Economics Marc ColemanThe real significance of the Groceries Order's abolition lies not in the future price of baked beans - it rests with the future role of leadership in government.
Business people have always understood the importance of leadership, but for politicians showing this quality can be counterproductive. These are days of prosperity, days when we resent guidance. "Don't bother us with tough issues or decisions," we say. "Let us enjoy the present and drift into the future."
But our recent history shows us how beguiling prosperity is. The modest prosperity of the mid-1970s was preserved for a time because a Fine Gael/ Labour government navigated our economy successfully through the storm of an oil shock. But this resulted in complacency and voters subsequently chose in 1977 to elect what became the worst government in the history of the state. We are far more prosperous now than then. And so, we can smell the danger. As revealed this week the Organisation for Economic Co-operation and Development thinks that our property market is overvalued and the Central Bank has failed to demur from this view. We are a more indebted and highly priced economy than ever before. But just when leadership is most needed it is least wanted. Until this week, it seems.
But what exactly is leadership? A textbook definition of it is the ability to influence a group to get things done. It comes in two forms: transactional and transformational. Transactional leaders are pragmatic, compromising and sensitive. But they are often poor at inspiring others, morally inconsistent and bad at making or sticking to tough decisions. They are often slow to realise when the time has come for drastic change. Transformational leaders are decisive change managers and good with tough decisions. Sometimes one person is either transformational or transactional. But there are those who can combine both styles.
The type of leadership needed is dependent on political and economic circumstance. Between 1987 and 1992 our economy was in a delicate position. It needed policy remedies of lower wage growth and fiscal consolidation. But unlike Britain during the Thatcher era our PR system denied the government an overall majority. And unlike in Britain the trade union movement was far stronger. So it had to tread carefully. This is why the transactional leadership skills of Bertie Ahern were then so important. Ahern was not leader of his party, but as a minister for labour played an essential role in listening to, negotiating with and compromising with business and trade union leaders.
In subsequent years, between 1993 and 1999, when finance minister and Taoiseach, he helped ensure the fruits of an expanding economy were distributed with regard for equity. The advantages of good policy need to be widely felt if they are to be widely supported. So Ahern's transactional leadership remained crucial.
But when economic fundamentals change, leadership style must change accordingly. In the period of the 1930s and 1940s Seán Lemass was also a transactional leader.
As minister for industry and commerce he went along with de Valera's protectionist policies because, in spite of the reservations of some, there was no apparent alternative. By 1957 the failure of those policies were apparent as unemployment rose and the state haemorrhaged young people. Lemass saw that times were changing and in the teeth of bitter opposition he led a process of reform designed by TK Whitaker. This laid the foundations for today's prosperity.
Times are changing again. While still important in non-economic policy areas - such as the peace process and the agreement of a draft EU constitution - transactional leadership ceased to be relevant to economic policy making about two years ago when the need to deal with our high-cost economy and our public sector became undeniable. More recently the financial stability of our economy has reared its head as an issue to be addressed.
But until last week the government went in the opposite direction, becoming less decisive. Competent ministers were punished for taking hard decisions, Noel Dempsey and Séamus Brennan being particular examples. Only Mary Harney's status as leader of her party has allowed her to be so vigorous in reforming the health sector.
Hopefully, Micheál Martin's success this week signals a change. Whether you are in favour or agin' the Groceries Order, it can't be denied that his decision was courageous and judiciously made. And although it was characteristic of transformational leadership, there was a dash of transactional aplomb in how he laid the ground by consulting with his colleagues.
The media's job, as far as political parties are concerned, is to encourage them to follow their finest traditions. So when, last Monday, the Government drew inspiration from the vision and willingness to reform shown by Lemass, it needs to be acknowledged, at least until budget day - when tough decisions about SSIAs, pensions and public spending will have to be taken. There is no reason why we cannot see a repeat performance. If anyone has the courage for transformational leadership, it should be Brian Cowen.
And if the Government continues to grow a spinal chord the opposition will have to take stock. In Germany the opposition effectively lost the recent election, going from a twenty point lead in the polls to being neck-and-neck on the day. It assumed that sloganising attacks on the government's record would be sufficient to get elected. But it learned that voters will not be fobbed off with the line that a government has been in power too long. Opposition parties must declare what they're for. They must do what retailers must now do, following the Groceries Order abolition - compete on the basis of a superior and cost effective product.
Fine Gael has a great slogan in its "Rip-off Ireland" campaign. But it is so far mostly a slogan. On issues such as café bar licences, its stance has been indistinguishable from the Fianna Fáil backbenches. On the Groceries Order Fine Gael sought a compromise that would amend the order but still retain it. Martin's lock, stock and barrel abolition of the order has made that position look silly. And Labour's tacit insistence on having its leader become Finance Minister is questionable. Pat Rabbitte's political skills are undoubted. But Richard Bruton is a trained economist and Joan Burton a trained accountant. Going for either a Burton or a Bruton for Finance would be better. If Eddie Hobbs has proven anything it is that the electorate are restless. As of this week voters have become the customer, and the customer is king.