December 11, 2014

Everything is much bigger in rugby nowadays - and that includes the money available

Posted in Irish Independent · 52 comments ·

My darkest memory of schoolboy rugby is being isolated, petrified, deep in my own 22′, waiting for a massive “up and under” to come down in the first minute of the schools’ cup final in Lansdowne Road. I sensed the Terenure pack coming up at me like a thundering herd, intent on clobbering me. The ball took ages. The wind caught it and seemed – cruelly – to suspend it above me, swirling. And still they advanced. I could feel my Blackrock teammates looking at me.

Don’t drop it; please don’t knock-on, not now, not here.

This was the final.

Worse still, it was Terenure.

Michaels, Belvo, Clongowes, Marys – they hardly mattered. What mattered was ‘Nure. We knew it, they knew it, the crowd knew it: the greatest rivalry in schools’ rugby was ‘Rock v ‘Nure.

It was Dublin v Kerry, United v City, Kilkenny v Tipp all rolled into one. It didn’t get bigger than this and now I was the last line of the Blackrock defence, being targeted by the ‘Nure out-half. He knew I didn’t like getting hurt; they’d watched the video and they’d done their homework!

I thought about volleying it in to touch like a soccer player, which I had done before, but never in a final, and what would the purists say? I could see the lights of old West Upper in Lansdowne Road as it then was as I waited for this dot in the sky to get bigger and bigger, closer and closer.

Gravity got the better of it and miraculously, there it was, the match-ball in my hands, both hands, no fumbles, no knock-on. I could hear the ‘Rock boys cheering.

Game on. Time to fly.


School rugby was a hoot. I enjoyed it tremendously and as a back on a Blackrock team all the way through secondary school, you thought you were handy because most of the time we were going forward. Rugby is easy when you have momentum, the line in your sight and a pack of forwards who could kick 40 shades out of anyone.

Despite this be-knighted experience, I do remember one downside of playing full back or winger was having to listen to rugby bores on the sidelines. Typically, these were Dads or past-pupils who had never played and yet they roared instructions. As I was usually the closest to them and on my own at the back, I tended to get, not just a general lesson in how the game should be played, but a personal grind.

I thought these people were consigned to history but last Saturday at Thomond Park, Limerick, I had one right behind me, in my ear, all match. You know the lads with the referees’ ear thingy, the fellas who know everything and if only they were on the pitch, Munster would have destroyed Clermont. I must admit I was impressed by his extraordinary vocabulary. One of the things that has definitely changed since I was subjected to the wisdom of this class of Alickadoo, is the intricate language that now surrounds rugby commentary. Today’s rugby lexicon is a complex form of linguistic hieroglyphics, accessible to only the most committed Alickadoo. There are specific terms that can only have been perfected by decades spent in some clubhouse. Most of the terms went over my head or were describing stuff that was so obvious as not to have warranted comment.

The other thing that has changed is obviously, size.

Rugby has got bigger.

At a school reunion recently, I spoke to one of the priests who trained us years ago and he told me there’d be no place for teenagers like me on a school cup team these days. I was simply too light, too skinny and too weak.

Another thing that has changed is the money in the sport. As Ireland bids for the Rugby World Cup (RWC) in 2023, it is worth considering the numbers for the World Cup in England next year. Here are some findings in a recent report:

• The tournament will generate up to £2.2bn;

• Up to £982m will be added to GDP of the UK, with economic benefits spread across the 11 host cities;

• An estimated 41,000 jobs will be created. This includes 16,000 employees directly linked to the tournament and 12,000 along the supply chain;

• A total of £85m will be invested in infrastructure with long-term benefits lasting long after the tournament;

• Between 422,000 and 466,000 visitors are expected for RWC 2015, more than any previous Rugby World Cup, with an average spend (for their total visit) of between £59 and £3,546 depending upon their origin and profile. It is estimated that visitors will inject up to £869m of revenue into the UK economy.

Looking at the Six Nations championship, the sport generates significant revenues for each of the participating countries.

In 2013, the total revenue generated by the English RFU was a staggering £153.5m. In the same year, the Welsh Rugby Union took in £61m in revenue. The figures for unions in South Africa, Australia and Ireland were close to £42m, £55.7m and £54m respectively.

