Patrick MacGill Summer School

The focus of this year’s Patrick MacGill Summer School is the Irish economy.  It features an array of excellent speakers.

Webcast archives of each of the sessions are being made available here and RTE has good audio material on its own website including some of the key politicians’ speeches here.

Update: About 900 people crowded into the hall in Glenties Tuesday night to witness an unusually gripping evening of oratory on economic policy, with presentations by Eamonn Gilmore, George Lee and Brian Lenihan.

George Lee’s talk was particularly noteworthy and suprising.

Other presentations at the Summer School include
Colm McCarthy
Peter McLoone
David Begg
Dan Boyle
Karl Whelan
Don Thornhill
Patrick Honohan

39 thoughts on “Patrick MacGill Summer School”

  1. I wonder if an evaluation by the attendees at this summer gabfest of the great and the good is produced and published. My first criterion would be “Part of the solution…or part of the problem?”

  2. It looks as if the organisers made their selection from the Government’s list of prospects, for filling the boards of its 800 quangos.

    There is official Ireland and a mix of politicians of various hues; representatives from social partnership, RTÉ and a big representation of academics including the TCD provost.

    It should all make for a polite exchange of views.

  3. @Michael
    Polite indeed. Now you should really have been at hte Richard Cantillon school last week…..NOT PC.

  4. One entrepreneur will share his views and there will be no insight from a recent start-up.

    There will likely be a lot of talk about developing new export markets from individuals who’ve no experience of the challenges.

    In contrast with the majority of the private workforce, most, if not all the speakers will have the security of excellent pension schemes.

    There are several former heads of Government departments but no current one.

    It would have been useful to have a developer on the list of speakers.

    Ireland still needs people to take risks and radical politicians.

    It’s strange that with so many politicians in attendance, the broken political system which should have prime billing in an analysis of the death of the Celtic Tiger, does not even get a mention.

    Given the tripe produced by the enterprise agencies, which is termed “strategy”, the session heading: “NEED FOR A NATIONAL STRATEGY AND VISION” does not inspire confidence.

    Specifics on reforms, such as public spending transparency, would be more useful than say arguing the merits of the April 2008 report, that is still under consideration by a so-called task force.

    I will concede that we are usually up to speed on producing laundry lists of aspirations but it would be a revelation indeed if this school could master why it takes so damn long to get anything of significance done in Ireland even when its not the usual army of vested interests coming over the hill?

    Or why for example, the annual compensation for injury from unrepaired public pavements and roads is greater than the annual repair costs?

    Finally on vested interests, before the Bord Snip report gave them an adrenaline shot, in early July, a report in the Irish Times that publicans were lobbying Fianna Fáil TDs to block moves by Minister for Transport Noel Dempsey, to lower the drink-drive limit, coincided with data from Germany which showed fewer road deaths in 2008, than in any year since 1950.

    Destatis said the ban on alcohol introduced in August 2007 for new drivers seems to have had an impact: In 2008 the number of new car drivers (aged 18 to 20 years) who were under the influence of alcohol and were involved in accidents with personal injury was down by 11% on the previous year.

    http://www.finfacts.ie/irishfinancenews/article_1017131.shtml

  5. I note Mary Coughlan has been saying that professionals need to reduce their prices and that they seemed untouched by the recession. which professions did she mention? Architects, Engineers and Solicitors got a specific mention – three professions that have been more than decimated by the collapse in the property bubble. I think the Tanaiste might find herself being accused of insensitivity.

    http://www.irishtimes.com/newspaper/frontpage/2009/0721/1224250998236.html

  6. @zhou_enlai

    It earned her a font page headline in the Irish Times.

    But as with the “smart economy” contribution, much more PR than substance. If only aspirations could be transmuted into something more tangible!

    Coughlan said: “Last April I had the opportunity to visit Stanford University in Silicon Valley, California, one of the world’s leading research and teaching campuses. Its approach to innovation, to multidisciplinary research and to engagement with industry has earned members of its academic staff the Nobel Prize on twenty-seven occasions since its founding.

