http://www.tcd.ie/business/staff/fbarry/papers/BCraftsIBR.pdf

In the 1980s, the answer was obvious: the failure to control public expenditure and to capture available revenues led to an ever-increasing share of our wealth was going to service our debt burden. This lead to a vicious cycle of increased taxation rates and foreign borrowings which was only broken in by draconian measures in 1987/88.

Dan O’Brien’s thesis could be recast as follows:
The benefits of a recovery will not flow to the Irish people if our current system of governance fails to act so as to avoid a repetition of the vicious cycle of taxation and borrowings.

I disagree with O’Brien’s analysis - and Gerard Hogan has an excellent rebuttal in today’s IT - but this is a valid subject for debate.

Please don’t sign off on my account.

In fairness to you and whatever proposals you wish to put forward and discuss with others for better governance in Ireland, I shall refrain from further posting on this thread. I have made my point. I challenged Dan O’Brien’s thesis and no one has come forward to refute my figures, not even Dan himself. I therefore consider that argument closed. So, I will not be posting on this thread again, although I will read your proposals with interest. Its all yours.

Sometimes, there is a reality on the ground that should have some relevance and I’m not referring to trying to measure happiness.

When BoI was producing wealth reports putting the Japanese as No. 1 in the world and Ireland No. 2, something seemed askew compared with other countries.

Japan had 35% of its population working as temps on less than the Irish minimum wage and companies such as Toyota were paying salary increases that would hardly buy a few cups of Starbucks’ coffee in a month.

As it was heading for a debt/GDP ratio of over 200%, it was mainly
funding it domestically but domestic savings were also falling signalling future problems.

In Ireland at the time, the hospital trolley index was getting a lot of air time.

Yesterday, Norway reported that its wealth fund was worth $455bn at the end of Sept.

Last weekend, on a flight to Kuala Lumpur, a Norwegian was grumbling to me about how parsimonious Norway’s politicians are.

The comparable population to Ireland’s did not go crazy after striking oil.

We may be nominally as rich as Norway but the difference between our debt and their surplus is just $600bn.

Given the overwhelming dominance of US firms in the Irish economy and the channeling of profits made elsewhere via Ireland, caution is required in comparative analysis of GDP data.

I see that you are unpersuadable, so there is little point attempting to engage. In signing off, just two observations: (1) economic growth that is fuelled by continued fiscal deficit financing of current expenditure and an increasing debt/GDP ratio is unsustainable (this is what characterised most of the ’80s and is what we are facing now) and (2) it is rare on this blog to have the opportunity to debate the root causes of these policy failures and to consider appropriate remedies. It is a cliche that those who refuse to learn from history are doomed to repeat it, but the desire to extend fiscal deficit financing has eerie echoes of the GUBU decade from 1977 to ‘87.

What’s deterring engagement is the inability of supporters of Dan O’Brien’s thesis to supply any statistics in support of it. I suspect that includes Dan himself. If you are reading this, Dan, come on, don’t be shy. If you can supply any statistics to support your thesis, let’s be having them. Silence will speak volumes.

The fact that people may wish to engage in discourse about possible improvements to the processes by which government policy is formulated and implemented doesn’t give them the right to rewrite the economic history of the country. We’ve had enough revisionism in regard to the political history of the country. We don’t need it in regard to the economic history of the country. Such revisionists have no right to rewrite a half-century of some of highest economic growth the world has ever seen as a half-century of chronic failure, which is essentially what Dan O’Brien is doing.

Re Paul’s specific points:

The ’50s’ was over half a century ago - its of no relevance today. How far back do you want to go? The 1840s perhaps? The Cromwell era? I’d say that the Irish economy performed pretty poorly in both those periods. The modern Irish economy began in 1958, with the move to free trade. Prior to 1958, I’d agree that economic growth in Ireland was nothing to write home about. But, then, unlike many of the European countries Dan O’Brien admires so much, Ireland didn’t have colonies in Africa, Asia and Latin America to loot and exploit. Its only with the end of colonialism in the late 1950s, that Ireland has been on a level playing field with the former colonial countries in Europe. Its the post-1958 modern outward-looking Irish economy that we need to assess. I’m saying that economy has an outstanding record for growth, and no one has been able to contradict that.