In terms of club rugby, the French are by far the richest. Toulouse tops the list of Europe’s 15 biggest rugby union clubs based on revenue. During the 2009/2010 season, Toulouse generated £27.4m (€33.5m) in revenue, followed by Clermont Auvergne at £19.5m (€23.8m) and Leicester Tigers at £18.5m (€22.6m). In total, French (11) and English clubs (four) dominate the top 15 positions by revenue.

Professional players get well paid for their enormous effort. In time, more and more players will be able to turn pro and, given what they subject their bodies to every week, these guys should be well paid.

Today, as father to a boy who, like his Dad, is a small teenager and is plying his trade up and down the wing, I worry about what is expected of these small kids in terms of tackling big lads. Desperately, I am trying to teach him the elegant and spectacular tap tackle

I was known in school as the only back who’d come off the pitch as clean as I went on. I don’t think that’s an option today!

But looking forward, rugby is a growing sport. It is wonderful to see it move away from the leafy suburbs and the largely fee-paying schools of bourgeois Ireland. As the game grows, the business and economics of rugby will change dramatically. As Ireland bids for the RWC, we should double our efforts to net this international tournament. Everyone will win.

  1. ex_pat_northerner

    David, Isn’t Sport just a microcosm of Society ? By that the Rich get richer and grass roots struggle on by. I’ve seen this with GAA, whilst this week Osborne announces 50million Govt funding in UK for Soccer — for an elite academy to support the England football team. — 50 million when food banks are growing a lot faster than the economy. 50 million to elite sport when pitches for sunday league games are covered in glass, or goalposts are broken, or ref never turns up. 50 Million, because he was convinced it was a good idea after viewing Man city’s new state of the art academy. The Premier league says its the richest league in the world, yet the English FA still seek Govt money for the national team ?

    Before the fall of the Roman Empire, the crowd, the mob was kept entertained — the old bread and circuses routine, and I fear its the same.

    On the size thing its also starting to percuolate GAA and other sports. In Soccer there’s a lot of athletes who happen to be able to kick a ball, covering ground seems more important, while of course there’s the familiar Rugby league joke of what needs to happen with Union to bring back skill — ie cut to 13 a side, uncontested scrums, define a tackle etc..

    League of course used to be the professional game – union, the amateur one.. and going to league meant not being able to represent your country.
    This was similar to the old days, where professional athletics existed outside the Corinthian ideals of the amateur sport (My Great grandfather used to run a version of the Great North Run before it ever became the current version back in early 1900s).
    With news of a major doping programme in Russia ( Well come on we’re being fed the propaganda and Sport is just one realm) we see the interlink between sport and politics. The boycott of Olympics, South Africa etc.. but we also see that as in life, there’ll be those who cheat and those who try and play by the rules.
    Like sport there are certain rules that are very definite. They should not be broken, .. and just like the breakdown, there’ll be a certain amount of leeway on things that are open for discussion.

  2. CallerNJ

    Sub… where us it?…

    • Morning from the Caribbean, just woke up. We’re four hours behind Ireland hence my tardiness to ‘subscribe’.

      Great article David and great picture.

      And you are right – #RuggerBuggerBores are a menace to a society and should be exterminated. I’ve been saying it for years.

      • Deco


        The seem to show up all over the worst run entities in the professional and banking sectors of the economy.

        The status obsession, the comfort zone, the pretend male bonding (the talk about everything, and yet they talk about nothing), the pissups, the shared arrogance, and lastly…the injuries.

        The whole lot of it is madness.

