicians of the time ‘

    Of the time ? It’s worse than that . Make that of ALL time . In retrospect when they do get it right it’s often just the result of happenstance and circumstance . From the ‘grain hoarding bubbles ‘ in ancient Rome to Scotland’s ‘Darien ‘ fiasco to the Dutch ‘Tulip ‘ investment frenzy to our own and others most recent property and stock market collapses the constant is always the inability /unwillingness of the powers that be or are supposed to be to either predict ensuing financial and or political chaos much less to do anything about it until as they say the ‘smoke ‘ has cleared and the ‘bodies’ have been disposed of and the ‘true’ history of events is decided by those academics who have survived the post ‘ideological’ wars to gain acceptance as ‘conventional ‘ wisdom .

    ‘sometimes cold neutrality is really what is required’

    A nice thought very rational and high minded . Alas we are all human beings well most of us anyway and the general track of history in all nations /cultures /empires /businesses etc when they are in a major crisis is for ‘reason ‘ to fly out the door with greater speed and for internal dissension amidst the different parties to grow exponentially . Thus we see the gap between Democrats and Republicans in the US increasing in recent decades as the fault lines within US society become starker and more apparent to the entire world .

    As for losing the ‘critical faculties ‘ ? Where they ever present ? I read of a absolute genius in Florida a GOP politician up for a primary election who is under pressure from an even more nutty headbanger of the far right populist christian wing of the party . To counter his opponent and to show his constituents that he is no fool and is not soft on ‘illegal ‘immigrants this GOP genius has put forward a proposal that would have any illegal immigrant found to have no ‘papers’ (by definition all of them ) to be sentenced to 20 days in jail .

    It apparently did cross this genius’s mind that American prisons are not just full to capacity but most States are trying to find ways of releasing ‘prisoners’ early to save on expenditure ? Thus one half of the neo con nutters want more prisons built while the other half want to have the present prisons reduce the number of residents /

    Of course if by any chance this incumbent GOP politician gets his way and ‘illegal immigrants ‘ are sentenced to 20 days imprisonment and the 14 million illegal immigrants in the USA were to present themselves for ‘incarceration’ for free food and lodging at the State’s expense for 20 days it would of course be a financial bonanza for the legal fraternity. And then with the prisons all full to capacity again there would be demands from even more of the neo con nutters to build a thousand or more new prisons across the country .

    Good news for the construction industry and for the ‘privatised prisons’ corporations :(

    Those who the gods wish to destroy etc ;(

  • Greenflag

    Mervyn Crawford ..

    A nice theory and if it was actually planned like that one could almost say in it’s defence that at least somebody knew what they were doing and why .

    While I don’t doubt your overall approach or your scenarioed outcome , the game of pass the parcel often ends in a bang . There comes a point when the ‘people’ say enough and then what was is swept aside in a new paradigm and there’s a new game . How this will happen none of us know but history tells us that it happens and sometimes without much of a warning ;) except of course after the event . Consider Northern Ireland in 1965 and what it had become in 1972 ? Who in 1965 would have thought that the events of the 1970’s and later were just over the time horizon ?

  • Greenflag

    ‘Mervyn Crawford ,

    ‘The return of hunan organisation to non-class society (after only 10,000 years of such) will unleash a flowering of human civilisation and technique. The true beginning of human history’

    Apologies for the bluntness but while your sentiment may appear noble and inspiring for the human condition the eh content is of course rubbish .

    What actually made human beings human was culture and his man made environment . We would not be as ‘human ‘ as we are without a class society . The specialisation of labour and skills and the freeing up of a small minority or early mankind to do other things is what drove human progress .

    There will always be ‘classes’ and at various times in history some classes will become extinct by virtue /vice of economic progress and other classes will rise to political power only in time to be overcome in turn .

    ‘The true beginning of human history.’

    We know the true beginning . It was when one near human lifted a stone and used it to smash a bone or a nut or his mother in law’s skull ;) It’s been progress ever since with the discovery of gods , gravity , geology and geography and not forgetting differential calculus !