    The University has spawned some 3,000 companies in high technology and other fields, resulting in the creation of tens of thousands of jobs. It is that type of innovation led environment that our drive for a smart economy must emulate in Ireland. There is no good reason why we cannot.”

    Of course – – but try and promote some reform that will help to achieve the goal.

    Talk is very cheap in Glenties, as it is elsewhere.

  7. @Michael Hennigan

    What exactly is your point in putting a comparison between Ireland’s and Germany’s performances in respect of reducing road deaths in an economics forum, other than as an excuse for your daily anti-Fianna Fail rant?

    If you weren’t such an anti-Fianna Fail obsessive, you’d know that road deaths in Ireland in 2008 also fell to their lowest level since the 1950s. Which is a greater achievement than in Germany as Ireland’s population increased by 50% in that time, while Germany’s only increased marginally. In recent years, the road deaths rate in Ireland has been falling faster than in any other EU country, a fact which has been reported in European Road Safety websites, but unlikely ever to make it to Finfacts.

    In 2008, Ireland’s road deaths rate had fallen to 6.3 (per 100,000) compared to 12.8 (per 100,000) in 1997. This was the sixth lowest road deaths rate in the EU and only marginally ahead of Germany’s 6.1. In the mid 90s, Ireland’s road deaths rate was one of the highest in the EU. So, far in 2009, the number of road deaths in Ireland is down another 10%, so it should fall below 6.0 (per 100,000) this year and may well go below Germany’s for the first time ever.

  8. @MH

    Point taken – The Tanaiste’s comments will go down well with much of her target audience (generally those who are furious that the banks aren’t lending). However, I think the comments will deeply offend professionals and add weight to the dangerous tag of being out-of-touch which hangs heavily on the Tanaiste. I reckon professionals are high octane Mavens. Attacking them all at once seems a bit reckless.

    As for nothing standing on our way to having an equivalent of Stanford in Silicon Valley; now that really is cheap talk. The first thing standing in our way is a lack of a credible strategy, the second thing is increased competition from China and India et al, the third thing is the lack of any efforts at industry clustering in Ireland (every parish pump politician wants a piece of the IT action). A “can do” attitude is no substitute for intelligence, strategic awareness and effort.

    Perhaps I am being too harsh given that we are working off snippets/spinnets. Is the text of the Tanaiste’s address available?

  9. The idea of a thinker of the calibre of Mary Coughlan giving lessons about what we should do here based on what they do at Stanford is unbelievably galling.

    Let me tell you what they don’t do at Stanford:

    • They don’t micomanage their academics or attempt to direct the research they conduct as though administrators and politicians are smarter than academics and therefore have a better idea of what needs to be done than the academics themselves;
    • They don’t run down their academics (as lazy, pampered, etc.) in public as a way of scoring cheap political points;
    • They don’t cut their pay or increase their bureaucratic workloads needlessly.

    I could go on.

    But here’s what they do do at Stanford: they show confidence in the abilities and professionalism of the people they have hired and they let them get on with it.

    There will be no Googles coming out of Ireland for the simple reason that Ireland insists on seeing everything in short-term value-for-money terms and is entirely unwilling to let the actually creative people in its universities do what they do best and without undue interference.

  10. @John

    Don’t over analyse!!

    I was just making a point that in a country with a history of alcohol abuse that may rank with Russia, the fact that the drinks lobby assumes that it would get a hearing from FF TDs, illustrates the power of vested interests.

    @zhou_enlai

    I guess having read Coughlan’s speech, you didn’t change your opinion.

    No Irish tech company has been able to achieve more than $100m in annual revenues and the most successful Iona, had to sell itself to a US firm last year.

    Trintech, one of the high hopes of the 1990s, announced in May revenues of $9.2 million for the first quarter ended April 30, 2009, an adjusted EBITDA net income of $693,000 and a net loss for the quarter of $411,000.

