Where’s our Social policy?
Last week I attended an ACCA debate on employment, jobs and the general economic outlook in Ireland, with specific emphasis on the SME sector. Mairead McGuinness (Irish MEP), Fintan O’Toole (journalist) and Patrick Delaney (IBEC) all made their points. The ACCA members made their points. All of them had valid points, but again they missed half the problem… they were passionately arguing economics, but none of them sociology.
How many times have we heard the economic arguments? Politicians, journalists and now-famous economists all have their views. In other Western countries it is well understood that economic and social policy must go hand in hand to achieve profound results, yet in Ireland, how often have we heard from the social scientists?
Much information, facts and figures were doled out by the experts. For example: (1) It seems that Irish people are saving double the OECD average at the moment (13% of their income), (2) It seems that the SME sectors across Europe and the US have picked-up to pre-2009 levels, but not in Ireland or Eastern Europe, and (3) the experts acknowledged that entrepreneurs rarely start their businesses for financial reasons, yet the SME’s are crucial to the economy. So what is going on? What is it that ties these points together? We need to address these issues because it is the people of Ireland who own the SME’s (the multi-nationals are mostly foreign owned) and they’re in trouble.
For most of the 20th Century, Ireland was a poor country on the periphery of Europe. In the 1990’s the Celtic Tiger arrived and Ireland enjoyed a boom like never before. Economic booms had been enjoyed in the rest of the OECD and beyond, including the US, UK, Holland, Belgium, Luxembourg, France, Germany, Finland, Australia etc. The centre of the boom was Dublin, with the wealth slowly spreading out to the rest of the country. When the bubble burst the headlines declared “it’s all over!” RTE ran programmes titled “How we blew the boom!” This tapped into the long history of Ireland as a poor, peripheral country. People began to believe it was all over and in fact, we got what we deserved. The people accepted redundancy and pay drops with barely a whimper. Blame was apportioned all round. Many of the people who had never enjoyed the fruits of the Celtic Tiger, many who had felt marginalised by the boom declared ‘I told you so’. Good news and positive aspiration were not acceptable news items. We had to get back in our box! The Irish SME sector is still suffering from the social consequences of decades of self doubt (just like the Eastern Europeans). We don’t believe in ourselves enough – and we’re hoarding our money, too afraid to spend.
So how do we get out of it? Well the first thing that needs to happen is that people need to understand ALL the reasons Ireland has suffered so badly; (1) property got too dear and a correction was inevitable, (2) at the same time the world economy went into melt-down and (3) our closest trading partners (the US and UK) were able to devalue their currencies… thus forcing Ireland that has no currency control, to cut costs to compete. Next, we need leadership. Not just the generally good economic policies of Brian Lenihan, we need the social leadership that a strong and charismatic leader brings. A leader who tells us that Ireland is still a great country, that it’s not all over for the country and that in fact, the future of Ireland is incredibly rosy.
The turn-around is already happening in Ireland, but it is led from Dublin. This isn’t unusual with so many businesses based out of Dublin, but it isn’t the only reason. The key social reason for Dublin’s return is the capitals self belief. Dubliners had many years of boom and retain some self confidence, and there are also very many OECD people living in Dublin who retain the self-belief of British, Americans and Australians that we are simply living through a cycle.
Ireland has to look at social & economic policy together. What are the social consequences of the recession? NAMA? Tax rises? Quinn? etc. If Quinn had been put into administration in September 2009 what would the social consequences have been? What if it was put into administration in December? January? Before NAMA? after NAMA…? How is the news delivered? When a CEO makes a decision that affects their company they consider the social consequences of the decision – the timing, how it is explained and what the consequences will be on its staff, short and long term. We need to start heeding social policy as much as economic policy. The short and long-term well-being of Ireland depends on it.
David Bloch – MD, Brightwater