National Accounts

The CSO have published the Q1 2013 Quarterly National Accounts.  GDP has contracted for three quarters in succession.  A decline in the net outflow of factor income led to a quarterly rise in GNP.  The Balance of Payments shows that there was a drop in the outflow of portfolio investment income on equity (though the impact this has on the seasonally adjusted national income figures is unclear).

Unsurprisingly, Consumption Expenditure fell in the quarter reflecting the pattern that has been obvious in recent Retail Sales Index releases.  The Investment figures are low and volatile and heavily influenced by the timing of purchases by aircraft leasing companies based here.  In real terms, Investment fell over 7% in the quarter.  Net expenditure by Government on goods and services was largely unchanged in the quarter.  All measures of domestic demand fell in the quarter.

In seasonally adjusted terms, real exports fell 3% in the quarter with a 1% drop in real imports.  The non-seasonally adjusted data in Annex 1 indicates a much greater drop in service exports compared to goods exports.

The National Income and Expenditure Accounts for 2012 have also been released.  The 2012 GDP growth figure has been revised down from +0.9% to +0.2%.  The GNP growth figure has been revised from +3.4% to +1.8%.

The Q1 2013 International Investment Position and External Debt figures have also been published.



119 thoughts on “National Accounts”

  1. Apples and oranges. They are constant price figures. The first set are in 2010 prices and the second are in 2011 prices. The impact of inflation means there is unlikely to have been much difference between the figures.

  2. @ Seamus

    Yeah I thought it seemed too good to true. Inflation last year was around 1.5% I think, so that accounts for the difference.

  3. Is the way we are being lied to now by our government really less bad than the Anglo bull?
    I don’t think so

  4. You say patent cliff
    I say flatlining
    You say rebalancing
    I say declining
    Let’s call the whole thing off


    You can tell I’m going on holiday this weekend…..

  5. ” The Investment figures are low and volatile and heavily influenced by the timing of purchases by aircraft leasing companies based here. In real terms, Investment fell over 7% in the quarter. ”

    GDP has fallen by €17.4bn in real terms since its peak at the end of 2007. Over the same period investment (Gross Fixed Capital Formation) has fallen by €21.8bn, more than accounting for the entire recession.

    In percentage terms GDP has fallen 9.8% while investment is 58.3% below the end-2007 level.

    The Irish Depression is now in its sixth year. As a result these are unfortunately well-established trends.

  6. It is worth reminding ourselves that the first recovery occurred in 2010 and was reasonably broadly based if cut short in 2011 by the impact of the bank bailout (and I would content the Croke park agreement).

    By the third quarter of 2010 GNP was growing by over 4 per cent (the full year growth was 0.9 per cent) and taxes were well ahead of schedule.

    Employment and retail sales also witnessed modest growth in that year.

    On which note, permit me to append here a link to my rebuttal to Julien Mercille’s critique of my commentary record during the boom.

  7. So the Croke Park agreement stopped the recovery in 2010? It banjaxed exports, investment and the like? Who would have thought it? Most of us blamed European uncertainty, slow growth in export markets, debt overhang, and the like. Thanks for clearing that up.

  8. As always Marc, context is everything. What good is a ‘recovery’ as indicated by GDP or GNP figures, when we know that most of it flows into everything from Tesco profits to excessively high pay at both private and public organisational entities, to high rents and mortgages, bank profits, brass plate operations in the IFSC, price-gouging from insurers, doctors, pharmacists, estate agents, auctioneers, the education industry, accountants and lawyers’ hourly rates… Never mind the black hole in the banks brought about by their allying themselves with real estate and monopolies instead of with real industry. ie. instead of making real profits, they focused on lending against economic rents created by special legal privilege or ownership rights. – A rentier tollbooth economy, as Michael Hudson called it. What is the answer? Well certainly not multi-generational mortgages, Marc. Or trying to ensure that no one ‘talks down’ this state of affairs, either.

  9. @MC: “It is worth reminding ourselves that the first recovery occurred in 2010 …”

    The FIRST?? Did I miss that? And the second? There has been no ‘recovery’ Marc. Dead-cat bounce/s perhaps.

    For what its worth a ‘recovery’ will be a sustained (min 36 month) +7% annual, compounding increase in G*P. And, 200,000+ re-employed.

  10. Seamus,
    What patents went in q1 13?

    Who thinks numbers like these hasten the breakup of the euro and the restoration of national sovereignty over fiscal and monetary policy. Italy must be in flitters now. August would be a nice time for a crisis just before the German election.

  11. Marc
    As the man said, put down the shovel. You contend that public sector workers are the root cause of all economic evils. And probably bad weather. Honestly man, give it a rest. Take some time off and relax.

  12. This is pretty grim news but with growth set to remain low there will remain special factors that can influence the headline figures on both the negative and positive side.

    Some data points to stabilisation but it doesn’t suggest a sustained recovery.

    There were 507,000 people on the Live Register or in publicly funded activation programs (86,000) at the end of May.

    @ Marc Coleman

    The 2010 GNP data isn’t reliable because of the impact of the shift of headquarters to Ireland by big overseas companies as per John FitzGerald’s April paper.

    In Q1, the data is also polluted. GNP jumped 2.9%.

  13. Some (many?) argue that GNP is a much better measure of the Irish economy than GDP….they’ll be delighted that GNP rose by 6.1% over the the year to Q1….

  14. PR Guy
    I was in London yesterday talking to some finance folk at a EIU event. They were remarkably insouciant about i rate rises in the medium term. Not sure I would share that worldview…

  15. @PRGuy

    Using Marc Coleman’s yardstick
    – Hardcore positive+never-say-die=Irish
    – Cheese eating surrender monkey = Not Irish

    I take it you’re “Not Irish”.

    Rising interest rates? ‘Tis but a scratch!

  16. @What Goes Up

    I have an Irish passport but I eat cheese abroad. The work situation was too dire in Ireland so I had to leave.

  17. @ Michael Crowley

    Both GDP and GNP are now suspect!

    In 2009, Cooper Industries with a payroll of 25,000 moved its headquarters from Bermuda to Maynooth, Ireland, to give the location more legitimacy in the eyes of US politicians.

    In Nov 2012 a takeover by Eaton, another US electric systems company, with a payroll of 75,000, was completed and the bigger Eaton decided to move the headquarters of the expanded group to Ireland and save an annual $160m on its tax bill.

    This gives an initial fake boost to GNP and overtime depends on what is retained and distributed.

