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June 24, 2007

Comments

Richard Delevan

Michael,
Bravo for an excellent riposte. Quite flattering.
But I do think you may not have characterised my argument quite in the way it was intended - almost certainly a failing on my part to be clear.
You're quite right about the inflection point in 2001 - a steep drop followed by a slight increase.
But there are three things at play here to highlight, I'd argue.
First, the whole point of the column was that it's a working assumption amongst some that inequality increased over the Celtic Tiger period. We know now that isn't true. You can argue that the trend line augurs badly, but you make a move in your 2nd to last para that suggests I claim inequality is currently decreasing - I don't argue that inequality is currently decreasing. There isn't data one way or the other at the moment. To be fair, I spend considerable space in the piece pointing out aspects of the OECD report about employer tactics re offshoring and pay negotiations I find worrying.
Second, why is partnership an inherently 'public' instrument? When you read this weekend's Tribune you'll see Peter Cassells, the godfather of partnership, talking about the nature of partnership and how he regrets its current association with institutional forms. In fact, partnership work practices according to Cassells look a lot like Google's management philosophy, and the Darwinian process that sorts the winners will see that those which, like Google, get the most from their people, will survive.
Third, the 2001 inflection point is worth talking more about, isn't it? What happened in 2001? Besides a lot of exogenous factors, another, surely, reflected in the export data, is that exports went flat or declined.
You're fairly dismissive of the "tome" that could be written about what went right between 1995 and 2001. Surely the urgent question, if we want to see a fair society, is to discern what went right in that period that is repeatable. No?
In any case, thanks for a great post.

david

Why should government try to reduce inequality?

Michael

Thanks Richard for your detailed comment. On your first point, I take what you say and apologise if I misrepresented your position on the current situation. I only tried to tease out what the OECD stats meant and didn't mean. And I should have acknowledged your reference to certain emerging employers' practices which I think all of us should be concerned with.

As to the second point, I take it that Peter's comments will be in next Sunday's edition. If so, I look forward to reading them. As to the 'public' nature of partnership, I would argue that it is part of the public realm, acting of course within the constraints of certain market forces. For example, unions participate in the process not just in the negotiations in Government buildings. They go back to their respective unions, debate and then individually ballot their members. Then, they come together and vote as a body within the ICTU. This is a democratic process (to what extent, though, is an argument in the trade union movement). Other social partners may have similar processes. This suggests a wider public involvement in the setting of wage increases, labour standards, etc. That the Government is also involved - and not just as an employer - also gives it a more public flavour.

On your third point, I certainly didn't mean to be dismissive of that inflection point. Indeed, throughout my posts I refer to this and have tried to get the Left to become more involved in analysing what was really happening in the different phases of economic growth so that we can intervene in a more constructive way on the debate - rather than cede the entire economic ground to the Right as was done in the last election. It is an extremely important point which I will address in a more head-on way in a further post. Thanks, again, for your comments.

As to why governments should try to reduce inequality, Dave, well there are a number of reasons. People acting democratically through state policy may want to reduce it for ethical or moral reasons (I note such an argument in today's Irish Times). They may want to do so because it is an economic cost. In this regard, its worth reading Will Hutton in The State We're In - his section on the cost of inequality is very strong. It's also worth noting that the wealthiest most competitive societies are those that have very low rates of poverty/inequality combined with progressive taxation and redistribution systems. They may also want to reduce inequality because the cost of not doing so is very high - if inequality is a factor in, say, poor health, this becomes a drain on the Exchequer. More equality, better health, reduced burdens. Ultimately, its all about the kind of society you want to live in.

Michael Mc Loughlin

Any views on the latest ESRI reports Michael

Michael

Michael, I've not had the chance to read the report (unfortunately, its not available on-line). I'm reluctant to comment on such a wide-ranging survey on the basis of media commentary. However, coming from the ESRI I'm sure it will be a thought-provoking read and if it challenges the notion that there was some 'golden age' of Irish values that is somehow lost by people becoming more affluent, all the better.

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