Ethical Reasoning and Economic Thought

Last week President Higgins delivered a lecture as part of the Ethics for All series in DCU.  The text can be read here.

93 replies on “Ethical Reasoning and Economic Thought”

Again he uses the language of the far left (neo liberalism) and takes a pop at Hayek and Friedman. This is inappropriate territory for a President.

This speech is wrong on so many levels. Not just the inappropriateness of having a sitting President engaging in nakedly partisan politics, but also because it is just so intellectually terrible. It’s like a goldmine of lefty nonsense. But also dangerous nonsense. If people like Michael D. had their way Irish students at primary and secondary level would learn virtually nothing of value and would spend all day being indoctrinated in leftist mumbo-jumbo. We already have students wasting half their days learning Irish and religion, now we have to add philosophy, ethics, politics and whatever else you’re having to the list.

Where exactly does he see the future economic opportunities for Ireland I wonder? Poetry perhaps? Or maybe everyone can get paid to go bucklepping on the Late Late, shouting out the latest pop tunes in Irish.

“The current state of the European economy, with its high levels of unemployment, poverty and increasing inequality, is a source of concern, anxiety and even moral outrage for many of our fellow citizens. ”

Desperate lefty nonsense.

“But the recent crisis has failed, so far, to prompt any far-reaching self-examination within departments of economics in universities across the world, as to how economics is taught and should be taught”

Indeed I think economics needs to go right back to basics and stop teaching the money multiplier model of banking. Far too many journalists, economists and political advisors have the wrong idea about banking. Many think banks take in deposits, keep some on reserve and lend out the rest.

But this is not how banking actually operates. Our guide on how it actually operates is available here.

It explains how banks create the money they lend which explains why every euro has a matching debt. It also explains how a loan repayment destroys money which is an important point overlooked by economics. I think it’s only when economists get a better understanding of how banking operates that we’ll see some real solutions to the crisis on the table.

whatever about your views, its refreshing to see an irish politician showing they have the capacity for deep analytical philosophically informed thought.
And no, its not inappropriate. Its what the president should be doing – reflecting on the ideological and sociological trends that have brought us to where we are.

“As to the project of renewal, I would like to make the contentious assertion that economics as a discipline may gain in considering itself as a craft, not a science. ” this has been said many times. and its still relevant.


Moral outrage hasn’t lifted anyone out of poverty or created any jobs. But it has helped the careers of a very comfortable section of society in the poverty industry, student unions, arts, trade unions, charities, quangos, media and university sector. If only we could export moral outrage we’d be the richest country in the world.


“If only we could export moral outrage we’d be the richest country in the world.”

Instead, we’re going to become the “best small country in which to do business, get a job, raise a family and grow old”.

So, we’ll be better than Finland, Denmark, Luxembourg, New Zealand and Signapore.

“deep analytical philosophically informed thought”
The whole speech relies on Foucault. Presume you understand what ‘analytical’ means in a philosophical context?

President Higgins may have a valid point / argument / concept / idea for a redirection of Irish society.

However what if he is wrong, or on implementing the new direction it is hijacked by other people / vested interests? Considering his age, it’s not as if he is going to be around to see the whole experiment going off the rails is it?

People are inherently greedy / selfish, that’s a given fact. No amount of talk by President Higgins will change this.

If President Higgins was really concerned about equality.. then perhaps he should be looking to implement greater accountability by people holding responsible positions.

One example being the Garda Siochana…. who will be held responsible for the Ian Bailey case………. or do the Gardai enjoy “open season” on all citizens at the expense of the taxpayer indefinitely?

One might argue the toss with the ideological orientation of the President’s lecture, particularly his ‘four legs good, two legs bad’ characterisation of economic theory. But he has a point about how economics as a science is narrowly construed and currently taught within schools and third level institutions; one which has been echoed more than once in posts by several academic economists on this site. I think the President is making an important point given the power and influence of economists within our society, both at the elite levels of politics and as media pundits. To paraphrase Sportshog above, he is “looking to implement greater accountability by people holding responsible positions.

@ Johnny

I think he touched a nerve because a lot of what he says about the market goes close to the bone. St Margaret of Finchley North said “you can’t buck the market” but that was 30 years ago before the Fed turned it into a Pavlov dog for $85bn a month.

And no sign of sustainable growth anywhere. So I think there’s more to it than moral outrage. The system isn’t working.

At some point there’s going to be a popular reaction to plutocracy. The memes are mostly banjaxed.

If he gets a debate going so much the better.

@ veronica

The primary job of the President is to uphold the Constitution. This includes staying within the parameters defined by it for his role. These do not include indulging in partisan political debate.

End of story!


He isn’t getting a debate going, he is putting the usual strawman (‘neoliberalism’) on trial. Why isn’t he starting a trial about something slightly more grounded and practical where Foucault has little to add? Like our useless apprenticeship system? Or the amount of time students waste in school learning Irish and religion? Or our Byzantine social welfare system? Or even more practically – how about a debate about the possibility of getting a refund from all those Senators who sat on their backside for decades sucking the State dry?

Better to second guess Hayek through the lens of Foucault I guess, and let the plebs eat cake.

Scary that a university professor cannot distinguish between deeply philosophical analytical etc and BS.

DOCM “These do not include indulging in partisan political debate.”
Where prey tell did he do that? Hes critiquing a dominant approach to economic thought.


You are correct. Judging from the tone of the comments, Michael D certainly has hit a few raw nerves.
Having read the speech, I cannot see what the problem is.

Maybe, the serious matters of life and living should be left to our betters in the Irish Times and elsewhere, to lead the way.

The speech brought to mind Yeat’s line of ‘September 1913’:
‘The raving slut who keeps the till’.
Well done, Michael D. Keep it up. The tadpoles need a voice.

