It's always curious when two writers you like pick a common theme at vey similar moments. Larry Elliott and Fintan O'Toole have done so this week. Both have chosen to comment on the consequential failures of globalisation.
Note that I do not say that they suggest that globalisation has failed. As Larry Elliott has it:
The financial crisis exposed the weaknesses of a system that was able to operate globally without adequate controls and effective supervision. The resulting slump was deep and the recovery has been long, painful and incomplete. Inevitably, countries have become more cautious.
That trend has been amplified because globalisation's fruits have been enjoyed primarily — though not exclusively — by owners of capital and the better off. Consumers have gained from lower prices, but inequality has risen in every part of the world. In democracies, there is a limit to how long people will put up with the rich getting richer while their living standards are stagnating or barely growing.
The suggestion is not that globalisation has failed as such. On the terms it set for itself it has not: the rich are richer. The trouble is that the rest of the world has noticed and that has created a global backlash. Elliott suggests we are now deglobalising. Coronavirus may hasten the process.
O'Toole makes a very similar point but he does so in the context of the Irish election result, which saw Sinn Fein do better than anyone expected. As he puts it:
The anti-establishment rage that drove voters towards Sinn Féin, the Greens, the Social Democrats and almost anyone except the parties that have run the state for almost a century, is not a reaction against the failure of globalisation.
It is a reaction against the success of globalisation. Ireland has not been left behind — it is, on the contrary, at the forefront of this vast process. But what the election tells us is that, even for the winners, the existing model of “free market” globalisation is deeply flawed: it cannot produce, even in a rich society, the public goods that citizens expect.
Deglobaliation is having a remarkable domestic impact right now in that case, and in the countries which have supposedly won the most from it.
What is the relevance of all this? I suggest three things.
The first is that we are facing - and may be are already in - a period of political transition where the direction of travel, from the global to the local, is becoming apparent. As some one who has pursued a green agenda and who wrote in 2012 about the need to hold global corporations to account locally there are elements to this that are, of course, welcome. The direction of travel is right.
At the same time, those who have won from globalisation - represented by an old elite - are fighting a rearguard action to preserve their privilege. The reality is that our current government is part of that process. Whatever it might say, it is all about retaining power for the Conservative Party and those that it represents, come what may. That is the old power elite and right now they are still heavily invested in globalisation - hence their extraordinary, even if wholly mistaken, belief in the supposed power of ‘free trade'.
And finally, because those power elites are seeking to defend privilege that is heavily compromised, and are doing so by seeking to use a narrative that is false - that there are ‘others' to blame for the position people find themselves in - there is a new, and marked, tendency towards fascism on the part of those who knowingly pursue this lie suggests that there is anyone to blame but themselves for the mess we are in. I could discuss this but Sean Danaher has already done so very well on Progressive Pulse: I recommend reading what he has to say on the issue.
Where does this leave us? Take your pick, from a state of despair, to waiting for the storm to break, to living in hope. All are entirely reasonable responses.
What is nit possible is that things will stay the same. We are at a point of instability. What is not clear is where the pieces will land.
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You do a disservice to Larry Elliot, whose critique is generally sound even if his prescriptions are often wanting, by mentioning Fintan O’Toole in the same breath. The latter is disengenuously seeking to set Ireland in a global narrative that deflects attention from the egregious and damaging behaviour of the parts of Official Ireland he favours. Indeed he has inveigled himself in to a position of being an adornment of Official Ireland and is fully embedded in it. Official Ireland not only tolerates, but actually encourages, the antics of tame left-wing academics, think tanks and media types to convey the impression there is a robust debate on policy matters across the political spectrum. But it poses no threat, and is intended to pose no threat, to the workings of Official Ireland. The nominally left-wing participants know the game and they play it – and they emerge as well-rewarded useful idiots.
As I’ve mentioned previously Ireland has a health crisis, a housing crisis and a cost of living crisis and the causes are almost entirely home grown and have precious little to do with globalisation. The Leprechaun Economics antics of multi-national firms have merely amplified the inherent and endemic inequalities. Prior to taxes and subsidies Ireland is the most unequal economy in the OECD. At great cost and with huge inefficiencies successive governments have maintained large transfers to those on low incomes so as to bring post-tax and subsidy inequality close to the OECD average. But hundreds of thousands of households just above these income levels are facing dire social and economic conditions while Official Ireland is in clover.
