Meet the father of the Celtic Tiger

In an era of high unemployment and emigration, something urgent had to be done, TK Whitaker tells Marc Coleman, Economics Editor

Anniversaries are back in vogue. Last month the nation celebrated the 90th anniversary of the 1916 Rising. But if the Rising made Irish independence possible, today sees the 50th anniversary of the event that made it viable. On May 30th, 1956, TK Whitaker was appointed as secretary to the Department of Finance.

Just 40 years after the 1916 Rising, a stagnant economy was forcing around 90,000 people to emigrate each year to escape unemployment. Fifty years later that number now comes here each year to work. Dublin Opinion, the monthly humorous journal at the time, carried a front page cartoon of Ireland, still beautiful and good-looking but getting a bit bedraggled, consulting a fortune teller and asking "Have I a future?".

Although he won't admit it, as the nation's top civil servant, Whitaker more or less single-handedly convinced the entire political establishment to end protectionist policies and begin the long haul of modernising and opening the economy.

Born in the year of the Rising, TK (Thomas Kenneth) Whitaker was only 39 when he was appointed to the post. He recalls the mood of despair in the country at the time. "The early 1950s were a period of permanent crises. It was all a series of disasters. There was no bright lights shining at the end of the tunnel. And there was an awfully depressed mood that was palpable."

Now 89, Whitaker's life perspectives straddles three centuries. He remarried last year (his first wife passed away). While his age may span only the 20th and 21st centuries, his main achievement was to achieve a victory over the forces of 19th-century thinking.

"In 1950s Ireland there was a sort of fatalism and nobody had faced the problem of discarding what we had inherited from the earlier days of Arthur Griffith. He was the great proponent of self-sufficiency. He had got all these ideas from the German economist and philosopher Friedrich List and he thought he had seen it work in Hungary. But it was an economic idea of independence - side by side with the political idea of independence - that imbued the main political parties from the 1890s."

Traces of the 19th century survived into his early childhood. Whitaker describes seeing women in black shawls carrying turf to the market place during a trip to rural Donegal. Another recollection is of being led by the hand to primary school by none other than Ben Dunne snr from his childhood home in Rostrevor, Co Down.

After partition in 1923, the Whitaker family, Catholic despite the English name, moved south to Drogheda. There, the Christian Brothers provided Whitaker with a secondary education and his first sense of career direction, two things for which he remains grateful.

"The Christian Brothers put everybody in for automatic interviews for local authority jobs and the civil service - in those days pounds rather than points got you into UCD. One day I was studying myself for an open scholarship in UCD when the postman dropped in a letter saying I had got first place in the clerical officer's exam."

Accepting the offer meant dropping plans to pursue an open scholarship. But while the wish to study could be deferred, with siblings and parents to support and a father nearing retirement - the need to earn could not.

Fortunately, promotions followed quickly and the whole family was able to move to Dublin. The clerical officer became an assistant inspector of taxes and then, aged just 20, a private secretary to a government minister.

MEANWHILE, THE early sacrifice of study was made good and Whitaker began studying economics by night. It was to be an important decision, given the fateful turn taken by his career a year later: in 1938, Whitaker was promoted to the post of administrative officer in the Department of Finance.

An 18-year climb up the department's hierarchy was to follow. That ended just 50 years ago today when, aged just 39, the leadership of the main economic policy department was thrust upon him. It was, as Whitaker recalls, a poisoned chalice.

"Here was Ireland at that time - the mid-1950s - plunged in despondency. Emigration very high. Very little in the way of employment. Parents asking themselves where their children were going to get jobs. There was a palpable air of despondency."

Somebody somewhere needed to do something. But with the State's political parties wedded to protectionism and economic debate non-existent, the initiative would have to come from within the civil service.

"It was clear to us from the beginning that with the policy of Sinn Féin, of self-sufficiency, of excluding foreign participation in industry, trying to keep everything under Irish control, that we were never going to achieve anything. We were already engaged with colleagues - off our own bat, nobody asked us to do anything - but we decided we had to do something because the situation was so bad. I got a couple of people who were close to me to work on that - Charlie Murray, and some of the younger people in my own department, Maurice Doyle and Tom Coffey and others - and said 'I'm preparing this, would you like to help?'. They did. It was really a work of collaboration. The result was a revolutionary document entitled Economic Development."

This was a total U-turn from Arthur Griffith's Sinn Féin economic policy. Tariffs for manufacturing were to go, foreign investment to be actively encouraged, rather than opposed, and the mantra of self-sufficiency to be replaced with a doctrine of engagement with the trading world.

The return to power of a highly protectionist Fianna Fáil in the 1957 election might have killed Whitaker's enterprise. But the country was desperate and politicians had little credibility. If anything, the protectionist credentials of the new taoiseach, Seán Lemass, turned out to be a blessing.

"It was fortunate that it was Lemass - the arch protectionist minister for industry and commerce - who was confronted with this question. He had been minister for supplies during the war and that brought him up against the inadequacies of protected industry, mostly of a packaging nature and not fundamentally useful to society."

In a foretaste of the Tallaght strategy some 30 years later, the opposition supported the initiative, and change happened quickly. The Control of Manufactures Act - designed to keep out foreign control of new industry - was renamed the Control of Manufactures and Encouragement of Foreign Investment Act 1958. Groups were set up to go into various industries to examine how they could be modernised and a system of grants established to support that goal.

It was not the end of economic policy disasters. Twenty years after Whitaker's revolution, insanity was restored to economic policy. The economy suffered severe damage from the disastrous Keynesian budget of 1977, a damage only finally repaired by the Celtic Tiger.

But had TK Whitaker not been appointed to lead the Department of Finance on this day in 1956, there would have been no economy to damage and no Celtic Tiger.