  • http://www.wsws.org Mervyn Crawford

    John Chan:

    “The tragic death of 104 workers in China’s latest coal mine disaster at Hegang city in Heilongjiang Province last week is a glaring reminder of the brutal exploitation of the country’s 400 million workers, whose sweat and labour constitute the foundations of Chinese and global capitalism.

    While the international financial press speaks of China as the bright spot in the world economy and cites the various statistics of high output and growth, the poverty-level wages, oppressive and unsafe conditions, and huge social costs involved are assiduously ignored.

    The deaths of the miners in Heilongjiang Province are a product of the transformation of China into a giant sweatshop for global capital. Amid the worst economic crisis since the 1930s, the drive for super-profits in China has only intensified, presided over by a Stalinist police state that ruthlessly suppresses any opposition by workers.”

    The rest of this article can be read here:
    http://www.wsws.org/articles/2009/nov2009/pers-n25.shtml

    Mr Maskey:
    You say my comments are racist? In what way? To point out that millions upon millions of the people of China, India, Vietnam work for a pittance?

    If one wishes to find racism may I refer others to Mr Maskey’s own comments comments from above:

    “[The japanese] are always putting on the poor mouth, like Irish farmers used to do………

    The West is an unbounded consumer society. People, when they are not watching Big Brother or osme other BS, vote for the parties that will allow them spend, spend, spend.”

    Given your prejudices Mr Maskey you will undoubtedly have a comfortable afternoon in the presence of ‘rich people’.

  • http://www.wsws.org Mervyn Crawford

    Greenflag,

    The progress gained through class differentiation is referred to in my point above.

    However, I disagree entirely with your cynical view when discussing the use of tools:

    “We know the true beginning . It was when one near human lifted a stone and used it to smash a bone or a nut or his mother in law’s skull .”

    Class societies developed as a result of the Agricultural Revolution. When pre-class, primitive communist societies manipulated plant and animal life to produce a surplus. Formerly man had simply gathered wild cereals, tubers etc and hunted wild animals.

    This change from hunter-gatherer to agriculture only took place about ten thousand years ago. Modern anatomical man, no different from us in brain size etc has existed for more than 150,000 years.

    For the first time in human history the revolutionary class that society has brought into being is not a new exploiting class (as capitalists were in feudal society); but rather are the exploited class.

    All previous class societies have now brought mankind to this point. Where we must return to non-class society; but at an infinitely higher level. The era of super-abundance – no want, no baseness.

    Classes are not inherent in human nature. They are a brief moment in the span of human history.

  • Alan Maskey

    Mervyn: You call bme a racist because i say the economic evidence belies the statements (that you echo parrot like) of Japanese officials that their economy is kaput and that the West is a consumer society which buys Chinese products and that I spend time with Chiense and Thai people.

    Go check your computer and see where it or its components are made. China continues to grow and the West continues to decline. The trade routes are moving eastwards. Fact.

    No country has changed its society and demographics more than Japan since World war 2 or Ireland in the last 10 years. Babies often went out with bathwater.

    Ireland should follow her own path. But the EU, the US and other super powers do not respect independence of mind or action. They prefer the economic hitmen who do their masters’ bidding.

    Speaking of which, it is back to Ebay to bid on some tasty things to make my home look even more of a middle class prison. I wil leave you guys to argue out to see who is today’s top economic w.nker.

  • Mack

    Well, he claims to be a socialist.

    No they weren’t managed properly. But it wasn’t due to a lack of socialist insight or input.

  • Alias

    “Speaking of which, it is back to Ebay to bid on some tasty things to make my home look even more of a middle class prison.”

    And wash those tatty, nicotine-stained net curtains while you’re about it…

    Now, economic “miracles” are very easy to perform. You simply surrender control over macroeconomic policy to a supranational agency, and then allow its expansionist monetary policies to inject 1.69 trillion euros of cheap credit into your economy over a 10-year period in order to stimulate consumer demand for German goods and financial services. The miracle is performed for every year that folks spend 200 or 300 hundred billion of borrowed money in your economy. Everybody benefits and all boats rise. Sadly, however, the miracle ends when you have to stop borrowing the cheap credit and start paying it all back.

