From birth rates to climate change: the unstoppable forces that will define our future
Reinventing Irish social models is a tricky task for a small country that is heavily influenced by external factors
Building a smart society is an internal process, but it is subject to the vagaries of events worldwide. Photograph: Getty Images
Any effort to reframe our society is necessarily an internal process of self-improvement. But as a small, peripheral island nation in a rapidly globalising world, we are vulnerable to major economic, political and climatic forces beyond our control. Successfully negotiating these larger trends and global risks will absolutely depend on our ability to function as a “smart society”.
Global economic forces
In part, the financial and political crisis we are still recovering from was the creation of domestic factors: our own bankers, politicians, developers and regulators were culpable. But it occurred in the context of worldwide financial instability, with Ireland a particularly serious victim of the malfunction of the global economy.
Avoiding such a malfunction in the future is a convoluted process that hasn’t shown much sign of success so far, as legislators in Washington and across Europe face the intransigence of an unapologetic financial industry.
Furthermore, the nature of our fragile recovery has been shaped to a large extent by our status as a small, open economy – the actions of the troika and the Department of Finance have been explicitly deferential to the abstract, capricious power of the “markets”, the modern and somewhat malevolent offspring of Adam Smith’s disinterested “invisible hand”. The reality appears to be that senior politicians fear the omnipresent power of the markets more than they fear the intermittent power of the voters, a misalignment of motives that can cause suffering for citizens.
The recent travails over the so-called debt ceiling in the US is a clear warning that political dysfunction in Washington poses a medium-term risk to the global economy that can’t be ignored. And the increasing systemic importance of China as an economic powerhouse depends on the continued success of its previously untested brand of “state capitalism”, which could very easily collide with economic reality in as disastrous a fashion as the West’s deregulated capitalism did in 2008.
A corollary of 21st-century globalised capitalism is a rise in income and wealth inequality. The US leads the way: the top 10 chief executives in the US take home $4.7 billion between them.
The perception of Ireland as being relatively classless is a convenient myth in most regards, but it speaks to an underlying recognition that an egalitarian society is a more desirable society.
The crisis, however, has led to a dramatic spike in Irish income inequality, though it has been somewhat offset by the redistributive effect of taxation. Income inequality is toxic to the health of a society. But keeping it in check might prove difficult. In his recent book Average is Over, US economist Tyler Cowen envisages a hyper-polarised disparity in the workforce, with 10-15 per cent of workers earning the lion’s share of the total income. “The labour market troubles of the young – which you can observe in many countries – are a harbinger of the new world of work to come,” he writes.