Opinion

Is Ireland broken? Yes and no, the data says

Data can only tell us about how good the Government’s policy choices were a decade ago: it sheds little or no light on the current ones being made

For an increasingly large cohort of the population, home ownership is now little more than a pipe dream, giving the lie to those economists who claim everything is rosy in Ireland's garden. Photograph: iStock
Sinéad O'Sullivan
Sat Oct 08 2022 - 05:00

The intriguing thing about data is that it can tell an infinite number of stories. We like to use data-driven insights to make decisions because we believe that the data knows the answer; it is an all-seeing, all-knowing qualification of the righteous truth.

But the reality is that we can make data tell us whatever we want to believe to be the truth. Most of the time, data is only as good as the inherent bias of the person using it.

Which brings us to the searing debate about whether Ireland is broken or not. The south Co Dublin population over the age of 50 says no; a lot of other people say yes. But what if both of these perspectives are true, simultaneously? What can the data tell us then?

David McWilliams, Chris Johns and Dan O’Brien are three economists who have recently used data to show us that, no, Ireland is not broken. And the data does indeed greatly support their perspective: Ireland has very high levels of income equality; it has high levels of inward immigration; it has a budget surplus; its GDP is doing better than most of its peers; as a country, in general, it is overperforming.

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As someone who has recently moved back from the United States to Ireland, I can confirm that there are many amazing things about this great country when I compare it to the US. Among them are healthcare, food quality, social equality, progressive taxation: the list goes on.

The housing crisis is not a sidebar. It’s the beginning, the middle and the end of every economy. Housing <i>is </i>the economy

However, economic statistics cannot tell us the entire story. As McWilliams and Johns point out in their column and podcasts respectively, Ireland is indeed amazing. Sure, they say, there’s a housing issue right now, but apart from that, we’re doing so well! Except: the housing crisis is not a sidebar. It’s the beginning, the middle and the end of every economy. Housing is the economy. And today’s housing crisis will only be reflected in the data many years from today.

Sinead O'Sullivan: "Today’s housing crisis will only be seen in GDP statistics in decades to come."

You see, what these economists have failed to mention so far is that their data can only tell us about how good the Government’s policy choices were a decade ago when they made them, that led to today’s high-growth economy. Their data does not show us how good our Government’s current policy choices are. As it turns out, all data is historical data.

For a lot of people, the future will look very much like the past. Those people are older, and have already lived most of their economically important lives. They accrued assets in the form of monetary and property wealth before the 2010s. Having a family and access to education and healthcare was a given. For these people, historical data will also tell the story of their future. For these people, Ireland is decidedly not broken.

What the divisiveness of this argument about the state of Ireland tells me is that there is a dangerous and growing polarisation in philosophy about the true nature of where we are today

However, there is another set of people for whom the past does not describe a future. For these people, income equality and immigration statistics predicated on decades-old policy is rather irrelevant: income equality doesn’t matter when you are homeless. Like I said, today’s housing crisis will only be seen in GDP statistics in decades to come. When people can’t live in cities, innovation tends to stagnate. When they can’t raise a family, populations tend to decline. When they don’t have an address, they can’t get a job.

For these people, there’s an entirely different data set that matters. The average age of an Irish person moving out of their childhood home is 27.9 years old. The number of young people living with their parents is the highest in Europe. Only 851 houses are available in the country to rent. College students are choosing to sleep in their cars over withdrawing from university.

The French Embassy has gone so far as to issue an emergency statement about what the Irish gerontocracy have tried to hide: there is a severe housing crisis in Ireland, and any French citizen thinking about relocating there should be forewarned.

For these people, Ireland is decidedly broken.

Ireland may have stellar income equality, but what the divisiveness of this argument about the state of Ireland tells me is that there is a dangerous and growing polarisation in philosophy about the true nature of where we are today. About the true nature of the ability of a large portion of the population to generate future wealth, create families, and enjoy a quality of life akin that portrayed by the economists who insist that nothing is wrong.

As I teach my undergraduates, data can only go so far to tell us the “truth” on nuanced issues pertaining to equality and the economy. I also tell them to be wary of anybody who uses data to portray absolutist philosophies about highly complex topics. Is Ireland a kip? Yes and no, simultaneously. And the sooner we acknowledge these two nuanced perspectives, the sooner we can start implementing change for those who desperately need it.

Sinead O’Sullivan is a former leader of Harvard Business School’s Institute for Strategy and Competitiveness