  • http://www.labourbelfast.blogspot.com DC

    Come on Mack – there was clearly greed right at the heart of government.

    Most hardcore left-wing socialists I know even have bank accounts, Comrade.

  • http://www.labourbelfast.blogspot.com DC
  • Comrade Stalin

    The boom collapses but that inflated house value must be repaid to the lender. A massive transfer of wealth from the citizen to the the super-rich.

    You’re ignoring, likely deliberately, the fact that the lender paid out those sums of money to those who were selling the properties. But it wouldn’t be like the looney left to let a few facts get in the way of a good rant about the end of capitalism.

  • Comrade Stalin

    There’s nothing like an over-educated Communist going at it hammer and tongs.

  • Alan Maskey

    Alias

    I don’t smoke. Nor do I allow smoking in my vicinity. It is bad for the balance of payments.
    Consumers buy mostly Chinese, not German goods through retail outlets/Chinese distribution points such as Asda, Tesco and the other places the unwashed shop. Germans are more niche players: high quality instruments like one gets in the North Sea and for which the idle Irish would presently have little use.

  • Mack

    DC –

    Are you equating socialism with poverty?

    The Unions (ICTU / SIPTU) represent workers (mostly public sector) in social partnership. They fought and won two rounds of overly generous pay rises (benchmarking 1 and 2). Greed? Certainly. But socialist rather than neo-liberal greed.

    CORI / Social Justice Ireland also pressured the government for large increases in social welfare payments. Such that the dole in Ireland was 3 times UK levels and pensions twice as large. Replacement rates – what it would cost a worker to go out an earn their benefit entitlements after tax – surged to the second highest in the EU-27 and the 3rd highest in the OECD. Given Ireland’s tax structure, coupled with large increases in public sector wages, huge increases in the numbers employed in the public sector, capital spending etc. These pushed spending beyond anything the government could reasonable afford. Hence the recent cuts.

    So, greed? Yes. But when it comes to government spending – it’s of the socialist hue.

  • Mack

    iMost hardcore left-wing socialists I know even have bank accounts, Comrade.

    Lol, sorry missed that – went over my head.

  • Greenflag

    ‘However, I disagree entirely with your cynical view when discussing the use of tools:’

    In the beginning there were no tools and it’s a big jump from stone flints to laser eye surgery and H bombs and computer motherboards and neutron bombs .

    I was not being ‘cynical’ just factual apart from the mother in law add in which social role had not yet been introduced back then and not until the human jaw had reduced in size to enable never ending chatter ;(

    ‘Where we must return to non-class society; but at an infinitely higher level. ‘

    Why the must ? Nothing is pre ordained except for Calvinists . Progress is not inevitable -humanity is quite capable of returning to an infinitely lower level . A thermo nuclear exchange would speed the process .

    ‘The era of super-abundance – no want, no baseness.’

    Admirable desires -very high minded and inspirational but will these future dwellers of Abundia be atually human beings or some other more advanced species ?

    ‘Classes are not inherent in human nature. ‘

    Thats why of course as humanity has evolved i.e become more developed there has been an increase in the number of classes . I don’t recall cave dweller Ugh back in the Upper Paleolithic complaining about the bourgeoisie or the lower middle class recalcitrants who refused to move to a cave location without compensation .

    ‘They are a brief moment in the span of human history.’

    Perhaps but when you start thinking in the longer term you may want to consider that ‘humanity’ itself may be just a brief span in the Earth’s history .

    Instead of hoping for a new Erehwon or classless Utopia it would make more sense to work for incremental economic and social advance interspersed occasionally with periods of rapid advance . But nothing is inevitable unless you are one of those fattening turkey’s who believes tomorrow will be as today and so will the next day but alas has never heard of Christmas .

  • Greenflag

    Alan unmasked Maskey,

    ‘and for which the idle Irish would presently have little use.’

    Delighted to see you come out of yourself and reveal your non us identity ;)?

    What a relief it must be .

