Diarmaid Ferriter: Is it honest to say there will not be austerity after the Covid-19 crisis?
How will the debts being generated be paid, and on whom will the burden fall?
According to Charles Haughey in 1987, the economic policies of his government had been ‘dictated by the sheer necessity of economic survival’. Photograph: Paddy Whelan
One of the darkest political jokes of 1987 related to the famous election slogan of that year: “Health cuts hurt the old, the sick and the handicapped.” This was Fianna Fáil’s campaign message during the general election that saw Charles Haughey replace Fine Gael’s Garret FitzGerald as taoiseach after Fianna Fáil was able to form a minority government, the last single-party government of our recent history. Such was Haughey’s conversion in office to cuts in public expenditure, especially in health, the joke was that Fianna Fáil’s election slogan had actually been a promise rather than a criticism of the previous Fine Gael/Labour coalition.
But whatever mirth the joke generated was bitter; “Ireland’s in hock and its people are in flight,” Coleman McCarthy reported in the Washington Post just after the election. Such was the scale of the economic crisis that Ireland’s GDP was only 64 per cent of the European average; the £25 billion national debt was equivalent to 1.5 time’s Ireland GNP, the servicing of which consumed a third of the exchequer’s tax revenue. There was an unemployment rate of 18.5 per cent of the workforce, 30 per cent of whom were aged under 25, and net emigration was estimated at close to 30,000, equalling the natural increase in the population.
Hope of sorts seemed to be offered later that year with the programme for national recovery agreed between government, employers and trade unions “to seek to regenerate our economy and improve the social equity of our society through their combined efforts”. It promised an alternative to the adversarial approach then the hallmark of Thatcher’s Britain. The economic model from 1987, incorporating social partnership, embracing a global economy and US corporate investment, resistance to public-sector growth, and fiscal discipline, has not generated consensus in the writing of Irish economic history and politicians involved in promoting it were wary of intellectualising it.
According to Haughey in 1987 it was not about ideology: the policies had not been “undertaken for any ideological reason or political motives” but were merely “dictated by the sheer necessity of economic survival”. Irish politicians have a long history of dismissing ideology and insisting instead they are “pragmatic”. Those attitudes have been ascribed to the electorate also. Seán Dorgan, chief executive of the IDA from 1999 to 2007, was blunt in that assessment: “The Irish are a pragmatic people who are intensely political, but they have little or no ideology.”
Are those days over? There is a euphemistic and harmonious language being used about the challenges ahead that might fit the current sense of national solidarity but in the long run might turn out to be very hollow. Talk of “rebooting” a “hibernated” economy and downplaying the idea of “austerity” might seem comforting, but is it honest? How will the debts be paid and on whom will the burden fall? If there was mention of possible future health cuts now we would regard that as abominable but when this crisis fades we might also be told we “are where we are” economically and must endure contraction, including in the very spheres we all now deem paramount.
What will the legacy of this crisis be in relation to personal liberties, surveillance, and policing?
We are once again being promised a recovery programme born of severe crisis that promises a new “social contract”, “doing things differently” and a vibrant policy that prioritises collective “well-being”. These were phrases used earlier this week by those seeking to govern, but there is a significant caveat, and that lies in the phrase “within the tight constraints likely to prevail”, a line included in Fine Gael’s list of “tests” any future coalition must pass.
Whether that will be tolerated or endured as it was in the past is the crucial ideological question. How will the current extended reach of the state against private interests, around which there appears to be such consensus, be sustained in increasingly straitened times without a firm ideological shift? And how can the proposed social contract work politically when it apparently borrows so heavily from the programmes of Fianna Fáil and Fine Gael’s political opponents, who are not being invited to be part of it?
Another relevant issue is our system of governance. We have always had an exceptionally centralised model of governance; it was originally born of the existential threat the Civil War generated but it was maintained. With the current pandemic we are again seeing power concentrated in remarkably few hands; most accept this as befitting an emergency but the longer it goes on the more dangerous it can become and what will the legacy of this crisis be in relation to personal liberties, surveillance, compulsion and policing?
When the shining of lights and reaching for the verses of Heaney has passed, rigorous interrogation of what constitutes a genuinely transformative and sustainable social contract is imperative to avoid us being set up for a new era of old ways under familiar “pragmatic” management.