The ’80s’ was actually 1982 to 1986. As the table I gave earlier showed, growth in Ireland was above the OECD average both in the periods 1980-1982 and 1986-1990. Between 1986 and 1990, economic growth in Ireland averaged 5% annually. So, when we talk about the ’80s’, let’s have a bit of precision.

There is another aspect to all this. Failure to recognise the long-standing and deep-rooted nature of high economic growth in Ireland is leading to incredibly bad economic forecasting during the current downturn. That ought to be a matter of concern, although it doesn’t seem to be. At the start of this year, it was being widely predicted that GDP in Ireland would fall by 12% between 2008 and 2010, compared with 2% in the EU, and that GDP would not begin to grow again until early 2011, some 18 months later than in the rest of the EU. It is now increasingly clear that these forecasts were wildly over-pessimistic. The fall in GDP between 2008 and 2010 will now probably be less than half that predicted, will probably only be very slightly lower than the EU average, and GDP probably started to grow again as early as 2009 Q3. I confidently predict that, by the time GDP figures for 2010 are published (in March 2011), Irish economists will be seen to have broken the world record for inaccurate forecasting. I’d attribute part of the blame to inadequate understanding of the country’s economic performance over the past half-century.

It is regrettable that your dogged refusal to accept the economic reality of the ’50s and the ’80s, the unsustainability of the recent “boom” and the nature of the likely extended recovery combined with your (slightly mocking?) attribution of “nobility” to those seeking to debate the underlying causes is dominating this thread and, possibly, deterring useful engagement.

I have no quarrel with people here discussing “reforms of structure and process required to improve the design, scrutiny and implementation of public policy, in particular, economic policy, and to ensure accountability on policy implementation” all they want. For those who are so high-minded that they take an active part in such a discussion, good luck and all credit to them. I hope their efforts bear fruit.

My post was not aimed at these noble people. It was aimed at refuting a claim by one particular economist, Dan O’Brien, who has just published a book. It was the argument presented in that book that was the trigger for this thread, so I feel perfectly justified in commenting on it. In the book, he makes the claim that Ireland is a chronically underperforming country economically and that this is due to corruption and inertia. He implies (in his ’slump-slump-growth-slump’ characterisation of the Irish economy) that periods of economic growth in Ireland are rare and that prolonged economic slumps are more the norm. And he contrasts this with other European countries where he claims that the reverse applies. He gives no evidence to back up these claims. Despite that omission, if his claims are left unchallenged, they will almost certainly damage Ireland’s economic reputation.

In my posts above, I have comprehensively demolished Dan O’Brien’s claims. I have given a mass of economic statistics to show that they are unfounded. Neither Dan O’Brien nor anyone else has refuted my statistics or given any statistics of their own to back them up.

If Dan O’Brien is reading this thread (and let’s face it, he probably is), I challenge him to back up his claim of chronic economic underperformance in Ireland with the same level of detailed statistics that I have give above.

I’ll leave Frank Barry to respond if he so chooses, but, for me, the thrust of this thread is focused on the reforms of structure and process required to improve the design, scrutiny and implementation of public policy, in particular, economic policy, and to ensure accountability on policy implementation. You may believe, and you are perfectly free to do so, that everything in Ireland is for the best of all possible worlds, but, by any objective criterion, it is difficult to conclude that the process of economic policy design, implementation and regulation in the last decade has advanced the interests of Irish citizens.

Ireland is not unique in this, but most other developed economies (with the possible exception of Spain) have suffered from the financial contagion arising from inadequate policy control and regulation of the financial sector. While many other countries have intervened to ameliorate the impact of the global downturn and timid steps are being taken globally to ensure more effective policy control and regulation of the financial sector, Ireland is struggling to contain a rapidly deteriorating fiscal situation and to shore up the entire domestic banking system. The global financial and economic crisis simply revealed the unsustainability of both which had remained largely hidden by a false boom fostered by wrong-headed economic and regulatory policy. We are fooling ourselves if we fail to address the root causes of this dual unsustainability.

Irrespective of the merits (or failings) of Dan O’Brien’s book, this is a debate we simply cannot afford not to have.