    BTW don’t diss the great unwashed . The western world indeed the entire world is waiting for the unwashed hordes of Americans , British and Germans to start spending again so that the taxpayers monies that were given to the banks after they gouged out the economies can be recovered ;(?

    So far it looks like the great German unwashed are the only ones who have the ‘readies ‘ to spend . The US , Ireland and the UK are all tied up in non flexible assets i.e property .

  • http://www.labourbelfast.blogspot.com DC

    Oh don’t worry the bank account thing was a cheap pop at Bertie Ahern’s statement that he didn’t have one back in the mid-90s when finance minister.

    I might seem a bit harsh on Ireland’s economic progress and I shouldn’t be viewed as critical of private sector involvement, which I’m not. I see the private sector both in Northern Ireland and the Republic as a key driver of positive change. Ireland’s history is littered with problems to do with state actors and actions – simple way out of that history and cul-de-sac is to shrink the role of the state. But shrunk in line with an intelligent design that improves private sector growth and service delivery to citizens in the process.

    Recent history shows us that (despite the crash) Ireland when awash with money has helped to create and sustain positive relations. A good thing. Without cash and disposable amounts of it life can be harder and sadly shorter.

  • Alias

    Alan, 1.69 trillion in external debt acquired under the governance of the German-controlled ECB is financial product that should be factored into the ‘balance of payments’ but isn’t. A huge chunk of it was ‘sold’ to lending institutions in Ireland by lending institutions in Germany. Each house sale in Ireland equalled a massive profit for a lending institution in Germany who sold the loan to a lending institution in Ireland who then sold it on to a consumer. Of course, those German lending institutions now want the money back that they lent recklessly to lending institutions in Ireland, and they are able to get the money back by using the EC to proffer ‘systemic risk’ to insist that debts must be contained within the borrowing state rather than default to the lending state and thereby demand that those who didn’t borrow the money (national taxpayers) guarantee that money and replay 100% of it to those who recklessly lent it in Germany.

  • JJ malloy

    Actually was more lilke 22 years ago.

  • Alan Maskey

    Yes Alias, no quibbles.
    Greenflag: Did you not do set theory at school? Oh well. Your poor grasp of set theory notwithstanding, please appreciate growth is in the East – China, India, Vietnam, not in Germany. Germany, incidentally lost the 1914-45 war. After the surrender of the Central European Powers and the Japanese, the USA put into place the system we have “enjoyed” ever since and into which we have been gradually subsumed via the EEC/EU.
    That policy was to keep the old adversatries – Japan and Gemrany – down and stop the new ones – USSR, China, India etc – gaining traction.
    Well, guess what. India and godless China are on the march and trade routes are following.
    All the Irish and Americans can do is eat hamburgers and buy over priced houses. They are the past.
    To have any future, they must shut the empty economists up. And work. But that is something the unwashed do not like to do.

  • Greenflag

    alan maskey ,

    ‘That policy was to keep the old adversatries – Japan and Germany – down and stop the new ones – USSR, China, India etc – gaining traction.’

    The problem with paranoia of the international conspiracy ilk or indeed of the Elders of Zion school etc is that creative paranoids can come up with dozens of interpretations of future likely events based on the same base set of ‘facts’ present or past .

    Even an apprentice paranoid like yerself should know that the real reason China is on the march is because Tricky Dickie Nixon and Henry Kissinger went and opened up China for capitalism in the early 1970’s roughly after that point when the writing on the Vietnamese wall was becoming decidedly unwelcome ;) Not quite the same kind of opening that an earlier ‘opening up for trade ‘ American export delegation plus gunship achieved in mid 19th century Japan . Still the results are broadly similiar although whether the eventual war comes to pass or not is still unclear .

    On the other hand American ‘manufactured’ exports to China seem to be much less than Mr Nixon and his economic advisors predicted .In fact the opposite is the case . They may have believed at the time -a common enough fault among colonial and neo colonial powers that the indigenous in this case Chinese would take several generations to ‘catch ‘ up on western technology . And so it goes .

    ‘To have any future, they must shut the empty economists up.’