  18. @brian lucey

    I guess if they have London finance folk incomes, they can be as insouciant as they like (there’s a word you don’t hear very often). I bet there are a lot of people on that borderline (in both Ireland and the UK) who are currently just about struggling to keep up with the mortgage but will break when rates go up.

  19. @PRGuy

    🙂 I’m Irish by birth, Irish by dairy product and Irish by location but I fear I too am “Not Irish” by the MC yardstick.

    We’re going Japanese with our banks and Icelandic with our personal debt – we’re going Japlandic!

  20. Excellent analysis from Taft
    “Ireland’s recession is continuing and even accelerating. GDP has fallen for three quarters – with the first quarter of this year registering a fall of 0.6 percent. Since the summer of last year the economy has fallen by 1.8 percent. Let’s put that in perspective. This is the biggest fall over three quarters since 2009 when the economy went ballistic.

    Let’s survey the main points:

    Consumer spending has fallen through the floor – falling 3 percent in one quarter. This is the biggest quarterly fall in the recession.
    Investment is continuing to fall – over 7 percent.
    Exports fell by over 3 percent. They have fallen in three out of the last four quarters. So much for the export-led recovery.
    We are in now in the middle of a perfect storm – falling exports (due to irrational austerity being pursued at EU level) and fall domestic demand – due to our home-grown irrationality.

  21. @PRGuy

    “We are so banjaxed when interest rates start going back up”.

    They’ll only go back when things are back to normal.

    Normal might be a long, long way away in the future. It might not happen until Mayo win the all Ireland.

  22. The shocking thing is that recovery is now less likely than Mayo winning the All Ireland as Mayo are making a better effort than the country.

  23. @Brian Lucey
    The perfect storm?
    Don’t worry about it.
    I just watched that nice economics guy say on rte news that Mario assured us that it will pick up from next Monday(second half).

    As for the interest rate rises.. It looks like they have stabilized today..US now at 2.49% and bunds at 1.73%. Even Portugal staged a bit of a recovery to 6.51%. It must be down to that Fed chap Dudley….he said rates won’t go up anytime soon…so who knows, but I wouldn’t bet the house on it.

    Btw, generic drugs the dearest in Ireland ….Irish Medicines Board are busy seizing drugs bought by people online..and bragging about it on tv. Are they now the police division of pharma cos.

  24. I don’t know much about Marc Coleman, and I’ve never heard of this Mercille character before, but I think it is worth noting that according to the QNHS employment in Ireland fell continuously on a seasonally adjusted basis during 2010, and that the value of retail sales excluding motor trade fell by 4.2% between 2009 and 2010.

  25. From Reuters Feb 24, 2012
    “Ireland’s economy will grow 0.9 percent this year(2012) and more than double that rate in 2013, a government-funded research body said on Friday, weathering austerity at home to track and likely outpace a gradual upturn in the euro zone.
    The forecast for this year from the Economic and Social Research Institute (ESRI) undercut government estimates but was more optimistic than the 0.5 percent projected on Thursday by the European Commission, which said output in the euro zone as a whole would shrink by 0.3 percent.”

    ESRI also predicted a “soft landing”in 2008-only problem could be rising wages………..and not a bank bust in sight!!!

  26. A French view.
    “Parliament president Claude Bartolone, who called for showdown over austerity policies with Germany in April, said Mr Barroso is a relic of the last century. “He is a man past his time. His behaviour is insufferable. He incarnates a Europe of markets, capital and a forced march towards austerity,” he said.”


    “Yet Mr Juppe said Europe itself had failed to rise to the challenge. “Remember the famous Growth Pact, the €120bn they were talking about two years ago: not a single euro has actually been spent.”

    The article by AEP

  27. ok ok WSJ and WP too…..WTF PR guy………and everything was going so well,any more tapes lurking….ah sur arrest someone quick they figuring it out stateside !
    “The poor growth numbers do constrain Ireland’s government, however. There will be little opportunity to ease up on austerity despite savings from Ireland’s success in restructuring the expensive financing underpinning the most broken parts of the banking system. With a budget deficit that still stood at 7.6% of GDP in 2012, Dublin will have little choice but to continue reining in spending.”

  28. @ JG: “NYT going off message too-where did it all go wrong?”

    It was never right John! PR spin cannot alter basic truths. An economy can only ‘recover’ when it stops declining. The Irish economy actually went from a massive credit-money driven faux growth to outright economic regression – skipping out the depression bit. My guess is that we are back in mid-1990s, and this regression will continue (absent a widespread and significant write off and write down of all types of debts) until we end up back in the 1970s. And that is before the coming energy (aka: oil) shocks start to effect us.

    That is a most inconvenient truth. If anyone doubts it I’m up to debating it. Its not a matter of being dogmatic or attempting to ‘persuade’ folk. The evidence is available. Each will have to analyze and evaluate for themselves.

    I just wonder? Do I detect a cold draught starting to chill the nether regions of some significant folk?

  29. 39 posts in and not much in the way of anything workable to arrest the decline.
    We have to face facts that the EZ is broken beyond repair.

  30. Hi Brian,my own “oul fella” just headed back to the old sod,a bit reluctantly it has to be said!
    He compares it too the 50’s in Ireland….claims it’s worst than the 80’s as he has no one to chat with at his local anymore:)
    The big question remains what supposed drive the much anticipated growth-exports to whom now exactly ?
    The US is NOT out the woods yet-Fiat referenced “rates” I take that was the 10 year.
    On ground reality a little different….mid 4’s on mtgs. highest in last few years.The UK is a disaster…..
    But the biggest issue remains what to do with the mortgage mess…it’s not going away.
    Good news on a REIT that will bring some much needed liquidity to commercial RE,hopefully put some downward pressure on cap rates…spur some much needed development too.


    The Blind Biddy Hedge School has acquired the communications data over the last 15 years from Hanglo Hirish Hbank & HINBS. This is a glorious opportunity, funded by the Blind Biddy Hedge Fund, for scholars in the human sciences, corporate governance, and medicine to reach for the Nobel in medicine with the Moolah Equation for prevention of misery to citizenries.

    Applications to MoolahEquations@bbhs.kom

  32. Marc Coleman’s rebuttal is amazing

    ‘Never argue with a man who buys ink by the barrel’

    All I can say about Marc Coleman’s economics editorship of the “newspaper of record” is that if he really was ringing the alarm pre-2007, then he evidently didn’t ring it loudly enough.

  33. @ BWS

    ‘I just wonder? Do I detect a cold draught starting to chill the nether regions of some significant folk?’

    Truth will out.