@Joseph Ryan

I see this argument “judging by the tone of the comments” a lot on this site. I would love to be able to employ this every time I get a negative response from a journal – rather than reflect on the substance of the peer review I can comfort myself that I don’t like the ‘tone’.

I was also reminded of September 1913 – a rich guy whines that the proles won’t build a new art gallery for him and his mates to ponce about in. All those common people going around doing all that disgusting ‘consuming’ and generally enjoying themselves when they should be at home reading Foucault and stroking their beards.

Dan O’Brien, and I presume the rest of the IT brigade, do not approve of Micheal D’s incorrigible attempts to inject ethics and dissent into Irish political discourse.

I imagine it’s very difficult for a generation raised to believe in efficient markets, deregulation, “there is no society”, and the intrinsic virtue of private corporations to actually _be_ challenged on their world view — especially by an old left, old school academic like Micheal D. Concepts like social policy, equality, a shared society, and the national interest have no place in the sphere of policy debate set by our (inter/euro)national newspapers. Micheal D has walked on the the polo match of modern economics to tell the players know that their horses have tramped and fouled the common playing field. The riders can only wax livid that he has interrupted their game.

Personally, I agree with Uachtarán na hÉireann, and don’t think much of troika-philes and their associated propaganda outlets taking cuts out of the elected head of state of my country. Micheal D is well respected by the people of Ireland who have been forced to pay for the gambling losses run up by others in the great intellectual casino created by modern economic philosophy.

The gamblers who ducked out, and the fawners who followed them, and the cohorts who continue to defend and promote this injustice can whinge all they like; but The President is entitled and indeed expected to lead the nation of Ireland forward, morally, civically, and intellectually through speeches like this one. Long may he continue to do so.

IMHO There is a lot of potentially useful thinking-outside-the-box in Higgins’ speech. J.M. Keynes wrote a wonderful short essay called “The Economic Problems of Our Grandchildren” in which he argued that the output/employment criteria of neoclassical economics would eventually become outmoded and society would need other criteria for judging economic and related social outcomes. We are now in Keynes’ great-grandchildren’s generation so perhaps it is time for this type of thinking.

@Johnny Foreigner

First you criticise Higgins for the inappropriateness of his commenting. Then you on to ask why he didn’t comment on matters more to your agenda. I also doubt that Higgins relied for his speech on the interpretation of just one person, Foucault, as you suggest.
As for your problems with Irish or religion, my view was that it was a lack of knowledge of mathematics, economics and banking and the unhelpful absence of any kind of morality or sense of nationalism, that condemned the country to the fate it is not enjoying.
And here is another little snippet from those long school years: The spelling may be off, but so be it.
Raghaidh me síos i mbeasc na ndhaoine
De shiul in mo chos
I raghaid me thíos anocht
Raghaid me síos ag lorg daoirse
On mbinibhshaoirse ata ag lui anseo.

Higgins may also have drawn on sentiments like those.

Beir Beannacht

@ Johnny

Neoliberalism isn’t a strawman. It’s a system.
“Far left” my arse.

“executives have learnt that often there is no such thing as the intrinsic value of any security – it all depends on liquidity.”

So where does that leave the efficient markets hypothesis or the notion of “economic efficiency” ?

Why did virtually none of the Fed’s QE go into job creation? It added a very watery 19000 jobs per month extra compared to the equivalent period pre QE. The US can’t manage to create 200 000 jobs a month for 6 months on the trot and labour participation is at its lowest since the 1970s.
Why do multinationals pay less tax than workers? Where’s John McHale’s growth ?

You say

“Moral outrage hasn’t lifted anyone out of poverty or created any jobs. ”
QE has been only marginally more effective.

The state of the financial system 5 years after Lehman ? SNAFU

By all means let’s have a discussion about the shite state of affairs in Ireland and the chronic ineptitude of the “Deep Irish State” but there’s a much bigger global discussion that needs to start as well.

@ seafóid @ Joseph Ryan

That is the rub of it, isn’t it? That it does indeed cut so close to the bone of matters.

No wonder the smelling salts are out among the pointy-headed free-market cultists.

The speech is ‘tame’ stuff. Nice quotes and all. Nothing serious to get your knickers and Y-fronts knotted up about.

“People are inherently greedy / selfish, that’s a given fact. No amount of talk by President Higgins will change this.”

Sporthog? I do not usually strongly disagree with things. But this is one. Most folk are caring and considerate – sometimes to a fault. But just now and again, and again, we do get underfed Piranha in the pond. Like now! Cause great mischief they do.

Someone mentioned analysis? Well, it depends which side of the coin you’re looking at: the theory side or the life side. The former is crystal clear, no ambiguities, no doubts or whatever. Whereas the obverse … its a tad messy – on a good day!

If you think M Dee is cute – just have a gander at Friedman’s efforts at Philosophy – ‘Essays in Positive Economics’. Popper shredded him. Never read Hayek. Will give it a try.

Other matters on which Michael D. is strangely quiet.

– A flat TV license fee for RTE that is the same whether you are a shop worker in a bedsit or a millionaire in a mansion. Why is Michael D. so soft on RTE I wonder?
– Free 3rd level education, a system that massively benefits the middle class professionals that make up the Labour Party base at the expense of those on low incomes. Who introduced that policy I wonder?
– The lavish salaries, pensions and expenses still enjoyed by former Ministers and current Presidents.

It’s the politics of distraction – don’t look at me, look at the ‘system’, In the old days the cute hoors in FF could blame the Brits while they robbed the State blind. Now its another fake bogeyman that has to be blamed while the insiders continue to feather their nests.

Other matters on which Michael D. is strangely quiet.

– the resurgence of Dublin football. Pro-Connaught bias?
– the choice of Ben Affleck as the new Batman. Elitist bias?