    So Coughlan talks about commercialisation but the usual pattern is that the early VC investors push for a trade sale and the founders take the cash after years of deprivation.

  11. @Ernie, for sure, one of the benefits of working some place like Boston or California is that you don’t constantly have to explain to people that you actually work quite hard, even during the summers.

    Another big difference is money. No way can Ireland ever afford a Stanford. What a silly comparison. Another obstacle is culture in my view — the values are very different over there.

    Irish politicians would be more credible if they set their sights on objectives that might actually be attainable in the long run given lots of work, investment and luck– doing as well as the Scandinavians, for example, whose values are also very different to our own, or the Swiss.

    In the meantime we need to make sure that the bread and butter job of teaching undergraduates doesn’t suffer as a result of all this tilting at windmills…

  12. @MH – You are correct. I didn’t change my opinion.

    I note that the Taniaste says that a huge amount has changed in the last year. I would be interested to know how many new policies or objectives the Tanaiste’s department has come up with. Bar the jobs subsidy (since debunked by Karl Whelan and David Begg) and the innovation panel (why was it not there already if the “knowledge economy” was already policy?) nothing new is on the agenda as far as I can see.

    I welcome the change on upwards only rent review but there is nothing to suggest to me that this will lead to auctioneers revising rents downwards. As such it is an incomplete and flawed policy.

  13. @zhou “Architects, Engineers and Solicitors got a mention”

    You can be sure she wasnt whinging about the cost of getting a patent filed when talking about solicitors or about getting some hardware designed when talking about engineers….She mentioned planners also………

    Is there no one in power who can think beyond property?

  14. @Garry “Is there no one in power who can think beyond property?”

    Sadly not. It is the very foundation of their belief system. The brick wall of prosperity. Their window of opportunity. The roof over their collective heads. The stairs to success. An extension of all that’s good about Ireland. The cement binding us all together….. hopefully, as one door closes, another will open………. or we are going to go through the floor.

    I got up too early. Sorry.

  15. Patrick Honohan’s contribution is succinct and readable. I expect it is indicative of Government thinking at this stage.

    The valuation of assets part was particularly interesting. It is appears this issue is up in the air in a number of countries. His NAMA 2.0 suggestion is interesting but I suspect that the dividend to be paid back to the bank might be treated as an uncertain asset by investors. It appears to be similar to the suggestion in the german paper (linked by PH previously) in relation to dealing with assets of unascertainable value. It makes sense to me that, instead of viewing land assets as having a (i) mark-to-market value and (ii) a different economic value, the correct approach should be to treat these assets as having wholly unascertainable values beyond the minimum value assignable today.

  16. Land has values that directly reflect the values of the society using it.
    Since the EU, land in Ireland has become more productive but vastly more expensive and more costly. Instead of high rise development and sensible public transport, we have hotch potch development based on corrupt cronyism. Until the values of this society rectify, there will be a huge reliance on the illusion of wealth in land in Ireland.

    Land elsewhere can be more highly valued, as in Japan….. or less as in Australia, which produces enormous amounts for owner and customer alike.
    How bizarre is it that one of the least densely populated countries in Europe has one of the highest valuations of undeveloped land?

    Intellect is undervalued while land is so highly valued that the return is of the order of 1-2%. Property is more valued than people. That is the problem. Land will not supply any solution to Ireland’s problems, but people might if they are given a chance.

  17. NAMA is all about valuation now. In Australia and NZ alot of loan book sales of property companies recently have been in the 10-30 c on the $. The last major sale here was of Creidt Suisses smallish near-subprime book, for 25c. Commercial and residential property prices here are down 30%ish from the peak and falling more. Property unit trust values are down 50% and more in the UK .

    Yet, we are told that the probable haircut will be 20%. Somethign wrong with this picture

  18. In 2008, the price of Irish agricultural land was the highest in Europe, at more than 4 times the UK level and at least 10 times the average in France.

    Property agents Savills says Ireland has a little over 10 million acres in agricultural use, which put the sales ratio in 2008 at 0.0005743%.

