When it comes to economics, we are regularly told by voices on the political left that, since the foundation of the state, Ireland has been dominated by two right-wing political parties and that it is high time that the country’s left unite to put them out of power. The implication is that voices favouring freedom and liberty have prevailed in Ireland over those who favour more state intervention. Yet by key empirical measures, Ireland is more of an interventionist and left-wing state.
Consider some key facts:
Taxation – When we examine the overall level of taxation and social contributions by comparing it to Irish GDP, Ireland appears to be a low tax economy with the EU raising over 40% of GDP in 2015 while Ireland raised less than 25%. But when we compare EU tax levels to Irish GNI* – the new CSO measure of annual economic output free from the distortions of multinational accounting – Ireland paid more in tax (30.2% GNI*) than the EU average (26.8% GDP).
Government spending – Total government spending before social expenditure in Ireland was higher in 2015 than the EU average (30.3% GNI* compared to 28.2% GDP). Ireland spends considerably less on Social Protection (14.5% GNI*) than the EU average (19.2% GDP) due to lower spending on the Old here (3.6% GNI*) than in the EU (10.3% GDP) because of our younger age profile and state pensions that are not pay-related.
Health spending – Eurostat data indicates that Ireland spent €4,147 per person on health in 2014. That’s more than what was spent in Germany even though they have a considerably older population than us. It’s more than double the Spanish per capita spend (€2,034), three times the Cypriot spend (€1,389) and over four times what the Slovakians spent (€970). Despite clear evidence that we are spending far more on health than our neighbours, the Dáil Committee on the Future of Healthcare proposed yet more public spending on health! Our health system is currently suffering from financial obesity and our public representatives are only wanting to stuff it yet with more money.
The fact of the matter is that state intervention in Ireland is as bad as it is across a European Union that is bankrupt at several levels: financially, morally and demographically. This reality should prompt those of us who favour freedom to consider some important questions. Firstly, how come Ireland is still considered economically “right-wing” by so many when it is so interventionist in reality? Secondly, what are the challenges limiting us in winning the debate as to what course Ireland should take? Thirdly, what opportunities are there for us to put things right?
Why is Ireland considered right-wing when it is so left-wing?
In my opinion, there are several reasons why so many people believe that Ireland is a right-wing country when, looked at objectively, it is interventionist and left-wing:
Many confuse the past with the present and cultural leftism with economic leftism — There is no doubt, in the years following independence, that Ireland moved towards a position of Catholic piety. But Ireland’s political romance with Catholic piety has been in sharp decline since the 1980s. Any doubts about this should have been eliminated in 2015 with the emphatic popular rejection of the Catholic Church’s position in the Same-Sex Marriage Referendum. Many confuse Ireland’s past with its present and cultural questions with economic questions to assert that Ireland is a right-wing country when, in fact, every political party represented in Dáil Éireann is either social democratic and soft left (Fianna Fáil, Fine Gael, Labour, the Social Democrats, the Green Party etc.) or socialist and hard left (Sinn Féin, Solidarity, etc).
Much of Irish public discourse is sub-intellectual — The confusion as to whether Ireland is left-wing or right-wing validates the 1980s comment of History Professor Joe Lee, that Irish public discourse is “more sub-intellectual than anti-intellectual. Anti-intellectualism is too intellectually demanding.” Instead of dealing with facts, many opinion-formers prefer top-of-the-head spoofery that leaves their core views undisturbed for facing uncomfortable facts would force them to think!
It suits the political left — By arguing that Ireland is a right-wing country, the political left can duck responsibility for the multiple and sustained failures of state intervention across areas such as health, policing and the care of troubled children. The left can argue that its remedies have never really been tried in Ireland even though we must confront the resulting institutional wreckage every day.
What are the challenges standing in the way of us winning the debate?
There are several forces at play that promote increased state intervention and make our goals harder to attain. Some of these factors are global in scope and some are largely Irish. The key forces are:
High levels of dependence on the state – It was that old Fabian, George Bernard Shaw, who said that “A government that robs Peter to pay Paul can always depend on the support of Paul.” The social democratic state has expanded so that – counting direct taxes and social transfers – only the top 30% of income earners contribute more to the state than they get back. Fully 70% of citizens get more form the state than they pay in. This is powerful lobby for a large state rather than a small state.
Longer dependence – Students are spending ever more years in full-time education and this is having some important political consequences. It was the German philosopher Nietzsche who pointed out that there are fundamentally two kinds of knowledge: “Erfahrung“, which he defined as knowledge based on experience, and “Wissen“, i.e., knowledge based on consuming (reading, hearing, or watching) secondary information, like books, speeches, and television. By spending longer in education, students’ political views are becoming increasingly based on the Wissen of their (often left-leaning) teachers rather than Erfahrung that they have gathered themselves in life.