“The Irish economy underperformed relative to what would have been expected on the basis of general Western European performance over most of the last half century.”

Sorry to trouble you again.

But, just so we could put some meat on this statement, would it be possible for you to:

(a) Specify which years in the last half century, “the Irish economy underperformed
relative to Western Europe”.

(b) Give the growth rates for Ireland and Western Europe in those years.

Then, we can see whether or not your use of the phrase “over most of the last half century” is justified.

“The Irish economy underperformed relative to what would have been expected.”

This is economist-speak. As I showed in my tables, the Irish economy has grown at twice the average OECD rate since 1970. It has grown at four times the rate of the Danish economy since 1970. It has grown at twice the rate of the Greek, Portugese and Spanish economies since 1970, even though these countries were poorer than Ireland in 1970 and therefore, according to the “relative to what would have been expected” theory, should have grown faster than Ireland. Ireland has continued to grow much faster than those countries which it overtook in the past decade. For example, Italy. GNP per capita in Ireland only overtook that in Italy around 2000. Based on the “relative to what would have been expected” theory, Ireland’s and Italy’s growth rates should then have converged. They didn’t. Ireland has continued to grow at four times Italy’s rate since 2000. And, as a result, GNP per capita in Ireland is now nearly 25% higher than in Italy. The figures I gave only went back to 1970, as that’s all the CSO and OECD databases give. But, between 1958 and 1970, Ireland’s GDP also grew faster than the OECD average, although the gap was not as large as post-1970. As if that weren’t enough, ESRI are predicting that GDP in Ireland will grow at around 5% annually from 2011 to 2020, which, if it proves accurate, will certainly be at least twice the average OECD rate. Thus, by 2020, it is very likely that Ireland will have gone through a period of 62 years, in which its economic growth rate grew much faster than the OECD average almost continuously, apart from the relatively short periods 1982 to 1986 and 2007 to 2009. In short, Dan O’Brien doesn’t know what he is talking about. But, he has a book to flog.

While on the subject, it now looks increasingly likely that the recession in Ireland ended in Q3, unlike in the U. Kingdom. It is of course never possible to be certain about these things in advance, but CSO figures out today show seasonally-adjusted manufacturing output up 4% in Q3 compared with Q2. Seasonally-adjusted retail sales are also up 3% to 4% in Q3 compared with Q2. This is the first quarter since 2007 that both these rose. While they don’t guarantee that GDP grew in Q3, they certainly mean that its more likely it did than it did not. Plus, the number on the Live Register has stated to fall, which would tend to confirm that GDP grew in Q3.

Agreed. We had “Economic Development” in 1958, attributed to T K Whittaker and Sean Lemass, that lifted Ireland out of the ’50s gloom and the combination of Ray MacSharry’s drive (drawing on the first Bord Snip) and Alan Dukes’s political self-sacrifice in the late ’80s. The key issue here is how do we reform the process of democratic governance to ensure that we minimise the impact of economic downturns, that we don’t implement policies that make them more severe when they occur and that we are not reliant on entirely fortuitous alignments of civil service and political leadership to get on the recovery path.

I fear there is limited recognition of, and zero political willingness to implement, the reforms that are required to speed the process of recovery and to avoid a repeat performance in the future.

How about:

Recovery, Boom, Int. Recession, Bubble starts, Bubble wild, Crash
mid60s early70s 74/75 78/79 80/81 82-87
mid90s late90s 2002 03/04 05/06 07-

Perhaps the problem is the politicians can’t face the slumps and rig the economy to delay them.

From 82 to 96 was fourteen years before normalcy.
Hopefully we get the deficit under control quicker this time.
From 08 to 2013 would be five years to normalcy.
Success?
Better than 2018 or 2022 anyway.

One can only admire your tenacity and diligence. I don’t think anyone on this blog is denying that Ireland won’t experience the sunlit uplands again - in some shape or form. I sense that much of the focus is on the economic policy decisions that will achieve this outcome as quickly and efficiently as possible. I think the focus on this thread is on identifying what changes might need to be made to ensure that any future fall from grace will be less severe and that the extent of any fall will be much less the result of self-inflicted wounds than is the case in this instance.

All the figures are for ‘real’ (inflation-adjusted) GDP. The Irish ones are from the CSO website.

