ECONOMY DECEMBER 8, 2010
As the Irish financial crisis culminated in an 85 billion euro bailout, the very thing the Dublin government had insisted until the last moment it would never accept, one theme could be heard from Dundalk to Bantry. It wasn’t just that the interest rates and other terms were harsh, especially when compared with the earlier rescue of feckless Greece, or that the brunt will be borne by ordinary people, with a ferocious reduction of public spending, slashed salaries, layoffs, and worse to come.
But the rage among the huge crowds demonstrating in Dublin was more than simply economic, it was patriotic. “We’ll be handing over our sovereignty,” said one elderly man, while in an overwrought editorial headed “WAS IT FOR THIS?” The Irish Times asked whether this was “what the men of 1916 died for: a bailout from the German chancellor with a few shillings of sympathy from the British chancellor on the side.” (The editorialist seemed to acknowledge a certain irony in posing the question like that in those pages, aware perhaps that at the time of the 1916 Easter Rising, his newspaper had been bitterly hostile to the rebels.) This reaction has already had political consequences. Three days before the bailout, the government lost a crucial by-election in Donegal, which left Brian Cowen, the prime minister, with only the most tenuous parliamentary majority.
That by-election was won by Sinn Fein, the ultra-nationalist party—“neo-fascist” is the term used by the novelist and critic John Banville—which was the official face, though junior partner, of the Irish Republican Army (IRA) while it carried out its campaign of terrorist murder. Now Gerry Adams, leader of the movement and a former head of the IRA, has said that he is ready to enter Dublin politics. The circumstances are propitious enough. Extreme nationalist parties are flourishing across Europe, and in Ireland there is an ancient wound of resentment, which had only seemingly been healed by Ireland’s slow path to modernity.
What those enraged protesters never ask is whether Ireland really had any sovereignty to hand over. Did “the men of 1916” and their heirs ever achieve true national freedom, or was it what might be called virtual independence?
ALTHOUGH I AM unavoidably English, I know Ireland quite well, having explored most corners of the island while visiting it yearly for more than 40 years, and in the process witnessing a breathtaking change. In the 1960s, indigent backwardness hit you in the face. Ireland was barely touched by the modern age, with landscape and little towns which would have been familiar to Somerville and Ross, and Dublin still recognizably the city which is the true hero of Ulysses, from its shabby beauty to its sheer poverty.
This was Eamon de Valera’s Ireland. That extraordinary figure had been one of the leaders of the Easter Rising and would have been shot with the others if he hadn’t been American by birth. But he survived, and, after fomenting a savage little civil war, “Dev” became prime minister in the year that FDR was elected president, to resign the year before JFK was. Even then, he became titular president of the republic, which he remained until the age of 90, a tall man casting a long shadow.
In a speech in 1943, he spoke about “the Ireland that we dreamed of ... the home of a people who valued material wealth only as a basis for right living, of a people who, satisfied with frugal comfort, devoted their leisure to the things of the spirit. ... The home, in short, of a people living the life that God desires that men should live.” Although those words excite derision in sophisticated Dublin today, they weren’t ignoble.
But did Dev’s dream describe an Ireland the Irish actually wanted? Whether or not they wanted it, “frugal” was certainly what they got, not to say unemployment and emigration. Then came the transformation, beginning when Ireland joined the European Economic Community in 1973. For most of the century, Ireland had had the lowest growth rate in Europe, until European funds pump-primed an economic takeoff which at first had some meaning in terms of education, innovation, and productivity, but which would show darker sides.
To encourage investment—and to the silent rage of other European countries—Ireland became a huge offshore tax haven, with the corporation tax cut from 32 percent to 12.5 percent and with some very rich people, if Dublin journalists are to be believed, effectively paying no taxes at all. Tax breaks supposed to fuel productive enterprise fueled instead a grotesque housing-credit bubble.
This was gloatingly justified as a brilliant success for market capitalism, although it was never a true Wirtschaftswunder. The prime minister from 1997 to 2008 was Bertie Ahern. No student of Ludwig von Mises, he just liked the way “the boom is getting boomier,” as he boasted while an unregulated financial sector ran out of control and debt exploded.
