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
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.
Topic: Books, Economy, Society and Culture
Region: EU, Ireland
‘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 !
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.
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.
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.
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?
‘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!
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
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.
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.
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.
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…
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,
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.