    Savills said in 2007, in France, each field changes hands at least once every 70 years, but in Ireland on average a field changes hands every 555 years! – – which suggests even small farmers through public supports, direct income and working ex-farm, have not been under pressure to sell.

    Savills says prior to 1999, Irish farmland values were on a par with those in England – at around €10,000/hectare.

    In all there were 110 reported sales in 2008, representing a 41% decrease from the previous year’s 154. The total area of land sold in 2008 was just 5,743 acres, compared to 9,933 acres in 2007.

    http://www.finfacts.ie/irishfinancenews/article_1015968.shtml

  19. “Savills said in 2007, in France, each field changes hands at least once every 70 years, but in Ireland on average a field changes hands every 555 years!” This obviously bogus assertion calls the rest of the stats into question.

    Also if there were only 154 sales of agricultural land in 2008 then a few large sites being bought for development at development prices would skew the statistice hugely.

    We are careening off topic here though!

    What do people think of PH’s NAMA 2.0 valuation model?
    What do people think of the valuation models in other countries?
    Will Ireland reisist being the “first to jump” (and publish its valuation model) or will ACC’s latest actions force their hand?
    Will it be in the legislation to be published before the end of the month?
    Is the 20% haircut of rumour and supposition looking more and more remote?

  20. http://www.independent.ie/world-news/schwarzenegger-pays-price-to-keep-golden-state-afloat-1834005.html

    More off topic: Stanford may have to trim expenditure…….

    Zoe is going to test NaMa. I went onto Zoe sites in the 1990’s. Whenever we looked we could not find contractors as they fled from us. Shy types! I analyzed the valuation model weeks ago on this site. Current use value of farm land, say 5-20%. Partly finished sites are very problematic as they may not now be tenanted….. for a decade or so….. say 10-50%? Finished sites will further rectify the malinvestments made by over cherishing land. They may be worth 50-70% of the previously estimated value if they can find a greater fool at the end of the beginning stage of the Greatest Depression…..!

    My admiration for Michael H is growing!

  21. It hardly matters what NAMA price bank assets at now. We know that we are be backing them right up to top tier 1 capital.

    Even a 90% hair cut on assets sold to NAMA simply would mean:
    – Government guarrantee on lower tier liabilities kicks in and tax payers stump up the capital, and/or
    – Government commitment to recap or nationalise banks kicks in and tax payers stump up the capital.

    We know it will cost the same either way. The only thing we do not know is to whom we have to write the cheque.

  22. Its the type of cliché that comes out all the time, but i’ve heard it three or four times already from the get-together in the Glenties, namely that “we can’t cut so-and-so expenditure as its unfair on these people, they didn’t cause the crisis and so its unfair to ask them to pay for it etc”.

    If we accept, as i hope most people now do, that much/most of the Celtic Tiger boom was based on nothing more than a tri-partite construction-finance-public spending bubble, then what did the average Joe Public Sector, Mary Minimum Wage, or Sally Social Welfare recipient do to justify the huge increases in the money they received directly from or regulated by the State? Many of their pay/benefit increases were directly related to either property prices/rents or private sector wages. You can’t accept the benefits of the boom and not expect to suffer from the downturn.

    Social welfare benefits are up 100% since 2000, the minimum wage by 66%, and the public sector pay and pensions bill by 118% (to Oct 08). With 650 or so private sector jobs lost in the last 24 hrs alone, somethings gotta give on the other side of the coin.

  23. “If we accept, as I hope most people now do, that much/most of the Celtic Tiger boom was based on nothing more than a tri-partite construction-finance-public spending bubble.”

    I certainly don’t accept it. The reason being, it isn’t true.

    Quite possibly, it is correct to say that most people do. But, that would be mainly because they get their information from politically-motivated media economists like George Lee, David McWilliams and Morgan Kelly. Does the man-in-the-street read CSO or Eurostat publications? I doubt it.