@ Johnny Foreigner

I’m afraid you’re on a hiding to nothing here. How dare you question our President’s inspirational words. Having read his speech I was inspired to storm some barricades – once I got the kids to bed and made some dinner for myself. I just couldn’t figure out what barricades I was supposed to storm. Then the nice Australian shiraz kicked in (God bless free trade, the WTO, and Tesco’s wine sale). So then I started up my PC (God bless the US and Silicon Valley) and logged on to Facebook and Twitter (God bless the US and Silicon Valley again) before checking out this blog on WordPress (God bless the US and Silicon Valley again and whatever philosopher can be credited with the idea of free speech).

Here’s a link to one book that won’t be on Michael D.’s Christmas reading list:

This is a review of a new book on Jeffrey Sachs and his attempt to end poverty so it’s ticking two boxes – economic theory and eradication of poverty.

@President Higgins

“The company one keeps says a lot about a person. That is as true in intellectual life as it is in social life. President Higgins keeps only one kind of intellectual company. Those mentioned approvingly at DCU included Ernst Bloch, Jean-Paul Fitoussi, Michel Foucault, Jürgen Habermas, David Harvey, Ruth Levitas, Philip Mirowski, Jamie Peck, William Morris, R H Tawney and Edmond Villey. The only Irish person quoted (other than himself) was Kathleen Lynch, an equality studies academic in UCD. All are very firmly on the left of the political spectrum.”


@Dan O’Brien

Social democratic intellectuals were never overly welcome at The Economist! Get a life.

@ Elia

The spectacle of someone in all seriousness proclaiming the creation of the Internet, a textbook of the success of collectivist and benevolent endeavours, as a product of capitalism is really quite charming…

It is psychologically revealing that that the reaction of neoliberals to the philosophy being discussed (and it has been the dominant political movement in the developed world for the last thirty years) is to firstly deny there are any neoliberals and secondly to claim that, even if there was such a thing as neoliberalism, it is not particularly influential. So when the banks were deregulated, the utilities privatized, the attempts made to reduce everything to a market so that a market solution could emerge, that was something other than neoliberalism at work. As the president says, neoliberals think that their way of thinking is simply the way of the world.

It is just peachy to read Dan O’Brien complain about the president’s political partiality (there is a journalist living the unexamined life with gusto). Well, there are not many self identifying neoliberals Dan but then again there are not that many people willing to identify themselves as racists any more.

Overalll a lovely thoughtful speech by Michael D, with this paragraph being a nice rebuke to the current Irish establishment and its supplicant relationship with the EU. I hope it the source the source of some teeth grinding in the government, and perhaps Michael’s own former political party.

Finally, about our institutions. We need to make sure that all institutions allow for truly democratic deliberations on economic policy choices, that no particular sector gets preferential treatment in the name of a narrow conception of wealth, and that our media do not foreclose political debate on economic matters.


“Having read his speech I was inspired to storm some barricades – once I got the kids to bed and made some dinner for myself. I just couldn’t figure out what barricades I was supposed to storm.”

That’s the problem with the President’s lecture – as a critique it’s fair enough from his own ideological perspective, which is, and always has been, that of a committed socialist. But beyond that where does it take us? I’m not convinced that there is any great radicalism on offer – dissing on an economic ideology that lies in tatters anyway, and its intellectual base, hardly qualifies as radicalism or the President stepping over the mark of his role. It’s more a gentle nudge towards ‘reflection’, than a call to storm the real citadels of power. It’s directed at an elite within our society, and would pass most of the rest of us by. So why are people getting upset over it?


The spectacle of someone in all seriousness proclaiming the creation of the Internet, a textbook of the success of collectivist and benevolent endeavours, as a product of capitalism is really quite charming…


On a related note people with some time to spare might read up on Mariana Mazzucato’s The Entrepreneurial State. She does a nice line in explaining why They (the public sector, universities, the state) did in fact build it (The Internet, the world wide web, much of the underlying technology behind smartphones, MRI scanners).

Good FT video interview here:


It’s directed at an elite within our society, and would pass most of the rest of us by. So why are people getting upset over it?

It poses a question which the current establishment must find distinctly uncomfortable. If neoliberalism is an ideology in tatters what does it say about Irish (and European Union) democratic structures that it still seems to be the ideology with the largest influence in policy making? Isn’t democracy supposed to work differently?

The idea that one might be enjoying taxation without genuine representation has had serious consequences before.

But beyond that where does it take us? I’m not convinced that there is any great radicalism on offer – dissing on an economic ideology that lies in tatters anyway, and its intellectual base, hardly qualifies as radicalism or the President stepping over the mark of his role.

During times of universal deceit, telling the truth becomes a revolutionary act.

As for neoliberalism/euro-ism/austerity lying in tatters, I don’t hear any victory speeches.


… the barricade of the closed narrow ill-educated mind, the anti-intellectualism at the heart of the Irish governing and possessing upper_echelon elite, the flawed concept of wo-man in Descartes and Robinson Cruseo, the Puritan inspired concept of wo-man as ‘baad’ in agency theory and the one-sided individualism in most of economics, the fact that Hayek and Mises went to this extreme in the ideological battle of the 1930s [vs collectivism, Marx, Lenin and the Stalin purges] which led to ‘free market hypothesis’ (sic cubed), neoliberalism, and latterly to the financialization of society and the arrival in Ireland of the ‘road to serfdom’ [Hayek] revised edition! – while back in the 1930s Alfred Schutz [who conversed with Hayek] developed the philosophical and empirical concept of the Lifeworld wherin each individual is socialized within a community – and these relations, as President Higgins eloquently notes [as does Habermas in his reformulation of Kant’s categorical imperative to Discourse Ethics] matter.

Open the ol’ mind. I hear that the GOP in the States now make policy based on the actions of characters in Atlas Shrugged! No mention of A. Rand in the President’s speech – must have upset Dan!

President Higgins is a poet and a writer not a businessman. It is appropriate that he expounds on ethics since in Ireland ethics are elastic but commercial rents are rigid. (hat tip to John Corcoran).