@Michael Hennigan

What exactly is the relevance of economic growth rates in the 1950s? How far back do you want to go? This is 2009. As I’ve pointed out on a number of occasions, Ireland’s growth rate since 1958 has been well above that in the EU15, UK and US in roughly 4 out of every 5 years. Is half a century of growing faster than other countries not sufficient to establish the case? What’s more, ESRI are forecasting that the same trend will continue in the next decade. So, by 2020, if ESRI are correct, we’ll have had 62 years of growing faster than other countries.

Re the 1950s, which seem to obsess you. In that decade, economic growth in Ireland was indeed lower than in most of Europe. The main reason was that most of Europe was flattened in World War 2 - houses, infrastructure and industrial capacity destroyed on a scale never before seen. So, naturally there was a reconstruction boom when peace was established. I’m sure that, if the RAF could be persuaded to bomb half the houses and offices, all the roads, railway lines, airports and bridges, and most of the industrial capacity in Ireland to rubble over the next year or two, it would be followed by the mother of all reconstruction booms in the next decade. But, I hesitate to say this, in case Tom Parlon thinks its a good idea.

@Paul Hunt

I did compare GDP growth rates between Ireland and other similar-sized European economies (as well as larger ones) in my post. Unfortunately, as I mentioned in my subsequent posts, my main post got mangled up and part is missing (the problem appears to be at my end - I’m on a different and much older computer to normal today - apologies for that). But, if we are talking about GNP per capita, Ireland is 4th highest in the EU even in this recession in common currency units (it was 3rd highest before the recesion). Only Luxembourg, Netherlands and Austria rank higher in GNP per capita even in this recession. If the ESRI forecasts for growth from 2011 on prove accurate, Ireland should overtake the latter two early in the next decade.

Re net migration. I don’t have the exact figure, but I’d estimate that since the census in 1961 there has been net immigration into Ireland of around 300k, totally reversing the trend of massive net emigration inherited from the days when Ireland was part of the U. Kingdom. Perhaps Michael Hennigan can supply the exact figure. As I say, its just a rough estimate off the top of my head but, I think there was net emigration of about 150k in the 60s, net immigration of about 100k in the 70s, net emigration of about 200k in the 80s, and net immigration of about 550k since 1991. No similar reversal occurred in our fellow subject country, Scotland, which is one of the reasons the population of the Republic alone is now getting close to that in Scotland while, back in the 1950s, it was little more than half.

I think we get the message. However, for those of us who’ve known Ireland since the 50s, the digested read “slump-slump-boom-slump” that Cathal attributes to Dan O’Brien resonates strongly. Perhaps, if you’d devoted a portion of your data search to comparing Ireland with other similar-sized European economies and looked at GDP(or GNP?) per capita in a common currency unit, unemployment rates and net migration you might have discerned the outlines of an economic history that many of us would recognise. And there is a fine line between stability and insular stagnation.

John,

You’re a good man with the figures but for example, between in the ten years from 1951 to 1961, the economy only contracted in 2 years but by 1961, the population had fallen to its lowest in 120 years.

GNP fell 1.3% in 1982 and 1.9% in 1993.

See Table Page 22:

http://www.finance.gov.ie/documents/publications/other/BES2008.pdf

So is a period of low growth, high emigration and pervasive fear of uenmployment, not a slump?

continues from here:

To further illustrate this, I have counted the numbers of years of booms and slumps in each EU15 country and the US since 1970. I define a ‘boom year’ as one in which GDP growth was more than 4% and a ’slump year’ as one in which GDP growth was negative. Again, the results are illuminating and blow Dan O’Brien’s thesis even further apart.

number of ‘boom years’ for each country since 1970 (GDP growth > 4%):