The legacy of Catholic social teaching and Ireland’s colonial legacy – While religious observance levels have dropped sharply in recently times, the subconscious effects of Catholic social teaching remain an important influence in public debate. This is short on individual thinking and long on promoting social solutions to most problems. It is also a fact that Ireland was colonised, rather than a coloniser: this generally leads us to adopt a feeling of sympathy for the underdog rather than to consider what incentives would best promote good behaviour. While Ireland enjoys higher living standards today than our neighbours in England, public discourse here is instinctively considerably more left-wing.
Growing complexity and growing interdependence – Two hundred years ago, a wealthy man could retreat from society and live a prosperous life in an autarkic fashion on his farm. Today, following two centuries of massive technological advances, we live lives that are far more interdependent on one another (in terms of travel, communications, sourcing food etc.). It is not possible to live an autarkic life without suffering a considerable financial penalty. But growing complexity and interdependence require a growing code of rules, regulations and laws to govern who does what and to make sure that both are successfully managed. Unfortunately, this comes at the expense of freedom and can be used by some busy-body bureaucrats to overstep the mark in trading away our freedom.
The arrival of the professional politician – One hundred years ago there were few professional politicians. And, because their pay was so low, professional politicians then were often well-off people motivated by a sense of public service. That inclined them towards a long-term view of problems which was helpful. Today the situation is totally different. Most countries are now governed by cadres of professional politicians wholly dependent on political success for their material wellbeing. That encourages them to behave in a way that they think their voters want. It inclines them to a short-term view of problems which is unhelpful. Consider the example of our tax system. A long-term view would promote a simple system that was easy to understand and easy to administer. But a political view would view the tax system as something that can used to project messages signalling that governing politicians are doing something about the problems of the day. Sadly, the Irish tax system reflects the latter (short-term and politically opportunistic) perspective rather than the former.
What opportunities are there for us to put things right?
Despite all of the above, there are some big opportunities available today to those of us who favour more freedom and less state:
The facts of state failure are becoming ever clearer – whether one looks at the Irish health system (with its long waiting lists and often alarming clinical misadventures) or the Irish policing system (with the example of the Gardaí’s failure to accurately record drink driving tests set against its success in harassing whistle-blowers) or the Irish judiciary (which pushed for the passage of a constitutional amendment to create a new level of courts but where the backlog of un-processed cases still gets longer every year) one sees a picture of repeated state failure.
The self-enriching behaviour of the public sector is becoming ever clearer – Irish public servants are paid 40% more than their private sector counterparts. In the UK, the equivalent gap is just 15%. Both gaps are measured before the impact of public pensions is considered. Despite all the efforts of the public service to justify this vast act of self-service (as opposed to public service), most citizens are unconvinced and fear that they’re being taken for a ride.
The state is an 18th century concept struggling in a disruptive 21st century environment – Disruptive technologies are having an enormous impact across swathes of the private-sector economy. But, to date, they have had little effect on the public-sector. The state is looking increasingly old-fashioned and behind the times. The challenges facing RTÉ to cope with such change – as it struggles with increasing numbers using the web rather than TV by increasing the television poll tax – illustrates the point.
We may be living through Peak Social Democracy – the problem with the social democratic state as it has established itself across the EU is that it systematically over-promises and under-delivers. It also systematically favours politically expedient short-term fixes over potentially painful long-term solutions. The result is a massive actuarial deficit on state pensions (€422 billion at the last count) coming on top of publicly recorded state debt (of around €200 billion) that on its own was almost enough to bankrupt the state. The figures are even worse in other countries (that have older populations and offer more generous pensions). We may be living through Peak Social Democracy.
Together with Eamon Delaney and Keith Redmond, I formed Hibernia Forum as an independent Irish think-tank and advocacy group dedicated to the principles of individual freedom, a free market and responsible and prudent government. We offer a bridgehead for constructive ideas through an active social media presence, a strong media presence, reports, factsheets, meetings and events organised in conjunction with like-thinking international organisations. All are welcome to join us. We salute Burkean Journal and those behind it. And we wish you every success in the future on our long road together.
Cormac Lucey teaches finance, at post-graduate level, at the IMI, UCD, TCD and Chartered Accountants Ireland.
He is also a commentator on economic and current affairs both on broadcast media and through his weekly columns with The Sunday Times (Irish edition) and The Times (Ireland).
And he is chairman of the Hibernia Forum (http://www.hiberniaforum.ie/), an independent think-tank which promotes the free market, individual liberty and responsible and prudent government.
He served as a special adviser to Michael McDowell when he was Tánaiste (Irish deputy prime minister) between 2002 and 2007. Cormac previously worked both in industry and in corporate finance in both Ireland in Germany.