I had a very unpleasant day today, for loads of reasons. One email which caught my eye and drew my attention away from the unpleasantness was a question from a commentator who wishes to remain anonymous. He asked me:
Why do Irish people persist in thinking that they are in a country of their own? Surely it's obvious you are just a small region in a huge pan European system. You've never really had any autonomy as a nation economically. Either you go with the flow, or you get crucified, it's as simple as that. First you were part of the UK, then you essentially acted as if you were part of the UK for most of the 20th Century, then you joined the EU in a flash of pragmatism. When it comes to the big things like monetary policy and the world economy, you just don't matter. So why get all upset by the fact your politicians can't do anything? It's like being upset at a local representative when the real decision are being made in Washington DC. It's just pointless, wouldn't you agree?
No, I don't agree, but I see where the commentator is coming from.
Ireland is too small to prop its faltering economy up by selling things we produce here to ourselves, or by asking the government to step in and fill the space left by receding markets.
Strategically, as a country we need to produce goods and services the world wants to buy if we want to get richer. The route to doing this is to create a basis for trade in high-value, export-oriented, home-grown products and services. These businesses that survive and thrive will grow the economy, and Irish society with them, through exports, producing what’s called export led growth.
The logic behind export-led growth is that if the stuff Irish people sell is more attractive in terms of price and quality than other countries’ stuff, then Irish sellers will see orders for their stuff increasing, meaning the economy will grow over time due to this increased economic activity. Better products produced in Ireland and sold abroad means a richer Ireland.
The only problem with this strategy is that it can’t be institutionalised to large degree—successes like these are a matter of luck, of trial and error.The old English proverb ‘There's many a slip 'twixt the cup and the lip’ applies when it comes to the development of any nation. Plans and strategies are fine, but when it comes to economic development, and economic miracles, most of what occurs is by accident—the Celtic Tiger being a case in point. I believe, and I’m not alone in this belief, that the Tiger years happened as the conflation of a series of very fortunate circumstances, rather than a grand design by policy makers. The subsequent downturn in the economy is, likewise, due to the actions of many individual actors in the process, rather than one or two groups. So we need luck if our hard work is to succeed. Joe Lee (p. 521) puts it better than most, when talking of a national recovery for Ireland:
‘’Such a leap forward may still occur... If such transformtaion occurs, however, it will not have been the result of forsight. It will be a sheer accident.’’
Answering the global question
Because of its size, Ireland is unable to have any significant positive or negative effect on the functioning of the world economy.Whether we double our wealth, or half it, it means nothing to the international economic community. We are just too small. The change in our fortunes, of course, affects us in Ireland. This is the key to Ireland’s global question: what we do will not affect those outside Ireland unduly, but what they do could harm us with relative ease.
The wealth of the Irish economy will increasingly come from external sources, so Ireland is very vulnerable to large swings in the world economy, such as the negative swing in economic activity we are experiencing right now. Larger nations can wield enough political, cultural, and economic clout through their large governments to change or even reverse some of the effects of large scale economic downturns. Ireland cannot. Size matters. Ireland’s place in the world, and the wellbeing of its citizens, is dependent on how we manage the challenges a globalised world will present to us in the future. Many studies place Ireland at the forefront of globalised nations. This openness to globalisation is a blessing and a curse.
Globalisation is a catch all term which means many things to many people. We can define globalisation roughly as the increased integration and interdependence between markets and economies, which occurs because various barriers to trade have been broken down. The effects of globalisation are increased movement (and interaction) between countries of goods, services, information, ideas, and of course, people. The world has experienced waves of globalisation several times, most notably from 1870 to 1913. The current wave of globalisation does not seem to have been adversely effected by the global downturn—although exports and imports are dropping, the channels through which these trades can occur are not being shut off by ‘protectionist’ policies.
Michael O’Sullivan has written about Ireland’s potential answer to what he calls ‘the global question’: can Ireland maintain its sovereignty and still manage its affairs in the context of powerful, highly integrated international markets, in which it will almost certainly not be a key player?
The global question is an extension of the national question Éamon De Valera posed to the Irish people throughout his time as Taoiseach and President: can we maintain our sense of ourselves in the face of powerful external forces?
There is no simple answer to the global question. The national question, I think, we solve because we have wanted sovereignty for hundreds of years, and finally got it in the last century. Whether that sovereignty means anything in a globalised world is up for debate.
The notion of 'autonomy as a nation' is seriously over-rated. Your commentator would probably rate Japan as an 'autonomous nation' (language, geography, history and all that): but it's an economic basket case because of 'decisions made elsewhere'. Not, mind you, the decisions of plenipotentiaries in Washington or Brussels, rather by millions of businesses and consumers deciding not to buy their products and services - for the foreseeable future at least. No nation is an island ...