Author: John McHale

The Use of Metaphor in the Irish Economy, A Guest Post by Gavin Kostick

John Donne is remembered on the blog by the phrase, “no man is an island” indicating, a good deal before Adam Smith, the interconnectedness of our lives. Donne (1572 – 1631) was the Dean of St Paul’s Cathedral, and a metaphysical poet. He specialized in drawing unexpected comparisons between a theoretical, spiritual or abstract notion and a concrete, palpable object. For example, Donne compared mutual love to a pair of mapping compasses, which, where-ever the points are placed on the surface of the world, lean towards each other and are connected.

The history of language itself is the history of the movement from the concrete to the abstract. Our ancestors had a far larger vocabulary than we do, as they were more particular than general.

The power of metaphor consists in making the abstract once again visceral: philosophy ‘proved upon our pulses’, in Keats’s phrase.

But it is a suspect power as it may not so much illuminate, as rhetorically persuade, or falsify.

The history of political and economic thinking is filled with metaphoric physicalisation of abstract ideas – from Hobbes’s “war of all against all”, Smith’s “invisible hand”, Marx’s “spectre haunting Europe”, right up to Matt Taibbi’s “great vampire squid”, powerful gut images have managed to consolidate a set of ideas, capture the public imagination, frame debate.

Rarely a thread of the blog goes by without some arresting image. The following is necessarily a swift and limited survey of some of the kinds of imagery used during the Irish economic crisis so far, followed by some thoughts towards a fresh set of images that might be explored.

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Where competition fails…and where it works, A guest post by Paul Hunt

‘Competition and consumer choice’ has become a policy mantra to shake up dozy and inefficient industries and to benefit consumers.  EU and national policy-makers and regulators have expended huge effort – and continue to expend effort – to complete the internal EU markets in electricity and gas in line with this mantra.  But all that has been achieved is to move from vertically integrated national monopolists in the individual member-states to a pan-European oligopoly comprised of 12 members (responsible for 85% of EU energy supply) and some residual dominant national incumbents.  (Successive Irish government, not surprisingly, have implemented their own cunning variation on a theme.)

So how did this happen – and what can be done?  The Troika is demanding some action on electricity and gas in Ireland.  The solution outlined has relevance to sectors that, at first sight, appear unlikely candidates.

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The Role of Competition in Ireland’s Economic Recovery

A number of the papers/presentations from last week’s Competition Authority conference are now available: see here. 

Last night’s The Frontline programme had an interesting discussion on competition in the market for GPs, among other topics related to the functioning of the health care system: see here. 

Coming soon . . . a guest post by regular IE contributor Paul Hunt on the failures of the “competition model” in key utility industries.

Alan Greenspan Interview

Charlie Rose interviews Alan Greenspan (see here, click on picture; 37 minutes long).   There are some interesting comments on Greece at the beginning. 

ESM will not have preferred creditor status

News organisations are reporting the European Stability Mechanism will not have IMF-style preferred creditor status for countries already in a bailout after all, which is a significant change from the draft treaty setting out the planned design of the fund.   Some reports here: FT; Irish Times; Reuters.

It has been apparent from the timing of spikes in bond yields, as well as from investor/rating-agency reactions, that features of the ESM’s design are considered impediments to Ireland regaining its creditworthiness.   The annoucement is therefore welcome news, though the limited initial falls in bond yields suggest it is not a panacea (see here).  Greater clarity about future debt-sustainability tests and also the form of future private sector involvement are important additional steps.   Greece-related developments are likely to be the main market movers for the time being.