  34. @tulll
    “39 posts in and not much in the way of anything workable to arrest the decline.
    We have to face facts that the EZ is broken beyond repair.”

    You are being negative. The Irish presidency has fixed the budget, fixed the cap and uffed up the banking resolution system. Two out of three ain’t bad.
    I think there is a song about that.
    The reality dawns..but not for the various pols.

    I’m looking forward to the Greek Presidency which starts in January…that should be a hoot…Angela reelected and Samaras leading a bankrupt nation down the tubes to the consternation of Schauble.

    Just keep doing what we are doing…nothing. It will all sort itself out on the night.

  35. @Tull

    “We have to face facts that the EZ is broken beyond repair”

    I say you don’t know
    You say you don’t know
    You say… take me out!

    But it’s more like purgatory. There won’t be any grand collapse.
    Just the slow drip of ongoing ineptitude.

    You may find the necessary support available in catholic ideology.

    “Jesus Mary and Joseph, assist me now and in my last agony”. That sort of thing.

  36. @ Tull Mcadoo

    39 posts in and not much in the way of anything workable to arrest the decline.

    We have to face facts that the EZ is broken beyond repair.

    We are dealing with a state of denial similar to the one in 2008 and in the remainder of the current Dáil term the Government will have the €6.4bn residue of the pension pot to create a mood of momentum with lots of announcements, but there is no credible strategy to put the economy on a sustainable basis.

    The ESRI’s John FitzGerald has dusted off his HERMES model and is set to produce a medium-term review soon.

    I hope the auld rusty gear-box doesn’t get out of kilter with all that pent-up demand and the like.

    Nobody needs powers of prescience to make a realistic assumption of low growth for a decade. That has been the realistic assumption since 2010.

    One week in Nov 2011, IBEC and PwC, the Big 4 accounting firm, published a report, which indicated that employment levels will be back at pre-crisis levels by 2016, as exports continue to grow and domestic firms start exporting new services and products. Meanwhile, Ernst & Young, another Big 4 firm, said the jobs level will not be back to 2007 levels until 2030.

    The IBEC/PwC fantasy was based on firms’ hopes. In the real world, most selling, in particular overseas, is a hard slog.

    Remember those 28 fantasists on the Innovation Taskforce who dreamt of up to 235,000 additional tech jobs in a decade! We can take on the world without the experience of selling a bean at home!

    With low growth and 15% or more of tax revenues going on debt servicing for the next decade, never mind debt repayment, it will in polite terms be a challenge.

    Actual individual consumption per capita, which for Ireland strips out the multinational distortions, was below the EU average in 2012 and in line with Italy’s:

    There is more reason for it to go down as up.

    There is no magic formula for developing a new jobs engine but the first step would be to have a big bonfire of the fairytales.

    No, it will not happen soon but like the 1950s, sometime inshallah.

    Maybe the official fantasy of being recognised as a world leader in scientific research by 2020 will still coincide with mass unemployment: the current broad rate is 24% according to the IMF.

    We could have lots of public-funded researchers while the apprenticeship system remains banjaxed.

    In the meantime, the new entrepreneurship forum had its first meet yesterday: another laundry list is in the making.

    It’s a glorious blue-sky morning in Kuala Lumpur as those slash-and-burn folk in Sumatra seem to have doused their camp fires!

    I remain an optimist.

  37. @Chancellor Merkel

    “… contempt ..”


    “… damaging to democracy and the social market economy …”

    Hmmm .. methinks same could be said about your imposed policies in the EZ?

  38. @Michael Hennigan

    “… a big bonfire of the fairytales.

    Luv a bit of slash an burn first thing in the morning! Can we begin with the “SAVINGS” on the promissory note deal?

  39. @ Tull: We CANNOT arrest this decline. The upcline was constructed on the wanton emission of credit-money. And last season’s credit-money is this – and every next season’s, income. That is the predicament. Incomes steadily declining – and worse vanishing. Cannot settle debts on time – and in many cases, never. Fix those two in a positive direction and you may fix the decline also.

    The first – and most important moves have to be unpleasant political ones – its Political Economy after all. Do you observe any positive, constructive reformations in that department? Well, neither do I!

    Some positive news though. Some builders providers of my acquaintance are a tad busy at the moment. Lots of small-scale work in progress. We’ll see how it goes.

  40. It may not be quite as funny as “US accuses Snowden of spying”, which I saw somewhere recently, but “Ireland falls back into recession despite multibillion-euro austerity drive” in the Guardian of all places does take the biscuit. Any foreign commentator who professes surprise at these numbers can be safely labeled a spoofer.

    We have at least a couple more austerity budgets to come, and our export markets are being battered by similar fiscal policies. This has obvious implications both for growth and debt (un)sustainability.

  41. As someone who is not very tolerant of claims that we are doing well based on over-reliance on National Accounts data, I should balance that by also questioning evidence that we are doing poorly based on data from the same source.

    We all know that total exports can jump up and down without significant meaning for the real Irish economy. We all know that GDP is a terrible measure of economic activity for Ireland, and that volatile exports can drive it up and down on a quarterly basis with no meaning for the real economy. John Fitzgerald has recently demonstrated that GNP is just as terrible a measure as GDP. A big quarterly gain or drop in any of these is as likely to be noise as signal when viewed as a measure of real Irish economic activity.

    The only headline figure from the National Accounts that is really worth attention and has been highlighted is the drop in consumer spending. But there is another important figure for Q1 that is actually pretty positive. Employment rose 0.4% in the quarter on a seasonally adjusted basis. OK, there’s a lot of part time employment in there, but it’s still a positive outcome.

    The country is still in deep trouble, but the evidence this quarter is not as bad as is being portrayed.

  42. BCT: would you agree with the characterisation that the economy has essentially flatlined since the initial collapse, and that talk of a recovery is premature? This has seemed to me for a long time to be the most prudent interpretation of the data, based on part on the considerations you raise.

  43. It’s a bit like GAA really. Mayo shipped 2 goals in the first few minutes of the AIF last year and it was possible that they would win the thing but of course they didn’t.

    It’s all rolling out as one would expect given the parameters. The bailout loaded too much onto the taxpayer and it was only justifiable with Albert Speer 1944-type growth optimism.

    Puke economics I suppose.

  44. @ BeeCeeTee

    In the quarterly household survey, the total in employment fell by 3.3k between Dec 2012 and March 2013.

    Reweighting from the Census 2011 is being done from Q4 2012 and there was an apparent jump in total numbers of 20.5K in the year to March 31 2013.

