Lemass's Bargain

Sean Lemass seems to be back in some fashion.  This is more than mere nostalgia.  With an economy addicted to multi-nationals, property, consumption and private borrowing, no wonder we look to past models that promoted production and exports – the actual process of making and selling things, whether goods or services.  This is, after all, the foundation of success for a small open economy.  This is what launched the Celtic tiger economy and, in another age, the mini-boom in the 1960s. 

The Left is extremely reluctant these days to develop policies in the traditional area of industrial policy (since services play an ever increasing role in wealth generation and exports, it would be more appropriate to call it ‘enterprise strategy’).  This is largely due to the fact that the Left has, with some exceptions, accepted the principle that Governments maintain the macro-economic framework – budgetary stability, low taxation, an appropriate, or low, regulatory regime, etc.- and leave the nuts and bolts of actual wealth generation to the self-selection of the so-called market (the Irish innovation to all this is social partnership – a further stabilising force in, primarily industrial relations, but to a large extent wages).  Yes, progressives do try to hem in the way enterprise operates – making sure they don’t overly-pollute or removing the worst aspects of labour exploitation (or try anyway).  But after that they focus on redistributing whatever gains are produced from that sector.  Thus, the Labour slogan: ‘A strong economy but a weak society.’

When Lemass took office things were much different. There was little industry to self-select from and, as a consequence of an historical agricultural economy, little capital to select with – self-selecting or otherwise. He had to address these problems in a more radical way. In doing so, he established the context in which much of our current wealth-generation has taken place – the making and selling thing part, anyway.

There is a growing sense that we have moved away from that paradigm. Money is invested into property, not enterprise; we borrow, rather than produce, to consume; Irish-based enterprise is still a speck on the value-added landscape. Our economic prospects are charted in the window advertisements of estate agents.

Now more than ever the Left should address the problems not just of how wealth is shared out in society but how it is created, what areas it is created in, how it can grow in a sustainable way – in other words a new enterprise strategy. We don’t have to reinvent the wheel. We, too, can look back at Lemass for some guidance. Here is one small example; one of my favourite Lemass quotes:

Nobody nowadays regards the operation of an important industrial undertaking as being the exclusive private concern of its owners. Rather, each such undertaking is looked upon as a national asset contributing to the country’s economic and social advancement, and is entitled to bring its problems when they arise to the government and expect help in coping with them. The social consequences of fluctuations in the level of business activity are matters of public debate. The contributions which a progressive and efficient industrial concern can make to national welfare . . . are widely understood. The industrial manager has unavoidable responsibilities, wider than those placed on him by his employer. He should be regarded and regard himself as a public servant in the finest meaning of that term.

This statement is appropriate for any age, encapsulating what could be called the ‘Lemass Bargain’. It is deserves some deconstructing:

Nobody nowadays regards . . . As Lemass made this statement in 1957 he was being wildly optimistic. But he was attempting to lay the ground by challenging the anti-social industrial orthodoxy (today insert ‘enterprise’ for ‘industrial’).

. . . the operation of an important industrial undertaking as being the exclusive private concern of its owners. This suggests there are other legitimate interests apart from just the owners – concerns of workers, consumers, the local community, the environment, the national welfare.

Rather, each such undertaking is looked upon as a national asset contributing to the country’s economic and social advancement . . . A business is less a ‘private’ and more a ‘social’ concern. This is the first part of the bargain.

. . . and is entitled to bring its problems when they arise to the government and expect help in coping with them. This is the second part – if you act as though your asset is a social asset, not only will the state assist you, you will be entitled to that assistance. But you have to perform the first part first.

The social consequences of fluctuations in the level of business activity are matters of public debate. The decision-making process that informs enterprises – at both a macro and micro level - are now all part of a wider democratic dispensation.

The contributions which a progressive and efficient industrial concern can make to national welfare . . . are widely understood. ‘Economic and social’ are inseparable; enterprise success is no longer confined to profit/loss, ROI or share value. There is a wider accountancy.

The industrial manager has unavoidable responsibilities, wider than those placed on him by his employer. A potentially subversive call upon management to ultimately to see their occupational interest not narrowly within the company but in the wider social landscape it participates in – in other words, be citizens first.

He should be regarded and regard himself as a public servant in the finest meaning of that term. The conclusion: enterprise serves not itself but society and is judged by its performance of that task.

Of course, Lemass may not fully recognise or agree with this reading but then he doesn’t live in our age and didn’t have the experience of the last 40 years to develop his thinking. And, yes, this formula has potential limitations – none more so than how you deal with global capital and recalcitrant enterprise which demands subsidies and supports but rejects the ‘social’. And yet, even in the heart of the metropolis – in the US economy – employers are posing these same questions and coming up with some surprising and potentially progressive answers.

But for the Left, which feels uncomfortable with enterprise strategy – contenting themselves with redistribution as if making money is something best left with the corporate class – this could be a useful theoretical starting point, a pathway to re-enter the debate. We could call it the ‘Lemass Bargain’.

It surely is the case that somebody needs to re-examine the problems of wealth generation in a fundamental way. For people have a distinct sense that the train is coming off the rails. If all the Left can do is promise that they will drive the ambulances faster than the Right, then we won’t have much to offer.

Comments

[Gerry O'Quigley]

A very interesting reading of Lemass. The 'Bargain' re-solidified the hegemony of Fianna Fáil after its grasp of power was faltering a little in the first few years after the war. FF stopped going on about land redistribution and the Irish language and created a rudimentary welfare state to gain the loyalty of the bulk of the urban working class.

This is a simplified version of the Bew and Patterson thesis which, I think, holds up quite well. FF under Lemass effectively reivented itself as a quasi social democratic party. Or at least it fused its nationalist and populist elements with policies that were acceptable to many people who might otherwise have voted in a more labourist way. FF's grip only started to weaken again when such Keynesian welfare state strategies were no longer possible in a very changed climate by the 1980s.