Posted tagged ‘economics’

A vision of Ireland at the crossroads?

November 13, 2012

I have now lived outside Ireland for the best part of two years. However, I am a frequent visitor and I keep up with things as best I can; and as I do so I am becoming increasingly intrigued by the direction of the national conversation. There appears to be a near consensus, in some circles at least, that the ‘Celtic Tiger’ years were all one big mistake and that the country should never have left the spirit of a previous era; though I am not always sure which previous era might be held up as a model.

Among those leading the discussion is Ireland’s President, Michael D. Higgins. The President has been forthright in rejecting the assumptions of the Celtic Tiger era, and in particular in rejecting the primacy of markets in economic affairs. His analysis has been interesting. In his lecture at the London School of Economics in February this year the President suggested that Ireland’s recent economic boom was a failure because ‘leaders and people had all but lost connection with the cultural and political elements of national revival’. What they pursued was the intellectual brainchild, he felt, of writers such as Friedrich von Hayek who promoted a ‘single hegemonic version of the connection between markets, economic policy, and life itself.’ This led to ‘extreme individualism’ supported by ‘unregulated markets’. A little later, in April of this year, the President spoke about ‘the folly of overweening material ambition’.

Pursuing this particular reference, I was a little struck that nobody appeared to have picked up the similarity of tone to that of a previous Irish President. In 1943 Eamon de Valera (admittedly when he was Taoiseach and therefore before he became President), made a speech mainly remembered for a reference he did not actually make (his alleged but never expressed yearning for ‘comely maidens dancing at the crossroads’). However he did say:

‘The Ireland which we would desire of would be the home of a people who valued material wealth only as the basis of a right living, of a people who were satisfied with frugal comfort and devoted their leisure to the things of the soul.’

At a recent gathering of psychologists Ireland’s current dissatisfaction with itself was attributed by one speaker to a ‘narcissistic system’ based on its colonial past, and which caused people to have a negative view of themselves and of the nation. What she was referring to was the country’s sense of flawed nationhood as it accepted responsibility for what went wrong in the national finances, including the problems caused by reckless banking behaviour. The implication was that this acceptance of responsibility, by political leaders at least, was part of a distorted self-analysis and an obsessive desire to please others (the ‘others’ here being the IMF and the European Union).

What picture of an ideal Ireland can we discern from all this? An insecure country that wants to reject its recent past? A country that is keen to renounce material possessions and return to a rural frugality? A country that thinks that what happened to the Irish economy was part of some aberration in the national destiny?

No country and no society can turn the clock back. For those who may remember, say, the 1950s and 1960s, and for those who have just read about those decades, there should be some hesitation before concluding that those were better days. Does Ireland want women back into the home, could it accept now the lack of social and physical mobility, or large-scale emigration? Not to mention child abuse.

Nobody can doubt that the recent past was not all that it should have been. But the way forward is forward. The last two decades brought Ireland a much greater liberal acceptance of human rights, greater access to scientific and technological progress, much better national infrastructure, a better awareness of the potential for global communication and interaction. There was much more good than there was bad. Those who believe that Ireland needs to reject all of its recent history should, really, think again.


Are we over-doing the pessimism thing?

December 7, 2008

Earlier this year – on St Patrick’s Day (March 17) to be precise – the American newspaper USA Today published a poll in which 76 per cent of those asked declared their belief that the United States was in a recession. Overall, the poll found the population of the United States deeply pessimistic about their economic future.

The newspaper also quoted David Wyss, chief economist at Standard & Poor, who said that ‘recessions are almost always crises of confidence, and that’s what we’re having right now’. And Barack Obama, then just one of two frontrunners for the Democratic nomination for the Presidency, declared that it was necessary to ‘restore the public’s confidence in the market’.

Assessing the role of confidence (or lack of it) in a recession is tricky. Does a failure of confidence by the general public contribute to or even cause a recession, or is it just a symptom or a consequence of one? When we broadcast our despair at economic developments, are we just commenting or are we engaging in self-fulfilling prophesies? John Maynard Keynes was of the view that pessimism could cause recessions, and other economists have voiced similar views.

It is hard to disentangle all the elements of the economic tornado that has spun through the world in 2008, but it is unlikely that it has been getting its velocity entirely from pessimistic consumers and citizens, or even pessimistic businesspeople. We know that it all began with the credit crunch, and we know that this in turn was stimulated by some very questionable practices in the global banking community. But on the other hand, is that all? Probably not.  Other factors have been at work, and a key one has been the decline – collapse, almost – of confidence and the growth of pessimism.

In Ireland pessimism, particularly of the rather irritating ‘I-told-you-so’ variety, is rife and has been for some months. It can be heard from the media, from the Oireachtas, and from the man propping up the bar. We are collectively frightening each other into surrendering our belief in the future, and because we believe what we are telling each other, our actions in the shops and at work reflect that and serve to exacerbate the problem we face. Over the past week or so, I have lost count of the number of times I have heard or over-heard conversations about the sheer hopelessness of our situation and the certainty of further disaster.

It would be silly to deny that we have a problem, in Ireland and indeed in the world. But maybe the time is right to stop complaining about it and to get on with doing something about it. Every recession has opportunities also, and Ireland may be well placed to exploit some of these. So let us get into planning and maybe give all the moaning a rest. Let us feel, express and therefore restore some confidence. Let us be imaginative and entrepreneurial, and let us work together.