No doubt at least half of the population would consider his ideas sound. The other half would be tone deaf or jump on the 5% of the presentation that they considered sosheealist. It was not the socialists that brought us down it was greedy, grasping, selfish business people and their political enablers.

I have no problem in President Higgins making a speech like this. Neither do I see it as partisan as the left has different shades of red and even Ernie Ball’s alter ego has said that he would tolerate capitalist enclaves in his workers’ paradise.

Words from leaders can have an enduring impact but the president’s speech sees all the “ideological falsehoods” elsewhere, avoids inconvenient truths and presents no challenges to the converted.

In contrast, in an interview published this week and comments made while recently travelling back from Brazil, the words of Pope Francis about gays and the church’s obsession with abortion, powerfully undercut the forces of intolerance that dominate his organisation.

Milton Friedman, in a 1951 essay, “Neoliberalism and Its Prospects,” argued for a “middle way” between communism and classic 19th-century liberalism.

Friedman was never in the middle and the Austrian Karl Popper, one of the towering intellectuals of his age (it was through him that I first heard of black swans!) who was an ex-communist, highlighted the protection of individual rights but eventually criticised what he called “free-market ideology.”

The failures of modern economics do merit attention but whether it’s President Higgins himself or the economists who control the profession, it’s hard to teach old dogs new tricks.

However, a big problem in this debate is that those who liberally toss the term ‘neoliberal’ around, see the world through the prism of Wall Street and that blinds them to the stunning advances in the world at large and possibly in their own lives.

President Higgins would do well to read Adam Smith’s ‘Wealth of Nations’ published in 1776 at the dawn of the Industrial Revolution.

Smith was a prescient advocate of progressive taxation, workers’ rights and free trade!

“It is not very unreasonable that the rich should contribute to the public expence, not only in proportion to their revenue, but something more than in that proportion.”

“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

“The capricious ambition of kings and ministers has not, during the present and the preceding century, been more fatal to the repose of Europe than the impertinent jealousy of merchants and manufacturers. The violence and injustice of the rulers of mankind is an ancient evil, for which, I am afraid, the nature of human affairs can scarce admit of a remedy. But the mean rapacity, the monopolizing spirit of merchants and manufacturers, who neither are, nor ought to be, the rulers of mankind, though it cannot perhaps be corrected may very easily be prevented from disturbing the tranquillity of anybody but themselves.”

It’s easy to understand the genesis of communism but in the sweep of history, the toll of human misery that followed the idealism will be compared with the successes of capitalism, despite its faults.

Globalisation, in effect the deregulation of trade, has been responsible for the greatest improvement in the lives of people in the history of humanity.

Look to the stars not the mud under your feet!

Greed has no particular ideology; a modern economy needs people of adventure as it cannot be sustained by bureaucrats and rent-seeking professionals; the market despite its faults has been embraced albeit reluctantly by the Castro brothers and China’s private sector resembles classic 19th century capitalism.

The god cannot even guarantee Utopia as she has to exist to do so and an old-time communists in search of a miracle medical remedy, is likely to be happy to be the beneficiary of American private and public innovation.

“Greed has no particular ideology.”

In Michael D’s world if you get them young enough you can brainwash it out. To a Statist there is no human problem that can’t be solved by the State, as long as they have enough time, resources and coercive force.

Unlike his leader,comrade Gilmore, comrade Higgins is not a member of the Nicolae Ceausescu wing of the labour party. I have lose count of the number of pensions comrade Higgins is in receipt of. I understand it takes seven kitchen staff to serve this gent his breakfast in bed. He lives like a king.

This highly ethical gent,had no problem in his government agreeing the amnesty for tax cheats, no problem in his government colluding with an organised criminal commercial property cartel, which wrecked our country–and despite his genius,he or his party, never lifted a finger to alert the public to the greatest property bubble in the history of mankind.

We have another president who is notably hard working, well informed and prepared to call a few things for what they are. That is a positive. Lack of political power does not mean lack of influence, if one has ideas, and Michael D has lots of them. He rightly points to Smith’s Theory of Moral Sentiments, which provides an essential counterbalance to the Wealth of Nations.

Like war, markets are part of life, not the purpose of life. How are we supposed to know what it is if we don’t think and talk about it ? And why is economics so different from every other science ? Perhaps because it touches on rank and power, and so is subject to political and social censorship/influence. Dan O’Brien could have written a much more civil, considered response, and I hope he will do so in time.

Michael D is a teacher as well as President, and he has a natural interest in what goes on in schools. If we don’t teach young people how to think broadly about life, how are they to navigate their way through the sea of marketing which assails them daily. iPods, for example, are not just entertainment, they are tools of indoctrination into an ideology of cossetted individualistic consumerism. The medium is the message, as Marshall McLuhan had it.

‘Our schools’ curricula and pedagogical methods reflect the kind of humanity our society seeks and nurtures. The society we so dearly wish for will not take shape unless we acknowledge the need for an education of character and desires, the need to encourage and support critical reflection and a more holistic approach to knowledge. Specifically, there would surely be considerable merit in introducing the teaching of philosophy in our schools, which could facilitate the fostering of an ethical consciousness in our fellow citizens’

We all only live for a while, and economics is all about interdependence. All people need a decent livelihood, and co-operation is surely preferable to domination. Of course many institutions are corrupt and badly run, but we have seen what happen when government is captured by Mr Market. It can’t work.

‘A second possible purpose for action is to examine the means by which we can embed in both our ideology and our institutions values that emphasise the irreducibly social and relational dimension of the human condition’

The evolution of the Syrian crisis is interesting, and offers hope for the regeneration of multilateralism and a properly functioning UN. I am neither Labour Party member or a Catholic, but there are also some interesting echoes here and there, in the new Pope’s interview. Green shoots.