    The reason I don’t accept it is because I take the trouble to look up the statistics. They tell me otherwise. The Celtic Tiger boom was/is based on a huge increase in the volume of exports. In 2008 the volume of goods exports was almost 5 times that of 1990 (link below). No other EU country comes even close to that.

    http://www.cso.ie/releasespublications/documents/external_trade/current/extrade.pdf

    Since 2000, the growth in the volume of goods exports has slowed down, but is still much higher than the EU average. However, since 2008 also, the growth in the volume of services exports has dramatically accelerated and is miles higher than in any other EU country.

    And, since the global recession started in late 2007, as I have pointed out on numerous occasions, while the volume of exports from most almost every other EU country has fallen by 20% to 35%, in Ireland the fall is about 3%.

    Those who wish to deny that the Celtic Tiger boom was/is based on exports, let them produce figures to back up their case. They never do.

  24. John,

    There appears to be a disconnect between your export nirvana and the Live Register heading for 500,000.

    In the period 1998 to Dec 2007, excluding the internationally traded goods/services sector and direct construction, more than 400,000 new jobs were added.

    After 2000, jobs in the internationally traded goods/services sector fell by 11,000.

    The property bubble added 127,000 jobs in construction and 400,000 in the public services, indirect property supporting services, distribution and tourism.

    In 2006, the peak year of the bubble, 83,000 new jobs were added. Only 6,000 were in the internationally traded goods/services sector.

  25. The selected McGill Summer School presentations listed on this post present some indication that the economy-shattering and hope-destroying impacts of the scale and speed of the fiscal adjustment being contemplated is beginning to be appreciated. George Lee provides the clearest evidence as he quotes approvingly from the IMF’s description of the optimal fiscal package – “it should be timely, large, lasting, diversified, contingent, collective, and sustainable”. Then he pulls his punch by simply advocating a slowing down and a down-scaling of the adjustment process.

    Colm McCarthy, at least, is consistent with his previous views when he suggests that “(T)he State is also funding a book of assets and it may need to de-leverage too”, but, apparently, he sees no additional virtues or benefits in any divestment of this nature. I find it mystifying that the potential to use the proceeds of any divestment of State assets to leverage the financing of new investments and activities does not get more attention while the State is caught in a fiscal vice-grip.

    The Minister continues to stick to the script provided by his officials. This contains the tired narrative about limits to the State’s borrowing capacity, increased debt-service costs and leakages via increased imports. But nobody with any sense – at least to my knowledge – is demanding an increase in borrowing to finance a stimulus. There is a simple suggestion to consider recycling the State’s holding of some assets to leverage the financing of new investment and activities.

    But this suggestion never receives the attention it deserves. And it’s easy to see why – the likely vociferous and negative reaction of the trades unions.

    This begs a very serious question which I doubt will be asked at this gabfest in Donegal: who actually governs this country and on whose behalf?

    @John,

    You have, in numerous posts, made a strong and compelling case for the importance of exports in the Celtic Tiger boom and the extent to which exports have held up while everything else seems to be crashing around our ears. However, one gets the sinking feeling that the MNCs who are the main drivers of this performance are continuing to churn out the exports while the marginal benefits of doing so outweigh the higher marginal benefits in other locations net of the one-off re-location cost.

    The emergence of new product lines requiring some additional fixed investment may be enough to swing the location decision (as Intel has demonstrated). That’s when the excessively high costs of doing business in Ireland (comprising direct costs and indirect costs arising from infrastructure deficiencies) come into play. If these costs aren’t brought down via privatisation of the semi-state sector, reform of regulation and competition policy and investment in modern infrastructure I have my doubts about the sustainability of this remarkable export performance.

  26. @ John

    i think what you’re referring to is the real Celtic Tiger boom, and what we’re referring to is the unfortunate Celtic Tiger ‘bubble’. The former took place in the late 90’s and the early part of this decade, the latter took hold from 2003 onwards. Can you tell me just how any people actually work in the internationally traded goods/services sector?

