Monday, 7 May 2012

Ill Fares the Land

Disappointing. I seized on Tony Judt's Ill Fares the Land, reserving it in Dublin City Libraries' online catalogue after a quick 'look inside' on Amazon which showed a series of interesting charts.
At first it seemed scholarly, well-argued and promising. Then I came to the references to what Judt sneeringly calls "the Irish miracle", and discovered that his arguments are fuller of opinion than of knowledge (in the case of something I know a little about); it makes me distrust the rest of his book.
The so-called "economic miracle" of the "plucky little Celtic tiger" consisted of an unregulated, low-tax regime which predictably attracted inward investment and hot money. The inevitable shortfall in public income was compensated by subsidies from the much-maligned European Union, funded for the most part by the supposedly inept "old European" economies of Germany, France and the Netherlands. When Wall Street's party crashed, the Irish bubble burst along with it. It will not soon reflate
writes Judt with a braces-snapping moral triumph.
I spent the Celtic Tiger years interviewing small business owners ("small" in business terms meaning anything up to millions in turnover), and reviewing the books of the accompanying Irish writing boom, and Judt's picture was not familiar to me.
The IDA (Industrial Development Authority) scoured the world for multinationals from the 1960s on, selling Ireland as the gateway into the European market. It brought in a host of pharmaceutical and technology giants - Pfizer, Intel, and so on - and other firms, their trading partners, followed.
Ireland is an island, which brings its own disadvantages - if you site your manufacturing company in the Netherlands or France, you can use trucks and trains to send your goods around Europe; if you site it in Ireland you must use more expensive sea transport.
Because of this, and because Ireland was at that stage a poor country with enormous unemployment, a 12.5% corporate tax rate was agreed, to compensate for these disadvantages. (Not as exciting as it sounds: this is a single, transparent tax rate, whereas France, for instance, has a series of small, untransparent tax breaks for big business that conjoined make for a huge tax advantage).
Ireland was given funding from the EU (European Union), as other "peripheral" countries were; however, Ireland had given the EU a superb matchmaking present on joining the European Economic Community (EEC), which later morphed into the EU: free access to its 50-mile offshore fishing grounds, then some of the richest fishing in the world, which the EU went on to rape and destroy; this fishing is estimated to be worth €3bn a year to the EU.
The multinationals had other reasons for coming to Ireland - lack of earthquakes and plentiful fresh water, in the case of Intel, for instance. A main reason was the workforce: highly educated, English-speaking, and then (at a time when Ireland was far more egalitarian than now), with a courteous and friendly attitude, and a lack of class distinctions.
The IDA provided huge grant aid to the multinationals, paying them to site in Ireland and bring jobs with them.
In the years after the multinationals settled they brought jobs, especially a chance for technically qualified graduates to work in their own country for good wages. The government had already instituted universal free education to the Leaving Certificate (the examination taken at age 17 or 18, which was generally accepted as the entry criterion for university courses); now free university education to BSc or BA level was instituted. Families of children who would have left school at 14 a generation before were graduating, and as work became freely available, more and more were going on to take masters' and doctorates.
The multinationals started to encourage their most entrepreneurial graduates to hive off small firms that would trade with them, and the universities got graduates and undergraduates to form companies in conjunction with the multinationals.
As these companies became successful, Enterprise Ireland (the trade board that facilitates Irish exports, which has offices and startup units in Irish embassies around the world) boosted them into international trade.
A financial centre was founded, with the prediction that services industries such as financial trading could overcome Ireland's main disadvantage - being an island.
For the first time, Ireland's exports were going to Europe in greater numbers than to Britain, which had always been the country's main trading partner. Exports were rapidly catching up with imports.
I was interviewing entrepreneurs whose fathers and mothers had been milkmen and factory workers. My heart burst with pride for them.
The trouble started with greedy, vicious politicians from the Tammany Hall tradition of Irish gombeen politics, where a politician's job is not to legislate and take care of the country, but to provide favours (often illusory) for constituents. These swines rejoiced in the soaring price of homes - wages and house prices fuelling each other, and no one profiting but the greedy - and the overheating of the construction industry (45% of the economy by the time the crash came).
Ireland had joined the euro, and these dimwits claimed that central financial planning in Brussels (or in reality in Frankfurt) meant they could not step on the pipe and slow down the pointless growth in prices. Some of the politicians themselves were investing recklessly in property, borrowing money from the banks they should have been regulating. They did not choose, for instance, to make it illegal for rezoning of land from agricultural to residential to change the value of that land. Planners and councillors conjoined, in some cases, in a feast of corruption due to the profits offered by such rezonings. They did not choose to change the "stamp duty" - the tax paid on sale of a house. They stopped building State housing. A constitutional case removed rent protection, awarding a higher value to the rights of landlords than to those of the people renting from them.
There was little, if any, real planning. This was government by reaction, and legislation by precedent. No intelligence was applied to any possible future.
They knew there could be a crash, but comforted each other, and bamboozled their voters, by saying the worst possibility was a 20% fall in house prices and a slight contraction in industry.
Ireland was horribly exposed to the American crash when it came - because of our reliance on multinationals, which flooded away to eastern Europe and India and the Philippines and China and all the other countries that were what Ireland had been - poor, peripheral, ready for growth, rich in subsidies. They didn't rush to pay back the IDA subsidies that had supported them.
For most of the history of the Irish State - and long before the State's foundation - emigration had bled the country of its young. It immediately started again; first, the construction workers - skilled builders, electricians, plumbers, architects, engineers, surveyors, even archaeologists, taking the planes from the glossy new airport terminal they had just built in Dublin, fleeing to Australia and Canada.
The government panicked, and signed up to pay back not just Ireland's sovereign debts - the price of bonds issued by the country - but also the debts of the country's banks, banks that were interlinked with the reckless German and American banks that had funded billions in insane loans to insolvent borrowers. It was insane.
The emigration has continued. Unemployment in Ireland is supposedly around 14%; this does not take into account the fleeing graduates in their thousands, still leaving Ireland by every flight - the young, the intelligent; increasingly, now, also whole families; a flight of the middle classes not seen since the Famine of the 1840s-1850s. If these emigrants were included, Ireland's unemployment rate would top Spain's.
So, Judt's parachute-journalism nonsense about the "plucky little Celtic tiger" is facile and flat. What about the rest of the book? I'll never know. I got to the next chapter, and flung it aside.
In the next chapter, Judt talks about how "without knowing anything about OECD charts or unfavourable comparisons with other nations, many Americans are well aware that something is seriously amiss".
They do not live as well as they once did, he writes. Everyone would like their child to have improved life chances at birth: better education and better job prospects. They would prefer it if their wife or daughter had the same odds of surviving maternity as women in other advanced countries.
I stopped here. Women, it seems, are the possessions of these Americans. "Their wife or daughter".  The people doing the thinking are not women; women are a subsidiary class.
Judt, says the blurb, was educated in Cambridge and the École Supérieure in Paris, and has taught in Cambridge, Oxford, Berkeley and New York University, where he is currently University Professor and director of the Remarque Institute, dedicated to the study of Europe, which he founded in 1955.
At this stage, 30 pages into his 237-page volume, I was deeply disappointed in a book I had wanted to read for its thesis - like that of The Spirit Level, Wilkinson and Pickett's study of outcomes in advanced nations - that inequality damaged societies. Perhaps Judt proves his thesis. But after reading those first few pages of lazy, opinionated thinking and flabby logic, the book is going back to the library, largely unread. Life is too short.

 Lucille Redmond's ebook, Love, gripping dark and funny stories of love and revolution, is available on Amazon and iTunes

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