“iPods, for example, are not just entertainment, they are tools of indoctrination into an ideology of cossetted individualistic consumerism.”

I’ve heard it all now.

What exactly is going to be in this new curriculum I wonder? It sounds more and more like a Maoist enterprise (little green book?). I presume that a committee of only the best sort of people will get to sift through the millenia of human thought to select the ‘right’ texts?

No thanks. We’ve only just emerged from centuries of brainwashing by Rome. I don’t need a school to tell my kids to love or hate money, or to love or hate God.

Teachers aren’t there to raise your kids to be good people!

@Johnny Foreigner

Do you have anything of substance to divulge? Before you twitch that reactionary gene – have you met Lord Lucan? Have you read Adam Smith or Michel Foucault – Do you dream with Levinas or tune in to Aristotle. Do you think DOCM is Lord Lucan? Are you pining for Mick PD McD or in mourning for Lucinda, the lost PD who thinks Latvia is paradise? Did you really vote for the FF bagman? Who’s your favourite character in Atlas Shrugged? Tell us something ‘interesting’. And those reviewers – what do they know to reject such eloquent, factual, empirical, and groundbreaking opinions of yours – a mere anonymous foreigner? C’mon – do you think DOCM is Lord Lucan?

@John Corcoran
Yerself and Dana outside Korkys would have been bee–uuuu—tiii-ful – on the 6 o’clock newz. Yer invitation to the Aras at the mo is in the post(script)


@Lord Lucan
We’re ontha!



As I understand it, neoliberalism is almost exclusively used these days by non-economists. Most economists give it a wide berth in their analysis because it is so ill-defined and multidimensional as to be practically meaningless for their purposes. Anyway, it has become so loaded with moral judgementalism and negative connotations that no-one would willingly designate themselves a ‘neoliberal’, even though in its German origins it was conceived as socially, as well as economically, progressive, a middle ground between the harshness of classic liberalism and authoritarian socialism. For the rest of the social sciences it appears that it currently serves as a convenient trope: as the single identifiable cause of everything that is wrong in society, so ubiquitous in use that it amounts to what Boas and Gans-Morse (2009) describe as a ‘conceptual trash heap’. It’s usefulness as an analytical tool is thus increasingly limited in providing a useful explanation of anything.

As for the globalization of financial systems and the cycles of boom and bust that inevitably follow, the upsides may be grand for a while, but are the downsides really worth it? I’m not convinced. We might debate that one as the tumbril in which we are seated together, condemned as ‘closet neoliberals’ or maybe even the ‘real deal’, rolls across the cobblestones…

@ MH: “Smith was a prescient advocate of progressive taxation, workers’ rights and free trade!”

Terms and Conditions, Michael, Terms and Conditions! And that was 1776 – and all that. Not 2013!

“Globalization, in effect the deregulation of trade, has been responsible for the greatest improvement in the lives of people in the history of humanity.”

These were the ‘winners’. But what about the ‘losers’ Michael? Free Trade – there being no such actual entity – it is a figment in the monorail imaginations of educated fools. It should more correctly be termed – Unidirectional Fettered Trade, since there has to be MORE losers than winners! Otherwise the winners cannot have that enjoyable surplus they enjoy.

@ PQ: “And why is economics so different from every other science?”

First-off, its not a ‘science’ – its a theoretical description of how an ideal set of productive processes would operate, ideally, in an ideal world. Sentiment rules! Not practicality.

Mostly it seems, that SNAFU, provides a greater causal explanation of things economical than the deliberate policy one. I mean, would one deliberately set out to create a truly destructive economic system? Pol Pot did, and look what happened. “If you meet the Buddha on the road – KILL HIM!”

Young persons regularly display episodes of righteous indignation, and complain bitterly about un-fairness and in-equality. They can hardly have been ‘indoctrinated’ at such young ages? Yet after 15,000 hrs of ‘schooling’ they emerge as hardened cynics. Now I wonder why?

I agree with the comment above that the President has every right to say whatever he likes. The people voted him in – the ingredients and his make up were there to be seen long before the Presidential election, why is anyone surprised the way in which the meal is now being served?

The nonsense about his Constitutional responsibilities is IT drivel. The same Constitutional rights for people fighting for proper healthcare and equality of treatment in a whole host of spheres are been abused daily. What’s the difference. Let the man speak whether one agrees with the content or not is irrelevant.

The speech reflects your bond rating…..junk just like the entire belief system that el presidente based his mediocre career on,while clipping the taxpayer left and right.


Ireland is infested with a commentariat that does nothing but drone on about neoliberalism ad nauseum. The only regular political show on TV (Tonight with Vincent Browne) has a presenter and guests who have been at this since 2007. The opinion writers for the IT (VB, FO’T, JW et al) all fundamentally see free markets as the enemy. The miracle is that Dan O’Brien was allowed to publish a contrary opinion at all.

@ Brian Woods Snr:


You appear to have a Malthusian view of the world. Maybe that’s like telling a conservative Irish person that they’re conservative!

What Adam Smith said about a good deal being one where both parties gain, has been borne out.

There are losers of course like those guys who trained to make sabots by hand and then some saboteur (I know that the guys were called that) came along with a contraption that could make multiple numbers in the same time it took to make one.

An Indian academic said about Dr Norman Borlaug in 2007: “The impact of the Borlaug-led Green Revolution symphony will be clear from the fact that during 1964-68, Indian farmers increased wheat production in four years by an order greater than that achieved during the preceding 4,000 years.”

Globalisation promotes inequality but makes the world more equal.

Before globalisation, absent natural resources, since 1945 no poor country including Ireland has become rich, without the benefit of globalisation. Asia, Latin America and there is hope at last in parts of Africa.

Contrary to popular myth, that overseas investments by American companies come at the expense of economic growth and job creation in the United States, research shows that the reality is US-based companies investing abroad are also the biggest job creators, investors, and exporters at home.

