Monday 14 April 2014

The criminality of the death of the Celtic Tiger in Ship of Fools

From The Week of April 6th, 2014

For society to function properly, for it to have hope for more than chaos and discord, the people must have trust in the State. There is no other way to maintain the rule of law. The State collects taxes in exchange for providing services. If those services are corrupted or dysfunctional, then taxation becomes, in the minds of the citizenry, just a nice word for extortion. And the moment the individual realizes this, then resistance against this unfair system is the only ethical course of action.

As clear cut as this may seem, however, there are complications. After all, only the most cynical citizens want to believe the State is broken. Thus, we grant it chance after chance to convince us otherwise. It is far easier to give the government a second chance than it is to overthrow it. But one can only give so many second chances. Once those are exhausted, there are only two options, rebellion or surrender. Sadly, the latter seems to be the path in Ireland, a tragic reality stingingly illustrated in Mr. O'Toole's engaging polemic.

From 1995 to 2007, the Republic of Ireland experienced a 12-year economic boom that, for a brief time, made this moribund country the envy of the world. After centuries of oppression, misrule and sectarian discord, the Celtic Tiger, as these boom times were christened, finally seemed to be lifting the near-permanent shadow from the heart of this benighted place and giving it a glimmer of hope for a brighter future. For once, jobs were plentiful, allowing the Republic to claim one of the world's best unemployment rates. For once, real-estate developments were inviting the famed and the fortunate to Irish shores, making the emerald isles a place to see and be seen. For once, foreign investment, particularly in the IT field, appeared to be offering a higher quality of life for the average citizen. There was just one problem. It was built on a lie.

Through reckless lending policies and criminally lax procedures, private Irish banks fuelled the Celtic Tiger by extending astronomical sums to already wealthy Irish developers who in turn used that money to develop a country that did not need it. This form of trickle-down economics may have happily continued on for years to come. But when the credit crisis detonated Wall Street in 2008, quickly sweeping the globe, those German and French banks that happily lent those Irish banks money to pass on to Irish developers suddenly wanted their money back. Unable to cover their debts, these Irish banks instantly collapsed under the strain of absurdly skewed ledgers and would have drifted into oblivion but for the Irish government who, in stepping in and nationalizing the debts of these banks, instantly burdened every Irish taxpayer with additional debts of more than 50,000 Euros. How this calamity came to be, both the systems that permitted it and the government that refused to stop it, illuminates these pages and sets fire to the notion that there ever existed a reasonable, moral Irish state.

Ship of Fools is is a blistering, convincing broadside to the Celtic Tiger and the government that manufactured it. Fintan O'Toole, a journalist and public intellectual, walks the reader through the last 50 years of Irish economic policy, an adventure that ought to put his every reader to sleep. But how could a single eyelid even threaten to droop when every turned page reveals another scam, another dropped ball, another scandal by which the Irish government revealed itself to be nothing more than a public-facing shell corporation for the Republic's obscenely wealthy elites, a small cadre of men who, over decades, established an Irish gentry that not only held the reins of business, but collared the government and the regulatory bodies designed to contain them. In this, the author lays down a painfully obvious pattern of corrupt and selfish behavior that made the death of the Celtic tiger both obvious and inevitable.

Though Mr. O'Toole largely keeps his critical focus on the government dysfunction that allowed the Celtic Tiger to all-but destroy the Irish state, he does not spare neoliberalism its fair share of the blame. It may well be that this business-first system of low taxes and small government has merit. Perhaps, in a vacuum, it could be executed admirably and allow every citizen a chance to succeed on their own, without aid or succor from governments. Certainly, there's appeal to economists in this scheme. After all, governments act in the interests of their constituents and from the necessities of politics, not caring what the consequences of these half-informed decisions might be. Removing this power from government removes the temptation to act which will allow a well-engineered system to operate smoothly.

However, a free market invariably evolves into one dominated by massive, conglomerated firms that use their outsized power to not only crush their competition, but to silence their opposition. The moment they've succeeded in ensuring that no one can say no to them, they act as only they see fit regardless of the consequences. It is the very definition of a doomed state.

The State cannot exist to service business interests. It cannot exist to facilitate the wealthy. It must exist for everyone, to give everyone a fair chance at life. And as Ship of Fools makes painfully clear, this has never been the case in the Republic of Ireland where self-serving economic policies and a hollowed-out government have created the worst of all worlds. A sad but powerful indictment... (4/5 Stars)

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