    Pointless . Even when the bastards (economists ) are dead their theories and schools of how the world works are still studied , misinterpreted and sometimes over interpreted . Keynes has been dragged from near obscurity and replaced on a fairly large pedestal and even busts of Marx are being dusted off and replaced on the shelves of both the washed and unwashed alike :(

    ‘And work. But that is something the unwashed do not like to do.’

    It appears the ‘washed’ are mostly desirous of others doing the work for them . How else would 14 million illegal immigrants survive in the USA or 400 million and a 200 million or more find work in China or India producing ever more useful and useless trinkets for the western consumer who’s expected expenditure is expected to reignite the world economy ?

  • JJ malloy

    Hundreds of billions are still in poverty. As for slaves, there are many industrial workers that are not much better than slaves. Poor rural folk who are promised great jobs in factories go there to find themselves crammed in horrible living conditions and unable to leave. They faced beatings and worse for ‘disciplinary’ reasons.

    This kind of thing is on the decline as the economy explodes but most cities have hundreds of thousands of unemployed laborers living in shanty towns or on the streets so they can’t be too picky about their jobs.

    (They will tell you that the Chinese Commies have lifted hundreds of billions out of poverty. ) It only took them decades of famine, near starvation, cultural revolutions, purges, before they decided to let capitalism (albeit limited and controlled) work it’s magic. Of course, their prisons are still full of political prisoners.

  • Tochais Síoraí

    As I was saying to my bank manager the other day, never trust anyone who doesn’t know the difference between a million and a billion.

  • Alan Maskey

    Greenflag: After the European powers surrendered in 1945, the USSR and USA divided up Europe into spheres of influence between them. The Marshall Plan was instituted to keep the US economy ticking over.
    After Japan surrendered, the USA would not allow any other beligerant – Britain, the Aussies, Australia, China and especially the USSR occupy it. So the USA re-engineered the post war world. Don’t argue from a position of ignorance.

    America did not besrwo anything on the Chinese. Chinese growth was not an American gift though having outlets like Walmart obviously helps.
    The unwashed I am speaking of are the Irish, unemployed Catholic, Pretestant and Dissenter, unmarried mothers, social welfare bums. Many, if not most, of them are unemployable. In a non corporatist, post Christain world, there should be no reason to support them.But these laggards have votes and their “needs” must be looked after.

    No busts of Marx or Keynes on my walls, thank you. But I do have the Irish Citizen Army.

  • Greenflag

    ‘The Marshall Plan was instituted to keep the US economy ticking over.’

    Only after the insane Morgenthau Plan (the alternative ) was binned . Some USA policy makers were of the view that Germany should be completely de industrialised and turned into four green fields to produce agricultural products :( Batshit crazy then but probably not more so than what passes for policy today in either Iraq or Afghanistan :(

    ‘America did not bestow anything on the Chinese. ‘

    1945 through 1965 they certainly did’nt . But during the South China famine of the mid to late 1960’s when the Chinese Communist land policy resulted in some 30 million Chinese starving to death , the Nixon administration did offer food aid to the Chinese to help alleviate the famine . The Chinese Communists wisely of course preferred to see 30 million of their people starve to death rather than risk losing face over being beholden to the Yankee running dog of capitalism :( . Such inhuman policy decisions are best left to authoritarian one party regimes of the left or right ! Our new born neo con nutters the heirs to Trevelyan are also of a mind to consign millions to eh ‘resource scarcity’ early deaths :(

    Post 1969 Chinese agricultural production soared as a result of the Green revolution which actually originated with researchers in Germany’s chemistry giant -Henkel which helped increase agricultural productivity and yields of staple foods worldwide . Thus was Chinas’ population able to expand from it’s Malthusian food production ceiling in 1970 of some 700 million to today’s 1.3 billion without any further mass famines .The Chinese have subsequently had to take action on the demographic front to avoid returning to the Malthusian trap .

    ‘The unwashed I am speaking of are the Irish, unemployed Catholic, Pretestant and Dissenter, unmarried mothers, social welfare bums. Many, if not most, of them are unemployable’

    So just the Irish then -not the English or American or German or Russian equivalents . You may have a wayward bee buzzing about inside that vacuum pack on your shoulders :(

    ‘ In a non corporatist, post Christain world, there should be no reason to support them’

    Of course not Herr Obersturmbahnfuhrer . I suppose you recommend Zyklon B and the Auschwitz solution . How kind:(

    ‘ No busts of Marx or Keynes on my walls, thank you.’

