Well, with Biffo Cowen having been explaining the Irish electorate to the assembled heads of government in Brussels, it’s perhaps worth returning briefly to the theme of the EU, at least as it’s seen in Irish politics, functioning as a cargo cult. Actually, the myth of “Europe” has become very much ingrained in the popular consciousness as in the simplistic equation Europe = Prosperity. It’s also a crucial part of the Eurocrats’ sales pitch to the like of the Bulgarians and Croats – knuckle under, accept a little pain at the outset and, who knows, in a few short years you too could be on the pig’s back.
Does this hold water? A serious historical analysis of the southern Irish economy is sadly lacking, or at least I haven’t come across one. But I think there’s some faulty causality here, of the type that spawns cargo cults.
It would be interesting to go back in time twenty years and ask people whether the EEC had brought prosperity to our wee island. In fact, membership was to a large extent a counsel of despair – having abandoned the project of economic independence, the Dublin government saw no alternative to following the Brits in. But this wasn’t followed by economic expansion. What it was followed by was the collapse of important native industries like sugar and paper, thanks to the removal of subsidies and protectionist barriers. And this then led into the crisis of the 1980s. There were other factors at work – basically the global recession plus O’Donoghuenomics – but the destruction of the Irish industrial base didn’t exactly help.
On the countervailing side we had the structural funds and the CAP. Whether those compensated for the industrial collapse is debateable. What’s not debatable is that these goodies were restricted more or less to two sectors – road-building and the big farmers.
But can Europe take the credit for the Celtic Tiger? Maybe in an indirect sort of way, coming out of Maastricht, when there was an idea that the Single Market would be supplemented by protectionist barriers being set up around the EU. That then led to a rush of investment from American corporations looking to establish beachheads within the EU. But there are a few counterintuitive points worth considering. One is that none of this would have been possible without the Greenspan boom in the States. Another is that the inward investment was overwhelmingly American with an admixture of Asian – not much came from the continent. Finally, there was a lot more American investment in Britain – it’s just that the small size and low starting point of the Irish economy allowed for a far more dramatic per capita impact.
So, where are we now? The American boom seems to be dying on its arse, and the downturn there has already started to have a depressing effect here. The structural funds have run out. The fisheries have been decimated (notice that every area that’s dependent on fishing voted massively against Lisbon), and Mandy Mandelson seems hell-bent on destroying Irish agriculture before he’s done. Put that together with the people who didn’t benefit all that much from the boom in the first place, and you’ve got the outlines of the working-class and small farmer No.
And what remains on offer? A continuance of (pardon the mixed religious metaphor) voodoo economics based on the idea that a combination of neo-Friedmanite nostra and sheer bluff can see us through the rocky times ahead. And the loss of an automatic EU commissioner, which might not seem important to the big countries, but to the smaller countries looks very much like the big players carving up an institution where everyone is supposed to have a voice. As for the supposed progressive measures around workers’ rights and the environment, where is it written that we are so backward we can’t do these things on our own, but need to have them imposed from Brussels?
For more on the Lisbon vote, the compulsively readable Slobodan Antonić has some pertinent thoughts.