Monday, June 04, 2012

Celtic Tiger 3


Generational Impacts: Positive and Negative
There is a general tendency in us Irish to be negative; probably resulting from the national inferiority complex due to hundreds of years of occupation by an outside power adverted to in our opening paragraphs.  Here, I wish to begin with the negative impacts because undoubtedly we are bombarded with them on a daily basis in both written and broadcast media who seem to literally thrive on depressing the populace.  Many commuters choose to listen to music on their way to work instead of listening to the gloom and doom of a programme like Morning Ireland. At least two young couples known to the present author are in considerable negative equity.  One couple bought an average three bed semi-detached house in a middle-class estate for some €555,000 in 2007 at the height of the Celtic Tiger only to have house prices in the same estate tumble to €265,000 in mid-2011.  Quite clearly we must agree with Nyberg (2011, p. ii) that “domestic Irish decisions and actions” were the main reason for the over-heating of the housing market as well as the economy in general.
The other major negative impacts are obviously the return of the two greatest historical scourges of modern Ireland, namely rising unemployment and increasing emigration. The latest figures available from the Institute of International and European Affairs (IIEA)[1] show that 9.7% of the EU labour force is unable to find a job; while Spain leads the field at 22.6% and Ireland comes in fifth position at 14.2%.  Similarly, recent figures from the Central Statistics Office[2] show that more than 3,000 Irish people are leaving the country each month, the highest number since the Famine.  Up to 76,000 people left Ireland in the 12 months leading up to April, including an estimated 40,000 Irish nationals. Despite the alarming numbers leaving Irish shores, CSO statisticians say that many who are leaving are not necessarily Irish citizens.
In all of this we may be fairly criticised for “sleeping on the watch” during the Celtic Tiger period and for “reaping the whirlwind” of growing unemployment and the scourge of returned emigration.  As Hardiman (2010, p. 75) puts it, we failed to see “the red lights flashing” when net lending by credit institutions quadrupled between 2003 and 2005 (net lending by credit institutions was running at 10% of GDP in 2003 and it spiralled to 41% of GDP by the end of 2005).[3]  One could think of other metaphors to describe the national blithe disregard for dangers ahead during the Celtic Tiger – an apposite and timely one might be “steaming ahead” at full speed with the nonchalance of the Titantic despite the iceberg-infested waters.

However, while analysis of what went wrong is a positive thing to do, we certainly cannot benefit from playing the blame game.  Apart from the fact that it is a waste of time, it saps the nation of its spirit.    There is no single factor or any single person in which all blame can lie as we have seen above.  Many factors conspired to bring about the boom and bust and likewise many people shared in the rise and fall of the Celtic Tiger. We must avoid other very Irish reactions like begrudgery and finger-pointing that seem endemic in the Irish psyche.  Such attitudes need to change.  It is silly surely and wasteful of precious time for this country to continue to drown in indecision and petty argument over what sector, institution or individual deserves the most blame while the world economy keeps on turning.
There have been many other positive generational impacts accruing from the Celtic Tiger era.  For example, there were massive infrastructure improvements. The addition of the Luas, and Port tunnel in the Dublin area, coupled with the improvement of existing road networks and the addition of new roads all around the country are massive assets for the country to have. Certainly, we have many “ghost estates” dotted liberally around the country, but we also are the proud possessors of wonderful shopping malls, not alone in Dublin but elsewhere.  There has also been the Docklands development on both the north and south side of the Liffey.
It is also important to point out that while greed may have been the motive of many of us during the reign of the Celtic Tiger that there was also a noted spirit of altruism and generosity in the Irish nation.  Much of the extra money in Irish pockets financed many philanthropic ventures both at home and abroad.  On a local level, the author can speak of the immersion programmes in a lot of our secondary schools which bring much needed help to various nations in Africa and South America.