    However, while the CSO raised past total workforce figures, its latest data shows a dip in employment of 23K in Q1 2012, while the Live Register fell by 9K in the same quarter.

    The largest rates of increase in the year to MArch 2013 was recorded in the Agriculture, forestry and fishing (+19.5% or 15,700). However, this maybe a fluke.

    The problem about part-time is that a small farmer who worked in construction full-time is still classified as employed; as work for as low as 1 hour per week is part-time, a rise in self employment likely means that unemployed people are struggling to do something for themselves.

    It’s too early to declare a new dawn.

  45. @Kevin,
    As I place more weight on employment than any other indicator of performance, I would say that the initial collapse was followed by a slower slide that bottomed out in a flatline about a year ago. I agree that talk of a recovery is premature.

    I think any discussion of recovery has to distinguish between two different concepts of what it might be. One is a slow improvement in activity that leaves us still with high unemployment, high emigration and high debt in ten years time. I would not be astonished to discover in retrospect that we are now at the start of a recovery of this type. However, I think the sort of recovery that most of us are looking for is one under which employment starts to increase at a sharp clip, and we make rapid progress on getting debt under control. I see no evidence of this sort of recovery.

  46. BCT,
    If the outlook is as per your base case of zero growth, then the EZ is one mild global recession away from D/GdP ratios going north fast. Italy at 130% plus must be a prime candidate for trouble.
    It would not take much for the Bond Vigilantes to conclude that the periphery was going over the cliff again. Thin markets in August might be volatile. Let us hope so. The current policy of confining S Europe & us in a debtors prison as a collective punishment for our fiscal sins is not a stable equilibrium.

  47. @Beeceetee

    Count yourself lucky! If you have nothing better to do with your time, and I hope you do, JM’s ‘attack’ on MC can be read in full here:

    Nor do I know either of these gentlemen, but one of them appears to be believe that ‘neoliberalism’ is the root cause of everything that is wrong with the universe whilst the other seems to have settled on public servants as the root cause of all our woes. Their respective contributions are of interest, but in the end don’t really get us very far.

  48. @ Tull
    There are no bond vigilantes – there are greedy traders looking for a return.
    With the ECB backstop peripheral bonds are a fantastic bet. All you need is to ensure that governments do what the ECB tells them and bonds get bought back. It is a mechanism to turn European governments against their own people.
    The market forces are psychopathic.

  49. I believe that a genuinely independent ESRI is necessary in order to protect citizens from being misled by government on economic issuies.
    Firstly, the practice of the existing board “pre-approving” (and therefore excluding) candidates for election to the board at the AGM should be ended. Otherwise proa-establishment coterie will continue to hold sway in the Institute. Did anybody resign after the “soft landing” prediction. (Nobody ever accused the Institute of being infallible!)
    Secondly, and more importantly, the Institute should be absorbed into a University and the researchers should be given the same status as university lecturers with guaranteed tenure under the Universities Act. Only in this way can the Institute be protected from government and central bank pressure and have its reputation be restored. A research institute which is answerable to citizens is required in the interest of the republic.

  50. Paddy
    ESRI are adjunct/associate/semi-detached members of TCD. I also would suggest that the next round of power grabbing madness, sorry “governance overhaul and modernisation” of the university sector will see strong pushes for tenure abolition. Look back at the early years of this crisis – La Trahison des Clercs was all the rage.

  51. @Brian

    Will see pushes for tenure abolition?!? It’s already basically happened. At UCD we were sent a rider to our contracts with only the tiniest fig leaf of justification in Croke Park and that contained the following:

    10. TENURE
    The University recognises the principle of tenure for permanent Officers of the University and the need to protect such Officers during their employment with the University through the provisions contained in the relevant university statute/s. Such tenure shall be governed by the provisions of those statute/s, the Unfair Dismissals Acts 1977 – 2007 and the relevant provisions of the Universities Act, 1997.

    Tenure affords protection to a permanent academic staff member against termination of his/her academic appointment by the University except (i) in accordance with lawful decision and for valid reason (including dismissal on grounds of capability, conduct, competence, performance, or other substantial grounds that would justify dismissal), and (ii) in accordance with the appropriate procedures specified in the relevant university Statute/s.

    That language, particularly the highlighted language basically vitiates the traditional notion of tenure.

  52. @Tull,
    I think we can get something of the order of 1.0% per annum growth in real economic activity without any change in employment (due to productivity improvements), and we can get a bit more growth on top before we make a serious dent in unemployment. The centre of my base base is therefore probably more of the order of 1.5% to 2.0% per annum growth in some ideal measure of Irish economic activity, rather than zero growth.

    I’m just talking about Ireland, not the other peripherals. That said, as an SOE we have more scope than Italy and the like to achieve and benefit from an effective devaluation, which I think offers the best prospect of sustainable progress relative to the Core.

    Thanks for the link. Not sure I can face that this afternoon.

  53. Earnie,
    Perish the thought that you would have equal treatment with the rest of the workforce.
    Anyway, you are ok. Not one tenured academic has to my knowledge lost his job for euphoric prognostications during the bubble.

  54. Point of order – to those who tell Marc Coleman to “put down the shovel”, please desist.

    Only an idiot digs with a shovel. A shovel is used for shifting sand/gravel/soil. A spade is what’s used for digging holes.

  55. ESRI reform seems an odd thing to prioritise, imho
    Also, why are we assuming Coleman wouldn’t use a shovel even if he should be using a spade?

  56. Tull
    Being serious though, basing hiring/firing decisions on the ability to predict events accurately rather than long term research/your body of work seems unfair and counterproductive. Very subjective aswell, and open to abuse

  57. @ Flj

    Nothing new there! The outcome of the election on 22 September is in no way guaranteed because of the intricacies of the German electoral system, despite Merkel’s personal popularity. A large proportion of the electorate may be hanging on to nurse but that does not mean that they are necessarily really enjoying th experience.

    @ TMD

    Perish the thought indeed!

  58. Irish Debt = (Sov + odious financial sys = 180GNP) + (Personal =180GNP) = 360GNP = 6 x 60 = 4 x 90 .. is .. er



  59. Is university tenure an archaic relic in common with Sir Charles Trevelyan’s 1850s era guarantee of work lifetime job security in the British civil service?

    These were once important concepts when most workers were serfs and arbitrary governance was the rule in society.

    In Sweden, workers today have equal rights wherever they work.

    Of course beneficiaries of privilege will always defend theirs as being in the public interest.

    Is the awarding of tenure like the selection of senior counsel by their clones or former classmates?

