Posted tagged ‘Celtic Tiger’

In memoriam the Celtic Tiger

November 21, 2010

In the debates about current events in Ireland, it is often now suggested that the ‘Celtic Tiger’ was all an illusion and that it never really existed, or that if it did it consisted almost entirely of a sleight of hand connected with a property bubble and banking misconduct.

Without wanting in any way to take away from the seriousness of what Ireland now faces, that kind of perspective on the Celtic Tiger is seriously misplaced. Even after all the stuff we are about to experience, Ireland will be an immeasurably richer country, with a wholly different infrastructure and economic capacity, than might have been expected back in the early 1980s. The property bubble was not the substance of the Celtic Tiger, but rather an aberration that resulted from it. Until 2004 or so the bulk of our economic activity was in exports of goods and services, rather than trading in property or domestic consumption. You can trace the transition from this to the more recent unviable distortion of the economy by reading the annual reports of the National Competitiveness Council (which correctly identified what was happening and warned about it early on).

It is worth making this point in order to remind ourselves that not everything that we did, or even that our politicians led us in doing, was wrong. It is just that eventually we all lost touch with reality. But we can, and I suspect we will, return to a more viable version of economic success. Our ability to do that will not be helped by enthusiastically adopting a hugely distorted vision of recent Irish history.

So did we waste all our wealth?

February 19, 2010

Sometimes it seems as if only yesterday we were describing ourselves and were being described by others as enormously wealthy as a country. But where is Ireland now? And if we were wealthy, did we make good use of that, at least while it lasted?

All these issues are addressed in a recent report issued by Davy Stockbrokers, entitled Years of high income largely wasted. The main drift of the report is that while we were indeed relatively wealthy as individuals (in terms of average per capita income) and to some extent still are, as a country we mis-allocated resources. In particular, 63 per cent of all capital investment between 2000 and 2008 went into housing stock, while key infrastructure requirements like roads, public transport and broadband were tackled but inadequately. The report adds that we also seriously under-invested in education.

I don’t think we should use reports such as this for recrimination. We all contributed to this problem. But we should note the lessons carefully, and we should use them for national strategic planning. I hope our relative prosperity returns; but then let us use it wisely.

Finding a political perspective

December 6, 2009

In previous posts (for example, in this one) I have reflected on the decline and virtual disappearance of ideology as a basis for political discourse. However it has recently seemed to some people – but not, I have to confess, to me – that the economic developments of the past year or two might herald the return of a more pronounced left-right divide in politics and, perhaps, a vigourous debate on whether capitalism could survive the crisis which had engulfed banking in particular.

An interesting and articulate contribution to this debate has just been published, in a book entitled Transforming Ireland: Challenges, Critiques, Resources. Edited by Debbie Ging, Michael Cronin and Peadar Kirby (the first two of whom are DCU staff, while the third is a former DCU colleague now in Limerick), the book argues the case for social solidarity as a frame of reference for analysis and ultimately action, and suggests that a fascination with markets over the past decade or two has generated increased inequalities and social problems.

For anyone interested in the rise and fall of the Celtic Tiger, and the implications of our recent national prosperity and current convulsions, this book makes interesting reading and provides a stimulating set of analyses and perspectives. Whether the authors are right in  their views may be open to some debate; I suspect that their antagonism to market economics and their belief in the emergence of social solidarity as a new left perspective may not be as readily endorsed by the wider population, who will I imagine be happy enough with the established order if it can re-create economic growth, employment and restored property values over the next year or two; and contrary to the current fashion of economic pessimism, I feel that it possibly will.

Nevertheless, any contribution to the debate is welcome, and one that pushes at least a little for the return of ideology as a driver of thinking will always be interesting to me. I suspect we are actually in a post-ideological world, but a large part of me regrets that and feels nostalgic for the sheer fun that used to be found in political debate, as well as the fact that political strategy is more interesting when it is more ambitious than just setting the numerical target for GDP growth.

At the very least, I would recommend this book to anyone who wants to engage in the discussion of where we should now be going.

Ireland: country with a bad attitude?

January 7, 2009

I sometimes find it instructive to study the letters to the editor of our newspapers. They reflect something important. Not necessarily the public mood, but what the writers think (or hope) is the public mood. Typically a letter-writer on these pages is looking for applause from somewhere, so they address issues in a way that, they believe, will please the gallery. And all of this is interesting because, of course, you and I are in the gallery.

Right now, I am particularly interested in how the letter writers are addressing the causes and consequences of Ireland’s current economic and budgetary situation. It would I think be fair to say that the overwhelming mood is one of cynicism.  This is targeted at politicians and businesspeople in particular – there is an undercurrent of anger at the perceived weakness of politicians and the duplicity or greed of the business community: yesterday’s Irish Independent had a letter calling for a ‘peasant’s revolt’ against the banking industry. But what I find even more revealing is what the writers have to say about the good years of the Celtic Tiger, in hindsight. And this, too, in almost wholly cynical. Last year a letter writer to the Irish Times suggested that, after a decade or so of the Celtic Tiger, what we had to show for it was the Luas (Dublin light rail), and that was pretty much it.

This latter theme also got an outing in the New York Times in October 2008, when the writer John Banville did an opinion piece titled ‘Erin go bust‘. In this he told the readers that, at a dinner party during the Celtic Tiger period, the guests had suggested that the figure most representative of what Ireland had become was a ‘a non-tax-paying businessman’s trophy wife’. As Banville himself points out in his piece, there is an undercurrent in all this of an affection for the pre-Tiger years, with a hint of nostalgia for a period that may not have been so bad after all.

It seems to me that all of this is dangerous nonsense. Can anyone really look back on the 1970s and early 1980s with any kind of nostalgia? Does anyone really believe – I mean, really believe – that we would be better off going back to the days of hyper inflation, hidden abuse, sexism, poverty, public squalor – not to mention the high levels of hypocrisy in public discourse. I was there, that’s what it was.

Recession is not a dinner party game at which we can gain points and personal pleasure by identifying miscreants from the recent past. It’s something that has to be fought because while it’s there it destroys jobs, quality of life and progress. Of course we need to learn from what we did wrong, and of course the behaviour of some was inexcusable, but that wasn’t the whole story. Since the mid-1990s (or to be fairer, since 1987 when the Programme for National Recovery started the process) we have gained immensely as a country. We have become (or rather, we became) more self-confident, more innovative, more tolerant, more secure. Our infrastructure (while still being below par) improved dramatically. Our population became more cosmopolitan and diverse.

At the moment, what we appear to be doing is standing on the sidelines shouting abuse. That doesn’t help anyone very much, least of all ourselves. We need to discover a sense of purpose and optimism, together with a clear strategic vision. We need our government to do the same. And we need to let go of all that cynicism. Otherwise we’ll re-discover soon enough what the bad old days were really like.