Capitalism is a juggernaut that needs good brakes. In Ireland we don't have them, writes FINTAN O'TOOLE
THE FAVOURITE myth of the rich is that great wealth is due to extraordinary effort. Mostly, it isn’t. The economist Branko Milanovic estimates that by far the biggest factor in the generation of fortunes is the one none of us can control – the accident of birth. “More than 80 per cent of the variability in income globally is due to circumstances given at birth” – the country you’re born in and the level of your parents’ incomes.
But there are, of course, some people who do fit the self-image of dynamic capitalism, the driven individual who starts with very little and accumulates fabulous wealth. Seán Quinn was certainly one of them. He didn’t quite begin with nothing – not many of us have the good fortune to have a sand and gravel quarry in our back gardens. He had a great deal of what would later be called social capital – a close, talented family and strong networks through the GAA. But he is the nearest thing to a classic 19th century capitalist that contemporary Ireland has produced. His rise and fall encapsulates the failure of indigenous Irish capitalism.
For all his quiet demeanour, Quinn embodied one of the most abrasively powerful forces in human culture: greed. This isn’t a criticism, merely a statement of an obvious truth he was happy to acknowledge. In a speech he gave in his own Slieve Russell hotel in April 2007, he confessed: “I suppose I was always very greedy. Whatever we had, I was never happy with what we had. And I was always looking for new opportunities. If it was sand and gravel, it was blocks and ready mix; if it was blocks and ready mix, it was roof tiles and floors.”
Greed is the foundation of all great fortunes. Afterwards, when a few generations have passed and new money has become old, that primal urge will be forgotten or at least obscured by taste and manners and art. But greed is as indispensable to the beginning of a financial dynasty as lust if to the creation of a physical one.
Greed may not be easy to admire, but it is not necessarily destructive. It is an energy. Quinn’s hunger for acquisition, his relentless need to accumulate, made him an unusual figure in Ireland: someone who generated wealth by making and selling things. He broke monopolies. (The cement business, when he got into it in the 1970s, was completely dominated by Cement Roadstone Holdings.) He created jobs: more than 6,000 people work for the Quinn Group. He brought a degree of prosperity to the neglected borderlands of Fermanagh and Cavan. Up to a point, Quinn’s greed did good. But primal urges are dangerous. Hunger, unchecked, leads to obesity. Uncontrolled lust creates emotional devastation. And greed without accountability becomes destructive.
There is a remarkable little moment in that 2007 speech of Quinn’s. At the time – though of course he said nothing of this to his audience – Quinn was secretly accumulating a huge stake in Anglo Irish Bank. Towards the end of his speech, he blurted out a rather mysterious reflection on greed: “We were too greedy for too long and we are still too greedy.” Somewhere in the back of his mind, Quinn seems to have sensed that his greed was leading him into dangerous territory. But greed is like any addiction – he couldn’t stop himself going for the easy money. He started by hauling money out of the ground in sand and gravel. He ended up believing he could get endless cash from the magic money machine that was Anglo.
Capitalism is a powerful juggernaut that needs good brakes. Irish capitalism doesn’t have them. There were no regulatory brakes: lobbying by the finance industry ensured that Quinn’s cute-hoor methods of acquiring Anglo shares remained secret. But more importantly, there were no cultural brakes. In countries where capitalism works, raw greed is tempered by certain innate rules: think of the long term; stick with what you understand; don’t take unnecessary risks. Irish capitalism didn’t have those
rules. Quinn sensed that he was “too greedy for too long”. But for those drunk on greed, there were only cheerleaders and enablers – on boardrooms, in the media, in government.
And in the end, of course, there wasn’t even capitalism’s ultimate rule – get too greedy and you lose your shirt. Quinn lost our shirts: every worker in this benighted economy will have to fork out an average of €1,100 to pay Quinn’s gambling debts.
In the theory of capitalism, one person’s drive to accumulate wealth scatters money downwards to ordinary folk. In Irish capitalism, this idea is turned on its head. We are told, again and again, that the wise thing to do with greedy people is to let them go for it. The rise and fall of Seán Quinn tells us that capitalism doesn’t really work without someone to say “stop”.