    It seems research rather than teaching is the main qualification in the US and then making money from external activities if you can get on television often enough.

    Did it make a difference during the Irish bubble?

    @ Paddy Healy

    Your proposal on the ESRI would be going from the frying pan into the fire.

    I too would like to see a more assertive stance from the institute such as that of Prof Paul Gorecki on the gombeenism of national waste policy in 2010 and Richard Tol on environmental issues.

    It’s not that anyone should be viewed as if they have papal infallibility, right or wrong what is key is to defend a position in the face of the public spin machine.

    In the academic business and economics area, they’re are a handful of academics who have international recognition.

    Maybe there is good research at the universities that is well hidden but in recent years it is the ESRI and Central Bank that is producing research that could have a positive impact on policy making.

    Prof Tim Callan of the ESRI may not have a household name but it appears on a lot of research in social and taxation issues.

  60. Ah come on DOCM, who at the top really lose their jobs for incompetence in any industry? (bar the self employed)

  61. Rf,
    Fair point. Most academics never prognosticate & if they don’t it can’t be used against them. If they do however and prove spectacularly wrong then it calls their competence into question.

  62. @ rf

    That is not the really relevant point – in the context of this discussion – as far as I am concerned. The issue is whether there should be common employment standards, including hiring and firing, across the workforce. It is a straightforward issue. There may be a need to have special arrangements of a general nature with regard to academic independence. Indeed, from my reading of the relevant legislation, these already exist.

    It will happen! Not because of any willingness on the part of the parties concerned but because of the fact that the current system is untenable in terms of the unfunded pension costs associated with it.

  63. @DOCM

    “… untenable in terms of the unfunded pension costs associated with it.

    So who funded your pension? Come out of the closer dear!

  64. @the sage of Kuala Lumpur

    “I too would like to see a more assertive stance from the institute such as that of … Richard Tol on environmental issues.”

    Thanks a lot. I just spit my coffee all over the keyboard. Yes, by all means let’s have more assertive climate change negationists. Because you’re really worried about getting the prognostications right.

    All of you Gradgrinds, focused as you are on economic “progress” as the only reason for anything to exist, do of course spectacularly miss the point about tenure. It doesn’t exist just to protect the ability of academics to speak out publicly and make economic prognostications (although one wonders if Morgan Kelly thinks its worth preserving). It also exists to allow academics not to be beholden to whatever is popular now and to take a longer view and investigate things that the public may know nothing about but that are nevertheless of great value to society. What often looks like a waste of time to those focused on the short-term may actually turn out to be innovation. So, when you fault academics for cheering on the bubble (nobody has named names, so I’m not sure who they are) or for making faulty prognostications about it, well, I can only agree with you. They need to take a longer, more distant and disinterested view and not get caught up in the ideologies and hysterias of the moment. However, abolishing tenure will ensure that you get more of that undesirable behavior and groupthink, not less.

  65. @Ernie Ball

    Let’s get real. The contribution of the mass of academics to the present crisis has been SILENTLY ABYSMAL; statsig *****

  66. “In Sweden, workers today have equal rights wherever they work.”

    Unlike Ireland, where the recent Financial Emergency Measures in the Public Interest Act, 2013 abolished recourse to contact law or labour law (other than the EU Working Time directive) for people in the public sector.

    Countries where there is political interference by venal politicians in the work of universities are not among the top performers in economic or general quality of life terms. A major casualty of Drumm and his mates is that it has provided a cloak for these power grabs.

  67. @ MH-ff: “It seems research rather than teaching is the main qualification in the US …”

    Correct. And they imported that model into Irl. A teaching qualification – however worthy, would be ignored.

    Before any of you sound off any more about tenured teaching/research academics I should direct your attention to some of the truly abysmal academic administrators who dot our ivory-towered landscape. Start by giving any such appointment a single, three-year term and no extra salary over and above their current (there are enough perks available to compensate).

    You might also give some thought to clearly separating research activities from teaching. The former is a doddle compared to the latter. A quite comprehensive skill-set is required for teaching. Not so much for research.

  68. @ David O’Donnell

    The crux of Whelan’s argument and I fully agree with him for once, is that blaming Anglo for everything is a convenient for those who want to distract from their own abysmal performances.

    “This viewpoint also distracts from the rogue economic policy making of elected politicians and senior civil servants”. These are also the very same people who want to investigate what happened.

    We need an outside investigation with no Irish saints and sinners allowed to control the levers and dictate what will be investigated, led by some one like Bill Black otherwise forget it and make it official and announce what we alredy know that nobody will be held accountable.

    This is really about whether we are accepting the fact, throwing in the towel as were, that we are an irredeemably corrupt country. We accept that it is part and parcel of the machinery of how we run the country, we continuously vote for it, complain about it but in reality it’s the way we like it.

  69. @Marc Coleman

    Idiot savant apparently describes an educated understanding of the terms of a discipline (economics) but a lack of context, the metaphor is a knowledge of the alphabet but unable to spell words or make a sentence.

    I think it must be embarrassing for you to be so exposed and show no humility

  70. Unsustainable debts + reduced salaries + increased costs = no discretionary money to spend = a dead local economy. One comment talks about overpaid teachers/doctors/nurses etc – but they spent their money in the economy and they borrowed based on those earnings. The personal and property tax paid by these people fueled much of the FF/PD largesse of the boom years. It is fair to say that a bankrupt state cannot afford the public sector salaries and it may be patriotic to take a pay cut. However if you cut the pay of the stretched middle you have to cut costs – otherwise they are financial zombies. State and big banks say ‘can’t pay won’t pay’ and get bailed out but individuals have to pay up or be harrased multiple times per day by the same people who lent them the crazy money in the first place. All debts need to be cut – not just for the ‘distressed’ – otherwise no spending money for the next 10-15 years.

  71. “I too would like to see a more assertive stance from the institute such as that of … Richard Tol on environmental issues.”


    By all means demand assertiveness but it has to come with credibility. And climate change deniers have none.

  72. @ Bjasus: “Unsustainable debts + reduced salaries + increased costs = no discretionary money to spend = a dead local economy.”

    Spot on! But try telling that to the zombies who are in the driving seats.

    As an example: to-day’s editorial in the IT: ‘Dealing with Mortgage Debt’.
    Presumably this was written by someone who has SOME clue about what is going on.

    But this: – ‘It is difficult to produce a perfect solution to the problem of mortgage arrears (well golly gee about that!)- one that is fair to lenders (fair to folk who cheated and lied! – that’s nice) and borrowers and protects their respective rights (rights to what? honesty, integrity and fair dealing?), but ensures that a resolution to the mortgage debt issue can be achieved, without delay (like voluntary, non-recourse write downs and write offs).’