Ireland: 22 boom years (71, 72, 73, 77, 78, 79, 89, 90, 94, 95, 96, 97, 98, 99, 00, 01, 02, 03, 04, 05, 06, 07)
Luxembourg: 20 boom years (72, 73, 74, 78, 84, 86, 88, 89, 90, 91, 93, 97, 98, 99, 00, 02, 04. 05, 06, 07)
Portugal: 15 boom years (71, 72, 73, 76, 77, 79, 80, 86, 87, 88, 89, 91, 95, 97, 98)
Greece: 13 boom years (71, 72, 73, 75, 76, 78, 88, 00, 01, 03, 04, 06, 07)
U. States: 13 boom years (72, 73, 76, 77, 78, 83, 84, 88, 94, 97, 98, 99, 00)
Spain: 12 boom years (71, 72, 73, 74, 87, 88, 89, 90, 98, 99, 00, 06)
Finland: 11 boom years (72, 73, 79, 80, 88, 89, 97, 98, 00, 06, 07)
Netherlands: 8 boom years (71, 73, 74, 76, 89, 90, 97, 99)
Austria: 7 boom years (71, 72, 73, 76, 77, 79, 90)
France: 7 boom years (71, 72, 73, 74, 76, 88, 89)
Belgium: 6 boom years (72, 73, 74, 76, 80, 88)
Denmark: 6 boom years (72, 76, 84, 85, 86, 94)
Germany: 6 boom years (72, 73, 76, 79, 90, 91)
Italy: 5 boom years (73, 74, 76, 79, 88)
U. Kingdom: 5 boom years (73, 86, 87, 88, 94)
Sweden: 3 boom years (84, 99, 00)

number of ’slump years’ for each country since 1970 (GDP growth 4%) corresponds to a goal scored. A ’slump year’ (GDP growth < 0%) corresponds to a goal conceded. The scores for each country are then as follows:

Ireland: 22 booms - 3 slumps (difference of +19)
Luxembourg: 20 booms -3 slumps (difference of +17)
Portugal: 15 booms - 6 slumps (difference of +9)
Spain: 12 booms - 3 slumps (difference of +9)
Finland: 11 booms - 4 slumps (difference of +7)
Greece: 13 booms - 6 slumps (difference of +7)
U. States: 13 booms - 6 slumps (difference of +7)
Netherlands: 8 booms - 3 slumps (difference of +5)
France: 7 booms - 3 slumps (difference of +4)
Austria: 7 booms - 4 slumps (difference of +3)
Belgium: 6 booms - 4 slumps (difference of +2)
Germany: 6 booms - 5 slumps (difference of +1)
Italy: 5 booms - 5 slumps (difference of +0)
U. Kingdom: 5 booms - 6 slumps (difference of -1)
Denmark: 6 booms - 8 slumps (difference of -2)
Sweden: 3 booms - 7 slumps (difference of -4)

So much for Ireland’s economy being ’slump-slump-boom-slump’, as Dan O’Brien claims. In some countries, there have actually been more ’slump years’ than ‘boom years’ since 1970. In Ireland, however, the figures are just 3 ’slump years’ and 22 ‘boom years’ since 1970. Based on this, the countries needing constitutional reform most are those with ridiculous and antiquated monarchical systems, rather than Ireland with its republican Constitution. In particular, given that Dan O’Brien works for a U. Kingdom publication, its a bit rich that he castigates Ireland’s Constitution on the grounds that it has a tendency to produce economic slumps, when, as the above table shows, the U. Kingdom has had more ’slump years’ than
‘boom years’ since 1970, while in Ireland the latter outnumber the former by 22 to 3.

Finally on the economic statistics front, …………

Lefournier says:

“Is John the Optimist correct in saying that, prior to the current crisis, we only experienced one recession in the past fifty years.

And that recession was limited to 1983/84?”

Actually, I was wrong. I spent most of yesterday checking the figures on the CSO and OECD websites. I do apologise for misleading eveyone. I was correct in stating that, prior to the current recession, there was only one recession in the past fifty years, But, I was wrong in stating that it was limited to 1983/84. Actually, it was limited to 1983, when GDP fell by 0.7%.
GDP grew by 3.2% in 1984, which was quite healthy. GDP growth was low but positive in 1985 and 1986. The CSO and OECD websites only give figures back to 1970, so I can state definitely that, prior to the current recession, there was only one year (1983) of negative GDP growth in Ireland since 1970. However, as I was around at the time. I’m pretty certain from memory that there were no years of negative GDP growth between 1958 and 1970.

