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  • irishtimes.com - Posted: October 4, 2008 @ 12:42 pm

    Simplistic solutions to the economic crisis

    Deaglán de Bréadún

    It was one of the strangest weeks in Irish political or economic history. Taking an historical perspective on the crisis: once upon a time we built protectionist walls to preserve us from the vicissitudes of the world market. It was also intended to build up native industry.

    To make a long story short, it wasn’t all bad as a policy but, in the 1950s, it went very badly wrong. I can still remember as a small boy in Enniscorthy how the menfolk emigrated en masse to England. They would come home for a fortnight or so in August, presumably the builders’ holidays, and then it was the sad, drink-fuelled journey back again on the overnight boat. How the families left at home must have felt doesn’t bear thinking about. Was this was the leaders of 1916 died for?

    It just couldn’t go on, we had to grow up and cast our bread upon the waters of the international economy. That worked fairly well in the early ’60s, helped by the fact that Eamon de Valera had moved on at long last and finally allowed Lemass to take over (Dev should have stepped down in 1948 when FF lost that election.)

    But opening up to the world really benefited us “bigtime” from the mid-90s onward. The Celtic Tiger was born: our workforce doubled; unbelievably, emigration was superseded by mass immigration; and the whirring of helicoper blades was a constant feature as the new rich skipped from the Curragh racetrack to the golf-course and back again.

    As Liza Minnelli sings in Cabaret, “It was a fine affair but now it’s over”. But it was always going to be like this. To take one obvious example, the obscene inflation in housing prices couldn’t go on forever. The bubble had to burst.

     The question is whether this is a necessary, but temporary, re-adjustment or a deepgoing crisis that will ultimately lead to disaster. Is it a recession or a depression?

    Let me add hastily that, if I knew the answer to my own question, I wouldn’t be sitting here writing this blog, I’d be making serious money as a financial advisor. It would be, “Step aside and make way, Eddie Hobbs.”

    Can I have been dreaming or did I really hear the Marxist ex-TD Joe Higgins and right-wing Senator Shane Ross agreeing on radio this week about the crisis? The name of Karl Marx also surfaced in an email from the Workers’ Party which consisted of a single, rather esoteric quotation  from his magnum opus Das Kapital about the national debt.

     At the time of the last Depression in the 1930s, people in many countries turned in great numbers to the doctrines of Stalinism* and Fascism as a ready explanation and response to mass unemployment, impoverishment and financial ruin.

    The existence of the Soviet Union seemed to show that “Uncle Joe” Stalin had the right approach. Assisted by the heavy censorship put in place by the Bolsheviks and the eager cooperation of visiting sympathisers (the notorious fellow-travellers), the myth developed that Russia and her satellites were a workers’ paradise.

    Likewise Hitler and Mussolini, from the other end of the spectrum, seemed to many misguided folk at the time to have the answer. Der Fuehrer garnered huge popularity with his measures to end unemployment and “prestige” projects such as the Autobahn and the staging of the Berlin Olympics in 1936. He also offer salve to wounded egos hurt by the treatment of Germany in the settlement after World War One.

    Both sides offered simple solutions. Stalin urged the takeover of the State by the Communist Party; Hitler blamed it all on the Jews. As we all know now, it ended in tears, warfare, bloodshed and disaster.

    The best solution seems to be the social market. Let enterprise fluorish but monitor its activities closely to ensure the interests of the ordinary people are looked after. Of course the market is unpredictable and there will be ups and downs, and that’s where you have to ensure there is a strong basis for continuing prosperity by building up your infrastructure and educating your workforce.

    Could extremist ideologies like Stalinism and Fascism come to the fore again? That depends on how deep the crisis goes and how well our existing leaders deal with the situation. Otherwise, there is never any shortage of pied pipers to draw us towards the abyss.  

    Winston Churchill said that democracy was the worst possible system – until you considered all the others. The dithering at the US Congress showed the weak side of democracy in that the delay in approving the emergency package could have been disastrous. There were real issues of course and Nancy Pelosi’s apparent triumphalism didn’t help.

    Our own Government’s approach was, let’s be blunt about it, a lot less democratic, but if we had the same kind of hemming and hawing that took place on Capitol Hill, where would we be today? Of course, we elected the Government in the first place so at least it was our own freely-chosen leaders who were behaving undemocratically. Maybe we need an inquiry by the Public Accounts Committee or some such body to explore and explain how we got into this mess.
    Deaglán de Bréadún, Political Correspondent, The Irish Times

    *I would draw a distinction between Stalinists and Democratic Socialists as some of the latter would call themselves Marxists.

    • Ray Dollard says:

      There is much talk now about the need for ethics and integrity in financial dealings. Ha-ha to that. If there was a smidgeon of ethics/integrity about, all of the banks’ chairs would have stood down by now. Instead no heads have or will roll. Re Joe Higgins, months ago he was on TV3 rightly railing about those speculators who play with peoples’ livelihoods on the stock market. He went on to say that the banks should be nationalised. The rest of the panel including Vincent Browne looked at him as if he had two heads. Well he wasn’t far off and the mess would not have happened if the banks had been rigidly controlled.

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