  3. Irish PI

    Having had the misfortune of being educated in a rugby secondary school [Cresent College comp Limerick],around the time our current minister for finance was a English and Geography teacher there and being a large youngster,I was forced,bullied threatned and cajoled onto a pitch and team to play this “sport”.To this point that today I hate the game with a passion and consider it a major Minus point in anyone I employ or if they start a conversation with “So did you,do ya play rugby?”
    What really put me off this whole sport and scam was when we got to leaving cert time,I was dealing with a dying parent in the USA,keeping a farm going that said dying parent had just upped and offed and dumped on myself and my mother two years previously and the mental,emotional and physical train wreck that consists of the leaving cert exam build up in Ireland.It was simply that I had do drop out of this and was considerd an utter traitor and welsher on the “glory of the school ” for doing so,and would never recive the coveted “good word from the head” in my future job career prospects.
    Despite the senior year getting utterly trashed that year with numerous walking and wheel chair bound injuries,people that did absolutely nothing in school or study bar play rugby ended up with some choice positions in and still are in our banking system!!These were peope who in the dawn of computor classes in the 1980s spent 15 minutes looking for the “any” key on their keyboards!
    What life lessons I took from this was;
    1]Its WHO you know and WHOM you curry favour with will get you places in Ireland

    2] You can be as dense as a stack of short planks,but if you play rugby or GAA you have any career open to you in Irish society.

    3]Don’t bother with good chat up lines or politeness with Irish girls,just grunt “Me rugby player,rugby good,me want woman!”

    4] Bugger the entire Irish society falling apart on all fronts,the rugby matches are THE MOST important news events,followed by any ball sport that is on the Telly.

    5] And we are surprised Ireland has gone to Hell in a handcart??The EU must be laughing on how easy it is to didfuse Ireland.Just throw them a few rugger and soccer balls.

    And now let the masscare of my commentary begin. :}}

    • Deco

      Irish Pi – that was one of the most honest, and insightful comments that I have observed on an Irish site (or even any site) in a long time.

      Sport is a means of enforcement of a highly dysfunctional “system”.

      Education is about the development of the intellect, and personal strengths and abilities. Running head first into somebody else with a oversized plastic peanut does nothing about this. If anything, it is proof of a coping out on personal development.

      I find the “enforcement” doctrine particularly dangerous, as it judges young people at a very critical age, according to their willingness to participate in a pursuit that is the height of utter absurdity.

  4. CorkPlasticPaddy

    Couldn’t agree more with you Irish PI! And that’s what’s presently wrong with this country of ours.

    I did play various sports at the Grammar School I attended in the UK with Rugby Union being one of them, but I wasn’t what you could really call being good enough to represent the school in any of the various sports I played though. I was just your average Joe who played these sports just for the fun of it. I was just an average student on the academic side of things as well. What I’m trying to say is that I’m not the type of person who suffers fools gladly, and by God there are certainly a lot of people who are involved in the running of this little country of ours, politicians and civil servants who’d definitely fall in to that particular category!! Common sense and fairness is what’s sadly lacking in this country and the sooner the people of this country get up off their backsides and vote for change in the next General Election the better! There’s a definite need for a political ‘cull’ in this country and the sooner this happens the better!

  5. coldblow

    I, too, played it in my London grammar school and I still dislike the sport. I never learned the rules properly. The last time it annoyed me was when I was watching a Premier League game in a local pub with my son. All the other sets in the place were showing Munster but we had this one to ourselves. Then this hyperactive plonker comes along and tries to get them to change that over too. I really enjoyed one match a year or two ago (there was no other sport on at the time and that’s all I watch) when Leinster (who were strongly fancied to win) were beaten in some cup game by a second-rank English club. It wasn’t that I wanted to see the English win as Leinster lose. Just look at the crowd. (sorry David)

    I didn’t mind sevens though as you had to get into the game and I was as good as anyone in that.

  6. Deco

    For Ireland, in terms of commerce, to win an event like this is hugely beneficial.

    However – it will have side effects. More young lads will play rugby. And that is a disaster. Because more players, means more injuries (at all levels of seriousness).

    I played some sports when I was a kid, but fortunately, I never took them seriously beyond the age of 12. 12 is the cut-off point. After 12 the testosterone kicks in, and that means more aggression, and more injuries.

    The best sport ? Chess. I wish I had learned chess when I was 8 instead of when I was 12. And I wished I had played it more.

    • Played football for years Deco and never once got injured. Got paid for it in Hungary and Antigua but never put in enough to go further than that even though I had the talent (as to many).

      Wouldn’t go near rugby with a narge pole though, it’s not enjoyable to play or watch – macho bullshit.

