June 29, 2005


The End of the Rainbow (THOMAS L. FRIEDMAN, 6/29/05, NY Times)

Ireland's turnaround began in the late 1960's when the government made secondary education free, enabling a lot more working-class kids to get a high school or technical degree. As a result, when Ireland joined the E.U. in 1973, it was able to draw on a much more educated work force.

By the mid-1980's, though, Ireland had reaped the initial benefits of E.U. membership - subsidies to build better infrastructure and a big market to sell into. But it still did not have enough competitive products to sell, because of years of protectionism and fiscal mismanagement. The country was going broke, and most college grads were emigrating.

"We went on a borrowing, spending and taxing spree, and that nearly drove us under," said Deputy Prime Minister Mary Harney. "It was because we nearly went under that we got the courage to change."

And change Ireland did. In a quite unusual development, the government, the main trade unions, farmers and industrialists came together and agreed on a program of fiscal austerity, slashing corporate taxes to 12.5 percent, far below the rest of Europe, moderating wages and prices, and aggressively courting foreign investment. In 1996, Ireland made college education basically free, creating an even more educated work force.

The results have been phenomenal. Today, 9 out of 10 of the world's top pharmaceutical companies have operations here, as do 16 of the top 20 medical device companies and 7 out of the top 10 software designers. Last year, Ireland got more foreign direct investment from America than from China. And overall government tax receipts are way up.

"We set up in Ireland in 1990," Michael Dell, founder of Dell Computer, explained to me via e-mail. "What attracted us? [A] well-educated work force - and good universities close by. [Also,] Ireland has an industrial and tax policy which is consistently very supportive of businesses, independent of which political party is in power. I believe this is because there are enough people who remember the very bad times to de-politicize economic development. [Ireland also has] very good transportation and logistics and a good location - easy to move products to major markets in Europe quickly."

Finally, added Mr. Dell, "they're competitive, want to succeed, hungry and know how to win. ... Our factory is in Limerick, but we also have several thousand sales and technical people outside of Dublin. The talent in Ireland has proven to be a wonderful resource for us. ... Fun fact: We are Ireland's largest exporter."

As we've seen in Ireland, India, Africa, etc., it's common for political elites in former colonies to initially react against the Anglo-American system that was forced upon them, but if they can get that little petty phase over with quickly and recognize that their people have internalized the values of that system then they're primed for success.

Posted by Orrin Judd at June 29, 2005 8:42 AM

Will someone please tell some of the American bishops of the Catholic church and writers of Catholic newspapers about Ireland so they can stop with the socialist drivel?

Posted by: Emily B. at June 29, 2005 12:13 PM

My Dad was in the Peace Corps in Africa (Liberia) in the 1960s. When he travvelled in other parts of Africa during his time off, people there consistently bitched if they had never been colonized by a European power. (Mainly Kenya and Ethipia, if I remember correctly).

Posted by: Tom at June 29, 2005 12:26 PM

They must be stubborn and proud. "The Florida Catholic" is unreadable. When these bishops aren't championing minimum wage increases, they are talking about "undocumented workers" rights.

It's in the blogs and internet where I find American Catholic priests who remember that Pope John Paul II praised capitalism.

Economic Liberalism is a faith killer in addition to being morally wrong. I think the Pope recognized this, but others have not been able to let go the lessons of their youth. There was never an endorsement of socialism, but the lack of a ringing endorsement of capitalism created regional and national differences.

Catholism is much stronger in the Southeast where economic liberalism did not take hold in the way it did in New England.

We had a mission at our church where a group from a D.C. church visited. Our parking lot, filled with "Choose Life" liscense plates and Pro-Bush bumper stickers CLASHED with the visiting groups Pro-Kerry stickers. We had never had a pro-Kerry sticker in the parking lot, and suddenly we had a gaggle of them.

Tom: I'm not surprised at all.

Posted by: Emily B. at June 29, 2005 1:30 PM

"As we've seen in Ireland, India, Africa, etc., it's common for political elites in former colonies to initially react against the Anglo-American system that was forced upon them, but if they can get that little petty phase over with quickly and recognize that their people have internalized the values of that system then they're primed for success."

So I guess this worked well for Sierra Leone, Zimbabwe, Zambia, Iraq and Pakistan-- all former British colonies? Conversely, somehow Taiwan-- a former Japanese colony-- seems to be doing quite well. Methinks that these countries' success or failure has a lot less to do with their former colonial masters and more to do with internal cultural factors.

As for Thomas Friedman, as usual he totally misses the point-- he looks and sees what he wants to see rather than what's actually there. Ireland's economic success is fabulous and a shot in the arm for those of us with Irish and Scotch-Irish heritage, and it has a lot to do with Ireland's opening up to a free-market system, indeed-- but some of the things which even Friedman cites are nothing less than government incentives designed to "prime the pump" of the population and get things in motion.

"Make high school and college education free"

What? Government-funded high school and college education? Those damn socialistic Irish pinkos, what are they thinking? Funny, because this is precisely *the France and Germany model* of education, not that of the US. Higher education is virtually free in Continental Europe, whereas in the US we charge very high tuition and other fees for public as well as private universities. Maybe Ireland is following "Old Europe" more than Friedman cares to admit??!!!

"Speak English"

Truly one of Friedman's all-time most idiotic comments, even for him. They speak English over there in Iraq, Sierra Leone, Zimbabwe and Pakistan, yet this obviously hasn't turned these countries into tigers of commerce, has it? (Or bastions of political freedom, either.) On the other side, over in Japan, China, South shockers-- Japanese, Chinese, Korean and Spanish, yet somehow those countries have become very successful. Economic prosperity has absolutely nothing to do with the language you speak-- it's a result of *what you do* in the language that your people speak.

"and build a consensus around the whole package with labor and management"

Yes, and Ireland has especially strong labor unions, much like Continental Europe and unlike the USA.

Friedman's obsessed with Iraq and sticking it to Old Europe. He still has this neocon fever fantasy about turning Iraq into an unbridled version of a multinationalist corporate honcho's playground-- even if hundreds of thousands of Iraqis have to die to allow for it. He makes me sick-- I've begun to use his columns in the Times as a doormat when walking in from muddy ground.

Posted by: Shamrock at July 4, 2005 2:47 AM