  27. @eoin

    I accept that your comments were not intended to denigrate the entire Celtic Tiger boom, but only the final quarter of it (from 2003 on). I still don’t agree with them, but I won’t labour the point by giving lots of statistics for 2003 on as there comes a point when statistics become incredibly boring (although I have given them for 2003 on in other threads).

    I don’t know for certain the number who work in the internationally traded goods/services sector? I do know that about 10% to 12% of the employed workforce in Ireland now work in manufacturing industry. While this might seem low, it is actually bang in line with most other advanced countries. In the US and UK, it is now less than 10%. From what I can make out, its now down to around 8.5% in the US. Here is the link to the US Dept of Labour Report for June 2009.

    http://www.bls.gov/news.release/empsit.nr0.htm

    In almost all developed countries, the proportion of the employed workforce working in manufacturing industry has tumbled in recent decades. In the US, its down from around 35% in the 1950s to under 10% in 2009. In the UK, its down from around 40% in the 1950s to under 10% in 2009. In Ireland, its down from around 17.5% in the 1950s to 10%-12% in 2009. In the 1950s, Ireland had a far smaller proportion of its workforce in manufacturing than in the US and UK. Today, it is a higher proportion (of a much larger workforce).

    None of this massive fall in manufacturing employment (as a proportion of the total) has stopped overall employment growth in all three countries (although the rate of such growth has been much higher in Ireland). Its simply a fact of life that, as developed countries become more and more educated, a smaller and smaller proportion of the workforce work in manufacturing and a larger and larger proportion of the workforce work in services. This site is a good example. I doubt if many of the posters here are employed in manufacturing, but I bet the parents of the lots of the posters here were employed in manufacturing. What sustains this model is that, even while manufacturing employment falls, manufacturing output increases and manufacturing productivity increases even more. This leads to increases in both real wages and real profits in manufacturing and , through the multiplier effect, an increase in consumer spending and employment in services.

    The main thrust of most of my posts is that, while it is self-evidently necessary to maintain competitiveness in manufacturing industry (I don’t dispute that for a second), it is also necessary to maintain spending power in the economy, as about 85% of those in employment depend on it. It is this which has now collapsed in Ireland, not exports or manufacturing. The reason it has collapsed is twofold: (a) cuts in wages (b) cuts in public spending. Both these are destroying spending power in the economy. If the economy depended only on exports and manufacturing, the recession would be over by now. Because, both hit their bottom in 2008 Q4 and have been rising so far in 2009.

    I never expected to find an ally in George Lee. A few weeks ago, I posted that the government should forget about spending cuts – simply hold public spending constant in real terms, and wait for the global rebound and resumed economic growth in Ireland to close the gap. Lo and behold, George Lee now says the same thing. This is what RTE reports him as saying;

    Fine Gael TD George Lee says Ireland needs a new era of responsibility and suggests a longer adjustment period for public finances as an aggressive approach without finding new ways to promote economic growth at the same time, could prove to be disastrous.

    The former RTÉ economics editor was speaking last night at the MacGill Summer School in Glenties, Co Donegal.

    Lee said the best cure for the fiscal nightmare that we are in is the resumption of robust economic growth. He said such economic growth means more activity; more activity means more revenue for the Government and some light at the end of the tunnel. However, the problem is, of course, that we cannot tell when global economic growth will resume, or how strong it might be, or how the type of international economy that emerges might suit Ireland. The international environment is outside of our control.

  28. @john,

    you may have a point about not slashing overall public spending in downturn. However, the problem is in the allocation of public spending. Currently we are spending too much on wages and pensions as evidenced by the premium public sector workers earn, to which must be added pension payments.

    For example if we were to cut the Gardai 4600 tax free rental allownace or even the allowance that Gardai get if they don’t get other allowances, we could employ more Gardai. Equally, if we were to abolish some of the spurious allowances for teachers, we could employ more teachers. Or we could cut consultants pay by 20% and hire more doctors. maybe we could close down some supernumerary 3rd level institutons and redeploy to the NS system.