There are some other positive factors, too, to add to the above list of positive impacts of the Celtic Tiger era, viz., the fact that we were the single largest exporter of software for a short time and that we are still near enough to the top in the same chart.  Also we possess a well-educated population, willing and ready to work.  While there may be gaps in our education system like the fact that we come in at fifteenth place in a list of 27 countries with respect to mathematical literacy at age fifteen years.  However, we’re ahead of the UK and Germany according to this survey by the OECD[4] and we are attempting to correct our mathematical ability through the implementation of a new Project Mathematics course at second level.  Indeed, Canada and Australia are two major countries who actively canvass for Irish graduates and tradesmen and women to come to their countries because they know the quality of what they are getting.
Another positive factor is the number of women who became available for work during the Celtic Tiger era and this represents a huge skills base which can still be tapped by Ireland in the future.  Coupled with this fact, the proportion of our population that is young is greatest is the EU – that is, our birth rate or total fertility rate is unique in Europe, and this is envied by many other European countries where the birth rate is either static or falling.
Conclusion
We have seen that there are many positive factors which we can use to inspire us as we go forward as a nation into the twenty first century.  To wallow in negativity, to point the finger in a blame game or to bemoan our “outcast state” are simply not options.  We can learn much from our mistakes, and that is surely one great positive step on the road to recovery.  Let us learn from Nyberg (2011, p. iv) to become aware of the resulting damage to our economy from taking refuge in any type of “herding practices” and “group think.”  What’s needed is critical thinking coupled with a healthy scepticism of easy consensus.  Easy consensus can be nothing short of a disease as we have learnt to our cost.  From Ruane (2009, p. 124-125), let us become more aware of the reality as opposed to the theory of the “cyclical” nature of any economy.  She makes a good case for the promotion of good solid “counter-cyclical” thinking, stating that as a nation “we’re not sufficiently counter-cyclical.”[5]

 Likewise, we must give more credence to prophetic voices who counter mainline consensus arguments.  This is not alone sound philosophical thinking that takes account of the arguments of the opposing side, but good sound policy, because easy consensus simply may be just that, the easy way out in the short term.  In this regard, we have been promised a good Whistleblower’s Act[6] to protect such prophetic voices.
We have, as a nation, much to be proud of culturally, and much of that can, does and will add to our economic future.  However, we are also a spiritual people, in the broadest sense of that term, who understand at a profound level that economic welfare alone is not enough to promote true wellbeing and happiness.  Sweeney (2008) reports that the Human Development Index, on foot of 2004 data, ranks Ireland as fourth in the world, while the EIU (2004) places Ireland top of the league for the highest quality of life of 111 countries.  Material wellbeing while important, therefore, is certainly not the sole factor in rating either wellbeing or happiness.  Sweeney (2008) highlights Ireland’s good social networks as being a major contributory factor to that high rating of wellbeing. 

Finally, our history has taught us much as a nation.  The present author’s father was fond of quoting a short phrase: “we’ve never died a winter yet,” a phrase he said he learnt from his grandfather whose three brothers emigrated to the United States in the late nineteenth century. Those brothers and their offspring sent many a dollar home to Ireland, and their returning descendants continue to marvel at the advances made by the Emerald Isle over the last fifty or so years.  Many of us are also well aware of the lesson that income levels are not necessarily the real stuff of life, that health – physical and mental – is more important, provided that is that Maslow’s primary needs are met first.  Once again we hear many of our fellows rightly opine that “your health is your wealth,” and this lesson has been reinforced by the demise of the Celtic Tiger.  It would seem that on reflection, we do not need the economist Richard Layard[7] to remind us where our real happiness lies.


[3] She continues: “Growth in banking at that speed and on that scale should have rung alarm bells in the Financial Regulator. But Ireland had adopted the British and U.S. Model of ‘light touch’ regulation...” (Ibid., p. 75)


[5] Ruane (2009, p. 140) underscores the fact that “Government needs to operate counter-cyclical policies and thus be ready for a downturn – it should not be taken by surprise when the inevitable happens.”

[6] Feb. 08/2012: “Minister Brendan Howlin this morning promised to make whistleblower legislation the ‘best in the world’.” See http://whistleblowersireland.com/, accessed 12/05/2012

[7] Cf. Richard Layard Lecture 2: Income and happiness: rethinking economic policy, Lionel Robbins Memorial Lectures 2002/3. Delivered on 3, 4, 5 March 2003 at the London School of Economics

Bibliography

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