February 28, 2005
What next for Sinn Fï¿½in? There seem to be three general theories doing the rounds. The first is that the doves succumb, in their own parlance, to the hawks, and the IRA goes back to war.
The second is that Sinn Fï¿½in forces the IRA to disband, in which case Sinn Fï¿½in – the nationalist socialist party – is back at the electoral races.
The third eventuality is that they are one and the same group, and that Sinn Fï¿½in/IRA always had a peace tactic rather than commitment to a peace process, and that they have been secretly trying to hoodwink all of us as part of a long-term strategy to increase influence and ultimately to gain control in the Republic.
Whichever theory you subscribe to, what happens next will have long-term ramifications for our economy. Strangely, the economic consequences of the peace – to paraphrase the title of John Maynard Keynes’ brilliant analysis of the 1918 Versailles treaty – are often overlooked.
There can be little doubt that prosperity and peace go together. The first lesson of economic history is to avoid war at all costs. War destroys everything. Continuously successful countries have avoided wars for hundreds of years. In Europe, Switzerland and Sweden are fine examples.
Although it is hard to prove conclusively, there is an obvious overlap in terms of timing at least, between the end of the war in the North and the blooming of the economy of the Republic.
It is impossible to distinguish chicken and egg. Common sense suggests, though, that given the semi-detached nature of most of Ireland’s relationship with the North, the direct impact of no bombs in Belfast on jobs and wealth down here was probably negligible.
But there is no doubt that the ceasefire affected perceptions of Ireland internationally – the vibe, the image, the marketing spiel, the entire background noise was positively influenced by the ceasefires.
What’s next? Let’s say the doves and hawks theory is correct and Gerry Adams gets pushed aside in favour of hardliners who see fit to go back to war.
The first economic casualty will be perceptions of Ireland in America.
Times have changed, both in the White House and in corporate America, and even a low-level campaign would have serious negative effects on direct American investment.
A second direct casualty would be tourism, the biggest employer in the state. We sometimes underestimate how many people were scared to come here in the bad old days – particularly British visitors, who are our best customers by far.
A third impact would be on Ireland as a place to live. Again we are talking about perceptions here, not reality. Immigrants are attracted to countries for a variety of reasons, one of which is the received wisdom about the place. A renewed IRA campaign – with CNN pictures beamed into living rooms around the globe – would dissuade immigrants from coming here.
All these factors would undermine business, consumer and investor confidence. At the moment in Ireland, confidence is crucial to keeping the whole indebted show on the road and anything that punctures that effervescence would have dramatic consequences.
But what if there is no war and either the IRA disbands or our short memories allow a cynical peace tactic rather than process to prevail? In this situation, Sinn Fï¿½in/IRA would continue to win at the ballot boxes.
We then have to consider the financial impact of Sinn Fï¿½in’s economic policies.
But what are Sinn Fï¿½in’s economics? A look at their manifestos does not help to give a title to Sinn Fï¿½in’s economic philosophy. It is certainly not capitalism, nor is it real socialism. It’s neither liberalism nor collectivism.
Sometimes the best way to categorise policies is to examine who benefits from them. In the past decade, the main beneficiaries of Ireland’s boom have been the much-maligned nouveau riche. But if Sinn Fï¿½in’s economics were to dominate in the future, the main beneficiaries will be a new class. Let’s call them the ï¿½provo riche’.
At the moment, the provo riche are, allegedly, a bunch of money launderers and bank robbers. But in an era of Sinn Fï¿½in economics, the provo riche would proliferate.
The main problem with the provo riche manifesto is that (like its bank robbing genesis) it says very little about creating wealth, but lots about taking wealth.
Here, for example, is the provo riche policy on taxation taken from Sinn Fï¿½in’s 2005 pre-budget submission: ï¿½It is essential to reform and re-weigh the taxation system in favour of the low paid and to increase the overall tax take by targeting wealth, speculative property and corporate profits.ï¿½
Measures should include the end of tax avoidance schemes, measured increases in corporation tax and increased capital gains tax for owners of multiple properties and a 50 per cent tax band for incomes over ï¿½100,000.
So far so extortionate. So the provo riche’s policy is about taking money from the rich, but what does the manifesto say about creating money and wealth? Not a lot, frankly. But back in 2003, at a submission to the Oireachtas Committee on the Constitution, the provo riche had the following to say about your house: ï¿½Private property has been and remains an instrument of oppression of people the world over.ï¿½
There are those (maybe the 86 per cent of Irish people who own their own homes) who would argue the opposite: that private property and ownership is the very cornerstone of a civilised, law-abiding society, that with property rights come responsibilities – the sort of responsibilities that bind families and communities together.
Once a manifesto deviates from private ownership, at the very least it puts huge faith in the promise of public ownership.
And this is at the core of the provo riche economic doctrine. It believes in the state – the power of the state, the control of the state over people and the primacy of the will of the collective over the rights of the individual.
In some areas there is a benefit to this approach, and, if wealth is generated, most of us support the idea of redistribution to help others. But you need to have a view about creation not just redistribution. And central to wealth creation is the ownership of property, capital and ideas. All these seem to be anathema to the provo riche.
In Putting People First, a serious, wide-ranging and interesting Sinn Fï¿½in policy document, the party outlines its views on multinationals, which are crucial to our economy. It states: ï¿½Sinn Fï¿½in believes there needs to be a fundamental rethink around the role of foreign investment and trans-national corporations in the Irish economy.ï¿½
It goes on to suggest that we should be managing trade and investment and increasing tax on these companies. It fails to see the positive side to multinationals and their contribution to our economic health. Throughout its economic publications, Sinn Fï¿½in displays ï¿½national socialist’ thinking. This means everything national, small and local is good, and everything, international, big and cosmopolitan is bad.
High tax seems to be an end rather than a means, and the philosophy is predicated on an all-knowing, all-powerful state taking our money and spending it for us in areas the state – that is Sinn Fï¿½in – sees fit.
At best, this is the economics of a 1970s student bedsit. If the manifesto were introduced to the letter, the country would risk bankruptcy. All would suffer – except maybe the provo riche.