SOCIETY: Celtic Tiger in Collapse: Explaining the Weaknesses of the Irish ModelBy Peadar Kirby Palgrave Macmillan, 288pp. £19.99
MANY YEARS ago the late Harry Chapin had a hit with a song, the name of which escapes me, but which contained the lines; “There’s no need to see things any other way than the way things always have been seen”. In a sense these sentiments capture the orthodoxy of the mainstream economists’ analysis of the current crisis – suffer the pain of cutbacks and economic growth will return through increased exports. It is a case of a mid course correction rather than a need for a fundamental change in direction. In due course it will be a return to business as usual.
In his latest scholarly work Prof Peadar Kirby presents an eloquent challenge to this narrative. Moreover, his analysis uses a political economy approach rather than a purely economic focus. The central insight of the political economy approach is that it is the interrelationship of state and market, of public and private authority, that requires examination in order to understand the particular and distinctive configuration of any economy. This is particularly relevant in Ireland because the indigenous private sector has shown weak capacity to develop dynamic economic sectors so that the state has been the key agent in fostering the upgrading of the productive economy from agriculture to industry, and, very recently, to an economy dominated by the services sector.
Yet the state has also been profoundly implicated in the lopsided outcomes achieved, according to Kirby. These have manifested themselves in a dualist type of economy in which domestic firms have never achieved the performance of foreign firms attracted here by the IDA. As a consequence the demands of the Foreign Direct Investment Sector have come to dominate industrial policy. At a social policy level the benefits from the Celtic Tiger boom were never used to prevent social polarisation or to reduce inequality. In fact Kirby raises doubts about whether we were even deluding ourselves about our Celtic Tiger image. He cites American academic Fred Gottheil thus: “What was really Irish about Ireland’s economic performance? That is to say, was it really a Celtic Tiger at work in Ireland or a US tiger caged in a Celtic zoo?”
The nature of the Irish state is of particular interest to Kirby. He has long held the view that it is more in the nature of a competition state – one which privileges the needs of FDI companies and business generally over its own citizens – than a developmental state, a more benign entity. In this new edition of his book he revisits this theme. He concludes that Ireland should be categorised as a competition state but acknowledges that despite its overriding logic of global competitiveness, pockets of developmentalism do exist within it.
Towards the end of the book, the role of civil society and social partnership is considered. All in all, the topic receives a critical review. It is posited that social partnership was, in the main, a device used by Government to assimilate actors who might normally be sources of dissent, into a grand project which is the competition state. His thesis is that this worked against the emergence of any form of social democratic polity. Obviously I am somewhat subjective in my view but I think this is not wholly true. It cannot be gainsaid that the social outcomes were less than were hoped for but the last agreement, Towards 2016, was the closest we have ever come to a social democratic programme in this country. This collapsed in December 2009 and it may be that, like Icarus, we flew too close to the sun in our aspirations.
It is worth noting too, as Kirby will know, that a lot of the literature on welfare states suggests that real social change requires strong trade unions working with social democratic parties in Government. That said, this thoughtful evaluation will reward careful study by those with open minds.
Kirby’s book is clearly inspired by the insights of the Hungarian socialist Karl Polanyi. In The Great Transformation, published in 1944, Polanyi set out a devastating critique of neo-classical economics. In particular he asserted that the idea of an unregulated free market was a utopian concept that could not work. We know from what has happened in financial markets, and to our cost, that this is absolutely true. Polanyi also found that a “Double Movement” emerged from the spontaneous reaction of society to the destructive impact of market forces. The author ponders why that has not yet happened in Ireland and why we have such a quiescent civil society.
Fintan O’Toole raised a complementary point when he launched the book by questioning the resilience of the dominant orthodoxy in the face of the known facts of our situation.
Perhaps the answer to both questions can be found in the natural desire of people to want to hear good news. But when in time the many reported sightings of “green shoots” do not materialise into mature plants they may take a different view.
Peadar Kirby has rendered a singular public service in writing this book. Anybody with an interest in the future of our country would do well to read it.
David Begg is general secretary of the Irish Congress of Trade Unions
