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The new Third World?

A recent visitor exposed to the apocalyptic reporting of the Irish economic crisis in the USA told me that he was surprised not to find tumbleweed on Grafton Street. How should we respond to this schadenfreude—with agreement? Rage? Squirming? Silence?
The historian’s response has to be the long-standing one—the owl of Minerva flies at dusk: we can only assess what has happened when it is over. In retrospect it is clear that there were in fact two Celtic Tigers: the first, ‘real’ one ended c. 2001; the second was a bubble, blown up by cheap money and even cheaper politics. Senior Fianna Fáil politicians, like Charlie McCreevy and Bertie Ahern, were the main abusers. On their watch, greed, collusion and corruption made a mockery of planning, as robber bandits sang ‘Keep your planning system, I’ve got a Merc outside’. A compliant media were ear-splitting advocates for the property sector—a media who have utterly failed to acknowledge their complicity in creating the fiasco (at least we can hold our politicians to account).
While an angry and repetitive ‘debate’ furiously assigns blame, it is clear that in a democracy a country gets the politicians and the policies that it votes for. A state operates the political system that its citizens permit it to operate: wider objectives cannot be attained unless the citizens support them. When we are done with the blame game, consider what actually happened. The Progressive Democrats, with their inside man McCreevy, restructured the tax system in an American direction—low taxation, low public spending, ‘light’ (for which read ‘no’) regulation. The inevitable consequence, long ago pointed out by J.K. Galbraith, is private affluence and public squalor. Implicit—and often explicit—in this analysis is that the can-do wealth-creating classes have no fiscal, political or ethical responsibility (especially through redistributive taxation) to help the disadvantaged. By 2005 the Republic’s ratio of taxes to GDP, at 32%, was 9% below the eurozone average of 41%. And yet, with an internationally low level of personal taxation, Irish citizens demand a Scandinavian level of public service provision. Total tax-to-GDP ratios are highest in the Nordic countries, topping 50% in both Sweden and Denmark. In Ireland, low taxes and low public expenditure on education, health and welfare result in inequality, relative poverty and weakening national cohesion. A large proportion—one third—of our society was left behind in the boom years, creating a two-tier society, and few politicians, or Irish people in general, seemed to care all that much. Those who might have acted as the voice of the disadvantaged had issues of their own: the Catholic Church mired in a dismal swamp of its own making, and trade union leaders eager to get their snouts in the trough of social partnership. Those stuck in the poverty trap include older people (especially older women), early school-leavers, the long-term unemployed, the chronically ill, the disabled, single mothers and ex-prisoners. These are the groups with least media access, political participation or involvement in civil society. In the Tiger years they drifted deeper into relative poverty, into lives lacking in dignity, and are more detached than ever from mainstream society.
The most striking feature of the Tiger is social rigidity. Social mobility has been remarkably muffled, given the astonishing scale of economic transformation. While the number of people in the higher social classes increased, this happened by expansion of the numbers, not by any redistribution or movement between classes. The education system was critical here. In Dublin especially, the school system functions as a social conveyor belt, reliably delivering Tiger cubs into the middle classes.
It is now clear that the Tiger model was an unsustainable hybrid of American neo-liberalism and European social welfarism. It is equally clear that the Irish political system bet the bank (literally) on this model. How did this happen? Irish politics moved decisively to the right in the Tiger years. The advent of the PDs encouraged an all-too-willing Fianna Fáil to follow them slavishly in that direction. Labour then moved from left of centre to capture the vacated Fianna Fáil space. The net result was a gravitational flow to the right across the entire Irish political spectrum. Fianna Fáil, after eight decades as the ‘natural party of government’, lost its way, as its political values hollowed out, and fell among thieves in pinstripe suits. It projected itself and behaved as a party of power and access to power, and nothing else, and it jettisoned even the vestige of vision. They became policy-takers rather than policy-makers—policies imported from Britain and America when they were well past their sell-by date. In pursuit of power but with no idea of how to use it responsibly, they abandoned politics as a realm of ideas and can have no complaints when voters now abandon them.
The strengthening of the Right undermined national cohesion, and Ireland now has one of the sharpest internal social divides anywhere in Europe. The privatisation and individualisation of the Tiger’s market model tore gaping holes in the social fabric, increasing the pressure on the state to plug all the gaps. And yet, when all this is said, done and acknowledged, are we really in the Third World? Economically, a wider and longer-term perspective might suggest that our problems were not entirely home-grown. We became the most globalised economy in the world: when the global economy boomed, so did we. When it tanked, so did we. When it improves, so will we. We are a rich country, judged by any international standards. It is an insult to countries immersed in genuine poverty to suggest that our problems equate with theirs. Our third-level educational participation rates are impressive by global standards: 63% of females and 48% of males aged twenty are in full-time education. There are more mobile phones than people in Ireland. Seventy-three per cent of our households have a computer. In 2010 we had higher penetration of broadband services (54%) than the USA, Britain or Germany.
Back in 1902, faced with an earlier crisis of the Irish state, W.B. Yeats suggested that great cultural and political leaps forward emanated not so much from progressive ideas as from despair: ‘The first flying fish leaped, not because it sought “adaptation” to the air, but out of horror of the sea’. Tumbleweed on Grafton Street, no; Abercrombie & Fitch, Uggs and Louis Vuitton, yes. Flying fish, anybody? HI

Kevin Whelan is Director of the Keough Naughton Notre Dame Centre in Dublin.