The tiger whimpers

Bobbie Heatley reviews Ireland’s Celtic Tiger in Crisis: growth and inequality in Ireland by Peadar Kirby, Palgrave, £16.99 pbk

PEADAR KIRBY began his research for this book at a time when most Irish economic commentators were uncritically optimistic of Ireland’s ‘great success’, seeing it as a prime example of the infallible merits of capitalist, free-market, globalisation.

Here was an example of the way forward for other aspirant NICs (newly industrialising countries), or so it was claimed.

Such euphoria has not been dissipated completely, despite recent shocks to the economies of the ‘first world’ countries, particularly the USA, from where the tentacles of globalisation have spread.

Kirby’s work is an antidote to such ‘best-of-all-possible-worlds’ delirium. He subjects ‘end-of-history’ theories to an objective and clinical social-scientific analysis and, unlike many ‘orthodox’ economists, he has looked at his topic in the round.

His methodology is more in line with the (English) traditional school whose members considered themselves to be engaged in the study of ‘political economy’. That is not to say that he eschews figures (i.e. numerical data). Far from it, he backs up the cautionary drift of his findings with comprehensible statistical tables.

For him, the merits or demerits of globalisation cannot be determined solely on the basis of changes in Gross Domestic (or even National) product, increases in the value of exports or sectoral changes in how the labour force is employed.

Alongside his observation that capital repatriation out of Ireland during the period between 1979 and the end of the 1990s rose from 2.8 per cent to 17 per cent -- reflecting dividends, rents and profits accruing to the external investors, he looks at how ‘retained wealth’ has been appropriated and how this has impacted on the quality of life of society as a whole.

Under the heading ‘Sharing the Benefits’, he regards such matters as poverty, income and wealth distribution and the general quality of life as being worthy of inclusion when assessing the outcome of Ireland’s incorporation into the international capitalist free-market.

Under the pressure of a failing protectionism, Sean Lemass began the process of opening up Ireland to these external forces back in the 1950s and 60s, thus proving James Connolly’s warning that a national revolution unaccompanied by a social one would still leave a country governed by outsiders.

The book also highlights how late the ‘Celtic Tiger’ was in coming to Ireland and how its advent depended on a set of fortuitous circumstances. Chief among these was boom conditions in major capitalist economies abroad-- those of the USA, Germany and the UK being particularly relevant for Ireland.

Of all the downsides of globalisation, which requires small countries such as Ireland to maintain an ‘open economy’ regime, this has been key. Dependency is total and nominal governments are reduced to becoming facilitators for outside financial interests whose primary concerns are, quite naturally, to maintain intact their capital and, where possible, the flow of profits to them from their investments.

Everyone is now looking to see how the present international crises afflicting the ‘developed’ world will impact on economic satellites everywhere -- not least of all in Ireland’s where recent phenomenal growth rates look set to be whittled down considerably. Other NIC-club members, such as Argentina and Brazil and the Asian ‘tiger economies’ of Hong Kong, Singapore and South Korea, have been in serious crisis for a some time.

Characteristically, few of the ‘orthodox’ economists saw this coming until it hit them in the face with the plunge in share values. They have been equally unable to tell anyone what is going to happen next.

In such a volatile situation as now confronts Ireland, Kirby’s book will be invaluable in enabling people to gain an understanding of the complexities of the present situation -- and perhaps serve to sober up those pundits who still believe that globalisation is an elixir, a free market ‘hidden hand’, steering NICs towards a world of social peace and plenty.