How Stupidity and Corruption Sank the Irish Tiger

How Stupidity and Corruption Sank the Irish Tiger by Fintan O'Toole

IN THE 1980s I lived for half a dozen years in Ireland. It's an easy country to fall in love with, and I did. Somehow the politics of the country – routinely discussed with far greater knowledge and sophistication than in Britain – engaged me more than British politics have ever done. I knew exactly the kind of Ireland I wanted to see emerge, and years later, with my namesake as the country's president, the first stirrings of the Celtic Tiger and a more liberal society no longer in thrall to the Church, it seemed as though it already had.

By the end of the 1990s, emigration had not only stopped but reversed. Ireland was exporting more computer software than anywhere else in the world. The economy was growing three times faster than the EU average, with per capita GDP way ahead of Britain's. Its property market reflected this, growing twice as fast as our own. Those "thick Paddy" stereotypes – remember all those anti-Irish "jokes" from the 1970s? – were long dead and buried.

Most Britons looked across the Irish Sea to a dynamic, young country awash with inward investment, in which labour and capital were in an enviably harmonious relationship. Culturally, Ireland was globally hip. Even their rugby and football teams started winning. Alex Salmond talked about an "arc of prosperity" among small northern nations and – as late as February last year – about creating "a Celtic Lion economy to rival the Celtic Tiger". Nobody laughed. We – and he – weren't looking hard enough. 

In this brilliant, coruscating polemic, Fintan O'Toole, for a couple of decades now the head boy of Irish journalism, shows just what we missed.

Let's start with corruption. Cronyism is always a danger in small countries – it's the chief culprit in Iceland's spectacular economic suicide – but where politics are based on individuals not ideologies it becomes positively lethal. In Ireland there's hardly anything to separate the two main centre-right parties, apart from the fact that they formed as a result of a civil war which hardly anyone living can remember. What matters instead is, at an individual level, which politician has, as the Irish say, the most "pull".

"Pull" is a key word in the Irish political lexicon. If you've got enough of it, you can override local planning laws and get a road built where you want. You can get land redesignated so it switches from green belt to something your developer friends might build houses or hotels on. If you have enough pull, those developers will make sure that you don't have any problem finding the necessary readies to fund your election campaign or – if you're really adept – funding your own lifestyle.

No-one in modern Irish politics ever had more pull than Charles Haughey, the Fianna Fáil leader nicknamed "the Boss". As Taoiseach, he transformed Dublin, turning Temple Bar into a tourist hotspot, building its International Financial Services Centre as a new low-tax haven, attracting millions to build new pharmaceutical and electronic engineering plants. Many of those millions, however, found their way into his back pocket: his 45 million fortune was 171 times his total salary payments as a full-time politician.

Everyone knew there was a whiff of sulphur about Haughey, but few realised the depths to which he would sink for money. When his right-hand man and former finance minister Brian Lenihan needed a liver transplant in the US, for example, the Boss raided funds raised for the operation to snaffle 250,000 for himself.

In Ireland, however, revelations about bungs from plutocrat friends hardly dented Haughey's popularity; arguably they even increased it. If you wanted a "fixer", someone who could get the Celtic Tiger up and running, if you wanted a politician with pull, who cared if a few laws were broken? Who really minded if civic morality wasn't all it should be? Who was really hurt by a few lies to the investigating tribunals?

When the bright, shiny new office blocks were transforming the cityscape, when Irish property developers were buying London landmarks and Irish farmers were snapping up Scottish land (a tenth the price of their own), when building sites throughout the land helped pull down the unemployment figures towards zero, the answer was: hardly anybody. This was a poor, historically oppressed country finally getting its day in the sun. Who could object to that?

With transparency, no-one. But the world of pull is all about collusion, about keeping things in the dark, about ignoring the letter of the law. That meant politicians keeping developers sweet with re-zoning deals, ignoring low-cost compulsory purchase land options and social housing promises. It meant tax evasion on a massive scale, "light touch" bank regulation that opened the door to fraud, and no-questions-asked developments that led, as O'Toole points out, to "the building of houses whose real purpose was to provide shelter not for real people but for the taxes of the builders".

continued...