    Given the context. This is pathetic drivel. And its gets Pole Position!

    “Dublin, we have a problem!”

  73. @Robert Browne

    Yeah – a useful contribution by Whelan. Good to see him take on the Holo_cost deniers Murphy & Donovan as well.

  74. @BW

    That is a bog standard IT editorial. They write them like that most of the time.
    They probably copied it from a mortgage editorial they wrote 2 years ago.

    IT eds don’t tend to get into systemic issues. Why does a certain problem tend to recur? “It is difficult”.

  75. Karl Whelan’s post expands on some points I made here.

    He views Donovan’s arguments on the guarantee as bizarre and as defying belief. You have to wonder if Donovan and Murphy ever spoke with any market participants or ever read the relevant EU Commission State Aid and ECB reports that described the guarantees given by other countries, or if they just spoke to and absorbed the Irish civil service/government/advisors “wisdom”.

    Their agenda seems to be that questioning the official response in 2008 in any detailed or analytical way would somehow undermine the public support needed for consolidation measures etc. etc. The sheep still need to be herded in the right direction, you see.

    At the end of the day the problem was not with the arrogant and cynical nature of the request made by Anglo executives (banker are bankers – in substance, if not in tone, all bankers would have acted in the same way) – the problem was in the nature of the compliant and submissive response. This response was a choice, not an inevitability.

    Just look at this and weep (“I am confident that Irish banks can absorb any impairments that emerge”). This was the interview about which Colm McCarthy made his classic comments in Michael Lewis’ Vanity Fair “When Irish Eyes are Crying” piece.

  76. @ seafóid/ Erniee Ball/ dearg doom

    The important point is that organisations like the ESRI are generally populated by clones and it’s important to have dissenters on board.

    I don’t wish to get sidetracked on Richard Tol’s position on climate change but the organisation is big enough to house diverse views while credible research is based on credible methods.

    There was an interesting finding by PEW a few years ago that the more ‘educated’ Republican Party supporters were, the more likely that they were climate change deniers.

    Some dissent is always wrong but it can help sharpen the arguments of the other side.

    ESRI dissent alone during the bubble would not have had any consequence as the system had been firmly captured by vested interests and by the bust, the country had the youngest average age of dwellings in the EU.

    However, Ireland also continued to have worse housing conditions than other countries with similar living standards, with floor areas per person of around a fifth less than the Western European average.

    We were short of land!!

    On tenure, the growth in insecurity of young staff likely encourages more conformity to pander to the old fogies on tenure awarding committees.

    The Economist said in 2010: “universities have discovered that PhD students are cheap, highly motivated and disposable labour. With more PhD students they can do more research, and in some countries more teaching, with less money. A graduate assistant at Yale might earn $20,000 a year for nine months of teaching. The average pay of full professors in America was $109,000 in 2009—higher than the average for judges and magistrates.”

    It’s striking that despite the spending of billions of euros on Irish university scientific research in recent years, no insider has risked public dissent. It would of course be career death at the hands of a tenured professor.

    I did get an anonymous message which among other things claimed that full-time staff in the SFI (Science Foundation Ireland) and Irish Universities retained part employment or paid status overseas.

    @ Brian Woods Snr

    In Irish universities, there is no transparency on staff workloads, nor standard requirements regarding work hours. Those thingies such as ‘transparency’ and ‘conflict of interest’ are strange concepts in Ireland.

    In Finland, the total number of hours specified in an academic contract is 1,600 per annum.

    In the institutes of technology, the academic contract provides for an annual teaching commitment of 560 hours (equivalent to a weekly norm of 16 hours per week for 35 weeks) for an academic year that runs from 1 September to 20 June, during which all work including exam boards and appeals must be done.

    The IFUT union has quoted a European survey where senior academics in Ireland claimed they worked 50 hours a week in contrast to the European average of 48 hours.

    In the US, the escalation of tuition fees has pushed up student debt to nearly $1tn and both the growth in useless research and administration are big factors.

    Business regards most of the research output of US business schools of no use as little of it is funded.

    A study by the University of Texas at Austin’s Center for College Affordability and Productivity concluded that if the 80% of the faculty with the lowest teaching loads were to teach only half as much as the 20% with the highest teaching loads, the savings could result in a 50% cut in tuition costs.

    The study says research is subject to diminishing returns. In the humanities and social sciences, for example, most enduring topics have been heavily researched, and there is little new to say — over 26,000 articles have been written on Shakespeare since 1980, for example.

    The rise in online learning will likely impact the Medieval routines of universities over time.

  77. “over 26,000 articles have been written on Shakespeare since 1980, for example”

    Why, that’s got to be approaching the number of flailing Michael Hennigan rants on The Irish Economy!

  78. @ Ernie B: I mused a bit about Irish academics and such. MH – in his reply has his facts completely straight about the matter.

    Rants? What rants would you be referring to? Oh! – about the wastage of scarce money taken from Irish taxpayers? Yeah! I could rant about that myself, only I’m not as well versed as MH. The truth cannot be refuted. Offer it up to the Holy Souls!

    @Seafóid. Thanks for that. Now I know why I stopped buying that piece of sh*te some years back.

  79. “In the humanities and social sciences, for example, most enduring topics have been heavily researched, and there is little new to say ”
    Yes. We should stop looking at all areas where there is a lot of research. And also counter groupthink by looking at all areas anew. At the same time….
    Bizzare comment MH. Your channeling the monomania of Marc Coleman

  80. @ BL: “Bizzare comment MH”.

    I beg to differ. I’d have to do an archeological trawl of my education files, but I recall a Guardian (Higher Education) article from 1970s which made similar ‘claims’. Then there was Chris Ball’s ‘Fitness for Purpose’. Alan Bloom, Charles Sykes, Noel Enthwistle, etc., ect., etc. Numerous, numerous academical publications on the issue of third-level education, teaching, research and administration. Some very inconvenient truths emerged. MH comments are somewhat mild by comparison.

    I’m recalling the ‘shovels’ on this topic! 😎

  81. One of the reasons we must always research is the propensity of people like Brian Woods Snr and Michael Hennigan to proclaim things to be “facts” and the “truth” in order to wash their hands of them. On that point: Do you include MH’s anonymous reported gossip about SFI among those “facts” and that “truth,” Brian? Does this mean you were the source?