    Of course not . Padded cells presumably don’t have shelves !

    ‘ But I do have the Irish Citizen Army.’

    If you had been around in the days of Connolly’s Citizen Army you’d have lasted five minutes before being taken out and shot as a traitor assuming they’d have let you join in the first place !

  • Alan Maskey

    Greenflag: What utter nonsense you write coupled with perosonal remarks.
    The Irish Citizen Army did not shoot anyone as a traitor, so why would they shoot me? Their ranks included the landed gentry. So enough of that. And it was not Connolly’s army by the way.
    And, as a traitor to what? To unemployable rabble? To filthy Catholics who do not wash themselves? Now, as you get yourself worked up, please remember the Irish Citizen Army, bless them, fired on such rabble from the GPO in 1916. So, goodnight Greenflag until you get out of school.

    Chairman Mao was all in favour of more little kiddies. His Great Leap Forwards were also in part plagiarised from Rostow and the Bootstrap economic theoreticians of the West. The Chinese, like the Vietnamese, now adopt another policy.
    You are probably not aware of it as they have not come to it yet in your remedial economics classes but today’s world demands specific skills, skills the great unwashed generally do not have.
    Why should tax payers like me support unmarried mothers and the unemployable? As we are speaking primarily about Ireland, I confine myself to there. But of course there are countless unemployable Brits too and not all of them can join the Armed Forces.
    “it’s Malthusian food production ceiling” Malthus was a bigger nutter even than you, or most anyone else. His scientifically laughable deterministic policy simply suited the polvcies of many genocidal maniacs. His stupid theory only indirectly affected the Chinse very indirectly through other morons like Marx.
    But we should not laugh too much at morons. They stil have their admirers.

  • Greenflag

    Gut evenink uber troll Maskey ;) Now go and read the true story of the 1960’s Chinese famine and stick your little red book of Mao where it belongs and probably fits !

    The thread subject is btw

    ‘What Did We Do Right?: Global Perspectives on Ireland’s Miracle edited by Michael J O’Sullivan and Rory Miller.

  • aquifer

    I like the suggestion that Ireland was doing both capitalism and socialism too well and both at the same time. And the social capital thing. Smart, friendly,honest people, don’t bother with class, not averse to either hard work or fun. High living standards and a social conscience, making money and spending it, everybody should want to live in houses here once the economy picks up again.
    After we dump Brian Cowan.

    Forget Sell Sell: Buy, Buy.

  • Alan Maskey

    Aquifier: Why should the Irish economy pick up? The country is up to its gills in debt, its monetary policy is decided in Brussels and people’s expectations are too high.

    House prices should be dependent upon location, location , location. Places go dead. Detroit went dead. Why not Dublin?

  • CMK

    ‘Socialist Greed’? Hmmm, that’s an interesting one.

    I thought the purpose of Partnership was to keep the proles in line and happy with tax cuts and widening the availability of consumer credit to create the illusion of prosperity.

    Most sensible socialists during the so-called ‘boom’ would have much preferred free collective bargaining. There was no ‘socialism’ in Partnership!

    For all of the huffing and puffing about raises in social welfare and government spending between 1995-2007 I have yet to see any similar angst about the Special Savings Incentive Scheme. Remember that? Where the more you saved the more the state gave to you? Where every member of the middle class and their cats, dogs and long dead relatives were given 5k by the state for doing what they do anyway: saving. Was that socialist greed, or was it just normal greed, I’m confused? Oh yeah, and the Savings scheme was intended to reduce inflation. Do you remember that, when it was rising at 5% and more year on year for years. Maybe that had something to do with increases in social welfare?

    Or do you remember when a duplex within 50 miles of Dublin was selling for six, seven, eight times the average industial wage. It was all a union plot to intimiate employers into granting outrageous wage increases. All those poor property developers, builders, estate agents, solicitors: they didn’t want to sell property at the prices but the power of those dastardly union and CORI forced them! Somebody should have shouted stop!