      Also you can be a midget in football and be the best in the world, it’s a fairer sport – just luck at the genius Messi – who is his equal in rugby? The arse licker Drico?

      • Sorry on my phone here in Antigua, spell checker all over the shop.

      • Deco

        Soccer is a non-contact sport. And it does not have the same status obsession, or clique-ishness.

        I played soccer for fun, and recreation myself. And I enjoyed it. In fact I recommend it.

        But I despise the clowns who sit in the pub watching millionaires playing it. And who could not run the length of an astro-turf.

        Unfortunately, the media currently provides, and fosters the pub soccer expert as an acceptable and safe male role model in both Britain and Ireland. This has been particularly prevalent since the 1990s.

        It gets pervasive to the problem that you get people who will ask you “who do you support ?” – as if it is some sort of character test.

        My answer – two pillar banks, NAMA, one thousand state quangos, numerous useless politicians, and the other beneficiaries of the tax system, etc..

    • martino

      Chess isn’t really a sport though, is it? A sport implies physicality, chess is more mental than physical; more of a game than a sport. I like swimming, a good sport that calls for fitness and technique, is gentle on the joints and can be enjoyed at any age.

      I went to a rugby school without realising at the time what it represented. I remember ‘cheer leading’ practice before the matches. Madness looking back on it now. It doesn’t stop me enjoying watching rugby now though.

  7. DB4545

    This is a tough one David. Bring on the revenue to the Country and of course I’ll endorse it. My son loves rugby and plays it. I haven’t a clue I’m bookish and sport skips a generation in my family. I’m really at a loss on this one. We’re unpaid taxi drivers taking him on excursions to boyne or navan or ratoath or dundalk or skerries and various other venues as true blue dubs following the boggers circuit. Your comments echo some of my colleagues comments. Begod Kilkenny are a world class team. Laois are in a league of their own. That Wexford lad is world class. Compared to ? But how would you have compared to the fatima mansions first team? What about the the rialto second team? The coolock third team? That’s the problem David.The Kiwis are all playing on a level field. and that’s why they do so well. The field is level. For Rugby anyway.

  8. mishco

    I played rugby as a kid – as a 13 year-old centre I got plenty of ball, but as we all got bigger, the pitch got boggier and the forwards used to dominate, and I ended up hating it and took up golf!

    My real reason for disliking rugby though was the way the best players would be held up by all the teachers as great representatives of the school, even though they were often thick as two planks, bullies or both. But looking back I can see that now they are no longer training future war commanders and cannon fodder, but rather CEOS and gung-ho team members in any upmarket field of endeavour. Not just that, though. A great rugby player can still be a fantastically creative individualist, or a charismatic never-say-die leader of the pack. And I guess we hope that by playing rugby a bit of this may rub off on our kids, as well as the sociability.

    But we shouldn’t forget what golf has to offer Irish youngsters who may not be the most gung-ho team-players or built like a Sherman tank. I started as a Junior member of a Dublin golf club. Up to 16, my Dad paid 10 shillings a year, and I had full access to course and clubhouse 4 days a week all year. It costs a bit more now to say the least, but down the years the pitch and putt courses have sprung up everywhere, and there have been many schemes to encourage kids into the game, as most people live near a course in Ireland.

    And they don’t have to be from bourgeois backgrounds. The great man himself, Christy O’Connor, started out hitting stones on a beach with a stick, and other fine players have worked their way to the pro ranks the hard way. As for income, Padraig Harrington, Rory McIlroy and the like are starting to bring in a lot more income to Ireland just like the rugby players, not forgetting their charity work too.

    For me (and of course it won’t be everyone’s cup of tea, especially for those who only associate golf with people like Fingers and Co.) the real payback is for kids, and it’s threefold: they learn to battle the course and the elements, they learn to battle their opponents and, above all, they learn to battle their own physical and mental demons as they play. And when the game is over, the camaraderie in any golf-club is great, and everyone is treated as an equal whatever their background.

    Soccer in schools? Sure, I’d put it at top priority, ahead of rugby. But for those who show inclination and some talent, let them start golf as early as possible too, and that goes especially for the girls. If Korea can produce so many good players most of whom start by hitting millions of balls into nets, why not Ireland with all its great courses?