    What constitutes “ranting” in my mind is availing of what the Freud called “kettle logic,” using mutually contradictory claims to defend (or in this case) attack a position. In Freud’s example, someone returns a borrowed kettle and the kettle is damaged. The party at fault then claims at one and the same time that the kettle was returned undamaged, that it was damaged when he borrowed it and that he never borrowed it at all.

    In Michael Hennigan, the kettle logic is in the service of bashing his favourite hobby horses and, in this, he has proven willing to avail of whatever comes to mind. Apparently, he has some success in snowing people here.

    Brian Lucey has isolated the main bit of (implicit) kettle logic in Hennigan’s last post. But there are others. For example, this little masterpiece of incoherent misdirection:

    On tenure, the growth in insecurity of young staff likely encourages more conformity to pander to the old fogies on tenure awarding committees.

    The Economist said in 2010: “universities have discovered that PhD students are cheap, highly motivated and disposable labour. With more PhD students they can do more research, and in some countries more teaching, with less money. A graduate assistant at Yale might earn $20,000 a year for nine months of teaching. The average pay of full professors in America was $109,000 in 2009—higher than the average for judges and magistrates.”

    What’s wrong with this picture? Well, first of all, Hennigan’s overall position (though you’d be hard pressed to derive it from this) is that tenure is an unnecessary and costly luxury that should be done away with in Ireland and, no doubt, elsewhere. In support of this idea he cites this claim in the Economist about what goes on in America, where graduate students are routinely exploited as cost-saving measure. Now, this practice is irrelevant to Ireland (currently) where most students are taught by lecturers with PhDs, but we won’t let that get in the way of a good rant.

    But it’s impossible to tell from this rant whether MH wants more insecurity or less. Does he want tenure to be abolished so that everyone will be in the position of the exploited graduate students? Or does he want more tenured professors so that the student are taught by highly-qualified and well-paid staff and nobody is exploited? Is he deploring or embracing the use of grad student labour (which is, of course, done mostly for cost-saving purposes which we all know are near and dear to his heart)? Does he think universities should save money or spend more of it?

    In the US, the rise of casualised adjunct labour and the decline in tenure are seen as two sides of the same coin, which is why the American Association of University Professors is opposed to such casualisation. Most there would see an attempt to enlist the fact of the rise in casualisation in an attack on tenure as, well, nutty.

    As for pandering to tenure committees or university workloads, MH really doesn’t have a clue about how universities actually work. But I will try to remember about his call for workload “transparency” the next time I’m sitting up at 2am with a stack of 100 2-hour exam papers in front of me…

  82. @ EB: Your comments are noted. Up at 2 am correcting scripts? Is that a wise admission? Hmmmm.

    Just so as you know. Spent a goodly time in front of chalk and white boards. Lot less on the lab bench. Corrected many of those ‘Deserts of Arid Prose’ – and was delighted when I encountered the occasional ‘Oasis of Sense’.

    Get thee to a good library and spend about two years researching Third-level education. After that, give me a call. In the meantime, “Stow that ‘shovel!”

  83. @ Brian Lucey / Ernie Ball

    The status quo seems fine and change if it happens at all in Ireland, needs a situation to become dire.

    The lawyers even tried to lobby the Troika directly.

    Im not in favour of dual markets. Tenure in itself is not a crucial issue but apart from positions such as judges, these lifetime guarantees are anachronisms.

    It is surely ridiculous that at a time of mass unemployment, that a position has to be created in the civil service for the deputy prime minister’s wife because her quango is abolished.

    A key issue is productivity and transparency.

    So how many hours each week of your 35 week year do you both spend teaching?

    Academics shouldn’t try and suppress questions about the balance between teaching and research, and the publish or perish syndrome.

    In the US, the reproducibility of scientific research has been the focus of attention in recent years.

    Dr. John Ioannidis of Stanford and his colleagues found that of 432 publications purporting sex differences in hypertension, multiple sclerosis, or lung cancer, only one data set was reproducible.

    Amgen, the biotech giant, found that 47 of 53 “landmark” oncology publications could not be reproduced.

    Bayer, the original maker of Aspirin, found that 43 of 67 oncology & cardiovascular projects were based on contradictory results from academic publications.

  84. So how many hours each week of your 35 week year do you both spend teaching?

    Between 10 and 12. This is up from the 6 hours a week I did for decades. I’m sure those working in Economics (at least at UCD) where they, notoriously, have no tutorials and therefore teach only their lecture hours, would be appalled. Now try to imagine how much preparation is involved, setting work, correcting it, meeting with students, supervising theses, etc. Then add in the administrative tasks: heading programmes, sitting on committees. Now add the shrinking part of the time that can be devoted to research (maybe 10-15 hours per week). I work 60-hour weeks during the academic year. Slightly less in the summer but almost entirely devoted to research.

    If you instituted the (bureaucratic, perforce) regime of “transparency” you are calling for, what you would find is that dedicated academics like myself would start to work less, not more. You’re so convinced that they must be swanning around drinking sherry all day but, in reality, you have no clue what is involved, particularly since the ECF came in. This is why demands for “more hours” from Haddington Road (and Croke Park) are a nonsense. I was already working “more hours” and I’m now working still more hours.

    But here’s the inimitable Mr. Finfacts kettle logic again: we’re all churning out too much makework and isn’t it a shame that we aren’t being made to do more of it.

  85. It’s like that Woody Allen line about two old ladies in the Catskills:

    Lady 1: “The food is really terrible here.”
    Lady 2: “I know! And such small portions!”

  86. Hi Ernie,I had a fabulous time I’m coll. when I visit I always do a Friday lecture/talk it’s normally empty joking its packed,my lectures changed my life truly.
    Also worked in the UK for the govt. shock horror as a public servant,met worked with incredible people had a great time.
    Pursuing the papers this afternoon here is a great Woddy Allen piece,enjoyed your blog a lot the writing is truly exceptional.

  87. a 35 week year…. thatd be nice MH. Far as I can see going to be a 48w year. had a week off in May, two in July then the crimbo.

  88. @ BW
    I have been following IT editorials on the Middle East peace process for 15 years and they are always the same well intentioned but pointless blather. It’s a system issue. Many editorial topics are. But you won’t get that reading the editorials.

    Nothing ever happens.

  89. @ Michael
    “The rise in online learning will likely impact the Medieval routines of universities over time.”

    I dunno. That sounds like something Rick Perry would come out with.
    Jury still out on that I think. “Over time” is hedging your bets as well.
    The internet was supposed to make us all rich. Over time.