The World Bank’s poverty rate has halved worldwide, from 43% in 1990 to 21% in 2010.

Ah, Michael, I kinda like the Rev M. Bit previous, as they say. But hardly incorrect. Some other time!

“Globalisation promotes inequality but makes the world more equal.” Can I sort of think about this for a bit.

As regards the exploitation of natural resources for productive enterprise – I’m in favour of this, but ….. some very nasty Terms and Conditions do apply, and I have to take cognisance of these inconvenient truths.

That was funny! Uploaded in mid- sentence, as I was about to spell check! Never mind.

Beautiful afternoon here. Lovely mild breeze from South. Going into the garden to catch some rays and sample some vino!


I do agree with him the wrong questions are being asked,lets start with at 3 million a year WTF do you need a figure head for..
The only positive is at least it’s not a dirty Provo there.
@Elia terrific link,downloaded the buke tks.

@John Gallagher

I hear you were out punting for the ‘chippies union’ in the Big Apple at the crack of dawn recently. Must say you looked very well in your Plough & Stars emblazoned leather jacket in the photo in the Washington Post – the Honda_50 was an inspired touch. And I hear that union affiliation is now up from 6.600% to 6.601%. Keep up the good work.

Tmor is Sunday and tmro nite we will witness the rise once again of Deutsche ORDO-Liberalism, which is what we are exposed to in Europe today.

Proud xcard carrying member off the United Brotherhood of Carpeteners off North America,I doubt ya last till the tea beak on a site…..

@Johny Foreigner

The miracle is that Dan O’Brien was allowed to publish a contrary opinion at all.

Indeed if it were not for the European Commission, the ECB, the governments of the Germany bloc, the OECD, the BIS, numerous think thanks, the majority of the business press, and the influential elements of the economics profession poor brave Dan O’Brien would be the sole defender of free market dogma in Europe from the red wave washing over European economic policy.

Prof Lucey,
We you not a teensy bit neo liberal once yourself. I see to recall you pushing sub prime as the way to go. What share did you recommend we buy for the long term…remind me,.

@ JF: “Ireland is infested with a commentariat that does nothing but drone on about neoliberalism ad nauseum.”

Are we? Do they? Infested??? Maybe you should contact RentoKill. Very good at infestations.

Listening and reading to some of the Commentariat offerings makes me form the opinion that they are indeed droning on – with little by way of reflective, informative explanations and longish on personal opinions. Sad stuff mostly.

Neo-liberalism (is this even the correct term?) is the obsessive hunt for The Free Market, like the obsessive hunts for the Holy Grail and The True Cross. Both of these latter enterprises were a tad bloody and destructive. The hunt for The Free Market is not dissimilar – except its not geographically confined but has gone global. An infestation of economical Dry Rot perhaps? Now where are those damn exterminators?

I fly Ryanair regularly, buy my books and CDs on eBay or Amazon having compared prices, buy all our family’s fruit and vegetables (among other things) in Aldi and Lidl as they have the cheapest prices, hate running up a credit card bill, believe I shouldn’t spend more than I earn as I won’t be able to save to put the kids through College or have some modicum of dignity in my old age … OMG! I think I may be the only neoliberal in the village.

@ Elia

Ditto! Even better, do run up a large credit card bill but settle it on time and let those that do not pay the interest for you! That’s capitalism! Which we all suffer under, whatever brand of “liberal” – or not – one happens to be.


As the President does not have the right under the Constitution to leave the country without the Government’s permission, it is hard to see how he has the right “to say what he likes” when acting in that capacity. As I pointed out above, his primary duty is to ensure respect for the Constitution, which is not a minor matter. Camouflaging the inciting of a rancorous political debate under the guise of his theorising about “ethics” is not fulfilling that duty.

Luckily, nobody is paying much attention; at least for the moment.


‘… Camouflaging the inciting of a rancorous political debate under the guise of his theorising about “ethics” …


Once again when a piece of intellectual discussion is beyond your pay-grade or level of intellect you attempt to disguise your atavistic and cerebrally-challenged ideological nature by launching personal jack-boot attacks or attempts to divert the discussion. Tiresome.

In terms of the content/substance of the President’s speech – can you even attempt to review any of the points made in a reasonably civilized manner – that is, if you actually ‘understand’ any of it.

Michael D. as the Irish President? When this was out in the news I laughed hard. Mind you, not at Michael, but at the delicious surrealism of such situation.

The at it’s core deeply reactionary and submissive Irish society, some may rather call this conservative, now had a humanist and left oriented intellectual as thePresident. On his inauguration – or whatever this is called – I remember many public faces who where incapable to cover up their dismay. That was great fun to observe.

The reactions on this blog are very funny as well, and stereotype.


Before commenting about Ireland you might try and brush on a few basics. Ever heard of Mary Robinson?


But of course JF, I’ll let you know when I am finished reading up on her and refrain from commenting in the meantime.


@Georg R. Baumann

What is ridiculous is making the claim that there is anything unusual about Ireland having a “left oriented intellectual as the President” when in fact it has been the norm for the last 23 years. Robinson, MacAleese and Higgins are all former academics with a leftist outlook.

What is laughable is the idea that Michael D’s speech represents a new departure for political discourse in Ireland.

Prof Lucey,
After extolling the virtues of sub prime, have you now donned a nice Socialist suit a la Bertie?


I’m of the view that had Mary McAleese for instance had the good sense to make a speech regarding the stupidity of the so called economic boom when she entered her second term we’d perhaps be significantly better off today.

Sometimes the President should speak his/her mind and to hell with the politcos because he/she is expected by the public not to be aligned with them.

For my money the President has the opportunity because of their office to actually call it as they see it. Tell me exactly where the harm is in expressing an alternative viewpoint? Given the warped nature of the Dail and the almost zero lack of Govt accountability to it, having a stronger Presidential role I believe is warranted, particularly today.