    • Deco

      My real reason for disliking rugby though was the way the best players would be held up by all the teachers as great representatives of the school, even though they were often thick as two planks, bullies or both.

      Excellent point.

      Not just a problem with rugby. The most obnoxious ass in my secondary school year was a Gaelic football midfield player on the school team. He made zero effort to learn anything from a book. He looked down on everybody. And the teachers fostered this dangerous illusion, because he represented what Irish Pi called “the glory of the school”. This was a CBS in the 1980s – so most of the kids wanted a good leaving, a good course, and a job. The “sportsman” route to a job was actually highly dysfunctional.

      Parents – when looking for a school for your children, pick one that is useless as sports. You son or daughter is more likely to turn out a well balanced, hard working, honest, respect, decent human being.

      • Irish PI

        If I could tell some tales about a “Munster legend” known as “The claw” and his carry on in school to weaker kids his reputation might be in a different light.I had the pleasure of his company in Cresent Comp Limerick from 2nd year to the Inter cert.Put it like this when I heard about his head stamping incident many years ago I wasnt surprised….

        Anyways,if you want to teach kids a sport that will foster self displine,responsibility,camerdarie,and leadership,not to mind has won Ireland about in the last five years,approx 300 bronze,silver and golds in UK Commonwealth games,US competitions,and Europen competitions.Is totally ignored by the media,gets virtually ZERO funding fro mthe state and its participents are treated like second class citizens despite being the most scrutinised people in the state by our security forces. …Get them to take up shooting,and especially any type of target shooting with a pistol..Dont think you need much condition or be fit for that??Little test…Take your normal clothes iron and hold it straight out in front of you single handed DEAD STILL for ten minutes! It gets wobbly after about 30 seconds and I’ve seen fit muscle bound lads give up after thee minutes!! Thats just a normal pistol training exercise with the equipment we can afford here to do it.Most EU and US competitors have specialised weights and devices to simulate a pistol..Want to be a bit more active?Try bi athalon shooting .Go for a run with your rifle,or ski even for a mile or so,and then drop down and shoot a 10 cm high steel plate at 50 meters under a time penalty.Being able to control your heart rate so you can be dead calm to do that kind of precision shooting is an athletic feat in itself.

  9. I enjoyed reading the article . I must say that only that David was in Thomond Park he may not have written it . I believe he tasted that Rugby religious fever ingrained mindset so prevalent in the city of Limerick and embraced the passion that engulfed and blinded and morphed him into the steed of an African animal . All the World of Rugby arrived in one spot and that fulcrum of a fountain of sweat had to be showered on the readers of his column .Now we are all stained with the mystery of what happens next week end and how will Munster will fare against Clermont Auvergne .

  10. Colin

    Thomond park is in Ballynanty (aka Balla). Football (aka soccer) is by far the most dominant sport played by kids in this old working class Limerick neighbourhood. More schoolboys play football than rugby in Limerick. More adults play football than rugby in Limerick.

    My old school (1/2 mile away from Thomond Park) had a open mind attitude to sport codes. The school enjoyed huge success both locally and nationally in football (soccer) in the 80s, when it was top dog over rugby and hurling. Since then, the school produced better rugby teams and players (including Paul O’Connell) and better hurling teams and has enjoyed success in these since I was attending. The main reason for this is because the school set out to attract pupils from rural Clare and rural Limerick and turned its back on kids from working class neighbourhoods nearby. It was a little bit of social engineering, lets say.

    But i remember we did sing a song at rugby matches, ‘Crescent are the w@@kers in your neighbourhood’ with the tune from Sesame Street, because the Crescent school was located in an outer suburb, and past pupils sent their sons and daughters there for the ‘prestigious school tie’ and Jesuit education, no matter if they lived the other side of town and had to get up an hour earlier in the morning to get there in time.

    • Ard Scoil Rís

      This great school originally was the only boys learning school to be built north of the city of Lymricke thus it was built for everyone of all classes and hair colours .It competed against the best of the Jesuits Crescent in national debates before Crescent Comp replaced the Jesuits and won national competitions . The first Irish EU President evolved from this team .It was also the original national Irish Basket Ball champion league team .