    There are millions of recipes online. But it’s hard to find a good one.
    Information is the same. It may be out there but is it accessible?
    And even if it’s available can it be put into context ?

    In theory the rise of online learning should have produced better informed corporate heads . But you need time to figure things out. And most people don’t.

  90. @ Ernie Ball

    Transparency doesn’t need a bureaucracy.

    All that’s required is for a kid to write a bit of code that would pull together departmental timetables. It wouldn’t tell the full story but in Ireland it would be an advance.

    As for logic, as theorist of your political party, what’s yours?

    Like Christianity, Marxism would work if it was tried? Interesting that Stalinism can be conveniently branded as state capitalism.

  91. @ seafóid

    “There are millions of recipes online. But it’s hard to find a good one.”

    That is one of the single most insightful things I’ve read in a long time. I keep heading back to the ‘Good Housekeeping’ and the ‘Silver Spoon’. Maybe the hairy bikers online?

  92. @ BL: “Let’s kill this thread. It died whe MH channeled Marc Coleman.”

    Why? Other than its somewhat ‘off-topic’ and probably boring the hell out of most readers – its not ‘news’ to me. Just reminds me of the really bad times I and many academic colleagues endured from the unwanted and misdirected attentions of the pygmy intellects of our erstwhile administrators.

    rem: J B Shaw: “Those who can, do!. Those who cannot, teach!” Well he got it arseways – as usual, for Monorail Thinkers. Milton F was a classical example of such. You might well (as an economist) ask how such a laser-brain became so influential and powerful.

    The correct version of the quote (in the context of third-level) is; -“Those who can, educate. Those who cannot, do research. The residuals get promoted into administration”

    Your welcome to gather the evidence and refute my assertions.

    @ Seafóid: Obliged for that. Try: ‘All in the Cooking’ vol I. Top notch stuff. Written by real cooks, who cooked! Try Cathal Brugha Street College library.

    @ Ernie: You have a quite influential near namesake: Christopher Ball. Familiar with? If not, look him up. ‘Fitness for Purpose’. May not be in JJ. Try TCD. And for what its worth: that nexus between research + teaching eventually got the Belgrano treatment. Complete chimera.

    Someone mentioned on-line learning? Hmmmm.

    “10 – 4”

  93. @BW
    The Ballymaloe cookbook for the basics. How to cook without recipes for the flavour framework. Fine Cooking magazine for third level inspiration. It is all about getting the flavours to work together. Where 1 + 1 equals 5.

  94. I didn’t suggest that online will replace traditional universities but it is an important development.

    That Internet thing will never catch-on!

    The New York Times says that the technology for online education, with video lesson segments, embedded quizzes, immediate feedback and student-paced learning, is evolving so quickly that those in the new ventures say the offerings are still experimental.

    “My guess is that what we end up doing five years from now will look very different from what we do now,” said Provost Alan M. Garber of Harvard, who will be in charge of the university’s involvement.

    Clayton Christensen, the Harvard Business School professor and expert on disruptive innovation, gave a compelling talk about how much today’s traditional university has in common with General Motors of the 1960s, just before Toyota used a technology breakthrough to come from nowhere and topple G.M. Christensen noted that Harvard Business School doesn’t teach entry-level accounting anymore, because there is a professor out at Brigham Young University whose online accounting course “is just so good” that Harvard students use that instead. When outstanding becomes so easily available, average is over.

  95. @ Brian Lucey

    Ironically, Marc Coleman, like your good self hold very uncompromising opinions. These castles in the sky you both defend vigorously are equally as opinionated and there is little confidence based on previous poor performance as MH references.

    Good advice would be to keep your powder dry to protect your inflated public salary, as you have a tough fight ahead of Croke Park II

  96. We need new economic memes to replace thatcherism. Google is not going to provide them. Universities will.

  97. @Michael

    >Because there is a professor out at Brigham Young University whose online accounting course “is just so good” that Harvard students use that instead

    I think it’s a big stretch to go from there to say that online learning is going to take over from universities. Accounting is not particularly complicated. One might even say it is formulaic. When not being abused.

    If some online stuff is good I’m sure some universities will adopt it.

    > Amgen, the biotech giant, found that 47 of 53 “landmark” oncology publications could not be reproduced.”

    It’s not clear that the market is going to fix cancer . Short termism doesn’t always suit research priorities. And that American “can do” attitude is fun as well.

    Then you have the values of the media world outside the university

    “Number of on-air minutes during last fall’s campaign season that CNN devoted to climate change : 23

    To Joe Biden’s smile : 43”

    There’s SO much that we don’t understand. Start with the brain.

    So there probably is room for improvement. But the net and the market will only be part of the mix.

  98. @ Seafóid: New Economic Memes?

    I believe that these are ‘around’ but grounding them is difficult – the existing ones (neoclassical and neo-liberal) are dug in pretty deep.

    These two rely absolutely on a foundation of continuously (or near continuous) expanding and increasing aggregate economic activity on an annualized, compounding basis such that there is always a surplus to be re-invested. This economic paradigm is visible in economics texts. But only in a general theoretical manner. There is no reference to the predicament that all economies are absolutely embedded in physical systems; systems with finite resources. And populated by quirky folk. Not atomistic rational-choice, utility maximizing, logarithmic discounting consumers. Stagnation is inevitable. Like now.

    Thomas Kuhn wrote about the problem of getting a new paradigm accepted. Its a fearsome, uphill slog but eventually the proposers overcome the current accepted paradigm. But he was writing about scientific paradigms where the weight of contrary evidence will increase until it is sufficient to refute the existing theory.

    But economics is NOT science. Its Political Economy. There are no immutable laws – just self-referential logical assertions. Mind you, the econometric stuff does look terrific. So at best Political Economy must evolve as society evolves. It may lag, but it evolves none the less. So there cannot be any grand equilibria to be attained. No great immutable truths to be discovered. Despite the demented efforts of countless ‘economists’. Look at Keynes. His theory is a one-way street. There is no political reverse possible. Yet it abides!

    And this from professor laser-brain himself, Milton F. in response to criticism that certain economic relationships could not be explained. Hence they should be rejected.

    These economic relationships, he asserted, held true (despite the absence of causal explanations) because there were also various relationships in science which held true even if their causal explanations could not be determined. Hence, there could be no problem with problematic economic relationships – even when contrary empirical evidence was available!

    A scientist of the stature of Richard Feynman would have demolished this intellectual meringue in seconds. Yet Friedman’s cult abides!

    Perhaps an eclectic crop of contrary Political Economists will emerge. I hope so. But how?

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