Dork of Cork why have you forsaken us ? I can’t see my hand in front of my face down here..

Handing over the reins of government to the money men just isn’t smart. It’s a question of power, and the balance thereof. The only power which can restrain the tyranny of Big Business is the state. Big powerful states are deeply challenged at present, and weak, corrupt, states, like our state, are being overrun. IMHO, that’s what the Prez is getting at.

@ veronica

Ordoliberalism, a German phenomenon, is not at all the same thing as neoliberalism, which is largely Anglo American in origin. Denying that it exists is a bit like the euro-communists denying the existence of the Gulag. Deregulation happened.

Political liberalism has in many ways, a brilliant, and very respectable, history. Read Norberto Bobbio, or Alexander Herzen, for example, to get the flavour. Neoliberalism, in favouring Big Biz, is in fact totally contrary to the democratic spirit of liberalism.

It’s more a reflection on the pathetic nature off the candidates,in fact politics in general in Ireland.The best banking mind,unless no experience at all is preffered,is hobbled for the smokescreen.The gangsterism perpetrated by the other candidate rendered it a one pony racy.


Sorry. Didn’t catch that set of links til’ now. Thanks a lot. I look forward to reading all. I like Simon Wren Lewis. He is a human bean.


‘ The chances of Germany assisting adjustment in the Eurozone by enacting a fiscal stimulus programme are therefore very slim indeed. Equally unfortunate may be the influence this anti-Keynesian view has on policy in the Euro area more generally. However, in the longer term I wonder if Ordoliberalism and Keynesian ideas are really that incompatible. Dullien and Guerot define the central tenet of Ordoliberalism as “governments should regulate markets in such a way that market outcome approximates the theoretical outcome in a perfectly competitive market”. The New Keynesian view of stabilisation policy is to bring the economy as close as possible to the market equilibrium that would prevail if prices were flexible. That does not sound so different’

Knock knock. Karl Polanyi The Great Transformation 1947. Plus ca change.

@Johhnny Foreigner

Robinson, MacAleese and Higgins are all former academics with a leftist outlook.

Not so. Robinson is a (comfortably-off) middle-class liberal, MacAleese a Catholic theologian. Higgins is a socialist Republican – quite a different category to either of the other two.

What is laughable is the idea that Michael D’s speech represents a new departure for political discourse in Ireland.

What is laughable is that you can say this with a straight face.

In Mandarin, mayo means “don’t have.”

Right and left labels often don’t mean very much in Ireland.

Many are the two things at once: such as farmers who are both conservative and addicted to public welfare/ subsidies while some are the beneficiaries of the stealth tax called rezoning. No party including Sinn Féin appears interested in touching that taboo issue.

Lefties who support dismantling the lawyers’ cartel, may well justify their own jobs for life.

It’s of course natural that the partner of the deputy prime minister would get a job created at existing terms and it’s natural that only new entrants would be told of changing times.

Rights, rent-seeking and camels! Solidarity for victims of austerity but why shouldn’t we have their taxes!

Raul Castro eventually realised that living in Cary Grant movie sets had lost its allure for many and to guarantee everyone work, may also be a guarantee of poverty.

In the 1990s, Zhu Rongji, another communist, had 30m fired from China’s state enterprises and he had housing and health supports removed as obligations for all companies.

The unemployment crisis during this recession appears to get a lower level of attention in the media and from politicians, than in past times – possibly because the traditional trade unions have become the defenders of one sectional interest.

The reaction in Ireland to the international tax debate, provides an interesting example of framing a public debate to avoid dealing with an issue directly.

So get the focus on not being a tax haven and protecting the 12.5% rate with the help of the amen chorus of lobby groups and tax accountants. Then ignore the central issue.

What does transparent mean?

US profits per Irish employee at $970,000; Irish tax paid at $25,000

@ Paul Quigley

I noted that comment by Wren-Lewis myself. Maybe for a thread devoted to the use, or rather misuse, of the word ‘liberalism’!

He is right on the substantive point. There will be little or no change in the external stance of Germany. Changes on internal issues that I have been banging on about could, however, have a more significant impact. Income distribution issues, notably the negative aspects of the Hartz IV reforms in Germany coupled with the lack of a minimum wage, are now entering centre stage because of the need for the CDU/CSU and the SPD to put together a programme from which the SPD can emerge undamaged at the end of the government’s mandate.

A really Machiavellian question which I have not yet seen raised is whether the FDP fell or was pushed by Merkel. She has already had to deny responsibility but the fact that she maintained that the CDU/CSU had “no votes to give away” – which, given the shift to the CSU that occurred in Bavaria in the state election she must have known was not true – puts her fingerprints all over the file.

I bring you news of great joy:

“Senator Feargal Quinn, the founder of Superquinn, is set to introduce a bill to outlaw upward-only rent clauses in all leases,writes Aine Coffey.
His Upward Only Rent (Clauses and Review) Bill will come before the Seanad this week. If enacted,it will abolish upward-only rent clauses in leases predating February 28, 2010. These clauses have already been out-lawed by legislation after that date.
Quinn said he is confident his bill avoids potential constitutional problems by balancing the rights of different parties. He said the bill would offer a “lifeline” to struggling small businesses. It is “proportionate to the social and economic objective which it seeks to achieve”,the explanatory memorandum notes.
“Hopefully it will solve something that hasn’t been solved”said Quinn,who said he has been working for about a year on the bill with Brian Hunt,a lawyer. “I think there is a real need and I think we have found the solution. The wording is such that fairness has to operate”.
In 2011 the coalition abandoned a commitment in the Programme for Government to ban upward-only rent reviews. It threw in the towel,after a heated and divisive lobbying campaign, and on advice from the attorney general that changing the law would result in taxpayers having to pay landlords compensation.
Proposed legislation was considered vulnerable to constitutional challenge on a number of grounds,including retrospective interference with private contracts and infringement of property rights.