    Yes, socialist greed: where workers and those dependent on social welfare steal wealth from its rightful owners. Down with that sort of thing!

  • http://rulehibernia.com Vespasian

    Its quite simple really. We priced ourselves out of the market. Wages went through the roof, the cost of living went throught the roof, and the cost of doing business went through the roof.

    Its a story that has been repeated again and again in various Tiger economies around the world

  • Mack

    Only some, favoured, workers, CMK, stealing wealth from future generations of workers before they’re even born. So, yeah, down with that sort of thing.

  • aquifer

    And ‘Why should the Irish economy pick up?’

    Because after a price adjustment people are still smart enough here to have the economy grow to make up lost ground. In the longer term it is the trend growth that will matter, not where the economy restarted from.

  • Alan Maskey

    Well Vietman and China have started low and are going high. Vespasian’s pointsd are spot on but he uses the past tense instead of the present/future. The French call Ireland the island behind the island. It is in deep shit.

    And don’t for those Pavolvian responses economists have been weened on. Ireland is an export market. And thye have f-all to export at a competitive price. Even sheltered industries – building, servicesand the like – are now the preserve of Eat Europeans. Unless Our Lady of Knock pulls something out of the bag, ain’t nothing gonna change.

    And Our Lady is fed up of party tricks. The Germans, Japanese, Chinese etc planned and planned well.

  • CMK

    Mack, so you mean that if workers are given decent pay rises today they’re effectively stealing from their own children, born and unborn?

    Whereas if we bung every available billion at the bankers, and keep taxes low for the rich, we’re giving future generations the best start in life?

    And, favoured workers? I presume you mean the public sector whose wages rose incrementally through partnership with an above inflation boost through benchmarking. All the while it would cost you 500 euro to get a plumber to do a half-day’s work and (almost completely un-unionized) builder’s labourers were eating in Patrick Guilbauds having gotten 1500 in cash on a Friday afternoon. The legacy of that madness is permeating through Irish society with hundreds of thousands of unemployed construction workers who’ll never work in that role again, but who are almost completely unsuited to any other employment. But, I suppose, the abyss is approaching quicker than we might like and soon it’ll be moot as whether it was socialist, capitalist or any other kind of greed and sent us over it…

  • Mack

    CMK, I mean running up large public debts robs future generations. It’s a pretty unfortunate situation, the economy was not well managed, but if you both cut taxes and massively increase spending (that is put the economy in fiscal position it can’t afford) *and* have a banking bust, you end up completely screwed.

    Anyway, I pretty much agree with the rest of your last comment. My initial response was to DC who thought that a socialist analysis would have prevented the credit bubble. Fact is, self-described socialists did have an input (and I don’t even mean Ahern), and one of the Union leaders sat on the board of the central bank, so it did no such thing.

    The credit crunch globally was caused by lax regulation in financial markets (which also played a role here), but in balance our home grown crisis seems to have been caused by a niave bunch loosing the run of themselves with cheap European money,

  • http://rulehibernia.com Vespasian

    They’re also very strong manufacturing economies, with powerful home grown companies. The Irish economy was (sorry for past tense again) highly dependent on foreign companies which left it in an extremely vulnerable position when the global down turn came.

    These multinationals were only going to stay here while it was economically appealing to do so, the minute we became a little too expensive they’re out the door looking for greener pastures.

    The gov really needs to look towards homegrown Irish companies -fair enough keep doing your best to attract the foreign ones but if you want the economy to be more robust in times of trouble you need native businesses that aren’t going to up and leave at the very first opportunity.

    Look at the Ryanair situation, bottom line is it’s a great homegrown company that employs masses of Irish workers and has succeeded not because of but DESPITE the government. Remember when they offered employment in what was it hangar 16? (Coughlan and friends) end up doing nothing to help and actually set about hindering them. The jobs ended up going abroad.

    If that had been Dell, or Microsoft offering 300 new jobs Coughlan would have bent over backwards for them.