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October 02, 2007



I just made my way here via

Excellent piece. I agree entirely.

McWilliams is becoming to Irish Economics what Michael Moore is to American Politics: provocative, loud, simplistic, annoying, cliché ridden, but ultimately, very effective in stoking serious debate.

I don't buy his diaspora theory at all. Most creative entreprenuerial Irish or Irish descendants are perfectly happy where they are. And Ireland could offer them little they don't have already. His thesis that their coming home, and what about this for a clanger, "would save their souls" is wrong. Like all displaced peoples, home for them is a hybrid place. But the vast bulk of Irish Americans for example are more at home in American than here. They may love to visit, but they aren't queuing up at the Irish Embassy for visas.

In the end the discussion goes exactly where you brought it: to our inability to invent, to work together on a coherent strategy, to invest in the future of out country. Our inability to modernise our insitutions, especially political ones, for the new century.

Part of the trouble with us Irish is that we are self-delusional. We think of ourselves as flexible, pragmatic and open minded. In reality we are conservative, slow moving, narrow minded and selfish. Narrow minded - for example, when we think investment we mean property. When we think transport we mean tarmac. Selfish - when we think of prosperity, we mean prosperity for me. We are hopelessly uncommunal and present centred.

Our mentality shifted straight from colonial to conceited without picking up an ounce of humility along the way. Yes, conceited. We think we are the friendliest, cleverest, most travelled, and richest people in the world. In many ways we are none of these things.

The one area where we are first class is telling stories. The trouble is, we believe them ourselves.


It must be tempting to argue that "unrestrained capitalism" is at the root of this, but the problem is that capitalism has been restrained. We have a government who have introduced distortions into the property market through planning laws and taxation policies. Withdraw those distortions and you don't see massive new estates in Leitrim or apartments being built as tax shelters in Athlone. Supply and demand for property would meet and at a much lower price than where we currently are.


Keith - I would agree about the undesireable effects of incoherent and ill-thought out distortions which were often brought into effect for all the wrong reasons.

But I don't think a purely unrestrained property market will provide a sustainable solution either. The market of itself might deliver a better price and avoid the Leitrim effect, but the market is not 'future' aware - the present worth of future environmental and social costs is not accounted for in its price mechanism. So left to itself - houses and huge appartment blocks would pop up willy-nilly in areas which are cheapest for builders. But the pattern would be ad hoc and wouldn't cater for future needs of the city. That is why planning is necessary. But planning only provides a benefit when it is done well by competent people who are not making decisions on the basis of brown envelopes.


The history of indigenous capitalism from 1922 onwards is one of a desperate inability to act in anything other than the most localist/short termism. I had the dubious fortune to examine in research the growth of a certain industry during that period and what was most remarkable was that unlike anywhere else in Europe it wasn't technological improvements, or commercial objectives but simple state intervention that 'grew' it. Time and again from the late 1920s with the establishment and expansion of the ESB, a small flurry of activity in the 1930s under FF at their most corporatist...the late 1940s with the Inter party coalition and then sporadically thereafter... It really demonstrated the enormous inability of Irish enterprise to deliver any sort of serious outputs other than when primed...

Which is why I'd be very very dubious about Keith's proposition regarding an unrestrained capitalism in this state as regards say housing... more shorttermism...incidentally talking of regulations I note that the apartments considered 'suitable' in the 1990s to now by the construction industry (and to its shame DCC) are no longer quite suitable enough. That certainly wasn't a case of overheavy 'regulation'...


Thanks Tomaltach for your comments. Regarding that 'bring'em back' notion of Mr. McWilliams' - I was struck by the comment of the NYPD fella who, as Irish-American as they come, when asked if he would like to go back 'home', said 'I wouldn't do that. I have roots here.' For him, home is NYC. People are quite capable of juggling all manner of ethnic, national and cultural inputs without getting misty-eyed.

Thanks Keith for your comments and congrats on an excellent blog. I intend to link it. As for the competing 'restrained' and 'unrestrained' theories of capitalism, I tend to particularise issues as in many cases people, with much different perspectives, end up agreeing. I'm dubious of 'free market' arguments only because I can't imagine what a 'free' market looks like (save for the pages of textbooks which are merely exercises in abstraction). Markets, sophisticated ones anyway, are invariably 'socially' constructed to some extent. For instance, property: unlike so many other markets, it consists of a 'good' that cannot be enlarged or manufactured, namely land. That in itself makes it unique. Add on the good points made by Tomaltach regarding planning, the nature of housing as a 'social' good, the issue of externalities (which markets everywhere have difficulty in dealing with) and all of a sudden we realise that we are in need of 'policy'. The issue, therefore, is not so much restraining as 'directing'.

That's why you are aboslutely spot-on about the 'distortions' (though I wouldn't use that phrase). We have too little debate about the instruments we use and to what end they are put to. That's why this Government has been allowed to get away with policies that have exacerbated the 'market'. And that's why the opposition parties - in particularly, the Left - fail to grasp the nettle. And there are many nettles in these distortions: property tax, tax-subsidies, rezoning, promiscuous lending. I don't mind people running to the government looking for help (I'm keen on social solutions). But its frustrating that we don't get informed debates on how we got into the mess in the first place.


Michael - it's interesting that the distortions we are talking about, and some of which you listed, are measures which are generally brought in to benefit the so-called vested interests. (I hate that term - it ususally means simply 'the rich'). Any distortions which are not there to serve the rich were made as populist measures - another terrible weakness of our political system in Ireland.

Paradoxically many of those who benefit most from the said distortions would have 'right wing' views and claim to be avowedly against government intervention! Nothing new there.

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