What is illuminating is to compare annual GDP growth in Ireland with that in the OECD as a whole since 1970. Then, we can see how ridiculous is Dan O’Brien’s thesis. I have compiled the following table from the CSO and OECD websites. It gives annual GDP growth in Ireland and the OECD as a whole each year since 1970. Those years in which GDP growth in Ireland was less than that in the OECD as a whole are marked with a double asterisk (**). I’ve done that because there are so few of them they might be missed.

1971 Ireland +4.6% , OECD +3.7%
1972 Ireland +6.9% , OECD +5.5%
1973 Ireland +5.6% , OECD +6.4% (**)
1974 Ireland +2.6% , OECD +1.2%
1975 Ireland +1.4% , OECD +0.4%
1976 Ireland +3.3% , OECD +4.9% (**)
1977 Ireland +6.3% , OECD +3.7%
1978 Ireland +7.2% , OECD +4.5%
1979 Ireland +4.2% , OECD +3.8%
1980 Ireland +2.9% , OECD +1.3%
1981 Ireland +2.5% , OECD +2.0%
1982 Ireland +1.5% , OECD +0.0%
1983 Ireland -0.7% , OECD +2.7% (**)
1984 Ireland +3.2% , OECD +4.6% (**)
1985 Ireland +1.9% , OECD +3.7% (**)
1986 Ireland +0.4% , OECD +3.0% (**)
1987 Ireland +3.6% , OECD +3.4%
1988 Ireland +3.0% , OECD +4.5% (**)
1989 Ireland +5.6% , OECD +3.8%
1990 Ireland +7.7% , OECD +3.0%
1991 Ireland +1.6% , OECD +1.4%
1992 Ireland +3.6% , OECD +2.2%
1993 Ireland +2.3% , OECD +1.5%
1994 Ireland +5.9% , OECD +3.2%
1995 Ireland +9.6% , OECD +2.5%
1996 Ireland +8.1% , OECD +3.1%
1997 Ireland +11.5% , OECD +3.6%
1998 Ireland +8.4% , OECD +2.7%
1999 Ireland +10.8% , OECD +3.5%
2000 Ireland +9.4% , OECD +4.2%
2001 Ireland +5.7% , OECD +1.3%
2002 Ireland +6.5% , OECD +1.7%
2003 Ireland +4.4% , OECD +2.2%
2004 Ireland +4.6% , OECD +3.2%
2005 Ireland +6.2% , OECD +2.7%
2006 Ireland +5.4% , OECD +3.1%
2007 Ireland +6.0% , OECD +2.7%
2008 Ireland -3.0% , OECD +0.6% (**)

So, in the 38 years between 1970 and 2008, the Irish economy grew by less than the OECD as a whole in only 8 of them (73, 76, 83, 84, 85, 86, 88, 08). Dan O’Brien’s thesis that Ireland’s economic performance can be characterised as ’slump-slump-boom-slump’ is clearly absurd. Its a piece of idiocy invented to sell a book.

To further illustrate this, I have counted the numbers of years of booms and slumps in each EU15 country and the US since 1970. I define a ‘boom year’ as one in which GDP growth was more than 4% and a ’slump year’ as one in which GDP growth was negative. Again, the results are illuminating and blow Dan O’Brien’s thesis even further apart.

number of ‘boom years’ for each country since 1970 (GDP growth > 4%):

Ireland: 22 boom years (71, 72, 73, 77, 78, 79, 89, 90, 94, 95, 96, 97, 98, 99, 00, 01, 02, 03, 04, 05, 06, 07)
Luxembourg: 20 boom years (72, 73, 74, 78, 84, 86, 88, 89, 90, 91, 93, 97, 98, 99, 00, 02, 04. 05, 06, 07)
Portugal: 15 boom years (71, 72, 73, 76, 77, 79, 80, 86, 87, 88, 89, 91, 95, 97, 98)
Greece: 13 boom years (71, 72, 73, 75, 76, 78, 88, 00, 01, 03, 04, 06, 07)
U. States: 13 boom years (72, 73, 76, 77, 78, 83, 84, 88, 94, 97, 98, 99, 00)
Spain: 12 boom years (71, 72, 73, 74, 87, 88, 89, 90, 98, 99, 00, 06)
Finland: 11 boom years (72, 73, 79, 80, 88, 89, 97, 98, 00, 06, 07)
Netherlands: 8 boom years (71, 73, 74, 76, 89, 90, 97, 99)
Austria: 7 boom years (71, 72, 73, 76, 77, 79, 90)
France: 7 boom years (71, 72, 73, 74, 76, 88, 89)
Belgium: 6 boom years (72, 73, 74, 76, 80, 88)
Denmark: 6 boom years (72, 76, 84, 85, 86, 94)
Germany: 6 boom years (72, 73, 76, 79, 90, 91)
Italy: 5 boom years (73, 74, 76, 79, 88)
U. Kingdom: 5 boom years (73, 86, 87, 88, 94)
Sweden: 3 boom years (84, 99, 00)