Under Ahern, house prices more than doubled, despite the fact that supply far outstripped demand: Between 2006 and 2009, 2,945 new homes were built in remote County Leitrim, with a population of less than 30,000, as the whole of rural Ireland was spray-painted with garish bungalows. See Ian Jack’s essay, “Ireland: the Rise & the Crash,” in the November 11 issue of The New York Review of Books and read the book he is reviewing, Ship of Fools, by Fintan O’Toole, who has long played Cassandra to his deluded compatriots.
No one listened. Bankers and politicians were alike culprits, with Anglo Irish Bank increasing its loan book between 2001 and 2008 from 15.1 billion to 100 billion euros, gleefully encouraged by the government of Fianna Fail, the party created by de Valera which now has some claim to be the most corrupt in Western Europe. In the end, Ahern resigned under a cloud of scandal, though that didn’t stop the fabled Washington Speakers Bureau from hiring him as a highly paid apostle of boomier free enterprise.
He seems not to be so much in demand now, although he remains a paragon of honesty compared with one of his predecessors. Charles Haughey was prime minister until 1992, when his career ended in disgrace. It might have occurred to his voters well before then to ask how a man who was born poor and spent his life as a professional politician had ended up flagrantly rich, with a country house and a private island.
OF COURSE, THE “Celtic Tiger” was a brutal rejection of Dev’s vision of simple, devout Gaelic autonomy. But that vision had failed on its own terms. At no time since the Free State was born in 1922 has Ireland been genuinely independent—not as Finland is. This is a fascinating comparison, and most revealing. Both countries appeared to win freedom early in the last century, but one acquired virtual independence and the other the real thing, from language to defense to finance.
Maybe it was the forbidding Finnish climate that fostered an honest and industrious ethic, or maybe Lutheranism. At any rate, Finland has achieved the things that Ireland aspired to. Today, the Finns speak Finnish, which isn’t even an Indo-European language, though I may say that the chap selling you a ticket on the Helsinki metro also speaks better English than his equivalent on the London Underground. And the Irish speak English, after the decline of the Gaelic language and then the failure of an attempted revival.
Both countries were neutral as well as ostensibly sovereign, but one meant it. In late 1939, Finland was invaded by Soviet Russia and held the Red Army at bay for four heroic months. De Valera’s Irish statelet had almost no military capacity at all and couldn’t have resisted the Red Army for four hours. Although Ireland maintained a sullen neutrality throughout World War II, the truth was, as George Orwell pointed out at the time: Ireland’s supposed sovereignty and neutrality depended entirely on the strength of the Royal Navy.
And finally there is the economy. When the two countries became autonomous after the Great War, Ireland had a much larger per capita income than Finland, but within half a century the position was reversed. Finland turned into the most admirable country in Europe, with a thriving market economy on the one hand and with outstanding public services on the other, as against what O’Toole calls Ireland’s Third World health system. With all their vigorous capitalism, their traditions led the Finns to expect a high standard of honesty from politicians and bankers.
Although I’ve detected a note of schadenfreude in some of the British commentary on the death agony of the Celtic Tiger, none of this is written with any pleasure. Watching any country emerge from poverty should be a cause for pleasure. But the danger was clear to see. After all, that fascinating Irish writer Standish O’Grady warned his countrymen as long ago as 1886 that they might end up with “a shabby and sordid Irish Republic ruled by knavish, corrupt politicians and the ignoble rich.”
A still more remarkable Irishman knew what he meant. Conor Cruise O’Brien’s own career in Dublin politics had not been happy, which sharpened his sardonic view. Some years ago, we stood outside a restaurant in St. Stephen’s Green after an unusually long lunch, and he said slowly, “It is not pleasant living in a country whose political culture you despise.” O’Brien was often reviled while alive; doesn’t he now seem prescient?
Geoffrey Wheatcroft’s books include The Strange Death of Tory England, and Yo, Blair! This article appeared in the December 30, 2010, issue of the magazine.