    Any discussion of the allocation of public spending has to confront the efficiency argument.

    Also in holding public sprending constant as a proportion of GDP is fine if nominal GDP rises. However,what happens if you have a prolonged period of debt deflation in Ireland. Have you a plan then?

  29. @John,
    I believe the link between export numbers and the impact of those exports on the Irish economy is weaker than you think. Based on Forfas ABSEI data, while exports by foreign-owned clients of the development agencies increased by 48% between 2000 and 2007 (from €65,726m to 97,482m) their total expenditure in the domestic economy (on labour, materials and services) only increased by 3% (from €17,542m to €18,179m). That 3% increase is in nominal terms, so their domestic economy expenditure actually fell in real terms.

  30. @John

    “it is also necessary to maintain spending power in the economy, as about 85% of those in employment depend on it. It is this which has now collapsed in Ireland, not exports or manufacturing. The reason it has collapsed is twofold: (a) cuts in wages (b) cuts in public spending.”

    I am a bit shocked by this statement from somebody who has so many facts and figures to hand. Irish people’s wealth has been destroyed through falling stocks, falling pensions, the bursting of the property bubble and the retrenchement in credit demand and credit availability. People who have not had wages cut are not spending money because they realise they have no wealth and the ageing process only goes one way. Also, it is hard to pay wages to people out of money you don’t have, out of profits you are not making or out of bank credit that is not available. Where are these higher wages to stimulate spending to come from????

    “If the economy depended only on exports and manufacturing, the recession would be over by now.”

    If the economy depended only on exports and manufacturing then what would be the level of employment in the country over the last number of years, what would be the level of wages, what would have been the level of tax take and public spending? If we exported enough to support the employment and wages we had from 2003 to 2007 we would be some geniuses altogether.

    “I never expected to find an ally in George Lee. A few weeks ago, I posted that the government should forget about spending cuts – simply hold public spending constant in real terms, and wait for the global rebound and resumed economic growth in Ireland to close the gap. ”

    I think you are hearing what you want to hear. George did not recommmend maintaining spending at its current levels. He lamented that this was not feasible given our situation but accepted it was not feasible. George called for a moderation of the cuts rather than maintaing spending.

  31. According to the World Bank’s World Development Indicators 2008, US manufacturing as % of GDP in 2006 was 14%, second to France at 12%.
    Ireland was at 25%.

    From anecdotal evidence, the links between the construction sector during the boom and the domestic services sector were significant. So it may be with manufacturing.

    Singapore’s manufacturing ratio was 29%.

    According to data this morning, Singapore’s merchandise exports ratio as a % of GDP in 2008, was 186%.

    http://www.finfacts.ie/irishfinancenews/article_1017242.shtml

    Ireland’s was about 50%.

    Both advanced economies with similar populations, are significant hosts of US drugs companies.

    So caution is required when extrapolating from headline exports figures where there is a high import content.

  32. @Michael, the ABSEI data I referred to above shows manufacturing industry spending €6.5bn on Irish services in 2007. As a point of comparison the same source shows manufacturing industry’s payroll to have been €9.2bn that year.

    So, yes, the links between manufacturing and domestic services are significant.

  33. E100m for 2 Battleships? (mid-July 2010)

    Battleships have been in decline for over a century. But in true Gilbert & Sullivan fashion, we have 3 Ministers (Defence, Enterprise and Finance) down in Cobh (en route to their holiday homes in West Cork?) telling us we need to spend E100m. (we have to borrow) to get two new ships into our fleet.

    Why? Drug-importation and Fisheries protection would be much better managed by quality information and tip offs! Enjoy the 2010 Summer

  34. Magill Summer School.

    It really is extraordinary. You operate a prestigious Summer School which is supposed to delve into the entrails of the extremely difficult World Economic situation without ever even approaching the core of the problem.