number of ’slump years’ for each country since 1970 (GDP growth 4%) corresponds to a goal scored. A ’slump year’ (GDP growth < 0%) corresponds to a goal conceded. The scores for each country are then as follows:

Ireland: 22 booms - 3 slumps (difference of +19)
Luxembourg: 20 booms -3 slumps (difference of +17)
Portugal: 15 booms - 6 slumps (difference of +9)
Spain: 12 booms - 3 slumps (difference of +9)
Finland: 11 booms - 4 slumps (difference of +7)
Greece: 13 booms - 6 slumps (difference of +7)
U. States: 13 booms - 6 slumps (difference of +7)
Netherlands: 8 booms - 3 slumps (difference of +5)
France: 7 booms - 3 slumps (difference of +4)
Austria: 7 booms - 4 slumps (difference of +3)
Belgium: 6 booms - 4 slumps (difference of +2)
Germany: 6 booms - 5 slumps (difference of +1)
Italy: 5 booms - 5 slumps (difference of +0)
U. Kingdom: 5 booms - 6 slumps (difference of -1)
Denmark: 6 booms - 8 slumps (difference of -2)
Sweden: 3 booms - 7 slumps (difference of -4)

So much for Ireland’s economy being ’slump-slump-boom-slump’, as Dan O’Brien claims. In some countries, there have actually been more ’slump years’ than ‘boom years’ since 1970. In Ireland, however, the figures are just 3 ’slump years’ and 22 ‘boom years’ since 1970. Based on this, the countries needing constitutional reform most are those with ridiculous and antiquated monarchical systems, rather than Ireland with its republican Constitution. In particular, given that Dan O’Brien works for a U. Kingdom publication, its a bit rich that he castigates Ireland’s Constitution on the grounds that it has a tendency to produce economic slumps, when, as the above table shows, the U. Kingdom has had more ’slump years’ than
‘boom years’ since 1970, while in Ireland the latter outnumber the former by 22 to 3.

Finally on the economic statistics front, the following table shows how the above combinations of ‘boom years’ and ’slump years’ translates into cumulative economic growth. The table gives the percentage changes in GDP in each country between 1970 and 2008:

Ireland: +474.0%
Luxembourg: +358.9%
Spain: +220.6%
U. States: +214.1%
Portugal: +213.6%
OECD: +197.8%
Finland: +194.4%
Greece: +187.9%
Netherlands: +170.1%
Austria: +168.4%
France: +152.7%
U. Kingdom: +144.8%
Belgium: +143.6%
Italy: +131.1%
Germany: +127.3%
Sweden: +122.6%
Denmark: +118.9%

The figures speak for themselves. Over a long period, and not just a short priod in the late 90s as some claim, economic growth in Ireland has been far superior to that of any other developed country.

The matter of a country’s Constitution goes beyond economics. It impinges on both political and social stability. The 1937 Constitution has made Ireland one of the most politically and socially stable countries in the world. In relation to political stability, it may be noted that during the Constitution’s lifetime, fascist, racist, marxist, sectarian parties have made no inroads at all in Ireland. There has been nothing like the success of the racist BNP in Britain, Vlaams Blok in Belgium and the Freedom Party in the Netherlands. Government in Ireland has always been led by one of two sensible moderate centre-right parties. There has been no lurch from extreme left-wing to extreme right-wing policies as a result of changes in government. Governments have usually lasted the full terms as this one most likely will (the only exception being in the period 1981/82). In relation to social stability, Ireland retains one of the highest rates of church-going and one of the lowest rates of divorce in the developed world. And the Constitution has spared Ireland the horror of on-demand abortion, which has destroyed the demographics of most European countries.

