Celtic Tiger Mytholology Redux

When it comes to evaluating recent Irish economic history the one thing that irritates me most is when slashing taxes and deregulation are cited as the factors that initiated and sustained the booming tiger economy.  The Irish model is frequently cited by neo-liberal commentators critical of the perceived rigidities of the failing social democracies of 'old' Europe.  Domestically that line is most vigorously pushed by the PDs and their old ally Charlie McCreevey.  There were many factors that contributed to the Celtic Tiger and other commentators emphasise different elements.  An example of this has appeared in The Globalist where Brian Beary highlights the importance of government economic planning and states that the Irish economic boom was far from miraculous. 

Beary also notes the role of social partnership and in particular emphasises the role of the NESC.  This is a useful corrective to the triumphalist narratives of neo-liberalism but let's not get carried away here and create a counter-myth in the process.  Yes, the role of the NESC was important in generating elite consensus about the need to try something new, even if that new departure was the sort of thing that small, successful open market economies in Europe had already being doing for decades.  Ireland had a lot of catching up to do.  There was an atmosphere of crisis and failure by the time the key NESC document A Strategy for Development was published in 1986.  Early next year Charles Haughey was back in power and the "Tallaght Strategy" garnered sufficient political consensus to push through a new attempt at brokering a new deal between government, unions and employers.

There were many things that were not exactly planned but happened fortuitously enough.  The Irish state was in a position to have some key institutions that were flexible enough to turn that newly formed political consensus into concerted action.  Nigel Boyle, in a fascinating paper delivered a few years ago makes much of how Fás, which he describes as "the Swiss Army Knife of the Irish state", played a critical role in driving key reforms in the labour market. 

The definitive account of the political economy of the Celtic Tiger has yet to be written. In the meantime Peadar Kirby's Celtic Tiger in Distress and George Taylor's Negotiated Governance and Public Policy in Ireland ought to be required reading for anyone trying to make sense of our recent past with a view to creating a coherent and critical narrative on economic policy.  Garret Fitzgerald was absolutely right when he claimed in Saturday's Irish Times that the opposition's silence on the economy during the last five years cost them the election.

Comments

[WorldbyStorm]

I know what you mean. Arguably Ireland had one of the most socialised economies throughout independence, simply due to a dearth of indigenous capital. And state intervention has remained a key component of that... incidentally just noticed your reading list...I feel ashamed!

[Michael]

Yes, yes and yes. In this regard, another provactive paper comes from Sean O'Riain (www.esr.ie/Vol35_10'Riain.pdf) where he attributes economic growth in the 1990s to what he calls 'institutional thickness' - the development of state institutions to assist and direct economic activity, rather than the neo-liberal claptrap. That the Left has not got a handle on both the rise and decline of the Celtic Tiger has inhibited forward economic thinking and paved the way for conceding practically the entire economic ground to the Right.