Capitalism not to blame for our inequality

Economics: Are you worried about globalisation? Are you one of those who feel that Ireland's prosperity is a deal with the devil…

Economics: Are you worried about globalisation? Are you one of those who feel that Ireland's prosperity is a deal with the devil? Unease about where free market capitalism is taking us is spreading.

That viewpoint got two outings in the past fortnight. On Wednesday of last week Joe Stiglitz came to town. As a former Clinton adviser, World Bank chief economist and Nobel Prize winner, Stiglitz has the intellectual weight of a sumo wrestler. In the past six years, he has been throwing that weight behind the most cogent criticism of the current international economic system seen since Karl Marx and Keynes.

Globalisation has failed to deliver an end to poverty in much of the world, Stiglitz says, because the playing pitch was not levelled before the game began.

A close observer of playing pitches of a different kind, rugby pundit Tom McGurk gave a strong speech to the Fianna Fáil parliamentary party think tank in Westport this week.

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Teenagers bingeing on alcohol, the increase in suicide and community breakdown are the dark underside of new prosperity, he argues. From the heights of the global economy to the local community, something is going very wrong.

You don't have to agree with these views to accept that they are valid. They are different though.

Stiglitz is identifying precise problems that have clear solutions. The policies of the IMF have favoured the developed world against the interests of the underdeveloped world, he argues. So we need to democratise that institution and put more distance between it and the economic interests of the west, he proposes.

The WTO has stumbled in its efforts to liberalise trade in agriculture because agricultural lobby groups in developed countries remain powerful, he argues. So governments in rich countries need to steel their backs against opposition to reform.

Rapid growth in the populations of China and India threatens the world's environment, he warns. So we need a global structure with clout to co-ordinate policy responses and to impose sanctions or tariffs on countries like the US that don't play ball with agreed remedies.

Stiglitz won a Nobel Prize for work providing reasons why markets sometimes fail to make the world a better place.

That failure at a global level can lead to pollution, underinvestment and chronic poverty in very poor countries and consequent lack of education and health services.

Most countries have developed a system to tackle such market failure at national level; government. As the global economies merge the gap in global governance is getting more worrying.

McGurk's point - at least in relation to the effects of capitalism within Ireland - needs to be handled in a different way. Has the new Irish capitalism killed our humanity, our family life, our culture?

Financially liberated for the first time in Irish history, our twenty-somethings are indulging in lifestyles and cultural choices that are increasingly Anglo-American and drink centred.

Our own language is under threat from an increasingly anglicised media. Statisticians tell us that suicide is on the rise, while common experience tells us that people have less time for family, for friends and for themselves. But can we blame this on capitalism? To blame capitalism for today's social malaise is a bit like saying that laptop computers are to blame for child porn. The laptop may enable you to access child porn, but it is your morality (or lack of it) which is to blame if you do. Capitalism doesn't force us to drink too much, get divorced or commit suicide. It gives us the freedom to earn as much money as we can.

The early fathers of modern capitalism were stern Dutch and Swiss Christians who saw hard work, thrift and profit making as godly endeavours.

They favoured investment over consumption and frowned on the kind of ostentation so common in Ireland today. They fostered a culture of sobriety and integrity that laid the foundation for enduring prosperity.

No, the trouble with Ireland today is not with capitalism, but with everything else; our own value system and, partly, with government. Fun-loving Celts that we are, we have turned prosperity into a decade long party.

Just when we need them most to counterpoint our new freedoms, many in the media have told us that the family and the church can now be dispensed with.

And while telling us to be more community and family minded, the Government has failed to gear its transport and planning policies to the challenge of preserving community in a growing economy. Market forces are working well in Ireland. It is people and government who are failing. To add insult to injury, we blame our benefactor for our sins. Capitalism is not the source of our ills - it just gives us the society we deserve.

But McGurk has nonetheless come near to a big bone. There is something wrong with Irish capitalism. If the begrudgers are still with us and if envy of achievement is still rife and if some in the public sector still go on strike or take unjustified sick leave, we should resist temptation to dismiss these phenomena as diseases of a bygone age. They are symptoms, not diseases.

Inequality of opportunity remains a chronic problem as our education system deals out widely differing hands to those with hereditary advantage.

Many workers must suffer low-paid, dead-end jobs in the knowledge that their fate was written before their birth. How can we expect such workers to be anything other than resentful at the new wealth they see around them?

Inequality of opportunity in business is also absent, with barriers to entry high in many crucial sectors, particularly network industries. The truth is that Stiglitz's observation about the world economy is just as valid about our own. The playing pitch needs to be levelled in this country, both in terms of creating fair opportunity for all our children and free and fair competition in our markets.

As leader of the State's main republican party, Bertie Ahern should remember that republicanism is government of all the people for all the people, and not just the insiders in the tent of social partnership.