Journalists or whoever will try to come up with explanations other than possibly the obvious one, given the big drop in the vote, that two uninspiring leaders failed to give the base of support confidence in the implementation of the platform that they were standing on . Of course there are as usual lots of other factors that could be speculated about such as the anti-euro AfD and maybe some voters would prefer not to have a Vietnamese looking vice chancellor.

@ Paul Quigley

“Ordoliberalism, a German phenomenon, is not at all the same thing as neoliberalism, which is largely Anglo American in origin.”

Agreed. However, the Anglo-American neoliberalism of the 1970s originates in the earlier German concept Ordoliberalism.

It’s a pity too that there’s no equivalent EU study to Krippner’s interpretation of what happened in the US, especially as the political system and processes of democracy in most EU states are both as different to each other as they are, individually and collectively, to the US model.

I’m sorry if you gained the impression from my earlier comment that I’m ‘denying’ neoliberalism. Far from it. My concern is with the ubiquity of an illdefined concept of neoliberalism used both in the perjorative sense as a critique, as well as the root ’cause’ of everything negative in social, political and economic terms, in our society. It’s jaded.

@ MH

The Machiavellism to which I refer relates to the policy intentions of Merkel and the fact that she refused a voting pact with the FDP, not to the wider reasons for the dramatic fall of the FDP on which German commentators are themselves divided.

Derek Scally returns to what he does best in this item i.e. reporting.

Even the philosopher Karl Popper, the one whose writings could be said to have had a real impact on the conduct of politics, gets a mention.

One can also gauge from the reported comments from advisers to Merkel that the negotiations on the proposed banking union will not stall but continue while the CDU/CSU and the SPD agree a programme. As it – the banking union, that is – is going in the direction set out by the SPD months ago, the omens, if anything, have improved.

@Paul Quigley

Ordoliberalism, a German phenomenon, is not at all the same thing as neoliberalism, which is largely Anglo American in origin.

I would have to disagree with you there, American neoliberalism has a varnish of libertarianism (courtesy of late stage Hayek and Friedman) that is absent from ordoliberalism but in a European Union context German ordoliberalism is identical in effect to actually existing Austrian school neoliberalism.

That is not to deny that German ordoliberalism is slightly more humane than the Austrian school in conception, just that the parts of ordoliberalism that make it more it acceptable to labour (collective wage bargaining) make no sense in a European context since multinationals are in a position to engage in forcing down wages at an international level where unions are not coordinated.

This is made all the more unfortunate by the fact that collective bargaining between employers and unions also provides most of what passes for macroeconomic policy in ordoliberalism so German dominance over European economic policy condemns us all to bad/no macroeconomic policy, a hard money fetish and the falling share of income going to labour that goes along with neoliberal economic regimes in general.


The President, Michael D. Higgins, gave a brief interview to the Today show this morning – well worth picking up on RTE player. It’s obvious that he thinks his job is about making people think…and I, for one, think that’s wonderful.


As you have failed to make a single comment on the substance of The President’s lecture I humbly suggest that you check out “Ethics for Dummies” in your local library; you might follow this up with a reading of Marx’s chapter on Ireland in Capital and learn the economic value of an acre … and a fat pig.


I don’t think that economics is the President’s strong point. Arguably, it never was! He’s coming at this from a social and cultural perspective, where he’s always had interesting things to say, irrespective of whether or not one might agree with them.

While I think the focus on neoliberalism in the context of social analysis is generally overused, or simply misapplied, and at this stage, very jaded, as stated in my previous comment; it still has application in respect of the predominant economic perspective. The trouble is that in political economy terms, classical economics has long since separated itself from the political. It discounts the political, and therefore, the social implications of following any particular course of action to resolve economic problems. The problem then becomes that whenever anyone says ‘hang on a minute, you need to think about…’ people talk past each other from their respective silos and the discussion becomes polarised.

The real struggle for a small state like ours is to find a means of survival within a globalised financial and economic marketplace and in the process, for our government(s) to retain legitimacy in the eyes of those who elected them as they go about that. Of course, the President can’t go near that one…

@ veronica

Whether economics as a subject is or is not the President’s strong point is not the issue. The issue is the extent to which the President can lend the weight of his office to one side or the other in a debate in the political arena. I agree entirely with the views expressed by Dan O’Brien in the matter.

Incidentally, the President IMHO has made an exceptionally poor job of defending his action which, I think, will be evident to most observers.


‘The issue is the extent to which the President can lend the weight of his office to one side or the other in a debate in the political arena.

NO. The ‘issue’ relates to the substance of a lecture by President Higgins as part of the Ethics for All series in DCU. He is admirably qualified to deliver such a lecture. Neither your good self (.) nor Dan O’Brien have a word to say on the substance of the lecture …. your partisan reactionary reactions may be viewed ‘as an exceptionally poor job’ of hiding blatant character assassination ‘which, I think, will be evident to most observers’. You have nothing of any substance to say ….. to paraphrase the early Wittgenstein [before he discovered Arthur’s Day], when you have feck-all of any relevance to say; it is best to shut up and keep silent.

What a fuss about so little!

The banks are going to fail. They are currently zombies, like those in Japan. They suck life from the economy instead of having been tidied up, they continue to take good money after the bad.

For the economically literate, these outpourings are remarkably stupid. History tells us what happens when credit has been shovelled out the door at 30% pa for nearly a decade.

Even a Labour pollie can see it! I agree he is flawed. We all are. But attacking the post and the man shows that the arguments are very close to accurate and unanswerable. The pseudo economics comes into play now so that the system can be fully stripped of what value remains, in a form of middle class welfare. NAMA and the refusal to accept that asset prices are still set by credit availability.

That is a clue as to what will happen when the can is again reached. Kick it if you must, but the plebs may now appreciate that it is not leadership! The President is leading. The Constitution envisages that, hence the title?

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