July 4, 2016
Ireland has just been given one of its luckiest breaks. Britain has handed us, on a plate, the opportunity to be the Anglo-American world’s investment location of choice. Maybe we don’t realise it yet. Ireland is now perfectly positioned to be a globalised, English-speaking, free-trading area, which could attract limitless international capital that will transform the country and the society.
To understand this, let’s take a step back. It is all about a shift in the nature of national power.
We are now in a world of soft power as opposed to hard power. The power that countries exert on the world is no longer the hard power of the military and the flag. Hard power is enforced, not coaxed; it is the power of exclusion not inclusion; it is the power of the 19th century and it is the strength of the traditional bully. Those days are over.
Today the power that makes a country strong is soft power. It is the power of persuasion; the power of branding; the power which allows a country to coax others into doing its bidding without them even knowing.
The Nordics are exemplars at this game. It is a deep psychological power that is deployed by culture, image and national tone – and once exerted, it is cemented, not by force, but by international law.
By voting for Brexit, the British have elected for hard power in a world of soft power. They may not see it but the English have profoundly diminished their attractiveness. They have lost goodwill.
For years, Britain, in the eyes of the world, was the coolest place on earth. They had the best music, the best fashion, the best street movements, the best raves, the best comedy, the best youth culture and, despite themselves, the most exciting food innovators.
Their literature wasn’t too shoddy and the small island also managed to have the sixth biggest economy in the world. Its language was spoken everywhere and, in the BBC, it set the standards in global broadcasting.
It had even managed to have the best, richest football league despite its shambolic national team. Indeed, the desperate performances of the national team became part of their ironic self-deprecating disposition, which made it the favourite country for European graduates who wanted to emigrate.
In London, England had Europe’s New York. And, in its embrace of the free market, it made itself a magnet for global capital.
This was old Britain, the master of the brand, the genius country that managed to paper over the cracks with clever marketing, agile advertising and fashionable presentation.
It had just about managed to replace the dying hard power of empire with the soft cosmopolitan power of the 21st century. Last Friday week, it blew it.
The new Britain that will present itself for the next generation to the world will be a nasty, flag-waving, petty, imperial England in a post-imperial world.
Britain will now involve itself in a very public period of wrangling with the EU where enemies will be created and where the ability of the British to enhance their standing in the world via diplomacy will decrease.
This shift from team player to cantankerous foe will impact profoundly on Britain’s ability to attract foreign capital. Remember: Britain received over one third of all direct foreign investment into the EU. The figure last year was €35 billion.
This global capital will not stop looking for a home, it will just look for a new home. This new home will be one that feels, smells and acts like the Old Britain.
It is one that speaks English, has a common law system, doesn’t make it hard to invest and doesn’t prevent foreign skilled labour from living in its cities.
It will be a country where taxes on capital are low, which doesn’t get into public scrapes with its neighbours and which has free access to 500 million rich customers.
It is a country where gay people can live in equality, where foreigners aren’t discriminated against and where the arts, culture, music and sport are encouraged.
That country can be Ireland.
We are the obvious candidate to best profit from England’s self-inflicted misery. We are in the same part of the world, speak the same language and to all intents and purposes, for the vast majority of humans, are quasi-British. Yet we are a safe harbour in all this chaos with free, unfettered access to Europe.
The economic model for Ireland should be the prosperous city states such as Venice in the 15th and 16th centuries or the Hanseatic cities of Lubeck, Danzig or Konigsberg in the medieval Baltic. These states combined free trade with clever political alliances to become magnets for foreign capital.
These cities played the big powers against each other, retaining just enough sovereignty to plot their own course but never insisting on so much autonomy that their independence might threaten others.
Ireland is in that position right now.
Britain will leave the EU. Many people, particularly those on the remain side in Britain, have been trying to convince themselves that some magic formula will be conjured up to avoid triggering Article 50. This will not happen.
My friends in Britain who voted Remain have been deluding themselves that there can be some form of words, some legal circumstances which might be invoked to avoid the inevitable.
Many others who voted Leave as a protest voice and are now suffering from what could be described as “buyer’s remorse” have been trying to convince themselves that there will be a second ballot. There won’t be. They are out.
Britain will eventually get a Norwegian-style deal with some local control on immigration but the damage to “Brand Britain” is done. It won’t recover for a decade. Its economy will recover from a temporary, cyclical wobble, but it won’t be the same.
Luckily for us, most of our indigenous exports to Britain are food and the Brits will not stop eating. Nor will they stop holidaying abroad and they will still come here in huge numbers. However, the rest of the world will look on them differently.
Where the world once saw flexibility, it will now see rigidity; where there was irony, there is now dogma; where there was self-deprecation, there is self-regard; where there was tolerance, there is now exclusion; and where there was once liberalism, there is now brittleness; where there was moderation, there is now excess. Goodwill is lost.
The Tories don’t realise that modern free-market capitalism is part of a suite of beliefs that go with openness, tolerance, creativity, enquiry and debate. Once you go for dogma, you close so many more doors than you open.
Ireland is now in a brilliant position to economically and financially benefit from the evisceration of Brand Britain; let’s seize the chance.