Just to let people know that Tom O’Connor, lecturer in economics and social policy in Cork Institute of Technology reviews Conor’s Sins of the Father in the Irish Examiner today. Here’s an excerpt:
Conor McCabe’s The Sins of the Father is the latest attempt to explain our economic collapse and is by far and away the best, writes Tom O’Connor.
AT LEAST half a dozen books have examined Ireland’s economic collapse in the past three years. All have done a good job in explaining economic policy failure in regard to Fianna Fáil, the construction industry, ‘light touch’ regulation, and political cronyism. McCabe’s book deals with all these issues.
However, it does far more than that. It traces these developments since the foundation of the state and identifies key historical economic policy decisions which establish continuity between past and present. The breadth and compass of the book is breathtaking. It is head and shoulders above the other books and is a tour de force as a critical economic history of Ireland.
McCabe’s book demonstrates that an elite class came to power in Ireland in 1922 which had little interest in fostering a type of economic development which would benefit the mass of society. Essentially, this class, drawn from the landed bourgeoisie and their professional descendants, favoured the economic interests of the ‘rancher class’ and ultimately their descendants in the law, construction, politics and high finance. Few would disagree that the two main parties have continued this process to the present day.
The book painstakingly highlights the political decisions which resulted in the prioritisation of owner occupation over the years, alongside the privatisation of public housing, through tenant purchase and the surrender grant schemes, which meant that social housing has represented an increasingly smaller percentage of total housing as the decades wore on.
The retreat by the state from building local authority housing since the 1980s and its selling back of most of the existing social housing stock since the foundation of the state resulted in hundreds of thousands of Irish people having little choice but to purchase houses at hugely inflated prices during the Celtic tiger. They simply had no other choice.
The book makes the striking observation that the prioritisation of owner-occupation, now resulting in 350,000 vacant housing and NAMA, did not result from the cultural attachment to property which is the favoured explanation: ‘There is no Irish property-owning gene. It is not part of our DNA'(p11) On the contrary, the 80% rate owner-occupation in the 1980s was a deliberate outcome of policies of successive governments.
The book demonstrates that Irish economic development never prioritised indigenous industry. It did not pump money into the economy up to the 1950s, largely based on its failure to set up an Irish Central Bank which could have issued government bonds to fuel government investment or increase its own money supply. This was strongly dictated to by its maintenance of a parity link with sterling.
The Irish banking system returned Irish savings to the London money markets and starved the native economy of funding. The failure of the banking system then to lend money to stimulate development resonates with its insatiable appetite for taxpayers’ money currently, while it fails to lend money to Irish businesses, driving dozens to the wall every week.
Having failed in economic development up to the 1950s, the Irish government handed over massive tax breaks to multinationals to short circuit the process. Crucially, McCabe highlights the Irish government’s policy of making itself a ‘middleman’ to foreign direct investment by depending on the construction, finance and administration jobs this investment would bring. In doing so, it lined the pockets of the middlemen in these areas: builders; bankers; property developers; lawyers; auctioneers and countless others. We all know what has happened today as a result.
Worse still, governments were prepared to sacrifice huge amounts of state resources for modest paybacks in employment and tax revenue. Fianna Fáil essentially gave away £16 million of copper mines in Avoca to a Canadian company in 1955 and the biggest lead/zinc mines in Europe at Tynagh to the Canadian Northgate group, which shortly afterwards made over $36m on it in one year.
Read the rest of the review at the Irish Examiner.