So, if economists are going to argue that all this should be thrown away and the Constitution vandalised, on the grounds that somehow or other it is resulting in chronically inferior economic performance to that of other countries, which seems to be the gist of Dan O’Brien’s argument and that of some posters here, then the least we should expect is that they actually supply some economic statistics to support their case. They have clearly failed to do so. And, the statistics I gave above clearly demolish any such argument.

Note: the software system that Aerlingus bought for its IBM 360s (IPARS) is still in use today at airlines around the world…

(Sorry for going wildly off-topic)

We have a situation where the contours of the Government’s fiscal policy (to be enacted next month) are being determined behind closed doors in negotiations with the “social partners”. Until this “democratic deficit” is tackled, I fear that Dan O’Brien’s interesting proposals are largely irrelevant.

You mention the IDA above. I was very glad to hear Tom Garvin in person give a talk about his latest book on Lemass lately. I understand that Lemass initially was against the IDA concept fielded by Fine Gael, because Lemass reckoned it might compete with his own department. But then later, Lemass realised the IDA was a good concept and supported it. I am sure that Garvin has much more to say about this in the book.

Clarke spent a good part of his life at Aer Lingus, where computers were central to the birth of a new national airline. I have met some of other characters also, who worked with Clarke at the time. But Clarke admitted to me, his life had been of mixed success overall. The thing with computer programmers - they vary enormously in talent. One guy could produce 10x the amount of work as another guy. But if you have to project manage anything in software you have to factor this in, and work with what you have got. Even if it is sometimes very lop-sided in terms of talent distribution amongst the human resources you have got.

Clarke was one of those 10x productivity kinds of guys. Steve Jobs was very lucky to link up with a guy called Steve Wozniak who was a natural computer programmer, and many times more brilliant than Jobs was. But on the other hand, perhaps Wozniak was lucky to end up teaming with Jobs. Funny these things eh?

B.

If you study the life of some of the most prolific innovators in history - Steve Jobs comes to mind as one example - many of them were experts at insulting people and pissing off a lot of people. I was reminded a lot of this, when I read the newspapers last week all about David McWilliams. Somehow this spirit of innovation and new thinking tends to go hand in hand with an ability to rub people the wrong way.

That is not to say that all innovators get it right all of the time. On the contrary, Steve Jobs managed to waste most of his fortune and then got other people such as Ross Perot to throw more good money after bad in an attempt to prove a point, that couldn’t work. I am also reminded of guys such as Howard Hughes. I was watching a movie called ‘The Tucker’ about some car, which was the first to have safety belts installed amongst other things. Only 50 were ever produced and they contained an engine for a helicopter that was given to the car builder by Howard Hughes, when the Detroit companies ganged together and would not supply a basic engine for the Tucker vehicle. It is a good movie, worth checking out some time.

THe point being, that with innovation it often requires you to put someone’s nose out of joint, in order to go where you want to go. My experience on this small island, is that being innovative and wanting to try out new stuff, is an instant recipe for moving yourself out to the margins. It is much more lucrative to stay in the fold, even if the ideas are no where good enough to make an impact. You still get lots of nice salaries and expenses etc from those at the top.

Having said that, I do know an awful lot of great people working in semi-state and state bureaucracies, who are cutting edge in terms of their ideas and ambitions. So nothing is ever as cut and dried as I tried to present above.

I wish now, I had more time to read and consider all of this blog entry more, some of the contributions above look really interesting.

All the best. B.

This of course is contrary to what the IDA is promoting.

He cites pan-European Eurostat and Eurobarometer surveys including a 2008 survey, which showed that only 17% of Irish households used the web to access newspapers and magazines - - just above Bulgaria and Romania.

He says the hostility to new ideas and the inward looking mindset, is reflected in low levels of innovation coupled with a lack of export success.

This isn’t being pedantic: the word “pattern” implies that it is recurring and predictable, which it isn’t, and that the changes he proposes are designed to break the pattern, which is also unconvincing for reasons pointed out by others.