Monday, June 23, 2008

Financial Times Journalist v. Me (or someone who has actually been to Ireland!)

For two weeks in a row a gentleman at the Financial Times has been, in my biased estimation, too rough on Ireland. I think he thinks a bit too much of the EU's role in the "Irish Miracle" (a term I hate). Here is my response.

Mr. Wolfgang Munchau of the Financial Times writes this week that the Irish are in danger of ruining their economic “miracle” based on the recent “NO” vote on the Lisbon Treaty referendum. Well Mr. Munchau, I think you discount the Irish and misunderstand the definition of “miracle”.

Wolfgang Munchau suggests in two recent articles that the Lisbon Treaty is destined to be ratified with or without the Irish, fair enough, but I don’t see how if the convoluted rules of the European Union state otherwise. Sure, as Munchau pointed out, The Republic of Ireland could be kicked out in some back room slick deal by an “unpredictable court,” but how is that good for the EU? What precedent and unintended consequences does that course of action suggest?

As an American who has lived in Ireland I am torn as to the best course for Ireland, I suppose on the one hand the “No” vote has signaled to the EU that it is a loose affiliation of States that has real limits on its ability to encroach on the sovereignty of a member. As well, the “No” vote signaled that the Treaty, even with the concessions to Ireland, was still stained with the lingering stench of Corporate Tax Harmonization… a nasty little phrase that means that France and Germany are tired of watching Free Market Capitalism work for such a small “insignificant” country (or the basic idea/rule/heuristic that lower taxes stimulate economic growth, and an educated labor pool keeps costs low by providing levels of efficiency and productivity). Ireland has had its moment in the sun and now must be taxed into submission like the rest of Europe!

On the other hand the “Yes” vote steers the EU towards a more realistic and streamlined decision making process. Basically, the “Yes” is what is best for the EU and the “No” is what is best for Ireland. And, so far as Ireland is part of the EU what is good for the EU is good for Ireland… right? Maybe not. A utilitarian calculus might suggest that a weaker EU provides more room for aggressive, capitalist, economically principled economies to flourish and not be so easily raided from time to time to pay for broad-based least-common-denominator agendas from Brussels.

Yes the rest of Europe just can’t figure out why this small area historically rife with “troubles” has jumped so far ahead of so many other countries. Pundits and some in Europe, confused as to how this could happen, apparently suggest it was the hand of God or a “miracle” -because basic principles of economics certainly can’t be the reason.

Munchau in an attempt to understand the Irish Miracle has suggested that it is a matter of Corporatism, a Socialist pseudo-egalitarian concept that might be instructive in a classroom setting but looses its meaning when placed into a real world situation. The myriad of interests supposedly represented in a modern so-called Corporatist system can not possibly be satisfied in a complicated real world economy. But, to his credit Mr. Munchau does note that the one interest left out of this “system” is that of the EU. In the American South we would say that Ireland has relegated the EU to the “hind teet”.

Finally, in what can only be termed “grasping” Wolfgang Munchau also suggests that Ireland’s majority Anglophone populace is a chief reason for its success. While I do agree that speaking English is the only way to have a hand in the big game, I would like to introduce to the associate editor at the Financial Times a country called INDIA. Ireland has two official languages and India has over 20! No, Ireland’s tech based economy would still be just fine if Irish were the predominate language rather than English. I can understand Irish taxi drivers just as well as Dell tech-support from Bangalore.

The EU in its rush to be fair to all has seen the consequences of that fool’s errand. Utopian concepts will eventually be shown for what they are, and I believe what the road to Hell is paved with. Ireland does have some reckoning to deal with (like inflation, problems of socialism, the utopian concept of Neutrality and immigration) and the good-ole days of Ireland’s economic up turn are fewer and fewer ahead, but Ireland’s powerhouse performance will continue for now and it is not a fluke, a miracle or a gift from the EU. It is good policy based on economic principles and hard work. “Principles” and “Hard Work” yep… that sounds like the Ireland I know.

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