      I agree Rugby was a late arrival and maybe personal tastes of the Principal had a lot to do with it then . How things since have changed and how many champions rolled out of this great school .

  11. StephenKenny

    Although David is clearly on the receiving end of ever more frantic PR from the UK, sport is wealth creating as an industry, but only very slightly. It encourages tourism, but that is the direction of a developing country.

    The increasing money in sport might just as easily be an indicator of the huge sloshing about of the hundreds of billions of new currency that governments and central banks have injected into their countries. The UK is putting in over £100n a year (the gap between revenue and expenditure), which is equivalent to about 15% of the UK government’s expenditure. This is highest that the UK has ever had – excepting certain years during WW2 and the climax of the Napoleonic Wars.

    Since all formal published market indicators are being ‘managed’ by central banks (currency rates, equity prices, commodity prices etc), the hunt for indicators that actually indicate facets of the real economy is an ongoing problem. Maybe the ballooning money in sport is an indicator of costs in certain sectors of the economy. The good old ‘BigMac Index’ has inspired many.

  12. This is often quoted.

    “Football is a gentleman’s game played by ruffians, and rugby is a ruffian’s game played by gentlemen.”

    I played soccer until 14 years old but on moving to Devon was reduced to Rugby. Captain of two school soccer teams reduced to an average rugger performer!!

    Playing rugby I met many a ruffian on the pitch from the opposing side that gainsaid the above. Fists, elbows and boots were all surreptitiously used and I suffered from it.

    I marked my adversaries well and as I developed physique those who had done me wrong were repaid tenfold.

    Players were often damaged. Eight broken noses one term and in another year there was a run of 6 broken legs. As for me?? I got away with a cracked wrist bone.

    In my amateur boxing career of 87 fights over 6 years I was only injured twice and a quick recovery was made. If you want to develop temperament, fitness and self confidence one could do worse than try a little boxing in your spare time, if you’r the man/woman for it!
    Incidentally every match was preceded by a medical doctor’s examination of all contestants and the doctor attended all bouts at ringside.
    The real gentlemen I found in the ring!! The rules were obeyed and rigidly enforced.

  13. Developing Brains More Important Than Brawn

    After conditioning it is always the smart one wins the match. The same for all things including the boxing!!

  14. michaelcoughlan

    Hi David,

    I need to make a post and will employ some imagination to keep it on topic. My post is not about gold though it is mentioned. In my view the great collapse has started. Buffet said if all the gold mined were melted into one cube that cube would fit on a rugby pitch only needing the distance from the goal line to the 22 to park it.

    As discussed before classical economists like yourself see deflation. Non economists like myself see inflation. It seems we are both right;

    “Biflation (sometimes mixflation) is a state of the economy in which inflation and deflation occur simultaneously.

    Imagine the “scrum” for milk and bread when hyperinflation “kick’s off” David? Remember the cattle being dragged off lorries in Argentina and slaughtered at the side of the road? Will all the teenagers in europe be asked to “lineout” in uniform for the opportunity to “attack the defences” of their opponents?
    Will gsucks play the part of the “bagman” holding the valuables “liens on assets” delighted in the secret knowledge that those assets have no possibility of ever being recovered?

    Could you not focus on providing some REAL guidance to the people of Ireland on how to protect themselves from what’s coming down the “tram lines” instead of writing about diversionary circuses.

    When hyperinflation takes control in the new year the only people who will be still in any type of position to take a deposit will be the local “hookers”.

  15. I was contemplating how much the sports activity adds to taxable revenue and GDP.

    Yesterday I visited a group of volunteers building a garage sized storage shed. They had a prefab package of panabode style lumber delivered

    Pouring their own concrete base and assembling themselves they spent 4000 pounds.
    Total worth of the project finished has to be 10,000 pounds. so these people working together created 6000 pounds of wealth that is not registered on the GDP but nevertheless exists. Likewise I built or rebuilt a smallholdings infrastructure last year which also one could say was volunteer ans unpaid. Also not on the radar of taxes and GDP.