It is voters in these households that generated the SF surge. But Fintan O’Toole doesn’t want people to focus on the entirely home-grown structural inequalities. Look, look, over there, at the greedy global capitalists.
Wow
Have you ever read Fintan O’Toole?
I can only presume not. If you had that comment would not have been possible
I have been reading him — and lesser-known, nominally left-wing Irish academics and commentators – for far longer than I care to remember. The extent to which the broader public and semi-state sectors in Ireland are complicit in and facilitate the endemic and pervasive capture of economic rents that contributes to the gross pre-tax, pre-subsidy inequality in Ireland rarely, if ever, features in these writings. Ireland is an example of crony capitalism in a mixed economy par excellence. But the focus in these writings is on the antics of the indigenous private sector and elements of global capitalism. Little, if any, attention is paid to the symbiotic relationship between the two sectors. Indeed, every effort is made to distract attention from the behaviour of the broader public and semi-state sectors by couching critiques in quasi-academic left-wing tropes or strained inter-country comparisons. It tends to be the usual “public sector good; private sector bad”. It just happens that Fintan O’Toole is the most gifted and capable purveyor of this optical illusion. And it is truly unfortunate that he is a prominent source of insight on Ireland for those of a left-wing persuasion in the English-speaking world.
This most certainly does not mean that those who direct and work in the broader public and semi-state sectors in Ireland are bad people. The vast majority are decent, honourable people. But any dissent or critique of the status quo would be career-threatening, if not career-ending. The fundamental problem is that Ireland is just too darned small. Everyone who exercises any power or influence knows everyone else who does. It would be neither profitable nor popular to reveal the unvarnished truth.
Paul
Three thoughts
How much do you really know about Ireland?
Do you really me now how hard it is to stand out from the crowd in such a place?
What do you really think O’Toole should be saying? That all is hunky dory if just a little twist was added?
I am beginning t wonder what your agenda is…
Richard
I have an interest and engagement in matters Irish that probably goes beyond what is healthy or wise, given the frustrating incestuousness of the place.
I don’t understand your second question.
Mr O’Toole is free to write what he likes. I’m just expressing my view that I’d prefer if he desisted from seeking to project this optical illusion.
It would need much more than a twist to solve the endemic social and economic problems in Ireland. But we need to be totally honest about causes and effects. It’s neither the private nor public sector. It’s the symbiotic relationship between them.
So what do you want?
No relationship?
Or how would you reform it?
You are very good at criticising
What is the proposal?
Requires some time and effort, but will respond.
You’ve asked some questions and I’ll try to respond. I’ll try to keep it focused because I doubt your readers have much interest in quintessentially Irish idiosyncrasies. Previously you’ve acknowledged my description of Official Ireland as being made up of the entire government apparatus, state agencies, state-owned enterprises, multitudes of quangos, state-sponsored voluntary bodies, the mainstream media, academia, the upper echelons of the trades unions, large firms, business associations and the professions. Variations of this nomenklatura may be found in all European members of the OECD, although the EU has imposed considerable homogeneity. I’ve excluded the courts, justice, policing, security, defence and citizens’/residents’ rights.
The broader public sector and its agencies operate as a provider of services (either directly or in co-ordination with the private sector), as the formulator, implementer and administrator of policies (which should be applied in a totally independent and objective manner when applied to the private sector), as a regulator/overseer of private sector activities and as a purchaser of private sector services (all again requiring to be performed independently and objectively in the public interest).
This is the ideal and those embedded in Official Ireland will swear blind that this is the reality and will work themselves in to a state of high dudgeon if anyone asserts it isn’t the case. But it isn’t the case. Human nature will always triumph and the denizens of Official Ireland (similar to their counterparts everywhere), across the public and private sectors, have been adept at developing mutually beneficial rent-capturing arrangements that they are very careful to ensure comply with the letter of the law, but, invariably, impose additional and unnecessary costs on the majority of ordinary citizens and small businesses.
And though this is not unique to Ireland, the pitch is also queered by the existence of state-owned enterprises providing services in the energy, transport, communications and other sectors. These are described as commercial semi-state companies and operate in a conveniently grey area between the public and private sectors. Competition policy, consumer protection policy and economic regulation all exist in a recognisable form, but they are entirely optical illusions and huge effort is expended to suspend disbelief and to maintain these illusions. All of the economic regulators have either been captured by those they regulate or they were established in a manner that ensured their capture. Competition policy and law is under-empowered and there is an unwillingness to apply the powers and sanctions that are available.