    This is not a recession; it is the new reality brought about by the extraordinary success of Technology over the last two decades or so. This success has been in gestation for centuries and began to gain momentum during the Industrial Revolution of the seventeenth and eighteenth century. It accelerated during the eighteenth century with the development of steam power and took a major step forward with the harnessing of electricity and the internal combustion engine and telephone as the twentieth century approached.

    War both crippled and initiated major developments during the first half of the last century but the most curtail discovery, possibly of all time, was the development of the first workable computing system to break the German U-boat codes. When asked in the mid fifties if this development might have any influence on Commerce, the head of IBM reputedly commented that the world had use for perhaps half a dozen such machines.

    Developments during the latter half of the nineteenth century picked up a pace and the first real manifestation of the achievements became apparent when agriculture in Europe which immediately after the war was unable to feed the population began 15 years later to produce mountains of beef and butter and lakes of milk and wine.

    This was brought about by the extraordinary advancement of mechanical farming equipment, improvement of biochemical fertilisers together with pesticides and innovation in farm methods and organisation. Europe was producing more than it could consume. This difficulty was managed by turning Economic Philosophy on its head; quotas capped the font of production and farmers were paid for producing less and in some instances producing nothing at all. The intervention continues to the present day but farming in Europe was saved from chaos and possible collapse.

    Millions of people were displaced from agriculture but the advancement of living standards, development of infrastructure and the pursuit of a better life for all created work opportunity for all those displaced and those who for the first time entered the “paid” work category. There is no such refuge for the jobless at the moment unless we rethink the role of work and jobs in society. Jobs are no longer required to create wealth, but are desperately needed to distribute it. The creation of more wealth than the World ever saw before is done by fewer and fewer people using ever more sophisticated machines.

    The era of Computerisation has dawned and suddenly it is possible to do the impossible. Technology usurps an enormous amount of work and the transformation in speed and cost of transportation enables sourcing of product from the most economical (cheapest) locations in the world.

    Developed economies are the most expensive production locations and consequently suffer serious job losses, but are the most lucrative for marketing purposes. As growth declined the panacea for such ills was initiated; interest rates were lowered to historical levels. The solution of borrowing what could not be earned came into being. When lower interest rates proved inadequate the cautious lending prudence of centuries was relaxed and abandoned. Easy credit mushroomed on a personal and national level and the rest is history. The debt nightmare is directly and logically traceable to the changes wrought by the advance of Technology and only remodelling Economics to accommodate Technology will alleviate it.

    Frantic efforts are underway to escape the calamity, but all remedies relate to debt management or in reality mismanagement. No consideration is given to the root cause that precipitated the crisis the world faces. Two of the great planks of Economic Philosophy have been ruptured beyond repair by Technology. Supply can constantly exceed demand and work is in serious decline. Both phenomena are in reality benign developments; for the first time in Human History the World can supply more than it need and people do not have to work nearly as much as heretofore. But there is absolute refusal to consider this extraordinary advancement in the context of relieving the difficulties that so many individuals and Economies now face.

    The world of commerce has changed utterly in the last two decades. The change is assuredly for the better but the inability of a Philosophy that embraces the concepts of continually producing more regardless of demand and working harder and longer when the work is not needed has turned the most optimistic of times into the most pessimistic. We must delve beyond the debt; we must establish what caused and allowed such irresponsible lending and we must recognise that the world will never be the same again in Economic terms.

    In order to emerge from the nightmare we must devise world systems to regulate the extraordinary capabilities of production, much as Europe did with farming, and we must create more jobs from less work. Otherwise we will fall victims to the debt as we lurch from crisis to worse crisis and risk serious breakdown of society in general.

    Your conference will discuss none of these possibilities. Your speakers are either unaware of or dismissive of the possibility. Until they face the reality of a transformed World in the Twenty First Century and begin to discuss the implications of the wondrous achievements of Engineering and Science, there is little hope of relief for beleaguered peoples.

    Padraic Neary, Tubbercurry, Co. Sligo. 087 681 5956

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