    As the visible economy slides deeper into recession/depression how much real wealth is created under the radar? I suspect this is what will sustain us as the money system collapses about us.

    This leads to the conclusion that people left alone create wealth while government “help” destroys it.

    Have a great day. Eat and drink well and volunteer to help your neighbour

    • michaelcoughlan

      The year before last I volunteered to help establish a member owned retail food co op. in Limerick.

      This year I volunteered to establish an on line food co op with free home delivery for orders over 15 euro. It was working beautifully with very competitive prices. I just couldn’t get enough people to use the site. I will revisit it in new year. I HAVE to get a decent level of remuneration next time out as volunteering can only get you so far.

      Your point is very insightful though. My uncle 89 this month remembers a time when there was no dole and no jobs. You survived by cooperating with your neighbours and your social standing was what gave you your purchase.

      Getting paid returns to the worker a substantial amount of the value he adds. Volunteering whilst very noble can do an injustice to the volunteer if he is not careful.


    • StephenKenny

      My difficulty with real estate construction as a form of wealth creation is that it is at best unsustainable, and more generally an example of so-called ‘broken window’ theory.
      On a green field site, a building is created, which employs people, and provides some utility afterwards – so for a utilitarian viewpoint, it’s a capital item.
      If it’s redevelopment, then as much is destroyed as is created, so the balance is not much. There may be good reasons for this, dereliction, etc, or it might just be speculation on the part of the developer.
      If real estate development was a real wealth creator, and demand the key driver, then rural India would be covered with 6 bedroom detached houses, with a double garage and a swimming pool.
      The longer these speculative excesses go on, the more the employment, infrastructure, and skills, malinvestment goes on, and the worse the situation gets.

      • michaelcoughlan


        Because McWilliams hates houses a rational debate on houses/real estate has never really been discussed.

        A well built house can be passed down the generations and is very sustainable development if modern building techniques and eco friendly technologies are used.

        Regarding redevelopment the newer real estate will generate rents far in excess of those previously or will create a built environment of much more quality than that which existed previously if done correctly.

        Your observations re malinvestment is SPOT ON but let me explain the difference between malinvestment in property and legitimate development activity.

        A country like Ireland needs 30 to 50 thousand new houses every year to upgrade existing stocks, provide homes for new entrants, create employment, keep rents and capital values in check etc.

        What should happen but doesn’t is that a first time house buyer saves a deposit and gets a mortgage to buy a reasonably price entry level apt or house. You have real demand from real savings and properly executed lending.

        In Ireland money was lent to speculators who built houses and apartments PRIOR to securing a customer and thats where all the malinvestment is and both you and McWilliams are correct in this regard.

        It’s even worse at the moment however than during the boom. In Dublin cash rich speculators are driving prices on existing houses balubas even though there are almost no new entrants in other words prices are rising from speculation rather than the increasing purchasing power of a population employed in a properly functioning capitalist economy.

        Nama got rid of its dev properties en masse to suit the need of the gov to deleverage it’s balance sheet. Vulture funds have bought these properties and will sit on them as the price rises.

        What should have happened is that nama should have developed the properties to increase supply bringing down rents and moderating price rises and also creating employment.

        Instead we have the exact opposite; Skyrocketing rents and prices, falling wages and non existent employment in house building. Homeless people dying on the streets etc.

        Worse and worse the gubuernment is making things. So McWilliam’s super bull trap graph of a number of months ago is a great pointer in my view of the way this will play out.

        Hope this helps,


        • StephenKenny

          It’s not really a very convincing argument for real estate to be anything other than a capital item – i.e. a cost.

          The 30-50k per year is unsustainable, and a number based on a time when there was massive immigration, which was in turn caused by the absurd real estate bank lending.

          Real estate construction clearly has a place in the broad economy, but it isn’t really part of wealth generation – any more than road construction is. A vital part of the infrastrcuture of the economy of course, but only a cost, not a productive industry in it’s own right.

          If it’s treated any other way, it’s starts to cause mal-investment, which is bad for the economy.

  16. mcsean2163

    It’s an indictment of the modern world that people pay to watch other people having fun… What’s next will people pay to watch other people drink, eat?

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