I suspect many will sneer, but, almost paradoxically here in the UK, there is evidence of a commitment and willingness to beef up economic regulation and the scope and application of competition and consumer protection policy. With the encouragement of the previous government (and apparently supported by this one), the Competition and Markets Authority (CMA) is looking for more powers to protect consumers. The Chancellor and the BEIS Secretary wrote to the CMA to assess the state of competition and to propose remedies:
https://www.gov.uk/government/publications/state-of-uk-competition-report-commission-to-the-cma
Javid and Leadsom may have gone, but the request from government remains. It is some evidence of the development of a more appropriate relationship between those charged with responsibility for economic regulation and market governance and the private sector.
I can’t see this happening in Ireland.
Do you subscribe to public choice theory?
It would seem so
If so you are very far from the left
The contributors to what is labelled as the sub-discipline of public choice theory inhabit a broad church. It is true that many have either couched their contributions or allowed their contributions to be warped to advance right-wing tropes and this has allowed the left to condemn the sub-discipline bell, book and candle. But distinguished economists such as Mancur Olson and Elinor Ostrom have made important contributions that right-wingers seek to suppress and these contributions have lasting value. In any event, the validity of any insights generated should be assessed separately from their subsequent misuse by mendacious politicians and opinion-formers.
I fully agree with your advocacy of rational spending and taxation policies, but I also approve of your advocacy of a well-functioning mixed economy. And this requires a healthy, productive and competitive private sector. While the state has the primary responsibility in terms of spending and taxation, I believe that it also has the primary responsibility to ensure the functioning of a healthy, productive and competitive private sector. And this is achieved primarily through effective market governance and economic regulation.
Unfortunately, many on the left totally reject market mechanisms and economic regulation in favour of public ownership and control and have a very selective take on the effective use of collective action in a mixed economy.
I very much hope you aren’t moving in to that camp.
Paul
I firmly believe in a mixed economy
But it seems you dislike those who do so
I am bemused as to why
Richard
You’ve lost me now. I just don’t know how you could come to that view.
The key point I’ve being making here is that the public sector in Ireland is enmeshed in facilitating legally authorised arrangements that allow the private and semi-state sectors to capture economic rents on a sustained basis at the expense of the majority of citizens – a crude estimate of the additional unnecessary cost burden is around €10,000 for the average household. Fintan O’Toole and his ilk consistently attempt to deflect public attention from this. This is the Irish version of the mixed economy and highlighting its malign impacts does not automatically imply that one is attacking those who work in the public sector. The vast majority really have no choice “because that’s the way things are”. But any attempt to highlight the reality attracts vicious attacks from those ostensibly on the left claiming that it is an attack on public sector workers. It is nothing of the sort.
The irony for me is that the current UK government appears to be taking steps to, at least, reduce the damage being done to the interests of final consumers in the British version of the mixed economy. Reducing these harms and facilitating the functioning of a healthy, productive competitive mixed economy is primarily a matter of governance. Successive Irish governments have maintained the exploitative status quo; this UK government (following on from some movement by the previous government) appears to be prepared to force some changes.
The surge in support for SF in Ireland had very little to do with a desire for a united Ireland. It was an expression of disgust and anger conveyed via the ballot box at these exploitative arrangements.
So, tell me, what are you going to do about it?
I have long said complaining without a solution is meaningless sloganeering
Tell us your top 5 asks
Perhaps you should set that task for other commenters here as well.
The first step is to ensure some recognition of the reality and analysis of the impacts. Then the path to resolution becomes clearer. But the resistance to recognising the reality is formidable. I have spent over 15 years trying to break it down. And I shall continue to do so.
As for the UK, I believe Labour, when it has finally got a leadership team in place, should get behind the government in its efforts to rein in exploitative firms and force the Tories to go to places they don’t really want to.
So you’re ducking?
Is that what you’re saying?
I set out my case often
So do others
Are you saying you have none?
If so why are you making all this noise? What for?
Cheating is built into life and usually it’s countered by the many cooperating to keep the few in check. The invention of money changed all that because it enabled excessive and substantially unrestrained leverage by the few over resource usage. This was a mixed blessing as the many are now discovering and the solution can only lie in “levelling” that leverage.
Helen, I am intrigued by your comment about ‘levelling leverage’ in the money context and wonder if you could expand on what exactly you mean and how it might be done?